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February 27, 2008

Exxon Valdez Case at the Supreme Court

Tomorrow (Wednesday), the Supreme Court will consider the Exxon Valdez oil spill, almost 19 years after the event. The issue is punitive damages under maritime law, a somewhat specialized area of study.

ExxonMobil [which was just Exxon in those days, and later SeaRiver Maritime] afterwards spent some 2.1 billion dollars cleaning up the polluted coastline and more than 300 million in compensation for fishermen and locals affected by the catastrophe.

The company also paid out more than 900 million dollars of fines in a bid to halt criminal proceedings begun against it by the US government and the state of Alaska.

But in 1994, a jury in a civil Alaskan lawsuit ordered the Texas-based firm to pay five billion dollars in damages to some 34,000 fishermen and others whose livelihoods were decimated in Prince William Sound.

The oil giant has fought that verdict ever since and in 2006, a federal court cut the punitive damages to 2.5 billion saying the amount was more in line with legal precedent.

It should be noted that, as of August 2007 and up to today as far as I know, $2.5 billion is larger than the total of all punitive damages affirmed by federal appellate courts in American history. On the other hand, the Valdez spill was also the largest in U.S. history, so I suppose there is some symmetry there. However, this is not about the compensatory award (which Exxon has already paid), but about punishment.

I bring it up only because the Court has extended oral arguments to 90 minutes from the usual 60, and Justice Alito has recused himself because he owns ExxonMobil stock. Also, I have a family connection to the spill--it provided an endless source of oil spill- and petroleum shipping-related science projects throughout junior high and high school--which causes me to perk up when I hear Exxon or the Valdez mentioned.


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posted by Gabriel Malor at 02:29 AM

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