U.S Supreme Court Hears Petition to Reduce Exxon Valdez Punitive Damages

By Aaron Poehler

Published on March 20, 2008

The $2.5 billion punitive award – intended for Alaskan fishermen, seafood processors, and other residents and businesses financially affected by the spill – was designed to punish the company for its wrongdoing and deter similar future actions. Representatives for Exxon Mobil argue that because federal maritime law has no provisions for or established tradition of punitive damages, the amount of the award is excessive and should be cut or eliminated.

The punitive amount was originally set at $5 billion in 1994 and has been tied up in appeals ever since. The award was reduced by half in 2006 after Exxon Mobil appealed the decision to the Ninth Circuit Court of Appeals. After the court refused to reduce the award further, the case was appealed to the Supreme Court.

In 2007 Exxon Mobil posted a record-high annual profit of $40.6 billion, while over 6000 of the original plaintiffs in the 1994 case have since died.

Justice Samuel Alito declined to participate in the case. Alito’s financial disclosure report for 2007 indicated that he owned Exxon stock.

A ruling in the case in expected in June or July of this year.

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