Court throws out much of $1.6 billion leak case vs Exxon

Tue Feb 26, 2013 6:35pm EST

The Exxon corporate logo is pictured at a gas station in Arlington, Virginia January 31, 2012. Exxon Mobil Corp's fourth-quarter profit narrowly beat Wall Street's expectations on Tuesday as rising crude oil prices offset falling margins for chemicals, engine lubricants and fuel. REUTERS/Jason Reed

The Exxon corporate logo is pictured at a gas station in Arlington, Virginia January 31, 2012. Exxon Mobil Corp's fourth-quarter profit narrowly beat Wall Street's expectations on Tuesday as rising crude oil prices offset falling margins for chemicals, engine lubricants and fuel.

Credit: Reuters/Jason Reed

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(Reuters) - Exxon Mobil Corp has won the reversal by Maryland's highest court of a $1 billion punitive damages award stemming from an underground leak at a gas station, and also won the reversal of portions of nearly $650 million of compensatory damages awards.

The Maryland Court of Appeals said Exxon's "shortcomings" in remediation efforts did not rise to the level of fraud, removing the basis for the punitive damages award.

The case arose from the leak of about 26,000 gallons of gasoline from beneath a fueling station in Jacksonville, Maryland.

Exxon reported the leak on February 17, 2006, but the leak had its origins five weeks earlier from a drilling puncture caused unknowingly by a contractor, the Court of Appeals said.

Several hundred residents and businesses sued Exxon, alleging damages from contamination of their water supply and a variety of misrepresentations by the oil company.

(Reporting by Jonathan Stempel in New York; Editing by Gary Hill)

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