To: koan who wrote (76743 ) 5/31/2010 10:49:02 AM From: stockman_scott Read Replies (1) | Respond to of 149317 Senators Target Supreme Court's 'Exxon' Ruling in Effort to Make Oil Companies Pay for Spills By Marcia Coyle The National Law Journal 06-01-2010 Lawmakers looking for ways to ensure that oil companies pay for devastating spills have a new target: a 2008 Supreme Court decision limiting punitive damages in maritime law. Sen. Sheldon Whitehouse, D-R.I., joined by Sens. Patrick Leahy, D-Vt., Richard Durbin, D-Ill., Robert Menendez, D-N.J., and Bernard Sanders, I-Vt., introduced a bill this month that would eliminate the 1:1 ratio of punitive damages to compensatory damages imposed in Exxon Shipping Co. v. Baker (pdf). The "Big Oil Polluter Pays Act" declares that, in any civil action for damages arising out of a maritime tort case, punitive damages may be assessed without regard to the amount of compensatory damages assessed in the action. The Baker case stemmed from the 1989 Exxon Valdez oil spill in Prince William Sound, Alaska. The Supreme Court, exercising its authority as a common-law court, voted 5-3 to to reduce a $2.5 billion punitive award to Alaskan fishermen, fisheries and others damaged by the spill, to $500 million. The Baker decision has been on a list of high court rulings Leahy has criticized vigorously in the last two months as examples of what he called "a very conservative activist Supreme Court." The legislation declares that, in any civil action for damages arising out of a maritime tort case, punitive damages may be assessed without regard to the amount of compensatory damages assessed in the action. It would allow juries and judges to assess punitive damages based on all of the facts in a case, without regard to the amount of other damages owed, according to Whitehouse. Several constitutional law scholars and litigators of punitive damages awards said Congress has clear authority to overturn the justices' ruling. But the legislation, they added, raises other questions without clear answers. "The decision rests on federal common law not constitutional law," said Jeffrey Fisher of Stanford Law School, who argued on behalf of Baker in the Supreme Court. "Congress can always trump common law by passing a statute. In that sense, there's no doubt of its authority. Once Congress steps in and says, 'We've thought about this and it's what we want,' the Court goes into sort of its criminal law mode, which is to give significant, but not unlimited deference." The harder question is whether even if Congress lifts the 1:1 ratio in maritime law, is any award over that ratio nonetheless unconstitutional, said a veteran litigator of punitive damages awards who asked for anonymity because of potential conflicts. "There are suggestions in the Baker opinion that the same result would be reached as a matter of constitutional law," he said. Justice David Souter, who wrote the majority opinion, noted in a footnote that the same considerations that led the majority to its conclusion about maritime punitive awards would apply to constitutional due process challenges, he and others recalled. "If I were defending somebody like BP, my first line of argument would be that this statute is ineffective because Baker makes 1:1 the appropriate amount under constitutional due process," said the punitive damages litigator. Fisher raised concerns that the bill says so very little about punitive damages awards. "If I were drafting legislation, I would want them to select a different cap and impose a more calibrated system which courts would be more inclined to defer to when engaging in the constitutional analysis," he explained. Another potential problem, particularly if the lawmakers want the reversal of Baker to apply to BP, is the question of retroactivity. The bill says nothing about its effective date. "It wouldn't be clearly unconstitutional," said Fisher. "The question would be whether this is a change in law or clarification of congressional policy. The general rule is you can change procedural rules retroactively but when you are talking about substantive relief, then retroactivity is disfavored. There would be a fight."