Processing Magazine

Alabama court to review $3.6 billion Exxon verdict

February 6, 2007

A $3.6 billion verdict won by the state against Exxon Mobil Corp. goes before the Alabama Supreme Court on appeal Tuesday with the company arguing the judgment—bigger than the state''s General Fund budget—is unconstitutionally excessive, the Associated Press reports. The verdict, which could swell to $4.7 billion when interest and deferred payments are added, was the largest returned in America in 2003 and is a record in Alabama. The state sued Exxon Mobil claiming it defrauded Alabama out of millions in offshore natural gas royalties. But Exxon Mobile attorney David Boyd of Montgomery calls the verdict "astronomical" and contends the jury that heard the case was improperly influenced by news reports of the state''s budget woes at the time. After the Supreme Court hears arguments Tuesday, it is under no deadline on when it must rule, but attorneys said it usually takes four to six months. In 2003, a Montgomery jury agreed with the state''s arguments that Exxon Mobil intentionally underpaid the state in royalties from natural gas wells drilled in state-owned waters along the Alabama coast, and it returned a verdict of $102.8 million in compensatory damages and $11.8 billion in punitive damages. Circuit Judge Tracy McCooey cut the punitive damages to $3.5 billion, which dropped the total verdict to $3.6 billion.