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Supreme Court Decreases Damage Award in Exxon Valdez Oil Spill Disaster

By Greg Webb

The Supreme Court has decreased the punitive damage award in the Exxon Valdez disaster from $2.5 billion to $500 million. The Court, however, split on the decision of whether or not punitive damages should be awarded at all, which leaves the appeals court decision ruling Exxon liable. The decision to decrease the damage award could have broader implications for constraining the amount of money a court can order businesses to pay. Plaintiff attorneys, on the other hand, say this decision will apply solely to cases involving maritime law.

Exxon Valdez was the worst oil spill in United States history. This disaster occurred when a supertanker dumped eleven million gallons of crude oil into Alaska 's Prince William Sound , polluting 1,200 miles of coastline and killing hundreds of thousands of animals. In 1994, a jury ordered Exxon to pay $5 billion in punitive damages, though a federal appeals court cut that award in half in 2006. Exxon further asked the Supreme Court to get rid of the punitive damage settlement altogether since the company already paid $3.4 billion to clean the area and compensate Native Alaskans, landowners and commercial fishermen. The Court has since ordered the 33,000 victims who filed a claim against the company to receive $15,000 each. The $15,000, however, does not account for any emotional-distress damages.

Supreme Court Justice David Souter wrote for the court saying punitive damages could not exceed what Exxon had already paid to compensate the victims for their economic losses, $507.5 million. This amount is equal to only four days of the company's profit from last quarter. Souter also stated the Valdez case involves reckless action that was profitless for the company and a penalty should be reasonably predictable in its severity. In a dissenting opinion, however, Justice John Paul Stevens supported $2.5 billion in punitive damages, pointing out that Congress has yet to impose restrictions in such situations. Justice Ruth Bader Ginsberg also dissented, claiming the court was engaging in lawmaking. She claims the decision by the Court should have been left to Congress. http://www.chron.com/disp/story.mpl/ap/tx/5856419.html

Originally posted at InjuryBoard by Greg Webb

Full post as published by Charlottesville Personal Injury Lawyer on July 07, 2008 (boomark / email).