ANCHORAGE, Oct. 19 -- U.S. District Judge H. Russel Holland today upheld the government's indictment of Exxon and rejected a plea to throw out criminal charges stemming from last year's Exxon Valdez oil spill.
The ruling was welcomed by Justice Department lawyers prosecuting Exxon Corp. and Exxon Shipping Co. for the nation's worst oil-tanker spill. Exxon lawyers said no appeal is planned.
Trial has been set for April 10, more than two years after the tanker left the port of Valdez and ran aground on a marked reef in Prince William Sound, spewing more than 10 million gallons of oil and fouling rich fishing grounds and wildlife habitats.
Exxon faces fines of up to $700 million if convicted of violating the federal Clean Water Act, the Refuse Act, the Migratory Bird Treaty Act, the Ports and Waterways Safety Act and the Dangerous Cargo Act. A federal grand jury indicted the two Exxon companies last February.
Exxon Corp. lawyer Patrick Lynch, in arguing for dismissal, told the judge that the parent corporation was not liable for acts of Exxon Shipping Co., saying, "The buck stops with the subsidiary corporation."
Assistant Attorney General George Van Cleve replied that, when Exxon Corp. transformed its shipping division into a separate corporation to save tax money, nothing changed except the company letterhead. As long as shipping remained a division of Exxon, the corporation remains liable, he contended.
Exxon lawyers also were thwarted in arguing that the accidental killing of thousands of sea birds by crude oil was not a violation of the Migratory Bird law.
Additionally, Exxon failed to distance itself from nearly a decade of alcohol problems experienced by Joseph J. Hazelwood, the tanker's fired captain. A state criminal case against Hazelwood ended with a conviction for negligence but acquittal on charges of recklessness and operating the tanker while intoxicated.