Exxon Gas Spill Lawsuit’s $1.5B Damage Award Reversed on Appeal

A Maryland appeals court has overturned more than $1 billion in punitive damages awarded to residents of a Baltimore County town that was the site of a 2006 Exxon-Mobile gas spill. 

In an opinion (PDF) issued on February 26, the Maryland Court of Appeals reversed an award returned by a jury in 2011, which found that Exxon-Mobile committed fraud and was deserving of punitive damages as a result of actions taken following a gas spill in Jacksonville, Maryland. The court also tossed out much of the $450 million the jury awarded in compensatory damages, ordering a new trial.

The gasoline spill occurred at an Exxon-Mobile fueling station, whose underground storage tanks leaked 26,000 gallons of gasoline into the local aquifer over a month’s time. Most of the residents use well water and many of their wells were contaminated with gasoline from the spill.

The Maryland environmental tort lawsuit was filed on behalf of a group of 154 families and other property owners who accused Exxon-Mobile of trying to cover up the release. When the spill first occurred, the company put up a sign saying that the station was closed for upgrades and did not immediately warn the public that there had been a spill. Monitoring wells close to the station contained 15 feet of gasoline when the leak was first discovered.

The jury found Exxon responsible for a diminution of property values, fraud, negligence, nuisance, strict liability, trespass, and determined that the company should be held liable for compensatory damages, as well as emotional distress and paying for medical monitoring for area residents. An additional award of about $1 billion in punitive damages was awarded to punish the company for their actions.

The appeals court ruling not only tossed the punitive damages awarded by the jury, but also rejected compensatory awards that went to plaintiffs who claimed emotional distress or who could not show that their wells were contaminated. The court has sent the case back to a lower court for a new trial.

The court also reversed the judgment in another lawsuit, which resulted in $150 million awarded to 90 households in 2009.

While the court determined that Exxon-Mobil had failed to adequately communicate with residents about the spill, the judges found that the plaintiffs had not established that the company’s actions were the result of intentional wrongdoing.

In its opinion, the appeals court described Jacksonville as “seemingly cursed,” noting that there have been multiple gas spills there over the years.