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In re the Exxon Valdez

296 F. Supp. 2d 1071 (2004)

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In re the Exxon Valdez

United States District Court for the District of Alaska
296 F. Supp. 2d 1071 (2004)

AR

Facts

The Exxon Valdez, an oil tanker owned by Exxon Shipping (Exxon) (defendant), ran aground in Prince William Sound, Alaska, and spilled 11 million gallons of oil. The cause of the wreck was human error, namely that of the captain, an alcoholic who was drinking at the time of the crash. Exxon knew the captain was an alcoholic but let him sail anyway. The best estimate of the actual harm caused by the spill was over $500 million in damages to 32,677 claimants. Much litigation followed, including a punitive-damages award against Exxon for $5 billion. Exxon appealed to the Ninth Circuit Court of Appeals, arguing that the punitive-damages award was so high that it violated Exxon’s Fourteenth Amendment due-process rights. The appeals court ordered that the punitive-damages award be reduced, and the district court reduced the award to $4 billion. Exxon appealed again, and the appeals court vacated the punitive-damages award and remanded the case to the district court to once again determine the lawfulness of the $5 billion punitive-damages award.

Rule of Law

Issue

Holding and Reasoning (Holland, J.)

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