What are the Appropriate Punitive Damages for Maritime Allisions?

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.

Applying these two cases to the case at hand, the court considers three factors in the assignment of punitive damages: (1) the degree of reprehensibility of the misconduct, (2) the ratio, or disparity between the punitive award and the harm, or potential harm, suffered by the plaintiff, and (3) the difference between this remedy and the civil penalties authorized or imposed in comparable cases. It is notable that, though the punitive damages in question result from this particular allision case, Marquette faces this penalty in light of 32 other incidents in which it also bore the fault. Moreover, if the company faces compensation for the inconveniences of the local residents in addition to the bridge repairs, the punitive damages could escalate in fair proportion. The potential jury will have to weigh the above factors to see if a 1:1 punitive to compensatory ration or a 2:1 or more will be enough to deter Marquette Transportation Company and others similarly situated from reckless behavior. The law provides for punitive damages in these rare circumstances to shift the bottom line toward public safety, when merely fixing what one has broken is not doing the trick.

The attorneys of Broussard & David are skilled in holding responsible at-fault parties for incidents resulting from negligence on the individual or corporate level in maritime cases and vessel collisions. Contact them to discuss your legal rights at (337) 233-2323 (local) or (888) 337-2323 (toll-free).

 

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