Exxon Shipping Co. v. Baker

544 U.S.471 (2008)

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Nature of the Case

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Facts

The supertanker Exxon Valdez grounded on the Alaskan coast spilling millions of gallons of crude oil into Prince William Sound. The owner, Exxon Shipping Co. (D), and its owner, petitioner Exxon Mobil Corp. (D), have settled state and federal claims for environmental damage, with payments exceeding $1 billion. This action by Baker (P) and others, including commercial fishermen and native Alaskans, was brought for economic losses to individuals dependent on Prince William Sound for their livelihoods. The tanker's captain was Joseph Hazelwood, who had completed a 28-day alcohol treatment program while employed by D, as his superiors knew, but dropped out of a prescribed follow-up program and stopped going to Alcoholics Anonymous meetings. There was strong evidence that D was an alcoholic and was not on the wagon. During the nonstandard departure from the port, Hazelwood left the bridge and went down to his cabin in order, he said, to do paperwork. This decision was inexplicable. Captains simply do not quit the bridge during maneuvers out of port, and no paperwork could have justified it. The evidence was that Hazelwood's presence was required, both because there should have been two officers on the bridge at all times and his departure left only one, and because he was the only person on the entire ship licensed to navigate this part of Prince William Sound. Hazelwood put the tanker on autopilot, speeding it up, making a required turn trickier, and any mistake harder to correct. A third mate unlicensed to navigate in those waters was left alone with the helmsman, a nonofficer. For reasons that remain a mystery, they failed to make the turn at Busby Light, and a later emergency maneuver attempted came too late. The tanker ran aground on Bligh Reef, tearing the hull open and spilling 11 million gallons of crude oil into Prince William Sound. Hazelwood's blood-alcohol was .061 eleven hours after the spill. Experts testified that to have this much alcohol in his bloodstream so long after the accident, Hazelwood at the time of the spill must have had a blood-alcohol level of around .241. That is three times the legal limit for driving in most States. D spent $2.1 billion in cleanup efforts. D was charged and plead guilty to a number of crimes. A civil action by the United States and the State of Alaska for environmental harms ended with a consent decree for Exxon to pay at least $900 million toward restoring natural resources, and it paid another $303 million in voluntary settlements with fishermen, property owners, and other private parties. The remaining civil cases were consolidated into this one. D stipulated to its negligence in the Valdez disaster and its ensuing liability for compensatory damages. In its charge punitive damages, emphasizing that they were designed not to provide compensatory relief but to punish and deter the defendants, the court charged the jury to consider the reprehensibility of Ds' conduct, their financial condition, the magnitude of the harm, and any mitigating facts. The jury awarded $5,000 in punitive damages against Hazelwood and $5 billion against Exxon. The Ninth Circuit remanded twice for adjustments in light of this Court's due process cases before ultimately itself remitting the award to $2.5 billion. The Supreme Court granted certiorari to consider whether maritime law allows corporate liability for punitive damages on the basis of the acts of managerial agents, whether the Clean Water Act (CWA), 86 Stat. 816, 33 U. S. C. §1251 et seq. (2000 ed. and Supp. V), forecloses the award of punitive damages in maritime spill cases, and whether the punitive damages awarded against Exxon, in this case, were excessive as a matter of maritime common law.