Punitive Damages after Exxon Shipping Company v. Baker: The Quest for Predictability and the Role of Juries
21 Pages Posted: 15 Jun 2010
This Symposium Essay considers the impact of the Supreme Court’s 2008 decision in Exxon Shipping Company v. Baker on the ability of juries to award punitive damages in a manner that comports with the law. In that case, the Court continued its two-decade crusade to place federal limits on punitive damages awards. The Exxon case was a federal maritime case arising out of the 1989 grounding of the Exxon Valdez in Prince William Sound, Alaska, resulting in arguably the biggest environmental disaster in U.S. history. In its decision, the Court for the first time identified “unpredictability” as the fundamental problem with punitive damages today. It then set out to make those damages more predictable by reaffirming the need for very low ratios, in this case 1:1, between punitive damages and compensatory damages. In this Essay, I argue that the Court’s quest for predictability has resulted in reviewing courts being forced to rely too heavily on the facts of other cases involving similar claims in order to determine if the punitive damages award in the case at bar is constitutional. Such a system is fraught with error and, more importantly, creates a situation where juries cannot possibly render punitive damages verdicts that meet due process requirements because the very evidence they need to assess predictability – the facts and damage awards in other cases – cannot be made available to them.
Part I provides a brief discussion of punitive damages generally and the Court’s recent effort to place federal constitutional limits on those damages. Part II discusses the Exxon case itself and highlights the Court’s focus on “unpredictability” as the fundamental problem with punitive damages. Part III shows how lower courts have applied the Exxon case. This Part reveals that even though courts recognize that the Exxon case is a federal maritime case rather than a substantive due process case, courts have embraced the call for predictable awards by ensuring punitive damages awards are in line (both as a matter of ratio and as an absolute dollar amount) with other similar cases. Part IV illustrates how the quest for predictability requires information on other similar cases that cannot be given to juries, and how the premium now placed on predictable damages awards makes it difficult, if not impossible, for juries to arrive at constitutional verdicts.
Keywords: punitive damages, due process, ratios, Exxon Valdez, oil spill, deterrence, predictability, retribution, juries
JEL Classification: K13, K14, K32, K41
Suggested Citation: Suggested Citation