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Supreme Court hears Exxon Valdez punitive damages case

[JURIST] The US Supreme Court [official website; JURIST news archive] Wednesday heard oral arguments [transcript, PDF] in Exxon Shipping Co. v. Baker [SCOTUSblog backgrounder; merit briefs] 07-219, where the Court considered the punitive damages to be paid by Exxon Mobil [corporate website] for the 1989 Exxon Valdez oil spill [EPA backgrounder]. Several justices indicated they may be willing to reduce the punitive damages award, which is larger than the total of all punitive damages awards affirmed by all federal appellate courts in US history. Exxon Mobil and its shipping subsidiary have been ordered to pay $2.5 billion in punitive damages for the spill of 11 million gallons of crude oil in Prince William Sound, Alaska. Justices Anthony Kennedy and David Souter suggested a more reasonable award may be equal to twice the compensatory damages awarded. A final decision, with Justice Samuel Alito abstaining because he owns Exxon stock, is expected later in the spring.

In December 2006, the US Court of Appeals for the Ninth Circuit reduced [JURIST report] Exxon's original $5 billion punitive damage award by over $2 billion, ruling [PDF, text] that the award was excessive in light of a 2003 US Supreme Court ruling on the need for punitive damages to be reasonable and proportionate to the harm incurred and the cleanup and compensation efforts already made by Exxon. When the Court granted certiorari [JURIST report] in October, it agreed to consider three questions presented [PDF text] by the appeal, but declined to hear a claim that the verdict was excessive under the Constitution's Due Process Clause [text] and a cross appeal to reinstate the initial $5 billion damages award. AP has more.

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