Supreme Court Reduces Exxon Valdez Oil Spill Punitive Damages Award

In 1989, an Exxon ship was responsible for the largest oil spill in U.S. history off the coast of Alaska referred to forever as the Exxon Valdez Oil Spill.  A jury awarded punitive damages of $5 billion which an appeals court reduced in half to $2.5 billion.  The punitive damages have been debated for years, and now the Supreme Court has put an end to the arguments by stating the punitive damages Exxon (now Exxon-Mobil; NYSE: XOM) must pay for the Exxon Valdez oil spill should equate to no more than the compensatory damages (i.e., what the actual costs were for clean up) of $507.5 million.

While Exxon-Mobil execs are jumping up and down and claiming victory, don’t expect the brand to get a big boost in the court of public opinion.  After all, the Exxon Valdez oil spill dumped 11 million gallons of crude oil off the coast of Alaska damaging 1,200 miles of coastline, closing fisheries and killing thousands of mammals and hundreds of thousands of birds.  The repercussions were felt around the world, but according to the Supreme Court ruling this week, Exxon-Mobile owes nothing more than compensatory damages.

Here’s the most pathetic part of this story.  Exxon-Mobil cried to the court claiming the company had already paid more than $3.5 billion for the spill.  Are we supposed to feel bad for Exxon-Mobil?  Considering Exxon-Mobil brought in earnings of $40.6 billion in 2007 and made $2.5 billion in just two days during the first quarter of 2007, I’m having a really hard time feeling bad for the company or its stockholders.  In fact, this whole story makes me sick.

What do you think?

Image:Flickr