Term: 2007
Docket: 07-219
Exxon Shipping Co. v. Baker
- Pro
07-219 EXXON SHIPPING CO. V. BAKER DECISION BELOW: 490 F3d 1066 THE PETITION FOR A WRIT OF CERTIORARI IS GRANTED LIMITED TO QUESTIONS 1, 2, AND 3(1) PRESENTED BY THE PETITION. JUSTICE ALITO TOOK NO PART. CERT. GRANTED 10/29/2007 QUESTION PRESENTED: An Alaska federal jury awarded $5 billion in punitive damages against Exxon under federal maritime law for the accidental grounding of the tanker Exxon Valdez and the resulting oil spill. The award did not punish for harm to the environment, which other proceedings had fully redressed, but only for lost income and similar economic harm to commercial fishermen and other private parties. Applying the Due Process Clause, the Ninth Circuit reduced the award to $2.5 billion—still 123 times the compensatory damages awarded and five times what the court found was the total, fully compensated loss to all private economic interests. The questions presented are: 1. May punitive damages be imposed under maritime law against a shipowner (as the Ninth Circuit held, contrary to decisions of the First, Fifth, Sixth, and Seventh Circuits) for the conduct of a ship’s master at sea, absent a finding that the owner directed, countenanced, or participated in that conduct, and even when the conduct was contrary to policies established and enforced by the owner? 2. When Congress has specified the criminal and civil penalties for maritime conduct in a controlling statute, here the Clean Water Act, but has not provided for punitive damages, may judge-made federal maritime law (as the Ninth Circuit held, contrary to decisions of the First, Second, Fifth, and Sixth Circuits) expand the penalties Congress provided by adding a punitive damages remedy? 3. Is this $2.5 billion punitive damages award, which is larger than the total of all punitive damages awards affirmed by all federal appellate courts in our history, within the limits allowed by (1) federal maritime law or (2) if maritime law could permit such an award, constitutional due process? LOWER COURT CASE NUMBER: 04-35183
In the Exxon Shipping Co. v. Baker case, the Supreme Court of the United States was tasked with deciding on punitive damages awarded in relation to the 1989 Exxon Valdez oil spill off Alaska's coast, one of the worst environmental disasters in U.S. history. The original ruling had ordered Exxon to pay $5 billion in punitive damages which was later halved by an appeals court. In a decision delivered by Justice David Souter, however, it was ruled that punitive damages could not exceed what was already paid in compensatory damages - approximately $507 million - significantly reducing Exxon's financial penalty for their role in causing extensive ecological damage and economic loss for local communities reliant on fishing and tourism industries affected by pollution from spilled crude oil.
In the dissenting opinion for Exxon Shipping Co. v. Baker, Justice Stevens argued that punitive damages should not be limited by maritime law's common-law tradition but rather should reflect legislative and executive judgments about appropriate penalties for corporate misconduct. He disagreed with the majority's decision to cap punitive damages at a 1:1 ratio with compensatory damages, arguing it was an arbitrary limit without historical or empirical basis in maritime law or any other body of law. Furthermore, he contended that this ruling undermines the role of juries in determining punitive damage awards and fails to adequately deter future reckless conduct by corporations like Exxon who can easily absorb such costs as part of doing business.
