EXPERT: EXXON CAN EASILY PAY $4.3 BILLION AWARD
Apr 19, 2001
News staff writer
MONTGOMERY - ExxonMobil Corp. can pay the $4.3 billion fraud verdict returned against it in December as easily as the average Alabama household can pay a $500 fine, a state witness testified at a court hearing Wednesday.
Saul Solomon, a Texas accountant and fraud examiner, told Montgomery County Circuit Judge Tracy McCooey that the petroleum giant's $638 million in daily revenues would equal the punitive damage award in just six days, and its net profits would cover the award in 62 days.
Exxon's witness, David Borden, a Montgomery accountant and accredited business evaluator, said the damage award against the company equals $769 for each man, woman and child in Alabama, or $1,441 for each individual taxpayer, whose average tax liability is $630 a year.
Testimony from the opposing accountants came in the second of two days of hearings on whether the record verdict, the fourth largest in the nation, is excessive and should be overturned, as Exxon contends.
Solomon testified that Exxon potentially could have gained $3 billion by underpaying the state on oil and gas leases from 1993, when production started on wells in Mobile Bay, through the term of the leases in 2029. Borden said there was no future damage to the state for those years because the under-payments were corrected. There will actually not be any future harm, Borden said.
McCooey refused to accept as evidence Bordens testimony that all of the punitive damage verdicts allowed by the Alabama Supreme Court from 1993 to 2000 total only $109 million.
Who cares? McCooey asked. It has zero to do with this. This is a unique animal. Borden testified that the damage verdict is 33 times the $87.7 million compensatory verdict awarded. A state law that went into effect after the Exxon lawsuit was filed capped punitive damages at $500,000 or three times the compensatory damages, whichever is greater.
McCooey gave lawyers a week to file final written arguments in the case, which the company has appealed to the Alabama Supreme Court.