Alabama Supreme Court Reverses $3.5 Billion Punitive Verdict
The Alabama Appellate Watch blog, which is published by Lightfoot Franklin & White, LLC, reports that earlier this week, the Supreme Court of Alabama reversed a $3.5 billion punitive verdict rendered against ExxonMobil Corporation in 2003. Lightfoot Franklin was among the counsel for ExxonMobil in the appeal. There is a separate post that provides news coverage of the decision.
The case was first tried in 1999 and resulted in a compensatory damages verdict of $87 million and a punitive damages verdict of $3.42 billion in favor of the plaintiff, the Alabama Department of Conservation and Natural Resources. The Supreme Court reversed on the grounds that the trial court had improperly admitted a confidential letter from Exxon's in-house counsel and ordered a new trial.
In the retrial in 2003, which was the subject of this appeal, the jury awarded punitive damages of $11.8 billion and compensatory damages of $102.8 million for the plaintiff. The State claimed that Exxon deliberately underpaid royalties that were due the State from natural gas wells that Exxon drilled in State-owned waters along the coast. The trial court reduced the punitive award by $8.5 billion based on an impermissibly high ratio of compensatory to punitive damages.
The Supreme Court held that the plaintiff had not proven that Exxon committed fraud and reversed the entire punitive damage award, which had been based on the jury's finding that Exxon defrauded the State. The Court affirmed the award of compensatory damages for breach of contract, but reduced that verdict from $63.7 million to $51.9 million, and remanded the matter to the trial court with directions to award compensatory damages and interest consistent with the opinion, which, according to an attorney for the State, would amount to approximately $80 million.
The case was first tried in 1999 and resulted in a compensatory damages verdict of $87 million and a punitive damages verdict of $3.42 billion in favor of the plaintiff, the Alabama Department of Conservation and Natural Resources. The Supreme Court reversed on the grounds that the trial court had improperly admitted a confidential letter from Exxon's in-house counsel and ordered a new trial.
In the retrial in 2003, which was the subject of this appeal, the jury awarded punitive damages of $11.8 billion and compensatory damages of $102.8 million for the plaintiff. The State claimed that Exxon deliberately underpaid royalties that were due the State from natural gas wells that Exxon drilled in State-owned waters along the coast. The trial court reduced the punitive award by $8.5 billion based on an impermissibly high ratio of compensatory to punitive damages.
The Supreme Court held that the plaintiff had not proven that Exxon committed fraud and reversed the entire punitive damage award, which had been based on the jury's finding that Exxon defrauded the State. The Court affirmed the award of compensatory damages for breach of contract, but reduced that verdict from $63.7 million to $51.9 million, and remanded the matter to the trial court with directions to award compensatory damages and interest consistent with the opinion, which, according to an attorney for the State, would amount to approximately $80 million.
