Supreme Court Reduces Punitive Damages to 1/10th of What the Jury Thought Was Fair for the Exxon Valdez Oil Spill

Right now the folks at Exxon Mobile are probably writing out their 'Thank You' cards to the U.S. Supreme Court Justices.  Even though the company posted a "disappointing" $10.9 billion profit in the first quarter of 2008 (the second highest U.S. corporate profit ever – the highest being themselves in 2007) the U.S. Supreme Court ruled today that the company only has to pay $500 million (nope, I didn't forget a zero) in punitive damages to the 30,000 victims of the Exxon Valdez oil spill.

Okay, so in 1994, when a jury in Alaska awarded the victims $5 billion, the punitive damages award really might have punished the company for causing this disaster.  In 1994, $5 billion represented a year's profits for the oil company.  In 2006, the award was cut down to $2.5 billion and only represented "about three weeks of Exxon's current [2006] net profits."  So, the current $500 million damage award is what?  Well, according to the New York Times, Exxon Mobile earned more than $1,287 of profit for every second of 2007.

At that rate, it only took them four and a half days to pay off this court's punitive damages judgment.


UPDATE:  There have been lots of commentary on this decision today.  These are some of our favorites.

• Stephanie Mencimer at the MOJO Blog
• various quotes posted by the local Alaska news channel KTUU
• the New York Times blog Dot Earth
• Tortdeform

Comments

[Kia]

Thank you notes. I love it. Well, I hate it. You know what I mean.