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ExxonMobil wins appeal over Maryland $1 billion pollution case

28 February 2013

ExxonMobil has won an appeal against the $1 billion in punitive damages awarded against the company over a 2006 gasoline leak that Maryland residents claimed had fouled their drinking water. A Maryland appeals court reversed the punitive damages ruling and returned the case for a new trial in Baltimore County Circuit court later this year.

ExxonMobil argued that the award, handed down in 2011 to 160 homeowners and businesses as part of a $1.5 billion jury verdict, was excessive.

Residents of Jacksonville, Baltimore County, claimed that a 37-day gasoline leak from an Exxon forecourt and tank farm resulted in 26,000 gallons of fuel polluting the area’s groundwater. The rural community does not have a public water system and relies on wells for drinking water.

Jurors in the original case in 2011 awarded $495 million in compensatory damages along with more than $1 billion in punitive damages, and found the company liable for fraud as part of their verdicts. At the time, Exxon said it spent $46 million on spill cleanup and had been fined $4 million by the state.

ExxonMobil reported the leak on February 17, 2006, but it had its origins five weeks earlier from a drilling puncture caused unknowingly by a contractor, the Court of Appeals said, adding that "shortcomings" in remediation efforts did not rise to the level of fraud, removing the basis for the punitive damages award.

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