Supreme Court Hears Exxon Valdez Oil Spill Case

The Supreme Court heard oral arguments February 27 on the $2.5 billion punitive damage award stemming from the 1989 Exxon Valdez oil spill incident. Exxon has already paid $3.4 billion in fines and compensatory expenses related to the case.

The spill released 11 million gallons of oil into Alaska’s Prince William Sound, prompting some 32,000 local fisherman and Alaskan natives to be awarded $2.5 billion in remedial relief by the Ninth Court of Appeals. It was determined that at the time of the spill, the Captain of the Valdez, Joe Hazelwood, was intoxicated and not present on the bridge, leaving the navigation of the tanker to a third mate.

At issue is whether a corporation, Exxon in this instance, is fiscally liable for the conduct of its employees. The question before the Court is whether federal maritime law or the Clean Water Act limits or exempts the award of punitive damages in this case. Federal maritime law holds that a ship owner is not liable solely for the actions of a ship captain, while the Clean Water Act can place limits on the level of punitive damages. The largest award given for a violation of the Clean Water Act is $500,000.

The Transportation Institute filed an amicus brief to the Court, stating that a ruling against Exxon could have far-reaching ramifications throughout the maritime industry. A ruling on behalf of the petitioners “would seriously and adversely affect the maritime industry, it would increase the cost of shipping and make shipping less competitive in relation to other forms of transportation, such as trucking and railroads.” Furthermore, smaller ship operators could be subject to “enormous punitive damages liability (that) could well put them out of business.”

The arguments were presented before an eight member Court; Justice Samuel Alito recused himself due to his ownership of Exxon stock. Should the Court split on a four to four tie, the Ninth Circuit Court of Appeals ruling would be upheld, resulting in the award of $2.5 billion in punitive damages.

Transportation Institute Submits Comments on EPA’s Proposed Stricter Emission Standards

The Transportation Institute submitted comments to the Environmental Protection Agency (EPA) in response to their Advanced Notice of Proposed Rule Making concerning the control of emissions from compression-ignition engines at or above 30 liters per cylinder (Category 3 marine engines). The EPA is interested in establishing new limits on emissions of nitrogen oxides (NO x), sulfur oxides (SO x), and particulate matter (PM) from category 3 engines. Proposed SO x and PM emission reductions would be achieved through low sulfur fuels and/or exhaust cleaning technology and be in effect by 2011. NO x limits would be phased in through 2016 and anticipated reductions would be met through catalytic or other after treatment technologies. In our comments, Transportation Institute encouraged the EPA to coordinate applicability of these proposed standards through the IMO to avoid creating further competitive disadvantages for U.S.-flag vessel operators. EPA’s proposed rule notice can be accessed at: http://www.regulations.gov/
fdmspublic/component/main?mail=DocumentDetail&o=090000648037
1db. Transportation Institute's comments to the docket may be found at:http://www.regulations.gov/fdmspublic/component/mail?main=Docket
Detail&d=EPA-HQ-OAR-2007-0121.

Tax Deductibility of Lobbying Expenses

            The Omnibus Budget Reconciliation Act of 1993 eliminated the tax deductibility of lobbying expenses for corporations. The law requires tax- exempt organiza-tions to notify its membership of a reasonable estimate of the portion of its dues that are applied to nondeductible lobbying expenses. For tax year 2008, Transportation Institute estimates that 10 percent of its monies will be applied to lobbying expenses.