Court Puts Exxon Valdez Damages at $4 Billion

Reuters | December 7, 2002

[HAL9000]

Friday December 6, 9:55 pm ET

IRVING, Texas (Reuters) - Exxon Mobil Corp., the world's biggest publicly traded oil company, said on Friday a federal court in Alaska has decided it should pay $4 billion in punitive damages for the Exxon Valdez oil spill.

Exxon Mobil, which argues that it should pay no more than $40 million for the 1989 tanker accident, said it planned to appeal the order.

The decision was handed down by the federal court in Anchorage and reduced to $4 billion from $5 billion the amount of punitive damages awarded last year in connection with the disaster.

The Exxon Valdez supertanker spilled 11 million gallons of crude oil when it ran aground on a charted reef in Alaska's Prince William Sound. It was the worst spill from a tanker in U.S. waters and polluted more than 1,200 miles of shoreline.

The court ruling represents a substantial victory for the plaintiffs -- including thousands of fishermen, Alaska Natives, property owners, other individuals and municipalities -- who have pushed for a punitive verdict of at least $4 billion.

"This ruling flies in the face of the guidelines set by the appeals court ... It requires us once again to appeal... ", said ExxonMobil's general counsel, Charles Matthews, in a statement.

The Ninth Circuit Court of Appeals last year declared the $5 billion punitive damages award "excessive" and sent the case back to the Anchorage District Court with orders to reduce the amount, Exxon Mobil noted.

Exxon Mobil has argued in court motions filed earlier this year the Valdez case lacks the "aggravating factors," such as malicious actions or violence, that would justify a large punitive award.

[July 4th]

a federal court in Alaska has decided it should pay $4 billion in punitive damages for the Exxon Valdez oil spill.

Something the courts have wrestled over in this case is 'what's the meaning of punitive damages?'

Sure, $4 billion is a big punishment. But the question is, has Exxon had punishment enough? They've already paid billions for cleanup. It's just that plaintiffs haven't seen a dime yet.

[Maedhros]

This is the Ninth Circus, but Standard Oil should be forced to pay up.

[Winston Smith]

Exxon Valdez, the gift that just keeps on giving. How many lawyers will retire off this one.
Give me a break, is the oil all gone or what!

[Brad C.]

No, the oil is not all gone. It will be with us for a very long time.

[TheConservator]

Punitive damages are completely illogical. They should be eliminated from the law, or capped at a reasonable figure (Say $50,000.00 per plaintiff).

Instead, where plaintiffs bring a lawsuit that a Court finds has merit and impact beyond the immediate plaintiff, the Court should be entitled to award the plaintiff reasonable attorneys fees.

Washington State has never allowed plaintiffs to recover punitive damages, period. We get along just fine.

[Brad C.]

I didn't intend to argue one way or another on the punitive damages, I was just commenting that the oil is still in Prince William Sound, and will be for some time.

That said, I have a very liberal brother who commercial fishes in the Sound, and the spill has had a dramatic impact on his livelyhood. He had just got his commercial permit and boat a couple of years before the spill and was doing well.

When the spill happened, he and just about every one else with a boat were hired to help with the clean-up, and they were paid an exceptional amount of money to do it. By my estimates, it enabled him to pay off the loan for both the boat and permit (approx. $250K) and then Exxon came back and repaired any and all damage to the boat and related equipment. Looked to me like he had done really well for himself, but he continues to complain to this day.

The reason for that is the fish stocks have fallen off, the market price is no where near where it used to be (fish farming plays a big role in that), and there is little or no market should he decide to sell his boat and permit. The spill all but destroyed fishing in the sound.

You mention a $50K cap on punitive damages, but that figure is about a third of what he was making annually prior to the spill, yet it is more than what he is making now. If you were in his situation, would you think $50k was sufficient or even reasonable?