Exxon Valdez

An online search of Exxon Valdez turns up over 4 million sites. Two decades after the event, this massive oil spill remains a very hot topic. The infamous March 1989 spill of 11 million gallons of crude oil into Alaska's Prince William Sound permanently scarred not only a dramatic ecosystem but also the giant oil company, Exxon. When the Valdez hit a reef, spewing heavy crude into a critical fishery, covering thousands of sea birds and marine mammals with black goo, and fouling beyond repair a shoreline ecosystem and native culture, Exxon scored the worst oil spill in U.S. history. The incident quickly became a crowning example of just how serious manmade environmental disasters can be, as well as a textbook case of bad corporate public relations.

The general crisis communication rule is to tell the truth and do so quickly. It took 10 days for the company's New York–based public relations staff to release an apology and a promise “to be there for the duration” as attempts at cleanup began. To date, few have bought the apology, and the legal battle over punitive damages against the oil giant only recently concluded.

In 1994, a federal jury ordered $5 billion to be paid to thousands of people damaged by the wreck, at the time, the largest punitive damage award in the nation's history. Exxon claimed the Clean Water Act does not provide for punitive damages and appealed the ruling; the company had already paid out $3.4 billion in damages and fines. After hearing the case in February 2008, the U.S. Supreme Court ruled in June of that year, finally ending the battle and giving one of the world's most profitable corporations what appeared to the 32,677 plaintiffs to be a mere slap on the hand. The final ruling sliced a $2.5 billion punitive damage judgment from a lower court (which had already cut the original award in half) to just $507.5 million.

Justice David Souter, writing for the majority (in a 5 to 3 decision), described Exxon's conduct as “worse than negligent, but less than malicious” and ruled that a ratio between punitive and compensatory damages of no more than 1 to 1 was appropriate in maritime cases. Justices Stephen Breyer, Ruth Bader Ginsburg, and John Paul Stevens disagreed. Justice Samuel Alito, who owns Exxon stock, had recused himself from the case. The hard-hit fishing villages in Alaska, now paying $6 a gallon for gas to power their boats, decried the verdict in news reports.

Anger against the former Standard Oil Company of New Jersey, now known as the Exxon Mobil Corporation, persists in the environmental and anti-big-business communities and especially among the over 30,000 Native Alaskans who had sought recompense for ecological, financial, and legal damages caused by the oil slick. Lives and livelihoods were changed forever. The old Standard Oil Company, accused of doing business with the German Nazis in the World War II era, had been reborn as Exxon, and the company had seemed able to maintain a less high-profile reputation in later years, their ads featuring a cartoon character urging consumers to “put a tiger in your tank.” During the Arab oil embargo of the 1970s, the company promised it was prepared for any accidents along the then-proposed trans-Alaska pipeline.

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