Punitive Damages

Exxon Gets $3.6B Verdict Slashed in AL Case

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Updated: The Alabama Supreme Court has tossed most of a $3.6 billion verdict against Exxon Mobil for underpaying natural gas royalties to the state.

The 8-1 ruling eliminated the entire $3.5 billion punitive damages award on the ground there was no proof the oil giant committed fraud, the Birmingham News reports. The court also lowered the compensatory damages from $102.8 million to $51.9 million plus interest.

How Appealing posted the opinion (PDF), courtesy of Alabama Appellate Watch.

The 2003 verdict against Exxon was reportedly the largest in the country that year and the largest ever in the state, the Associated Press reports.

Ken Wallis, the governor’s legal adviser, told the Birmingham News it is unlikely the state could succeed in getting the U.S. Supreme Court to hear an appeal because the ruling is based on state contract law.

The U.S. Supreme Court has accepted a different case concerning a huge verdict against Exxon. The federal question concerns whether U.S. maritime law permits a $2.5 billion punitive award for the Exxon Valdez oil spill.

Updated 11/2/2007 at 9:50 AM.

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