Carly Kruse

September 9, 2007

On August 20, 2007, Exxon petitioned the U.S. Supreme Court to review the Ninth Circuit's decision that required Exxon to pay $2.5 billion in punitive damages for causing the 1989 Exxon Valdez oil spill. Although the Ninth Circuit already reduced Exxon's punitive damages from $5 billion in 2002 and 2006, the $2.5 billion punitive damage award is still the largest in the history of maritime law.

The Exxon Valdez ran aground on March 24, 1989, and spilled over eleven million gallons of oil into Alaska's Prince William Sound. In this line of Exxon Valdez litigation beginning in 1994, a jury originally awarded $5 billion in punitive damages to fisherman and others who suffered economic loss due to the oil spill. The Ninth Circuit found the $5 billion award excessive, given Exxon's independent efforts to clean-up the oil spill and compensate for the spill's damage. On remand, the district court lowered the amount to $4 billion. However, the court increased the award to $4.5 billion when the Ninth Circuit sua sponte remanded the case in light of recent Supreme Court litigation in State Farm v. Campbell, 538 U.S. 408 (2003). The district court interpreted State Farm to allow punitive damages of up to nine times the total harm. The Ninth Circuit then reduced the award to five times the total harm, or $2.5 billion, finding that Exxon's "tort fell within the "mid range" of reprehensibility." The Ninth Circuit declined to review its decision on May 24, 2007. Exxon's appeal to the Supreme Court marks its last attempt to reduce or eliminate the punitive damages in this case.

Exxon argues that maritime law and the Clean Water Act do not allow for punitive damages. Exxon further argues that if punitive damages are allowed, the excessive award violates both maritime law precedent and due process.

Almost twenty years later, Alaska's environment is still damaged from the Exxon Valdez oil spill. Unsure about Alaska's ability to restore Exxon Valdez waters within a "reasonable time," the EPA is currently reviewing Alaska's decision not to list such waters as "impaired" in accordance with § 303(d) of the Clean Water Act as of June 13, 2007. Also, the Prince William Sound Regional Citizens' Advisory Council is now calling for the ban of dispersants to dissolve the oil. These dispersants work best with wave action, but the technique could cause chemically-treated oil to resurface when wave action stalls.

Sources:

Petition for Writ of Certiorari, In re Exxon Valdez, No. 07-219 (9th Cir. Aug. 20, 2007), available at http://www.adn.com/statute/includes/news/exxonpetition.pdf.

Elizabeth Bluemink, Exxon Takes Spill Appeal to the Supreme Court, Anchorage Daily News, Aug. 22, 2007, available at http://www.adn.com/news/environment/story/9241256p-9156734c.html.

Felicity Barringer, Appeal Panel Cuts Award in Valdez Spill by Exxon, N.Y. Times, Dec. 23, 2006, at A17.

Press Release, Environmental Protection Agency, EPA Approves Addition of Kenai River to Alaska's List of Impaired Waters, Places Exxon Valdez Waters Decision on Hold (June 13, 2007), available at http://yosemite.epa.gov/opa/admpress.nsf/a883dc3da7094f97852572a00065d7d8/f8b3886533a6392b852572f90069cfdf!OpenDocument.

News Release, Prince William Sound Regional Citizens' Advisory Council, Citizens' Group Calls for Dispersants Ban in Prince William Sound (May 4, 2006), available at http://www.pwsrcac.org/newsroom/060504-2.html.