Court: Exxon Valdez award too high
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SAN FRANCISCO, Nov. 7 (UPI) -- A record $5 billion punitive damage award stemming from the devastating 1989 Exxon Valdez oil spill was ordered reduced Wednesday by an appeals court that ruled the original award was out of line with Supreme Court guidelines and improperly included compensation for environmental damage.
The 9th Circuit Court of Appeals ruled that while punitive damages were justified in the complex case, the $5 billion award strayed outside the bounds of the case, which had been to compensate commercial fishermen for their economic losses caused by the spill.
"The panel noted that the jury was instructed that its damage award could not include environmental harm," the court said in a statement. "The panel agreed with the district court that as a matter of law punitive damages could be awarded in this case but, following recent Supreme Court law, remanded to the district court to reduce the punitive damage award."
The court also agreed with Exxon's arguments that the punitive damages did not take into account a Supreme Court ruling establishing guidelines that punitive damage awards should run around four times the compensatory damages; the Exxon Valdez award was more than 17 to 1 compared to the compensatory damages.
ExxonMobil Chairman Lee Raymond said in a statement from the company's Texas headquarters that the Exxon Valdez oil spill was "a tragic accident that the company deeply regrets."
He added, "The company took immediate responsibility for the spill, cleaned it up, and voluntarily compensated those who claimed direct damages."
The oil company said it had spent $2.2 billion cleaning up the spill and had paid compensation to more than 11,000 people and businesses.
The appellate court said Exxon's actions at the time, coupled with the fact that the grounding of the tanker and subsequent spill of some 11 million gallons of crude was an accident, were in the company's favor.
"There was no violence, no intentional spilling of oil (as in a 'midnight dumping' case), and no executive trickery to hide or facilitate the spill," the opinion said. "Although the huge oil spill obviously caused harm beyond the 'purely economic,' the punitive damages award was expressly limited by the instructions to exclude environmental harm." |
