ONRC Action and Klamath Forest Alliance (collectively ONRC) brought a citizen lawsuit against Columbia Plywood, Inc. (Columbia) under the Clean Water Act (CWA).[1] ONRC alleged that Columbia’s National Pollution Discharge Elimination System (NPDES) permit was invalid because Columbia failed to renew it in a timely manner, and therefore was illegally releasing pollutants into the Klamath River. They alternatively argued that if Columbia’s permit was valid originally, its failure to renew after five years invalidated it in 1994. Further, ONRC argued that the Department of Environmental Quality (DEQ) did not have the authority to renew the permit after the original period. The district court granted Columbia’s motion for summary judgment on the renewal issue, stating that the DEQ had waived the renewal period and Columbia properly discharged pollutants under the shield of ORS 183.430(1).[2] The district court dismissed ONRC’s alternative claims for lack of subject matter jurisdiction because ONRC failed to properly raise them in the required sixty-day citizen suit notice. Columbia filed a counterclaim for attorney fees, which the district court also dismissed. Both parties appealed.

The CWA requires a NPDES permit before an entity can discharge pollutants into a waterway.[3] Oregon’s permit program is administered by the DEQ, which issued Columbia the original permit in 1984. Pursuant to Oregon Administrative Rule 340-045-0030(1),[4] Columbia was required to submit a renewal 180 days before the expiration of the permit in 1989. Under Oregon law, while a renewal application is pending, the entity has a continuing shield which allows it to keep on discharging pollutants until the DEQ either approves or denies the renewal.[5] Although Columbia submitted a renewal application outside the 180-day period, DEQ accepted the application, and Columbia continued to discharge pollutants. At the time the suit was filed in 1997, the DEQ had yet to approve or deny the permit renewal.

The Ninth Circuit affirmed the district court’s determination that Columbia’s NPDES permit was valid because the DEQ waived the time limit, and that while awaiting renewal Columbia could continue discharging pollutants under the shield regulation. On appeal, the Ninth Circuit certified two questions to the Oregon Supreme Court: 1) whether DEQ had authority to accept permit renewals that do not meet the time guidelines, and 2) whether DEQ’s extension of the permit beyond its original five year term was invalid due to an invalid waiver. The Oregon Supreme Court certified that “DEQ has the legal authority to accept and process permit renewal applications that do not meet the 180-day filing requirement in . . . OAR
340-045-0030(1).”[6] Since it found the waiver valid, the Oregon Supreme Court did not reach the second certified question. Based on the Oregon Supreme Court’s answer, the Ninth Circuit held that Columbia’s renewal application was “timely,” and therefore Columbia could avail itself of the continuing shield of section 183.430(1) of the Oregon Revised Statutes.

The Ninth Circuit then addressed ONRC’s alternative claims that 1) DEQ does not have the authority to renew a NPDES permit beyond the original term and 2) Columbia was required to renew its renewal in 1994, five years after its first renewal application. The district court dismissed ONRC’s alternative claims for lack of adequate notice under 40 C.F.R. section 135.3(a) because the notice was not “sufficiently specific.”[7] Under the CWA, a citizen suit requires that sixty-day notice be given to the violator, the State, and the Environmental Protection Agency with “sufficient information to permit the recipient to identify the specific standard, limitation, or order alleged to have been violated, the activity alleged to constitute a violation, the person or persons responsible for the alleged violation, the location of the alleged violation, the date or dates of such violation.”[8] The Ninth Circuit cited Hallstrom v. Tillamook County,[9] a United States Supreme Court case that required strict compliance with the notice provision for citizen suits. Based on this standard, the Ninth Circuit concluded that the notice in question was not sufficient to alert Columbia to these alternate claims, although it was sufficiently specific as to the theory that the permit application was invalid for being untimely. Finding that ONRC failed to give requisite notice for a citizen suit, a divided Ninth Circuit
panel affirmed the district court’s dismissal of the alternative claims for lack of subject matter jurisdiction.

Dissenting only on this last issue, Judge Reinhardt argued that ONRC gave Columbia sufficient notice and addressed the merits of the alternative claims. In support for his position, he cited the policy behind the notice requirement, stating that the wording of the notice alerted Columbia to ONRC’s contention that it did not have a valid permit, and the alternative claims directly challenge that validity.[10] Having reached the claims, Judge Reinhardt would dismiss the first claim that Columbia was required to renew its permit, but reverse on the basis that the DEQ’s failure to act for more than twelve years usurped the federal government’s power to establish the term of a NPDES permit.

The Ninth Circuit also affirmed the district court’s dismissal of
Columbia’s claim for attorney fees, determining that ONRC had filed a nonfrivolous complaint.

[1] Federal Water Pollution Control Act, 33 U.S.C. §§ 1251-1387 (2000).

[2] Or. Rev. Stat. § 183.430(1) (2001) (extending a shield from liability for discharging pollutants while a renewal is pending).

[3] 33 U.S.C. § 1311(a) (2000).

[4] Or. Admin. R. 340-045-0030(1) (2001).

[5] Or. Rev. Stat. § 183.430(1) (2001).

[6] ONRC Action v. Columbia Plywood, Inc., 26 P.3d 142 (Or. 2001).

[7] ONRC Action v. Columbia Plywood, Inc., 286 F.3d 1137, 1143 (quoting Natural Res. Def. Council v. Southwest Marine, Inc., 236 F.3d 985 (9th Cir. 2000)).

[8] 40 C.F.R. § 135.3(a) (2001).

[9] 493 U.S. 20 (1989).

[10] ONRC Action, 286 F.3d at 1143 (stating two policies behind strict notice as to give the violator a chance to rectify the problem and give the agency a chance to take remedial action, making the citizen suit unnecessary).

The City of Martinez, California (the City) filed seventeen claims against Texaco Trading and Transportation, Inc. (Texaco) for damages to Mococo Marsh resulting from oil spilled from a Texaco oil pipeline. The district court found the City’s suit barred by res judicata after a criminal suit brought against Texaco by the California Department of Fish and Game (DFG) and arising from the same incident resulted in a civil settlement. The Ninth Circuit affirmed in part and reversed in part, determining that the City’s claims on behalf of the public interest were barred by res judicata, but the City’s private easement claims were not.

In January 1997, the City obtained an open space and conservation easement in a portion of Mococo Marsh. In November 1997, somewhere between 44.32 and 331.15 barrels of oil leaked from a pipeline owned by Texaco into the marsh. After Texaco completed cleanup operations, the Contra Costa County District Attorney filed a criminal misdemeanor complaint against Texaco alleging the oil spill had violated California’s Fish and Game Code section 5650(a). This complaint eventually ended in a civil settlement requiring Texaco to pay $138,292.80 to DFG. The Deputy District Attorney told the City it need not participate in the settlement negotiations, as it would have a separate opportunity to pursue its claims. When the City filed its civil complaint against Texaco however, the district court granted summary judgment for Texaco, finding all of the City’s claims barred by res judicata.

The Ninth Circuit reviewed the district court’s grant of summary judgment de novo, applying California law to determine whether res judicata applied in this case. The court identified three elements that must be in place before res judicata can bar a plaintiff’s suit: 1) the issues resolved in the first suit must be identical to the issues raised in the second suit, 2) the first suit must result in a final judgment on the merits, and 3) either the plaintiff or a party in privity with the plaintiff must have been a party to the first suit. California also recognizes a public interest exception to res judicata permitting “relitigation of an issue of law concerning a public entity’s ongoing statutory obligations that affect individuals and members of the public not specifically before the court in the first litigation.”[1]

Under California law, in order for issues to be identical, they must involve the breach of the same “primary right[s].”[2] The court found that the City’s property interest in Mococo Marsh was a distinct primary right that had not been resolved in the earlier suit. Specifically, the City was entitled to bring its claims for damages under California Civil Code sections 815.1 and 815.3(b) for “the loss of scenic, aesthetic, or environmental value to the real property subject to the easement.”[3] The City was also entitled to bring its claim that the oil spill had decreased the value of the easement.

The court distinguished the decision in Citizens for Open Access to Sand and Tide, Inc. v. Seadrift Ass’n.[4] In that decision, the California Court of Appeals barred a new plaintiff’s claims on the basis of res judicata, but implied that the claim would not have been barred if the new plaintiff had claimed private property rights separate from those already adjudicated. Here, those of the City’s claims arising from its private property interests in the easement were private property rights that had not been adjudicated in DFG’s criminal complaint against Texaco. The court pointed out that the City did not receive any of the money awarded in Texaco’s settlement with DFG. Moreover, the criminal court would not have had jurisdiction over the City’s claims, so they could not have been raised in the earlier criminal proceeding. The court ruled, however, that those of the City’s claims brought on behalf of the public interest were barred. The DFG was “statutorily authorized to take the lead in responding to oil spills,”[5] and was therefore assumed to have adequately represented the public in the prior proceeding.

The court then turned to the issue of privity. The court found that the City was in privity with DFG with respect to the public interest claims but not with respect to the easement claims. For the purposes of res judicata, privity requires parties’ interests to be so similar that one party could act as the “virtual representative”[6] of the other. The court noted that California law[7] authorized DFG to act on behalf of the public in resolving the oil spill dispute, and reasoned that in its settlement DFG had therefore virtually represented the City’s claims on behalf of the public. However, DFG did not have authority to settle the City’s private property damage claims, and so the court found that it was not in privity with the City with respect to those claims. Moreover, the court noted that “by informing the City that the settlement would not preclude it from later raising its civil claims, DFG made clear that it did not think it was representing the City’s [private property] interests.”[8] Finally, the court determined that it would be unfair to disallow the City’s private property claims because the City had been told it need not participate in the earlier proceeding.

The Ninth Circuit thus affirmed the district court’s ruling that res judicata barred the City’s claims on behalf of the public, but reversed and remanded with respect to the City’s private property claims, finding that those claims had “never been addressed by any court.”[9]

[1] City of Martinez v. Texaco Trading and Transp., Inc., 353 F.3d 758, 762 (9th Cir. 2003) (quoting San Diego Police Officers’ Ass’n v. City of San Diego Civil Serv. Comm’n, Cal. Rptr. 2d 248, 251 (Cal. Ct. App. 2002)).

[2] Id.

[3] Id. at 763 (quoting Cal. Civ. Code §§ 815.1, .3(b) (West 2000)).

[4] 71 Cal. Rptr. 2d 77 (Cal. Ct. App. 1998).

[5] City of Martinez, 353 F.3d at 763 n.3.

[6] Id. at 764.

[7] Cal. Gov’t Code § 8670.7(a) (West 2000).

[8] City of Martinez, 353 F.3d at 764.

[9] Id.

In a suit surrounding the proposed nuclear waste repository at Nevada’s Yucca Mountain, the United States sued the state of Nevada and the state engineer of Nevada because the defendants denied the plaintiff’s water permit applications. The United States District Court for the State of Nevada abstained from deciding the question, and the United States appealed. The Ninth Circuit vacated the district court’s decision and remanded the case for adjudication on the merits. A dissent was filed by Circuit Judge Hug.

In designating Yucca Mountain the national nuclear waste repository, the United States applied for several water permits that were instrumental in the planned operation of the facility. The decision to approve the permits fell on the state engineer, who could deny the permits for any of three reasons: a lack of unappropriated water, a conflict with existing water rights, or a determination that the proposed use might be detrimental to the public interest. Based on Nevada Revised Statute 459.910,[1] which prohibited the storage of high-level nuclear waste in the state, the state engineer found the water use would conflict with state law and would be inherently detrimental to the public interest. The state engineer consequently denied the permits. The United States sued in district court, but the district court abstained from deciding the case based on the Pullman,[2] Burford,[3] and Colorado River[4] doctrines.

The Ninth Circuit first examined whether the district court had jurisdiction based on the existence of a federal question. Noting that the United States complaint sought acknowledgment that the Nuclear Waste Policy Act (NWPA)[5] preempts Nevada Revised Statute 459.910 under the Supremacy Clause, an order requiring the state engineer to contemplate the United States’s permit applications without reference to the Nevada statute, and a finding that the state engineer’s ruling was arbitrary and capricious, the Ninth Circuit found these pleadings conferred federal question jurisdiction.

The circuit court disagreed with the district court’s rationale. The district court held that the United States’s constitutional claim was misplaced because the state engineer’s decision was not based on Nevada statutory law, but on the public interest, which was merely reflected in the state statute. As a result, the decision could not be preempted under the Supremacy Clause. The Ninth Circuit did not address this novel argument, but instead held that federal question jurisdiction is determined by the “legal construction of [the plaintiff's] allegations.”[6] Because the plaintiff clearly couched its complaint as a federal question, the district court could either exercise jurisdiction or dismiss the suit as insubstantial. The Ninth Circuit found that the plaintiff’s preemption argument was far from insubstantial and that independent subject matter jurisdiction existed under 28 U.S.C. § 1345.[7]

Turning to the question of abstention, the Ninth Circuit lined up the Pullman, Burford, Colorado River, and Younger[8] doctrines, reviewed the facts de novo, and methodically dismissed each doctrine as inapplicable. The Ninth Circuit noted that Pullman abstention is appropriate only when three conditions are met: (1) The federal plaintiff’s complaint must require resolution of a sensitive question of federal constitutional law; (2) that question must be susceptible to being mooted or narrowed by a definitive ruling on state law issues; and (3) the possibly determinative state law must be unclear.[9] The court found that those conditions were not satisfied in the immediate case. The court noted that while Pullman abstention required the court to resolve a sensitive question of federal constitutional law, the case before the Ninth Circuit presented no substantial constitutional issues. Furthermore, Pullman abstention required unclear state law, a condition the Ninth Circuit found did not plague the state of Nevada.

Burford abstention is proper where a complicated state regulatory scheme renders federal judicial rulings of little assistance.[10] The Ninth Circuit found that the requirements for Burford abstention were not met in the plaintiff’s case because complex state law issues did not exist. The court also noted that Burford abstention was not appropriate because the United States’s case was based on preemption.

The district court primarily cited Colorado River[11] as its basis from abstaining from deciding the case. Abstention based on this doctrine was not warranted because, while Colorado River recognized a need for unified state adjudication when sanctioned by Congress,[12] Congress did not in this instance express a preference for unified action. Additionally, the facts of Colorado River were dissimilar from the facts before the Ninth Circuit, making application of the doctrine inappropriate. Finally, unlike Colorado River, which involved a state law claim pursued in federal court, this case was based on federal law that the state sought to adjudicate in state court. To this, the Ninth Circuit noted, “[i]t would be surprising indeed if Congress had passed a law expressing a preference for state adjudication of federal preemption issues.”[13]

While the district court did not base abstention on the Younger doctrine, the Ninth Circuit nonetheless explained why it was inapplicable. Younger abstention is designed to “avoid unnecessary conflict between state and federal governments.”[14] The court noted that there had already been a lengthy history of conflict between Nevada and the United States on the issue of nuclear waste, and therefore abstention based on this doctrine would be “disingenuous.”[15]

The dissent felt that Younger was applicable. Because state proceedings implicating important state interests had been initiated, and those proceedings provided an opportunity to raise federal questions, Younger‘s three-pronged test was satisfied. Consequently, the dissent would have abstained under color of the Younger doctrine.

[1] Nev. Rev. Stat. 459.910(1) (2001).

[2] Railroad Comm’n of Texas v. Pullman Co., 312 U.S. 496 (1941).

[3] Burford v. Sun Oil Co., 319 U.S. 315 (1943).

[4] Colorado River Water Conservation Dist. v. United States, 424 U.S. 800 (1976).

[5] Nuclear Waste Policy Act Amendments of 1987, 42 U.S.C. §§ 10101-10270 (2000).

[6] Ultramar America Ltd. v. Dwelle, 900 F.2d 1412, 1414 (9th Cir. 1990) (alterations in original) (quoting Tennessee v. Union & Planters’ Bank, 152 U.S. 454, 460 (1894)).

[7] 28 U.S.C. § 1345 (2000).

[8] Younger v. Harris, 401 U.S. 37 (1971).

[9] United States v. Morros, 268 F.3d 695, 703-704 (9th Cir. 2001).

[10] Knudsen Corp. v. Nevada State Dairy Comm., 676 F.2d 374, 376 (9th Cir. 1982). Under Burford, courts may decline to rule on an essential local issue arising out of a complicated state regulatory scheme where (1) the state has chosen to concentrate suits challenging the actions of the agency involved in a particular court; (2) federal issues could not be separated easily from complex state law issues with respect to which state courts might have special competence; and (3) federal review might disrupt state efforts to establish a coherent policy. Id. at 377.

[11] 424 U.S. 800 (1976). In Colorado River, the Supreme Court found that “there are principles unrelated to considerations of proper constitutional adjudication and regard for federal-state relations which govern in situations involving the contemporaneous exercise of concurrent jurisdictions. . .These principles rest on considerations of wise judicial administration, giving regarding to conservation of judicial resources and comprehensive disposition of the litigation.” Id. at 817.

[12] United States v. Morros, 268 F.3d 695, 706-707 (9th Cir. 2001).

[13] Id. at 707.

[14] Id.

[15] Id. at 708.

The Ninth Circuit held that a plaintiff’s state law claim for damages based on unenforced violations of the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA)[1] was preempted because allowing such claims would interfere with agency discretion and unduly burden regulated entities. FIFRA is a comprehensive regulatory scheme controlling the use, sale, and labeling of pesticides. FIFRA prohibits the knowing falsification of any application for the registration of a pesticide[2] and provides that EPA must approve all labels proposed by manufacturers.[3] FIFRA expressly forbids a state from imposing any requirements for labeling or packaging that are in addition to, or different from, those required by the Act.[4]

DowElanco manufactures the pesticide Vikane. During application of Vikane, food and drugs must be removed or protectively sealed in nylon polymer bags. When Nathan Kimmel, Inc. (Kimmel) informed DowElanco of its intention to manufacture these bags in competition with DowElanco’s brand, DowElanco petitioned EPA under FIFRA for a change in Vikane’s labeling. On the basis of allegedly erroneous information submitted by DowElanco, EPA approved the new label, which prohibited consumer use of Kimmel’s product, thereby securing DowElanco’s market advantage.

Kimmel sued DowElanco in federal court under diversity jurisdiction on a state tort law claim for injunctive relief and damages. The district court dismissed Kimmel’s complaint on a 12(b)(6) motion, holding that FIFRA preempted state law. The Ninth Circuit affirmed the district court “because ordinary conflict preemption principles dictate[d] that Kimmel’s state law claim [was] impliedly preempted by FIFRA.”[5]

The court relied on a recent Supreme Court decision, Buckman Co. v. Plaintiffs’ Legal Committee.[6] In Buckman, the plaintiff sued in state court to recover for medical injuries caused by bone screws, alleging that the manufacturer’s regulatory consultant had made fraudulent representations to gain FDA approval to market the screws.[7] The Court in Buckman held that allowing fraud-on-the-FDA claims for private injury under state tort law would interfere with FDA’s balancing of competing statutory objectives.[8] Further, allowing state law claims would burden applicants seeking FDA approval in ways not contemplated by Congress by exposing those applicants to diverse state standards.[9]

Following the Buckman Court’s reasoning, the Ninth Circuit found that allowing Kimmel’s state claims based on a FIFRA violation would interfere with EPA’s policy objectives and enforcement discretion. Although EPA did not challenge DowElanco’s misrepresentations, it was for the agency, not a jury, to police FIFRA’s labeling requirements. Because Kimmel’s state law claim was based solely on alleged violations of FIFRA under EPA’s purview, the court held the claim preempted. The court noted that Kimmel might be able to bring an administrative action within EPA or sue EPA itself under the Administrative Procedure Act.[10]

[1] 7 U.S.C. §§ 136-136y (2000).

[2] Id. § 136j(a)(2)(M).

[3] Id. § 136a(c)(1)(C).

[4] Id. § 136v(b).

[5] Nathan Kimmel, Inc. v. DowElanco, 275 F.3d 1199, 1204 (9th Cir. 2002).

[6] 531 U.S. 341 (2001).

[7] Id. at 343.

[8] Id. at 348.

[9] Id. at 348-53.

[10] 5 U.S.C. §§ 551-559, 701-706, 1305, 3105, 3344, 4301, 5335, 5372, 7521 (2000).

In the latest chapter of the fallout resulting from the Exxon Valdez’s infamous spill, Exxon Corporation and Exxon Shipping Company (Exxon) appealed a jury award of $5 billion in punitive damages to plaintiff fishermen, landowners, and others adversely affected by the spill. Exxon and the Captain of the Exxon Valdez, Joseph Hazelwood (Hazelwood) brought additional appeals. The plaintiffs also cross-appealed a number of issues including the district court’s grant of summary judgment to the defendants regarding the viability of a claim brought by entities that had suffered purely economic injury.

The Ninth Circuit held that imposing punitive damages against Exxon was appropriate. However, it determined that in light of recent Supreme Court decisions,[1] $5 billion was excessive and remanded. Summary judgment against those plaintiffs who suffered only economic injuries was improper, and the circuit court remanded the claims to determine whether those plaintiffs could establish damages allowed under state law. All other appeals were denied.

On March 24, 1989, the oil tanker Exxon Valdez, laden with crude oil, ran aground on Bligh Reef in Prince William Sound and disgorged eleven million gallons of oil into the waters of the sound. The third mate was in charge of navigating the vessel at the time. Acting against established law and protocol, a very intoxicated Captain Hazelwood[2] had ordered the third mate to guide the ship out of the sound. As the extensive harm from the resulting spill became apparent, the state of Alaska, the United States, and various private parties filed lawsuits. A previous consent decree between Alaska and the United States accounted for reparations for environmental damage. Private parties suing for economic injuries were awarded $287 million for compensatory damages, $5 billion punitive damages against Exxon, and $5000 punitive damages against Hazelwood.

The Ninth Circuit began by examining whether punitive damages were permissible against defendants Exxon and Hazelwood. Exxon claimed that, owing to its considerable expenditures to date, punitive damages served no purpose.[3] The court disagreed, finding no precedent for this assertion. The Ninth Circuit also dismissed the argument that punitive damages are not allowable in admiralty law.

The court subsequently dismissed the argument that the consent decree between Alaska and the United States created res judicata and thus barred punitive damages. Pointing to a saving clause and language in the decree characterizing the $900 million as compensatory and remedial, the rights of the plaintiffs to bring private actions were retained and res judicata was inapplicable. However, the consent decree did settle damages attributable to environmental degradation and the general public. Therefore, res judicata barred any punitive damages pertaining to those wrongs.

Exxon, citing Middlesex County Sewerage Authority v. National Sea Clammers Ass’n,[4] argued that common law punitive damages were impermissible, as they were preempted by the Clean Water Act (CWA).[5] The Ninth Circuit pointed out that the Supreme Court’s limitation on common law claims under color of the citizen suit provision of the CWA[6] applied only to situations in which those claims were for violations of the CWA itself, as opposed to other acts or another statute.[7] Such was not the case here because the action was grounded entirely in common law. The court also stated that because the CWA does not expressly limit private causes of action it is reasonable to believe that common law actions are still available. Finally, whereas certain common law remedies for effluent violations were preempted by the CWA if they conflicted with an administrative remedy addressing the same violation,[8] no administrative decisions addressed plaintiffs’ claims; therefore no conflict existed.

The circuit court then addressed the standard of proof necessary to demonstrate whether an action is malicious or reckless. Because a preponderance of the evidence is generally the standard of proof in a federal civil action, and because the Supreme Court held permissible those standards when part of state law,[9] jury instructions to apply the preponderance of the evidence standard did not constitute an abuse of discretion. Exxon’s argument that vicarious liability was an impermissible means of assigning punitive damages under the Supreme Court’s ruling in The Amiable Nancy[10] also failed. While that decision rested on a finding that the corporation did not have notice of or ratify the behavior of its agent, Exxon had notice that Hazelwood had resumed drinking after treatment for alcoholism but nonetheless gave him command of a supertanker.

Exxon next argued that insufficient evidence existed for a jury to award punitive damages. The Ninth Circuit denied any deficiency of proof in reference to Hazelwood, noting a jury could have reasonably concluded that, among other things, Hazelwood was extremely careless. Again noting Exxon’s knowledge of Hazelwood’s alcoholism, the court held that a jury could award punitive damages.

The Ninth Circuit then turned to the amount of the punitive damage award. Noting that it is compelled to examine jury awards of punitive damages,[11] the court identified two recent Supreme Court decisions setting out the criteria for determining appropriate punitive damages awards. BMW of North America, Inc. v. Gore[12] established three guideposts: the degree of reprehensibility of the person’s conduct, the ratio of the award to the harm inflicted on the plaintiff, and the difference between the award and the civil or criminal penalties in comparable cases.[13] An appellate court must review de novo the district court’s determinations.[14] If applying these guideposts reveals a gross disproportion between the compensatory and punitive damages, the punitive damages violate due process and are considered excessive because the defendant lacked notice of the severity of penalties.

Examining the reprehensibility of Exxon’s actions, the circuit court noted an absence of intent to cause the spill, violence, trickery, or deceit on the part of the Exxon executives. Furthermore, punitive damages are less appropriate for economic injuries (the basis of this claim) than for injuries involving human health or safety.[15] The Ninth Circuit also noted that Exxon responded immediately to mitigate the damage of the spill, which should discount the reprehensibility. Those factors, combined with the disparity between the punitive damages awarded against Hazelwood, who directly caused the spill, and those awarded against Exxon, indicate a miscalculation of reprehensibility.

The court also found disproportionate the ratio of awarded punitive damages to compensatory damages. The court noted that a ratio of between twelve to one and seventeen to one greatly exceeded the four to one ratio the Supreme Court considered appropriate[16] and would deter enterprise in oil shipping, an activity having significant social value. For comparable penalties, the court cited 18 U.S.C. § 3571, the Trans-Alaska Pipeline Act,[17] and the Oil Pollution Act[18] to arrive at a set of parameters that, on remand, the district court could use to set an appropriate level of punitive damages.[19]

The court then examined allegations that the jury had considered evidence derived outside of the proceedings. The court found no basis for overturning the district court’s finding that such misconduct had not occurred. Exxon argued that compensatory awards for chum salmon and setnetter fishermen were indefensible but cited no applicable law. Because of the degree of uncertainty permeating any jury calculation of those damages, the court refused to overturn the district court’s decision.

Hazelwood separately appealed the admissibility of the results of a blood test taken eleven hours after the spill and the individual disability report. While noting the remarkable mishandlings of the blood specimen, the district court nonetheless believed that doubt as to the origin of the specimens would be detected by the laboratory technicians; thus, the court allowed the specimen to be admitted. The district court had found nothing to prevent admission of the disability report, and the Ninth Circuit agreed.

On cross-appeal of the district court’s grant of summary judgment, the plaintiffs argued that economic injury alone entitled them to economic recovery. The circuit court first noted that no act of Congress controlled the case at bar, and therefore maritime law could be pre-empted only if state law allowed recovery for purely economic damage. The court remanded for a determination of the appropriateness of such damages based on a balancing test of strong state interest in providing remedies for harm caused by oil spills against federal legislation that seemed also to also contemplate such remedies.[20] The court denied the plaintiffs’ conditional cross-appeals to admit further evidence of Hazelwood’s alcoholism.

[1] BMW of North America v. Gore, 517 U.S. 559 (1996); Cooper Industries, Inc. v. Leatherman Tool Group, Inc., 532 U.S. 424 (2001).

[2] Testimony revealed that Hazelwood had consumed at least 10 ounces of alcohol before boarding the Exxon Valdez.

[3] Exxon spent $125 million in fines and restitution awards and another $2.1 billion in clean-up costs.

[4] 453 U.S. 1 (1981).

[5] Federal Water Pollution Control Act, 33 U.S.C. §§ 1251-1387 (2000).

[6] Id. § 1365(e). “Nothing in this section shall restrict any right which any person (or class of persons) may have under any statute or common law to seek enforcement of any effluent standard or limitation or to seek any other relief . . .” Id.

[7] On this issue, the Supreme Court stated, “[i]t is doubtful that the phrase ‘any statute’ includes the very statute in which this statement was contained.” National Sea Clammers, 453 U.S. at 15-16.

[8] See Milwaukee v. Illinois, 451 U.S. 304 (1981) (holding that a federal district court could not impose and enforce more stringent effluent limitations than those established by the agency charged with enforcing the CWA; thus, the Act preempted the common law remedy).

[9] Honda Motor Co. v. Oberg, 512 U.S. 415, 433 (1994).

[10] 16 U.S. (3 Wheat.) 546 (1818).

[11] Honda Motor Co., 512 U.S. at 432.

[12] 517 U.S. 559 (1996).

[13] Id. at 575-85.

[14] Cooper Industries, Inc. v. Leatherman Tool Group, Inc., 532 U.S. 424 (2001).

[15] While the spill endangered human health and safety, those issues were resolved in the consent decree with Alaska and the United States.

[16] Pacific Mutual Life Ins. Co. v. Haslip, 499 U.S. 1, 23 (1991).

[17] Trans-Alaska Pipeline Authorization Act, 43 U.S.C. §§ 1651-1656 (2000).

[18] Oil Pollution Act of 1990, 33 U.S.C. §§ 2701-2761 (2000).

[19] Those parameters ranged between $150 million and $1.03 billion.

[20] Oil Pollution Act of 1990, 33 U.S.C. §§ 2701-2718 (2000); Trans-Alaska Pipeline Authorization Act, 43 U.S.C. §§ 1651-1656 (2000).