Supreme Court Slashes Exxon Damages Verdict!

On Wednesday the U.S. Supreme Court, by a 5-3 vote, slashed a punitive punishments award against Exxon Mobil from two and a half billion dollars to about 500 million dollars. It is no surprise that this decision was applauded by business and decried by Alaskans and environmentalists.

This means that victims of the spill who filed a claim may expect to collect an average of $15, 000 each. Under the 2.5 billion dollar judgement they would have collected an average of $75,000 each.

Osa Schultz of Cordova, Alaska, said she was “pretty disappointed” with the amount of the settlement. “On the other hand, I’m relieved they slapped Exxon in the face,” Schultz said, adding that a $15,000 award wouldn’t even begin to cover the losses to her and her husband’s gillnet fishing business.

Justice David Souter wrote for the court that punitive damages may not exceed what the company already paid to compensate victims for economic losses, $507.5 million, an amount equal to about four days worth of Exxon Mobil Corp.’s profits last quarter.

In an opinion dissenting from the Souter decision, Justice John Paul Stevens endorsed the $2.5 billion figure for punitive damages, pointing out that Congress has chosen not to impose restrictions in such circumstances.

Justice Ruth Bader Ginsburg also dissented, saying the court was engaging in “lawmaking” by concluding that punitive damages may not exceed what the company already paid to compensate victims for economic losses.

Exxon has been fighting to reduce or erase the punitive damages verdict by an Alaskan jury, a verdict reached because of the crash of the Exxon Valdez super tanker in 1989. That crash dumped eleven million gallons of oil into Prince William Sound fouling 1200 miles of coastline and leading to the deaths of hundreds of thousands of seabirds and other marine animals.