Bill Introduced to Remove Cap on Punitive Damages

Posted on May 13, 2010 by Shelley Buckholtz

Senator Whitehouse (Rhode Island) introduced legislation that would remove the cap on punitive damages set by the United States Supreme Court in Exxon Shipping Company v. Baker.  The Supreme Court's cap on punitive damages in the Exxon spill case resulted in a recovery of damages far below the actual damages that were sustained by all affected over time. 

In the Exxon spill case, over 40,000 claims were also tossed out under the application of the Robbins Drydock doctrine, such that all those who suffered economic loss without being in actual contact with oil, had no viable claim, except commercial fisherman. 

Text of the legislation is not yet available from the GPO, but is most likely a direct response by Senator Whitehouse, a longtime advocate for the protection of ocean waters, to the Deepwater Horizon casualty. 

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Ninth Circuit Rules that Exxon Must Pay 12 Years' Interest on Punitive Damage Award

Posted on July 27, 2009 by Lafcadio Darling

In 2008, the U.S. Supreme Court limited the punitive damages award in the infamous Exxon Valdez case, holding that under maritime law the a punitive damages award is limited to 100% of the compensatory damages (see the Supreme Court’s 2008 opinion).

On remand, the Ninth Circuit Court of Appeals in Exxon Valdez v. Exxon Mobil Corp., 2009 WL 1652256 (June 15, 2009), held that interest on the punitive damages award should accrue from September 1996, the date of the original verdict against Exxon), not in 2008 when the final punitive damages award was fixed. Therefore, interest ran at a rate of 5.9% (the average accepted federal interest rate set by the Treasury) on the $507.5 million punitive damages award since September 24, 1996. The Ninth Circuit also held that each party must bear its own costs for the protracted appeals; Exxon had sought to have the plaintiffs bear all, or at least 90%, of Exxon’s appellate costs, since it had successfully reduced the original punitive damages award of $5 billion to $507.5 million.

Although hardly compensation for the large reduction in punitive damages by the Supreme Court, this ruling will give those who were damaged by the EXXON VALDEZ oil spill a somewhat better outcome and, perhaps more importantly, will move this case towards completion, more than 20 years after the spill. You can view a copy of the Ninth Circuit’s opinion.

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