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An Alaska jury’s $5 billion punitive damages award stemming from the 1989 Exxon Valdez oil spill-already revisited and reduced in 2001-will be revisited again in light of a recent U.S. Supreme Court decision on punitive damages. The 9th U.S. Circuit Court of Appeals re-remanded the case to an Alaska federal court on Aug. 18. Baker v. Exxon Corp., nos. 03-35166 and 03-35219. On March 24, 1989, the oil tanker Exxon Valdez ran aground, spilling 11 million gallons of oil into Alaska’s Prince William Sound. The spill caused an environmental and economic disaster, killing wildlife and harming commercial fishing. A flood of litigation ensued with charges that Exxon was reckless in the incident and that the ship’s captain, Joseph Hazelwood, was drunk at the helm. Exxon entered into a consent decree with the federal government and the state of Alaska, settled and litigated with various private parties and paid more than $2 billion in cleanup costs. Federal jurors in the instant case, instructed to consider commercial damages-such as damage to fishing-and not environmental damage, which had been addressed in other litigation, in 1994 returned a verdict finding $287 million in compensatory damages and awarding $5 billion in punitive damages-at the time, the largest punitive award in U.S. history. In 2001, the 9th Circuit held the $5 billion award was excessive, and last year, the district court reduced the amount to $4 billion. In its Aug. 18 order, the 9th Circuit, once again, ordered U.S. District Judge H. Russell Holland to revisit the punitive damages award in light of the U.S. Supreme Court’s April decision in State Farm Mut. Auto. Ins. Co. v. Campbell, 123 S. Ct. 1513 (2003). In Campbell, the high court held that a punitive to compensatory damages ratio of 145 to one violated due process. While the court declined to establish a bright-line ratio limit, it said “few awards exceeding a single-digit ratio” would satisfy due process. Even with the previous remittitur, the Exxon Valdez ratio remained at almost 14 to one. Still, some federal circuits have declined to follow Campbell‘s single-digit ratio guide. On Aug. 7, the 5th Circuit, in Lincoln v. Case, No. 02-30333, declined to apply Campbell, stating that the ratio merely gives the court an idea of whether the size of award is suspect.

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