upreme No. 07-219 ! ~ I ~ ~ ! OFFICE OFTHE CLERK ,,~II ~t [__.SUPREME COURT. EXXON SHIPPING COMPANY, et al., Petitioners, V. GRANT BAKER, et al., Respondents. On Petition For A Writ Of Certiorari To The United States Court Of Appeals For The Ninth Circuit BRIEF OF AMICUS CURIAE THE AMERICAN WATERWAYS OPERATORS, GULF INTRACOASTAL CANAL ASSOCIATION, TEXAS WATERWAY OPERATORS ASSOCIATION, AND LOUISIANAASSOCIATION OF WATERWAY OPERATORS AND SHIPYARDS IN SUPPORT OF PETITIONERS BARBARA L. HOLLAND Counsel of Record JUSTIN E. DOLAN GARVEY SCHUBERT BARER 1191 Second Avenue, 18th Floor Seattle, Washington 98101-2939 (206) 464-3939 Attorneys for Amicus Curiae The American Waterways Operators, Gulf Intracoastal Canal Association, Texas Waterway Operators Association, and Louisiana Association of Waterway Operators and Shipyards COCKLE LAW BRIEF PRINTING CO. (800) 225-6964 OR CALl, COLLECT (402) 342-2831
Transcript
upreme
No. 07-219! ~ I ~ ~
! OFFICE OFTHE CLERK,,~II ~t [__.SUPREME COURT.
EXXON SHIPPING COMPANY, et al.,
Petitioners,V.
GRANT BAKER, et al.,
Respondents.
On Petition For A Writ Of CertiorariTo The United States Court Of Appeals
For The Ninth Circuit
BRIEF OF AMICUS CURIAE THEAMERICAN WATERWAYS OPERATORS,
AND LOUISIANAASSOCIATION OFWATERWAY OPERATORS AND SHIPYARDS
IN SUPPORT OF PETITIONERS
BARBARA L. HOLLANDCounsel of Record
JUSTIN E. DOLANGARVEY SCHUBERT BARER1191 Second Avenue, 18th FloorSeattle, Washington 98101-2939(206) 464-3939
Attorneys for Amicus CuriaeThe American WaterwaysOperators, Gulf IntracoastalCanal Association, TexasWaterway Operators Association,and Louisiana Association ofWaterway Operators and Shipyards
I. The Ninth Circuit’s Decision Raises Issues ofNational Importance Regarding ImportantQuestions of Federal Law ............................5
II. The Ninth Circuit’s Decision Conflicts withthe Decisions of the Other Circuits,Departs from Supreme Court Precedent,and Rests on Dictum ....................................10
III. The Ninth Circuit’s Decision Raises aSeparation of Powers Issue as to Whetherthe Comprehensive Remedial SchemeEnacted in the Clean Water Act Preemptsa Punitive Damages Award in This Case ....19
Black’s Law Dictionary 1100 (7th ed. 1999) ..............14
Restatement (Second) of Torts § 909 (1979) ..............13
The American Waterways Operators, together
with the Gulf Intracoastal Canal Association, theTexas Waterway Operators Association, and theLouisiana Association of Waterway Operators andShipyards, submits this brief as amicus curiae insupport of the position of Petitioner Exxon ShippingCompany, et al., with the written consent of all par-ties pursuant to Sup. Ct. R. 37.2(a).1
INTEREST OF AMICUS CURIAE
The American Waterways Operators (AWO) is thenational trade association for the nation’s inland andcoastal tugboat, towboat, and barge industry. AWO’s400 member companies employ more than 30,000American mariners. The industry owns and operatesnearly 4,000 tugboats and towboats and more than27,000 barges throughout the country. AWO repre-sents the largest segment of the U.S.-flag domesticfleet; its members’ vessels operate on the nation’sinland rivers; on the Atlantic, Pacific, and Gulf coasts;on the Great Lakes; and in ports and harbors aroundthe country.
~ Petitioners have submitted a blanket consent to the filingof amicus briefs. Respondents’ consent to the filing of thisamicus brief has been filed with the Clerk of the Court. Pursu-ant to Sup. Ct. R. 37.6, counsel for amicus curiae AWO statesthat it authored this brief in its entirety and that no otherperson or entity other than AWO provided monetary support forthe preparation or submission of this brief.
Each year, the tugboat, towboat, and bargeindustry moves more than 800 million tons of cargoand generates more than 350 billion ton-miles offreight transportation. Its vessels make nearly onemillion voyages annually from over 2,000 bulk cargodocks and terminals and serve 87 percent of all majorU.S. cities. AWO’s members account for 79 percent ofall domestic waterborne freight. Their vessels carry20 percent of the nation’s coal, enough to produce 10percent of all U.S. electricity used annually, moveover 60 percent ($8.5 billion worth) of America’s grainexports, and transport approximately 70 billiongallons of petroleum and petroleum products eachyear.
In short, the tugboat, towboat and barge industryallows the U.S. to take advantage of one of its great-est natural resources - its 25,000 mile waterwaysystem. For over 60 years, AWO has worked to pro-mote a better understanding of the domestic water-borne transportation industry and its contribution tothe U.S. economy. To that end, AWO acts as theindustry’s principal advocate with policymakers andfederal officials in Washington D.C., pursuing respon-sible legislation, regulations, and safety procedures toensure that the nation’s waterway system remains ashared economic resource and national transportationasset for all.
AWO is joined in this arnicus brief by the GulfIntracoastal Canal Association (GICA), the TexasWaterway Operators Association (TWOA), and theLouisiana Association of Waterway Operators and
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Shipyards (LAWS). GICA is the trade associationpromoting inland waterways navigation on the GulfIntracoastal Waterway and its tributaries. Its mem-bers include towboat and barge companies, shippers,waterways service providers and others with aninterest in inland waterways transportation on theGulf Coast. TWOA is the Texas trade association forthe inland tugboat, towboat and barge industry. Itsmembers provide inland waterways transportationand ship docking assistance in Texas. LAWS is thetrade association of the tugboat, towboat, barge andshipyard industries in Louisiana. The members ofthese regional associations share AWO’s paramountinterest in maintaining the uniformity and predict-ability of the federal maritime law principles at issuein this case. For ease of reference, this brief will referto all of the amicus trade associations representedherein collectively as "AWO."
As amicus curiae, AWO supports the petition forcertiorari of the largest punitive damages awardaffirmed on appeal in our nation’s history. Because ofthe Ninth Circuit’s decision in this case, the owner ofa tug and barge company who is blameless now facesthe risk of a punitive damages award sufficient tosink his business, based solely on the reckless actionsof one of his masters. A significant portion of thiscountry’s maritime commerce takes place along thecoastline and waterways of the Ninth Circuit. Thespecter of unpredictable punitive damages awardsagainst non-culpable vessel owners operating withinthis geographic expanse threatens the economic
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stability of the tugboat, towboat, and barge industry.This, in turn, decreases the industry’s ability toprovide the safe, efficient, and environmentallyresponsible waterborne transportation on which thecountry relies. AWO’s members therefore have muchat stake in this case.
SUMMARY OF THE ARGUMENT
The decision below raises issues of national im-portance because it exposes vessel owners within avast geographic area to punitive damages for a mas-ter’s reckless conduct on proof of vicarious liabilityalone. By legitimizing a rule of law that conflicts withthe law of every other circuit that has considered theissue and departs from 200 years of Supreme Courtprecedent, the Ninth Circuit’s decision underminesthe hallmarks of federal maritime law - uniformityand predictability. If the decision is allowed to stand,a non-culpable vessel owner who operates within theNinth Circuit will face a threat of punitive damagesthat it will find nowhere else in the United States andthat it never faced before in the history of maritimelaw. Further bolstering the need for review is the factthat the decision was based on prior Ninth Circuitdictum, which itself conflicted with prior Ninth Circuitlaw. AWO respectfully requests that this Court grantcertiorari to resolve the clear circuit conflict andconfirm the well-established maritime rule prohibitingvicarious liability for punitive damages.
In addition, the Ninth Circuit’s decision presentsan important separation of powers issue requiringreview by this Court: whether the comprehensiveremedial scheme enacted by Congress in the CleanWater Act precludes the Ninth Circuit from adding ajudge-made remedy - punitive damages - to thoseallowed under the statute. In finding that the CleanWater Act did not preempt punitive damages in thiscase, the Ninth Circuit ignored well-establishedfederal maritime principles of statutory preemption.The court’s interpretation of the applicable SupremeCourt jurisprudence is contrary to the interpretationof other circuits on this issue and raises importantseparation of powers concerns. Like the issue ofvicarious liability for punitive damages, this issuereaches far beyond marine pollution cases and hasenormous impact on the maritime industry.
ARGUMENT
I. The Ninth Circuit’s Decision Raises Issuesof National Importance Regarding Impor-tant Questions of Federal Law.
Judge Kozinski has aptly highlighted the na-tional importance of the issue presented for certiorari:
The panel’s decision exposes owners of everyvessel and port facility within our maritimejurisdiction - a staggeringly huge area - topunitive damages solely for the actions ofmanagerial employees. Because of the harshnature of vicarious liability, ship ownerswon’t be able to protect themselves against
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our newfangled interpretation of maritimelaw through careful hiring practices. Acci-dents at sea happen - ships sink, collide andrun aground - often because of serious mis-takes by captain and crew, many of whichcould, with the benefit of hindsight, be foundto have been reckless. For centuries, compa-nies have built their seaborne businesses onthe understanding that they won’t be subjectto punitive damages if they "[n]either di-rected it, nor countenanced it, nor partici-pated in" the wrong; the panel opinion hasthrown this protection overboard.
Pet. App. 290a-291a (citation omitted).2
The Ninth Circuit’s decision undermines nationalmaritime policies of uniformity and predictability.Maritime courts have long recognized "that maritimelaw traditionally resists doctrinal change that mightbalkanize its uniformity and generality." Lewis v.Timco, Inc., 716 F.2d 1425, 1428 (5th Cir. 1983).Indeed, maritime law is "a conceptual body whosecardinal mark is uniformity." Id. This uniformity,"with [its] companion quality of predictability, [is] aprized value in the extensive underwriting of marinerisks, [and is] best preserved by declining to recognizea new and distinct doctrine without assuring thecompleteness of its fit." Id. Maritime courts have alsoacknowledged that "the need for predictability in the
2 "Pet. App." refers to Exxon’s Appendix to its Petition for aWrit of Certiorari which contains the Ninth Circuit decisions inthis case that are referenced herein.
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commercial maritime arena is arguably greater thanin other areas of law and commerce." Coats v. PenrodDrilling Corp., 61 F.3d 1113, 1137 (5th Cir. 1995). Asstated by the Fifth Circuit,
This is true because there are already nu-merous and inherently unpredictable factorsstemming from the perils of the sea and thecontinual - and frequently fortuitous - in-teraction with enterprises of other nations. Itis axiomatic that when the rules of law areclear, parties may contract within or aroundtheir boundaries, and the commercial systemis facilitated in many ways, including re-duced litigation, more favorable insurancecoverage, and overall ease of application.
do
The members of AWO rely upon the predictabilityand uniformity of the maritime law in order to prop-erly assess and protect against the risks inherent inthe marine transportation business. They work toavoid accidents by, among other things, employingcareful hiring practices and stringent safety policies.As Judge Kozinski noted, however, accidents andmistakes happen, and vessel owners must be able toevaluate and manage such risks in order to maintainsound businesses. They enter contracts, invest in newequipment, buy insurance, and make countless otherdecisions based upon time-honored principles offederal maritime law. The uniformity and predictabil-ity of federal maritime law is enormously important
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to the vessel owner’s ability to operate in the nationaland international world of maritime commerce.
By ignoring 200 years of maritime precedent andplacing itself at loggerheads with the First, Fifth, andSixth Circuits, the Ninth Circuit has upset these twinaims of maritime law. Under the rule announced bythe Ninth Circuit, every accident and mistake is nowfraught with the possibility that the vessel owner willface unpredictable punitive damages for the actions ofits captain or other shipboard officer, even if thevessel owner is blameless. For AWO members, manyof whom are family-owned businesses, and most ofwhom do not have the substantial coffers of a Fortune500 company, the potential liability for vicariouspunitive damages poses a serious economic threat.
This threat to maritime commerce is of nationalimportance and should be addressed by this Court.
See Foremost Ins. Co. v. Richardson, 457 U.S. 668,674 (1982) (recognizing that "the primary focus ofadmiralty jurisdiction is unquestionably the protec-tion of maritime commerce").
The Ninth Circuit’s decision also undermines thetraditional maritime principle that vessel ownersshould not be subject to unlimited damages whenthey are not culpable. The Limitation of Liability Actbest exemplifies this principle. 46 U.S.C. §§ 30501-11.The Act allows a vessel owner to limit liability fordamages to the value of the vessel and its freight,unless the negligence or unseaworthiness that causedthe damage was within the vessel owner’s privity orknowledge. Carr v. PMS Fishing Corp., 191 F.3d 1, 4
(1st Cir. 1999). Privity and knowledge require "somedegree of culpable participation" from the vesselowner. Id. For example, there is no privity or knowl-edge attributed to a corporation for a captain’s navi-gational errors. In re Hellenic, Inc., 252 F.3d 391,396(5th Cir. 2001). Further, in situations where "theowner is so far removed from the vessel that he canexert no control over the master’s conduct, he shouldnot be held to the master’s negligence." Id. In thosesituations, "the owner may rely on the master’s skilland expertise." Id.
In contrast, the Ninth Circuit’s decision allowsfor vicarious punitive damages without any proof thatthe vessel owner was at fault. It turns maritime lawon its head to say that a court can subject a vesselowner to vicarious punitive damages, yet limit liabil-ity under the Limitation of Liability Act if the vesselowner lacked privity or knowledge - i.e., lacked "somedegree of culpable participation." The Ninth Circuit’sdecision is clearly at odds with the purposes behindthis important and longstanding maritime statute.
The Ninth Circuit’s decision threatens maritimecommerce and undermines the uniformity and pre-dictability of maritime law, thus raising issues ofnational importance. The decision’s effect ripples farbeyond the limited facts of this case, and affects everyvessel owner and operator in the maritime commu-nity. As Judge Kozinski pointed out, if maritime lawis to be upset, it should only be done by the finalarbiter of maritime disputes:
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Shippers everywhere will be put on notice: Ifyour vessels sail into the vast waters of theNinth Circuit, a jury can shipwreck your op-erations through punitive damages and thefact that you did nothing wrong won’t saveyou. Such major turbulence in the seascapeof the law ought to come, if at all, from theSupreme Court.
Pet. App. 291a.
II. The Ninth Circuit’s Decision Conflictswith the Decisions of the Other Circuits,Departs from Supreme Court Precedent,and Rests on Dictum.
When the Ninth Circuit held that a vessel owneris subject to punitive damages for a master’s recklessconduct on proof of vicarious liability alone, it de-parted from Supreme Court maritime precedent,effectively overruled prior Ninth Circuit maritimelaw, and confirmed the existence of a genuine conflictof law with the other circuits. See The AmiableNancy, 16 U.S. 546, 559 (1818) (holding no punitivedamages against vessel owner when principal is"innocent of the demerit of this transaction, havingneither directed it, nor countenanced it, nor partici-pated in it in the slightest degree"); Pac. Packing &Nay. Co. v. Fielding, 136 F. 577, 579-80 (9th Cir.1905) (reversing an award of punitive damagesagainst a steamship owner for captain’s malice when"no evidence was given tending to show that thedefendant corporation ever authorized the master to
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commit any of the acts complained of, or ever in anymanner ratified them"); United States Steel Corp. v.Fuhrman, 407 F.2d 1143, 1148 (6th Cir. 1969) ("Wethink the better rule is that punitive damages are notrecoverable against the owner of a vessel for the actof the master unless it can be shown that the ownerauthorized or ratified the acts of the master eitherbefore or after the accident."); In re P&E Boat Rent-als, Inc., 872 F.2d 642, 652 (5th Cirl 1989) (en banc)(following Fuhrman and holding that in maritimecases "punitive damages may not be imposed againsta corporation when one or more of its employeesdecides on his own to engage in malicious or outra-geous conduct"); CEH, Inc. v. F/V Seafarer, 70 F.3d694, 705 (lst Cir. 1995) (holding that in maritimecases there must at least be "some level of culpabil-ity" before a principal can be subject to punitivedamages for an agent’s reckless acts).
In affirming the district court’s issuance of a juryinstruction that allowed the jury to impose punitivedamages on Exxon solely for vicarious liability, theNinth Circuit concluded that it was "bound" by Pro-rectus Alpha Nay. Co. v. N. Pac. Grain Growers, Inc.,
767 F.2d 1379 (9th Cir. 1985), a decision that wascomplete dictum. Pet. App. 86a. In Protectus Alpha, adock foreman’s gross negligence destroyed a plain-tiff’s ship and cargo at defendant’s grain facility onthe Columbia River. At trial, plaintiff’s argument forpunitive damages was that the dock foreman (andanother employee) had acted pursuant to the grainfacility’s company policy:
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Protectus contends that punitive damagesshould also be assessed against North Pacificbecause Anderson and Van Skike acted in ac-cordance with company policy. North Pacificinsists that Anderson and Van Sldke werecorrect in casting off the ship because of theextreme hazard of an explosion and hascommended them. Protectus asserts that acompany policy that requires casting off ofall burning ships regardless of the circum-stances constitutes "deliberate and wantondisregard of the property of the shipownerand the lives of the crew and firemen."
Protectus Alpha Co. v. N. Pac. Grain Growers, Inc.,585 F. Supp. 1062, 1068 (D. Ore. 1984).
Relying on The Amiable Nancy, Pacific Packingand Fuhrman - the three governing cases on punitivedamages awards against maritime companies - thedistrict court in Protectus Alpha found that the grainfacility’s "approval of such conduct was unconscion-able and merits the imposition of punitive damages."Id. at 1069. Thus, the defendant’s own culpability, notthat of its employees, subjected it to punitive dam-ages, and the Ninth Circuit should have affirmed thepunitive damages award on that basis.
Inexplicably, the Ninth Circuit in Protectus Alphaaffirmed on a wholly different basis, creating a mari-time rule on punitive damages without precedent.The court held that an award of punitive damagesagainst the grain facility was proper on the basis ofvicarious liability alone because the foreman was a
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managerial employee acting within the scope ofemployment. 767 F.2d at 1386-87. No one had arguedfor this rule nor presented briefing on the wisdom ofadopting it, because the grain facility did not chal-lenge the finding that its company policy authorizedthe foreman’s actions. Id. at 1385; Pet. App. 85a. Inlight of this undisputed finding of fact, there was noneed for the court to consider, much less adopt, a rulethat vicarious liability was alone sufficient to justifythe award of punitive damages.
In creating this new maritime rule of vicariousliability for punitive damages, the court in Pratectus
Alpha relied solely on the Restatement (Second) ofTorts § 909 (1979). It ignored this Court’s holding inThe Amiable Nancy and the Sixth Circuit’s decision inFuhrman. Although it admitted that its decisionconflicted with its own decision in Pacific Packing, itjustified this result by hypothesizing that the Re-statement better reflects modern day corporate Amer-
ica. 767 F.2d at 1386. The court reasoned that its newrule imposed "a reasonable burden on the employer toknow its management personnel and choose themwisely." Id. But this "reasonable burden" was alreadyin place under traditional maritime law. See, e.g.,Fuhrman, 407 F.2d at 1148 (6th Cir. 1969) ("Punitivedamages also may be recoverable if the acts com-plained of were those of an unfit master and theowner was reckless in employing him."). The NinthCircuit also reasoned that "no corporate executive ordirector would approve the egregious acts to whichpunitive damages would attach and, therefore, no
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recovery for more than compensatory damages couldever be had against a corporation if express authori-zation or ratification were always required." 767 F.2dat 1386. However, this argument was illogical giventhat this is exactly what the grain facility in ProtectusAlpha had done.
Thus, the Protectus Alpha court’s adoption of astrict vicarious liability rule for punitive damageswas unnecessary to the decision, and therefore dic-turn. See Best Life Assurance Co. v. Comrn’r, 281 F.3d828, 834 (9th Cir. 2002) (defining dictum as "a state-ment ’made during the course of delivering a judicialopinion, but one that is unnecessary to the decision inthe case and therefore not precedential ... ’") (quot-ing Black’s Law Dictionary 1100 (7th ed. 1999)).Dictum is not precedent. See Fed. Deposit Ins. Corp.v. McSweeney, 976 F.2d 532, 535 (9th Cir. 1992)("Judicial assumptions concerning.., issues that arenot contested are not holdings.") (quoting UnitedStates v. Daniels, 902 F.2d 1238, 1241 (Tth Cir. 1990)).Because dictum is not precedent, the Ninth Circuitshould not have concluded that it was ’%ound" byProtectus Alpha. See Williams v. United States, 289U.S. 553, 568 (1933) (noting that "obiter dicta ...ought not to control the judgment in a subsequentsuit when the very point is presented for decision.").
In the decision below, the Ninth Circuit concededthe possibility - if not its implications - that Protec-tus Alpha was dictum:
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Arguably Protectus Alpha, in relevant part,could have been dictum. Although it was notmentioned in the panel opinion,3 there wasan express company policy that required theforeman to do exactly what he did, and thecompany expressly ratified what the foremanhad done. The district judge held the com-pany liable for punitive damages on that ba-sis, not on the basis that the foreman was amanagerial employee. With this finding offact, which was not challenged on appeal,there was no need to reach the question ofwhether the company would be vicariouslyliable for a managerial employee’s conduct inthe absence of a corporate policy authorizingand ratifying his conduct.
Pet. App. 85a (citations omitted).
Despite this concession, the Ninth Circuitclaimed its hands were tied and that any challenge toProtectus Alpha had to be left for an en banc hearing"or to a higher court." Id. at 85a-86a. The court didnot find that the required "irreconcilable conflict" foran en banc hearing existed between Protectus Alphaand Pacific Packing, although it was a "close" ques-tion. Id. Failing to find an "irreconcilable conflict," theNinth Circuit said "[w]e cannot hold that the district
3 Contrary to this statement, the panel opinion stated thatthe damages award against the grain facility was based on thedistrict court’s "finding that the grossly negligent actions of [theemployees] were done pursuant to North Pacific’s policy, andapproved by North Pacific after the fact." 767 F.2d at 1385.
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court abused its discretion by following our decisionin Protectus Alpha." Id. However, the question waswhether a jury instruction correctly stated the law,and the district court’s decision was therefore notentitled to deference. See Navellier v. Sletten, 262F.3d 923, 944 (9th Cir. 2001) ("In civil cases, wegenerally review de novo the question whether a juryinstruction misstates the applicable law.").
The Ninth Circuit admitted that there is a genu-ine inter-circuit conflict with respect to the issue ofvicarious liability for punitive damages:
Protectus Alpha was specifically rejected bythe Fifth Circuit, and accepted only in partby the First Circuit. CEH, Inc. v. F/V Sea-farer, 70 F.3d 694, 705 (1st Cir. 1995); Matterof P&E Boat Rentals, Inc., 872 F.2d 642, 652(5th Cir. 1989) (en banc). The Sixth Circuitfollowed The Amiable Nancy, Lake Shore,and this circuit’s opinion in Pacific Packingto hold that "punitive damages are not re-coverable against the owner of a vessel forthe act of the master unless it can be shownthat the owner authorized or ratified the actsof the master either before or after the acci-dent." United States Steel Corp. v. Fuhrman,407 F.2d 1143, 1148 (6th Cir. 1969).
Pet. App. 85a.
Indeed, the cases subsequent to Protectus Alphahave rejected it in favor of traditional maritime law.The First Circuit rejected Protectus Alpha to theextent that it does not require any culpability on the
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part of the principal. 70 F.3d at 704-05. The FifthCircuit rejected it in favor of the Sixth Circuit’s rulethat only authorization or ratification of an agent’sreckless conduct will justify an award of punitivedamages against the principal. In re P&E Boat Rent-als, Inc., 872 F.2d at 652. In recognizing the conflictamong the circuits and explicitly rejecting ProtectusAlpha, the Fifth Circuit focused on Supreme Courtprecedent:
For reasons that follow, we agree with theposition adopted by the Sixth Circuit in U.S.Steel v. Fuhrman which is more restrictivethan the views on this question expressed bythe Ninth Circuit in Protectus Alpha Naviga-tion Co. First, the Sixth Circuit view is morefaithful to the teaching of the Supreme Courtin THE AMIABLE NANCY and Lake Shore& Michigan Southern Railway Co. v. Pren-tice. Second, we relied on these SupremeCourt cases in The Complaint of Merry Ship-ping in determining that punitive damagesare recoverable under the general maritimelaw. It is appropriate that we look to thesesame authorities to define the scope of thepunitive damage relief that should be ac-corded under the general maritime law.
Id. (citations omitted).
The Fifth Circuit also noted that the policiesbehind punitive damages - punishment and deterrence- do not support a rule allowing vicarious punitivedamages awards against non-culpable parties. Thesepolicy considerations are particularly applicable in the
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maritime industry where, unlike shore-side busi-nesses, a vessel owner has limited ability to supervisethe master while the vessel is in navigation. The besta vessel owner can do to guard against human erroris to implement careful hiring practices and vigilantsafety policies. Prior to the decision at issue, if avessel owner acted reasonably in this regard, it wasnot subject to punitive damages. Now, the vesselowner who follows careful hiring and safety policies,and does not direct, ratify or participate in culpableconduct, may be punished for the reckless conduct ofits master. As Judge Kozinski noted, "nothing haschanged in the relationship between ship owner andcaptain that would justify" the Ninth Circuit’s deci-sion. Pet. App. 288a. "The captain has always borne
the responsibility for safeguarding his crew and thirdparties, and this hasn’t changed in modern times." Id.
Despite the contrary rulings in the First, Fifth,and Sixth Circuits, and the sound policy reasons fordistinguishing between maritime commerce and "thereality of modern corporate America," 767 F.2d at1386, the Ninth Circuit insisted on following Protec-tus Alpha. Pet. App. 86a. In doing so, it also departedfrom The Amiable Nancy, where Justice Story heldthat it was improper to award punitive damagesagainst a vessel owner when the principal is "innocentof the demerit of th[e] transaction, having neitherdirected it, nor countenanced it, nor participated in it inthe slightest degree." 16 U.S. at 559. In an effort tojustify its decision, the Ninth Circuit concluded thatThe Amiable Nancy had been effectively overruled by
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Pacific Mutual Life Insurance Co. v. Haslip, 499 U.S.1 (1991). Pet. App. 86a. Haslip, however, was a non-maritime case in which the Court addressed theconstitutionality of an award of vicarious punitivedamages under state common law. The issue in theinstant case is whether federal maritime law permitsthe imposition of vicarious punitive damages. Pet.App. 289a. On this issue, the Ninth Circuit shouldhave relied upon The Amiable Nancy, not Haslip.
In sum, this case presents an important issue offederal maritime law and a clear circuit conflict thatmust be resolved by this Court. The decision belowdirectly departs from this Court’s decision in TheAmiable Nancy and contradicts the Ninth Circuit’sown decision in Pacific Packing. The only precedentfor the decision below is complete dictum, and there-fore is not precedent at all. The issue presented isappropriate for review and this Court should grantthe request for certiorari.
III. The Ninth Circuit’s Decision Raises aSeparation of Powers Issue as to Whetherthe Comprehensive Remedial Scheme En-acted in the Clean Water Act Preempts aPunitive Damages Award in This Case.
In its decision below, the Ninth Circuit held "thatthe Clean Water Act does not preempt a private rightof action for punitive as well as compensatory dam-ages for damage to private rights." Pet. App. 78a-79a.This decision raises important and interrelated
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separation of powers concerns as to (1) whetherfederal courts may supplement maritime remedieswhen Congress has legislated in a particular sphere,and (2) the preemptive scope of the Clean Water Act.
First, in Miles v. Apex Marine Corp., 498 U.S. 19,
36 (1990), the Court held that federal courts "are notfree to expand remedies at will" in maritime caseswhere Congress has spoken. See also Pet. App. 75a(Ninth Circuit acknowledged that in Miles "Congres-sional limitations were held to prevent an inference ofbroader remedies in the general maritime law").Because the Jones Act only allowed for recovery ofpecuniary damages in actions for the death of aseaman, it precluded a plaintiff from seeking reme-dies in a general maritime action beyond those pro-vided by Congress. 498 U.S. at 36-37. Separation ofpowers concerns led the Court to refuse to createremedies that go "well beyond the limits of Congress’ordered system of recovery for seamen’s injury anddeath." Id. at 36.
The Court’s decision in Miles rested in part on asimilar decision in Mobil Oil Corp. v. Higginbotham,436 U.S. 618 (1978). In Higginbotharn, the Court heldthat a plaintiff may not recover damages for loss ofsociety under a general maritime claim for wrongfuldeath, because Congress had not provided for therecovery of such nonpecuniary loss in the Death onthe High Seas Act. Invoking the doctrine of separa-tion of powers, the Court reasoned "that we have noauthority to substitute our views for those expressedby Congress in a duly enacted statute." Id. at 626.
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Because Congress had directly spoken on the issue ofdamages in maritime wrongful death cases, "it would[have been] no more appropriate to prescribe a differ-ent measure of damages than to prescribe a differentstatute of limitations, or a different class of benefici-aries." Id.
The decision below raises a similar separation ofpowers issue regarding the propriety of the NinthCircuit’s conclusion that punitive damages are al-lowed in a general maritime negligence claim forharm caused by marine pollution when the CleanWater Act ("Act") does not provide for them. Similarto the statutes in Miles and Higginbotham, the Actprovides an "ordered system" for the recovery ofdamages caused by water pollution. To punish anddeter polluters and to assure compensation for harmthey cause, the Act subjects vessel owners to civilpenalties, criminal fines, clean-up costs, and naturalresource damages. 33 U.S.C. § 1319(c)-(d); 33 U.S.C.§ 1321(b)(6) & (7); 33 U.S.C. § 1321(f). The Act allowsa citizen who has "an interest which is or may beadversely affected" to "commence a civil action" forthe recovery of "any appropriate civil penalties undersection 1319(d) of this title." 33 U.S.C. § 1365(a) &(g). However, the Act does not provide for the recoveryof punitive damages against those found liable formarine pollution. Under Miles and Higginbotham, afederal court cannot supplement a comprehensiveremedial scheme with judge-made remedies.
Second, in Milwaukee v. Illinois, 451 U.S. 304,332 (1981), this Court specifically addressed the
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preemptive effect of the Clean Water Act. In Milwau-kee, Illinois tried to enjoin certain Wisconsin munici-palities from emitting sewage into Lake Michigan. Infinding that the Act foreclosed such a remedy, theCourt applied Higginbotham, noting that whereCongress "spoke directly to a question," federal courtsmay not provide their own answer. Id. at 315 (quotingHigginbotham, 436 U.S. at 625). The Court reasonedthat its "’commitment to the separation of powers istoo fundamental’ to continue to rely on federal com-mon law by judicially decreeing what accords with’common sense and the public weal’ when Congresshas addressed the problem." Id. (quoting TennesseeValley Auth. v. Hill, 437 U.S. 153, 195 (1978)). Thus,federal courts were not free to apply "often vague andindeterminate nuisance concepts" when Congress had"occupied the field through the establishment of acomprehensive regulatory program supervised b.y anexpert administrative agency." Id. at 317.
The case at bar presented a similar questionregarding the preemptive effect of the Clean WaterAct, as interpreted in Milwaukee and its progeny,with respect to punitive damages. See MiddlesexCounty Sewerage Auth. v. Nat. Sea Clammers Ass’n,453 U.S. 1, 22 (1981) (dismissing plaintiff’s damagesclaim under nuisance law, because under Milwaukee"the federal common law of nuisance in the area ofwater pollution is entirely pre-empted by the morecomprehensive scope of the" Act); Conner v. Aerovox,Inc., 730 F.2d 835, 842 (lst Cir. 1984) (dismissingplaintiff’s maritime law claim for nuisance under
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Milwaukee and Sea Clammers because those cases"would appear to encompass all federal judge-madelaw of nuisance whether maritime or general federallaw") (emphasis in original); see also Illinois v. IllinoisOutboard Marine, 680 F.2d 473, 478 (7th Cir. 1982)("The lesson of [Milwaukee] is that once Congress has
addressed a national concern, our fundamentalcommitment to the separation of powers precludesthe courts from scrutinizing the sufficiency of theCongressional solution.").
The Ninth Circuit answered this question in thenegative, concluding that "[t]hough the question isnot without doubt.., the better reading of the CleanWater Act is that it does not preclude a private rem-edy for punitive damages." Pet. App. 75a. In holdingthat the Act does not preempt a claim for punitivedamages, the court attempted to distinguish Milwau-kee and its progeny on the ground that allowing anuisance claim to go forward would have allowed thecourts in those cases to impose effluent limitationsthat conflicted with those set forth by an administra-tive agency responsible for enforcement of the Act. Id.at 76a-78a.
The First Circuit has expressly disavowed thisnarrow interpretation of Milwaukee:
Milwaukee II might have been read to hold nomore than that [the Clean Water Act] preemptsthe authority of a district court to imposeunder federal common law of nuisance morestringent limitations on effluents than thosepromulgated by EPA under the Act. But the
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Supreme Court made clear in Sea Clammersthat this is too narrow a reading of the Mil-waukee H decision.
Conner, 730 F.2d at 837.
Although the First Circuit decision in Conner didnot specifically address "whether a negligence actionfor injuries due to water pollution still sounds inmaritime tort after [the Act’s] enactment," Id. at 838n. 6, its broader interpretation of the preemptiveeffect of the Act conflicts with the Ninth Circuit’snarrow stance. If Milwaukee and its progeny holdthat the Act preempts all nuisance claims, thenconsistency requires a similar result with respect tothe Act’s preemption of negligence claims for punitivedamages. This conflict between the circuits raises asignificant federal question implicating separation ofpowers concerns.
The Ninth Circuit decision ignores importantmaritime principles and precedent regarding statu-tory preemption that reach far beyond the limitedfacts and parties in this case. This Court should grantcertiorari to confirm the application of the principleset forth in Miles and Higginbotham: that the NinthCircuit was not free to expand the remedies providedby Congress in the Clean Water Act by allowing theimposition of punitive damages.
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CONCLUSION
For the reasons set forth above, AWO respectfullyrequests that the petition for a writ of certiorari begranted. 4
Respectfully submitted,
BARBARA L. HOLLANDCounsel of Record
JUSTIN E. DOLANGARVEY SCHUBERT BARER1191 Second Avenue, 18th FloorSeattle, Washington 98101-2939(206) 464-3939
Attorneys for Amicus CuriaeThe American WaterwaysOperators, Gulf lntracoastal CanalAssociation, Texas WaterwayOperators Association, andLouisiana Association of WaterwayOperators and Shipyards
September 19, 2007
4 With respect to Petitioner’s request that the Court grantcertiorari to clarify the extent to which substantive maritimelaw shapes the standards for determining the appropriate size ofpunitive damage awards, AWO also joins that request. SeeExxon’s Petition for a Writ of Certiorari at 21-27.
