OVER HERE - WELL EXCUSSSSSSSSSE US
Last Year Exxon made 40 billion dollars profit. Nice. Yesterday, the rich got richer as the Supreme Court of the United States dismissed the $2.5 billion dollar punitive damage claim against the company that resulted from the 1989 Exxon Valdez crude oil spill off the coast of Alaska.
Compensatory damages are intended to make the victim whole. Puntive damages are not compensatory damages. Punitive damages are punishment damages, and intended to send a message. The jury sent the message (actually awarding $5 billion which was a year's profit at the time), but it has been reduced and fought over by a corporation able to make 60 petitions and appeals, 23 time extensions and over 1000 motions, briefs etc. Now the Supreme Court has found a way to allow Exxon to demonstrate that its nearly 20 year fight against the jury's verdict paid off. Wonderful. Exxon's spill covered 11,000 square miles of ocean and devastated marine life and the coast of the 49th state. Thousands of people lost their homes and jobs. Lovely. Makes the soaring price of gasoline seem so much more comforting.


Reader Comments (28)
This entire subject is "inside baseball" but I think that the concept of Punitive Damages should be abolished. It makes a mockery of the justice system, as awards are all over the place, and often have no relationship to the harm done.
Some years back, there was a massive punitive award because a car buyer was not informed that his car had been scratched ( and repaired, painted over, like new )
Punitive damages abuse happens only in the US. The concept exists in Canada and in other places, but you will never see large awards there.
None of this is meant to express sympathy for Exxon or for the ecological crime that they committed in Alaska, but punitive damages are inherently unjust and should be eliminated. They are at the heart of the vast cesspool of abuse that is the us civil law system.
Phantom - I think punitive damages should only be awarded in rare situations (which in fact is what generally happens). This situation warranted it.
Incidently I read in the New York Times Metro section that a Bay Ridge Blog was involved in a police drug raid. Did you see that yet? You may have been scooped!
At first glance it appears that if you (i.e. an individual or a corporate entity), have enough cash and time, you don't have to take any responsibility for your actions. In other words, you become a law unto yourself.
In a corporate scenario, surely such a stiff penalty should have repercussions on 'the men in charge', i.e the board of directors, but I don't recall any action being taken from within the company, at the time, or since. I'll wager they still received their options and bonuses...
And we have yet to discuss the morality of appealing such damages, in the light of the sheer scale of the damages caused.
Not only will this decision damage Exxon's image, but more importantly, it will damage and diminish the Supreme Court itself.
Is there no institution left in the world that one can respect without any reservation, - is there anyone who can be trusted?...
Mahons
I'm scooped all the time by guys like Bay Ridge Rover
He does very good close to the ground work.
--
All I know is that all the other countries in the world, including Europa and Canada survive just fine without the lottery that is US style Punitive Damages, payable to the real (or imagined, or exaggerated) victim.
And the practice of "punitive damages" plays no small part in the very high health care costs and overall legal/insurance costs here.
I work in the liability insurance area. For an identical products liability exposure, the insurance cost as expressed in rate in the US will be ten times or so as compared with an advanced country like Japan, Germany, or even the UK. That causes very great economic harm in the US
No one wants to take away a right to sue where wrong has been done, but here the biggest injustice is the legal system itself, and crooks like John Edwards who exploit it.
Phantom - what you say has a lot of truth. I suppose criminal penalties would be more appropriate in these situations if the level of conduct rises to it. You've convinced me, I am just pissed at Exxon.
What a load of CRAP...
First off Exxon's profit margin is 8% on the dollar the government tax on Exxon is 18% on the Dollar so who is raping us through windfall profits while attacking the company providing a service.
#2 This was a Maritime Law case based in Maritime Law not Constitutional law. Maritime law is different in a multitude of areas.
The basic drift was a shipping accident can not be used to destroy a company who ships billions of gallons of product in a safe manner without a proven record of negligence.
The ruling affirmed that they needed to pay for the clean up and damages not imaginary pain and suffering
Mahons I can't wait to read your views on todays ruling...LOL
Did the 'clean-up' not cause more damage than the original spill? The chemicals used as dispersants were found to be rather more damaging than the fully bio-degradable oil which was spilt.
Troll - As usual you are making very little sense. It appears that in your first point you are saying Exxon's profit margin isn't as great as it is taxed, which even if true, has nothing to do with the verdict.
Second, where in the post did you see a claim about the Constitution? That being said, I would point out to you that the exclusive right of the Federal Court to hear Maritime/Admiralty of course contained in (guess).
As for Exxon's record, that is immaterial to negligence on this occasion which was proven (and I believe ultimately accepted by Exxon).
A punitive damage award is not for pain and suffering, real or imagined.
Allan - I am not sure, but Exxon was of course involved in the clean-up as well.
Allan that's called environmentalism at work.
The environmentalists in the name of "saving the planet" have done immense damage in several areas. That is why everyone should be concerned when they advocate a "fix" to a problem.
Mahons
Your rant at the begining of your post about exxons profit is what inspired the first part of my comment. Inspired by your communist sympathizer remark "the rich got richer"
Second I brought up the difference in Maritime Law vs Constitutional Law to point out that the rules for damages are not the same. and Exxons record on shipping is relevant under Maritime Law when assigning damages.
You are not trying to claim that the jury in awarding that large of damages against Exxon did so for any reason other than imaginary pain and suffering to the planet are you...LOL
Troll - Communist sympathizer because I made a comment about Exxon's profits? Now I know where they got the model for the Down's Syndrome Doll.
The jury awarded compensatory damages and punitive damages. The punitive damages were to punish Exxon to the extent it not commit such an act of gross negligence again. If you can locate the transcript of the case you'll see there was no claim for imaginary pain and suffering to the planet.
--If you can locate the transcript of the case you'll see there was no claim for imaginary pain and suffering to the planet--
Maybe the plaintiff's lawyers were therefore guilty of legal malpractice. I want them to pay punitive damages!! Payable to me. Details to follow.
excuuuuse me for using the wrong term but look at what your saying and what I am saying you say:
"The punitive damages were to punish Exxon to the extent it not commit such an act of gross negligence again."
I say and the court agreed that it was a shipping accident and a one time incident. That is why thier history in shipping has meaning. They acknowledge this accident and the factors that led to it. Which can be layed at the feet of the captain and the crew NOT the company. There was no bad equipment ie: a malfunctioning ship that upkeep was not maintained.
Which is why the punishment was lowered. Like it or not the court felt the same way.
We'll wait for the shocking details.
It is the company's responsibility which is why they paid the compensatory portion of the verdict (around 500 million). The punitive punishment was lowered because the Court held it could not exceed the compensatory damages.
it is the companies responsibility because it was their crew
"which is why they paid the compensatory portion of the verdict (around 500 million). The punitive punishment was lowered because the Court held it could not exceed the compensatory damages."
Mahons
what's your take on this
I knew Troll would be chomping at the bit to debate the Supreme court guns decision.
Well Troll, why wait for Mahons, Stick a big fat cigar in your gob , your favourite handgun swinging on one hand and post a good ol' TrollVlog on the topic for us all to view.
I think the Court did the right thing in general as the outright ban on handguns was clearly against the Constitution. I haven't read the entire decision, just an abstract, but it seems to make sense.
Oh Mahons. Troll will be dissapointed. He was squaring up for a gunfight at the ATW Corral with you over this.
Colm: He'll have to go back to palying Donkey Kong instead.
Mahons
Donkey Kong ?
Does that mean, what I think it sounds like it means? If you know what I mean
No. It was a Nintendo arcade game from the early 80's.
Oh thanks Mahons - well that's my dirty mind put right.
Colm - Who says he can't multitask?
never was a Donkey Kong fan I was more an Asteroids player
Actually Colm It was more curiosity on how Mahons would interprit the decision I was curious if he would spin or except
But don't worry I won't disapoint I'll do a trollcast this weekend for sure!
You mean "accept" I think, if I "interprit" you correctly.