January 21, 2008

Upcoming Exxon Valdez Decision May Have Little Impact Outside Maritime Law

When the U.S. Supreme Court agreed to review the Ninth Circuit's latest decision in the Exxon Valdez litigation, the grant of certiorari grabbed headlines mostly because of the $2.5 billion punitive damages award (which was actually a reduction from the $5 billion in punitive damages originally awarded by the jury). But a closer look at the issues and the briefing suggests that the case (scheduled for oral argument on Wednesday, Feb. 27) may have only a limited impact on punitive damages litigation outside the context of maritime law. Exxon's brief on the merits is focused exclusively on maritime law issues, as are some of the amicus briefs filed in support of Exxon.

Two of the amicus briefs, one filed by the Washington Legal Foundation and one by the Products Liability Advisory Committee, urge the Supreme Court to take a broader approach and impose limits on punitive damages under federal common law. Even that proposal would have a limited impact, however, as it would not apply to punitive damages imposed under state law.

One amicus brief, filed by the American Petroleum Institute and others, advocates an even more expansive approach; it asks the court to articulate a universal test for excessiveness that applies not only to maritime cases but to any case posing an excessiveness issue. That approach, if the Supreme Court adopted it, would obviously have a tremendous impact on all punitive damages cases. But recent history, particularly Philip Morris v. Williams, suggests the Roberts Court is more likely to confine its decision to the maritime issues addressed in Exxon's brief.