December 12, 2008

Exxon Shipping: Potential Impacts are Well Beyond Maritime Law

William E. Thomson and Kahn A. Scolnick recently published an article entitled "The Supreme Court Sets New Damage Limits Under Federal Common Law" in the October 2008 issue of the Federalist Society's publication, Class Action Watch. The authors make the claim that while the case arose under federal martime law, "the decision is important in several respects that may have application far beyond that narrow context." In particular, the authors contend "there is little principled basis for refusing to extend Baker's1:1 ratio to other areas of federal common law." As one example, the authors point to federal civil rights cases where the 1:1 ratio might be applied. The authors also speculate that the rationale for the 1:1 ratio would also apply equally in due process challenges to punitive damage awards in light of State Farm's statement that in cases with "substantial" compensatory damages, a 1:1 ratio "can reach the outermost limit of the due process guarantee."