Supreme Court decision could affect Exxon Valdez judgment

Posted: Monday, April 14, 2003

FAIRBANKS, Alaska (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.

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.

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 before the 9th U.S. Circuit Court of Appeals in San Francisco.

Exxon has argued the award was far too much, while Dave Oesting, an Anchorage attorney representing more than 30,000 commercial fishermen, Natives and other people has argued the jury's original award should be upheld.

While calling the ruling worrisome, Oesting said, I'm confident it's not going to make much difference.''

A spokeswoman at Exxon Mobil headquarters in Irving, Texas, declined to comment.

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 even though he believes the Utah case is very, very different factually.''

Exxon Mobil has argued that the punitive damages should be $25 million the amount of the fine the government imposed for the spill, the worst in the nation's history.

The spill happened in 1989, when the 987-foot oil tanker ran aground on a reef, spilling nearly 11 million gallons of crude oil into Prince William Sound, smearing black goo across roughly 1,500 miles of coastline.

Exxon Mobil has maintained that the sound has fully recovered since then.

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