Class Action Settlements: Exxon
Exxon Mobil Corporation is the world’s largest publicly traded international oil and gas company. Exxon replaced the well-known Esso, Humble and Enco brands in 1973. It is the parent of Esso, Mobil and ExxonMobil worldwide.
Exxon is also engaged in the exploration, production, transportation and sale of crude oil and natural gas and other petroleum products. It has over 30,000 gross and net operated wells in the world.
Exxon was well-known for the Exxon Valdez tanker that crashed in Alaska in 1989, creating at that time the greatest environmental disaster in U.S. history. Thousands of fisherman lost prime fishing grounds when more than 11 million gallons of oil spilled into Prince William Sound and beyond. A jury eventually awarded punitive damages against Exxon in the amount of $5 billion. In 2008, however, after years of appeals, the U.S. Supreme Court reduced the award to $507.5 million. Environmental groups have complained that the settlement constituted about one-fifth of the $2.5 billion clean-up cost. It was not until 2010 that the funds from the settlement were finally disbursed.
In 1991, another lesser-known class action suit was brought against Exxon on behalf of 11,000 gas-station owners who had alleged that the energy giant had overcharged them for gasoline. It arose out of the company’s Discount for Cash program whereby Exxon would charge its dealers a separate 3 percent fee for processing credit card transactions. Exxon claimed it would reduce the wholesale price of fuel by that amount in order to offset the fee.
The case was actually tried twice before a jury which each time found that Exxon had not reduced the wholesale price. The case was eventually appealed to the U.S. Supreme Court which upheld the verdict. A settlement on compensation was reached in July 2006 for $1.08 billion. The nine class representatives were awarded $15.9 million. Other class claimants received a 5 percent reserve fee as a refund. The law firms involved in the action received an overall award of $325 million.
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