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McKenna laments Exxon ruling

By John O'Brien | Jun 25, 2008


OLYMPIA, Wash. (Legal Newsline) - The e-mail campaign undertaken by Washington Attorney General Rob McKenna and his colleague in Maryland, Doug Gansler, proved relatively fruitless Wednesday when the U.S. Supreme Court trimmed a $2.5 billion punitive damages award against Exxon.

The two had rounded up support from other attorneys general in filing an amicus brief in the case, sending an e-mail message that persuaded 32 other attorneys general to join their cause. The class action case stemmed from the 1989 oil spill caused when the Exxon Valdez crashed off the coast of Alaska.

Wednesday, the U.S. Justices voted 5-3 that the award was excessive and told Exxon that it should have to pay no more than $507 million in punitive damages.

"We are pleased the court upheld an award of punitive damages, since Exxon had argued that no punitive damages can be awarded in a maritime case under federal law, no matter how egregious the circumstances," McKenna said.

"We are disappointed, however, that the Court did not award the full punitive damages authorized by the Court of Appeals. The reduced award is brutally disappointing for the Washington and Alaska fishermen and their families who were counting on this money to help make them whole."

Associate Justice David Souter wrote that the punitive damages award should be brought into line with compensatory damages awarded earlier in the case.

"The award here should be limited to an amount equal to compensatory damages," Souter wrote.

He said, "A 1:1 ratio, which is above the median award, is a fair upper limit in such maritime cases."

McKenna's brief did not address Exxon's argument that the judgment was excessive. Instead, it argued that the approach to punitive damages in maritime cases should follow the standards that 48 states use and that the Clean Water Act does not prohibit punitive damages from being awarded.

"The Amici states have vital interests in the substantive rule of tort law that this Court will adopt to govern corporate liability for punitive damages in maritime law," the brief says.

"Exxon's assertion that the availability of punitive damages in maritime law implicates no issues of federalism or state sovereignty... pays little heed to the states' strong interest in deterring misconduct that could result in massive toxic spills, with potentially catastrophic effects to our coastlines, lakes and rivers, and the economies that depend on those waters."

When Gansler took office last year, one of his stated goals was cleaning up the Chesapeake Bay. Nineteen of the states that signed into his brief have coastal shorelines.

"In many instances, a region's culture, and the lives and livelihoods of its people, depend almost entirely on the health of our territorial waters, our coastlines, and our rivers and lakes," the brief says.

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. for one of the worst environmental disasters in American history.

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.

Other states that signed McKenna's and Gansler's brief were: Arkansas, California, Connecticut, Delaware, Georgia, Hawaii, Idaho, Illinois, Iowa, Kentucky, Louisiana, Maine, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oregon, Rhode Island, South Carolina, South Dakota, Tennessee, Utah and West Virginia.

From Legal Newsline: Reach John O'Brien by e-mail at john@legalnewsline.com.

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