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Uncertain seas for maritime punitive damages: once assured of smooth sailing, plaintiffs find that U.S. Supreme Court cases have muddied the waters.

Article Excerpt
On March 23, 1989, minutes before the oil tanker Exxon Valdez was to make a critical turn away from a well-known and dangerous reef, an intoxicated Captain Joseph Hazelwood put his vessel on autopilot, gave the wheel to a fatigued third mate whose shift had ended and whose replacement had not shown up, and left the bridge.

The third mate tried to turn the giant tanker away from the danger, but was unsuccessful. The reef ripped into the hull, allowing 11 million gallons of oil to escape and pollute the environmentally pristine Prince Edward Sound. (1)

Although Exxon knew Hazelwood was an alcoholic who had fallen off the wagon, the company placed him in charge of a large tanker in an environmentally sensitive area. Given this, could a jury assess punitive damages against Exxon? Would such an award make this kind of tragedy less likely to happen again? How should a jury determine the appropriate amount of punitive damages?

These questions are being asked not only by the courts considering In re Exxon Valdez (2) but by maritime courts across the country. Unfortunately, the answers are far from clear.

Punitive damages have long been a part of American maritime law. In 1818, the Supreme Court recognized the recoverability of punitive damages in admiralty. (3) One early decision described in colorful language the unique potential for widespread harm posed by maritime disasters and the concomitant role of punitive damages in helping prevent the repetition of such disasters:

[I]t is not legally correct to say that a court cannot give exemplary damages, in a case like the present, against the owners of a vessel.... There is no subject upon which more repeated and solemn complaints have been made [by] the public, and few of deeper interest to the community, than the accidents, always attended with frightful alarms, and sometimes by the most fatal and melancholy consequences, from the collision of steamboats.... The Delaware River has been particularly exempt from these disasters, and it should be the determination, as it is the duty, not only of the courts when appealed to, but of every good citizen, to keep it so. (4)

In recent years, punitive damages have come under attack. Nonmaritime Supreme Court decisions have placed constitutional restrictions on how all such awards must be measured and apportioned. Maritime punitive damages have also come under fire, so much so that one scholar has suggested that they are "swiftly being eliminated" from the maritime law. (5)

While one hopes this prediction is overstated, punitive damages awards in maritime cases clearly have suffered significant setbacks in recent years, and courts differ on whether and when they may be allowed. How have we come to this uncertainty and confusion in the law?

'The curse of Miles'

Before the 1990 U.S. Supreme Court decision in Miles v. Apex Marine Corp., punitive damages were recoverable in many areas of maritime law. (6) Generally, a seaman was entitled to punitive damages for an employer's wanton, willful, or intentional disregard of the seaman's right to maintenance and cure. Punitive damages could also be recovered in connection with a seaman's personal injury claim based on unseaworthiness. On the other hand, courts differed on whether punitive damages could properly be awarded under the Jones Act.

Punitive damages were generally available to nonseamen for a variety of personal injury claims, including physical injury and the "blacklisting" of fishermen by an insurance company. (7) They were also allowed in property damage cases. (8) While there was much less certainty in the area of wrongful death, a significant body of...