Supreme Court Reviews $2.5 Billion Punitive Damage Award Against Exxon

by Hans Bader on October 31, 2007 · 2 comments

Jacob Sullum’s syndicated column describes Exxon Shipping Co. v. Baker, in which the Supreme Court will decide whether federal maritime law permits punitive damages against Exxon, and if so, whether the $2.5 billion in punitive damages it was ordered to pay for an oil spill was excessive.

Sullum notes that the punitive damages work out to $23,000 for each barrel of oil spilled, and that Exxon has “spent more than $3.4 billion on clean-up costs, fines, and compensation payments,” quite apart from the punitive damages awarded against it. Moreover, even the appeals court that set the punitive damages admitted “that Exxon acted quickly to mitigate and repair” the effects of the oil spill.

Yet, ironically, this excessive damage award is cited by trial lawyers (and commenters at liberal blogs such as DailyKos) as an example of a big company getting off too lightly (since the appeals court reduced the punitive damage award from the $5 billion awarded by the trial court to $2.5 billion, which is still an astronomical sum). They won’t be satisfied until unguided juries are permitted to redistribute the entire gross national product.

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