By Associated Press
Montgomery AL – The state government's lawsuit against Exxon Mobil is officially over because Gov. Bob Riley decided not to ask the Alabama Supreme Court to reconsider its decision throwing out nearly all the state's $3.6 billion judgment in a royalties dispute.
The Supreme Court issued an 8-1 decision Nov. 1 that cut the state's award to $51.9 million. The court's decision split along party lines, with eight Republican justices siding with the oil company and the court's lone Democrat dissenting.
After consulting with lawyers, Riley decided that seeking a rehearing by the Supreme Court "would be futile," the Republican governor's legal adviser, Ken Wallis, said Monday.
The state government originally won the judgment in a lawsuit against Exxon Mobil over royalties due from natural gas wells the company drilled in state-owned waters along the Alabama coast. A Montgomery jury agreed with the state's claim that Exxon Mobil deliberately underpaid royalties to the state. But a majority of the Supreme Court said the state failed to prove fraud by the oil company, which would be necessary to justify such a large verdict.
Wallis said that while he personally disagreed with the court's reasoning, the numbers indicated that seeking a rehearing by the court would not succeed.
"With 8-1, we did not feel there was a likelihood of success," he said.
The Supreme Court's decision was similar to one it issued in 2004, when it threw out a $24.6 million verdict the state won in a similar but much smaller royalties dispute with Hunt Petroleum over natural gas wells along the coast.
That 6-1 decision also split along party lines, with six Republicans siding with Hunt and one Democrat dissenting.
In the Exxon Mobil case, attorneys for the state and for the oil company are still working out how much interest the state will get on the $51.9 million left by the Supreme Court. State attorney Robert Cunningham of Mobile said the total with interest will be about $72 million.
In a separate case, Exxon Mobil is seeking about $41 million in severance tax refunds from the state Revenue Department. The dispute is currently in Mobile County Circuit Court.