Exxon Mobile Court Orders Only Fraction of Damages

Federal Appeals Court Waters Down Exxon Valdez Oil Spill Damages 10 to 1

The Ninth U.S. Circuit Court of Appeals ordered Exxon Mobil Corp to pay litigants just over $500 million (plus interest), only a fraction of the original punitive damages stemming from Exxon Valdez disaster.

The Exxon Valdez, three days after the vessel ran aground on Bligh Reef. Photo: NOAA

A jury in 1996 had awarded total punitive damages of $5billion to  Alaska natives, business owners and other litigants against the 1989 Exxon Valdez massive oil spill off Alaska.

“The opinion issued on Monday by the Ninth U.S. Circuit Court of Appeals set the punitive damages figure, and determined the date from which the interest would run, after the U.S. Supreme Court ruled that the maximum ratio of punitive to compensatory damages is 1:1 under maritime law.” Reuters reported.

A few days after the vessel grounded, a storm pushed large volumes of  oil onto the rocky shores and beaches of Prince William Sound, Alaska. Pooled oil from the Exxon Valdez sits between rocks on the shore. Photo: NOAA

To add insult to injury, the court decided each party should bear its own attorney fees and court costs. This means the lions’ share of the money would go to the lawyers.

Grounded.  Photo courtesy of the Exxon Valdez Oil Spill Trustee Council. Exxon Valdez oil supertanker struck Bligh Reef in Prince William Sound (March 24, 1989), spilling an estimated 11 million gallons of crude oil in what was the largest environmental disasters in the US history. Only about a quarter of 26 monitored species have recovered to pre-spill numbers.

Interestingly the order regarding costs was a split decision by the judges. They want the litigants believe that there is at least  minority of judges which are more understanding.

The Exxon Valdez supertanker disaster, which contaminated about 1,250 miles of Alaska’s coastline, is considered the worst oil spill in the US history, with a clean-up price tag of about $2.5 billion.

Exxon Valdez Oil Spill Area.  Image Source: Ecotrust

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