Exxon Mobil Corporation (ticker: XOM, exchange: New York Stock Exchange (.N))
News Release -
ExxonMobil Confirms Valdez Punitive Damages Award
IRVING, Texas, Jan 28, 2004 (BUSINESS WIRE) -- Exxon Mobil
Corporation (NYSE:XOM) today confirmed a decision by the federal court
in Anchorage that revised punitive damages awarded in the 1989 Exxon
Valdez accident from $4 billion to $4.5 billion plus interest.
"The Ninth Circuit Court of Appeals has twice vacated Judge
Holland's decisions in this matter. This is exactly why ExxonMobil
argued before the Ninth Circuit last year that the case should not be
remanded to Judge Holland. We said it would result in further serious
delays and would be sending the case back to a court that has already
made numerous mistakes with regard to the punitive damages issue,"
said Charles Matthews, vice president and general counsel of Exxon
The Anchorage federal court last year reduced the punitive damages
award from $5 billion to $4 billion, after the Ninth Circuit vacated
the original $5 billion award, calling it "excessive." Both the
plaintiffs and ExxonMobil appealed that decision to the Ninth Circuit.
The Ninth Circuit panel then vacated the District Court's $4 billion
award and sent the case back for the District Court to reconsider its
decision in light of the recent Supreme Court decision in Campbell v.
The Ninth Circuit Court of Appeals had previously found that none
of the "aggravating factors" identified by the Supreme Court as
justifying a large punitive damages award were present in the Valdez
case. Those factors include violence, intentional spilling of oil, and
trickery to hide or facilitate the spill. In fact, the trial court
noted in its ruling that "immediately after the spill Exxon stepped
forward with both its people and its pocketbook and did what had to be
done under difficult circumstances."
"This ruling flies in the face of the guidelines set by the
appeals court when they sent this case back to Judge Holland. It will,
unfortunately, require us once again to appeal an order that is
entirely inconsistent with the law already established by the Ninth
Circuit, as well as principles set forth by the Supreme Court,"
Under State Farm, punitive damages would arguably be limited to a
1:1 ratio with compensatory damages. In addition, the Ninth Circuit
has ruled that voluntary payments should not be included in any
punitive damage calculation. Because ExxonMobil responded immediately
and voluntarily with $3.2 billion in compensatory payments, cleanup
payments, and settlements, it has only had to pay $25 million in
court-ordered or non-voluntary compensatory damages.
The largest punitive damages award approved on appeal by any
federal court is $58.5 million in United International, followed by
Rhone-Poulenc at $50 million. Both were for intentional fraud.
The Valdez oil spill was a tragic accident that the company deeply
regrets. The company took immediate responsibility for the spill,
cleaned it up, and voluntarily compensated those who claimed direct
ExxonMobil paid $300 million immediately and voluntarily to more
than 11,000 Alaskans and businesses affected by the Valdez spill. In
addition, the company paid $2.2 billion on the cleanup of Prince
William Sound, staying with the cleanup from 1989 to 1992, when the
State of Alaska and the U.S. Coast Guard declared the cleanup
complete. ExxonMobil also has paid $1 billion in settlements with the
state and federal governments. That money is being used for
environmental studies and conservation programs for Prince William
SOURCE: Exxon Mobil Corporation
Tom Cirigliano, 972-444-1109
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