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Allapattah Services, Inc. v. Exxon Corporation | 61 F. Supp. 2d 1326 (1999)

Breach-of-contract damages are intended to give the injured party the benefit of its bargain. In Allapattah Services, Incorporated versus Exxon Corporation, gasoline dealers aggrieved by Exxon’s alleged breach of contract sought to recover their losses and more. Claiming Exxon’s breach was in bad faith, the dealers demanded punitive damages, meant to punish Exxon and deter wrongdoing.

Exxon sold gasoline to its dealers according to a pricing model specified in supply contracts. Allapattah and roughly ten thousand dealers claimed that Exxon systematically overcharged them. The dealers brought a class-action suit in federal district court alleging Exxon had breached the supply contracts. Shortly before trial, the dealers moved to amend the pleadings. The dealers sought punitive damages on the ground that Exxon’s breach was in bad faith. Exxon countered that punitive damages weren’t proper because it hadn’t committed any tort.

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