A federal jury in Anchorage, Alaska, ordered Exxon Corp. on Friday to pay $5 billion in punitive damages to 10,000 Alaska fishermen and thousands of other Alaskans who said they were harmed by the Exxon Valdez oil spill more than five years ago.
The 11-member jury also ordered the former captain of the Exxon Valdez, Joseph J. Hazelwood, to pay $5,000 in punitive damages. Lawyers for Exxon and Hazelwood said the award of punitive damages, which are meant to punish defendants for harmful behavior, was unfair and they planned appeals.The jury's award, ending a 20-week trial that began in early May, is the largest ever in a pollution case and the second largest in a civil case in the United States.
The largest award in a civil suit was the $10.5 billion verdict against Texaco Corp. in a contract dispute involving Pennzoil in 1985. The case was later settled for $3 billion.
The largest civil award ever in an environmental case was the $470 million that Union Carbide paid in a court in India in the poisoning deaths and injuries of thousands of residents of Bhopal, India, in 1984.
After the verdict, Exxon stock, which had been pushed down during the trial, rose $1.50 within minutes. Exxon last year reported net earnings of $5.28 billion on revenues of $111.2 billion for all of 1993.
In the moments after the verdict was announced by Judge H. Russell Holland in U.S. District Court in Anchorage, lawyers for the fishermen and other Alaskan plaintiffs said they were elated.
"That is enough money that when it gets distributed among the fishermen and native Alaskans it will allow them to make a new start on their lives," said Brian O'Neill, a 47-year-old lawyer from Minneapolis who led the plaintiffs' trial team.
Patrick Lynch, a lawyer from Los Angeles and one of Exxon's lead trial lawyers, said the verdict would fuel the debate in legal and political circles about the fairness of huge punitive damages in such cases.
"I think it's a common experience in the law right now that punitive damage awards by juries are a problem, because it is difficult to give a jury meaningful standards to determine in money what will constitute punishment or deterrence," said Lynch, noting that Exxon had already spent $3.4 billion cleaning up Prince William Sound in Alaska and taking other measures to respond to the Valdez spill.
The verdict against Exxon and Hazelwood came after 13 days of deliberation by the jury of nine women and three men in the last of three phases of the civil lawsuit.
The trial, which began May 2, gradually became a test of endurance for everyone involved, especially for the jury.
In the first phase, which ended in June, the jury determined that Exxon and Hazelwood were reckless, setting up the third phase of the trial, which ended Friday.
The second phase, to determine the amount of compensatory damages, ended in early August with the award of $286.8 million to the plaintiffs.
The huge jury award could mean that the 80 law firms working for the plaintiffs could share roughly $1 billion and perhaps more.