1. Can the United States Supreme Court reduce the $2.5 billion punitive damage award?
Yes. During the oral argument the Court focused almost entirely on whether punitive damages are permissible under maritime law and if so, whether the $2.5 billion award was excessive. If the court finds that punitive damage awards are permissible then the amount is at issue. Maritime law is a unique area of federal common law, or judge made law. In this respect, the Supreme Court has the authority to set standards that could limit punitive damages awards in the maritime law context as it has done with punitive damage awards challenged under constitutional due process.
2. Why might the Supreme Court Justices reduce the punitive damage award?
In the last decade the Supreme Court has endeavored to set limits on punitive damages under the premise that excessive damages violate constitutional due process. During the years where this case bounced back and forth between the Ninth Circuit and the District Court of Alaska this was the main issue and ultimately the basis for which the Ninth Circuit cut the award. Now the Supreme Court is looking at the excessiveness of punitive damage awards under the lens of maritime law. Since this area of maritime law has not really been touched for nearly 200 years it is unclear whether a different standard should be applied. If in fact, there is a “different standard” it may or may not be more stringent than the constitutional standard. The result could reduce the award. This is what the Justices must decide.
3. Will the Supreme Court reach a decision before June?
Yes. There is always the possibility that a decision will be delivered before the summer recess deadline at the end of June. This largely depends on the complexity of the case and how long it takes for all of the Justices to approve the final written opinion.
4. What can I expect from the oral argument?
Typically, an attorney for each side will have 30 minutes to make a presentation to the Supreme Court. In this case, the Court granted Exxon’s request for additional time so each side will have 45 minutes to argue. The arguments generally are very interactive and driven by questions posed by the Supreme Court Justices.
5. Who is arguing on Exxon’s behalf?
Walter Dellinger. Mr. Dellinger is the former acting Solicitor General and currently with the firm O’Melveny & Myers. He is a seasoned veteran of the Supreme Court bar and is scheduled to argue three cases before the Supreme Court this term.
6. Who is arguing on the Plaintiffs’ behalf?
Jeffrey Fisher. Mr. Fisher is a professor at Stanford Law School. He is a rising star of the Supreme Court bar with victories representing criminal defendants. Mr. Fisher will also argue three cases this term.
7. What are Exxon’s main arguments?
Exxon argues that punitive damages are not an available remedy under maritime law and/or the Clean Water Act. Exxon claims that longstanding maritime law precedent protects a company from the reckless acts of a captain at sea as long as the company did not direct or participate in the conduct. Exxon thus asserts that Hazelwood’s actions should not be imputed to the company.
In the alternative, Exxon claims that the Clean Water Act supplants all existing common law, including maritime law in the context of an oil spill. Since the Clean Water Act does not expressly mention punitive damages, Exxon argues that Congress did not intend it to be an available remedy.
Finally, Exxon argues that even if punitive damages are an available remedy the $2.5 billion dollar award is excessive. Exxon claims that the expenses it incurred to clean up the oil and the other criminal and civil government penalties and fines were adequate to punish the company.
8. What are the Plaintiffs’ main arguments?
The plaintiffs argue that punitive damage awards are proper and permissible under maritime law and/or the Clean Water Act. Plaintiffs contend that under maritime law and modern tort law a company is liable for the reckless acts of a managerial employee. Further, plaintiffs argue that regardless of vicarious liability Exxon was independently reckless when it continued to employ captain Hazelwood despite the known fact that he was a relapsed alcoholic. Therefore under either theory, the plaintiffs maintain that Exxon acted recklessly and is thus liable for punitive damages.
Plaintiffs also argue that in 1989 the Trans-Alaska Pipeline Authorization Act rather than the Clean Water Act governed oil spills of trans-Alaskan oil. However, even if the Clean Water Act is applied it does not occupy the entire field of remedies with respect to oil spills especially as it pertains to private economic harm. The Clean Water Act was designed to help government enforce statutory standards to help remedy environmental harm. Tort law remains in place to help redress private economic harm. Thus the plaintiffs contend that punitive damages are available and in this case permissible.
Finally, the plaintiffs dispute Exxon’s claim that it was already adequately punished. Plaintiffs argue that after a very lengthy trial the district court reasonably determined that a multi-billion dollar punitive damage award was necessary to achieve punishment. Exxon foreseeably caused catastrophic harm when it placed a relapsed alcoholic in command of a supertanker. Thus the jury had ample reason to reject Exxon’s claim and award punitive damages.
9. Who can attend the oral argument?
The oral argument is open to the public but seating is limited and on a first-come, first-seated basis. Seating for the first argument will begin at 9:30 am. Please note that there are two lines, one for individuals who wish to hear the entire argument and one for tourists who just want to get a glimpse of the Supreme Court. The locations of the lines are marked by signs. Some arguments attract a very large crowd and may require getting in line very early to secure a seat.
10. Will the case be decided on February 27?
No. The Supreme Court will hear the case on February 27 but will not issue an opinion until later. There is no definite schedule or due date for a decision but all cases argued during the term are resolved before the Court recesses at the end of June.
11. How does the Supreme Court make a decision?
After the oral argument, the Justices meet in private to discuss the case and take a preliminary vote. A Justice in the majority is then tasked with drafting an opinion. The draft is privately circulated among the Justices until a final draft is agreed upon. This takes some time as the draft bounces around between the Justices. At any time before the final decision a Justice may change his/her mind.
12. Can either party appeal the Supreme Court decision?
No. The decision of the Supreme Court is final. However, a party has 25 days from the entry of judgment or decision to file a petition for rehearing. A rehearing is only granted if a majority of the Court agrees to revisit the decision.
13. What happens in the event of a tie?
The Supreme Court is generally composed of nine Justices so a tie is rare. However, in this case Justice Alito disqualified himself due to a conflict of interest so there is an even number. If the Court is deadlocked the Ninth Circuit’s $2.5 billion dollar punitive damage award remains intact and binding on the immediate parties.
14. How will we know when the Supreme Court makes a final decision?
When a final decision is reached the Justice who wrote the opinion announces the decision in a Court session. The Public Information Office then releases the full text of the opinion to the public and news media.