TortsProf Blog

Editor: Christopher J. Robinette
Widener Commonwealth Law School

Wednesday, February 1, 2006

Exxon Valdez Punitives Argument

The case about the Exxon Valdez punitives returned to the Ninth Circuit for approximately the 3,145th time last week, with the judges and parties continuing to bounce around how much is appropriate for punitive damages.  Exxon noted that it's spent $3 billion in cleanup already, suggesting that amount is sufficient for deterrence.  (The plaintiffs, meanwhile, are presumably hoping that the judges are at least aware, at least in the back of their minds, that the $5 billion verdict would represent the profits from half a quarter).

You can also listen to the argument here [WMA, I think that link will work].

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What relevance are the profits? Increasing punitive damages because profitability is (temporarily) high is punishing a defendant because they're profitable, rather than because of their bad behavior. One presumably wants to deter the latter, rather than the former.

Posted by: Ted | Feb 1, 2006 5:59:25 AM

Well, there are various credible arguments that the profitability of a company is relevant in determining whether a verdict of a particular size will in fact have a specific deterrent effect. A $100,000 punitive verdict against me and my academic salary would have a heck of an effect; against Exxon, less so.

But post-State Farm and the like, I think you're probably right on the law, which is why I said the plaintiffs are hoping that the judges are thinking about it in the back of their mind ("Gosh, even $5 billion isn't that big a hit") rather than, say, seeking to submit supplemental briefs to point it out.

Posted by: Bill Childs | Feb 1, 2006 7:14:29 AM

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