Exxon spill awards could be held up in court for several weeks
Damage awards stemming from the 1989 Exxon Valdez oil spill were scheduled to be in the mail this week, but the payments could be stalled for a month or more. The settlement, which was slashed in June by the U.S. Supreme Court from $2.5 billion to $507.5 million, will be distributed to more than 32,000 plaintiffs, of which 80 percent are Alaska fishermen.
“Some obstacles have arisen and the soonest we will see checks is mid-November, and it may roll over to December,” said Andrew Ott, a plaintiff attorney in Kodiak.
Ott defined one of the obstacles as complex accounting procedures over the payment distributions. Another snag comes from a threat by “a very small claimant group that is unhappy with their share,” Ott said.
“They are having it reviewed by the 9th Circuit Court of Appeals and we are waiting for that outcome. In the meantime, they might throw in an objection to any authorization for distribution to the rest of the claimants until they say their share has been confirmed or changed,” he said. “At this stage, the distribution allows for the remaining plaintiffs to receive their portion of the shares, and the objector’s portion can be put in a reserve fund until their issue is resolved. In the meantime, the court has to give process whenever something is filed in court, so there may be a delay of 30 days or so until that ruling occurs. It is a fairly minor issue, but it does eat up a little bit of time.”
Whenever the plaintiffs do get their settlements, they will also get some tax relief as part of the $700 billion bail-out package passed by Congress. It will allow plaintiffs to income average their awards over three years, contribute up to $100,000 to retirement plans, and exempt payments of self employment or payroll taxes on any Exxon awards.
“We recognize that waiting 19 years to get settlements from Exxon is tough enough, but having to turn a good portion over to Uncle Sam is adding insult to injury. And the timing of this in allowing for some tax relief is just about perfect,” said Alaska Sen. Lisa Murkowski, who pushed through the tax relief measure along with Sen. Ted Stevens.
Murkowski said in a phone interview that she was not happy to vote for the massive Wall Street bail out package, but she felt it was necessary to provide a financial assist to U.S. credit markets.
“Having the Exxon tax relief included made it a bit easier to swallow,” she said.
Exxon is appealing an additional $488 million in interest payments on the damages award, and the tax breaks will also apply to that settlement.
“That is now on a briefing schedule with the 9th Circuit Court of Appeals and they may come out with a ruling by year’s end, but more likely in early 2009,” said attorney Ott.
A bill by aimed at giving U.S. fishermen a fuel tax break failed to get the nod from Congress this session. The two-year measure would give fishermen an extra tax deduction based on the difference between fuel prices paid on Labor Day 2004, adjusted for inflation, and prices paid this year.
“The finance committee was faced with so many different bills that the fuel tax relief bill simply didn’t rise to the top of the stack,” Murkowski said. “I do intend to see what I can do in the next Congress to introduce legislation that would again provide relief to fishermen, whether in the form of fuel assistance, or maybe some kind of consideration if you work, for example, to retrofit an engine.”
The nation’s financial crisis derailed many other bills, including one that would allow fishermen to obtain low cost operating loans through the Farm Bill.
Likewise, efforts failed again to get the U.S. to sign on to the 1982 Law of the Sea Treaty (LOST). This year the U.S., Canada, Denmark, Norway and Russia adopted a declaration of cooperation in the Arctic, which supports the treaty as the legal framework for governance. But without ratification, the U.S. remains sidelined while the other nations stake claims to oil, gas, fisheries and other resources in the Arctic.
One measure that did move forward was the Bush Administration’s push to permit offshore fish farms using converted oil and gas platforms in U.S. waters. That was advanced through the rulemaking process and tagged on to an energy bill as a way to sidestep Congressional hearings.
“What they were doing was kind of back door to get offshore aquaculture moving because we have not advance that bill in the way they wanted. And I don’t appreciate that at all,” said Murkowski. “My office has been very vocal in letting folks know that there is a process that needs to be followed, and if not, you can expect strenuous opposition. I am very concerned about this and we are not going to let it get away from us.”
The Minerals Management Service has scheduled offshore fish farm public meetings on the West Coast next year and Murkowski said she is insisting that Alaska is included.
October marks the start of dive fisheries for sea cucumbers, geoduck clams and urchins.
“These are pretty hardcore fishermen diving in the winter weather in the Gulf of Alaska. But for a lot of these guys it’s an important piece to their overall annual fishing livelihood,” said fishery manager Nick Sagalkin of Kodiak.
About 14 local divers compete for 140,000 pounds of cukes around Kodiak, smaller fisheries occur at Chignik and along the Alaska Peninsula.
Southeast Alaska boasts the biggest dive fisheries; 175 divers are targeting more than a million pounds of sea cucumbers, valued at over $2.50 a pound.
Divers can also scoop up 5.4 million pounds of sea urchins, valued at about 33 cents a pound. Giant geoduck clams are the most lucrative dive fishery, and this year’s quota is 869,000 pounds.
The clams, which can weigh up to 10 pounds, fetch $3.50 to $3.90 a pound if live, and less than $1 if processed. About 60 divers are on the grounds, said regional manager Bill Donaldson. The combined dive fisheries were valued at $7 million at the Southeast docks last year.
Also in Southeast each October: spot prawn and coon stripe shrimp fisheries, fall Dungeness crab, and the winter troll fishery reopens for 45,000 king salmon.
“Similar to Kodiak, more and more you get salmon fishermen who also do dive fisheries or shrimp or something in the fall,” Donaldson said. “Fishermen have diversified and they fish a portfolio of different fisheries.”