Craft & Sheppard's Supreme Court Review
Punitive Damages, Maritime Law
In 1989, an oil tanker, the Exxon Valdez, ran aground in Prince William Sound resulting in a massive oil spill and an environmental disaster. At trial, the jury heard evidence that management knew the tanker captain, inebriated at the time of the incident, was a backsliding alcoholic. In Exxon Shipping Co. v. Grant Baker, Justice Alito recused himself, and a 4-4 Court declined to rule whether a ship-owner is liable for punitive damages caused by his employees’ acts without the ship-owner acquiescing in them, held that punitive damages were not impliedly preempted by federal maritime law when it did not expressly provide for them, and reduced the original $5 billion punitive damages award to the amount of compensatory damages, or less than one-tenth of that amount. Exxon had not profited from the conduct. Significantly, the Court based its punitive damages analysis in developing federal maritime common law remedies, not on due process limitations.
