Exxon in court plea on oil spill damages

  • 27/02/2008

  • Financial Times (London)

ExxonMobil yesterday tried to persuade the US Supreme Court it should not have to pay $2.5bn in punitive damages to victims of the 1989 Exxon Valdez oil spill, the largest such award in US history. The justices are being asked to bring closure to the lengthy legal dispute. The US business community is hoping that they will use the case, which involves a tanker crash that released 11m gallons of oil into Alaska's Prince William Sound, to discourage large punitive damage awards. But unlike previous similar punitive damage cases before the Supreme Court, this one does not ask whether such damages violate the US constitution. The issue is whether the award violates federal maritime law, a set of principles governing the rights and duties of commercial vessels. ExxonMobil says it should not have to pay punitive damages at all, since Congress laid out criminal and civil penalties for oil spills. A jury in 1994 awarded $5bn in punitive damages against Exxon for the Valdez wreck, which was blamed on the ship's captain who was absent from the bridge. The victims alleged that Exxon ignored repeated warnings that the captain had a drinking problem and presented evidence that he was drunk on the night of the accident. A federal appeals court cut the award to $2.5bn (