Supreme Court drastically cuts punitive damages in Exxon Valdez oil spill case

Mike Lytle, a third-generation fisherman from the coastal village of Cordova, Alaska, said many residents were planning their retirements with the $2.5 billion in punitive damages that Exxon Mobil Corp. was expected to pay the nearly 33,000 victims of the 1989 Exxon Valdez oil spill that dumped 11 million barrels of crude into Prince William Sound.

But the Supreme Court dashed their hopes June 25, deciding in a 5-3 ruling to cut the punitive damages for the disaster to $507.5 million, which translates to an average of $15,000 per victim.

In 1994 a jury decided Exxon should pay $5 billion in punitive damages. In 2006, a federal appeals court cut that verdict in half.

The Supreme Court ruling said that punitive damages may not exceed what the company already paid to compensate victims for economic losses, or $507.5 million.

Exxon said punitive damages would be excessive punishment on top of the $3.4 billion in cleanup costs, compensatory payments and fines it already has paid.

“The Valdez oil spill was a tragic accident and one which the corporation deeply regrets,” the company said in a June 25 statement. “We know this has been a very difficult time for everyone involved. We have worked hard over many years to address the impacts of the spill and to prevent such accidents from happening in our company again.”

Robert J. Kopchak lost a quarter of his earnings when the Pacific herring fishery crashed in the early 1990s. Adding to his family’s burden at the time, he still owed thousands of dollars on two herring permits that are worthless today.

Sylvia Lange, also of Cordova, used to fish commercially but for her the spill was more about the end of Alaska Native traditions and a subsistence lifestyle for several villages in the region. Because of the spill, many Natives were forced to stop harvesting seal, salmon and herring roe and move to urban areas, never to return, she said.

—The Associated Press