In legal shenanigans spanning some 20 years that includes a recent SCOTUS ruling that reduced Exxon’s liability, Exxon, which has enjoyed record profits, is still fighting “to avoid any liability for punitives.”  This time, the issue is when should interest start to incur retroactively—during the original district court judgment that was entered on 1996 or when the Supreme Court handed down its decision on 2008. Of course, greedy Exxon argued that the “legal basis for an award was not sound in 1996.” Personally, I believe this was a brazen argument, especially since corporations such as Exxon are perceived as voraciously profit driven.

Fossil fuel companies have a great incentive to obstruct policies that expand the use of alternative energy sources, promote sustainability, or reduce carbon, since extracting and burning fossil fuels results in colossal profits for energy corporations like Exxon. Literally, for energy corporations such as Exxon, asking them not to extract fossil fuels from the Earth is like asking an individual not to withdraw money from their bank account. From the Los Angeles Times (emphasis added):

Exxon Mobil Corp. must pay victims of the 1989 Exxon Valdez oil spill $480 million more in interest on their delayed punitive damages awards as well as cover $70 million in the company’s own appeals costs, a federal appeals court ruled Monday.

The decision by a three-judge panel of the U.S. 9th Circuit Court of Appeals more than doubles the oil giant’s costs in settling the lawsuits brought by fishermen, cannery workers, marine services and eco-tourism purveyors whose livelihoods were ruined by the nation’s most devastating oil spill.

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The Supreme Court action reduced the amount due the average plaintiff to about $15,000.

By setting the interest rate clock back to the original 1996 jury award, though, the 9th Circuit decision could double that amount for each plaintiff.

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Judge Andrew J. Kleinfeld dissented from the panel’s decision to make the oil company pay for the costs of appealing the jury award.

“Satisfying though it may be to shovel money from a large corporation to those whom it wronged, respect for the Supreme Court decision in this case and precedent in other circuits obligates us to award Exxon most, but not all, of its costs for its mostly successful appeal,” Kleinfeld, appointed to the appeals court by President George H.W. Bush, wrote in a dissent that ran twice as long as the majority’s seven-page opinion.

Hacker referred comment on whether the 9th Circuit decision would be appealed to Exxon’s headquarters in Irving, Texas. Exxon spokesman Tony Cudmore said the oil company “will review the opinion before commenting further.”

From the Ninth Circuit court case, Exxon Valdez v. Exxon Mobil Corp. (2009) (emphasis added):

Although Exxon has succeeded in reducing an original jury verdict of $5 billion by about 90%, it remains liable for a far-from-nominal punitive award of more than $500 million.

The controlling rule is Federal Rule of Appellate Procedure 39(a)(4), which provides that where “a judgment is affirmed in part, reversed in part, modified or vacated, costs are taxed only as the court orders.” Plaintiffs point to the last time we issued a mandate on punitives in this case, in 2001, when we ordered each party to bear its own costs. In re Exxon Valdez, 270 F.3d at 1254. The punitive damages award had been remitted at that time as well. Plaintiffs also stress that, in a case of mixed judgment, where each side wins something, this Court usually orders each party to bear its own costs.

Exxon contends that it is essentially the winner of the litigation and that plaintiffs should bear all, or at least 90%, of Exxon’s appellate costs. With some 20/20 hindsight, Exxon now characterizes the course of this case as having been all about the amount of money Exxon would have to pay in punitives. Having reduced that amount by 90%, it declares itself the winner. Yet this ignores the hard-fought, even relentless, battle Exxon waged to avoid any liability for punitives, a battle that resulted in an evenly divided decision by the Supreme Court in 2008 leaving in place our 2001 decision on vicarious liability. Exxon Shipping Co., 128 S.Ct. at 2616.

To bolster its position, Exxon points to the fact that the Supreme Court awarded Exxon its costs. But the default rule before the Supreme Court is that when the lower judgment is vacated, the petitioner gets costs “unless the Court otherwise orders.” Sup.Ct. R. 43.2. Rule 39 contains no such presumption: when a judgment is modified, “costs are taxed only as the court orders.” Fed. R.App. P. 39(a)(4). The dissent does not recognize the difference.

In this case, neither side is the clear winner. The defendant owes the plaintiffs $507.5 million in punitives-according to counsel at oral argument the fourth largest punitive damages award ever granted. Yet that award represents a reduction by 90% of the original $5 billion. In light of this mixed result, and mindful that the equities in this case fall squarely in favor of the plaintiffs-the victims of Exxon’s malfeasance-we exercise our discretion by requiring each party to bear its own costs.

Our decision is in accord with our usual practice when each side wins something and loses something. This court has consistently ordered each party to bear its own costs on appeals where punitive damages are upheld, but reduced.

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Because the evidentiary and legal bases for the original judgment of punitive damages have not been overruled, we award interest on the final judgment of $507.5 million, at the statutorily set rate of 5.9%, to run from the date of the original judgment, September 24, 1996. Because the amount of the original $5 billion judgment has been substantially reduced, we order that each party bear its own costs.

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