U.S., Alaska Won't Pursue Additional Exxon Valdez Damages

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By Lars-Eric Hedberg

Oct. 15 — The U.S. and Alaska will no longer pursue additional restoration costs from Exxon Mobil Corp. for the 1989 Exxon Valdez oil spill in Prince William Sound, according to a status report filed in federal court.

In the Oct. 14 joint status report, the federal and state governments wrote that “the documented recovery of sea otters and harlequin ducks has negated the claim that the patches of lingering oil in some Spill area beaches amount to a ‘substantial loss or substantial decline' in a population, habitat, or species within the meaning of the Reopener.”

In addition to various fines and restitution payments, the company paid $900 million to the governments over 10 years to cover past costs and the restoration of natural resources under a 1991 consent decree that settled the governments' civil claims.

The settlement included a “reopener” provision that allowed the governments to seek up to $100 million in additional restoration costs for loss or decline in habitats or species populations. The provision was operative from Sept. 1, 2002, to Sept. 1, 2006.

In 2006, the governments discovered oil in subsurface, intertidal areas where the otters and ducks feed. They developed a restoration plan and demanded $92 million from Exxon to implement the plan, according to the status report.

Based on monitoring results, the Trustee Council, three federal and three state natural resource trustee agencies reclassified both species as recovered in November 2014. As such, the governments will not seek an order from the U.S. District Court for the District of Alaska directing Exxon to release the reopener funds.

The trustees still have more than $200 million in settlement funds available that may be used to address lingering oil and other restoration purposes, according to the report.

“The Reopener in our settlement with Exxon was unique and set a high bar for recovery of additional damages,” Assistant Attorney General John C. Cruden said in a statement released by the Department of Justice. “Together with our partners in the Alaska Department of Law, we preserved a potential Reopener claim and investigated it to its logical end. Our action today allows us to celebrate all that has been accomplished in Prince William Sound since the spill.” 

The joint status report of the U.S. and Alaska in United States v. Exxon Corp. is available at http://www.bloomberglaw.com/public/document/United_States_of_America_v_Exxon_Corp_et_al_Docket_No_391cv00082_.