Can I Recover Punitive Damages Under Maritime Law?

Posted by: rzehl
October 09, 2008
Topic: General Maritime Claims

Generally, punitive damages have always been recoverable under general maritime law. However, a recent Supreme Court decision, Exxon Shipping Co. v. Baker, presented three questions: (1) whether punitive damages are barred by the enactment of federal statutory law, like the Clean Water Act (CWA), (2) whether a corporation may be held liable for punitive damages because of the conduct or behavior of a managerial employee and (3) whether the award of $2.5 billion in punitive damages against Exxon was excessive under general maritime law. This case involved the infamous supertanker “Exxon Valdez” and the environmentally devastating oil spill it caused in Prince Edward Sound.

In its decision, the Court concluded that punitive damages are allowed under maritime law and are not preempted by any federal statutory law, including the CWA. The Court did, however, find the $2.5 billion award to be excessive and, using its rule-making powers bestowed upon it by Article III, § 2 of the U.S. Constitution, introduced a punitive damage cap of no more than the amount awarded for compensatory damages. This basically means that you can only recover punitive damages up to the amount you receive in compensation for your actual loss, a maximum ratio of 1:1. This resulted in the reduction of the $2.5 billion award to $507.5 million, the amount awarded in compensatory damages.

Interestingly enough, the Court was split (4-4 with J. Alito not participating) as to the issue of whether a corporation may be held liable for punitive damages stemming from the reckless and wanton behavior of its managerial employees. Because of this split, the Court followed long-standing precedent and left the opinion of the Ninth Circuit holding Exxon punitively liable for the actions of its managerial employee.

If you or someone you know has been injured offshore, contact the experienced Jones Act attorneys at the Fitts Zehl Law Firm by email at info@gulfcoastmaritimelawyer.com or by phone at (800) 99-FITTS. We represent clients from throughout the entire Gulf Coast region including: Homa, Gulfport, Houston and Tibideaux.

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