Supreme Court to hear Exxon Valdez appeal

[John of Phoenix]

The Supreme Court will hear Exxon Mobil Corp.'s appeal of a $2.5 billion punitive-damages award tied to the 1989 Exxon Valdez oil spill, the energy giant said Monday.
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Irving, Tex.-based Exxon Mobil (XOM: Last: 93.76+1.55+1.68%) said it "welcomes" the decision by the Supreme Court to hear its appeal and reiterated its argument that no punitive damages are warranted in the case.
18 years later? Is there no statute of limitations on such things?

Any bets on the outcome of this one? :rolleyes:

[Norman Bernstein]

The MSNBC.COM coverage of this is at http://www.msnbc.msn.com/id/21528042/

I suppose it all depends on how you feel about the concept of punitive damages.

In far smaller, much more personal cases, the point of punitive damages is the notion that compensation for economic damages alone isn't a fair settlement. For example, I run over you father... it costs $25,000 in medical expenses... but that doesn't include things like the lost wages you had to forgo to care for him, the worry, hurt, etc.....

Sure, punitive damages can go too far... and are often reduced; in this case, they were already cut in half. However, the true damage to the alaskan economy, and to many Alaskan people, surely exceeds the direct costs of the cleanup.

The article doesn't really explain the legal issued to be discussed... it's hard to believe that they're going to argue the magnitude of the punitive damages, as opposed to the principle of punitive damages, itself.

[peb]

It is my understanding that the jury verdict and appeals court have overturned 100s of years of maritime law with the punitive damages. If so, this should be heard from the Supreme Court. It will have very long-lived consequences.

My understanding of the legal issue is as follows: Prior to this case, a ship's owner cannot be held for punitive damages, unless the activities which caused the harm were directly countenanced by the owner. In this case, the jury found that the negligence was not, but awarded punitive damages anyway.

Someone can correct me if I am wrong.

[Norman Bernstein]

It is my understanding that the jury verdict and appeals court have overturned 100s of years of maritime law with the punitive damages. If so, this should be heard from the Supreme Court. It will have very long-lived consequences.

My understanding of the legal issue is as follows: Prior to this case, a ship's owner cannot be held for punitive damages, unless the activities which caused the harm were directly countenanced by the owner. In this case, the jury found that the negligence was not, but awarded punitive damages anyway.

Someone can correct me if I am wrong.

From law.com:



The Exxon petition raises important questions of federal maritime law, said John Paul Jones, a maritime law scholar at the University of Richmond School of Law who is drafting an amicus brief supporting high court review on behalf of a group of law professors.

"The fundamental questions are: Does a federal court sitting as a court of admiralty have the power to award punitive damages in any case, and in a case that has certain characteristics such as this one?" he said.

Jones and others said the Supreme Court has issued two decisions in which it appears to take for granted that admiralty courts can award punitive damages. But, Jones added, "That is far short of a holding and far short of certainty in the law."

Various courts have said on many occasions that punitive damages are available under general maritime law, but there are very few cases in which they actually have been awarded, particularly in the corporate context, said maritime law scholar Robert Force of Tulane University School of Law.

"The mere fact some employee or low-level person acts in an outrageous manner is ordinarily insufficient to impose liability on the corporation itself," he said. "You have to show management acted in a malicious, outrageous or extreme manner."

Exxon has made debatable at least whether the jury verdict found Exxon liable for its own misconduct or vicariously liable for Captain Hazelwood's conduct, said Richmond's Jones.

"It may be the general maritime law allows punitive damages under the circumstances and by the same standards as either the prevailing view of American common law, or the view of Alaska, the forum state," he said. "But it doesn't have to. It could go its own way for reasons that are peculiarly maritime."


The plaintiffs might be hanging their hat on the fact that Exxon knew of Hazelwood's drinking problem.

[peb]

You are probably correct with you last sentence. The more I read about this case, the more I suspect Exxon might win this appeal. It seems like the jury was making a statement, which is ok. Then, perhaps the court of appeals simply did not want to touch a political hot potatoe. Why take the heat when the Supreme Court will decide anyway?


BTW, I neveer said that punitive damages were not available from a ships owner, only that the owner of the ship must have countenaced the actions which caused the harm in order to be assessed punitive dmages.. This is exactly what your article says.

[Norman Bernstein]

I think the most interesting thing will be to see whether they reject puinitive damage completely because they want to establish new legal precedent, or if it's the magnitude of the punitive damages that becomes the main issue.

I've never heard of the ratio (9.92:1) of punitive damages to actual damages before... I guess there's lots of precedent and court decisions about that.