U.S. SC won't hear $54 million appeal

Jessica M. Karmasek Dec. 14, 2010, 3:38pm

WASHINGTON (Legal Newsline) - The U.S. Supreme Court on Monday refused to hear an appeal by Shell Oil Company of a Stephens County jury award of $53.6 million -- the largest punitive damages award in Oklahoma history.

The company's appeal, which called the punitives award "unconstitutionally excessive," urged the justices to more firmly establish a rule that punitive damages can seldom exceed the amount of compensatory damage award.

The case involved a dispute over oil and gas leaseholders' rights to share in the profits from exploration in the state. The leaseholders sued Shell for failing to pay them profits they were due from the land.

Shell argued the compensatory award was only $750,708 and the punitive award was 70 times the actual compensatory amount. The compensatory award had been increased to $13.2 million, the company said, because the court included $12.4 million in pre-judgment interest.

The Court did not say why it turned down Shell's appeal.

However, a spokesman for the company told The Oklahoman it will honor the lower court's judgment.

National business groups wanted the verdict overturned.

From Legal Newsline: Reach Jessica Karmasek by e-mail at jessica@legalnewsline.com.

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