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Pete Burns
Pete Burns
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Valdez Revisited

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The judicial branch of government is the only forum the average citizen has to stand toe to toe with the corporate behemoths and get a fair shake. Not only are the litigants guaranteed a fair trial but in instances where the conduct was reckless, wanton or purposeful the jury is empowered to protect society from having the same thing happen again. To provide that protection the jury is given the choice of awarding punitive damages.

On March 24, 1989, the captain of the Valdez ran the ship aground and Exxon spilled 11 million gallons of crude into Prince William Sound near Valdez, Alaska. Fishermen and other affected citizens filed suit and the jury concluded that Exxon acted recklessly in putting a relapsing alcoholic in a position to do so much harm. In order to prevent similar wrongs the jury returned a $5 billion punitive verdict.

Then the appellate courts began second guessing the jury. In 2006, the 9th U.S. Circuit Court concluded that a verdict of $2.5 billion would be a sufficient deterrent. Exxon appealed that decision to the Supreme Court, which – by a 5 to 3 majority – in June of 2008 ordered the award reduced to the amount of compensatory damages $507.5 million. What made the Supreme Court think that $500 million dollars was sufficient to deter reckless risk taking by big oil? $500 million dollars is a drop in the bucket to companies such as BP which made $6 billion in profit in the first quarter of 2010.

There is nothing about a black robe that gives an appellate judge superior expertise at determining the appropriate amount of punitive damages over the jurors who heard the evidence. The Alaska jury did its job. Had the federal appellate judges not interfered big oil would have a different world view today. Wouldn’t it be nice if big oil had learned the lesson the Alaskan jury tried to teach back in 1994?