Landmark Exxon Valdez ruling likely Monday

By Chris Rizo | Jun 21, 2008

WASHINGTON (Legal Newsline)-The U.S. Supreme Court on Monday will likely end the long-running class-action lawsuit over the Exxon Valdez oil spill.

The lawsuit, which has been running for nearly twenty years, centers on a dispute over the $2.5 billion in punitive damages awarded after 11 million gallons of crude oil spilled in March 1989 in Alaska's Prince William Sound after the ship ran aground.

The ruling is expected Monday, the last scheduled day of the U.S. Supreme Court term. But the ruling could come later in the week, court observers say.

Ted Frank, director of the American Enterprise Institute Legal Center, told Legal Newline in an earlier interview the high court could use the case to redefine the role of punitive damages.

Or, the justices could simply rule narrowly on a point of admiralty law, he said.

"It has the potential to be a major case," Frank said. "The court could remove strictures on punitive damages and leave it to the discretion of the lower courts and juries, and if that happens that obviously gives free rein for gigantic punitive damages."

The 32,677 plaintiffs in the case have been waiting for their award since 1994, when an Anchorage jury returned a $5 billion punitive-damages verdict against Exxon Mobil Corp.

In 2006, the 9th U.S. Circuit Court of Appeals in San Francisco reduced the award to $2.5 billion. Exxon then appealed to the U.S. Supreme Court.
The justices heard oral arguments in the case Feb. 27.

Exxon based its appeals on an 1818 court decision that holds that ship owners aren't liable for punitive damages for the actions of their agents at sea unless they're complicit in their behavior.

The Irving, Texas-based oil giant also argues it should not face any punitive damages because the company already has paid out $3.4 billion in fines and penalties, cleanup costs, claims, among other expenses.

From Legal Newsline: Reach reporter Chris Rizo by e-mail at

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