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Here's Hoping the Supremes Grant Cert in the Exxon Valdez Case

The National Law Journal has a good summary of Exxon's cert petition in the infamous Exxon Valdez case. It is not compensatory liability that is being challenged, but the $2.5 Billion punitives award.

After the wreck, Exxon spent about $2.1 billion on cleanup. It paid $125 million in criminal fines and $900 million for environmental restoration. Exxon also paid $300 million in out-of-court settlements to parties claiming economic injuries caused by the 1989 oil spill.

At Exxon's urging, the U.S. District Court for the District of Alaska certified a multi-class action consisting of a compensatory damage class and a mandatory punitive damages class of 32,677 commercial fisherman and related individuals.

After a 1994 trial that lasted 83 court days, the jury assessed $5 billion in punitive damages against Exxon yet only $5,000 against the drunken Captain Hazelwood. The jury in an earlier phase had awarded $287 million in compensatory damages. The punitives award was sent back to the district court to reconsider in light of intervening Supreme Court rulings, and ultimately the 9th Circuit cut the jury award in half. That $2.5 Billion award against Exxon is the object of the latest appeal.

Exxon's attorneys have three claims. Their most important claim is that admiralty law does not permit a shipowner to be punished vicariously for the conduct of the ship's master when the owner did not countenance or participate in that conduct. Subsidiarily, Exxon argues that admiralty law cannot expand remedies Congress created in the controlling statute -- the Clean Water Act -- by adding a punitive damages remedy, even if one is available in admiralty. Third, Exxon argues that this $2.5 billion award is outside the limits of maritime law and of constitutional due process.

If cert is granted (and I hope it is -- admiralty law can ultimately emerge from no other source than our nine sages), this will the Supreme Court's most important admiralty decision in a very long time.



Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.