Exxon: Pouring Oil on Trouble Waters -- Part 6

December 21, 2008
Exxon: Pouring Oil on Troubled Waters -- Part 6
-AKA-
How The Grinch Stole Christmas

For many years ... nearly 20 actually, the "standard" birthday or Christmas wish was "May Exxon come in this year!"

For the first Christmas in the lifetime of some young adults ... that will not be a Christmas wish this year.

We never knew; we never even seriously considered the possibility. Hardly anyone truly doubted; even those who gruffly claimed "Ah we'll never get nuthin; the courts are part of the "system" and the Exxons of the world run the 'systems'. The courts will never make Exxon pay what they owe us". Even that was essentially just bluster to cover up how deeply they cared.

Other than a handful of the crazy paranoids, we knew better. We knew the judicial system and the justice system were just different names for the same thing. To the utter shame of our country thousands of victims involved now know that was extremely naive. In addition to being bad simply because it was immoral, unethical and illegal; it also fed the rapidly growing disgust by the citizenry with the government, and; (particularly in Alaska the ramifications are especially critical) the mistrust, distrust and beliefs that they are an (illegal) trust with Big Oil. It may well be that Exxon will yet rue the day when they decided as a "matter of principle" to fight their victims with every possible weapon at their disposal; to throw so much money and lawyers at it the plaintiffs would be buried; to call in all chits, favors, lobbying benes and fight this in as dirty a "take no prisoners" and salt the earth battle as can be conducted.

But that day will do none of the current victims any good.

Because now, it, the unthinkable, the unbelievable, the life-shatteringly tragic has happened. [Nope, that is not hyperbole ... for many, many people their Exxon claim was their primary asset. And the only one that would give them a chance at a retirement that didn't solely consist of social security and food stamps].

This Christmas ... the first since 1989 ... we have no magical, mysterious "Exxon claim" keeping the holiday spirit alive. "Do you have a claim?" was a regular question; especially this time of year because we always hoped that someday we'd be able to buy that [fill in the blank] that we really couldn't afford "until Exxon comes in".

I don't know if pride goeth before a fall or not. But it certainly does at times after one. Through no fault of their own ... after a decade, certainly after two decades, people could not maintain the positive self-image that had seen them through so much of the rough, wild, hard ... but ultimately, intensely fulfilling life they led before Exxon dumped oil on them.

All many now lived for, wrapped in their bitterness, was making Exxon pay for destroying their lives and life styles. They believed ... these men who trusted nothing but their own two hands ... somehow had faith in our judicial system.

It is a sad thing to watch faith die.

But die it most certainly did, even among the most pro-court plaintiffs. It may have hit them the hardest because they really believed that the Court was above simple theft and now they know it is not. The Supreme Court stole our money. They "redistributed" it as President-Elect Obama likes to say. But the Supremes took from the poor to give to the rich. Sort of the "anti-Robin Hood". The Court will get away with it because there is no one to stop them. And it will not technically be considered "theft" because the Supremes are the ones who ultimately define all legal terms. But make no mistake, it was stolen.

This is how it happened. This is how the Grinch stole Christmas:

I mentioned how the "pro-court" plaintiffs were taken and shaken by this decision. Sadly, I think the same realization has happened to the plaintiff lawyers who devoted their careers to this. I think they really believed in the system and (essentially all the main players that I met were that rare breed of top notch lawyer who truly believed they were doing good with their "life's work" and who truly -- believed in our justice system and honestly believed that right would prevail and that we would ultimately win (and not because they were being paid on a contingency basis and probably made 5 cents/hour for their time on this case over the 20 years since the spill). They apologized on behalf of the courts (!) to the fishermen for this process taking so long. As "officers of the court" as all attorneys are, they are part of the system.

It may be difficult for those who had no faith in the judicial system anyway (and who probably figured all lawyers to be crooks :) to believe the plaintiff lawyers who were sharp enough and had been practicing long enough that they were intimately familiar with the system truly had faith. Maybe I'm the naive one here, but I'm convinced that Brian O'Neill (and the entire law firm of Faegre & Benson - who were my attorneys) were honestly embarrassed that "their system" (the judicial system of which they are a part) took so long to render unto the victims what was the victims'. They never apologized because they thought the judgment might be in jeopardy. Oh, everyone knew it might get cut a bit ... and even the 50% cut that the 9th Circuit gave us was somehow ... acceptable because the interest the award had accrued by then offset the cut! :-)

But I don't believe that Brian or any of the main plaintiff attorneys believed there was a realistic possibility that the punitives would be hacked to the bone. As difficult as it is for the cynics to believe ... I honestly think that Brian and others believed ... both in the system and that we would get the majority of our jury award (and that those two propositions were necessarily intertwined.)

I haven't talked to Brian since the Supremes did their dirty work, but is fairly well assured that this is no longer true.

The "anti-punitive damage" crowd (primarily, though certainly not entirely, conservative Republicans) has been in control of the strings long enough that their political appointments to the Federal Court Bench were finally wielding the primary power. This is the George Bush "crowd" (and by that I am not pointing fingers solely at either George Bush individually for the totality of the damage; it goes back many years before them and included many people besides them). But it is made up of the people who favor "tort reform" which is just another euphemism for destroying punitive damages. Aside from the rare actually bribed judge or legislator, they believe this because the insurance companies and Big Business have scared the doctors, business people of all kinds and others with their demonstrably false malarkey. They contribute heavily to the campaigns of those who oppose punitive damages and who, when in office, will appoint judges and justices to the Federal Bench who agree with that litmus test. To a large degree federal judges "advance" from within. So, you appoint a pile of District court judges who agree with your litmus test and in a few years a lot of them are sitting on federal Appellate courts and some even make the Supremes. [Seven of the nine current Supreme Court Justices were appointed by Republican presidents (four by the Bushes), the other two by Clinton.]

They do this because they believe that punitive damage awards hurt the giant multi-national corporations (say, for example, companies like Exxon) that contribute so heavily to their campaigns and they hate anything that dips its hand into the pocket of Big Oil because ... well, you get the idea. The fact that the Bushes are, in fact, oilmen themselves didn't help their objectivity any either.

Bizarrely this is largely brought to you by people who decree that they are "strict constructionists" and who want only "strict constructionists" on the bench! They want judges and justices who follow the law, not make it. The inherent absurdity of this position is unclear to these people.

All "common law" is judge made law! That's what it means (although I'd bet well over half of the "strict constructionists" who, of course, believe in the Common Law, don't understand that is just another term for "judge-made law!") We are a "common law" nation (as opposed to many "civil law" countries where the bench has to follow the specifics of the vastly complex codified laws). In our country, Louisiana is the only example of a civil (code-based) legal system, which is a relic of their French heritage.

Our forefathers waged their "lives and sacred fortunes" so that we may have the benefit of a Constitution that enshrines "judge made law" because they knew that was so critical to protecting our liberties. Again, this "judge made law" is the "common law" ... no matter how many times I say it, there is a large contingent who will refuse to understand because they have been fighting to uphold the common law and to stop the judges from making law! Their lives have been devoted to riding a Push-Me Pull-You and they are incapable at this point in understanding what they are doing.

In civil-law countries (most of Europe, for example; indeed, most of the rest of the "civilized" world) the judiciary is generally a rubber stamp rather than a "balance of power" or third branch of government. This balance of power was so crucial to the Founding Fathers ensured that the protections of the common law were specifically provided for in the Constitution. In other words ... a strict constructionist should believe in judge-made law by definition!

Those folks who couldn't say enough bad about the French when France decided not to slaughter their young in exchange for oil for the U.S. ... (unknowingly ... which is a nice way of saying ignorantly) want us to adopt France's legal system(!)

The Founders were very careful and very specific:

U.S. Constitution; 7th Amendment: In Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, and no fact tried by a jury, shall be otherwise re-examined in any Court of the United States, than according to the rules of the common law."
[Emphasis added.]

But that all got tossed. Those who are in the pocket of the insurance companies (whether they know it or not) and are in favor of Tort Reform and getting rid of punitive damages dislike opinions like, for instance, Roe v. Wade because the justices "made up" law [the law of privacy that they found written between the lines in the Bill of Rights to the U.S. Constitution ... but which is specifically provided for in the Alaska Constitution]. But in deciding that punitive damages should equal a certain percentage of the compensatory damage award ... the Supreme Court simply pulled that number out of the thin air without even a pretense of any other justification but that it seemed fair. [This is "strict constructionism"???] The Justices made far more law in the Exxon v. Baker case than they ever did in Roe v. Wade.

Very briefly, the Supreme Court's terrible "made-up law" in this case was to decide that punitive damages can only be within a range of damages tied to percentages of the recoverable compensatory damages.

The Court focused on the fact that the punitive damage award in this case was so large compared to historical standards. If size is a legitimate legal issue/consideration/criteria, then what they should have focused on was how large the companies are compared to historical standards!

The Supreme Court made a gross error that effectively destroyed many lives (except that, as noted previously regarding their infallibility), when it is the Supreme Court they don't make errors. Instead, they make "bad law". Yet legal scholars can certainly debate and determine whether it was a rotten decision even if it can't be an error since they have the power to change the common law and are not bound by stare decisis. (It is, however, Court policy to follow it unless they specifically determine that the earlier decisions were in error ... or that the world has changed so much that they no longer apply). The Court does not typically go around just ignoring the precedents set by earlier Supreme Courts, but gives them the utmost deference possible.

For hundreds of years the common law was generally interpreted to hold that the size of a punitive damage award should be based not on the size of the accompanying compensatory award, but on the size and profitability of the tortfeasor [the one who wrongfully causes the damages]. This Court switched those considerations. Even if I had nothing to do with the Exxon claims I could tell that this was bad law. In essence it is a "Get Out of Punitive Damages Card" that is valid only for giant corporations and insurance companies.

The Supreme Court completely abrogated the existing and ancient concept of punitive damages.

The theory of punitive damages is completely different from that regarding compensatory damages. The amount of compensatory damages is calculated by attempting to determine what the negligent acts of the wrongdoer have cost the victim and then come up with a number that tries to make the victim "whole". It is irrelevant whether the tortfeasor (wrongdoer) is rich or poor. What counts is the value of the damage (s)he caused.

Punitive damages are an entirely different concept. When a wrongdoer's behavior is so bad , so grossly negligent(or even intentional), or so "reckless" [or as often stated "so recklessly indifferent to the lives and property of others"], then our society, through the courts, developed within the "common law" a mechanism to punish these wrongdoers. It is not a criminal action. That differs in too many ways to explain at the moment. Indeed, about the only thing they have in common is their joint goal of punishing the wrongdoers. One reason it developed as part of the civil law goes back to that determination that a corporation is a "person" for legal purposes ... yet one cannot jail a corporation. Another mechanism for punishment was required.

For those reasons and others, the doctrine of punitive damages was created (by the English courts, before the founding of this country). Determining a standard for when they should apply, although responsible for the death of forests from the trees harvested to write books, articles and treatises arguing the point, is fairly straightforward, (although it may not have seemed so clear originally, it has, by now, had a few centuries of honing and clarifying).

If a wrongdoer did something so bad that it was bad enough or reckless enough that it "shocked the conscience" [eg: a classic example: turning the keys to a loaded oil supertanker over to a drunk who couldn't even legally drive a Ford pickup (as previously mentioned he'd lost his driver's license sue to drunk driving) and telling him to take it through one of the world's most pristine and productive waters in the world ... at night] then they would be liable to pay punitive damages as punishment for their recklessness.

The more difficult question lay in determining "how much" once it was determined that a company was indeed liable for punitives. It would make no sense to tie that award to the amount of damages done. Suppose an Exxon officer, while on company time at the annual Christmas party had imbibed a bit too much and wanted to see how big a splatter a balloon filled with crude oil would make when dropped from the 38th floor of Exxon's U.S Headquarters. Suppose further that, although accidental, the balloon landed on someone knocking them over, giving them a slight neck joint problem which resulted in medical bills and slight but permanent nerve damage in the neck (as well as soaking their clothes with oil). Ultimately in our example, suppose these actions resulted in a jury verdict against Exxon (as well as the balloon dropper personally), with the jury determining that the victim was damaged in the reasonable amount of $15,000. Suppose also that the jury decided that since all of the officers and directors were at the party and had all encouraged the balloon dropper, that the company had shown recklessness to a degree that warranted punitive damages.

If those damages were tied to the amount of the compensatory award of $15,000; even assuming that it was a multiple of it: say three times the comps. That $45,000 punitive damage judgment could come out of Exxon's next year's Christmas party fund and the whole thing would remain a big joke. If it had been George's Shoe Store that had rented a room on the 38th floor of a hotel for their annual Christmas party and all five of their employees had shown up, and everything else happened identically, the $45,000 punitive damage award (particularly on top of the $15,000 compensatory damage award) could easily send George's Shoes into bankruptcy.

This is clearly and demonstrably unfair. George's is being punished vastly more severely than Exxon for the identical actions. This breaches several Constitutional guarantees, including such things as equal protection and due process. It is basic hard-wired "even Supreme Courts can't change it" Constitutional law called "substantive due process" (which is much "tougher" than "procedural due process"). In this country ... people [and corporations are legally people] are to be treated generally equally by the court system. George's Shoes should receive approximately the same level of pain and punishment as should Exxon for the identical bad acts.

So instead, after struggling with it for years (which is an advantage that the common law has over statutory law ... the courts can more appropriately refine it) it was determined that for punitive damages, the only fair (and possibly the only constitutional) system was to tie them to the value of, and/or the earnings of, the tortfeasor. If, for instance, the jury thought that the act was bad enough that it should equal 2% of the company's net profit for that year ... George's might have to pay $5,000. Exxon, however, to feel the same amount of pain ... to receive a similar amount of punishment ... might have to pay, say, $800,000.000.

On February 1, 2008 Exxon nka Exxon Mobil, posted the largest annual profit by a U.S. company in the history of the universe. Exxon had a profit [not just gross income] of $40.6 billion dollars! They also had the highest quarterly net income of any U.S. company in history: $11.7 billion dollars of net profit for the last three months of 2007. They ruined the lives of tens of thousands of people, countless fish and wildlife, thousands of miles of pristine shoreline, with continuing and likely permanent damage and had been ordered by judge and jury to pay $5 billion dollars as punishment for their horrendously stupid and reckless actions. That is less than 6 weeks of their NET profit! It is frankly unconscionable that they should be able to be so reckless and do so much damage and receive such a tiny slap on the hand for doing so.

The spill covered 11,000 square miles! They oiled and blackened 1,300 miles of some of Alaska's most beautiful and bountiful shoreline. Pristine waters that teemed with fish and the mammals and birds that fed on them. By comparison, ANWR is a tiny bleak ugly piece of frozen tundra that is virtually incapable of supporting life. People demonstrate by the thousands to "keep ANWR" away from the Oil companies. Where is the public outrage at what Exxon already did which is thousands of times worse than it is even possible to do to ANWR.

Less than 6 weeks worth of their net profit was all the punishment they received for recklessly causing almost unimaginable damage! And the Supreme Court of the United States decided that was much too high and sliced it to approximately $500 million dollars. This is a company that makes $130 million dollars of net profit PER DAY!

The day when punitive damages actually punished the wrongdoer is clearly gone ... for the Big Boys. The giant corporations, the insurance companies, people who are well insured ... there will be no "punitive" remaining in "punitive damages". This is one of the most asinine decisions that the U.S. Supreme court has ever made and it will have horrendous consequences beyond the wreck of the Exxon Valdez! The big corporations are now free to behave as recklessly as they please. They risk less than four days of their net profit for the most egregious intentional or grossly negligent actions. And they managed to delay even that for just a few months shy of 20 years (and are claiming to the courts and will probably win, that they owe no interest on it).

If the idea is to spank the wrongdoer ... 10% if their net profits spanks them substantively but doesn't destroy them. Nor does it let them off with a limp wrist hand swat that they don't notice. That would be a reasonable criteria for punitive damages. But to comply with substantive due process and equal protection guarantees of the U.S. Constitution, punitive damages must be tied to the value and profitability of the company ... not (as the Supreme Court just did) to the amount of compensatory damages.

If the amount of punitives is tied to the amount of compensatories, as it now is following this Decision, then for exactly the same acts, either George's Shoes would be bankrupted, or Exxon wouldn't even notice the "punishment". This is flatly unconstitutional. Clearly a Court that understands the law and the Constitution and has enough I.Q. points to comprehend what today's Court did, will have to change this. This Decision and our Constitution cannot co-exist. But until the day that we have a Court that understands Constitutional Law 101, horrendous damage will be done; the corporations will gain vastly more power and control; the "people" will have lost so many of their rights and protections ... that I'm honestly afraid it might be too late.

By making the Supreme Court a lackey of the corpocracy we may well have just ensured that we will be passing on to our children and grandchildren a destroyed country which has totally reverted to corporate feudalism.

We should be ashamed.

This, then, is how the doctrine evolved such that the relevant standard focused on company size and income since the purpose is "punishment". It was on that basis that punitive damages have been calculated for most of our country's history and it is the instructions that Judge Holland gave the jury.

And it is this doctrine that the U.S. Supreme Court defenestrated [:-)] (threw out the window).

We are now back to that Never-Never land which I just finished describing and explaining why damages could not rationally or fairly be tied to the amount of the compensatory reward. But ... despite the fact that is impossible for it to be fair and that the only fair formulation was just destroyed ... that is exactly what the Supremes did and, because they are the Supremes, that is what is now the law of the land.

It is terrible. It is inexcuseable. It is horribly unfair. And it creates terrible law that will need to be applied to thousands of other situations in the next few years. The punitive damages doctrine was a valuable ... indeed critical ... part of the arsenal of justice. But it was an egg sitting on a wall and the Supreme Court came by and blithley knocked it off.

And all the King's insurance companies and all the King's multinational corporations are dancing hand-in-hand because they know that Humpty Dumpty cannot be put back together again.

In a display of corporate arrogance unmatched in modern times (well, perhaps, other than Enron giving top management huge bonuses just before closing their doors), Exxon vowed that as a matter of principle, and because it thought that people should be grateful to it (for all the work it did cleaning up the spill) instead of suing it, it would make sure the fishermen and other plaintiffs never received anything anywhere close to an award of that magnitude. Tragically, they successfully carried through on their arrogant pronouncement.

And so: your right to trial by jury in civil matters just got tossed because the jury verdict is now irrelevant if it isn't "politically correct". Indeed, it is part of an ongoing trend by the "Conservative Court" to take power away from the juries and trial judges (who are the only ones truly familiar with the case)! You right to trial by jury is eroding much faster than you probably realize.

Even a source as conservatively mainstream as Answers.com says this about it:

"The Court has continued to grant review of state punitive damage awards. In a major onslaught on the jury trial right, in Cooper Industries, Inc. v. Leatherman Tool Group (2001), the Court established that appellate tribunals may review punitive damage awards using a de novo standard because these damages express moral outrage, not the finding of facts; hence traditional deference to the jury does not apply."

We now have law of politics instead of law of justice. Given various historical precedents (which is all a topic I will expand on in a later post), this does not bode well for the future of our country or the people in it.

In a brief break from all the ranting I've been doing here, I'd like to single out three ... "entitles" if you will that performed admirably and deserve out deepest appreciations despite the ultimate outcome. First, believe it or not (! :-), the plaintiff lawyers. They did magnificently without a dime coming into their coffers for the whole 20 years.

Secondly, Judge Holland. Despite the fact that "chain of command" is probably more rigidly enforced in the court system [I will no long be referring to it as the justice system!], Judge Holland "was there" at the trial. Unlike every other judge he heard and saw the evidence. Unlike every other judge ... he watched as the jury stuggled through the difficulties presented in trying to reach a fair accomodation. Unlike every other judge he had the ability to question witnesses (judges can do that if they wish) and rule on the evidence ... including ruling evidence inadmissible so the jury (and appelate courts) didn't get to see it ... but he did. He knew right from wrong. He knew that the 9th Circuit was doing wrong. And he rebuffed them. Masterfully. Twice. It is amazing that they let him retire instead of tossing him from the bench. Because he did what he knew was right despite the orders form the higher muckety-mucks.

The third "heros"; who would get appropriate recognition as such if the case hadn't been trashed. (No one builds statues for the losers!) was ... the jury. At great personal sacrifice (and potential personal danger ... someone, presumably hired by the Oil Boys, threw a dead salmon in an elderly lady's front yard as a "warning"). She was one of those "on the fence" and the Oilees apparently thought they could scare her away from crossing them. They obviously don't know Alaskan women! :-) [It is also a spooky realization that they knew who was on the fence. Jury deliberations are supposed to be private. It appears they had infiltrated the jury ... or possibly the jury room.] In any event ... they are true heros. They did what they knew to be right after agonizing over their decision. They did so knowing that Big Oil knew who they were and bad things sometimes happened to people who "crossed" Big Oil.

Judge Holland and the jurors are people we should be proud to claim as "true Alaskans" in heart and spirit.

It wasn't the judge or jury that shafted the victims. It was one of the the giant multi-national corporations that will soon be (truth be told, already are) running out lives and economies more than we allow ourselves to believe ... and it was the judicial system that has been filled, fairly quietly, with the "approved selections" of the Big Boys and the conservatives such that now they have taken over from inside "without a shot being fired". Although the giant corporations had a huge hand in making it come to pass, they couldn't have done it alone. I blame the "strict constructionist" conservatives who have been in ascendence for the past few decades. They are the brain-washed backers of "tort reform" which is one of the greatest scams ever pulled on the American people. I blame them for their utter ignorance (which is simple to cure - it is ignorance, not stupidity that is our problem and that is morally blameworthy) in not understanding that "strict construction" requires that they believe in judge-made law since that is what the common law is; and the common law is guaranteed to us as surely; truthfully more surely, than the right to bear arms and is right up there with freedom of speech and religion.

I think it is good for citizens to get involved in their government. Civic affairs are important and public service can be exactly what it is called. Thomas Jefferson did what was necessary to serve his country, then went home. He didn't make a profession out of it. I think it is much more difficult to justify being a professional politician. That isn't just civic involvement. Once it becomes your career, your priorities change. You are no longer doing your civic duty to make government better. You are doing it to further your professional career.

I do not believe that it is possible for professional politicians to have the public's interest as "foremost" as a non-professional who is doing his or her civic duty to try to help out the country (or their little part of it ... serving on a county advisory board is morally just as admirable as serving in the state or even U.S. Senate).

But back to "tort reform". If the Legislature passes a constitutional law (questionable if it is even possible), limiting tort punitive damage awards ... that is one thing and the courts should examine that law when/if it properly comes before them with their constitutional maginifying glass. But to have the courts do it on their own as they did in this case ... to abrogate the common law and to "make law" they like better by pulling a concept and a number out of ... this is a G rated blog ... thin air ... these "strict constructionists" made [and made up] more law than the "liberal justices" the conservatives railed about for years.

Ultimately, if this is not soon changed (and I see no possibility of that for very many years), we will have lost the judicial system as a substantive part of our government. Oddly, they are castrating themselves at the behest of those who gave them their power. As far as our country goes, this is a recipe for disaster.

Very briefly, countries appear to have a choice when they evolve out of the "monarchial" or "totalitarian" phases of government and attempt to become what has, by really poor semantical choice, come to be called "democracies". They either make the courts a real functioning third branch of Government with substantial power over the other two (which have substantive, but different, powers over the Supremes in exchange); or ... that power vacuum gets filled by the military which is often forced to step in when the rest of the government gets out of control.

It turns out that governments, unlike storks, cannot long stand on one leg nor, like people, on two. To achieve any sort of long term balance by anything other than the barrel of a gun, a govenment must have three solid legs. If there is not a powerful working court system making up that third leg ... historically (and currently) around the world, the military (often of necessity, sometimes simply out of opportunity) steps in to become that third leg. So we have a simple but stark choice. Do we want the third leg of our government to be the courts or the military. It truly is that simple.

We have already surrendered, due to the insurance companies and Big Boy multinational corporations, the ability for a jury of real people to punish it with punitive damages (which was the only realistic way ordinary people could punish a giant corporation). That's one more of our extraordinarily valuable and rapidly diminishing supply of "protections for the people" that our Founders attempted to claim for us disappearing. Again, without knowing what they do ... the conservative "strict constructionists" who claim to believe in limited government and strong protections for the people, have emasculated the court system which was our only chance to maintain limitations on government and maintain strong protections for the people. They (these self-described "patriots") have already turned us into a corpocracy with many fewer rights and protections. Let's just hope that they have also not taken us too far down the path to a military dictatorship to stop on that slipperiest of slopes.

Many things caused this horrendous and incongrous result. Two stand out:

Exxon was evil. But, not to put too fine a point on it ... court systems are designed to deal with evil and to deal with it appropriately! So, although I think Exxon should have been a better corporate citizen if only for their long-term bottom line, it isn't their job to slap their own hand and tell it to get out of the cookie jar.

The courts were (are) packed with conservative judges and justices who do not believe that punishing giant corporations is a good idea. (How can the money "trickle down" if it is used to pay victims of the cheap greed that acquired it?) Let's face it. As much as I have disagreed with every Supreme Court (! :-) on occasion, at least the U.S. Supreme Court used to be made up of people who were smarter than the MENSA average. That clearly is no longer true.

The Exxon Valdez was a huge event in many ways. It is a much more critical decision than anyone seems to yet realize. For those whose lives it destroyed, that destruction is, of course, the primary effect of the ruling. And this happened because the insurance companies and multinational business interests have slickly (and sucessfully) worked at brainwashing the populace with fear techniques.

They cleverly convinced the constitutional "strict constructionists" that tort reform was required to keep us on track with the Constitution. It is not. Tort reform is just an honorable sounding name for taking away the jury's right to punish a corporation ... or well insured individual ... for actions unacceptable in a civilized society; and the corresponding right of the victims to be awarded the benefit of such punishments because they were unacceptably mistreated [well beyond the "treated negligently" standard which is used for compensatory damages] and because, frankly, the standards for compensation for negligence often don't come close to truly making the victims whole.

They certainly didn't in the Exxon case. Justice was not done. Injustice was purchased by those who have a lot more money than anyone opposing them, and the determination was, in the end, a political decision, instead of one that resulted from the intelligent, trained ponderings of our greatest legal minds.

Lawyers and judges like to say "hard cases make bad law". This refers to a situation where the apparent equities in a case make one want to rule in a way favorable to a sympathetic person or position ... but doing so would create law that if followed in subsequent cases would bring negative results. And we do follow the law as set forth by the Supreme Court. To do otherwise would result in sheer chaos as each court and jurisdiction took off following their own predispositions and "court shopping" would be the name of the game. This doctrine of stare decisis is (a critical) part of the common law guaranteed to us by the Constitution.

But the Supreme Court decision that ended the case of the Exxon-Valdez, and its eventual ramifications, was the most major (although so far generally unrecognized as such) event of all of the events involved in the history of this sad twenty year saga and the court's pathetic final ruling.

We all bear responsibility in allowing the system to get so far out of whack.

And we should all be ashamed of ourselves.

To Be Continued:

Exxon: Pouring Oil on Trouble Waters -- Part 5

December 19, 2008
Exxon: Pouring Oil on Troubled Waters -- Part 5
-AKA -
"Billions for Defense; Not One Penny to Pay Our Just Debts"

"The day" finally came.

The day we were going to find out if the Supreme Court was going to hammer Exxon and "correct" the 9th Circuit for halving the jury's award of damages or if, somehow, they were going to find a way to ratify that decision. Or ... some folks who had learned pessimism by being a part (the "victim" part) of this 20 year fiasco, actually believed that the Supremes might reduce it further. Our attorneys, the best in the business, however, had assured us that couldn't happen. That there was no legitimate way for the Supreme Court to lower the award further. That was one option we were not to worry about.

We had several days of anticipation as Supreme Court decisions were handed out over a few day period and ours didn't happen on the first day. Or the second. In fact, it didn't happen until the day the Court was ready to leave [get out of Dodge] for the season.

It wasn't until July of 2008 that the Supreme Court handed down its decision. It made its determination and sent it back to the 9th Circuit for implementation.

[To the tune of American Pie, please:] "That was the day that justice died."

The United States Supreme Court ignored everyone the 9th Circuit had ignored ... jurors, a long-term highly respected judge, the Constitution and common law that it provides we are to follow, the State of Alaska, the earth's environment ... and all of the people who live below the waterline. And then it ignored the 9th Circuit also.
In an announcement that left the hardest of hard-bitten attorneys in numbed shock ... the court chopped the remaining $2.5 billion award down to $507.5 million.

There are no words. It is as manifestly unjust as anything I have ever witnessed the court system doing. It was not only legally wrong, but it was morally wrong. Indeed, it was the first time I have truly believed that the Courts have been so politically packed that they are now simply part of the corpocracy. They are not a check and balance. They are not an independent judiciary. They are bought and paid for politicians. And they have committed an act of overt evil.

Then, just because it could, Exxon took the plaintiffs and rubbed their faces in it one last time. They argued to the 9th Circuit that because the Supremes said that $507.5 million was all that could be awarded ... that meant they didn't have to pay the 20 years of interest on it either.

Plaintiffs and their attorneys were so defeated and destroyed that there was no fight left. We filed pro forma motions with the 9th Circuit explaining that, once again, Exxon was simply flatly wrong legally. But no one's heart is in it. And no one even seems to be able to care how the 9th rules. We are arguing over the pennies to place on our closed eyes after having lost fortunes. It really makes no difference.

For the tiny amounts that the Supremes said we could have; we settled with Exxon for 75% of them. I have no clue what leverage Exxon had left to deny paying the entire amount the Supremes said they had to. But they proved that the courts would do pretty much whatever the Big and Powerful asked for and there was no fight left in any of us. When the elephants play, the grass gets trampled. And we were all, ultimately, the grass.

So the checks are starting to arrive. Little tiny checks. People's lives and livelihoods had been ruined by Exxon beyond hope of repair or salvation. All they were left was the knowledge that at least Exxon was going to have to pay ... and pay enough that they could afford to retire (after 20 years of waiting and scraping and scrimping and taking new jobs at middle age for which they weren't trained, some still trying to eke out a living catching what fish they were allowed by Fish and Game as the Department tried to manage PWS to revive the fish stocks). Many people have been clinging with their fingernails so long to keep from the total financial collapse that just letting go and crashing and burning is better than continuing to try to hold on.

And now, the Courts have stolen their retirement also.

I used strong language above. I speak of the courts committing true evil and stealing from people. I believe that to be true. But I wish to make one point extremely clear here. Although I do believe what the courts did was wrong ... horribly, terribly, immorally wrong, and that the Exxons of the world have "bought" our courts and did prove that they can "buy" [what one might still euphemistically refer to as] "justice"... I do not believe that the individual justices were directly bribed nor do I have any suspicions or accusations about any particular justice or justices who personally "sold" their decision. I don't know what all other criteria the individual justices considered; or indeed, the courts in joint session considered. One may not want to know such things. If you wish to enjoy your meal, stay out of the kitchen! But, largely, although I think they were horrendously, clearly, and demonstratively wrong ... I believe it most likely that the justices believed their votes were "right" and that their decisions were made without substantive improper motivations.

I do not wish, with this series of articles, to accuse either the justices of the 9th Circuit or of the U.S. Supreme court of malfeasance or improper abuse of office.

The Supremes do suffer from institutionalized arrogance. Because they have "the last word" ... ie: there is no where to appeal their decisions. They are very proud of the quote that:

"We are not final because we are infallible; we are infallible because we are final".

These checks won't hurt. Some folks may manage to pay down a credit card bill or even buy a truck. But we ended up, after 20 years, with less than $500 million of the $5 billion that the judge and jury had said was legally ours. Justice delayed is justice denied. Especially when after two decades of injustice, the courts put the decimal point in the wrong place and overtly deny it as well.

The plaintiff attorneys are brilliant people who are at the top of their game. They had secured one of the greatest of all time verdicts for one of the most deserving groups of victims. This isn't tobacco legislation where people got sick and died because they decided to smoke. This isn't a McDonalds case where the plaintiff put a cup of scalding hot coffee between her legs and then squeezed.

The fishermen and other plaintiffs had done absolutely nothing wrong.

In this situation we had totally innocent plaintiffs, unlike almost all mega-award cases (which somehow seemed to survive this appeal process ... the tobacco companies for example virtually all decided to settle; they didn't have Exxon's "make war not peace; win at all costs and hurt the other side as much as is humanly or, more precisely, corporately possible" mentality).

The plaintiff attorneys had put their political lives and careers (as well as their reputations and financial futures) into this case and had defended it through the most violent of legal storms that could be unleashed by a behemoth that had vastly more money to throw at this than almost anyone in the world. If one could buy "justice", Exxon was going to do it.

In a con job worthy of anything Alice believed before breakfast Exxon tried to convince the world that they had done nothing wrong either! Although many (most?) news outlets were not easily flim-flammed, Exxon clearly has the power and influence even with the media to get its story out.

Exxon argued (argues) that Hazelwood, Captain; or God, An Act of; were the only reckless culpable parties. In English ... the only ones who did anything wrong. So that, therefore, only Hazelwood and God deserved any blame. And if Exxon didn't deserve any blame, they certainly didn't deserve any punishment.

It is important to understand that for legal purposes a corporation is an entity that is legally construed (for essentially all purposes) as a "person". I personally am not convinced of the wisdom of such exalted treatment to an entity that one can create on a piece of paper and the stamp of the appropriate state office in a few minutes, but it is a concept with much history and is well-settled law.

So Exxon, although a corporation, is legally capable of wrongdoing and being punished for such wrongdoing. To carry an analogy much farther than it should go, the Board of Directors, officers and executives are the "brain" of the corporation which sometimes cause it to do things that it shouldn't; much like our brains do with us. So it is the corporation itself, not its officers nor directors, that was found liable for causing damages by its negligent behavior and was assessed punitive damages for its reckless behavior. [Captain Hazelwood was also found liable of these things, but a judgment against him is not worth the paper it is printed on as he has nowhere near sufficient assets to satisfy such a judgment. But Hazelwood and Exxon were found jointly and severably liable which means that each is liable for the entirety of the damages awarded by the jury.]

And it is the corporation which [who? :-)] was trying to make the case to the public (and hiring marketing firms to do so), that the entities at fault were simply God and Hazelwood; not the corporation. But if the corporation was negligent (!), it was not reckless (which is the critical issue regarding punitive damages and such a determination was necessary in order for punitive damages to attach).

Let me be crystal clear here. This is a critical point. We can debate whether we think Exxon was reckless for putting a known drunk at the wheel of an oil tanker. But our decisions are (and should be) irrelevant, because the jury; those whose duty it was to decide and who were in the best position to decide, did decide. Exxon, itself, was reckless. This is no longer solely an opinion, it is a determined matter of law that even the Supreme Court has no legal ability to change.

It was reckless for an additive plethora of reasons, the primary one of which was that they knowingly placed a fully loaded ~1000 foot, 212 ton, tanker filled with 56 million gallons of the worlds ugliest (tarry, high sulphur content, etc.) crude oil under the control of Captain Hazelwood while it traversed some of the most pristine environmentally sensitive areas of the world; at night (it was almost exactly midnight when they missed the gap and hit the reef) ... knowing that he had a substantial drinking problem and a history of incredibly poor judgment. Exxon had paid for Hazelwood's alcohol rehab treatment in 1985, but made no follow-ups of any sort: no post-treatment evaluations or counseling, no monitoring of any sort.

Instead Exxon immediately put him back in command knowing as they admitted at trial that "a captain with a substance abuse problem was a recipe for disaster".

Hazelwood's driver's license (for automobiles, not supertankers ... although one would think if he wasn't considered capable of entrusting an automobile to, it is difficult to imagine that handing him the keys to a crude oil carrying supertanker would be fine) had been revoked or suspended three times between 1984 and 1989 by the State of New York for alcohol violations. In fact, at the time of the spill, his driving license was in suspension because of an arrest in New York for driving under the influence in September of 1988. This information is routinely reported to employers and is generally a requirement that it also be reported to the employer by the drunken driver himself. It is virtually inconceivable that Exxon did not know that at the time they told him to drive one of the largest and potentially most destructive vehicles in the world ... he could not legally drive to the docks to board the vessel.

Exxon senior management was proven to have received multiple and continuing reports between 1985 and 1989 that Hazelwood was continuing to drink to excess openly; indeed publicly. Exxon took no actions of any sort in response to these reports, except that his superiors would drink with him!.

In 1989 (five years before the trial and before Exxon's lawyers and P.R. people got everyone in the company's management "under control", the Chairman of Exxon specifically said that putting Hazelwood in charge of a supertanker was a "gross error"). Not just a negligent mistake, mind you, but he specifically admitted that Exxon had made a "gross error". There are many ways of saying "reckless" for purpose of punitive damages and other legal issues. "Gross error" is one of those equivalent terms. An "error" equates to "reckless" which might make them liable for compensatory damages, but does not make them liable for punitive damages. But "gross error" is the same as "gross negligence" which is the equivalent of "reckless". Therefore, by the admission of Exxon's own chairman ... Exxon fit the criteria for punitive damage liability.

Further, at trial five years later, after having been heavily coached, an Exxon manager testified that Exxon's policies, despite their knowledge of the risk to the public of the "catastrophic" results of a supertanker accident, allowed a relapsed alcoholic to command an oil tanker which left him (the manager), given "Exxon's attitude towards alcohol", with "no policy to protect the safety of the public".

There was other testimony regarding that and other aspects of Exxon's general recklessness in shipping out of PWS (breaking federal fatigue laws, departing into heavy ice conditions at night to save money, etc.).

But I don't need to try to prove that Exxon was reckless. I noted at the beginning of his section that it was reckless as a matter of law that not even the Supreme Court has the power to change. That is because the jury so determined. And once a jury makes a factual determination (which this is construed to be), that issue is not appealable.

The way our system works is often misunderstood. But since the right to trial by jury is paramount, only the jury is allowed to determine facts. [Which makes practical sense as well ... it is only to a jury that factual disputes are presented. Only the jury (and trial judge) hear the testimony and watch the body language of those speaking and are privy to so many things that can't be captured in an electronic record, that it would make no sense to have an appellate court attempt to redetermine the facts of the case.] Additionally, in this case, there was no question but what there were highly competent lawyers and experts on both sides making sure the evidence was properly presented and done so in as favorable a light to their side as possible. And the jury determined that Exxon was reckless.

What is appealable is the "law". That is what the lawyers argue to the judge about and what the judge ultimately includes in his written (and spoken) jury instructions. If the judge was incorrect on the law ... if he made a ruling (regarding an objection to the admission of certain evidence, for instance) that was wrong legally, or if an instruction regarding the law given to the jurors was wrong ... that may be appealed.

But whether Exxon was reckless or not, may not be appealed unless the judge gave incorrect instructions regarding his jury instructions regarding how they are to determine whether conduct qualifies as reckless. No one has seriously argued that the judge got the law wrong on this issue. (I say "seriously" instead of just saying that no one argued it ... because it is possible that Exxon did argue it at some point. But no one took it seriously and no appellate court ever suggested that there was a problem with the formulation of the law.)

Presumably, in fact, that is why the Supreme Court had to leave in the award some amount of punitive damages. They too were bound by the jury's finding of recklessness. (That said, even though they couldn't legally touch the fact that punitive damages were appropriate, in their consideration of "how much?" they effectively did by the back door what they could not by the front.)

The general public, however, was not so bound. Exxon argued vociferously to the media and anyone else outside the courtroom who would listen, that it was not reckless.

There is an old theory that if you can obsfucate an issue sufficiently, then no one really understands what is right and what is wrong and assumes everything is gray and that whatever the courts ultimately decide is probably right. Because we as a nation, perhaps more than any other on earth, respect and honor our judicial system.

Indeed we believe in it in a way that we seldom even think about but that folks from other countries really don't ever seem to understand. Other countries have legislatures to pass laws and an executive branch: presidents or other administrations to carry them out ... but in perhaps no other country is the court system relied upon so strongly, and believed in so fiercely, as the third leg of out government and the one most important for preserving out freedoms and protections from oppression. In the words of the Australian commedian/singer Fred Dagg: "You don't know how lucky you are, mate, you don't know how lucky you are."

Sadly, despite the intellect and apparent nitty-gritty willingness to claw and scratch and give their best fight no matter what the arena, the plaintiff attorneys proved to be idealistic optimists after all. They believed in the system. Even after so many, many years of delay, they too, honestly believed that although the wheels grind slowly, that they grind exceedingly fine and that justice would ultimately prevail. They believed that we were a country of laws and an honorable court system and that raw money and power could not buy justice away from those to whom it belongs if the forces of good gave it their all. I would not be surprised to see the major law firms that have gone so far out on a limb for those below the waterline in this case to be shuttering their offices. Some will stop in the bankruptcy courts that they had practiced in. Others will simply go away.

Because they were wrong.

Exxon proved, gloatingly, to the world, that we no longer live in a country of justice and law. Instead, we live in a corpocracy and the Exxons of the world run it. And they glory in proving that they do.

It is conceivable that a justice was bribed. Exxon certainly had the money and we've seen a lot of outright bribery by oil companies in Alaska. And justices don't make enough money to be above financial temptation. But I have no evidence nor even real suspicions that such happened.

I believe what happened is that the insurance companies finally purchased the judges they want on the bench (judges and justices do not believe in the concept of punitive damages or if they do, they believe they should be severely limited). But they did this ... well ... I am not alleging that they did it in any way that was not legal. There are ways within the system to "purchase judges" without committing a crime.

Continued:

Exxon: Pouring Oil on Trouble Waters -- Part 3

December 15, 2008
Exxon: Pouring Oil on Troubled Waters -- Part 3
-AKA-
Being Exxon Means You Never Have To Say You're Sorry

Oil ... $$$$$$$ ... Black Gold!

The centerpiece of international politics, wars and economics. A sizable portion of the world's population believes we are at war in Iraq because of it. A song that I quite enjoyed when there was a small handful of us loudly proclaiming that we would be nuts to go to war with Iraq; one that I copied and passed out freely before George W's "shock and awe", was entitled "How Did Our Oil Get Under Their Sand?".

We have it (oil ... we're a little light on the sand). Indeed, we have so much of it we can apparently afford to dump it in the ocean.

In the minds of most people when they think of oil, they envision the stuff they pour into their car engines. And, of course they are correct. That is refined motor oil. But crude oil, the unrefined hydrocarbon gunk that is pumped out of the ground and, at one time was attributed to decayed dinosaurs, is not something you'd want in your car. Nor in your boat. Nor in your fishing pots or nets. And most certainly not in the seafood meal at the fancy restaurant.

Nor is all oil the same; not even all crude oil. The oil that Captain Hazelwood and Exxon decided to return to nature had made a remarkable journey even before it so abruptly ended.

The oil had arrived in the port of Valdez after being pumped from deep, deep wells nearly a thousand miles to the north in Alaska's North Slope Prudhoe Bay fields and travelling completely across the state (which is the most difficult, by far, of all states to travel across) via one of the world's engineering and construction marvels: the Alaska pipeline. The Port of Valdez is a deep water port, ice free (by Alaskan terms) year round, and able to handle the giant oil tankers that transported the Black Gold to the energy starved world.

Alaskan oil [somehow appropriately] is heavy, tarry stuff that requires [like many Alaskans :-)] a lot more "refining" than most. It is not the clean "sweet" oil found in backyard wells in Texas. Nor is it the stuff that Jed Clampett could find bubbling up in his backyard woodlot. Our oil is thousands of feet below the surface and for whatever reason, largely decided to locate itself in some of the most inhospitable places on earth.

Alaska's North Slope holds vast reserves of oil. As anyone who has followed the news at any time in the last few decades knows, there is a terrific and ongoing battle regarding extraction from the ANWR portion of the North Slope between the Luddites who hide behind the much cooler sounding title "environmentalists" on one side and Sarah's "drill, baby, drill" contingent on the other. This topic deserves vastly more in-depth treatment than I can give it here, but may well be a follow-on column since oil is such a "hot" topic these days in any event.

I personally am in no hurry. Even if alternative energy forms were found and oil was essentially replaced as a fuel, it has sufficient other uses that it will always remain of high value. I'd just as soon leave it in the ground as a bank account for my grandchildren. My objections however have nothing to do with environmental concerns. There are none remaining of note. That is simply a phony excuse by the Luddites. The existing oil operations in the North Slope have had no negative environmental impact. The caribou and other wildlife seems quite attracted to the spectacle (face it ... they are bored with thousands of miles of featureless tundra as their lifetime view) and it has not had any negative effects on the environment whatsoever.

No ... the only time our Alaskan crude oil has harmed the environment was when a drunk sea captain decided to see if his boat was tougher than the rocks of Bligh Reef [it wasn't].

And that harm to the environment was real. It wasn't the "pretend harm" that the greenies use to scare people into opposing drilling. This was real harm. And it not only harmed the environment dramatically (twenty years later and it still hasn't recovered ... biological processes operate much more slowly in this cold climate), but it harmed, even more dramatically, the people who made their living off that environment. And those who made their living off the people who made their living off of the environment.

For those of you just joining us, the brief synopsis is that a drunken Captain (who Exxon had put through alcoholic rehab previously and absolutely knew that he had relapsed badly; indeed he couldn't legally drive even a car - his license was suspended for his third DUI since the rehab only a few years before the accident) was given command of a massive oil tanker and, without bothering to tell anyone, apparently tried to slip through a channel where no oil tanker belonged. And then, he and his bottle went down to his stateroom to do "paperwork" while leaving control of the vessel in the hands of a third mate who was not certified to run the tanker in Prince William Sound (PWS), although he was in the open ocean. For reasons that will never be known, it didn't make it. It appears that when they first scraped the reef a drunken Hazelwood staggered into the wheelhouse and screamed "hard right". Unfortunately he was drunk (and perhaps dyslexic?). If he'd yelled "hard left" we may never have heard of the Exxon Valdez.

As it was, it (in the Captain's inimitable slurred radio report) "fetched up" on the reef and was apparently leaking some ... cargo. That "hard right" caused unfathomable destruction of wildlife and pristine habitat. The spill killed an estimated 350,000 to 390,000 seabirds, in addition to 3,500 to 5,500 sea otters, 300 harbor seals, 250 bald eagles, 22 killer whales and billions of salmon and herring eggs (along with countless other flora and fauna).

It also caused unfathomable loss and damage to those who lived there and were "married" to the land, the sea, and its abundant resources.

This happened in 1989.

No, I didn't mistype. My fingers didn't slip. I didn't get confused. It truly has taken nearly 20 years to pry any money out of them.

Let me give you a move visceral feeling for how long ago Exxon oiled us and then postponed the day of reckoning. In 1989, we had the Exxon Valdez Oil Spill. On June 3 of that year, we also had the Tiananmen Square Massacure. Seems we've had several Chinese governments and entire major philosophy changes since then! :-)

The world moves right along unless you are Exxon with your foot on the brake.

Indeed, Alaska has only been a State for 50 years! For 20 of those we've been living with the never-ending saga of the Exxon Valdez.

In 1989, on November 9 ... the Berlin Wall fell. "No", you say, "that couldn't be! That was more like half a century ago." Well, the Exxon spill was 1/5 of a century ago. But yes ... before such major changes in the world ... the Exxon Valdez had already attempted to cut a new channel through Bligh reef.

In 1989, gasoline was $1.29 a gallon. The mimimum wage was $3.35. A dozen eggs were 96 cents; a loaf of bread, 69 cents! Oh and before serious competion with the internet which should have lowered it's price (!), the cost of a first class stamp was $.25!

It seems like it was a different age, a different era. And it was! Exxon managed to delay through the passing of years, decades, a century and a millenium. It is difficult to believe that the Supreme Court of 1989 (or 1994) would have sliced and diced the exemplary damages award so viciously. [Truefully, even though I understand that this Court is the most conservative in a very long time ... I still find it difficult to believe that even they would do ... what they did!]

Exxon is so big and so powerful and so unbelievably arrogant that they were able to "leverage" that power to keep the money out of the hands of the fishermen for all this time ... and Exxon has now succeeded in keeping most of the money out of the hands of the fishermen forever.

"The check's in the mail."

Exxon claimants [as all the prevailing plaintiffs in the Exxon-Valdez lawsuit are called] have been waiting nearly 20 years to hear those words; nearly 15 years since the jury verdict awarding us, in addition to modest compensatory damages, a $5 billion punitive damage award.

But, the checks aren't for anything close to that. Actually, ignoring interest [as Exxon still hopes to be able to do] and many other variables, we are roughly a decimal point off. In other words, if your share, according to the only people legally qualified to know and therefore to decide; the jurors, was say $100,000, then your "check" would be for ~$10,000. If the jury [and convoluted formulas that were subsequently applied] said your claim was worth $10,000, then your check is for ~$1,000.

And for this we waited 20 years?

Actually, the checks aren't in the mail yet. Presumably they will be soon.

The folks that will be receiving money in this first "round" are those claimants who had no issues of any sorts attached to their claims [eg: judgments against them, IRS liens, child support liens, probate issues (since so many of our original claimants have died), assignments (so many people were so broke they were forced to sell part or all of their Exxon claim to speculators for a small percentage of its worth. Of course, they may look like geniuses now ... , or other]; and had gone through all the stacks of paperwork properly and along the way filled out the proper forms to have the Claims Administrator [the law firm of Keller Rohrback] directly deposit the funds to their bank accounts.

But given the history of this situation, that's really close to "the check's are in the mail".

In 1994 a major trial was held in federal court with approximately 32,000 plaintiffs and a jury, who by all accounts took their job very seriously. After four weeks of testimony and argument and four days of significant deliberation and balancing Exxon's claim that they didn't deserve to be punished any further, primarily because of all the money they had already spent cleaning up their mess, against the reality of what happened, the jury concluded that Exxon needed to both finish reimbursing the actual "out of pocket or never in pocket" type losses (compensatory damages) which was never much at issue. It also made the finding of primary importance that Hazelwood AND Exxon were reckless (ie: "grossly negligent"). Although this point seemed unassailable and crystal clear to everyone but Exxon, it was so dear and the attorneys had fought so long and so hard to get to that point that the lead plaintiff attorney actually had tears when the announcement was made. He had done it.

The finding meant that Exxon was liable for punitive damages and, given the size of the company it was expected that they would be "significant" [the relevant standard being focused on company size and income since the purpose is "punishment" and an award of $10,000 might punish a small mom and pop, but wouldn't be noticeable to Exxon]. Generic formulations yielded nearly absurd results because Exxon was SO huge and profitable that in order for it to "feel" the punitive damages award, the number would have to be staggering.

If one wishes to swat a two year old child for doing something he shouldn't have, it doesn't take much to accomplish that goal. If you swat an elephant with the same force and power ... it would notice you no more than it would a mosquito. In fact, it would probably be more bothered by a mosquito.

Exxon was, and Exxon-Mobil is, an elephant compared even to other elephants.

Instead of shooting for an absurd number that would actually be fitting under the circumstances, plaintiff counsel determined to ask for something that, given Exxon's size, was clearly reasonable and, therefore, presumably appeal-proof. They asked for fifteen billion. The jury gave them five. This was far less than the purpose of punitive damages would dictate as it was but a small percentage of Exxon's annual profits and a pittance compared to Exxon's overall value. It may not have been something that Exxon could pay out of the petty cash annual party fund, but neither would it have a substantive negative effect on the company. This discrepancy (between the value of the award and the value and profits of Exxon) has only increased with time.

As Brian O'Neill, the plaintiff lead attorney said shortly after the initial verdict::

"With a company as large as Exxon that thinks it is above the law, you need to take a substantial bite out of their butt before they will change their behavior. We want to change Exxon. We want to make the Exxons of the world aware that they are responsible the same way that you and I are responsible. It is really a great day. It took five years to bring it about, but we got there."

Indeed, all that was true and for the first time in five years in some of the economically devastated towns and villages, it was the first day of sunshine in half a decade. Despite all the suffering, the loss of culture, the loss of livelihood, the psychic pain that could never be healed ... it was a large enough verdict that there was sunshine and some smiles again. Even though the award was fairly small in terms of the size of award compared to size of company that would be required for "punishment", Exxon was so huge that, in absolute terms, this was a tremendous award; it would arguably be the second highest sustained jury award on record.

There was only one little problem. The award was not sustained.

In a display of corporate arrogance unmatched in modern times (well, perhaps, other than Enron giving top management huge bonuses just before closing their doors), Exxon vowed that as a matter of principle, and because it thought that people should be grateful to it (for all the work it did cleaning up the spill) instead of suing it, it would make sure the fishermen and other plaintiffs never received anything anywhere close to an award of that magnitude.

Exxon succeeded beyond its wildest dreams and beyond the wildest nightmares of the plaintiffs and their attorneys. They made certain that the lesson for all to see was NOT that "the Exxons of the world were made aware that they are responsible the same way that you and I are responsible". Instead, Exxon set out to prove, and ultimately did so with resounding success that the Exxons of the world are NOT responsible the same way that you and I are responsible. They boldly and "in your face" demonstrated that O'Neill was absolutely correct in saying that Exxon believed that were above the law ... and they successfully proved that, indeed, they were.

There is an old African proverb that says: "When elephants play, the grass gets trampled." You have to give O'Neill and his firm credit though. They stuck with us the whole time and fought tooth and nail every inch of the way. It is a tragically sad commentary on our system that even with powerful law firms on our side, that we didn't manage to rise much above the level of the grass. The elephants in the world have gotten so big that there is almost nothing able to control them. They've been paying lobbyists for so long (and as we have been discovering in Alaska, the Big Oil boys have been cutting out the middle man when convenient and paying the legislators directly) that they managed, by the back door, to pack the courts as well.

At most ... we got up off the ground by sheer brute force and transformed ourselves from grass to mosquitoes.

We buzzed around them. We even bit them. But ultimately we had about as much effect as one would expect a mosquito to have in dealings with an elephant. We were naive. All of us, including the Federal District Court Judge Holland who maintained his honor by telling the 9th circuit to shove it when they ordered him to knock the punitives down. Our hot-shot lawyers were naive. The fishermen were naive. "Oh, come on ... the United States Supreme Court is not going to take a drunk driving case!" Unless, that is, you have a Court that has been picked as they rose through the system by litmus test on such things as "tort reform", which is phony lingo for "taking away rights guaranteed by the U.S. Consitution but not admitting to it". 20 years of naivete. Even more than the money (and that is saying a fair bit), I think all of us on the side of right, truth and justice are more upset by a 20 year spanking than anything else. We are embarrassed that we actually believed our "judicial system" was in the business of dispensing justice. Even I fell for it and I had a Superior Court judge tell me once to always remember that the courts are in the business of judgments; not justice.

And that there was a huge difference between the two.

Which is something we have all now (even the most stubborn of us) finally learned.

Harken back to Brian O'Neills' statement following the verdict, above. This is what he said after the Supremes gutted it:

"I feel bad for all the claimants, that they're not going to get enough money to put together their lives again. I feel bad for all the claimants because they're not going to get the satisfaction knowing that there was a just punishment administered to Exxon. And I feel bad for all of the claimants because the judicial system has let them down. It just isn't fair."

Part 4 of This Series May be Viewed Here:

Exxon: Pouring Oil on Trouble Waters -- Part 2

December 13, 2008
Exxon: Pouring Oil on Troubled Waters -- Part 2
-AKA-
"The Wreck of the Exxon Valdez"

By: Captain Heavyfoot
[With apologies to Gordon Lightfoot :-)]

The legend lives on from the fishers on down,
Of the Big Sound 'twas made in Prince William.
The ocean, it's said, was their butter and bread,
But oil tar on the sandwich just killed 'em.

Tanks topped with black crude, and with vodka home-brewed,
The famed Exxon-Valdez was quite loaded.
The Captain was too, yet silent his crew,
When they poured both the Captain and cargo aboard her.

Captain Hazelwood had been drinking at two separate bars or more prior to their scheduled departure. There was sworn testimony that he had consumed at least five double-vodkas (enough to knock out anyone who wasn't an alcoholic). He didn't get even a breathalzyer test until 11 hours after the accident, but working backwards from the booze in his blood at that time they calculated that at the time of the accident he was three times the legal limit for driving a car.

Indeed, he wasn't licensed to drive a car ... his license had been suspended for (yet another) DUI. He had completed a rehab program three or four years before the accident and had wracked up three or four DUIs in that period of time! Not only were his superiors aware that he had badly relapsed, but they had actually been drinking with him not long before the accident!

In any event, shortly after the Exxon Valdez pulled away from the dock at 9:12 p.m. and having successfully passed through the Valdez Narrows, the master pilot who was specially hired for such tasks, left the ship. It was a beautiful evening on the water. The seas were calm, visibility was good and the ship had all the latest and most sophisticated of navigation equipment. The official story was that there were icebergs in the normal shipping lanes, so Captain Hazelwood instructed the man at the wheel to take the ship slightly outside the shipping lanes and around the ice. Experts agreed however that such story simply didn't hold together -- they were too far off course with too many ways, both through equipment and visual observation, to not be able to tell.

In fact, it was apparent that they weren't just skirting an iceberg or two, but indeed, whether to avoid icebergs or to make up lost time, or just to shorten the voyage, they almost certainly attempted to follow the old steamship passage and "shoot the gap" between Bligh Reef and Reef Island. This is an incredibly dangerous maneuver for a ship the size of an oil tanker. Authorities at the time likened it to flying under the Golden Gate Bridge. Yes, it can be done. Yes, it has been done before. But it is dangerous and absolutely not recommended nor approved. (There were rumors that for years tankers had snuck through there on occasion but no one had ever actually caught them at it. It was universally agreed, however, that such would be a stupid and dangerous maneuver.) Even so, at that point, Hazelwood then left the bridge in the control of a third mate and was down in his cabin "doing paperwork" through this trickiest part of the passage.

Neither Exxon nor Hazelwood ever admitted that was what they were attempting. The normal shipping lanes out there are extremely wide, deep and forgiving. Anyone could drive a tanker through that part of the journey. But they were over a mile and a half outside the shipping lanes and just barely missed the shortcut gap. Either they were horrendously screwed up (to be a mile and a half off course) which makes no sense, or that is exactly what they were trying.

The poor crewman left at the wheel didn't know what to do. Indeed Third Mate Gregory Cousins was not even certified to operate a ship in PWS and, indeed, it was flatly illegal for him to be at the wheel. (Of course it was also illegal for Hazelwood to be drunk!) It was widely reported at the time although such reports dropped out of sight quickly, that Hazelwood had put the ship on autopilot and instructed Cousins to contact him when they reached a certain point. Despite the fact that this was known as a treacherous area for large vessels; and that they were operating outside the normal shipping lanes, there were no guide boats or tugs and purportedly no one but a rudimentary computer was directing the massive ship. No one who wasn't there knows for sure what actually happened that night. There were also reports that a drunk Hazelwood had made his way back to the bridge and ordered a "hard right" when he should have ordered a "hard left". That isn't the official story either, but the micro-computer in the auto pilot was at least sober and probably would have been the preferred option to the drunk captain. Even so, "computer" is too fancy of a concept for it. The computer you are using to read this article is hundreds of times more intelligent.

If true, one of the largest a 211,500 ton, 988 foot long, fully loaded oil tanker was being controlled by a machine with the approximate I.Q. of a fancy toaster.

And it went crunch.

It shuddered to a halt, engines still running full bore driving it further into the "sandbar" as Exxon likes to call the rocks of the well-charted Bligh Reef that ripped the thin single hull like a sardine can. In the version of the story where he hadn't already made it to the bridge yelling "hard right", Hazelwood stumbled to the bridge, uttered a few choice words, and then tried "rocking" the huge vessel off the rocks by jamming it full throttle forward, full throttle reverse, as you might try to drive you car out of a mudhole. Unlike your car and the mudhole, however, these manuevers acted to rip the holes in the hull much wider and allow much more oil to escape than would have otherwise. Finally, after failing to dislodge it and after the crew inspected things, he slurred into the radio that they had "fetched up" on a reef and were "evidently leaking" some of their cargo.

Truer understatements were seldom more understated.

The "little bit" of "cargo" that leaked was nearly 11 million gallons of tarry black Alaskan crude oil. It fouled 1300 miles of mostly pristine Alaska shoreline and covered 11,000 square feet of ocean.

Although there is a minor error or two, this is an excellent dynamic one-page pictoral "overview" of PWS and the spill.

Part 3 of This Series May be Viewed Here: