WASHINGTON - The Supreme Court agreed Monday to decide whether Exxon Mobil Corp. should pay $2.5 billion in punitive damages to victims of the huge Exxon Valdez oil spill that fouled more than 1,200 miles of Alaskan coastline in 1989.
The high court stepped into the long-running battle over the damages that Exxon Mobil owes from the supertanker accident in Prince William Sound that was the worst oil spill in U.S. history. The Exxon Valdez ran aground on a reef, cracking its hull and spilling 11 million gallons of oil.
Hundreds of thousands of seabirds and marine animals died as a result.
It is a case filled with superlatives. The award, even after it was cut in half by a federal appeals court in December, would be the largest punitive damages judgment ever. A jury in Alaska awarded $5 billion in damages in 1994 and the company has been appealing the verdict ever since.
Exxon Mobil, based in Irving, Texas, is the world's largest publicly traded oil company and last year posted the largest annual profit by a U.S. company - $39.5 billion. That result topped the previous record, also by Exxon Mobil, of $36.13 billion set in 2005.
Arguing against Supreme Court review, lawyers for the plaintiffs, some of whom have died, said the damages award is "barely more than three weeks of Exxon's net profits."
The plaintiffs still living include about 33,000 commercial fishermen, cannery workers, landowners, Native Alaskans, local governments and businesses.They urged the court to reject the company's appeal, saying, "After more than 18 years, it is time for this protracted litigation to end."
The justices said they would consider whether the company should have to pay damages at all under the Clean Water Act and centuries-old laws governing shipping. The court has frequently sided with business interests in punitive damages and other cases of corporate liability.
Justice Samuel Alito, who owns between $100,000 and $250,000 in Exxon stock, did not take part in the decision to accept the appeal.
Exxon Mobil shares were up $1.40, or 1.5 percent, to $93.61Monday. The shares are up nearly 30 percent since the start of the year. The case is Exxon Shipping Co. v. Baker, 07-219.
Meanwhile, the Bush administration urged the Supreme Court on Monday to bar a Muslim inmate from suing prison officials who allegedly confiscated two copies of his Koran and prayer rug.
The inmate should be limited to filing an administrative complaint as thousands of other prisoners do every year for a variety of allegations, a Justice Department lawyer told the court.
The government laid out its position regarding a lawsuit by convicted murderer Abdus-Shahid M.S. Ali, who says Muslim prisoners around the country are regularly mistreated by their jailers because of their religious faith.
Chief Justice John Roberts and Justice Antonin Scalia expressed doubts over the inmate's claim of having a right to sue, while Justices Ruth Bader Ginsburg and Stephen Breyer suggested they are skeptical of the government's position.
"There is no court remedy?" asked Ginsburg.
No, but under the administrative process, the U.S. Bureau of Prisons has paid compensation for over a thousand inmate claims in the last three years, Assistant Solicitor General Kannon Shanmugam replied.
Ali says the books and rug are among the personal items that have been missing since 2003, when he was moved from a federal penitentiary in Atlanta to a facility at Inez, Ky.
Ali is serving a sentence of 20 years to life in prison for committing first-degree murder in the District of Columbia.
In the Supreme Court, the question is whether federal prison officials qualify as law enforcement officers under the Federal Tort Claims Act of 1946 and are therefore exempt from suit. The statute bars liability claims against customs and excise officers or "any other law enforcement officer" involved in detaining property. Two lower federal courts ruled against Ali. The case is Ali v. Federal Bureau of Prison, 06-9130.
Information for this article was contributed from Anchorage, Alaska, by Jeannette Lee, from Washington by Pete Yost and from Houston by John Porretto of The Associated Press.
Front Section, Pages 4 on 10/30/2007