Supreme Court cuts Exxon Valdez damages

WASHINGTON, June 25 (UPI) -- The U.S. Supreme Court ruled punitive damages were allowed in a suit over the Exxon Valdez oil spill, but lowered the award to $507.5 million from $2.5 billion.

Justice David Souter delivered the fractured opinion of the court, with eight justices agreeing or concurring in part, and dissenting in part. Justice Samuel Alito did not participate.

The participating justices were evenly divided on whether maritime law permitted punitive damages and left the 9th U.S. Circuit Court of Appeals decision unchanged. Justices also determined the federal Clean Water Act did not preempt a punitive award.

However, "(the) punitive damages award against Exxon was excessive as a matter of maritime common law. In the circumstances of this case, the award should be limited to an amount equal to compensatory damages," the court said.

The court said applying a 1-to-1 ratio of punitive-to-compensatory damages was appropriate, and reduced punitive damages from the initial $2.5 billion to $507.5 million, which the lower court calculated for compensatory damages.

The Exxon Valdez spilled millions of gallons of oil into Alaska's Prince William Sound in 1989 in one of the worst environmental accidents in U.S. history. The company has paid more than $3.4 billion in remediation, fines, compensation and other costs.

The class-action suit was filed by 32,677 fishermen and others whose businesses were disrupted by the spill.

(Exxon Shipping Co. et al vs. Grant Baker et al)