Supreme Court Cuts Exxon Oil Spill Penalty
Ruling finds the $2.5 billion damages award is excessive
The Supreme Court held today that a $2.5 billion punitive damages award against Exxon was far too high. In a 5-to-3 decision (in which Justice Samuel Alito was recused), the court held that the jury award in the 1989 Exxon Valdez tanker spill—the world's worst—far exceeded the average ratio between compensatory and punitive damages.
The court's problem was that occasional large jury awards create an unpredictability that is at odds with the desire for fairness and consistency in the court system. Based on the median payouts in punitive damages for maritime cases, the court held that the ratio of punitive damages should not be greater than 1:1.
For Exxon, that means punitive damages can be no more than $507.5 million, the amount a district court held for compensatory damages. The Supreme Court has remanded the case to the lower courts for a final decision.
This sum comes on top of billions Exxon has already paid. The company spent roughly $2.1 billion on cleanup efforts, settled a civil action for at least $900 million, and paid an additional $303 million to private parties. In addition, Exxon pleaded guilty to criminal violations.
—Emma Schwartz
Reader Comments
Some corporations are accidents waiting to happen
In response to "Accidents will Happen" JPaul of MA
If there were no sanctions in place most large corporations wouldn't be responsible for their actions. In many third world countries corporate waste is dumped into the water system. By your standard this can be called an accident and forgotten. They must be responsible and held responsible if otherwise. That is the reality
Accidents will happen
Corporations are neither good nor evil, just instruments of human endeavor in a capitalistic system. Reparations and penalties need to be fair. They are not entitlements. They are not assurances of perfection. They cannot erase the past.
(Those who would crucify Exxon or other corporations for their 'evil' ways should seriously consider moving abroad to a non-industrialized third-world country, if that is truly what they prefer, rather than trying to gradually make the United States into a third world country. The ability for corporations to operate and to profit is the lifeblood of our economy and our way of life. We must educate our children in reality.)
Impeach the Supreme Court
This is what happens when the court gets stacked with right-wing big-business types. They have way too much power and are wreaking havoc on our society. In this case they are writing the law instead of judging it. The Bush appointees should be removed.
The states and congress should also take steps to improve Exxon's conscience by removing their rights to drill and transport oil and giving those rights to a company that will take their responsibilities more seriously.
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