Court Eases Up On Big Oil

The U.S. Supreme Court reduces oil spill penalty to $500 million.


June 25, 2008 — -- While the Supreme Court agreed that ExxonMobil should be punished for the worst oil spill in U.S. history, it decided that the original fine was far too much, under existing shipping laws.

In a 5-3 decision the court reduced punitive damages in the case from $2.5 billion to $500 million, which means each of the people who joined the original suit against the oil company will receive an average of $15,000. Thirty-three thousand Alaskans had joined together, suing ExxonMobil to punish it for its negligence in the accident. Six thousand of them have died since the Exxon Valdez ran aground in Prince William Sound, Alaska, on March 24, 1989.

"A penality should be resonably predicatable in its severity," wrote Justice David Souter for the 5-3 majority. Justice Samuel Alito, who owns ExxonMobil stock, did not take part in the case.

The oil company's early reaction was relief, pointing out that it has already worked hard to repair any environmental damage.

"We have spent 3-and-a-half billion dollars in fines and penalties, and this case isn't about compensation," said Kenneth Cohen, a vice president of ExxonMobil Corp.

After the disaster 19 years ago, Exxon sent thousands of workers to clean up Alaska shorelines and compensate fishermen, an effort they say has restored Prince William Sound to its original beauty.

The company's opponents, however, say looks can be deceiving.

"An ecosystem was forever altered. We do not know how to clean up oil spills," said Carol Hoover, an activist from Cordova, Alaska. "There is no safe way."

Cindy Shogan of the Alaska Wilderness League said, "I'm ashamed at the Supreme Court, ashamed at this decision, and I'm just shocked that, once again, the oil industry wins."

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