From a small northwestern observatory…

If you follow the litigation news, you’re probably aware that this past week, a state-court jury in Towson, MD, awarded a group of plaintiffs $495 million in actual damages plus about $1 Billion in punitives in the mass-tort matter of Allison v. Exxon. The facts of the case are pretty straight-forward: Exxon leaked a significant amount of MTBE-laden gasoline into the drinking water aquifer of an unincorporated suburban Baltimore community known as Jacksonville.

I was the sole damages expert testifying for the plaintiffs, and methodologically, this was one of the more intriguing cases in my career. We utilized a mass-appraisal hedonic model for my determination of the unimpaired value of the properties as of February, 2006 (the date of the spill) and then amended this model to add factors for the impact of the contamination on these property values (using contingent valuation, meta-analysis, and case studies in the absense of a well-functioning transactional market). We also developed business loss determinations, loss of use-and-enjoyment measures, and present value calculations for medical monitoring costs.

Exxon literally threw everything they had into the damages aspect of the case — they knew this case had the potential to be both big as well as precedent-setting. They hired a veritable battalion of big-named appraisers, professors, modeling experts, and consultants, and one of their two damages testifying experts was a hold-over from the Exxon Valdez case. The multiple days of deposition, motions-in-limine hearings, and trial testimomy (and cross examination) were among the toughest I’ve ever seen.

Naturally, I’m always pleased when my clients win, but not for the reasons people tend to think. I’m not in this for the “win or lose” part of it, but it is intellectually challenging to climb these sorts of mountains, and when a court agrees with me, I’d be disingenuous to say it’s not intellectually affirming.

I’ll be developing a white-paper on this case very soon, and by some coincidence, I’m slated to speak in Manhattan at the semi-annual meeting of the American Academy of Justice next Monday on the topic of “Use and Enjoyment Damages”. As you might guess, this case will be featured in that talk — and probably plenty of subsequent ones.