Supreme Court to Consider Exxon Punitives Appeal
The U.S. Supreme Court will decide on Friday whether to accept Exxon’s appeal of a $2.5 billion punitive damages judgment against it for the Exxon Valdez oil spill, the largest award affirmed by a federal court.
Exxon’s cert petition claims the award, which was reduced from an initial $5 billion by a federal appeals court, is excessive under maritime law and violates constitutional due process protections, Legal Times reports.
The petition claims maritime law shields Exxon from liability since it did not direct or participate in the captain’s conduct that caused the shipwreck. It also argues that the punitive award, which was five times the calculated total losses caused by the shipwreck, is still unconstitutional given the substantial compensatory award.
The brief in opposition says jurors properly punished Exxon for reckless conduct that included allowing an “alcoholic culture” at its shipping operations. The Exxon Valdez captain admitted he was drinking the night the oil tanker ran into a reef.
In a Wall Street Journal commentary (sub. req.), litigator Theordore Boutrous Jr. says the court should take the case.
“The company long ago paid dearly for the catastrophic accident: some $3.4 billion in clean-up costs, natural resource damages, claims payments, fines and penalties,” writes Boutrous, who has represented several defendants challenging punitive awards.
He argues that Exxon had no fair notice of potential punitive liability under maritime law. “This is a serious constitutional wrong, which the Supreme Court should right,” he says.
