The Exxon Valdez case runs aground at the Supreme Court.

Oral argument from the court.
Feb. 27 2008 7:07 PM

Oil and Water

The Exxon Valdez case runs aground at the Supreme Court.

(Continued from Page 1)

Justice Kennedy says Hazelwood could not be an agent of Exxon if he was violating express company instructions by drinking on the job. Roberts asks Fisher to cite cases in maritime law that included punitive damagesand Fisher concedes that the applicability of punitive damages awards in admiralty law is "an open question with a smattering of cases pulling in different directions." He says there is a dispute among the appeals courts, "and that's why you agreed to hear this."

"That and $3.5 billion," grins Scalia.

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Roberts worries that if Exxon is liable for the acts of Hazelwood, what can a corporation do to protect itself when its agents act against company policy?

"They can hire fit and competent people," replies Fisher.

"But that is its policy," says Roberts. "What else can it do?" Fisher says it can implement its policies, which Exxon did not. "There were 33 instances of Exxon employees drinking with Hazelwood over a three-year span."

Fisher finally takes aim at Exxon's claim to have been punished enough. He says it was not until the end of the legal process that Exxon's complicity in the spill really came to light, referring the court to a DVD he's sent them illuminating the misconduct in detail. Fisher reminds them that "in the wake of the spill, Exxon fired one person—Hazelwood—reassigned one, and everyone else received bonuses and raises."

For his part, Dellinger concludes his four-minute rebuttal with a reminder that "Exxon gained nothing here and paid dearly for it." The problem is, that's not quite responsive to Fisher's argument that Exxon may not have profited from the spill, but then it never much cared that it was running a booze cruise in Alaska, either—until it got caught. Life at Exxon will hardly grind to a halt if this judgment must ultimately be paid. The plaintiffs have calculated that the company, which boasted $40.6 billion in profits last year, earns $2.5 billion in net profits about every three weeks. Even if Exxon pays out the full amount, the $75,000 or so each class member will collect won't be enough to rebuild the dying town and businesses the Valdez spill has left behind. Which further contributes to the sense that Exxon should pay simply because it can afford to. Of course, that's not the issue here, but then, when you're surrounded by grizzled men in faded rugby shirts in the gallery of the Supreme Court, the niceties of vicarious liability fall away, which is precisely what Fisher set out to prove. In an unusually visceral way today, you can't quite shake the contrast between the high-flying corporate world of big oil and the rusting old fishing boats in Cordova, Alaska. Oil and water still don't mix. Even 19 years later.