By Arthur Hirsch, The Baltimore Sun
8:37 PM EDT, June 28, 2011
ExxonMobil Corp. has lost its bid to avoid paying punitive damages in a case stemming from an underground gasoline leak in northern Baltimore County in 2006, but how much the international company will have to pay remains to be seen as the case continues in Circuit Court on Wednesday.
A six-member civil jury retired for the day Tuesday after returning a sealed judgment intended to compensate families and businesses for damages — plaintiffs had claimed lost property values, medical monitoring and emotional stress. The jury also took an unusual step in agreeing to hear arguments on how much of a financial hit ExxonMobil should take as punishment.
ExxonMobil had hoped to pay only compensatory damages to about 150 families in the community of Jacksonsville, where homes and businesses depend on private wells for their drinking water. The company argued during the six-month trial that it had taken responsibility for the 26,000-gallon leak of unleaded gasoline and had worked to clean it up.
The plaintiffs' lawyer, Charles G. Bernstein, yesterday asked the jury to award "three to five times" as much as their compensatory judgment for punitive damages. He said the purpose of the punitive award was to "express the outrage of the community" about the company's "leak and lie" approach, to make ExxonMobil a "good citizen" and to "deter them so no one else goes through this again."
In a previous trial stemming from the same gasoline leak, a jury in 2009 awarded a smaller group of plaintiffs $150 million in compensatory damages. That award is now being challenged by ExxonMobil in the Maryland Court of Special Appeals. No cases of physical illness from exposure to contaminated water have been reported in Jacksonville.
Circuit Court Judge Robert N. Dugan told jury members on Tuesday that in deciding damages meant to punish ExxonMobil, they should consider whether they found the company's actions "morally reprehensible" or "despicable, flagrant or willful" and weigh if the actions went on over a period of time and if the company has shown "remorse." He said the company's wealth could be considered, but he said punitive damages were not meant to "bankrupt or financially destroy the defendant."
ExxonMobil's lawyer, James F. Sanders, told the jury "I respectfully disagree" with their decision to consider punitive damages, but "you have spoken, we have heard you, and it hurts." As he has before during the trial, Sanders said "we are sorry for the leak, we are sorry for the damage we have caused."
He argued that ExxonMobil has already spent more than $46 million to clean up the leak and has been fined $4 million by the Maryland Department of the Environment. He said the cleanup "will be completed no matter what. ExxonMobil will clean up the mess that it made here."
Represented by the Peter G. Angelos law firm, the plaintiffs have argued that the company tried to mislead the public about the extent of the damage, misled the county about the safety of the underground tanks and knew about the leak days before the public was told. Their lawyers have pointed to a sign that ExxonMobil put up at the station and soon took down days after the leak was discovered saying that the station was closed for repairs, but making no reference to the gasoline leak.
"Since 1979 they have leaked and lied," said Bernstein, referring to earlier leaks that took place at another Exxon station that no longer exists in Jacksonville, just south of the current location at the intersection of Jarrettsville Pike and Paper Mill and Sweet Air roads. He referred to a bill from a well inspection contractor that he said indicated ExxonMobil knew about the spill on Feb. 14, although the Maryland Department of the Environment was not told until Feb. 17, and the public was not informed until a community meeting on Feb. 21.
He argued that ExxonMobil refused to deliver bottled water to homes beyond a certain distance from the gas station as part of its strategy to claim the damage was more limited than it was.
"This was all part of a big lie," said Bernstein. "An ethical company doesn't do that. That is reprehensible and warrants punitive damages."
The bar for winning punitive damages is high in Maryland, said Robert L. Hanley Jr., a Towson lawyer who handled cases against Exxon in connection with underground tank leaks in Jacksonville in 1979 and 1980, and is preparing a case in connection with leaks in Harford County.
"Maryland has a very strict standard," Hanley said. In the 1980s, he said the standard changed from "gross negligence" to showing "actual malice" or "fraud."
He said he could not think of a recent Maryland case in which punitive damages were awarded.
Sanders challenged Bernstein's claim that the contractor's bill was evidence ExxonMobil knew about the leak on Feb. 14. He urged the jury to consider that whatever ExxonMobil's wealth, the damage award would ultimately be paid by shareholders in the public company, who could be any member of the community.
Bernstein showed the jury copies of forms ExxonMobil filed with the U.S. Securities and Exchange Commission reporting $10 billion in profit for the first quarter of 2011, and a total net worth of $158 billion.
"Exxon can pay any amount that you think is just," Bernstein told the jury. "You've got to send them a message."
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