Federal court voids $5 billion award against Exxon for Valdez spill

By the OGJ Online Staff

HOUSTON, Nov. 7 -- The Ninth Circuit Federal Court of Appeals, San Francisco, Wednesday voided a $5 billion punitive damage award against ExxonMobil Corp. for the 1989 Exxon Valdez oil spill.

The court said the amount was too high in light of recent US Supreme Court decisions governing such awards.

The three-judge panel remanded the case to Anchorage, Alas., Federal District Court with orders to reduce the award to an amount consistent with constitutional limits.

In a 1994 jury trial, Exxon was required to pay $287 million in compensatory damages to Alaska fishermen, commercial interests, and property owners plus $5 billion in punitive damages for allowing the accident to occur.

ExxonMobil Corp. Chairman Lee Raymond said Wednesday that the oil spill was a tragic accident that the company regrets. But he noted the company took immediate responsibility for the spill, cleaned it, and voluntarily compensated those who claimed direct damages.

ExxonMobil spent $2.2 billion on the spill cleanup, continuing the effort from 1989 until 1992. It said that more than 11,000 persons and businesses received more than $300 million in compensation.

It said the Anchorage jury determined in 1994 that actual damages totaled $287 million and rejected the plaintiffs' claims for additional compensatory damages.