Last week, the Supreme Court heard oral arguments on the punitive damages award arising from the 1987 Prince William Sound Exxon Valdez spill.  Exxon has already paid about $500 million dollars in compensation to injured parties and over 3.4 billion dollars in cleanup costs, fines penalties and other expenses.  The original 5 billion dollar punitive damages award was previously reduced to 2.5 billion dollars.

It is that award that is now at issue.  The case raises three issues regarding punitive damages.  First, earlier Supreme court precedent (BMW v. Gore) limits punitive damages to a relatively small multiple of actual damages.  Is the 10 to 1 ratio (depending on the bookkeeping) here too high?  Second, is there a different ratio when the compensatory damages themselves are already so high, capping the punitive damages at some absolute limit?  State Farm v. Campbell seem to suggest there is.  Finally, punitive damages are not traditionally available in martime law, but might be under the Federal Clean Water Act.

The Supreme court could leave the 2.5 billion award in place, reduce it, or eliminate it entirely.

Disclosure: I worked very closely with the Coast Guard investigator assigned to prepare the Coast Guard's investigation into the Exxon Valdez disaster. I also peripherally assisted Mike Chalos and Joseph Hazelwood in the defense of Captain Hazelwood's Coast Guard license.  Joseph Hazelwood was condemned worldwide and even immortalized as the patron saint of the foul polluting  "Smokers" in the "hit" movie "Waterworld."  As Wikipedia notes, the causes of the grounding were more complex than depicted in the mass media.  There was plenty fo blame to go around.

A sympathetic portrayal of Hazelwood is here.

A little known immediate and heroic response to the spill is depicted here.  The image shows the Exxon Valdez hard aground on Bligh Reef.  Next to it is the tanker Exxon Baton Rouge.

When the tides were right, the Exxon Baton Rouge, was brought over the top of Bligh Reef.  The remaining 40 million gallons of Exxon Valdez cargo was transferred in a rpocess called "lightering" to the Baton Rouge, allowing the Valdez to be refloated, but done so that the Baton Rouge itself did not ground. The crews of both ships, the pilots and technical advisors aboard the two ships all worked in very hazardous conditions to keep a bad situation from getting much worse. The lightering was a superb display of seamanship in sharp contrast to the seamanship leading up to the grounding.

Posted by Joseph R. McFaul on Monday, March 03, 2008 at 00:00 Comments Closed (0)

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