Forum
U.S. Supreme Court
Case Status
Decided
Docket Number
07-219
Term
2007 Term
Oral Argument Date
February 27, 2008
Questions Presented
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?
Case Updates
Outcome
June 25, 2008
The Supreme Court held that a $2.5 billion punitive damages award against Exxon was excessive as a matter of maritime common law, and limited the award to a 1:1 ratio of compensatory to punitive damages. In the ruling, the Court was equally divided on whether maritime law allows corporate liability for punitive damages for the acts of a shipowner’s agents, and left that part of the lower court’s decision undisturbed. The Court also rejected the argument that the Clean Water Act displaced federal common law remedies such as punitive damages. Although the decision focused on maritime law, the Court’s sensitive and rigorous analysis of punitive damages is likely to be cited before judges state and federal for the proposition that tight ratios provide the best solution to outlier decisions by juries.
NCLC files amicus brief regarding excessive punitive damages in the admiralty context
September 20, 2007
NCLC filed twice in this case: once to support review and once on the merits. NCLC urged the Supreme Court to hold that the Clean Water Act displaces federal common law remedies, including imposition of punitive damages, and to make clear, in the alternative, that the federal common law provides judicial standards for limiting excessive punitive damages. Arising from the Exxon Valdez shipping accident in 1989, this case presented an opportunity for the Court to issue clear guidance to lower courts as to excessive punitive damages awards in the maritime context.
Case Documents
- Exxon Shipping Company, et al. v. Baker, et al. (NCLC Brief Supporting Cert.).pdf
- Exxon Shipping Company, et al. v. Baker, et al. (NCLC Brief on Merits).pdf