Barriers blocking judgment payout for Kodiak fishermen continue to fall with a decision Wednesday by the 9th Circuit Court of Appeals refusing Exxon’s request for a 15-judge panel to hear arguments contesting a $2.5 billion judgment.

“We are done with the 9th Circuit,” said Andrew Ott, an attorney for the plaintiffs along with lead counsel Matt Jamin. “The en banc request has been denied.”

The San Francisco court heard appeals three times since an Anchorage jury on Sept. 16, 1994, returned a $5 billion punitive damages verdict against Exxon.

Wednesday’s ruling represents a milestone in the 19-year-old case, ending a back-and-forth ping-pong phase of litigation between the California Appeals Court and the Alaska District Court.

Ott said plaintiffs are still on track for a possible settlement by the end of 2007, now that the 9th Circuit is out of the picture.

Had the en banc hearing been granted, it would have substantially lengthened a settlement payout.

Kodiak plaintiffs filed a motion in March before the 9th Circuit objecting to Exxon’s request for the 15-judge panel.

Plaintiffs also requested the amount of the settlement be reinstated to $5 billion.

A federal appeals court in December 2006 reduced the total amount of punitive damages to $2.5 billion. U.S. District Judge H. Russell Holland of Anchorage had set the amount at $4.5 billion in January 2004.

With Wednesday’s ruling, Exxon has 90 days to file an appeal before the U.S. Supreme Court for further review and a decision on the lower court damage settlement ruling. Exxon said Wednesday it would file an appeal.

“The 9th Circuit Court ruling now allows the case to be appealed to the U.S. Supreme Court, where we believe the case should be decided,” Exxon spokesman Mark Boudreaux said.

In 1994, a federal jury found that Exxon and Valdez captain Joseph Hazelwood acted recklessly in the worst oil spill in U.S. history, when 11 million gallons of crude oil were spilled after the oil tanker struck the chartered Bligh Reef.

Ott said plaintiffs anticipate Exxon will wait until the last day of the 90-day period to file its appeal. That would mean the appeal is likely Aug. 23.

“They always wait until the last day to file. That has been part of their strategy. They don’t have an interest in moving along the case,” Ott said.

After an appeal is filed, plaintiffs have 30 days to respond.

Ott said plaintiffs likely would file a motion 10 days after Exxon files its appeal in the form of a petition response and cross-appeal contesting the $2.5 billion amount, asking instead to have the total $5 billion reinstated.

“Potentially, it is possible there could be an end to the case and a resolution by the end of 2007 if the Supreme Court denies Exxon’s appeal,” Ott said.

If the Supreme Court does hear the case, a decision would not likely be rendered until sometime in 2008.

If the $2.5 billion is the settlement amount, part of that will be distributed to 51 groups of Kodiak claimants with the Kodiak salmon seine group receiving 14.5 percent, or $450 million. Set-netters would get $130 million.

There are 387 salmon seiners, 189 salmon set-netters, 33 salmon beach seiners and other claimants.

There were originally about 40,000 claimants in the class-action suit. However, lawyers for the plaintiffs estimate about 20 percent of their clients have died waiting for payment. Claimants now stand at about 33,000 commercial fishermen, cannery workers, landowners, Natives and local governments and businesses.

While court action is still developing, a bill introduced in February by Sens. Lisa Murkowski and Ted Stevens would lift the cap on the amount of money a fisherman who is awarded a punitive damage check could invest in a retirement fund without a tax liability and also provide tax relief through income averaging.

The bill gives the plaintiffs until the end of the taxable year in which they receive the settlement to transfer funds to a retirement plan. Plaintiffs would be able to use settlement funds to contribute to retirement plans until the day before the tax-filing deadline for the taxable year when they received the funds.

The bill also allows a plaintiff to average his or her income between Dec. 31 of the year of the judgment payment and Jan. 1, 1994, the year of the original court decision in Anchorage.

Kodiak fishermen expect average claims ranging from about $200,000 to more than $1 million, depending on whether the person was a crewmember or boat owner, the time fished and other factors.

If the fishermen were given a chance to frontload a retirement fund with a contribution limited by the value of the settlement check, a retirement could be locked in for a lifetime income stream.

Attorneys and local investment firms are urging fishermen to prepare a plan to use settlement money, and also to urge support of the Murkowski retirement bill.

Mirror writer Bryan Martin can be reached via e-mail at bmartin@kodiakdailymirror.com.