Jan. 7

Justices have selected Feb. 27 as Exxon Mobil´s day in the Supreme Court.

Almost exactly 19 years after the worst oil spill in U.S. history, Chief Justice John Roberts and seven of his eight colleagues will hear hour-long oral arguments about the legality of $2.5 billion in punitive damages assessed against the world´s largest publicly traded oil company.

The supertanker Exxon Valdez, captained by Joseph Hazelwood, leaked 11 million gallons of crude oil after running aground on a reef March 24, 1989, on Bligh Reef in Alaska´s Prince William Sound.

A pivotal issue for the court, which opted to take the case Oct. 29, is whether maritime laws allow such punitive damages to be imposed. Lower courts are divided on the issue. A case summary by the high court refers to the $2.5 billion as larger than the total of the combined punitive damage awards approved by all federal appellate courts in U.S. history.

An amalgam of local governments, Native Americans, property owners and fishermen filed the initial class action suit, claiming the spill caused private economic harm. However, Exxon Mobil (it was Exxon Corp. in 1989) countered by asking if further punishment is warranted in a case where a company voluntarily compensated most plaintiffs within a year of the spill.

The oil company claims it has spent more than $3.5 billion, including compensatory payments, cleanup payments and government-imposed settlements and fines.

"This case has never been about compensating people for actual damages," Exxon Mobil said in an October statement. "We do not believe any punitive damages are warranted in this case."

Not surprisingly, the National Association of Manufacturers joined four other major trade associations -- American Petroleum Institute, the American Chemistry Council, the American Tort Reform Association and the Western States Petroleum Association -- in supporting Exxon Mobil´s claim.

A decision is expected by June. Justice Samuel Alito Jr. is recusing himself from the case because he owns a significant amount of Exxon Mobil stock.

The spill, which devastated at least 1,500 miles of coastline, killed and harmed thousands of birds, fish and other aquatic species.

"It is also important for the Supreme Court to uphold long-standing maritime law that provides that ship owners are not liable for punitive damages based upon conduct by the ship-master who disregarded the owner´s rules and policies," Exxon officials said.

Back in 1994, an Alaska federal jury originally awarded $5 billion in punitive damages to the plaintiffs. After several appeals and remands, the 9th Circuit Court eventually cut that amount in half.

Either way, lawyers for those who filed the suit say Exxon Mobil makes enough in net profits in less than a month to cover a multibillion-dollar judgment. The $39.5 billion in annual profits earned by the Irving, Texas-based company in 2006 is recognized as the largest by a U.S. business.

The case, 07-219, is Exxon Shipping Co. v. Baker.

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