Appeals court rules in Exxon’s favor

by The Associated Press

A 9th Circuit Court of Appeals panel ruled on Nov.7 that the $5 billion in punitive damages awarded by an Anchorage jury against Exxon Mobil was excessive. The panel ordered a lower court to reduce that amount.

A federal jury in Anchorage ordered Exxon to pay $5 billion in 1994 to thousands of commercial fisherman, Alaska Natives, property owners and others harmed by the 11 million-gallon oil spill.

In its ruling Nov. 7, the Court of Appeals in San Francisco said some damages were justified to punish the company for its harmful behavior, but that $5 billion was excessive. The appeals court said that for every dollar in compensatory damages, the jury awarded more than $17 in punitive damages — a ratio that would not get by the U.S. Supreme Court.

The appeals court noted the high court in 1991 ruled that a 4-to-1 ratio was “close to the line” between a constitutionally acceptable and unacceptable jury verdict.

The state was not part of the lawsuit but reached a negotiated agreement with the federal government and Exxon in 1991. Gov. Tony Knowles said Nov. 7 that he will attempt to bring the two sides to a negotiated settlement, saying the case has dragged on too long.