The Anchorage Daily News reports, in a story entitled “Resolution of Exxon interest issue may be soon,” that the Supreme Court typically issues its final judgment 32 days after issuance of the opinion. In this case, the 32nd day falls on July 28. Thus, the court is likely to either clarify the interest issue by July 28, or issue a final judgment without addressing the interest issue. Both sides have argued that they should win if the final judgment is silent on the question of interest.
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Exxon Opposes Plaintiffs’ Request for Interest on $500 Million Punitive Damages Award
Last week, the plaintiffs in Exxon Shipping Co. v. Baker asked the Supreme Court to clarify whether they are entitled to interest on their punitive damages award. The plaintiffs were concerned that they might be denied interest under Supreme Court Rule 42.1, which provides: “If a judgment is modified or reversed with a direction that a judgment for money be entered below, the mandate will contain instructions with respect to the allowance of interest.” In this case, the Supreme Court’s opinion did not contain any instructions regarding interest. The plaintiffs claim they are entitled to about $488 million in interest.
Exxon has now filed a response. Exxon agrees that the Supreme Court should resolve the interest issue, but Exxon contends the plaintiffs are not entitled to any interest. Exxon argues that the purpose of awarding postjudgment interest is to compensate a plaintiff for the lost use of their money during the time between the ascertainment of the damages and the payment of the judgment. But Exxon contends that the plaintiffs in this case have no right to compensation of any kind, because they have already been fully compensated by the compensatory damages award. The punitive damages were awarded purely for the public purposes of punishment and deterrence, and those purposes will be served regardless of whether interest is added to the award. Exxon also argues that the extraordinary delay between the date of the original judgment and the Supreme Court’s decision was caused by the plaintiffs, who repeatedly persuaded the district court to ignore the decisions of the Ninth Circuit and the Supreme Court.
Hat tip: SCOTUSblog.
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PrawfsBlawg: Supreme Court Punitive Damages Cases Illustrates Folly of Attempting to Predict Outcomes Based on Political Labels
Prof. Rick Hills at PrawfsBlawg has a post entitled “Spatial Attitudinalism & Philip Morris v. Williams.” Hill criticizes the approach of political scientists who attempt to predict or explain the outcomes of legal cases by focusing on the political ideology of the judge (often based on the party of the President who appointed the judge.) Hill points out that the voting patterns of Supreme Court Justices in punitive damages cases illustrates the shortcomings of such an approach:
Could any attitudinalist model predict that these two conservative Republicans would be making a stand against the National Association of Manufacturers in favor of state power over punitive damages? Loyalty to federalism and hostility to judicial discretion in interpreting the due process clause surely explain their votes more than any constitutionally irrelevant “attitude.” Likewise, Breyer’s championing restrictions on juries surely rests on his love of technocracy over decentralized juries more than any fealty to the values of the Democratic Party or love of Big Tobacco.
I think Hill has a good point. As my co-blogger Jeremy Rosen has observed, however, popular commentary on the Court’s punitive damages decisions (and even some academic commentary, like this article by Erwin Chemerinsky) has often criticized the “conservative” court for the outcomes in those cases, without even seeming to notice that the most conservative justices on the court dissented from those opinions. After all, BMW v. Gore, the case that launched the Court’s foray into substantive due process restrictions for punitive damages, was authored by Justice Stevens, not usually described as a conservative. (Though he was appointed by a Republican, so I guess that would fit a primitive “spatial attitudinalism” model.)
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Exxon Valdez Plaintiffs Ask Supreme Court to Confirm Their Entitlement to Interest on the $500 Million Punitive Damages Award
The plaintiffs in Exxon Shipping Co. v. Baker have filed a “submission” with the Supreme Court, seeking clarification of their entitlement to interest on the reduced punitive damages award, dating back to the date of the original judgment.
Supreme Court Rule 42.1 provides: “If a judgment is modified or reversed with a direction that a judgment for money be entered below, the mandate will contain instructions with respect to the allowance of interest.” In this case, however, the Supreme Court’s opinion did not contain any instructions regarding interest. The plaintiffs seek interest at the rate of 5.9 percent, compounded annually, dating back to Sept. 24, 1996, for a total of $488 million. Not exactly chump change.
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Ted Frank Podcast on Exxon Shipping Co. v. Baker
Ted Frank at Overlawyered reports that he has recorded a podcast for the Federalist Society on the Supreme Court’s decision in Exxon Shipping Co. v. Baker.
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Does West Virginia’s Lack of a Right to Appeal a Punitive Damages Award Violate Due Process?
West Virginia is one of three states that does not afford litigants an automatic right to file an appeal. Rather, under Rule 3 of the West Virginia Rules of Appellate Procedure, the losing party must first petition the Supreme Court for permission to appeal. A full appeal only follows if the court permits it.
The United States Supreme Court has held that defendants’ federal due process rights are violated by certain punitive damage awards. Can a state procedural rule preclude review for such federal due process violations? In 2003, the United States Supreme Court denied certiorari in Mountain Enterprises, Inc. v. Fitch et al., No. 03-1223 (U.S. Sup. Ct.), a challenge to the West Virginia Supreme Court’s refusal to hear an appeal from a punitive damage award. This may not be the final word. We previously blogged here about the West Virginia Supreme Court’s refusal to hear the appeal from a $270 million punitive damage award entered against NiSource. As reported in the PR Newswire, NiSource has now indicated it plans to file a petition for writ of certiorari raising again the issue that the refusal to be permitted to appeal from a punitive damage award is itself a violation of due process. NiSource could rely on Honda Motor Company v. Oberg, in which the Supreme Court held that Oregon’s denial of review of the size of punitive damages awards violates the Due Process Clause.
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Anthony Sebok Findlaw Essay: “The Lessons of the Supreme Court’s Recent Decision Granting a Huge Victory to Exxon in the Exxon Valdez Oil Spill Case”
Findlaw.com features this essay by Anthony Sebok, a law professor at the Benjamin N. Cardozo School of Law.
In light of Sebok’s prior writings, it is not surprising that he finds fault with the Court’s adoption of a one-to-one ratio in Exxon Shipping Co. Unlike the dissenters in that case, however, Sebok does not criticize the majority for improperly delving into substantively law. He views the majority opinion as an appropriate exercise of common law rulemaking; he just thinks the opinion’s reasoning is misguided because it rests on a misunderstanding of the historical purpose of punitive damages.
Sebok concludes by making one of the same observations that we made about the Exxon Shipping Co. decision: that the unusual circumstances of this case yielded a five-justice voting alignment that’s not likely to be repeated if the Supreme Court takes on another punitive damages case.
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ALI-ABA Will Hold July 17 Webcast on Exxon Shipping Co. v. Baker
On Thursday July 17th from noon to 1 pm. EST, ALI-ABA is presenting a webcast/telephone seminar entitled Exxon: The Supreme Court Rules on Preemption and Punitive Damages. The panelists will include Andy Frey of Mayer Brown (who argued BMW v. Gore and Philip Morris v. Wililams and filed an amicus brief in Exxon Valdez), University of Minnesota Law Professor Alexandra Klass, and UNLV Law Professor Jeffrey Stempel.
Hat tip: TortsProf Blog.
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Coverage and Commentary on Exxon Valdez Decision
Every major news outlet and countless bloggers have now weighed in on the Supreme Court’s opinion yesterday in Exxon Shipping Co. v. Baker. Howard Bashman has a nice collection of the mainstream media links.
In addition to those stories, here are a couple of opinion pieces with diametrically opposite responses to the opinion. Greg Palast writes about the $500 million in punitive damages: “It’s so cheap, it’s like a permit to spill.” On the other side of the spectrum, the U.S. Chamber hails the decision in a blog post entitled “Towards Predictability and Common Sense.”
In a couple of odd footnotes to this saga:
A Wall Street Journal article on the Exxon Shipping Co. opinion mentions that after the accident, the Exxon Valdez continued to sail the seas as a single-hulled Exxon oil tanker, ferrying crude outside of the U.S., until earlier this year when it was sold to a Hong Kong company, which converted it to carry bulk ore. It is now known as the Dong Fang Ocean.
And Newsday.com has a story about the current whereabouts of the infamous Captain Joseph Hazelwood, whose drunken encounter with a reef off Bligh Island twenty years ago caused this whole mess. The reporter asked Captain Hazelwood to comment on the Supreme Court’s opinion and he said he had “no reaction.”
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If Supreme Court Justices Were Required to Put Their Stock Holdings in Blind Trusts, Exxon Might Have Saved $500 Million
David A. Ridenour has written a Christian Science Monitor editorial entitled “Blind Trusts Will Improve Blind Justice in the High Court.” Ridenour contends that the president and the senate should require Supreme Court nominees to place their assets in a blind trust as a condition of serving, to avoid recusals due to a financial conflict of interest.
Ridenour’s article is particularly timely, coming out on the same day as the decision in Exxon Shipping Co. v. Baker. In that case, Justice Alito recused himself because he owns stock in Exxon Mobil. As a result, the Court split 4-4 and could not reach a decision about Exxon’s argument that, under maritime law, punitive damages cannot be imposed on a ship owner based on the acts of a ship captain. Because the Court couldn’t reach a decision, the Ninth Circuit’s decision on that issue was affirmed.
There’s a good chance Justice Alito would have adopted Exxon’s argument on that issue if he had not recused himself. If so, his recusal cost Exxon $500 million. But Exxon saved $2 billion even without Justice Alito’s participation, so they probably won’t be complaining.