Supreme Court hears arguments in Exxon Valdez case

The U.S. Supreme Court heard oral arguments Wednesday on ExxonMobil's appeal of a record $2.5 billion punitive damages award against the company to victims of the Exxon Valdez oil spill in 1989.

Exxon, in its brief, argued that punitive damages are exceedingly rare in maritime law and that one rule of maritime-law punitive damages has always been clear: Punitive damages may not be awarded against a shipowner based solely on the conduct of a ship's master.

Reportedly, from their remarks and questions, while several justices seemed to think the $2.5 billion award approved by a federal appeals court was too high, there also appeared to be some questioning whether the award should be eliminated altogether.

A jury initially awarded $287 million to compensate for economic losses to fishermen and others resulting from the 11 million-gallon oil spill, and $5 billion in punitive damages. The Ninth Circuit Court of Appeals cut the punitive damages in half, but Exxon said it was still too high.

The justices also were interested in the question of whether the captain of the Exxon Valdez, who had left the bridge of the ship and who allegedly may have been drinking -- was a high-ranking corporate official whose conduct would open Exxon up to punitive damages  .