Justinian C. Lane, Esq.
Let Justice Be Done, Though the Heavens May Fall
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Justinian's Blog

ExxonMobil Hit With 6.5 Billion in Punitive Damages

I got another alert today from Ross, Dixon, & Bell regarding some legal news. Here's the excerpt:

ExxonMobil Corp. "was intentionally malicious" in connection with the 1989 Exxon
Valdez oil spill and must pay $6.75 billion in punitive damages, a federal district
court judge has concluded in Alaska. In re the Exxon Valdez, 2004 WL 170354, D.
Alaska (decided 1/28/04). Last year, the court awarded $4 billion in punitives
against ExxonMobil. The Ninth Circuit vacated the $4 billion award and remanded the
case to the trial court for reconsideration in light of the U.S. Supreme Court's
punitive damages analysis in State Farm v. Campbell. On remand, the district court
increased the punitive damage award from $4 billion to $4.5 billion plus $2.25
billion in interest (for a total of $6.75 billion), finding that ExxonMobil's
conduct "was many degrees of magnitude more egregious" than the plaintiff in the
State Farm litigation. ExxonMobil apparently will appeal the court's punitive
damages award.

It's not often that a case is remanded to a trial court and the verdict is increased. The State Farm v. Campbell case mentioned in the excerpt held that only in rare circumstances should punitive damages be more than a single digit multiple of compensatory damages. I disagree with Campbell, because single-digit multiples don't discourage multibillion-dollar corporations from engaging in conduct that nets them many millions of dollars in profit.

I'm curious as to just how badly ExxonMobil behaved to warrant such a large award of punitive damages.

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