DUI on the Seas

By James Evans

One night, when I was three years old, 5000 miles away an oil tanker collided with a reef and spilled 11 million gallons of oil into the Prince William Sound. Today, I'm 22, and the case of the Exxon Valdez has finally reached what might be its last day in court, about a mile and half down the street from me at the Supreme Court of the United States.

On Wednesday the Justices heard Exxon's argument that alcoholic captain Joseph Hazelwood was not a decision-making agent of Exxon, so Exxon should not have to pay $2.5 billion in punitive damages to the fishermen of Alaska hurt by Hazelwood's tragic navigation error.

The $2.5 billion figure has been the subject of years of legal wrangling. In 1994, a jury in federal court in Anchorage ordered Exxon to pay $5 billion in punitive damages, about a year's worth of Exxon profits at the time.

Punitive damages, for the legally disinclined, are awards courts can give to lawsuit plaintiffs that are meant to literally punish the defendants for their wrongdoing. Punitive damages are especially contentious because they can bankrupt companies and are crafted based on little more than juries' whims.

Today, $2.5 billion represents Exxon's profits over an average of three weeks.

So why has Exxon fought for fourteen years to avoid paying out the profit it will pull in between now and St. Patrick's Day?

According to former Solicitor General Walter Dellinger, who argued the case for Exxon, "Exxon gains nothing by what went wrong in this case, and paid dearly for it."

Exxon's position is that the $2 billion it spent attempting to clean up the disaster and $400 million paid in compensatory damages for lost revenue should suffice as punishment, especially considering Exxon doesn't like oil spills and doesn't plan on having another one soon.

However, Captain Hazelwood was already violating company policy when he drunkenly piloted the tanker into Prince William Sound and left the bridge in the command of an officer who lacked certification to navigate the Sound an hour before the collision. Cleary the Company isn't always in control.

"What if there is a breach of the corporate policy? I don't see what more a corporation can do," Chief Justice John Roberts asked of counsel for the Alaskan fishermen suing Exxon, Jeffrey Fisher, continuing, "[W]hat more can the corporation do other than say here is our policies? And try to implement them."

However, can Exxon simply plead a lack of control over its own employees to shirk a $2.5 billion debt? According to Fisher, it cannot because Hazelwood was indeed a principal agent of Exxon, making decisions for the Company that led to the disaster.

Fisher pointed out that it was Hazelwood's call to leave port in Valdez, noting, "The record unequivocally says that Captain Hazelwood is the one who made that policy decision."

Fisher also noted Exxon was aware that Hazelwood had a problem. "Up and down the corporation, as the district judge explained, for three years, upper management was receiving reports that this man was drinking aboard the vessel. Now, its policy, Mr. Chief Justice, was that that was not allowed."

These facts put the Supreme Court into a position to decide whose rights are more important: Exxon Mobil, a global corporation that raked in about $40.6 billion in profit last year; or a class of Alaskan fishermen whose livelihood was put in jeopardy by a drunken sailor one night 19 years ago.

It is alarming that some Justices expressed serious opinions in favor of Exxon holding onto every penny it can. While the Court's decision must be grounded in the controlling law, Fisher pointed out that lower courts aren't clear on punitive damages in maritime law, adding, "I gather that's one of the reasons why this Court decided to grant certiorari in this case."

"That, and $3.5 billion," Justice Antonin Scalia retorted. Billions that ought to go the little guy for a change.