Supreme Court decision could affect Exxon Valdez judgment

Posted: Sunday, April 13, 2003

FAIRBANKS (AP) -- A U.S. Supreme Court decision limiting the size of jury awards in civil cases could affect the $5 billion judgment still pending in the Exxon Valdez oil spill case.

Dave Oesting is an Anchorage attorney representing more than 30,000 commercial fishermen, Natives and other people hoping to someday collect the Exxon award. He said the ruling was worrisome but ultimately might not factor very heavily.

''I'm confident it's not going to make much difference,'' he said.

The Supreme Court last week ruled in a case involving a Utah traffic accident that a state court jury's award of $145 million to punish insurance company State Farm was grossly excessive. The majority in the 6-3 decision found punitive damages should not so vastly exceed the actual damages of only $1 million in the Utah case.

As a guideline, the court held that the ratio of punitive to actual damages should not exceed single digits, thus 9-to-1 or less, far smaller than the 145-to-1 ratio in the Utah case.

The court also held that juries may not award giant sums to punish companies just because they're big, rich or regarded as part of an unsavory industry.

A federal court jury in 1994 awarded $5 billion in punitive damages to fishermen and other plaintiffs injured by the Exxon Valdez oil spill. Since then, lawyers for the plaintiffs and defendant Exxon Mobil Corp. have battled in court, and the matter is now pending again before the 9th U.S. Circuit Court of Appeals in San Francisco.

Exxon has argued the award was far too much, while Oesting has argued the jury's original award should be upheld.

A spokeswoman at Exxon Mobil headquarters in Irving, Texas, declined to comment on possible ramifications of the Supreme Court ruling.

Oesting said he's certain the Supreme Court decision will be weighed by the appellate court and that Exxon Mobil will use the decision to bolster its arguments.

But Oesting said he believes the Utah case is ''very, very different factually'' from the Exxon case, and that could limit the relevance of the Supreme Court decision.

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