Baker v. Exxon (2008)

It’s been a generation since the largest oil spill in history devastated Alaska’s Prince William Sound, but for the residents in the small fishing community it might as well have been yesterday.

Locally-owned fishing companies are still being forced to close because there are simply not enough fish left. Residents are suffering from depression and other psychological problems because of the ongoing stress. And there’s still more than 26,000 gallons of oil soaked into the shoreline. Still, even after 18 years, the corporation that caused the damage is still trying to get out of paying the residents.

The saga began on March 24, 1989. Joseph Hazelwood, the captain of the Exxon Valdez oil tanker, was a relapsed alcoholic, and that night he was drinking while he was piloting the ship. He ran the ship aground, spilling 11 million gallons of oil, damaging 1,200 miles of Alaskan coastline, and killing hundreds of thousands of seabirds and marine animals.

The spill devastated the small fishing communities in the Prince William Sound, both economically and emotionally. A group of 33,000 commercial fisherman and residents filed a class action lawsuit against Exxon Valdez. In a victory for the residents, an Alaskan jury decided to punish the corporation by ordering it to pay $5 billion to the Alaskan residents. But Exxon’s been fighting that amount ever since, arguing that it is too high.

After several rounds of litigation, the most recent court to hear the case, the Ninth Circuit Court of Appeals, lessened the amount to $2.5 billion, which is less than three weeks of Exxon’s current net profits. Exxon still thinks that amount is too much.

So the Supreme Court decided it would hear the case this term to decide whether $2.5 billion was too much for Exxon to pay. Exxon lawyers argue that a court has never awarded so much money to plaintiffs for the sole purpose of punishing a corporation. But the plaintiffs argue that the amount needs to be high in order to preserve corporate accountability. If Exxon is forced to pay a large amount of punitive damages, it will set an example to other corporations that this sort of conduct will not go unnoticed. But if the Supreme Court lets Exxon off the hook with a smaller amount, it is sending the message that corporations do not need to be responsible for their wrongdoings.

Only eight of the nine justices will hear this case. Justice Samuel Alito has recused himself from participating because he owns a large amount of stock in Exxon Valdez. No matter what the remaining eight justices decide, this case will have a profound effect on corporate responsibility. Whether it’s a good effect or a bad one is up to the Supreme Court.

For more information see our fact sheet on environmental protection.