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Punitive Damages in Maryland Gas Leak Case against Exxon

Posted on behalf of Goldberg Finnegan, LLC on Jun 29, 2011 in Environmental Law

Get ready for a huge verdict coming out of Baltimore County this week. A Baltimore County jury will be awarding punitive damages in an environmental law gas leak case that is in Baltimore County Circuit Court before Judge Robert N. Dugan. The Maryland environmental law case involves Exxon Mobil leaking gas that damages the properties of 154 households, 7 commercial property owners and two business owners. More than 25,000 gallons of fuel leaked from the Exxon gas station over the course of 5 weeks before it was discovered in 2006. The plaintiffs asked for damages for diminution of their real properties value, emotional trauma, medical monitoring, and fraud. The case was tried to a jury of all women. Yesterday the jury reported that they have decided to award punitive damages. Therefore, the attorneys gave argument about that specific issue yesterday afternoon and the jury will continue to deliberate today. The final jury verdict of both compensatory damages and punitive damages will be announced at the same time. Most likely later today or tomorrow. The fact that the jury will be awarding punitive damages basically tells us that they found Exxon Mobil guilty of "fraud" as that is an intentional tort which would allow for punitive damages under Maryland law.

Punitive damages are very rare in Maryland because in 1992 the Maryland Court of Appeals held in Owens-Illinois v. Zenobia that punitive damages can only be awarded when there is actual malice and in intentional tort cases. What this means is that even for egregious conduct in Maryland punitive damages are not available. For example if you are injured by a drunk driver in Maryland, you are not entitled to punitive damages (the jury will not even be allowed to consider it.) But if the driver of a car intentionally strikes a person, then punitive damages could be awarded (but there probably would not be any insurance coverage because of exclusions for intentional acts.) It should be noted that the U.S. Supreme Court has put further restrictions on awards of punitive damages by basically limiting such damages to a multiplies of about 8 times the amount of compensatory damages.

Punitive damages are especially appropriate in Maryland environmental law cases because they deter future misconduct by corporations. It is important that Maryland lawyers keep in mind that by pleading and proving fraud you preserve your client's right to punitive damages. However, at the same time, you may lose applicable insurance coverage if the insurance policies have an exclusion for intentional misconduct. Therefore, Maryland trial lawyers need to determine whether the defendants have the ability to pay for punitive damages at the pleading stage. One thing is for sure--Exxon Mobil and other large corporations that cause environmental damage in Maryland can afford to pay punitive damage awards.

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