Supreme Court Slashes Damages for Exxon Valdez Spill

The Exxon Valdez tanker ran aground in Prince William Sound in 1989, devastating thousands of miles of coastline. No one disputes that the accident was Exxon's fault. The question is how much the company should pay to compensate the people of the region for the massive environmental damage Exxon caused.

A jury thought that Exxon should pay $5 billion to make the region whole again, that figure was cut by a federal appeals judge, and again, yesterday by the Supreme Court:

WASHINGTON (AP) -- The Supreme Court on Wednesday cut the $2.5 billion punitive damages award in the 1989 Exxon Valdez disaster to $500 million.

The court ruled that victims of the worst oil spill in U.S. history may collect punitive damages from Exxon Mobil Corp., but not as much as a federal appeals court determined.

Justice David Souter wrote for the court that punitive damages may not exceed what the company already paid to compensate victims for economic losses, about $500 million compensation.

Exxon asked the high court to reject the punitive damages judgment, saying it already has spent $3.4 billion in response to the accident that fouled 1,200 miles of Alaska coastline.

A jury decided Exxon should pay $5 billion in punitive damages. A federal appeals court cut that verdict in half. [NYT; Continued...]