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US Supreme Court rules punitive damages not to exceed compensatory damages

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  • Pacific Merchant Marine Council, NLUS
    Much has be written and said about the tragic Exxon Valdez incident in 1989 and the aftermath. It is incredulous that Captain Hazelwood gave the con to the
    Message 1 of 1 , Jun 26, 2008
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      Much has be written and said about the tragic Exxon Valdez incident in 1989 and the aftermath.
       
      It is incredulous that Captain Hazelwood gave the con to the third mate and the helm to an able seaman to take the ship out of Prince William Sound then departed the wheelhouse and retired to his stateroom. Also should not the pilot have stayed with the ship till it was safely out to sea in the sea lane heading south?
       
      For his role in this disaster he was convicted of a misdemeanor charge of negligent discharge of oil, fined $50,000, and sentenced to 1,000 hours of community service. Captain Hazelwood never had his masters' license revoked and it remains valid to date.
       
      Phelps
      __________________________________________
       
      Exxon Valdez oil spill
       
       
      Exxon Valdez offloading its remaining crude oil to another tanker three days after the vessel grounded.
      Exxon Valdez offloading its remaining crude oil to another tanker three days after the vessel grounded.

      Exxon Valdez departed the port of Valdez, Alaska at 9:12 p.m. March 23, 1989 with 53 million gallons of crude oil bound for California. A harbor pilot guided the ship through the Valdez Narrows before departing the ship and returning control to Hazelwood, the ship's master. The ship maneuvered out of the shipping lane to avoid icebergs. Following the maneuver and sometime after 11 p.m., Hazelwood departed the wheel house and was in his stateroom at the time of the accident. He left Third Mate Gregory Cousins in charge of the wheel house and Able Seaman Robert Kagan at the helm with instructions to return to the shipping lane at a prearranged point. Exxon Valdez failed to return to the shipping lanes and struck Bligh Reef at around 12:04 a.m. March 24, 1989. The accident resulted in the discharge of around 11 million gallons of oil, 20% of the cargo, into Prince William Sound.[9]

      During Hazelwood's trial following the accident, Alaska state prosecutors failed to convince the jury that Hazelwood was intoxicated at the time of the grounding. By his own admission, Hazelwood drank "two or three vodkas" between 4:30 and 6:30 that same night, his blood alcohol content was found to be .061. However, the defense argued that the blood samples were taken nearly ten hours after the incident and were mishandled. Most states, including Alaska, do not allow samples after three hours and a preservative required to halt fermentation was not added to the sample. Fermentation could have added to the amount of alcohol in the sample making the result invalid. As a result of the accident, in 1991 the United States Coast Guard suspended his masters' license for a period of nine months. Hazelwood was acquitted on all felony charges, but was convicted of a misdemeanor charge of negligent discharge of oil, fined $50,000, and sentenced to 1,000 hours of community service.[3]

      Post-Exxon Valdez

      Time magazine featured Joseph Hazelwood and the Exxon Valdez in the July 24, 1989 edition.
      Time magazine featured Joseph Hazelwood and the Exxon Valdez in the July 24, 1989 edition.

      Captain Hazelwood never had his masters' license revoked and it remains valid to this date, but he has been unable to find long-term work as a captain after the spill. In a show of solidarity his alma mater, SUNY Maritime College, hired him as a teacher aboard the T/S Empire State V the year after the incident with the Valdez. In 1997, he was working as a paralegal and maritime consultant with New York City's Chalos & Brown, the firm that represented him in his legal cases. He was residing on Long Island in Huntington, New York in 1997.[10]

      Though he was originally sentenced to assist with the clean up of the oil spill, due to the lengthy appeals process, his community service was conducted in the Anchorage, Alaska, area, beginning in June 1999 picking up trash from local roads then later moving to Bean's Cafe, a local soup kitchen.[11] His community service was conducted over five years with the Anchorage Parks Beautification Program.[12] He paid the $50,000 fine in May 2002.[13]

       
      __________________________________________
       
      Top US court slashes Exxon Valdez oil damages
       
       
      Tugboats towing the oil tanker Exxon Valdez off Bligh Reef in Prince William Sound for repair and salvage two weeks after the tanker ran aground in March 1989, spilling 11 million gallons of crude oil. The US Supreme Court has ruled that punitive damages and interest imposed on ExxonMobil over the 1989 Exxon Valdez oil spill disaster were excessive and should be drastically reduced.(AFP/File/Chris Wilkins)
      Tugboats towing the oil tanker Exxon Valdez off Bligh Reef in Prince William Sound for repair and salvage two weeks after the tanker ran aground in March 1989, spilling 11 million gallons of crude oil. The US Supreme Court has ruled that punitive damages and interest imposed on ExxonMobil over the 1989 Exxon Valdez oil spill disaster were excessive and should be drastically reduced.

      by Fanny Carrier Wed Jun 25, 4:18 PM ET

      WASHINGTON (AFP) - The US Supreme Court Wednesday rejected as excessive 2.5 billion dollars in punitive damages awarded to victims of the Exxon Valdez oil disaster and said it should be cut to 507 million dollars.

      The long-running legal battle stretches back to March 24, 1989 when the Exxon Valdez crashed into a reef in Prince William Sound, Alaska, spilling 11 million gallons of crude into the sea in the United States' worst oil disaster.

      After the spill, ExxonMobil spent about 2.1 billion dollars cleaning up the polluted coastline and more than 300 million in compensation for fishermen and locals affected by the catastrophe.

      The company also paid out more than 900 million dollars of fines in a bid to halt criminal proceedings brought against it by the US government and the state of Alaska.

      In an opinion penned by Justice David Souter, the Supreme Court said ExxonMobil should not have to pay out punitive damages exceeding the compensatory damages awarded against it.

      In 1994 a jury in a civil Alaskan lawsuit ordered the Texas-based firm to pay five billion dollars in punitive damages to some 34,000 fishermen and others who worked in Prince William Sound.

      That sum was cut to four billion in December 2002, and then increased to 4.5 billion in January 2004 in various appellate rulings.

      Then in December, the US Court of Appeal cut the punitive damages to 2.5 billion saying the amount was more in line with legal precedent.

      Wednesday's ruling rejected the federal appeals court damages and transferred the case to the lower court "to remit the punitive damages award accordingly."

      While acknowledging there were no firm rules for determining punitive damages, the high court said it was guided by studies of penalties in hundreds of civil cases in lower courts.

      In those cases, the median of the punitive awards handed down came to less than the amount in compensatory damages, Souter wrote.

      As a result, the justices concluded that the punitive award in the Exxon case should not exceed a one-to-one ratio of the 507.5 million dollars already awarded in compensation damages.

      In a statetment, ExxonMobil said: "The Valdez oil spill was a tragic accident and one which the corporation deeply regrets.

      "We have worked hard over many years to address the impacts of the spill and to prevent such accidents from happening in our company again."

      The US Chamber of Commerce called the ruling a "victory."

      "For years the chamber has argued that punitive damages are too unpredictable and unfair, and today the court agreed," the chamber's president Tom Donohue said in a statement.

      But People for the American Way, a liberal organization critical of the conservative justices appointed to the court by President George W. Bush, condemned the outcome.

      "Exxon was responsible for one of the greatest environmental disasters our country has seen, and the Supreme Court let them off with a slap on the wrist," its president Kathryn Kolbert said in a statement.

      "This award is a drop in the bucket of Exxon's enormous profits, and it certainly provides no disincentive for them to avoid another accident in the future."

      ExxonMobil had asked the country's top court to consider both the amount of the damages and whether it was in fact liable under existing maritime law.

      The court was split 4-4 on the principle of whether the company was liable under maritime law, with Justice Samuel Alito recusing himself because he owned shares of Exxon stock.

      That let stand an earlier decision by a federal court that held Exxon liable for punitive damages.

      Examining the history of punitive damages, the Supreme Court said the concept dates back to the 1700s and under US law has been meant to serve as retribution and deterring harmful conduct.

      But it said rules for punitive awards vary from state to state and are often seen as arbitrary or unpredictable.

       
       
       

       

      News Stories for Exxon Valdez

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      • 1.
        Top US court slashes Exxon Valdez oil damages
        AFP via Yahoo! News - Jun 25 1:18 PM
        The US Supreme Court Wednesday rejected as excessive 2.5 billion dollars in punitive damages awarded to victims of the Exxon Valdez oil disaster and said it should be cut to 507 million dollars.
      • 2.
        AP via Yahoo! News - Jun 25 11:12 AM
        The Supreme Court on Wednesday slashed the $2.5 billion punitive damages award in the 1989 Exxon Valdez disaster to $500 million.
      • 3.
        Supreme Court rules damages excessive in Exxon Valdez oil spill
        AFP via Yahoo! News - Jun 25 8:01 AM
        The US Supreme Court ruled Wednesday that a 2.5 billion dollar punitive damages award to victims of the 1989 Exxon Valdez oil spill disaster was excessive and should be slashed to 507 million dollars.
      • 4.
        AP via Yahoo! News - Jun 25 12:16 PM
        Reaction to Wednesday's ruling in which the Supreme Court cut a $2.5 billion damage award to $500 million in the Exxon Valdez oil spill case in Alaska:
      • 5.
        USA Today - Jun 25 8:01 PM
        The Supreme Court tossed out a $2.5B punitive damages award in a 5-3 decision arising from the 1989 grounding of the Exxon Valdez.
      • 6.
        AP via Yahoo! News - Jun 25 7:11 AM
        The Supreme Court on Wednesday cut the $2.5 billion punitive damages award in the 1989 Exxon Valdez disaster to $500 million.
      • 7.
        Exxon Valdez $2.5 billion oil spill ruling overturned
        Reuters via Yahoo! News - Jun 25 2:51 PM
        The U.S. Supreme Court on Wednesday threw out the record $2.5 billion in punitive damages that Exxon Mobil Corp had been ordered to pay for the 1989 Exxon Valdez oil spill off Alaska, the nation's worst tanker spill.
      • 8.
        Exxon Valdez $2.5 bln oil spill ruling overturned
        Reuters via Yahoo! News - Jun 25 7:17 AM
        The U.S. Supreme Court overturned on Wednesday the $2.5 billion in punitive damages that Exxon Mobil Corp was to have paid for the 1989 Exxon Valdez oil spill off Alaska.
      • 9.
        Washington Post - Jun 25 1:35 PM
        Tom Goldstein, a partner at Washington law firm Akin Gump and the founder of Scotusblog, was online Wednesday, June 25 at 3 p.m. ET to discuss the court's rulings today, the most notable of which were about death penalty sentences for child rape and the size of the damages awarded in the Exxon Valdez oil spill.
      • 10.
        The Philadelphia Inquirer - 13 minutes ago
        WASHINGTON - In a victory for corporations seeking to limit big-dollar lawsuits, the Supreme Court yesterday cut the $2.5 billion in punitive damages awarded in the 1989 Exxon Valdez oil spill.
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      www.loe.org/series/exxon/almanac.htm - Cached
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      en.wikipedia.org/wiki/Exxon_Valdez_oil_ spill - 80k - Cached
      ... (born 1946) was the captain of the Exxon Valdez during its 1989 oil spill. ... Exxon Valdez failed to return to the shipping lanes and struck Bligh Reef at ...
      en.wikipedia.org/wiki/Joseph_Hazelwood - Cached
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      www.eoearth.org/article/Exxon_Valdez_ oil_spill - 69k - Cached
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      www.evostc.state.ak.us/History/FAQ.cfm - Cached
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      www.loe.org/series/exxon/aground.htm - Cached
      Historic News coverage of the 1989 Exxon Valdez oil spill in Prince William Sound, Alaska. Plus information about the spills economic, sociological and environmental ...
      www.adn.com/evos/stories/EV84.html - Cached
      The Exxon Valdez, after receiving 53 million cargo of crude, pulled away from ... The Exxon Valdez is one of the largest vessels on water. ...
      gurukul.ucc.american.edu/ted/exxon.htm - Cached
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