Supreme Court today: Exxon v. Baker

There was one ruling, announced by Justice Kennedy. The question was whether plaintiffs could file an age discrimination suit against Federal Express even though they did not go through the normal EEOC complaint process first. The Court deferred to the EEOC’s interpretation of its rules and found that the filings to the EEOC, though not the complete normal process, were a “complaint,” so the suit can go forward. Justices Thomas and Scalia dissented.

The case today was Exxon v. Baker. Justice Alito has recused himself, likely because he is an Exxon-Mobil stockholder. The question is whether maritime law allows punitive damages against Exxon for the Exxon Valdez oil spill, and if so whether there’s a limit to how large they can be. There is no clear, recent precedent on the issue, so the Court is looking at rulings from 200 years ago in cases that aren’t directly comparable. Exxon is arguing that the captain of a ship cannot make company policy and is therefore independent enough that the company should not be held liable for his actions violating their policy; these concerns are the grounding for the precedents. Additionally, Exxon argued that punitive damages are unneeded in a case where the action was not intentional and did not benefit the company in any way. Baker argues that nothing has changed since the spill, indicating Exxon does need incentive to make sure it doesn’t happen again. Baker also argues that the captain is in charge of a “business unit” of Exxon and therefore is high enough in the company that the company should be liable for his actions. Most states follow a “managerial agent” standard for determining when a company should be held liable in cases like this, and Exxon does not contest that the captain is a managerial agent; instead they argue that the rules are different in the maritime context. Justice Souter suggested the distinction may have been relevant when ship captains were out of touch with land for long periods and captains had to act independently, but the distinction may no longer make sense. On the size of the award, Exxon argues the Clean Water Act’s limit of double the compensatory damages should be considered, but Baker points out the CWA considers economic harms to people rather than environmental harms.

All of the Justices seemed unsure of the strength of precedent in this case, so I do not feel comfortable predicting how any of the Justices will vote.

[Disclosure: the author is an Exxon-Mobil stockholder.]