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State of Alabama $11.9 Billion Verdict Against ExxonMobil

An Alabama jury decided that ExxonMobil cheated the state out of royalties due from natural gas wells drilled in state-owned waters in Mobile Bay. They awarded the state $63.6 million in compensatory damages and $11.8 billion in punitive damages.

ExxonMobil?s attorneys argued that the verdict was excessive and unconstitutional. However, state attorneys claimed that amounts were justified, based on what the state stood to lose over the life of the natural gas wells.


The state?s accountant estimated that the underpayment could total as much as $930 million, based on 1989 natural gas price forecast. Exxon?s accountant put it at no more than $58.5 million in present day values, and said that natural gas prices dropped between 1989 and 1993.

Circuit Court Judge, Tracy McCooey, said that she would not order a new trail, and the only thing left to decide is whether to reduce or uphold $11.8 billion in punitive damages.