WASHINGTON - The Supreme Court agreed yesterday to decide whether Exxon Mobil Corp. should pay $2.5 billion in punitive damages to victims of the huge Exxon Valdez oil spill that fouled more than 1,200 miles of Alaskan coastline in 1989.
The high court stepped into the long-running battle over the damages that Exxon Mobil owes from the supertanker accident in Prince William Sound that was the worst oil spill in US history. The Exxon Valdez ran aground on a reef, cracking its hull and spilling 11 million gallons of oil.
Hundreds of thousands of seabirds and marine animals died as a result.
It is a case filled with superlatives. The award, even after it was cut in half by a federal Appeals Court in December, would be the largest punitive damages judgment ever. A jury in Alaska awarded $5 billion in damages in 1994, and the company has been appealing the verdict ever since.
Exxon Mobil, based in Irving, Texas, is the world's largest publicly traded oil company and last year posted the largest annual profit by a US company - $39.5 billion. That result topped the previous record, also by Exxon Mobil, of $36.13 billion set in 2005.
Arguing against Supreme Court review, lawyers for the plaintiffs, some of whom have died, said the damages award is "barely more than three weeks of Exxon's net profits."
The plaintiffs still living include about 33,000 commercial fishermen, cannery workers, landowners, Native Alaskans, local governments, and businesses. They urged the court to reject the company's appeal, saying, "After more than 18 years, it is time for this protracted litigation to end."
But the justices said they would consider whether the company should have to pay damages at all under the Clean Water Act and centuries-old laws governing shipping. The court has frequently sided with business interests in punitive damages and other cases of corporate liability.
Exxon said it already has paid $3.4 billion in cleanup costs and other penalties resulting from the oil spill.
"This case has never been about compensating people for actual damages," company spokesman Tony Cudmore said in a statement. "Rather it is about whether further punishment is warranted. . . . We do not believe any punitive damages are warranted in this case."
Exxon Mobil shares were up $1.40, or about 1.5 percent, to close at $93.61 on the New York Stock Exchange.