Exxon Shipping Co. v. Baker

Exxon Shipping Co. v. Baker

Opinion

 [*475]  [**2611] Justice Souter delivered the opinion of the Court.

There are three questions of maritime law before us: whether a shipowner may be liable for punitive damages  [****9]  [*476]  without acquiescence in the actions causing harm, whether punitive damages have been barred implicitly by federal statutory law making no provision for them, and whether the award of $ 2.5 billion in this case is greater than maritime law should allow in the circumstances. We are equally divided on the owner's derivative liability, and hold that the federal statutory law does not bar a punitive award on top of damages for economic loss, but that the award here should be limited to an amount equal to compensatory damages.

On March 24, 1989, the supertanker Exxon Valdez grounded on Bligh Reef off the Alaskan coast, fracturing its hull and spilling millions of gallons of crude oil into Prince William Sound. The owner, petitioner Exxon Shipping Co. (now SeaRiver Maritime, Inc.), and its owner, petitioner Exxon Mobil Corp. (collectively, Exxon), have settled state and federal claims for environmental damage, with payments exceeding $ 1 billion, and this action by respondent Baker and others, including commercial  [***576] fishermen and native Alaskans, was brought for economic losses to individuals dependent on Prince William Sound for their livelihoods.

 [**2612] A

The tanker was over 900 feet long and was  [****10] used by Exxon to carry crude oil from the end of the Trans-Alaska Pipeline in Valdez, Alaska, to the lower 48 States. On the night of the spill it was carrying 53 million gallons of crude oil, or over a million barrels. Its captain was one Joseph Hazelwood, who had completed a 28-day alcohol treatment program while employed by Exxon, as his superiors knew, but dropped out of a prescribed followup program and stopped going to Alcoholics Anonymous meetings.  According to the District Court, "[t]here was evidence presented to the jury that after Hazelwood was released from [residential treatment], he drank in bars, parking lots, apartments, airports,  [*477]  airplanes, restaurants, hotels, at various ports, and aboard Exxon tankers." In re Exxon Valdez, No. A89-0095-CV, Order No. 265 (D. Alaska, Jan. 27, 1995), p 5, App. F to Pet. for Cert. 255a-256a (hereinafter Order 265). The jury also heard contested testimony that Hazelwood drank with Exxon officials and that members of the Exxon management knew of his relapse. See ibid.  Although Exxon had a clear policy prohibiting employees from serving onboard within four hours of consuming alcohol, see In re Exxon Valdez, 270 F.3d 1215, 1238 (CA9 2001),  [****11] Exxon presented no evidence that it monitored Hazelwood after his return to duty or considered giving him a shoreside assignment, see Order 265, p 5, supra, at 256a. Witnesses testified that before the Valdez left port on the night of the disaster, Hazelwood downed at least five double vodkas in the waterfront bars of Valdez, an intake of about 15 ounces of 80-proof alcohol, enough "that a non-alcoholic would have passed out." 270 F.3d at 1236.

The ship sailed at 9:12 pm. on March 23, 1989, guided by a state-licensed pilot for the first leg out, through the Valdez Narrows. At 11:20 pm., Hazelwood took active control and, owing to poor conditions in the outbound shipping lane, radioed the Coast Guard for permission to move east across the inbound lane to a less icy path. Under the conditions, this was a standard move, which the last outbound tanker had also taken, and the Coast Guard cleared the Valdez to cross the inbound lane. The tanker accordingly steered east toward clearer waters, but the move put it in the path of an underwater reef off Bligh Island, thus requiring a turn back west into the shipping lane around Busby Light, north of the reef.

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