Oil and Water Do Not Mix: An Argument for the United States Supreme Court's Deferral to Congress in Exxon v. Baker

AuthorPaige Kohn
PositionWill receive her J.D. from Capital University Law School in May 2010
In 1994, an Alask an jury entered a verdict of $5 billion in punitive
damages agains t oil giant Exxon, which at the time was the largest punitive
damages award in American history.1 The award stemmed from events
that occurred in 1989, when Exxon Valdez, a tanker owned and operated
by Exxon,2 collided with an underwater reef, thereby breaking the hull and
leaking eleven million gal lons of oil into Prince William Sound , Alaska.3
The oil sp ill was als o “the worst in A merican hist ory”4 and wreaked
enormous en vironmental, 5 economic ,6 and emotional damage7 on bo th
Copyright © 2009 Paige Koh n.
* Paige Kohn will receive her J.D. from Capital University Law Scho ol in May 2010.
She received her B.A. in Histo ry from The Ohio State University in August 200 4. The
author would like to thank Capital Un iversity Law Professor R achel M. Janutis for o ffering
valuable f eedback throughout the writing of this article. S he would also like to thank the
many friends, family memb ers, and professors who provided insight and assistance.
1 In re Exxon Valdez, 270 F.3d 1215, 1225 (9th Cir. 2001).
2 Exxon Shipping Co . v. Baker, 128 S . Ct. 2605, 2611–12 (2008). The tanker was
operated by Exxon Shipping Co., Inc., a subsid iary of the corporation now called Exx on
Mobil Corp. See, e.g., Renamed E xxon Valdez Will Ply D ifferent Waters, N.Y. TIM ES, July
7, 1990. Exxon Mobil acquired their new n ame after Exxon’s merger with Mobil in 1999.
See, e.g., Exxon-Mobil Merger Done, CNN MONEY.COM, No v. 30, 1999, http://money.cnn.
com/1999/11/30/deals/exxo nmobil.
3 Exxon Shipping Co., 128 S. Ct. at 2612–13 (2008). See also EXXON VALDEZ OIL
evostc.state.ak.us/facts/spil lmap.cfm (displaying a map of the areas affected by the Exxon
Valdez oil spill).
4 Adam L iptak, Damages Cut Against Exxon in V aldez Case, N.Y. TIMES, June 26,
2008, at A19.
5 See, e.g., Charl es H. Peterson et al., Long-Term Ecosystem Response to the Exxon
Valdez Oil Spill, 302 S CIENCE 2082, 2082 (2003) (“[M]ass mortalities of 1000 to 2800 sea
otters . . . and u nprecedented numbers o f seabird deaths estimated at 250,000 . . . were
documented during the days after the spi ll.”); Jeff Short, Stanley Rice & Mandy Lindeberg,
The Exxon Valdez O il Spill: How Much Oil R emains?, ALASKA FISHERIES SCIENCE CENTER,
Sept. 2001, http://www.afsc.noaa.go v/Quarterly/jas2001/feature_jas01.htm (“Long-term
humans and wildlife. Although hundreds of l awsuits stemmed from th e
devastation,8 the plaint iffs represented in Exxon v. Baker were over 32,000
Alaska Natives, landowners, and commercial fishermen.9 The case was
also a consolid ated and mandat ory punitive d amages class acti on.10 The
United States Su preme Court opinion in Exxon v. Bak er effectiv ely en ded
the punit ive damages matter that had been the so urce of complex litigation
for over a decade. 11
Exxon v. Bak er raised th ree issues of law: vicarious liability, federal
preemption, and pun itive damages.12 However, this article only analyzes
monitoring in the oiled areas has also shown that fauna from hig her trophic levels such as
sea otters and sea ducks still have not recovered.”); Kyl e Hopkins, D ebate Persists About
Long-Term Effects Of Exxon Valdez Oil Spill, ANCHORAGE DAILY NEWS, F eb. 6, 20 09, at
A1, available at http://www. adn.com/exxonvaldez/story/682335.html.
6 See, e.g., Exx on Valdez Oil Spill Trustee Council, Economi c Impacts of the Spill,
http://www.evostc.state.ak.u s/facts/economic.cfm (providing five studies und ertaken by the
Alaskan stat e government eva luating the econo mic impact to recreational fishing, tourism,
and replacing birds and mammals); SAMUEL K. SKINNER & WILLIAM K. REILLY, THE
harmful impacts the oil spil l had on commercial fisheries, recreation , and natives).
7 In re Exxon Valdez, 236 F. Supp. 2d 1043, 1 062 (D. Alaska 2002) (“Communities
affected by the spill ‘reported increased incidences of alcohol and drug abuse, domestic
violence, mental he alth problems, and occupation r elated problems.’” (quoting Duane A .
Gill, Environmental D isaster and Fishery Co-Management in a Natural Resource
Community: Impa ct of the Exxon Valdez Oil Sp ill, in FOLK MANAGEMENT IN THE WORLDS
FISHERIES 207, 227 (Christopher L. Dy er & James R. McGoodwin eds., 1994))).
8 In re Exxon Valdez, 270 F.3d 12 15, 1223–24 (9th Cir. 2001); see, e.g., Eyak Native
Village v. Exxon Corp., 25 F.3d 773, 775 (9th Cir. 1994) (discussing civil and criminal
prosecutions brought by the state of Alask a and the United State s government); State v.
Hazelwood, 866 P.2d 827, 828 (Alaska 1993) (discussing criminal pros ecutions brou ght
against the ship’s captain, Joseph J. Hazelwood).
9 Exxon Shipping Co . v. Baker, 128 S. Ct. 2605, 2613 (2008).
10 Id.
11 Liptak, supra note 4, at A1.
12 See Exxon Shipping Co., 128 S. Ct. at 2611. See Aaro n T. Duff, Comm ent, Punitive
Damages in Maritime Torts: Examining S hipowners’ Punitive Damage Liability in the
Wake of the Exxon Valdez Decision, 39 SETON HALL L. REV. 955 (2009), for r ecent
analyses on the v icarious liability issue; B randon T. Morris, Comment, Oil , Money, and the
Environment: Punitive D amages Under Due Process, Preempt ion, and Maritime Law in the
Wake of the Exxon Valdez L itigation, 33 TUL. MAR. L.J. 165 (2008).
2009] EXXON v. BAK ER 231
the punitiv e damages aspe ct of the opinion, and only in a limited fas hion.13
As a result, the area of law under considerat ion will not only be punitive
damages, b ut also federal maritime law, which was the jurisdiction al basis
for which the Supreme Court accepted the case on certiorari.14 The 5-3
decision in Exxon v. Baker created a 1:1 ratio between compensato ry and
punitive damages in federal ma ritime law, drastical ly reducing the original
$5 billion punitive damage award to $507 million15 to be shared amongst
the 32,000 plus pl aintiffs.16
Analyzing wh ether the Supreme Court mad e the ri ght decision in
Exxon v. Baker is not an easy t ask. On the surface, it may appear that
people who s upport the opinion are against the environment, and people
who side with the plaintiffs are an ti-corporation.17 However, this
simplistic approach fails to con sider th e nuanced legal equities inv olved in
13 For example, this article does not evaluate the pros and cons of punitive damages,
whether pun itive damages are excessive, or wh ether a lower ratio will ups et the objectives
of punitive damages such a s deterrence and punishment. See Jeffrey L. Fisher, The Exxon
Valdez Case and Regularizing Pu nishment, 26 ALASKA L. REV. 1 , 16–2 3 (2009)
(comparing p unitive damages to crimin al sentencing), for analyses of other punitive
damages issue s in light of the Exxon v. Baker decision; Charles S. Doskow, Wha t Do You
Do with a Drunken Sailor? Reprehensibi lity, The Exxon Valdez, and Punitive Damages, 2 7
QUINNIPIAC L. REV. 465 (200 9) (considering the issue of reprehensib ility and due process in
punitive damages).
14 Exxon Shipping Co., 128 S. Ct. at 2614.
15 Id. at 2633–34. The figure ros e, however, to about $99 5 million when interest was
included. Nate R aymond, Attorneys' Fees Plummet Following Exxon Valdez Decisio n, THE
AM LAW DAILY, June 2 5, 2 008, http://amlawdaily.typepad. com/amlawdaily/2008/06/
attorneys-fees.html. For a breakdown of how the punitive damages will be divided and
general update s on lingering Exxon Valdez issues see th e ANCHORAGE DAILY NEWS
website, http://www.adn. com/exxonvaldez.
16 Id. at 2613. Interestingly, “Exxon itself will actually get 11 percent of the verdi ct,
under a settlement with a group o f seafood comp anies known a s ‘the Seattle Seven.’ The
firm agreed in 1991 to pay them $63.75 million fo r their stake. That stak e, it turns out, is
worth around $106 millio n.” Raymond, supra note 15.
17 See, e.g., A Supreme Court on th e Brink, N.Y. TIMES, July 3, 2008, at A22
(“Corporations fared especially well in this term.”); Exxon verdict: Supreme Court Makes
Life Easier for Corporate Wrongdoers, ANCHO RAGE DAILY NEWS, June 26 , 2008, at B4;
Supreme Cou rt: A Win fo r Big Oil, SEATTLE POST-INTELLIGENCER, June 25, 2008, at B6
(discussing how corporat e responsibility has not exactly been on this court's agenda).

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