Thursday, February 28, 2008

Exxon Valdez at Supreme Court, Roberts Makes an Ass of Himself

In 1989 the Exxon Valdez struck a reef and spilled 10.8 million gallons of Prudhoe Bay crude oil into Prince William Sound, Alaska. Captain Joseph Hazelwood was in his cabin, possibly drunk and the third mate, probably overly fatigued was in command.

"In 1994, in the case of Baker vs. Exxon, an Anchorage jury awarded $287 million for actual damages and $5 billion for punitive damages." Exxon appealed and in 2002 the judge reduced the damages to $4 billion. Exxon appealed again and the judge increased the punitive damages to $4.5 billion, plus interest. Exxon appealed again and in 2006 the damages award was cut to $2.5 billion. Exxon appealed again and was heard by the US Supreme Court yesterday.

Dana Milbank reports on the oral arguments in the Washington Post At the High Court, Damage Control.

The plaintiffs lawyer was Jeffrey Fisher "What you have today are 32,000 plaintiffs standing before this court, each of whom have received only $15,000 for having their lives and livelihood destroyed and haven't received a dime of emotional-distress damages,"

Most troubling to me is this from Chief Justice John Roberts: "Roberts seemed the most agitated as he argued that Exxon wasn't responsible for the captain's unauthorized drunkenness. "I don't see what more a corporation can do," he said. "What more can the corporation do other than say 'Here is our policies' and try to implement them?" He's obviously never worked in business. Execution is kind of important, as is risk management that's more than a piece of paper.

"What bothered the chief justice was that Exxon was being ordered to pay $2.5 billion -- roughly three weeks' worth of profits -- for destroying a long swath of the Alaska coastline in the largest oil spill in American history. 'So what can a corporation do to protect itself against punitive-damages awards such as this?' Roberts asked in court. The lawyer arguing for the Alaska fishermen affected by the spill, Jeffrey Fisher, had an idea. 'Well,' he said, 'it can hire fit and competent people.' The rare sound of laughter rippled through the august chamber. The chief justice did not look amused."

"Ruth Ginsburg pointed to the evidence that 'Exxon knew that this captain had a severe alcohol problem, and yet, they let him stay on voyage after voyage and did nothing about it.'" Justice Alito is an Exxon shareholder and recused himself.

Robert Barnes has more on the case as does Linda Greenhouse.

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