Exxon: Pouring Oil on Troubled Waters -- Part 4
-AKA-
"We Don't Care. We Don't Have To Care. We're Exxon!"
During nearly 20 years of waiting (sometimes somewhat desperately) with several "we're going to be cutting checks in the next few weeks" over-optimisms along the way, the fishermen and other plaintiffs in the oil spill litigation never lost hope. I spoke to a great number of them during this time. Many "refused to think about it" because they didn't want to get their hopes up that they would soon be seeing money. Many thought the appeals process would result in a somewhat smaller award. But even the most hard-bitten and cynical of these independent, largely "have no use for government" weather-worn men and women of the world's most dangerous profession [commercial fishing in Alaska held that distinction for many years although modern safety mandates may now have dropped us below logging] still believed. We all believed that, although the wheels may grind slowly they would grind fairly and we would receive the bulk of our money. Particularly for those who died, and even those who went broke and bankrupt or faced other horrendous problems because of the delay in the interim, the phrase "justice delayed is justice denied" was often used.
But I don't believe in the entire 20 years speaking with hundreds of fishermen, claimants and lawyers, did I ever hear anyone suggest that they thought the jury award would ultimately be thrown out. Battered, bruised, a bit leaner ... yeah, we knew the jury verdict/award was in for a rough trip through the appellate process just from Exxon's arrogant pronouncements after the trial when the essentially flatly announced that it simply wasn't going to happen and they'd do whatever it takes to make sure of that. But for a group of people who you would think would be natural cynics and who would have the least faith in "the system" of any group outside of armed fortresses in Montana, the fishermen were remarkably confident that the system would, eventually, bring them justice (in the form of a substantial check!)
In June of 2008, in the case captioned Exxon Shipping Co. v. Baker, Supreme Court Case Number 07-219, the United States Supreme Court utterly destroyed that faith. They also utterly destroyed the entire concept of punitive damages as they had been understood for hundreds of years; and which were thus protections granted to the citizenry by the common law which protections were specifically enshrined in the U. S. Constitution. Although the award was only a pittance to Exxon [equal to ~three weeks of profit in 2006], it was a fortune to the largely ... "economically challenged" ... plaintiff class. The Court destroyed the fortunes of many in order to hand a pittance to a giant corporation. To do so they had to ignore the Constitution, the concepts of common law and the entire concept of punitive damages as it had always been known.
The money meant nothing in itself to a behemoth the size of Exxon, but the law that the case created succeeded beyond the wildest hopes of corporate boardrooms and insurance companies to behead the "punitive damage monster" which was one of the last protections against the malevolent acts of the corpocracy left to the people.
It is conservative chic now to be against punitive damages awards because the insurance companies have spend untold amounts of money to convince people (especially people in legislatures, government executive branches and those who sit on court benches, but the citizenry as well) that punitive damages caused the horrendous increases in insurance premiums. There is not a scintilla of truth to that and many studies have proven that there is no causal connection (other than by convincing people of it, the companies can get away with raising rates and have something to blame it on), or that punitive damage awards had (or have) any statistically substantive effect on either the percentage or actual amounts of money paid as damages. Even insurance companies don't really care about punitive damages. In fact, I would bet a bundle that they like having them in the states where they remain. Because the most profound connection between insurance companies and punitive damages is not in relation to how much insurance companies pay out in jury awards ... but rather as the "fall guy" for how large a premium they can get away with charging for their policies.
Yes ... I believe in the market. But insurance companies are so big and so collusive, and so tied into government, that they have, to a large extent, removed themselves from the actions of the market. That, again, is such a large topic there isn't room to deal with it adequately here. But conservatives ... Constitutional "strict constructionists" ... should be the last people in the world to want the government to intervene and yank yet one more set of protections that "the people" have and that were guaranteed by the Constitution. Those insurance company patsies are simply being used ... and unwittingly, used against their own core philosophies without being aware of it.
As noted earlier in this series, the jury awarded $5 billion dollars in punitive damages against Exxon to be paid [by mind-numbingly complex formulations] to the members of the plaintiff class ... in 1994. Exxon, true to its promise (hmm ... that is almost an oxy-moronic sentence, but it is accurate), appealed the case to the 9th Circuit Court of Appeals.
The trial court had ordered interest on the award at 6.9% until it was paid, so the fishermen and their lawyers weren't too bothered by Exxon's appeal to the 9th Circuit. Of course, that was because they expected to win it.
But that was just the beginning of the whittling and the incredible delays. Well, the delays didn't begin, they "continued". It had already taken five years after the spill to get a verdict in 1994. It took another seven (!) years (although no one seems to understand why) for the 9th Circuit to rule on it; throwing the verdict out as "excessive" in 2001 in the 9th Circuit Appellate decision 490 F.3d 1066.
The 9th Circuit sent it back ("remanded it") to trial court judge Holland for "reevaluation". Holland did a masterful job defending the initial verdict, but presumably to avoid directly contradicting the higher court and hoping that he would be able to end it once and for all, in December of 2002 he reinstated the punitives at four billion. Again ... we were expecting that it would get whittled at a bit. No one was greatly surprise nor greatly distressed. Indeed, we were proud of Judge Holland for sticking to his guns and not knocking it down much more substantially. The checks would soon be in the mail ... not.
Exxon marched it back to the 9th Circuit. The 9th Circuit sent it back to Holland saying, in effect "try again". Holland, to whom the fishermen should build a monument (if they had any money to build with which they don't), was close enough to retirement that he simply refused to be bullied. He knew that it was a fair verdict and that $4 billion was, if anything given Exxon's size, too small of an award! Thus he flatly refused to kow-tow to the judicial overlords and after drafting another masterful decision demonstrating the appropriateness of the existing award, in January of 2004 he reinstated it at $4 billion (plus the $2.25 billion in compensatories plus interest). When it comes time to build statues in Alaska he deserves one. Unfortunately, because his magnificent work was trashed by the appellate courts he won't get one. But he did exactly what the law and judges are supposed to do and he had the nerve to not back down to the power of the Appellate Justices when they "strongly suggested" that he change his mind (so that he would take much of the heat for a judgment that the Justices will, hopefully, be ashamed of for the rest of their lives). He refused to compromise his principles, beliefs or The Law, which the good judges of his generation truly believed to be an honorable thing. He believed in the concept of stare decisis upon which our entire legal foundation rests. He is the sort of judge that should have been promoted to the appellate courts.
He wasn't.
Why it took so long it seems impossible, in retrospect, to understand. But Exxon marched it back to the 9th Circuit and in January of 2006 claimed to the court that the award should be cut to $25 million! The plaintiff counsel and legal experts across the country were aghast, but reassuring. Virtually no one believed that it would get hammered further.
By this point, the IRS had special offices set up in Anchorage to make sure they got their cut of the substantial payments that even the IRS and other branches of the federal government believed would soon be forthcoming. In fact ... those special IRS offices had been set up for years. I don't know when they finally disbanded them. The law firm of Keller-Rohrback that had been appointed to handle the disbursing of the funds had their humongous data base system set up. Percentages for individual claimants had been argued about, fought about, hammered out and finally finalized. The arguments now were that Exxon should not be allowed to continually pointlessly delay the day of reckoning. So many of the original plaintiffs had died that it had become an abuse of process to continue to allow the delays.
But delay was the name of the game. Certainly Exxon in the oily blackness of its heart seemed to believe so. But, unbelievably, the 9th Circuit, after yet another set of mind-numbing procedural morasses, in December of 2006 essentially told the very Honorable Judge Holland (and the jury who devoted months of their lives to the case, the State of Alaska itself, and, most of all, those fishermen and others who had lost their livelihoods, their cultures and their ways of life) ... in the most polite terms descriptively plausible ... to "stuff it". On its own, the 9th Circuit simply bypassed Judge Holland and slashed the punitive damage award from $4 billion to $2.5 billion.
It was a mindlessly vicious thing to do and amounted to no less than outright theft.
Even though it was simple politically motivated theft that the "strict constructionists" of the Constitution have to make illogical exceptions for ... at least it was over. At least the checks would be in the mail soon. Keller-Rohrback did a test run of the plant sending the tiny compensatory damage checks to those who still "had some coming". With a sort of communal resigned sigh, the plaintiff class, litigants and attorneys both, accepted that half a loaf was better than nothing and that for the sake of closure, we needed to just accept it and get on with our lives. Exxon had already proven that justice delayed is justice denied (especially for the substantial percentage of claimants who had died over the intervening 17 years) and ... that Exxon had enough muscle that it could flex it and cause this delay and by doing so thereby making their point and proving it.
And then, in a move that shocked even the battle hardened veterans of this war; the attorneys who had fought and battled this fight for most of their careers and whose (substantial) law firms would barely break even if that after all they had gone through (and the public has a low opinion of lawyers? Well, now that I mention it I'm not very fond of the Exxon 3-piece suit goons, but the plaintiff lawyers went above and beyond) ... Exxon appealed the award to the U.S. Supreme Court. The reaction was mostly that everyone was infuriated. Plaintiffs' lead attorney, the awesome Brian O'Neill was literally "shocked". We all knew beyond any doubt that the United States of America's Supreme Court ... was not going to hear a drunk driving case.
It was just yet another delay tactic. But ... we reminded ourselves that we were at least getting 6.9% interest which at that time wasn't bad at all, and resigned to wait a few more months until the Supremes turned down the case. [Unlike many appeals, there is no appeal of right to the U.S. Supreme Court. They have absolute discretion on what cases to hear.]
Then there was a sound, a rustle in the wind, and oven doors opened wide and flames of the underworld leaped out. The Grinch stole Christmas once again. The Supremes actually decided to hear the case! It was absurd. It was beyond absurd. And every legal professor and scholar of note agreed. There was obviously no way that they were going to reduce the award further. Ahh. Perhaps this was a backhanded way of scolding the 9th Circuit for cheating the poor, the fisherfolk, the Native cultures, those who lived below the waterline [when the Titanic sank, the people in the expensive berths above the waterline almost all survived; those in the cheap berths below the waterline largely perished]. The 9th Circuit had wrongly ignored the jury, the judge and the law and had tossed those who lived below the waterline into the oiled ocean at the behest of one of the richest, most powerful corporations. Maybe we had it wrong. Maybe the Supremes were going to slap down the Grinch and we'd have Christmas after all.
We could wait another year. We'd waited this long.
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