Justices appear to back Exxon

WASHINGTON - The Supreme Court seemed inclined yesterday to let Exxon Mobil Corp. off the hook for some of the $2.5 billion it was ordered to pay as punishment for a massive 1989 oil spill in Alaska.

The justices questioned attorneys for the company and nearly 33,000 victims of the Exxon Valdez disaster for 90 minutes, making only one passing reference to Exxon's record profits. The award represents less than three weeks' worth of Exxon profit, which came to $11.7 billion in the last three months of 2007.

Exxon has vigorously fought to knock down or erase the 1994 punitive-damages verdict returned by a jury in Alaska for the accident that dumped 11 million gallons of oil into Prince William Sound.

The verdict has been cut in half once by an appeals court.

The problem for the people, businesses and governments who waged the lengthy legal fight against Exxon is that the Supreme Court in recent years has become more receptive to limiting punitive-damages awards. The Exxon Valdez case differs from the others because it involves issues peculiar to laws governing accidents on the water.

But several justices said limits could be appropriate in this context, too.

Justice Stephen G. Breyer, who has voted to overturn damages awards, said he worried how the court's decision in Exxon Shipping Co. v. Baker would play in other maritime accidents. "This is a very dramatic accident," he said. "But there are accidents every day. . . . What principles do you have to suggest, if any, for creating a fair system that isn't just arbitrary?"

Justices Anthony M. Kennedy and David H. Souter suggested that perhaps a reasonable number would be twice the amount of money the company has paid to compensate victims for economic losses - about $500 million.

Overall, Exxon has paid $3.4 billion in fines, penalties, cleanup costs and other expenses resulting from the worst oil spill in U.S. history.

"Exxon gained nothing by what went wrong in this case and paid dearly for it," said lawyer Walter Dellinger, who urged the court to throw out the punitive-damages judgment that was upheld by the San Francisco-based U.S. Court of Appeals for the Ninth Circuit.

Stanford University law professor Jeffrey Fisher said the commercial fishermen, Native Alaskans, landowners, businesses and local governments he represents have each received about $15,000 so far "for having their lives and livelihood destroyed and haven't received a dime of emotional-distress damages."

Nothing in prior Supreme Court rulings, he said, should lead the justices to overturn the $2.5 billion award, about $75,000 for each plaintiff.

Justice Samuel A. Alito Jr., who owns Exxon stock, is not taking part in the case.

Read a transcript of yesterday's arguments in the Exxon case via http://go.philly.com/valdezEndText