Exxon Corp

Nearly 19 years after the Exxon Valdez oil spill fouled Alaska's Prince William Sound, the Supreme Court debated Wednesday whether the world's largest oil company must pay a record $2.5 billion in punitive damages. The eight justices who heard the case appeared closely split, although several of them said they were looking for a way to reduce the size of the award. Justice Samuel A. Alito Jr. sat out the case because he is an Exxon stockholder.

Every time Sohaila Rezazadeh rings up a sale at her Exxon station in the Oakton section of Fairfax, Va., her cash register sends the information to Exxon Mobil's central computers. If she raises the price of gasoline a couple of pennies, chances are that Exxon will raise the wholesale price she pays by the same amount. Through a password-protected Web portal, Exxon notifies Rezazadeh of wholesale price changes daily. That way the oil giant, which is earning about $3.

Exxon Corp.'s purchase of Mobil Corp. and five other oil-company mergers since 1990 lifted U.S. gasoline prices an average of 1 or 2 cents a gallon, the U.S. General Accounting Office said. The GAO, the watchdog agency of Congress, concluded that the mergers increased market concentration in the refining and sale of gasoline, leading to higher wholesale prices. In addition to the 1999 Exxon-Mobil deal, the GAO also cited alliances Texaco Inc. formed in 1997 with Shell Oil Co.

In 1994, it was the biggest punitive damages judgment in history: $5.3 billion that an Alaskan federal jury awarded to fishermen and others whose livelihoods had been devastated by the Exxon Valdez oil tanker spill. Three years later, as Exxon waged its appeal, a new line of research began to appear in several respected academic journals and Ivy League law reviews. Some articles challenged the competence of juries to fairly set punitive damages.