$3.4-Billion Verdict Upheld Against Exxon

A judge upheld the largest jury verdict in Alabama’s history, $3.4 billion in punitive damages against Exxon Mobil Corp. for deliberately underpaying the state for natural gas royalties. “Exxon engaged in egregious, intentional fraud by which it sought to deprive Alabama of hundreds of millions of dollars, probably well over $1 billion,” Circuit Judge Tracy McCooey wrote in an order. Irving, Texas-based Exxon Mobil plans to appeal to the state Supreme Court, which attorneys estimated could take as long as 1 1/2 years to rule. McCooey presided over the December trial in which a jury decided Exxon Mobil had fraudulently underpaid the state on royalties for natural gas wells drilled in waters along the Alabama coast. Along with the record punitive damages, the jury awarded the state $87.7 million in compensatory damages, bringing the total judgment to $3.5 billion. The state’s suit was filed against Exxon in 1999, before the company’s merger with Mobil. Mobil also had wells along the coast, but the state had no dispute with it. Exxon Mobil shares were up $1.45 to close at $87.55 on the New York Stock Exchange.