Full opinion text
Order; Dissent to Order by Judge KOZINSKI; Dissent to Order by Judge BEA; Per Curiam Opinion; Dissent by Judge BROWNING. ORDER IT IS ORDERED THAT: The opinion in In re Exxon Valdez, 472 F.3d 600 (9th Cir.2006) is amended as follows: On page 621, delete the first full paragraph commencing with “There is also a limit on the law of the case doctrine ...” and concluding with “... may not generally be used as part of the calculation of harm.” With that amendment, the panel has voted to otherwise deny the petition for panel rehearing. The petition for panel rehearing is DENIED. The full court was advised of the petition for rehearing en banc. A judge of the court called for a vote on whether to rehear the matter en banc. The matter failed to receive a majority of votes of the nonreeused active judges in favor of en banc consideration. Fed. RApp. 35. The petition for rehearing en banc is DENIED. KOZINSKI, Circuit Judge, dissenting from the order denying the petition for rehearing en banc: For two centuries, maritime law has protected ship owners from liability for punitive damages based solely on the fault of captain and crew. See Thomas J. Schoenbaum, Admiralty & Maritime Law § 5-17 (2005) (“[Ajdmiralty cases deny punitive damages in cases of imputed fault.”). The Supreme Court first erected this bulwark in The Amiable Nancy, 3 Wheat. 546, 16 U.S. 546, 558-59, 4 L.Ed. 456 (1818), explaining that a ship owner can’t be subject to “exemplary damages” for the actions of its agent if the owner is “innocent of the demerit of this transaction, having neither directed it, nor countenanced it, nor participated in it in the slightest degree.” Dutifully following The Amiable Nancy, we held in Pacific Packing & Navigation Co. v. Fielding, 136 F. 577, 580 (9th Cir.1905), that punitive damages are unavailable against a ship owner for the reckless conduct of the captain. We abruptly changed course in Protectus Alpha Navigation Co. v. North Pacific Grain Growers, Inc., 767 F.2d 1379 (9th Cir.1985), and held that, under maritime law, punitive damages are available against an owner for the actions of his agent who “was employed in a managerial capacity and was acting in the scope of employment.” Id. at 1386 (quoting Restatement (Second) of Torts § 909). The conflict between Protectus Alpha and Pacific Packing washed ashore in In re the Exxon Valdez (Valdez I), 270 F.3d 1215 (9th Cir.2001). Following Protectus Alpha, and consigning The Amiable Nancy and Pacific Packing to the dustbin of history, the district court instructed the jury that Exxon was responsible for the reckless acts of the captain if he was “employed in a managerial capacity while acting in the scope of [his] employment.” See Valdez I, 270 F.3d at 1233 (internal quotations omitted). Once the jury found that the captain acted recklessly, it was also required to find that Exxon acted recklessly. On appeal, the panel recognized that Protectus Alpha conflicts with Pacific Packing; at that point, it was duty-bound to call this case en banc. See United States v. Hardesty, 977 F.2d 1347, 1348 (9th Cir.1992) (en banc) (per curiam). Instead, it scuttled the en banc process and held that Protectus Alpha’s, imposition of punitive damages based on vicarious liability is now the maritime rule in our circuit. See Valdez I, 270 F.3d at 1235-36. This decision puts us at loggerheads with every other circuit that has considered this issue. In United States Steel Corp. v. Fuhrman, 407 F.2d 1143 (6th Cir.1969), cert. denied, 398 U.S. 958, 90 S.Ct. 2162, 2163, 26 L.Ed.2d 542 (1970), the Sixth Circuit followed The Amiable Nancy and Pacific Packing in holding that a ship owner cannot be held liable for punitive damages “unless it can be shown that the owner authorized or ratified the acts of the master either before or after the accident ... [or] the acts complained of were those of an unfit master and the owner was reckless in employing him.” Id. at 1148. The Fifth Circuit followed the same course in In re P & E Boat Rentals, Inc., 872 F.2d 642 (5th Cir.1989). In rejecting Protectus Alpha, it observed that admiralty courts, going back to The Amiable Nancy, have held that punitive damages are unavailable based on vicarious liability. See id. at 652. Finally, in CEH, Inc. v. F/V Seafarer, 70 F.3d 694, 705 (1st Cir.1995), the First Circuit, while taking a somewhat broader view of what constitutes a ship owner’s fault, endorsed the principle that “some level of culpability” on the part of the ship owner is required before punitive damages may be imposed under maritime law. The panel’s decision is also contrary to the modern drift of maritime law, which has reaffirmed its historical reluctance to impose hedonic and punitive damages at all. See Guevara v. Maritime Overseas Corp., 59 F.3d 1496, 1508 n. 11 (5th Cir.1995) (en banc). In Miles v. Apex Marine Corp., 498 U.S. 19, 31-33, 111 S.Ct. 317, 112 L.Ed.2d 275 (1990), a unanimous Supreme Court held that the family of a seaman couldn’t recover nonpecuniary damages in a wrongful death action brought under general maritime law. Courts have read Miles as barring nonpe-cuniary damages, including punitive damages, for wrongful death, personal injury and other related actions brought on behalf of seamen, see Glynn v. Roy Al Boat Mgmt. Corp., 57 F.3d 1495, 1502-05 & n. 14 (9th Cir.1995); Guevara, 59 F.3d at 1503, 150607, 1512, and some have interpreted Miles as applying to nonseamen, see Wahlstrom v. Kawasaki Heavy Indus., Ltd., 4 F.3d 1084, 1092 (2d Cir.1993). While these cases involve the intersection of federal statutes with maritime common law, they confirm the Supreme Court’s observation in Executive Jet Aviation, Inc. v. Cleveland, 409 U.S. 249, 270, 93 S.Ct. 493, 34 L.Ed.2d 454 (1972), that the “long experience [of] the law of the sea ... is concerned with ... limitation of liability.” It makes no sense to hold that families of those who are killed and maimed at sea can’t get punitive awards, or even damages for pain and suffering or loss of consortium, and yet reverse centuries of maritime law to make it easier for businessmen to recover billions in punitive damages for harm to their commercial interests. The panel’s decision exposes owners of every vessel and port facility within our maritime jurisdiction — a staggeringly huge area — to punitive damages solely for the actions of managerial employees. Because of the harsh nature of vicarious liability, ship owners won’t be able to protect themselves against our newfangled interpretation of maritime law through careful hiring practices. Accidents at sea happen — ships sink, collide and run aground — often because of serious mistakes by captain and crew, many of which could, with the benefit of hindsight, be found to have been reckless. For centuries, companies have built their seaborne businesses on the under standing that they won’t be subject to punitive damages if they “[n]either directed it, nor countenanced it, nor participated in” the wrong, The Amiable Nancy, 16 U.S. at 559; the panel opinion has thrown this protection overboard. This case demonstrates the pernicious impact of departing from the traditional protections of maritime law. The plaintiffs here suffered no physical injuries — then-only claim was that the oil spill harmed their commercial fishing interests. See Valdez I, 270 F.3d at 1221. After the accident, Exxon acted as a model corporation — it spent over $2 billion to remove oil from the water and adjacent shore and $900 million to restore damaged natural resources. Id. at 1223. Furthermore, before the jury ever entered a verdict, Exxon compensated the plaintiffs for most of their damages. See Valdez II, 472 F.3d at 611-12. Yet the jury, perhaps subscribing to the maxim that a rising tide lifts all boats, took advantage of the vicarious liability instruction to award billions in punitive damages as a windfall to their fellow Alaskans. As Exxon learned, a company can voluntarily compensate harmed parties, take every step imaginable to undo the tragic mess its agents created, and still be subject to the largest punitive award ever upheld by a federal court — all because it had the misfortune of hiring a captain who committed a reckless act. Moreover, the effects of this opinion are not limited to shippers and docks based in the Ninth Circuit: The shipping business knows no circuit, or even national, boundaries. Shippers everywhere will be put on notice: If your vessels sail into the vast waters of the Ninth Circuit, a jury can shipwreck your operations through punitive damages and the fact that you did nothing wrong won’t save you. Such major turbulence in the seascape of the law ought to come, if at all, from the Supreme Court. Because my colleagues don’t seem to share my concern that we have undermined the uniformity of maritime law and contravened long-settled Supreme Court precedent, as well as the unanimous view of our sister circuits, I dissent. BEA, Circuit Judge, dissenting from the order denying the petition for rehearing en banc: I agree with Judge Kozinski that punitive damages should not have been awarded in this case. However, even if punitive damages were appropriate, I note that the ratio of punitive damages to compensatory damages is excessive. The Supreme Court has instructed that “[pjerhaps the most important indicium of the reasonableness of a punitive damages award is the degree of reprehensibility of the defendant’s conduct.” BMW of North America v. Gore, 517 U.S. 559, 575, 116 S.Ct. 1589, 134 L.Ed.2d 809 (1996). As the panel itself noted, the reprehensibility of Exxon’s conduct here is “at most, a mid range.” In re the Exxon Valdez (Valdez II), 472 F.3d 600, 618 (9th Cir.2006) (per curiam). Importantly, the panel correctly concluded that “Exxon’s conduct caused no actual physical harm to people,” although it did cause “more than mere economic harm to them, because the economic effects of its misconduct produced severe emotional harm as well.” Id. at 614. Of course, the plaintiffs in State Farm Mutual Automobile Ins. Co. v. Campbell, 538 U.S. 408, 123 S.Ct. 1513, 155 L.Ed.2d 585 (2003), had economic and emotional harm also. In that case, the Campbells brought a claim against State Farm for bad faith failure to settle within policy limits, fraud, and intentional infliction of emotional distress. The emotional distress the Campbells suffered was not limited to that caused by their business losses, as the Exxon Valdez plaintiffs suffered. The Campbells were faced with a large potential judgment beyond insurance limits coverage — which the insurance company gaily told them would probably cost them their house. As in Valdez II, State Farm liquidated all economic damage by paying the third-party judgment before the Campbells filed their complaint. Nonetheless, the court awarded $1 million in compensatory damages and $25 million in punitive damages. The Supreme Court reversed the judgment and held that a 25 to 1 ratio of punitive to compensatory damages was constitutionally invalid as excessive. Instead, even considering the economic and emotional harm, in remanding, the Supreme Court stated “a punitive damages award at or near the amount of compensatory damages” would be appropriate. Id. at 425, 123 S.Ct. 1513. Although the Supreme Court has declined to set a brightline ratio for punitive damages awards, “in practice, few awards exceeding a single-digit ratio between punitive and compensatory damages, to a significant degree, will satisfy due process.” Id. Moreover, “[w]hen compensatory damages are substantial, then a lesser ratio, perhaps only equal to compensatory damages, can reach the outermost limit of the due process guarantee.” Id. (emphasis added). The Supreme Court characterized the Campbells’s $1 million compensatory damages award as “substantial.” Id. at 426,123 S.Ct. 1513. Surely, then, the $513 million in compensatory damages here is also “substantial” damages. Hence, the 5:1 ratio adopted by the majority seems to violate the limits implied by the Court for a case where the reprehensibility of the conduct of the defendant does not include infliction of physical injury, nor an assessment for environmental damage. Accordingly, I respectfully dissent from denial of rehearing en banc. OPINION PER CURIAM: I. INTRODUCTION We look for the third time at the punitive damages imposed in this litigation as a result of the 1989 grounding of the oil tanker Exxon Valdez, and the resulting economic harm to many who earned their livelihood from the resources of that area. See Baker v. Hazelwood (In re the Exxon Valdez), 270 F.3d 1215 (9th Cir.2001) [hereinafter Punitive Damages Opinion /]; Sea Hawk Seafoods, Inc. v. Exxon Corp., No. 03-35166 (9th Cir., Aug. 18, 2003). We are precluded, as the jury was, from punishing Exxon for befouling the beautiful region where the oil was spilled, because that punishment has already been imposed in separate litigation that has been settled. See Punitive Damages Opinion I, 270 F.3d at 1242. As we explained in Punitive Damages Opinion I, the plaintiffs’ punitive damages case was saved from preemption and res judicata because the award “vindicates only private economic and quasi-economic interests, not the public interest in punishing harm to the environment.” Id. “The plaintiffs’ claims for punitive damages expressly excluded consideration of harm to the environment.” In re the Exxon Valdez, 296 F.Supp.2d 1071, 1090 (D.Alaska 2004). The resolution of punitive damages has been delayed because the course of this litigation has paralleled the course followed by the Supreme Court when, in 1991, it embarked on a series of decisions outlining the relationship of punitive damages to the principles of due process embodied in our Constitution. See, e.g., Pac. Mut. Life Ins. Co. v. Haslip, 499 U.S. 1, 111 S.Ct. 1032, 113 L.Ed.2d 1 (1991); TXO Prod. Corp. v. Alliance Res. Corp., 509 U.S. 443, 113 S.Ct. 2711, 125 L.Ed.2d 366 (1993) (plurality); BMW of N. Am., Inc. v. Gore, 517 U.S. 559, 116 S.Ct. 1589, 134 L.Ed.2d 809 (1996); State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 123 S.Ct. 1513, 155 L.Ed.2d 585 (2003). Intervening Supreme Court decisions have caused us to remand the matter twice to the district court for reconsideration of punitives in light of evolving Supreme Court law. The district court’s opinion, after our last remand for it to consider the impact of the Supreme Court’s decision in State Farm, is published at In re the Exxon Valdez, 296 F.Supp.2d 1071 (D.Alaska 2004) [hereinafter District Court Opinion]. It is the subject of this appeal. Now, with the guidance of the Supreme Court’s decisions, the district judge’s thoughtful consideration of the issues, and our own prior decisions in the litigation, we trust we are able to bring this phase of the litigation to an end. While we agree with much of the analysis of the district court, we are required to review de novo the district court’s legal analysis in applying the Supreme Court’s guideposts. See Cooper Indus., Inc. v. Leatherman Tool Group, Inc., 532 U.S. 424, 436, 121 S.Ct. 1678, 149 L.Ed.2d 674 (2001). While the original punitive damages award was $5 billion and in accord with the jury’s verdict, the district court reduced it to $4 billion after our first remand. In re the Exxon Valdez, 236 F.Supp.2d 1043, 1068 (D.Alaska 2002), vacated by Sea Hawk, No. 03-35166. Then, after our second remand, it entered an award of $4.5 billion. District Court Opinion, 296 F.Supp.2d at 1110. For the reasons outlined further in the factual development and the analysis of this opinion, we conclude that the ratio of punitive damages to actual economic harm resulting from the spill, reflected in the district court’s award of $4.5 billion, exceeds by a material factor a ratio that would be appropriate under Punitive Damages Opinion I and the current controlling Supreme Court analysis. See State Farm, 538 U.S. at 425, 123 S.Ct. 1513. We order a remittitur of $2 billion, resulting in punitive damages of $2.5 billion. We do so because, in assessing the reprehensibility of Exxon’s misconduct, the most important guidepost according to the Supreme Court’s opinion in State Farm, there are several mitigating facts. See id. at 419, 123 S.Ct. 1513. These include prompt action taken by Exxon both to clean up the oil and to compensate the plaintiffs for economic losses. These mollify, at least to some material degree, the reprehensibility in economic terms of Exxon’s original misconduct. Punitive Damages Opinion I, 270 F.3d at 1242. In addition, in considering the relationship between the size of the award and the amount of harm, we concluded in our earlier punitive damages opinion that the substantial costs that Exxon had already borne in clean up and loss of cargo lessen the need for deterrence in the future. Id. at 1244. We disagree, however, with Exxon’s ultimate contention that, as a result of two sentences in Punitive Damages Opinion I, written five years ago and before the Supreme Court’s opinion in State Farm, Exxon is entitled to have punitive damages assessed at no higher than $25 million. See id. Our dissenting colleague goes to the other extreme. Exxon’s misconduct was placing a relapsed alcoholic in charge of a supertanker. Punitive Damages Opinion I, 270 F.3d at 1234. Yet, the dissent claims that we should ignore our unanimous conclusion in Punitive Damages Opinion I, 270 F.3d at 1242, that Exxon’s conduct with respect to the spill was not intentional. The dissent effectively treats Exxon as though it ealeulatingly and maliciously steered the ship into disaster. Purporting to rely on the intervening Supreme Court decision in State Farm, the dissent also refuses to apply our earlier holding that Exxon’s mitigation efforts reduce the reprehensibility of its conduct. This amounts to a rejection of the bedrock principle of stare decisis. State Farm was an insurance contract case. Nothing in it suggests that this court’s decision in Punitive Damages Opinion I was improper. The Supreme Court did not explicitly or implicitly hold that mitigation plays no role in determining the constitutionality of a punitive damages award. Such a lack of discussion in an insurance contract case cannot supplant our express holding in the toxic-tort arena that mitigation efforts are a factor in assessing the punitive damages award in this case. Controlling authority should not be ignored or distorted. As Learned Hand famously once said, “a victory gained by sweeping the chess pieces off the table is not enduring.” Learned Hand, Mr. Justice Cardozo, 52 Harv. L. Rev. 361, 362 (1939). We reiterate our previous holding that Exxon’s conduct was not willful. Accordingly, a punitive damages award that corresponds with the highest degree of reprehensibility does not comport with due process when Exxon’s conduct falls squarely in the middle of a fault continuum. Because the history of this litigation tracks the recent jurisprudential history of punitive damages, our analysis is best made in light of a thorough understanding of that history. We therefore outline that history with what we hope is sufficient clarity and thoroughness. II. LEGAL AND FACTUAL BACKGROUND A. From the Time of the Accident through the First Punitive Damages Award and Denial of Motion for New Trial: The Common Law through the Supreme Court Decision in TXO. The Exxon Valdez ran aground on Bligh Reef in Alaska’s Prince William Sound on March 24, 1989. Punitive damages at that time were governed by general common law principles. At common law, the jury determined the punitives, and the trial judge conducted a limited review to determine whether the jury’s verdict was the product of passion and prejudice, or whether the award was one that shocked the conscience. See Renee B. Lettow, New Trial for Verdict Against Law: Judge-Jury Relations in Early Nineteenth Century America, 71 Notre Dame L.Rev. 505, 542-51 (1996); Paul DeCamp, Beyond State Farm: Due Process Constraints on Noneconomic Compensatory Damages, 27 Harv. J.L. & Pub. Pol’y 231, 246-48 (2003); see also Browning-Ferris Indus. of Vt., Inc. v. Kelco Disposal, Inc., 492 U.S. 257, 278 n. 24, 109 S.Ct. 2909, 106 L.Ed.2d 219 (1989) (affirming district court’s application of Vermont’s “grossly and manifestly excessive” standard for judicial review); Honda Motor Co. v. Oberg, 512 U.S. 415, 432 n. 10, 114 S.Ct. 2331, 129 L.Ed.2d 336 (1994). Although there were cases dating from the Lochner era that had suggested that there may be a due process ceiling on punitive damages, at the time of this accident in 1989, the Supreme Court had never invalidated an award on grounds that the size of the award violated due process. See BMW v. Gore, 517 U.S. at 600-01, 116 S.Ct. 1589 (Scalia, J„ dissenting) (discussing the history of due process review of punitive damages awards) (citing Seabord Air Line R. Co. v. Seegers, 207 U.S. 73, 78, 28 S.Ct. 28, 52 L.Ed. 108 (1907); Southwestern Tel. & Tel. Co. v. Danaher, 238 U.S. 482, 489-91, 35 S.Ct. 886, 59 L.Ed. 1419 (1915); Waters-Pierce Oil Co. v. Texas, 212 U.S. 86, 111-12, 29 S.Ct. 220, 53 L.Ed. 417 (1909); Standard Oil Co. of Ind. v. Missouri, 224 U.S. 270, 286, 290, 32 S.Ct. 406, 56 L.Ed. 760 (1912); St. Louis, I.M. & S.R. Co. v. Williams, 251 U.S. 63, 66-67, 40 S.Ct. 71, 64 L.Ed. 139 (1919)). In 1991, however, the Supreme Court decided Pacific Mutual Life Insurance Co. v. Haslip, 499 U.S. 1, 111 S.Ct. 1032, 113 L.Ed.2d 1 (1991). There, for the first time in the modern era, the Court conducted a substantive review of an award of punitive damages. Haslip was an insurance fraud case, in which the agent pocketed the premiums and caused the plaintiffs insurance to lapse. Id. at 4-5, 111 S.Ct. 1032. The Court upheld a punitive damages award that amounted to four times the award of compensatory damages and 200 times the out-of-pocket costs of the defrauded insured. Id. at 23-24, 111 S.Ct. 1032. The Court noted that the ratios might be “close to the line,” but said the award had to be upheld because it “did not lack objective criteria.” Id. The Court therefore concluded that the punitive damages did not “cross the line into the area of constitutional impropriety.” Id. The Supreme Court did not, at that time, and has not since, defined any bright line of constitutional impropriety. It has, repeatedly, indicated that there is none. See, e.g., State Farm, 538 U.S. at 424-25, 123 S.Ct. 1513. In 1993, two years after Haslip, the Court took on another major punitive damages case. In TXO Production Corp. v. Alliance Resources Corp., 509 U.S. 443, 113 S.Ct. 2711, 125 L.Ed.2d 366 (1993), the Court reviewed a jury award of $19,000 in compensatory damages and $10 million in punitive damages. Id. at 451, 113 S.Ct. 2711. That case arose out of an oil and gas development fraud scheme. Id. at 447-51, 113 S.Ct. 2711. The case produced no majority opinion. The plurality, reiterating that due process places some limit on punitive damages, said that the award was not so “grossly excessive” that it should be overturned, thus invoking the standard used in Haslip. Id. at 462, 113 S.Ct. 2711. The Court declined to provide any particular guidance in determining when an award would be “grossly excessive.” Id. The plurality chose instead to say that the dramatic disparity between the actual financial loss and the punitive award was not controlling. Id. The award was upheld. Id. It was against this background that the jury in this case was instructed in 1994. The jury was told to take into account the reprehensibility of the misconduct, the amount of actual or potential harm arising from the misconduct, and, additionally, to take into account mitigating factors such as the clean up costs and fines already imposed as deterrents. District Court Opinion, 296 F.Supp.2d at 1081-82. The instructions were the product of mutual effort of the parties and the district court, and have not been seriously challenged. Id. They are not questioned here and were, in retrospect, quite forward looking. On September 16, 1994, the jury returned a $5 billion punitive damages verdict, having some time earlier imposed a compensatory award of $287 million. The district court accepted the punitive award and entered judgment. Citing Haslip and TXO, the district court denied Exxon’s motion for a new trial in January of 1995. B. The Appeal of the Damage Allocation Plan and Our Decisions in Baker and Icicle. Prior to trial, several plaintiffs, many of the sea food processors, had entered into settlement agreements with Exxon. Icicle Seafoods, Inc. v. Baker (In re the Exxon Valdez), 229 F.3d 790, 792 (9th Cir.2000) [hereinafter Icicle ]; Baker v. Exxon Corp. (In re the Exxon Valdez), 239 F.3d 985, 986 (9th Cir.2001) [hereinafter Baker], The agreements anticipated a sizable punitive damages award. See Icicle, 229 F.3d at 793; Baker, 239 F.3d at 986-87. In return for receiving substantial millions in payments from Exxon, the settling plaintiffs, in two separate agreements, agreed to allocate a portion of their punitive award to Exxon. One agreement was a so called “cede back agreement,” Icicle, 229 F.3d at 793, and the other was an assignment of the future award, Baker, 239 F.3d at 986-87. The district court, however, did not know of the agreements during trial. Icicle, 229 F.3d at 793. When the court did learn of them, during consideration of the parties’ proposed damage allocation plan, and after the punitives had been imposed in accordance with the jury’s verdict, the district court frowned on the settlements. Id. at 794. In the district court’s view, Exxon should have told the jury about the agreements so that the jury would have known how much Exxon was actually going to have to pay in punitive damages. Id. The district court, therefore, refused to permit the settling plaintiffs to receive any of the punitive damages award, on the theory that Exxon should not benefit from the settlements. Id.; Baker, 239 F.3d at 987. Exxon pursued two appeals from the district court’s refusal to enforce the agreements: one involving the cede back agreement, Icicle, 229 F.3d at 793, and the other involving the assignment agreement, Baker, 239 F.3d at 987-88. The two different forms of agreement were intended to have essentially the same effect: allowing Exxon to keep some portion of the eventual punitive award in exchange for settling compensatory damage claims. In Icicle, this panel considered the cede back agreement. In a thorough opinion, we held that the cede back agreement was valid and enforceable and that the jury quite properly was not told of its existence. Icicle, 229 F.3d at 800. We reasoned that had the jury been told of the agreement, it might well have compensated for the settlement by imposing more damages. Id. at 798. This, in turn, would have frustrated the efforts of parties to reach settlements. We pointed out that settlements should be encouraged, particularly in large class actions like this one. Id. “Far from being unethical, cede back agreements make it easier to administer mandatory class actions for the assessment of punitive damages and encourage settlement in mass tort cases. As a result, such agreements should typically be enforced.” Id. The second appeal, Baker, considered an assignment agreement. Baker, 239 F.3d at 987-88. Following the Icicle reasoning, this panel reached the same conclusion. Id. at 988. C. The Supreme Court’s Decision in BMW v. Gore. As the parties were beginning their preparation for the first appeal of the $5 billion punitive damages award, the Supreme Court issued its first major due process/punitive damages decision after TXO. In 1996, it decided BMW of North America, Inc. v. Gore, 517 U.S. 559, 116 S.Ct. 1589, 134 L.Ed.2d 809 (1996). This was the Supreme Court’s first attempt to describe specific factors that a court should consider in reviewing a jury’s award of punitive damages. See id. at 575, 116 S.Ct. 1589. The Court invoked the traditional concepts of due process to describe the purpose of the review as an assurance of fair notice to the defendant of the consequences of its conduct. Id. at 574, 116 S.Ct. 1589. The Court described three factors to be considered. Id. at 575, 116 S.Ct. 1589. The first was the reprehensibility of the conduct. Id. The Court explained that reprehensibility is “[pjerhaps the most important indicium of the reasonableness of a punitive damages award,” and said that an award should reflect “the enormity” of the offense. Id. (citations omitted). The second factor was the disparity between the actual or potential harm to the plaintiffs flowing from that conduct, and the punitive damages assessed by the jury. The Court said that the disparity factor was the most commonly cited. Id. at 580, 116 S.Ct. 1589. The Court reasoned this factor is important because it “has a long pedigree” extending back to English statutes from 1275 to 1753 providing for double, treble or quadruple damages. Id. at 580-81, 116 S.Ct. 1589. Thus the critical measure here is the ratio between the punitive award and the amount of harm inflicted on the plaintiff, or plaintiffs, before the court. The third factor was the difference between the punitives and the civil and criminal penalties authorized by the state for that conduct. Id. at 583, 116 S.Ct. 1589. The Court indicated that reviewing courts should use this factor to “accord substantial deference to legislative judgments concerning appropriate sanctions for the conduct at issue.” Id. at 583, 116 S.Ct. 1589 (internal quotations omitted). In BMW v. Gore, the defendant had engaged in a practice of repainting damaged cars and passing them off as never-damaged cars with their original paint. Id. at 563-64, 116 S.Ct. 1589. The plaintiff who had purchased one of these cars was awarded $4,000 in compensatory damages and $4 million in punitives. Id. at 565, 116 S.Ct. 1589. The Alabama Supreme Court reduced the punitives to $2 million, and the defendant petitioned for certiorari review. Id. at 567, 116 S.Ct. 1589. The Supreme Court held the punitives were excessive. Id. at 585, 116 S.Ct. 1589. In examining the reprehensibility of the conduct, the Supreme Court in BMW v. Gore stressed that the only harm inflicted by the defendant was economic and not physical. Id. at 576, 116 S.Ct. 1589. The Court also emphasized that the conduct to be considered was only the conduct of the defendant towards the plaintiff in the Alabama case and not other conduct that might be a part of a nationwide practice. Id. at 572, 116 S.Ct. 1589. Justice Breyer’s concurring opinion noted the danger in subjecting a defendant to punishment multiple times for the same conduct. Id. at 593, 116 S.Ct. 1589 (Breyer, J., concurring). Thus, in looking at the ratio between the punitives and the harm, and in stressing that the ratio must be a reasonable one, the Court was holding that the ratio must be measured by the ratio of punitive damages to the harm suffered by the plaintiff in that case, without regard to harm that might have been experienced by others and for which the defendant might also be responsible. Id. at 580, 116 S.Ct. 1589. It concluded that a ratio of 500 to 1 was grossly excessive. Id. at 583, 116 S.Ct. 1589. Such an excessive ratio resulted from the jury’s improperly measuring the punitives in relation to the damage inflicted on a nation of potential plaintiffs rather than the damage to the plaintiff before that jury. Id. at 573, 116 S.Ct. 1589. With respect to the third factor, the relationship between the punitive damages and the comparable penalties under state law, BMW v. Gore looked to the Court’s federalism jurisprudence. The Court’s opinion stressed that reviewing courts should be mindful of the need to pay due deference to the legislative judgments of states in assessing the reprehensibility of conduct. Id. at 583, 116 S.Ct. 1589 (“[A] reviewing court engaged in determining whether an award of punitive damages is excessive should ‘accord ‘substantial deference’ to legislative judgments concerning appropriate sanctions for the conduct at issue.’ ”) (quoting Browning-Ferris, 492 U.S. at 301, 109 S.Ct. 2909 (O’Connor, J., concurring in part, dissenting in part)). Again refusing to draw any kind of mathematical bright line between acceptable and unacceptable ratios, the Court described the 500 to 1 ratio in BMW v. Gore as “breathtaking.” Id. It remanded for further, not inconsistent, proceedings, because, unlike Haslip, where the Court affirmed a questionable award, the Court in BMW was “fully convinced” that this award was “grossly excessive.” Id. at 585-86, 116 S.Ct. 1589. D. The First Punitive Damages Appeal. It was against this background that briefing in the first appeal of the original $5 billion punitive damages award in this case went forward. Exxon contended the amount of the award violated due process principles, as described in BMW v. Gore. Punitive Damages Opinion I, 270 F.3d at 1241. The district court had not had an opportunity to review BMW v. Gore before its original judgment became final and ap-pealable upon denial of Exxon’s motion for a new trial. Id. In its appeal from the $5 billion award, Exxon, in addition to challenging the amount of the punitive damages, challenged the sufficiency of the evidence supporting punitive damages; the jury instructions; the allowability of any punitive damages as a matter of public policy, maritime law and res judicata; and the preemption of punitive damages by other federal law. Needless to say, briefing was extensive. After appellate proceedings were stayed from January 1998 to September 1998 for the parties to pursue a limited remand, this panel heard argument in May of 1999. While the case was under submission, the Supreme Court granted certiorari in another Ninth Circuit case, and in May 2001, decided Cooper v. Leathemian Tool Group. The Court there held our review of punitive damages was to be de novo. Cooper, 532 U.S. at 436, 121 S.Ct. 1678. This did not ease our task. E. Punitive Damages Opinion I. We issued our first opinion on punitives damages in November, 2001. Our opinion went in detail through the facts of the disaster and the conduct of Exxon, and of Captain Hazelwood, because they bore so heavily on the consideration of the issues on appeal. Punitive Damages Opinion I, 270 F.3d at 1221-24. In an opinion of more than 40 pages, we rejected Captain Hazelwood’s separate appeal, and dealt at some length with all of the issues raised by Exxon. We ultimately rejected all of them except the challenge to the amount of punitive damages. Id. at 1254. Referring to the “unique body of law” that governs punitive damages, we focused on the two Supreme Court opinions that had been decided after the district court’s decision in the case, and we termed them “critical.” Id. at 1239. These were BMW v. Gore and Cooper v. Leatherman Tool Group. We said: In BMW, the Supreme Court held that a punitive damage award violated the Due Process Clause of the Fourteenth Amendment because it was so grossly excessive that the defendant lacked fair notice that it would be imposed. Dr. Gore’s car was damaged in transit, and BMW repainted it but did not tell Dr. Gore about the repainting when it sold him the car. The jury found that to be fraudulent, and awarded $4,000 in compensatory damages for reduced value of the car and $4 million in punitive damages. The Alabama Supreme Court cut the award to $2 million, but the Court held that it was still so high as to deny BMW due process of law for lack of notice, because the award exceeded the amounts justified under the three “guideposts.” The BMW guideposts are: (1) the degree of reprehensibility of the person’s conduct; (2) the disparity between the harm or potential harm suffered by the victim and his punitive damage award; and (3) the difference between the punitive damage award and the civil penalties authorized or imposed in comparable cases. We apply these three guideposts to evaluate whether a defendant lacked fair notice of the severity of a punitive damages award, and to stabilize the law by assuring the uniform treatment of similarly situated persons. Id. at 1240-41 (internal quotations omitted). We noted that in Cooper v. Leatherman Tool Group the Supreme Court decided that “considerations of institutional competence” require de novo review of punitive damages awards. Id. at 1240 (quoting Cooper, 532 U.S. at 440, 121 S.Ct. 1678). We went on to observe that the district court had not reviewed the award under the standards announced in those cases because neither case had been decided by the time the jury returned its verdict, and Exxon had never challenged the amount of the award on constitutional grounds until after the jury’s verdict. Id. at 1241. In view of the need for de novo review and the intervening decisions of BMW v. Gore and Cooper v. Leatherman Tool Group, we remanded for reconsideration of punitive damages. Id. We also provided some observations on possible alternative analyses of punitive damages under the BMW v. Gore factors. Id. at 1241-46. These observations began with the factor of reprehensibility, quoting the Supreme Court’s admonition in BMW v. Gore that it is “[pjerhaps the most important indicium of the reasonableness of a punitive damage award.” Id. at 1241. We pointed to the Court’s analogy to criminal cases, and its statement that nonviolent crimes are less reprehensible than violent ones. Id. We drew an analogy to the facts of this case, where Exxon’s conduct was reckless, but there was no intentional spilling of oil “as in a midnight dumping case.” Id. at 1242. We agreed with the plaintiffs that Exxon’s conduct was reprehensible in that it knew of the risk of an oil spill in transporting huge quantities of oil through the Sound, and it knew Hazelwood was a relapsed alcoholic. Id. at 1242. We observed, however, that such reprehensibility went more to justify punitive damages than to justify such a high amount. Id. We noted some mitigating factors, including prompt ameliorative action and the millions spent in clean up. Id. We then turned to the ratio of actual harm caused by the misconduct to punitive damages awarded. Id. at 1243. Again analyzing BMW v. Gore, we said that it was difficult to determine what we called the “numerator,” that is, the value of the harm caused by the spill. Id. We used the jury award of $287 million in compensatory damages as one possible numerator and also, as alternative numerators, the district court’s estimates of harm, which at that time ranged from $290 million to $418 million. Id. We noted that if compensatory liability were used, any amounts Exxon had voluntarily paid in settlements should not be taken into account. We said that [t]he amount that a defendant voluntarily pays before judgment should generally not be used as part of the numerator, because that would deter settlements prior to judgment. “[T]he general policy of federal courts to promote settlement before trial is even stronger in the context of large scale class actions.” Id. at 1244 (citing Icicle, 229 F.3d at 795; Baker, 239 F.3d at 988). As a final observation on the relationship between the punitive damages award and the harm, we pointed out that the substantial clean up costs and other losses to Exxon from the oil spill had already had considerable deterrent effect. We indicated such deterrence should, depending on the circumstances, call for a lower, rather than a higher ratio. Id. Turning to the third BMW v. Gore factor, we observed that the nature of criminal fines, which are potential state and federal penalties, might be useful in reviewing .punitives. Id. at 1245. We observed that “[e]riminal fines are particularly informative because punitive damages are quasi-criminal.” Id. We then looked to the general federal statutory measure for fines and discussed a number of alternative guideposts. Id. We noted the federal fines could range from $200,000 to $1.03 billion. Id. We looked as well at the ceiling of civil liability under the Trans-Alaska Pipeline Act and noted it was $100 million in strict liability for anyone who spills oil from the pipeline. Id. In addition to those possible penalties, we looked at the actual penal evaluation made in the case by the Attorneys General of the United States and of the state of Alaska. Id. at 1245-46. Agreeing with the district court that they did not establish a limit, we noted that they did represent an adversarial judgment, by executive officers, of an appropriate level of punishment. Id. at 1246. Finally, without necessarily exhausting available analogies in the penalty field, we noted that Congress had subsequently amended the statute to increase the amount of civil penalties for grossly negligent conduct, and that the maximum penalty here under the new federal statute would be a maximum of $786 million. Id. The federal penalties are based upon the number of barrels of oil spilled. 33 U.S.C. § 1321(b)(7). In suggesting various possible guidelines to assess whether the $5 billion was “grossly excessive” we did not imply that any single guidepost would be controlling. Concluding that the $5 billion was too high to withstand the review we were required to give it under BMW v. Gore and Cooper v. Leatherman Tool Group, and noting that those cases came down after the district court had ruled, we remanded for it to apply the due process analysis required under those decisions, with what we hoped would be helpful guidance from our opinion. Id. at 1241. No district court analysis of BMW v. Gore was before us and we thus could not have decided any specific issue arising from any such analysis arising from its guide posts. Id. We offered only guidance culled from what was then controlling Supreme Court precedent and general principles applicable to the calculation of damage liability. Id. F. The District Court Opinion on our First Remand. The district court again did an extensive analysis of the relative reprehensibility of Exxon’s misconduct and of the harm it caused. In re the Exxon Valdez, 236 F.Supp.2d at 1054-60. Though noting that an accurate assessment of the full extent of the plaintiffs’ actual harm was impossible, the district court attempted to reconstruct that harm by adding together the jury’s compensatory damages verdict of $287 million, judgments in related cases, as well as payments and settlements made to plaintiffs before and during the punitive damages litigation. Id. at 1058-60. The district court concluded that the actual harm was just over $500 million. Id. at 1060. The district court also concluded that the circumstances of this case justified a ratio of punitive damages to harm of 10 to 1. Id. at 1065. This calculation would have supported the original $5 billion award. Id. The district court nevertheless reduced the punitive damages to $4 billion, to conform to what it viewed as our mandate. Id. at 1068. G. The Second Appeal, the Supreme Court’s Opinion in State Farm, and our Second Remand. Not surprisingly, Exxon appealed again. And, not surprisingly, the Supreme Court issued an opinion in still another punitive damages case while the appeal was pending. State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 123 S.Ct. 1513, 155 L.Ed.2d 585 (2003). The plaintiffs in State Farm, the Camp-bells, were involved in a head-on collision and sued their automobile insurer, State Farm, for bad faith. Id. at 413, 123 S.Ct. 1513. The claim was based on State Farm’s rejection of an offer to settle the Campbells’ claims at the policy limit, State Farm’s assurances to them that they had no liability for the accident, State Farm’s resulting decision to take the case to court despite the substantial likelihood of an excess judgment, and its subsequent refusal to pay an adverse judgment over three times the policy limits. Id. at 413-14, 123 S.Ct. 1513. The ease was similar to BMW v. Gore in that there were only two plaintiffs before the jury. Id. Nevertheless, as in BMW v. Gore, the jury was allowed to consider the effects of similar but unrelated misconduct on many potential plaintiffs who were not before the court. Id. at 415, 123 S.Ct. 1513. Final judgment after appeal to the Utah Supreme Court was for $1 million in compensatory and $145 million in punitive damages. Id. at 412, 123 S.Ct. 1513. The United States Supreme Court remanded for the Utah courts to reduce the award. Id. at 429, 123 S.Ct. 1513. The Supreme Court in State Farm once again emphasized that the “most important indicium” of a punitive damages award’s reasonableness is the relative reprehensibility of the defendant’s conduct. Id. at 419, 123 S.Ct. 1513; see also BMW v. Gore, 517 U.S. at 575, 116 S.Ct. 1589. Yet State Farm significantly refined the reprehensibility analysis by instructing courts to weigh five specific considerations: (1) whether the harm caused was physical as opposed to economic; (2) whether the conduct causing the plaintiffs harm showed “indifference to or a reckless disregard of the health or safety of others;” (3) whether the “target of the conduct” was financially vulnerable; (4) whether the defendant’s conduct involved repeated actions as opposed to an isolated incident; and (5) whether the harm caused was the result of “intentional malice, trickery, or deceit, or mere accident.” 538 U.S. at 419, 123 S.Ct. 1513. The Court did not rank these factors. It did explain, however, that only one factor weighing in a plaintiffs favor may not be sufficient to support a punitive damages award, and the absence of all factors makes any such award “suspect.” Id. As to BMW v. Gore’s second guidepost, the ratio between harm or potential harm to the plaintiff and the punitive damages award, the Court “decline[d] again to impose a brightline ratio which a punitive damages award cannot exceed.” Id. at 425, 123 S.Ct. 1513. But it provided some sharper guidance than it had in previous cases. First, it indicated that ratios in excess of single-digits would raise serious constitutional questions, and that single-digit ratios were “more likely to comport with due process.” Id. In fact, despite the Court’s disclaimer that “there are no rigid benchmarks that a punitive damages award may not surpass,” the Court strongly indicated the proportion of punitive damages to harm could generally not exceed a ratio of 9 to 1. Id. at 425, 123 S.Ct. 1513 (“[F]ew awards exceeding a single-digit ratio between punitive and compensatory damages, to a significant degree, will satisfy due process.”). Second, the Court discussed particular combinations of factors that would justify relatively higher or lower ratios. For example, where a “particularly egregious act has resulted in only a small amount of economic damages” or where “the injury is hard to detect or the monetary value of the noneconomic harm might have been difficult to determine,” ratios in the high single-digits and perhaps even higher might be warranted. Id. (quoting BMW v. Gore, 517 U.S. at 582, 116 S.Ct. 1589). Conversely, “[w]hen compensatory damages are substantial, then a lesser ratio, perhaps only equal to compensatory damages, can reach the outermost limit of the due process guarantee.” Id. Finally, the Court minimized the relevance of criminal penalties as a guide, saying that they were not particularly helpful in determining fair notice. Id. at 428, 123 S.Ct. 1513. Indeed, the Court did not analyze State Farm’s potential criminal penalty at all, characterizing it as a “remote possibility.” Id. As to civil penalties, the Court noted only that the $145 million punitive damages award “dwarfed” the $10,000 maximum applicable fine. Id. The Supreme Court’s opinion in State Farm was filed in 2003, after the district court, on our first remand, had already reviewed the punitive damages award. Because the district court performed its review without the benefit of the more focused guidance provided by the Court in State Farm, we remanded the second appeal summarily for the district court to reconsider the punitive damages award in light of State Farm. Sea Hawk, No. 03-39166. H. The District Court Opinion on our Third Remand and this Appeal. On remand for the third time, the district court, in an assessment similar to that in its opinion after our first remand, calculated plaintiffs’ harm at $513.1 million. District Court Opinion, 296 F.Supp.2d at 1103. Interpreting State Farm as holding that “single-digit multipliers pass constitutional muster for highly reprehensible conduct,” and citing our decision in Zhang v. American Gem Seafoods, Inc., 339 F.3d 1020 (9th Cir.2003), the district court decided to increase punitives from $4 billion to $4.5 billion. 296 F.Supp.2d at 1110. The final punitive damages award represented a ratio of just under 9 to 1. Id. Once again, Exxon appealed. The plaintiffs also appealed, seeking to reinstate the jury’s full $5 billion punitive damages verdict. In this appeal, Exxon has focused intensively on the sentences in our earlier opinion where we noted that prejudgment payments generally should not be part of the “numerator” to avoid deterring pre-judgment settlements. Punitive Damages Opinion I, 270 F.3d at 1242. Exxon has argued strenuously in the district court and to us that all of its settlement and other pre-judgment compensatory payments to plaintiffs must be subtracted from the over $500 million amount of actual harm in the ratio of punitive damages we use to review the award pursuant to the BMW v. Gore/State Farm factors. This would reduce the harm to the relatively paltry figure of $20.3 million. We recognized in Punitive Damages Opinion I that Exxon, soon after the spill, instituted a claims payment system that almost fully compensated plaintiffs for their economic losses and did so promptly. Id. We also recognized that Exxon’s prompt payment of compensatory damages should be a substantial mitigating factor in our review of punitives. Id. In Exxon’s appeal, major issues therefore relate to how, after State Farm, to assess the reprehensibility of Exxon’s conduct and the effect of the mitigating factors. An important subsidiary issue is the extent to which we are bound to give literal effect to the sentences in our earlier opinion concerning subtracting the prejudgment payments from actual harm, even though State Farm suggests the mitigating factors should be taken into account differently. For the reasons more fully explained in this opinion, we do not accept the minimal bottom line figure urged by Exxon and properly rejected by the district court. We do, however, conclude there is merit to Exxon’s contention that punitives should be reduced. In their cross appeal, plaintiffs seek a reinstatement of the original $5 billion punitive award. We do not fully adopt their position either because doing so would peg the ratio of punitive damages to harm at a level State Farm reserves only for the most egregious misconduct. There was no intentional infliction of harm in this case. In addition, because Exxon’s mitigating efforts after the accident diminish the relative reprehensibility of its original misconduct for purposes of reviewing punitive damages, such a high ratio is not warranted in this case. III. ANALYSIS A. Lessons From History. The history of the experience of the Supreme Court with punitive damages over the last decade-and-a-half reflects an evolutionary, not a revolutionary, course. In its first opinion in Haslip, the Court suggested that there might be a bright line of demarcation between punitive damages that comport with constitutional protections, and punitive damages that do not. Haslip, 499 U.S. at 23, 111 S.Ct. 1032. Although it did not say what “the line” would be, it termed ratios of punitive damages to compensatory damages of 4 to 1, and to out-of-pocket costs of 200 to 1, to be close to it. Id. In subsequent cases, however, the Court expressly avoided a rigid mathematical formula or limit, while refining its ratio analysis, concluding in State Farm that a ratio of punitive damages to actual harm of less than 10 to 1 was more likely to comport with due process than an award with a higher ratio. State Farm, 538 U.S. at 425, 123 S.Ct. 1513. Along the way, the Court’s experience reflects efforts to comport with the tried and true concepts inherent in due process, i.e., those of notice and fairness. See, e.g., Mullane v. Cent. Hanover Bank & Trust Co., 339 U.S. 306, 70 S.Ct. 652, 94 L.Ed. 865 (1950); Int'l Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945). In State Farm, the Court expressly noted its concern that the jury had been allowed to take into account the effect of conduct that may have taken place nationwide on thousands of potential plaintiffs. State Farm, 538 U.S. at 422, 123 S.Ct. 1513. The unfairness of a defendant being hit with punitive damages many times for the same conduct was central to the Court’s analysis in remanding. Id. The Court explained, “[pjunishment on these bases creates the possibility of multiple punitive damages awards for the same conduct; for in the usual case non-parties are not bound by the judgment some other plaintiff obtains.” Id. at 423, 123 S.Ct. 1513. Indeed, in State Farm, the Court stressed that the most important factor is the reprehensibility of the particular conduct in the case. State Farm, 538 U.S. at 419, 123 S.Ct. 1513. This is because, in assessing the foreseeability of the possible effects of the defendant’s conduct as it might bear on punitive damages, the reviewing court is in reality dealing with the traditional concept of the need for fair notice of the possible legal consequences of one’s misconduct. Id. at 417, 123 S.Ct. 1513. Perhaps because such traditional elements of due process are flexible, the Supreme Court has not often taken on the task of reviewing the amount of punitive damages and has, in fact, overturned only two punitive awards because of their size. Each of them exceeded by a multiple of more than 100 the amount of compensatory payments necessary to compensate a plaintiff for the actual harm caused by the defendant’s misconduct. BMW v. Gore, 517 U.S. at 582, 116 S.Ct. 1589 (striking down a 500:1 ratio); State Farm, 538 U.S. at 429, 123 S.Ct. 1513 (striking down a 145:1 ratio). B. BMW v. Gore/State Farm Guideposts. BMW v. Gore identified three guideposts for reviewing punitive damages, and State Farm added important refinements. The guideposts are (1) the reprehensibility of the defendant’s misconduct, (2) the ratio of punitives to harm, and (3) comparable statutory penalties. They need not be rigidly or exclusively applied, for we agree with our sister circuit that “[t]hese guideposts should not be taken as an analytical straight jacket.” Zimmerman v. Direct Federal Credit Union, 262 F.3d 70, 81 (1st Cir.2001). We must, nevertheless, examine them in the context of this case. 1. Reprehensibility. The most important guidepost is the reprehensibility of Exxon’s misconduct. State Farm, 538 U.S. at 419, 123 S.Ct. 1513 (quoting BMW v. Gore, 517 U.S. at 575, 116 S.Ct. 1589). In our prior opinion, we defined the relevant misconduct supporting punitive damages as Exxon’s keeping Hazelwood in command with knowledge of Hazelwood’s relapse into alcoholism. We said that “Exxon knew Ha-zelwood was an alcoholic, knew that he had failed to maintain his treatment regimen and had resumed drinking, knew that he was going on board to command its supertankers after drinking, yet let him continue to command the Exxon Valdez through the icy and treacherous waters of Prince William Sound.” Punitive Damages Opinion I, 270 F.3d at 1237-38. We see no need to reconsider this issue, despite Exxon’s invitation to do so. To evaluate the reprehensibility of the misconduct, State Farm, refers to five sub-factors: (1) the type of harm, (2) whether there was reckless disregard for health and safety of others, (3) whether there were financially vulnerable targets, (4) whether there was repeated misconduct and (5) whether it involved intentional malice, trickery, or deceit, rather than mere accident. State Farm, 538 U.S. at 419, 123 S.Ct. 1513. We must also consider mitigating factors. In Punitive Damages Opinion I, in the context of this particular case, we looked to Exxon’s response to the catastrophe, including its prompt cleanup and compensatory payments. We held they were factors mitigating the reprehensibility of the original misconduct. Punitive Damages Opinion I, 270 F.3d at 1242. “Reprehensibility should be discounted if defendants act promptly and comprehensively to ameliorate any harm they cause in order to encourage such socially beneficial behavior.” Id. The dissent takes issue with two components of our BMW v. Gore analysis. Its reasons, however, are surprising, because they contradict our unanimous holding in Punitive Damages Opinion I, 270 F.2d at 1242, that the spill was not intentional nor Exxon’s conduct malicious. See Dissent at 1103 (characterizing Exxon’s conduct as “malicious”). Then, the dissent misapplies the Supreme Court’s mandate that we must perform an exacting appellate review to ensure that “an award of punitive damages is based upon an ‘application of law, rather than a decisionmaker’s caprice.’ ” State Farm, 538 U.S. at 418, 123 S.Ct. 1513 (citing BMW v. Gore, 517 U.S. at 587, 116 S.Ct. 1589). First, the dissent maintains that the value of defendant’s pre-litigation mitigation efforts should not affect punitive damages because the Supreme Court did not explicitly provide for such a calculus in State Farm. Dissent at 1098. Thus, the dissent would reject the principle of stare decisis and the law of the case and overturn our holding in Punitive Damages Opinion I, 270 F.3d at 1242, that Exxon’s voluntary compensation to the plaintiffs effectuated good public policy in making an injured party whole as quickly as possible. We are not prepared to question the soundness of our unanimous conclusion in Punitive Damages Opinion I merely because intervening Supreme Court jurisprudence in the insurance context did not address the issue. See State Farm, 538 U.S. 408, 123 S.Ct. 1513. By contrast here, we have already held that mitigation is both relevant and conscientious in the toxic-tort setting. It would be unwise in reviewing punitive damages to ignore the prompt steps of a defendant to take curative action in a mass tort case. The dissent also claims that we-improperly treat BMW’s fifth factor, the fault analysis, as a dichotomy with two mutually exclusive options: finding Exxon’s conduct intentional and thus grossly reprehensible, or finding it accidental and thus to a large degree excusable. Dissent at 1100-01. This is not our analysis. We acknowledge that Exxon’s conduct was not intended to cause an oil spill, but neither was allowing a relapsed alcoholic to command a supertanker “mere accident.” Majority at 1088. Exxon’s reckless malfeasance falls in the middle of a continuum between accidental and intentional conduct. Accordingly, the fifth subfactor of the reprehensibility analysis supports neither high nor low reprehensibility on the part of Exxon. The Supreme Court has reserved the upper echelons of constitutional punitive damages (a 9 to 1 ratio) for conduct done with the most vile of intentions. Thus, an affirmance of the district court’s application of such a ratio in this case, where the defendant’s conduct was reckless but not intentional, would transgress the requisite constitutional boundaries as the Supreme Court has explained them to date. We turn now to the specific State Farm reprehensibility subfactors. These demonstrate that a 5 to 1 ratio more appropriately comports with due process. a. Type of Harm — Physical versus Economic. To evaluate the type of harm, State Farm instructs us to consider whether “the harm was physical as opposed to economic,” because conduct producing physical harm is more reprehensible. State Farm, 538 U.S. at 419, 123 S.Ct. 1513. In this c