Hope for State Slim in Exxon Case

posted on:
November 3, 2007

author:
Staff

category:
Fraud

Gov. Bob Riley said Friday it probably wouldn’t do any good to ask the Alabama Supreme Court to reconsider its 8-1 decision throwing out nearly all of a $3.6 billion judgment the state won against Exxon Mobil.

Riley said he would talk to the state’s attorneys before making a decision but he indicated it’s unlikely the justices would change their minds in the lopsided decision.

"With a 8-1 verdict, why would you continue that?" he told reporters while in the Mobile area for the groundbreaking for a steel plant.

Exxon Mobil attorney Dave Boyd has the same view as Riley.

"We believe any further review will result in the same decision," he said Thursday night.

Jere Beasley, a Montgomery lawyer who was part of the state’s legal team, said the state has no appeal options other than asking for the Supreme Court to reconsider its decision.

"In my opinion this winds it up if they don’t grant rehearing, " he said Friday.

Alabama won the $3.6 billion judgment in 2003 in a lawsuit accusing Exxon Mobile of intentionally underpaying royalties due the state from natural gas wells drilled in state owned waters along Gulf Coast.

The Supreme Court ruled there was no proof of fraud by Exxon Mobil and threw out all punitive damages, which made up most of the judgment. The states highest court left the $51.9 million in compensatory damages, plus interest to be determined later.

Attorneys said the interest payments could end up pushing the final amount to about $100 million.

In the Supreme Courts decision, it said the way the state conservation department interpreted some payments due by Exxon Mobil was correct. That will result in Exxon Mobil having to make more payments to the state, plus interest, from the time of the trial to the present. Attorneys said that will be millions on top of the compensatory damages, but they were not immediately sure how many.

Whatever the amount, it’s still far short of what former state Conservation Commissioner Jim Martin hoped the state would get when he started auditing Exxon Mobil’s royalty payments to the conservation department in 1996. Those audits led to the state lawsuits.

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