Following a maritime allision involving a crane barge and a bridge in southern Louisiana, Marquette Transportation Company could be facing a class-action lawsuit with punitive damages due to the company’s alleged gross negligence manifested in the frequent and consistent reckless behavior of its employees. Repairs to the bridge are underway, and the costs of said repairs could amount to more than $5 million, a price currently charged to the State of Louisiana. The scope the lawsuit involves compensation for the bridge repairs as well as compensation for the inconveniences caused to the 25,000 local residents who use the bridge on a frequent basis. If the egregious conduct is proven, punitive damages should be awarded to deter those unsafe practices – because running into 32 bridges and merely fixing the damage caused has not been enough deterrence for Marquette Transportation Company to change its ways. The question becomes, “How much in punitive damages is appropriate or necessary in a maritime case like this?”
To answer this question, one can look to two relevant cases. The first is Exxon v. Baker from the year 2008, and the second is Warren v. Shelter Insurance from the year 2017. Following a defense appeal of a punitive-damages award of $5 billion, the Court reduced the award to $2.5 billion so as to be more proportionate to the concurrent compensatory damages awarded. Citing civil code, Exxon states, “An award for punitive damages should be (1) in an amount that will deter the defendant and others from similar conduct, (2) proportionate to the wrongfulness of the defendant’s conduct and the defendant’s ability to pay, but (3) not designed to bankrupt or financially destroy a defendant.” The case admits that the notion punitive damages often falls under criticism due to their sheer unpredictability throughout recent history; however, it seeks to find a fair “upper limit” by way of proportions, and it ultimately concludes that a 3:1 ratio of punitive to compensatory damages is an appropriate maximum, though a median ratio of 1:1 ought to be pursued.
Fitting the logic of Exxon, the Warren case issued a punitive-damage award of 2:1 following the violent death of an individual involved in a boating incident. Warren uses the same criteria enumerated in Exxon for determining the amount of punitive damages; however, unique to the case, it adjusts the amount of compensatory damages to form a proper proportion between the two. Repeating the language of Exxon, Warren states that “punitives are aimed not at compensation but principally at retribution and deterring harmful conduct.” An excessive penalty violates the defendant’s due process rights, but a minimal penalty could be ineffective. In this case, the defendant’s penalty was reduced from $23 million to $4.25 but the compensatory damages were raised from $125,000 to $2,125,000, creating the 2:1 ratio.