Sizing Up the Exxon Valdez Punis Argument
The Wall Street Journal Law Blog has an update to its report on the Exxon Valdez hearing:
The Supreme Court weighed into murky waters today during oral arguments in a case involving the 1989 Exxon Valdez oil spill. At issue: whether to uphold a $2.5 billion punitive-damages award levied against Exxon Mobil for the spill, which occurred in Alaska’s Prince William Sound and created one of the largest environmental accidents in U.S. history.
According to the Dow Jones Newswires report, the justices seemed inclined to uphold at least part of the Exxon-Mobil award, which is five-times greater than the underlying actual damages. In other contexts, the Court has held that punitive damages do not violate due process so long as they bear a reasonable connection to the underlying harm suffered. Recent cases have loosely pegged the permissible ratio of punitives-to-compensatories at 9:1.