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ALABAMA'S EXXON MOBIL VERDICT NO. 1 FOR 2003

Feb 10, 2004

By PHILLIP RAWLS
The Associated Press
From al.com


MONTGOMERY, Ala. (AP) -- The state of Alabama's $11.9 billion verdict against Exxon Mobil wasn't just the biggest jury verdict of the year in the United States. It was bigger than the rest of the Top 100 verdicts combined.

The National Law Journal and VerdictSearch have come out with their annual compilation of the top 100 jury verdicts for 2003. Perched in first place - with no competition even close - is the verdict that a Montgomery County jury returned against Exxon Mobil.

In second place is a $934 million verdict in a lawsuit between two companies in California.

The total of the top 100, excluding the Alabama case, is $7.6 billion. But it's not the first time the top verdict on the list has topped all the others combined. The same thing happened in 2002.

Alabama sued Exxon Mobil in 1999, claiming the oil company cheated it out of millions of royalties from natural gas well drilled in state-owned waters along the Alabama coast.

The case first went to trial in 2000, with a jury returning a $3.5 billion verdict. That verdict ended up in third place on the year's list of biggest verdicts.

In 2002, the Alabama Supreme Court threw out the verdict and ordered a new trial because an internal legal document from the oil company was improperly admitted into the trial.

At the new trial in November, the jury returned a verdict of $63.6 million in compensatory damages and $11.8 billion in punitive damages.

It was the largest punitive damage verdict ever won by a single plaintiff, state attorney Robert Cunningham said Monday.

Exxon Mobil is challenging the verdict. Montgomery County Circuit Judge Tracy McCooey has scheduled a hearing March 11-12 on whether to throw out the verdict or reduce it.

Company spokesman Bob Davis argues that no fraud was involved and that no punitive damages are justices. He also argues that the verdict is unjust and unconstitutional.

Cunningham said Exxon Mobil made the same argument last time, but the Alabama Supreme Court didn't reverse it on those issues.

No matter what McCooey does, each side expects the case to go back to the Alabama Supreme Court.

Both sides agree two big issues on appeal will be what is the proper ratio of punitive damages to compensatory damages and whether the courts should take into consideration the potential gain to Exxon Mobil over the anticipated 30-year life of the natural gas wells.

The state's attorneys argued at trial that if Exxon Mobil had continued paying the state as it was, the company would have kept $930 million due the state.

When the Legislature convened last week for its regular session, several lawmakers questioned whether the lawsuit might produce enough to resolve the state's current financial problems. Cunningham said it will be years before the state sees any money.

The state also sued three other oil companies with fewer wells along the coast than Exxon Mobil. In 2002, Shell settled $33.5 million and Amoco for $29 million. A Mobile County jury returned a verdict against Hunt Petroleum for $24.6 million in 2001. That verdict ranked 82nd on the year's list of biggest jury verdicts.

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