Water Keeper Alliance v. Smithfield Foods, Inc.

In re Exxon Valdez

Nos. 97-35191 et al. (270 F.3d 1215) (9th Cir. Nov. 7, 2001)

ELR Digest

The court holds that commercial and native subsistence fishermen may be awarded punitive damages for economic injuries they suffered as a result of the Exxon Valdez oil spill, but the $5 billion awarded the fishermen is excessive in light of U.S. Supreme Court precedent. A class of commercial fishermen filed suit against the oil company for negligence and was awarded $19,590,257 in net compensatory damages and $5 billion in punitive damages. The oil company appealed, arguing the punitive damages were barred as a matter of law. The court first holds, however, that the company's prior criminal sanction does not bar the award, nor does maritime law bar punitive damages. In addition re judicata does not apply. The punitive damages are for harming the interests of commercial fishermen, the availability of fish to native subsistence fishermen, and private land. The harm and punishment, therefore, are distinct from an earlier case in which the company was penalized for environmental harm. The court next holds that the Clean Water Act (CWA) does not preclude a private remedy for punitive or compensatory damages. Although the CWA limits the allowable civil penalty for oil spills, it does not preempt common-law rights to other relief. Here, the $5 billion award vindicates only private economic and quasi-economic interests, not the public interest. Further, where a private remedy does not interfere with administrative judgments and does not conflict with the statutory scheme, a statute providing a comprehensive scheme of public remedies need not be read to preempt a preexisting common-law private remedy. Had the U.S. Congress intended to limit private remedies, it would have expressly said so. The court further holds, however, that the $5 billion award is excessive and must be reduced in light of BMW of North America, Inc. v. Gore, 517 U.S. 559 (1996), which was decided after the jury announced its verdict in this case and which establishes a guide for courts to determine if a jury award is excessive. The court finally holds that the district court erred in granting summary judgment against claimants who suffered purely economic injury. On remand, the district court must determine whether the claimants who suffered purely economic injury. On remand, the district court must determine whether the claimants suffering purely economic injury have allowable claims under state law.

Counsel for Plaintiffs
Brian B. O'Neill
Faegre & Benson
90 S. 7th St., Minneapolis MN 55401
(612) 336-3000

Counsel for Defendants
Thomas M. Russo
Freehill, Hogan & Mahar
80 Pine St., New York NY 10005
(212) 425-1900

[32 ELR 20320]

[OPINION OMITTED BY PUBLISHER IN ORIGINAL SOURCE]