U.S. Supreme Court

Several Justices Focus on Punitives Cap, Dismiss Liability Precedent in Exxon Case

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Justice Ruth Bader Ginsburg peppered the lawyer for Exxon Mobil with questions during oral arguments yesterday on whether a $2.5 billion punitive damages award should stand.

Ginsburg suggested a jury may have concluded the company itself was a grave wrongdoer for failing to fire the captain of the Exxon Valdez before he ran the ship aground, the New York Times reports. Such conduct would amount to more than vicarious negligence, she said.

“The jury could have found that Exxon knew that this captain had a severe alcohol problem; and, yet, they let him stay on voyage after voyage and did nothing about it,” Ginsburg said.

Ginsburg also questioned Exxon lawyer Walter Dellinger’s argument that settled maritime law precluded liability unless a company directed, ratified or participated in wrongdoing. Dellinger had relied on an 1818 Supreme Court case called The Amiable Nancy and a later 19th Century case barring liability.

“That was on land,” Ginsburg said when commenting on the railroad case.

Justice David H. Souter pointed out that times were different at the time of The Amiable Nancy. Back then, “the ship was sort of a floating world by itself. And the contact with the shipowner was simply gone until the thing came back into port again.”

Several stories on yesterday’s arguments said it appeared Exxon would be assessed punitives but the justices would lower the award. The New York Times said the question of whether maritime law allowed punitive damages “appeared to be a draw,” which would have the effect of leaving in place a federal appeals court ruling imposing punitive damages. Justice Samuel A. Alito Jr. is not participating in the case and a 4-4 tie is a possibility.

Rather than emphasizing the possibility of a tie, the Wall Street Journal (sub. req.) reported that “the justices seemed unpersuaded” by Dellinger’s argument that The Amiable Nancy precedent barred liability. At one point, Justice Antonin Scalia referred to the precedent as “Amiable whatever it is,” Legal Times reports.

However, several justices seemed inclined to impose a limit on the amount of the damages, according to the news accounts. A Washington Post column on the likelihood of a cap had this headline on the newspaper’s main page: “High Court Feels Exxon’s Pain: Ruling likely to find roughly three weeks’ profit too much to pay for largest U.S. Oil Spill.”

The Washington Post news account of the arguments said Souter suggested damages could be capped at double the amount of compensatory damages, which were found to be about $500 million in the case.

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