Thank God the damages were reduced to help the largest oil company in the world. Heaven forbid that corporate responsibility apply to big oil. Surely, such a ruling would stand in the way of progress.

An appeals court in San Francisco today cut the $4.5 billion punitive award for the 11 million-gallon Exxon Valdez tanker spill, saying the verdict exceeded U.S. Supreme Court limits on such damages. The court said Exxon’s “reckless misconduct” in the 1989 accident still warranted severe sanctions. A final judgment against Exxon may include interest of almost $2 billion, a lawyer for the victims said.

Exxon, the world’s largest oil company, set aside $5.4 billion in a letter of credit to cover any eventual award in the case, according to company filings with the U.S. Securities and Exchange Commission. Exxon had said it should pay no more than $25 million in punitive damages because it has spent $3.5 billion to clean up the spill and compensate victims.

“It’s still a significant amount of money, but they’ve got to be relieved that they’re getting the whole thing put to rest,” said Douglas Christopher, whose largest holding is Exxon Mobil shares in an $8.5 billion portfolio at Crowell Weedon & Co. in Los Angeles. “This frees up money they can put toward the business of finding and producing oil.”

Exxon, based in Irving, Texas, earned $36.1 billion in 2005, the biggest annual profit for any company in U.S. history.
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