Wednesday
Feb272008
Supreme Court today: Exxon v. Baker
There was one ruling, announced by Justice Kennedy. The question was whether plaintiffs could file an age discrimination suit against Federal Express even though they did not go through the normal EEOC complaint process first. The Court deferred to the EEOC's interpretation of its rules and found that the filings to the EEOC, though not the complete normal process, were a "complaint," so the suit can go forward. Justices Thomas and Scalia dissented.
The case today was Exxon v. Baker. Justice Alito has recused himself, likely because he is an Exxon-Mobil stockholder. The question is whether maritime law allows punitive damages against Exxon for the Exxon Valdez oil spill, and if so whether there's a limit to how large they can be. There is no clear, recent precedent on the issue, so the Court is looking at rulings from 200 years ago in cases that aren't directly comparable. Exxon is arguing that the captain of a ship cannot make company policy and is therefore independent enough that the company should not be held liable for his actions violating their policy; these concerns are the grounding for the precedents. Additionally, Exxon argued that punitive damages are unneeded in a case where the action was not intentional and did not benefit the company in any way. Baker argues that nothing has changed since the spill, indicating Exxon does need incentive to make sure it doesn't happen again. Baker also argues that the captain is in charge of a "business unit" of Exxon and therefore is high enough in the company that the company should be liable for his actions. Most states follow a "managerial agent" standard for determining when a company should be held liable in cases like this, and Exxon does not contest that the captain is a managerial agent; instead they argue that the rules are different in the maritime context. Justice Souter suggested the distinction may have been relevant when ship captains were out of touch with land for long periods and captains had to act independently, but the distinction may no longer make sense. On the size of the award, Exxon argues the Clean Water Act's limit of double the compensatory damages should be considered, but Baker points out the CWA considers economic harms to people rather than environmental harms.
All of the Justices seemed unsure of the strength of precedent in this case, so I do not feel comfortable predicting how any of the Justices will vote.
[Disclosure: the author is an Exxon-Mobil stockholder.]
The case today was Exxon v. Baker. Justice Alito has recused himself, likely because he is an Exxon-Mobil stockholder. The question is whether maritime law allows punitive damages against Exxon for the Exxon Valdez oil spill, and if so whether there's a limit to how large they can be. There is no clear, recent precedent on the issue, so the Court is looking at rulings from 200 years ago in cases that aren't directly comparable. Exxon is arguing that the captain of a ship cannot make company policy and is therefore independent enough that the company should not be held liable for his actions violating their policy; these concerns are the grounding for the precedents. Additionally, Exxon argued that punitive damages are unneeded in a case where the action was not intentional and did not benefit the company in any way. Baker argues that nothing has changed since the spill, indicating Exxon does need incentive to make sure it doesn't happen again. Baker also argues that the captain is in charge of a "business unit" of Exxon and therefore is high enough in the company that the company should be liable for his actions. Most states follow a "managerial agent" standard for determining when a company should be held liable in cases like this, and Exxon does not contest that the captain is a managerial agent; instead they argue that the rules are different in the maritime context. Justice Souter suggested the distinction may have been relevant when ship captains were out of touch with land for long periods and captains had to act independently, but the distinction may no longer make sense. On the size of the award, Exxon argues the Clean Water Act's limit of double the compensatory damages should be considered, but Baker points out the CWA considers economic harms to people rather than environmental harms.
All of the Justices seemed unsure of the strength of precedent in this case, so I do not feel comfortable predicting how any of the Justices will vote.
[Disclosure: the author is an Exxon-Mobil stockholder.]
tagged 
Supreme Court, environment, exxon, maritime, oil spill in News/Commentary
Supreme Court, environment, exxon, maritime, oil spill in News/Commentary
Reader Comments (1)
There is argument mentioned in the SCOTUS report that the size of the corporation should have no bearing on the size of a 'punative damage'. "As if being a large successfull business should be penalized for it's huge sucess'. If punative damages are the only way to make a corporation sence that it has recklessly and/or knowingly harmed another (or others), in an attempt to influence it to mend it's ways, wouldn't it be right then to inflict monetary pain to that corporation that would indeed catch it's attention, resulting in it's responsible board to remediate imediately its errant policy/philosophy...and effectively act as a deterrant? Would you think that penalizing an auto maker for fraudulently selling damaged good as new(as in the BMW V wealthy Dr used as comparrison by Dellinger) should ride in the same trolly of offences as Hazzlewood's managers....up thru the ranks to Exxon CEO's who... KNEW BUT DID NOT DETER while knowing via 32 employee reports of his relapsed drinking...over an extended period of time...resulting in this massive oil spill which resulted in the class action of over 32,000 damaged victims of corporate complacency?
How thick is a massive corporation's skin? How much do it's shareholders, BOD, and top suits need to EACH INDIVIDUALLY LOOSE(of potential proffits) for them to consent and promote in a major change of policy and deterrant of like incidents? Remember also that the spilled oil sat on calm water for nearly 4 full days while.....virtually no industry supervised effort was actually in place to take any of it out of the water....it was on paper but not in reality.....Then the wind blew the mess far and wide.