Oily justice for spill victims

Last week, in a 5-3 decision, the U.S. Supreme Court decided, in a case that may set a precedent for generations, that corporate crime really does pay.The occasion was the slashing of the punitive damages lower courts had assessed against ExxonMobil for Exxon's culpability in the 1989 Exxon Valdez oil spill in Alaska's Prince William Sound. The incident, which a jury found Exxon responsible for, cost the North Pacific fishery and Alaska's economy billions. Fishermen were driven out of business; 19 years later, the pristine waters and beaches of Prince William Sound have never fully recovered.But that's OK. Mustn't inconvenience the nice corporation with the army of lawyers.Five justices randomly decided that punitive damages cannot exceed what a company pays to partially compensate (human) victims for their economic losses. Thus, for Exxon, the original jury award of $5 billion in punitive damages - already halved to $2.5 billion (for no apparent reason) by an appeals court - was magically cut to $500 million. A LESSON NOT LEARNEDFor the 30,000 or so claimants, 2,000 of whom live in the Puget Sound region - and 3,000 of whom have already died as company lawyers dragged out the litigation for 19 long years - it was never about the money. It was about the precedent of enforcing corporate responsibility. The original jury award of $5 billion represented, in 1994, a year's worth of Exxon profits. Fourteen years later, profits are up eightfold. With oil speculation running rampant, today's resulting gas prices represent pure windfall profit for ExxonMobil. There are plenty of reserves, and while it still costs about the same as it did at the start of this decade to extract a barrel of oil, prices have tripled. And so ExxonMobil, responsible for the single-worst environmental crime in the history of the Western hemisphere, is, regardless of its rap sheet, the most profitable corporation in the history of the world, netting some $40 billion in profits in 2007. It'll be higher in 2008. Rather than losing a year's profits, the Supreme Court has ensured that ExxonMobil will pay out about 95 hours' worth of profits for the Exxon Valdez disaster.That'll teach 'em.A BAD PRECEDENT TO SETMore worrisome, however, is the precedent set by this decision, which is sure to be cited every time a corporation misbehaves and a jury tries to hold it accountable. Imagine, if you will, Union Carbide at Bhopal, with 10,000 deaths on its hands, having to pay out only economic damages. Or the operator of a nuclear power plant that melts down. Or even a more ordinary case of, say, toys contaminated with lead, or worker-safety procedures systematically disregarded.Companies now have that much more incentive to game the system, to calculate the point at which punitive damages become less expensive than cutting corners to save costs. These sorts of risk assessments are routine. The calculations have now, thanks to five justices, been realigned sharply in favor of corporate lawbreaking as a rational path to higher profits.Nobody should be surprised. There's now 122 years of case law, dating back to the infamous Santa Clara County vs. Southern Pacific Railroad case of 1886, based on the notion that corporations have the rights of people and are thus protected by the 14th Amendment. But corporations aren't human. They can't be imprisoned. They are inherently amoral. They have one purpose: to make money. If they can make more money by creating a mountain of dead bodies, they are legally obligated to their shareholders to build that mountain.BIPARTISAN CORPORATE SUPPORTFor all the partisan rancor of the last generation over Supreme Court issues like abortion, privacy rights and the like, the steady expansion of corporate rights has enjoyed a healthy, bipartisan D.C. consensus. David Souter, the justice who wrote the Exxon opinion, is considered one of the court's liberal judges. Democratic and Republican nominees over the last 30 years might differ on, say, Roe vs. Wade, but several are (like Souter) millionaires. Many have a corporate-law background, and most have backed further expansion of corporate rights (or, more often, a curtailment of individual rights to challenge corporate power). The Exxon decision is a logical, if appalling, extension of that trend. Had one of George W. Bush's appointees, Samuel Alito, not recused himself from the case (because he owns up to a quarter of a million dollars' worth of ExxonMobil stock) it would have been a 6-3 decision, meaning that even without the recent conservative Bush appointments the Supreme Court would have found for Exxon. Money transcends ideology, at least as it's practiced in Washington, D.C.Money also apparently trumps crime. Ask the 30,000 claimants who waited 19 years to see their jury award cut to less than 10 percent of its original value after inflation. Or, ask the millions of fish, birds and other creatures devastated in the Exxon Valdez spill. As with any epic tragedy, the losses incurred as a result of the world's worst oil spill transcend monetary value. But the lessons corporations will absorb as a result of this decision will cost us all.Geov Parrish can be reached at needitor@nwlink.com.[[In-content Ad]]