WASHINGTON - The Supreme Court yesterday pondered one of those questions that seem designed for brilliant legal minds: How much in punitive damages would be an adequate punishment for a company responsible for one of the nation's most horrific environmental disasters, the Exxon Valdez oil spill off the coast of Alaska?
A jury said $5 billion. An appeals court said $2.5 billion. And Exxon's answer yesterday was nothing at all, because the company has already paid plenty for the tragedy in Prince William Sound nearly 20 years ago.
Justices explored just about every possible alternative through intense questioning during an hour-and-a-half of arguments before a packed courtroom. By the end, it seemed several held the view that the company could be found liable for punitive damages, but perhaps not as much as even the appeals court had found.
There were several unusual aspects to yesterday's arguments in a case that has bounced through the legal system for 14 years.
Justice Samuel Alito is recused because of his Exxon stockholdings, so even a 4-to-4 tie on the court would affirm the lower court's decisions that punitive damages are owed to nearly 33,000 fishermen, native Alaskans, businessmen, and others consolidated into the single suit against Exxon.
And, as Justice David Souter noted, the court for a decade has struggled with determining whether punitive damages awarded by state courts were excessive. Now, he suggested, it is the Supreme Court's turn to "come up with a number."
Exxon has acknowledged that the captain of the Exxon Valdez, Joseph Hazelwood, was drunk at the time of the March 24, 1989, accident, and the corporation has paid about $3.4 billion in fines, compensation, and cleanup costs.
But in his opening arguments, Exxon's attorney before the court, Walter Dellinger, said punitive damages - awarded to punish the company and deter future wrongdoing - were unnecessary and improper under "maritime law rule that has been settled for 200 years."
But he did not get far, coming under fire immediately from Justice Ruth Bader Ginsburg.
"It's rather, I think, an exaggeration to call it a long line of settled decisions in maritime law," Ginsburg said, adding that the 1818 decision that Dellinger relied upon did not touch on punitive damages.
Ginsburg was no more impressed with Dellinger's alternative argument, that it was wrong for the jury to conclude that because Hazelwood was reckless, so was Exxon, and thus liable for punitive damages.
Perhaps the jury was reacting to testimony that Exxon knew Hazelwood was a lapsed alcoholic, but allowed him on "voyage after voyage," Ginsburg said.
But Chief Justice John G. Roberts Jr. and Justice Anthony Kennedy were more sympathetic to that argument, wondering whether Hazelwood was high enough in the corporate structure for his actions to open the entire company to what Dellinger called "vicarious liability."
Roberts said Hazelwood violated Exxon policy that night both by drinking and by his actions on the ship. "So what can a corporation do to protect itself against punitive damages awards such as this?" Roberts asked Jeffrey Fisher, a lawyer and Stanford law professor representing the plaintiffs.
Fisher replied that Exxon had a "paper" policy, but did not follow it. Despite years of evidence that Hazelwood was drinking again, Fisher said, Exxon kept him in place, "putting a drunken master in charge of a supertanker."
