Landmark Maritime Case Targets Punitive Damages

August 16, 2008
Client Alert Newsletter August 2008

On June 25, 2008, the U.S. Supreme Court held in Exxon Shipping Co. v. Baker that punitive damages in this maritime case arising from the Exxon Valdez disaster cannot exceed the award of compensatory damages. Although the holding, which reduced the punitive damages award from $2.5 billion to approximately $500 million, is confined to maritime law, many observers expect the Supreme Court's 1:1 ratio between compensatory and punitive damages to be applied far more broadly by the lower courts.