Anchorage Daily News

On Nov. 4, 1814, the Haitian schooner Amiable Nancy, bound for Antigua with a cargo of corn, was boarded by sailors from the American privateer Scourge and plundered of its papers, money, apparel and poultry.

The American ship was working for its country, attacking British ships during the War of 1812, but in this case its crew went too far. For their attack on "unoffending neutrals," the ship's crew and owners were sued in federal court and ordered to pay not only for the loss of goods but "vindictive damages."

Four years later, in a decision that became a monument in federal maritime law, the Amiable Nancy decision was reversed by the U.S. Supreme Court, which ruled that the owners of the Scourge couldn't be held liable for the error of its captain.

On Monday, the Amiable Nancy sailed again through the Supreme Court, this time with the supertanker Exxon Valdez in its wake.

The Supreme Court agreed Monday to hear an appeal of the Exxon Valdez punitive damages decision, based on Exxon Mobil Corp.'s invocation of maritime law, a vast and watery common-law domain that surrounds the federal statutes governing oil spills and civil damages.

Drawing on the Amiable Nancy precedent, Exxon's lawyers argued that maritime law has a long tradition of limiting the liability of ship owners from the reckless mistakes of their captains.

The Supreme Court singled out the maritime law arguments for consideration in the coming year. Four justices must agree, by secret vote, to hear a case on appeal.

For fishermen who have been waiting since 1994 for their class-action lawsuit against Exxon to reach a conclusion, one development seemed to play in their favor. Justice Samuel Alito sat out the vote, presumably because he owns Exxon stock worth an estimated $100,000 to $250,000, according to his most recent financial disclosures.

That eliminates one of the stronger pro-business justices on the conservative Roberts court. Five of the remaining eight justices will have to agree with Exxon to overturn the current punitive damages figure -- $2.5 billion plus interest.

THREE POINTS OF LAW

The court declined to hear the part of Exxon's appeal based on the much-hashed-over question of constitutional limits to punitive damages. It also declined to hear the appeal of the fishermen, who hoped to see the original $5 billion in damages restored.

Monday's decision came as a disappointment to the fishermen's attorneys, who said the maritime arguments had been only on the fringe of the legal discussion before now.

"It really wasn't framed or briefed or argued in the court below," said lead attorney David Oesting of Anchorage. "Needless to say, I was surprised that they accepted (the case) on that basis."

Backed by friend-of-the-court briefs from shipping and business interests, Exxon argued three points related to maritime law:

A ship owner should not be liable "vicariously" for the reckless behavior of a captain, under the Amiable Nancy precedent. Jury instructions in the original civil trial did not clearly spell this out, Exxon contends.

Exxon paid hefty fines under the Clean Water Act, which the company argues does not provide for additional punitive damages under maritime law.

Maritime law has a long tradition of limiting punitive damages out of concern of bankrupting shippers because of mistakes made by distant captains.

SURPRISE TURN IN THE CASE

The admiralty issues in the Exxon case were first brought into sharp focus last May in a minority opinion by Judge Alex Kozinski with the 9th U.S. Circuit Court of Appeals.

Kozinski discussed the dangers of shipping and quoted the Amiable Nancy decision, which found the owners of the Scourge "innocent of the demerit of this transaction, having neither directed it, nor countenanced it, nor participated in it in the slightest degree."

Maritime law has developed as common law over generations through a chain of court decisions.

The precedent absolving shipowners dates back to a time when captains set to sea for years at a time, forsaking all contact with their home port, Oesting responded Monday. It's time that such laws were retired, he said, arguing that Exxon should be held liable for "putting a drunk skipper on the bridge knowingly." "That's ludicrous these days," he said.

"That's an anachronistic view of life or the law. These ships are monitored by satellite."

Daily News reporter Erika Bolstad contributed to this story.

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