JURIST - Paper Chase: Appeals court chops $2 billion off Exxon Valdez punitive damages award

[JURIST] The US Court of Appeals for the Ninth Circuit Friday reduced by $2 billion a 1994 damages award against ExxonMobil corporation in respect of the sinking of the tanker Exxon Valdez, which caused a major Alaska oil spill [Anchorage Daily News archive] when it ran aground [BBC file report] in Prince William Sound in 1989. A three-judge panel held [ruling, PDF] that the original $5 billion punitive damage award against the corporation was excessive in light of a 2003 US Supreme Court ruling on the need for punitive damages to be reasonable and proportionate to the harm incurred and the cleanup and compensation efforts already made by Exxon.

Responding to the ruling late Friday, Exxon noted its objection to even the reduced award, saying in a press statement:

The Valdez oil spill was a tragic accident that ExxonMobil deeply regrets. The company took immediate responsibility for the spill, cleaned it up, and voluntarily compensated those who claimed direct damages.

This case is not about compensating people for damages. The plaintiffs have been compensated for damages and most were compensated within one year of the spill. This ruling is about whether punitive damages are warranted in this case....It is our view that the U.S. Supreme Court needs to provide more definitive guidance to the lower courts on the law governing punitive damages. In our opinion, the facts of this case do not warrant an award of this size.

Reuters has more.

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