Exxon Discussion Board: “A Further Attempt to Reel in Punitive Damage Awards”

Richard Garbarini is an associate at Kreindler & Kreindler LLP and co-author of an Amicus Brief filed on behalf of the ship masters and expert mariners Captains Mitchell Stoller, Joseph Ahlstrom, Roger Johnson, John Scott Merill and Tom Trosvig in support of respondents.

The Court today cleared up the muddied waters of maritime law finding punitive damages are indeed available under maritime common-law. It also dealt a swift blow to the issue of pre-emption by the CWA, finding “. . . it hard to conclude that a statute geared to protecting “water” “shorelines” and “natural resources” was intended to eliminate sub silento oil companies common law duties to refrain from injuring the bodies and livelihoods of private individuals.” The Opinion is, however, in all respects, a further attempt to reel in punitive damage awards, and insert judicial restraint for the informed reasoning of a judge and jury.

This is the first case to decide the issue of punitive damages in the context of a “common-law standard of excessiveness.” All other cases involved state punitive damage laws and thereby were premised on due process considerations. Justice Souter couched his opinion in the context that the Court is “. . . in a position of a common law court of last review, faced with a perceived defect in a common law remedy.”That defect being arbitrary punitive damages awards “whether by judge or by jury”.

Today’s opinion, is, at its heart, judicial activism at its worst. Justice Souter, writing for the majority, found that “[t]he common sense of justice would surely bar penalties that reasonable people would think excessive for the harm caused in the circumstances.” While the Court agrees that most punitive damages award are assessed by a jury of presumed reasonable people and reviewed by a judge, the Court still somehow finds this process unreasonable.

The decision is also not founded in maritime law. Maritime law is a creature of federal statute and statutory construction. As Justice Stevens so aptly stated in his dissent, “in light of the many statutes governing liability under admiralty law, the absence of any limitation on an award of the sort at issue in this case suggests that Congress would not wish to create a new rule restricting the liability of a wrongdoer like Exxon.” Here the Court has inserted its judgment for the sound reasoning of juries, the informed review of judges and the intent of Congress.