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Ninth Circuit rules Exxon Mobil owes interest on oil spill verdict

By Bernard Hibbitts (editor) and University of Pittsburgh School of Law students.

[JURIST] The US Court of Appeals for the Ninth Circuit ruled Monday that Exxon Mobil owes interest on the more than $500 million in punitive damages awarded against it following the 1989 Exxon Valdez oil spill. The court found that the interest began accumulating following the original 1996 verdict in the plaintiffs' favor. The court said: We therefore conclude that plaintiffs' entitlement to punitives was "meaningfully ascertained" when the original district court judgment was entered in 1996. Neither the evidentiary basis for the award nor the legal foundation for an award has been disturbed after nearly a dozen years of subsequent litigation. We see no reason to depart from Planned Parenthood's general rule in this case. The plaintiffs are entitled to interest from that date on the principal amount they ultimately are entitled to receive, $507.5 million.The court estimated the interest costs to be close to $70 million. It is hoped that the ruling will finally conclude long legal battle following the massive oil spill.Last August, the US Supreme Court declined to rule on whether Exxon Mobil owed interest on the punitive damages award, thus remanding it to the Ninth Circuit. In June 2008, the Supreme Court ruled 5-3 to reduce a punitive damages award to be paid by Exxon from $2.5 billion to $500 million, but did not rule on the issue of interest. In December 2006, the Ninth Circuit reduced Exxon's original $5 billion punitive damage award by more than $2 billion, ruling that the award was excessive in light of a 2003 Supreme Court ruling that punitive damages must be reasonable and proportionate to the harm incurred, and also considering Exxon's cleanup and compensation efforts.

Full post as published by JURIST - The Paper Chase on June 16, 2009 (boomark / email).