5 Billion Dollar Punitive Damage Award For Oil Pollution Reduced By 500 Million Dollars
In re the EXXON VALDEZ. This Order Relates to ALL CASES
No. A89-0095-CV (HRH)
UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ALASKA
296 F. Supp. 2d 1071; 2004 U.S. Dist. LEXIS 1514
January 28, 2004, Decided
January 28, 2004, Filed
PROCEDURAL POSTURE: Thousands of plaintiffs' oil spill claims were consolidated against defendants, oil and shipping companies, and captain. The case was pending proceedings on remand from the U.S. Court of Appeals for the Ninth Circuit. The oil and shipping companies submitted a second renewed motion for reduction or remittitur of punitive damages.
OVERVIEW: The appellate court had earlier vacated a $4 billion punitive damages judgment and remanded the case, this time to reconsider the punitive damages award in light of the U.S. Supreme Court's State Farm decision. The question was whether the jury's $5 billion punitive damages award offended the Due Process Clause. The court again concluded that a $5 billion award was justified by the facts and was not grossly excessive so as to deprive defendants of fair notice--their right to due process. This conclusion was based on the court's findings that (1) defendants' conduct was highly reprehensible, (2) the ratio of punitive damages to actual harm was a permissible 9.74-to-1, and (3) comparable criminal and civil penalties could have exceeded $5 billion. However, the appellate court instructed the court to reduce the punitive damages award. In light of State Farm, which instructed that single-digit multipliers passed constitutional muster for highly reprehensible conduct, which was what was before the court, and in light of Zhang, in which the appellate court approved a 7-to-1 ratio for conduct that was also highly reprehensible, the court reduced the award to $4.5 billion.
OUTCOME: The motion for reduction or remittitur of the punitive damages award was granted. $500 million of the $5 billion jury award was remitted, and therefore, the punitive damages award was reduced to $4.5 billion. The clerk was directed to enter an amended partial judgment accordingly.
