Jury Returns $11.9 Billion Verdict Against Exxon Mobil

In November 2003, Alabama’s state government won an $11.9 billion verdict against Exxon Mobil Corp. in a suit over disputed natural gas royalties.

Alabama filed suit against the Irving, Texas-based oil company in 1999. The state claimed the company had breached its leases for natural gas wells in state-owned waters along the Alabama coast. The state also accused the company of intentionally over-deducting expenses for operating the wells, thus depriving Alabama of millions of dollars.

The case was initially tried in 2000, and a Montgomery jury awarded Alabama $3.5 billion. However, the Alabama Supreme Court overturned the decision because the jury was inappropriately allowed to view an internal oil company memo. As a result, a new trial began in late October 2003.

The state asked for $9.3 billion in this case, but the jury went even higher.

After two days of deliberation, jurors reached a verdict in the multibillion-dollar case. Punitive damages awarded were a record-breaking $11.8 billion in the state, and compensatory damages amounted to $63.6 million.

“We felt Exxon thought they were going to get away with this,” said jury foreman Joseph King of Montgomery. “We wanted to send a message that they were not and that this corporation can’t get away with doing wrong.”

Exxon Mobil spokesman Bob Davis said the verdict was excessive and the company would appeal.

“The jury brought the largest corporation in the world to its knees for the second time. They felt we didn’t ask for enough,” said Robert Cunningham, an attorney for the state.

Attorneys said an appeal of the verdict meant it could be years before the state knows whether it will collect any money.

The state hired two of Alabama’s top plaintiff law firms, Beasley Allen and Cunningham Bounds, to handle the case on a contingency fee, meaning that they would receive no payment if they lost the case but would be entitled to 14% if they won.