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A narrow ruling on punitive damages.

Article Excerpt
The most important thing to know about the Supreme Court's recent decision in Exxon Shipping Co. v. Baker is that the decision is about punitive damages only in maritime cases. (1) In the ruling, the Court was clear and emphatic that it was not relying on the Constitution in its analysis of punitive damages, and, in fact, it denied certiorari on Exxon's constitutional challenge to the punitive damages awarded against it.

Justice David Souter, writing for the 5-3 majority, concluded that under maritime common law, punitive damages should be in a 1-to-1 ratio with compensatory damages. Souter stressed the need for predictability and consistency in punitive damages and said that a 1-to-1 ratio would accomplish these goals.

The case arose from the catastrophic oil spill that occurred on March 24, 1989, when the supertanker Exxon Valdez grounded on Bligh Reef off the Alaskan coast, fracturing its hull. An estimated 11 million gallons of crude oil spilled into Prince William Sound.

The accident was the result of the drunkenness and errors of the tanker's captain, Joseph Hazelwood. Before the Exxon Valdez left port on the night of the disaster, Hazelwood downed at least five double vodkas in the waterfront bars of Valdez, enough alcohol "that a nonalcoholic would have passed out." (2) Although Exxon knew that Hazelwood had a serious drinking problem and that he had been through treatment for it, the company made no attempt to monitor him or ensure his sobriety on the job.

Commercial fishermen, native Alaskans, and other people who were dependent on Prince William Sound for their livelihoods brought thousands of civil suits seeking to recover...

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