ExxonMobil on Monday won the chance to persuade the US Supreme Court that 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 according to the Financial Times.
The US business community had urged the Supreme Court to intervene in the 18-year old legal fight over the Valdez crash, which released 11m gallons of oil into Alaska’s Prince William Sound.
Business groups wanted the court to use the case to issue a broad ruling that large punitive damage awards are unconstitutional.
The justices on Monday refused to go that far, agreeing to a narrower review which would determine whether the Exxon award violated maritime law. However, the case could still have a big impact beyond the world of shipping, legal experts said.
“This is a big deal. Anytime the court takes a punitive damages case, that’s an important thing,” said Robin Conrad, executive vice-president of the National Chamber Litigation Center, the legal arm of the US Chamber of Commerce. “This will affect a lot of companies and not just in the maritime arena.”
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.
Read it here: High Court to hear Exxon’s Valdez case