Lawmakers looking for ways to ensure that oil companies pay for devastating spills have a new target: a 2008 Supreme Court decision limiting punitive damages in maritime law.
Sen. Sheldon Whitehouse, D-R.I., joined by Sens. Patrick Leahy, D-Vt., Richard Durbin, D-Ill., Robert Menendez, D-N.J., and Bernard Sanders, I-Vt., introduced a bill this month that would eliminate the 1:1 ratio of punitive damages to compensatory damages imposed in Exxon Shipping Co. v. Baker (pdf).
The “Big Oil Polluter Pays Act” declares that, in any civil action for damages arising out of a maritime tort case, punitive damages may be assessed without regard to the amount of compensatory damages assessed in the action.
The Baker case stemmed from the 1989 Exxon Valdez oil spill in Prince William Sound, Alaska. The Supreme Court, exercising its authority as a common-law court, voted 5-3 to to reduce a $2.5 billion punitive award to Alaskan fishermen, fisheries and others damaged by the spill, to $500 million. The Baker decision has been on a list of high court rulings Leahy has criticized vigorously in the last two months as examples of what he called “a very conservative activist Supreme Court.”
The legislation declares that, in any civil action for damages arising out of a maritime tort case, punitive damages may be assessed without regard to the amount of compensatory damages assessed in the action. It would allow juries and judges to assess punitive damages based on all of the facts in a case, without regard to the amount of other damages owed, according to Whitehouse.
Several constitutional law scholars and litigators of punitive damages awards said Congress has clear authority to overturn the justices’ ruling. But the legislation, they added, raises other questions without clear answers.
“The decision rests on federal common law not constitutional law,” said Jeffrey Fisher of Stanford Law School, who argued on behalf of Baker in the Supreme Court. “Congress can always trump common law by passing a statute. In that sense, there’s no doubt of its authority. Once Congress steps in and says, ‘We’ve thought about this and it’s what we want,’ the Court goes into sort of its criminal law mode, which is to give significant, but not unlimited deference.”