Exxon Valdez oil-spill award slashed to $507.5 Million by US Court

26 June 2008

Though divided, the US Supreme Court slashed the punitive damages awarded against Exxon Mobil Corp for the 1989 Valdez oil spill from $2.5 billion to a relatively paltry $507.5 million.

The Exxon Valdez super tanker spilt oil off the Alaskan coast 19 years ago, when it ran aground in Alaska's Prince William sound in 1989. It spilt over 40-million litres (11 million gallons) of crude oil into the water, and closed fisheries, and killed hundreds of thousands of birds and marine animals, causing substantial ecological damage.

It is said to be the worst oil spill in US history.

Exxon had argued that it could not be punished for the misconduct of the vessel's captain, Joseph Hazelwood, who was said to be drunk on the night the vessel ran aground.

A group of around 33,000 Alaskans had sued Exxon asking for compensation and additional punishment for the company. Their lawyers had argued that Exxon managers had assigned a relapsed alcoholic in Capt. Joseph Hazelwood to command the supertanker. The jury found that Captain Hazelwood acted recklessly, and also found that Exxon had acted recklessly as well.

Hazelwood was ordered to pay $5,000 in punitive damages, and Exxon was ordered to pay $5 billion, which was later reduced to $2.5 billion.