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Widener Univ. School of Law

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Friday, December 22, 2006

Valdez Case Heard, For the 3,472nd time, By the Ninth Circuit

...and they've finally given up on telling the trial judge to come up with a number, instead setting the number for punitives at $2.5 billion (five times the actual harm determined by the trial court).  Of note, the trial court had previously set the figure at $4.5 billion, within the 9:1 ratio suggested by State Farm.

The opinion is here [PDF].  One significant issue involves the impact of payments made pre-judgment -- settlements, interest, and the like.  Exxon argued that it should be subtracted from the numerator such that the "actual harm" figure would be around $20 million rather than the $500+ million used by the trial court.  The Court of Appeals rejected that view, but also rejected the plaintiffs' argument that the ratio of 9:1 would be appropriate, concluding that the conduct was not so reprehensible as to justify going to that end of the range:

Thus, Exxon’s conduct is in the higher realm of reprehensibility, but not in the highest realm. In addition Exxon’s post-grounding efforts to mitigate the harm serve materially to reduce the reprehensibility of the original misconduct. They reduce the reprehensibility for purposes of our review to, at most, a mid range. 

Judge Browning dissents, and would affirm.

http://lawprofessors.typepad.com/tortsprof/2006/12/valdez_case_hea.html

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