Justice ill served in 'Valdez' case

June 27, 2008

In another important decision delivered this week, the Supreme Court cut the punitive damages imposed on ExxonMobil Corp. for the calamitous Exxon Valdez oil spill 19 years ago by $2 billion, leaving fishermen, native Alaskans and local landowners with just 20 percent of an award previously approved by a federal appeals court.

That disappointing outcome of a case reminiscent of Dickens' Bleak House in its torturous 13-year history threatens to offer more bad news in the future for plaintiffs in cases involving claims of major harm for large classes of victims. The court decided that the punitive damages awarded to 32,677 fishermen and others whose business was disrupted by the spill on Prince William Sound should be limited to an amount matching the $507.5 million in actual damages awarded in the case. Business groups cheered the decision, which is likely to be cited in efforts to limit awards in future cases.

Justice David H. Souter, writing for the majority, said that the original $2.5 billion award introduced a degree of "stark unpredictability" that could render damages unjust. But taking this long to resolve the case resulted in this predictable outcome - one-fifth of those eligible for damages died without receiving compensation. The company has already paid more than $3.4 billion for the cleanup of what was a major ecological and economic disaster with a cost incalculable - except by this court.