This Day in Legal History: Exxon Valdez

On March 24, 1989, the oil tanker Exxon Valdez ran aground on Bligh Reef in Alaska’s Prince William Sound, spilling millions of gallons of crude oil into the surrounding waters. The disaster quickly became one of the most devastating environmental crises in United States history, contaminating vast stretches of coastline and severely impacting wildlife and local communities. In the immediate aftermath, attention turned not only to cleanup efforts but also to the legal consequences for Exxon. Federal and state authorities pursued claims under environmental statutes, while thousands of private plaintiffs, including fishermen and Alaska Natives, filed civil lawsuits seeking compensation for economic and ecological harm.

The litigation that followed raised complex questions about corporate responsibility and the scope of damages available under maritime law. A central issue was whether punitive damages—intended to punish especially reckless conduct—could be imposed on Exxon for the actions of the ship’s captain. The case eventually reached the U.S. Supreme Court in Exxon Shipping Co. v. Baker, where the Court addressed the proper limits of punitive damages in maritime cases. In a closely watched decision, the Court reduced the punitive damages award, holding that it should be roughly equal to the compensatory damages awarded to plaintiffs.

This ruling had lasting implications for how courts evaluate excessive punitive damages and balance punishment with fairness to defendants. Beyond the courtroom, the spill prompted Congress to pass the Oil Pollution Act of 1990, which strengthened federal authority to prevent and respond to oil spills. The Act also expanded liability for companies and created a trust fund to ensure prompt cleanup and compensation. Together, the disaster and its legal aftermath reshaped environmental regulation, corporate accountability, and the development of modern tort law in the United States.

The U.S. Supreme Court is preparing to hear arguments on whether the Trump administration can limit the processing of asylum claims at the U.S.-Mexico border. At the center of the case is a policy known as “metering,” which allowed immigration officials to turn away asylum seekers when border facilities were considered too overwhelmed to handle additional applications. This policy had been used in a more informal way starting in 2016 and was formalized during Trump’s first term, before being rescinded by President Joe Biden in 2021.

The legal dispute focuses on how to interpret federal law requiring that migrants who “arrive in the United States” be allowed to apply for asylum and be inspected by immigration officials. A key question is whether individuals stopped on the Mexican side of the border can be considered to have “arrived” under the statute. A federal appeals court previously ruled that the government must process asylum seekers even if they are waiting at official border crossings, finding that the metering policy violated the law.

The Trump administration disagrees, arguing that “arriving” requires actually entering U.S. territory, not merely approaching it. Officials have indicated they may reinstate the policy if conditions at the border justify doing so. The case, originally brought by an advocacy group, could significantly shape how asylum law is applied at the border.

This dispute highlights a broader pattern of ongoing legal battles over immigration policy before the Supreme Court. The Court has recently sided with Trump in several emergency rulings on related issues, including deportation practices and limits on temporary protected status. Additional cases involving birthright citizenship and protections for certain migrant groups are also scheduled for review.

US Supreme Court to weigh Trump’s power to limit asylum processing | Reuters

The Trump administration has opened two new federal investigations into Harvard University, intensifying its broader scrutiny of elite U.S. schools. The Department of Education’s civil rights office is examining whether Harvard violated federal law by discriminating based on race, color, or national origin. One investigation focuses on whether the university continues to use race in admissions despite the Supreme Court’s 2023 decision ending affirmative action. The second probe looks into allegations of antisemitism on campus, following reports that both Jewish and Muslim students experienced harassment.

Harvard has denied wrongdoing, stating it complies with the law and is taking steps to address discrimination while defending its institutional independence. These new investigations add to ongoing legal conflict between the federal government and the university. The administration has already filed lawsuits seeking financial penalties and documents related to admissions practices, while negotiations to resolve the disputes have stalled.

The probes are part of a wider campaign by the Trump administration targeting universities over issues such as campus protests, diversity initiatives, and federal funding. Critics argue these actions threaten academic freedom, free speech, and student privacy, while supporters say they are necessary to enforce civil rights laws. Some settlements with other universities, including large financial payments, have raised concerns about setting precedent for costly agreements.

Trump administration launches more probes into Harvard | Reuters

The National Collegiate Athletic Association has filed a lawsuit against DraftKings, accusing the company of improperly using trademarks tied to its college basketball tournament. The dispute centers on well-known phrases such as “March Madness,” “Final Four,” “Elite Eight,” and “Sweet Sixteen,” which the NCAA argues are being used without authorization in DraftKings’ betting promotions. The lawsuit, filed in federal court, seeks to stop DraftKings from using these terms and also requests monetary damages.

The NCAA claims that DraftKings’ marketing falsely suggests a connection or endorsement between the organization and the betting platform, which it says harms its reputation. It also argues that sports betting—especially “prop bets” focused on individual player performance—can threaten the integrity of games and expose student-athletes to harassment or undue pressure. The NCAA has long opposed partnerships with gambling companies for these reasons.

DraftKings disputes the claims, arguing that its use of the terms is descriptive and protected under the Constitution, rather than a violation of trademark law. The company maintains it is simply identifying the events on which users can place bets.

This case comes amid a surge in sports betting, with billions of dollars expected to be wagered on the tournament, and reflects broader tensions between sports organizations and the gambling industry.

NCAA sues to block DraftKings from using ‘March Madness’ trademarks | Reuters

In my Bloomberg column this week, I examine New York City Mayor Zohran Mamdani’s proposal to sharply lower the state’s estate tax exemption to $750,000 and the broader issue it raises about how the U.S. tax system treats inherited wealth. I argue that Mamdani is right to highlight a fundamental imbalance: wealth passed down across generations is often taxed more lightly than income earned through work. However, I contend that his current proposal is poorly targeted and risks burdening middle-class households, particularly in a high-cost market like New York, where even modest homes can exceed the proposed threshold.

I explain that estate taxes are one of the few tools available to address intergenerational wealth concentration, but they must be carefully designed to avoid unintended consequences. A major flaw in the proposal is its low exemption level, which could capture asset-rich but cash-poor individuals, forcing difficult financial decisions such as selling homes or small businesses. I also highlight a structural problem in New York’s existing estate tax system—the so-called “cliff”—where slightly exceeding the exemption can trigger taxes on the entire estate, creating sharp and arbitrary increases in liability.

I note that this cliff encourages costly estate planning strategies that do little to benefit the broader economy while allowing those with resources to minimize their tax burden. Expanding the tax without fixing this issue would likely worsen these inefficiencies and inequities. While critics argue that higher estate taxes could drive wealthy residents out of the state, I suggest that the real issue is not whether to tax inherited wealth, but how to do so effectively.

I conclude that a better approach would involve lowering the exemption more moderately, eliminating the estate tax cliff, and focusing higher tax rates on very large estates in the tens of millions. I also suggest policymakers consider special rules for illiquid assets like primary residences and closely held businesses. Overall, I argue that estate taxes can play a meaningful role in reducing dynastic wealth—but only if they are structured in a way that is fair, predictable, and politically sustainable.

Mamdani’s NY Estate Tax Exemption Should Target Dynastic Wealth

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