Alaska Divorce Lawyer & Attorney : Peg Roston Law Firm : Property Division, Net Worth, Division of Assets : Anchorage, Alaska

Since 1996, the law in Alaska has been that the Exxon Valdez claims for punitive damages are marital property to the extent that the claims for compensatory damages are marital property. Lundquist v. Lundquist, 923 P.2d 42, 51 (Alaska 1996). However, as the Alaska Supreme Court commented in 2000: “[I]t is not known how much will be collected or even if the plaintiffs will ever actually collect this award.” Edelman v. Edelman, 3 P.3d 348, 355 (Alaska 2000).

At the time of Edelman, the punitive damages award was $4.786 billion dollars. Id. But Exxon had appealed the award to the Ninth Circuit Court of Appeals. Id.

Yesterday, the United States Supreme Court slashed the punitive damages award from $2.5 billion dollars to $500 million dollars. The Alabama Appellate Watch has a well-written succinct summary of the Exxon Shipping Co. v. Baker decision:

Justice Souter authored the 5-3 majority opinion. In his opinion, Justice Souter found that this was a maritime case, and thus decided under the federal common law and not due process principles. Justice Souter discussed at length the different punitive damage standards used by various states, and discussed the general purposes of punitive damages. Interestingly, Justice Souter notes that "by most accounts the median ratio of punitive to compensatory awards has remained less than 1:1." Slip Op. p. 24-25.

Justice Souter also examined three various methods used to review punitive damages: (1) verbal tests (using criteria such as "shock the conscience" or "passion and prejudice"); (2) dollar caps; and (3) ratios.

In the end, Justice Souter found the ratio test most appropriate. Under the facts of this case, where no malicious intent was found or behavior driven primarily for gain, and with a substantial compensatory award, a 1:1 ratio was appropriate. Thus, the award was reduced to the amount of the compensatory award, which is approximately $500 million.

I recommend that any visitor to this post who has been involved with the Exxon case and has a final judgment, is in the middle of a divorce, or is contemplating a divorce contact their divorce attorney to discuss the impact of this decision on them. 

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 During a marriage, spouses manage their finances and raise their children according to their personal values and family traditions. Unless one or both of them decide to end the marriage, it is unlikely that they will become familiar with Alaska divorce law. But if you are reading this post, you are probably interesting in learning about the legal framework, which guides a family lawyer in representing divorce clients. 

A divorce case can be divided into property, custody and support issues.  This post offers some general information about the division of property in a divorce case.  The process of dividing property in a divorce case is referred to as "equitable distribution."  Under Alaska law all property and debts spouses acquired during marriage are subject to being divided between them when they divorce. In the case of property, it does not matter how it is titled or whether only one spouse’s earnings were used to purchase the property. If the property was acquired while the spouses were married and before they permanently separated, it is subject to being divided when they divorce. Similarly, if a debt was acquired while the spouses were married, the balance of the debt at the time the spouses permanently separate will be included in the list of property and liabilities, which have to be allocated between the spouses.  There are a couple of exceptions to this general rule including property acquired by gift or inheritance. But depending on how the spouses handled this property during the marriage, the “immunity” generally afforded property acquired by gift or inheritance may be lost. If you have gifted or inherited property, you should be sure to discuss this property with your divorce attorney. 

If you are interested in paths to divorce other than the traditional civil divorce lawsuit, you may want to visit the South Carolina Family Law Blog's post about on-line videos, which have short presentations about the changing landscape of divorce.

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