District Judge Rejects Exxon Oil-Spill Settlement

A FEDERAL judge rejected a plea bargain in the criminal case against Exxon, declaring that a $100 million fine in the nation's worst oil spill is inadequate. US District Court Judge H. Russel Holland said Wednesday the fine represented nothing more than Exxon's cost of doing business and failed to reflect the enormous damage caused by the 11 million-gallon oil spill in Prince William Sound in March 1989. ``The fine ... does not appear to adequately punish the defendants for the guilty pleas that were offered.''

Judge Holland's rejection of the deal was a slap in the face to the US Justice Department, which had offered the deal to Exxon. In Washington, the department officials expressed disappointed by Holland's ruling but said they were prepared to go to trial.

Under the plea bargain, Exxon would have pleaded guilty to four misdemeanors and paid the $100 million fine in exchange for having six charges dismissed, including four felonies. The proposed fine would have been the largest-ever imposed for breaking environmental laws.

Holland's action also throws into question a $1 billion civil damage settlement worked out by Exxon and the state and federal governments. A clause in that agreement permits Exxon to pull out of the deal if its criminal plea bargain was rejected.

Lawyers for Exxon, the Justice Department, and the state of Alaska all said Holland's rejection of the criminal deal jeopardizes the civil settlement. The civil case also is before Holland, but Exxon and the governments have until May 3 to withdraw before that deal goes before the judge.

Holland gave Exxon 30 days to decide what to do next.

Lloyd Miller, a lawyer representing Alaska Aleuts, said Holland's action appeared to acknowledge the view that the spill caused far more damage than the settlement would have held Exxon accountable for. He said he hoped Exxon would not withdraw from the civil settlement, which calls for the company to pay $900 million in damage payments over the next decade and another $100 million if long-term damage is found later.