Run Aground Again: The Exxon Valdez's Collision With the Supreme Court's Punitive Damages Jurisprudence

Date01 November 2009
11-2009 NEWS & ANALYSIS 39 ELR 11097
Run Aground
Again: The Exxon
Valdezs Collision
With the
Supreme Court’s
Punitive Damages
by Shawn LaTourette
Shawn LaTourette is a recent graduate of Rutgers
University School of Law-Camden and will be joining
Latham & Watkins, LLP as an associate in the rm’s
Newark, New Jersey, oce in December 2009.
   
in the Exxon Valdez case established a new constraint on
punitive damages. e decision will impact the future of
       
have implications for federal and state common-law claims
also have consequences for the constitutional due process
rooted in federal maritime law, the Exxon Valdez decision
The Exxon Valdez has long been on a collision course
with the U.S. Supreme Court’s punitive damages
jurisprudence. Just as the supertanker ran aground
o the coast of Alaska in early 1989, the high court began
to signa l a tide change in the regulation of punitive dam-
ages awards.1 At that time, punitive d amages were largely
regulated by state law, but the Court soon established a con-
stitutional limitation on grossly excessive punitive awards.2
As that limitation has taken form over the la st two decades,
the catastrophic fallout f rom the Exxon Valdez oil spill was
being litigated in the lower courts. Nearly 20 years af ter the
spill, those who sought punitive damages for their resulting
injuries were met by a Supreme Court still hostile toward
punitives, and poised to limit them in a new and unique way.
Long before the Exxon Valdez case made it to the Supreme
Court’s docket, there were concerns that punitive dama ges
awards had run amuck.3 Eventually, the Court devised
a means of limiting grossly excessive punitives as a mat-
ter of substantive due process.4 An important element of
the Court’s due process analysis involved the relationship
between compensatory and punitive damages: the prevailing
notion was that punitive damages should be tied to compen-
satory damages by means of a ratio or ma ximum multiple.5
As the Court’s punitive damages jurisprudence was develop-
ing, so too was the litigation on behalf of plaintis injured as
a result of the Exxon Valdez spill. e parties, a nd the lega l
community, expected that the Exxon Valdez litigation would
at some point test the connes of the due process limita-
tion on punitive damages. In a surprise move, however, the
Court refused to address the constitutional issue, and instead
examined the prospect of limiting punitive damages as a
matter of federal maritime common law.6 us, the Cour t
established a new limitation on punitive damages, grounded
not in the U.S. Constitution, but in the Court’s authority as
a common-law court of last review to construct (or in this
case, repair) a remedy. e Court ultimately held that a puni-
tive award should not exceed a compensatory award, thus
1. e Exxon Valdez ran aground on March 23, 1989. See Exxon Shipping Co.
v. Baker, 128 S. Ct. 2605, 2612, 38 ELR 20149 (2008). e Supreme Court
rst signaled that punitive damages may be subject to limitation under the
Due Process Clause of the Fourteenth Amendment on April 26, 1989. See
Browning-Ferris Indus. of Vt., Inc. v. Kelco Disposal, Inc., 492 U.S. 257,
275-76 (1989).
2. See infra Part I.
3. Pac. Mut. Life Ins. Co. v. Haslip, 499 U.S. 1, 18 (1989) (expressing concern
about punitive damages that “run wild”).
4. See infra Part I.
5. See infra Part I.
6. See infra Part II.B.
Editors’ Note: is Article was the winner of the Environmental Law
 
Copyright © 2009 Environmental Law Institute®, Washington, DC. reprinted with permission from ELR®,, 1-800-433-5120.

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