The Supreme Court Limits Punitive Damages Award In The Exxon Valdez Case To 1:1 Ratio To Compensatory Damages
In a closely-watched case this week, Exxon Shipping Co. v. Baker, No. 07-219, — S. Ct. —, 2008 WL 2511219 (June 25, 2008), a 5-3 majority of the Supreme Court vacated a $2.5 billion punitive damages award, and instead limited punitive damages to a ratio no greater than 1:1 to the compensatory damages in federal maritime cases. The Court’s holding does not apply directly to awards of punitive damages in state law cases and did not involve application of the Due Process Clause. State law governs punitive damages in all but rare cases, although subject to the limits of constitutional due process. Nevertheless, the Court’s analysis may provide significant insight into its thinking regarding restrictions that should be placed on punitive damages awards more generally.
To view the Supreme Court's opinion, please click here.