After hearing oral arguments on Feb. 27, the U.S. Supreme Court is expected to rule by early summer on ExxonMobil Corp.’s challenge to a $2.5-billion punitive-damages judgment after the 1989 Exxon Valdez oil spill. After the tanker hit a reef off Alaska’s coast, 11 million gallons of oil spilled into Prince William Sound. Since then, the company says it has spent $2.1 billion on environmental cleanup and $1.3 billion in fines, penalties and other expenses.
A federal jury had set punitive damages at $5 billion but a federal appeals court cut that to $2.5 billion in 2006. ExxonMobil contends that the appellate court ruling should be reversed. Defendants in the case, Exxon Shipping Co. v. Grant Baker, say the judgment “is rational and proportionate.”