Exxon Would Like to be Excused

by emptywheel

Back when I taught, at the beginning of the school year each year the school would hand professors a description of the incoming freshman class so the professors could understand what world their students were coming from. It usually read something like:

2007: This year's incoming freshmen were born in 1989.

The top TV series for most of these students' teen years was American Idol.

These students matured after the first big judgments against online file-sharing.

During these students' freshman year of high school, the first legal gay marriages were performed in this country.

The Exxon Valdez disaster happened the year most of these freshmen were born.

I made up the whole list (though I think I'm close on most counts)--and my ignorance of current pop culture has been pretty well established. But my point was to contextualize the Exxon Valdez disaster which did, indeed, occur the year that most incoming college freshmen were born. It's been 18 years, and the interim years have seen record-smashing profits for Exxon, not to mention two wars to ensure our access to oil in the Middle East.

But Exxon is still fighting the fines imposed on it for the disaster.

The Supreme Court today agreed to hear an appeal by Exxon Mobil Corp. that seeks to overturn $2.5 billion in punitive damages a federal court ordered the company to pay for the 1989 Exxon Valdez oil spill off Alaska.

Stepping into the long-running dispute between the world's largest publicly traded oil company and more than 30,000 class-action plaintiffs, the court separately rejected the plaintiffs' appeal to reinstate the trial jury's original award of $5 billion in punitive damages. The 1994 award ultimately was cut in half during an appeals process that reached the U.S. Court of Appeals for the 9th Circuit, which issued its ruling in December.

Exxon Mobil argues that the $2.5 billion punitive award violates federal maritime law, and the Supreme Court agreed to take the case to settle that question. The justices declined to consider an argument that the award was so large that it violates the Constitution.

Now, setting aside the legal merits (or not) of Exxon's appeal (and note, Alito recused himself, so at least it'll be a relatively fair 4-4 fight), consider what this means for the externalities of business behavior and the environment. Exxon's negligence devastated the environment in Valdez for some time. But the only costs Exxon thinks it should pay are clean-up costs. And eighteen years after it caused that damage, our society (the same one funding wars that benefit Exxon) still haven't gotten the fine imposed on Exxon for its negligence.

 

Comments

[Ishmael]

Maybe we should call Mothers Against Drunk (Oil Tanker) Driving and let them know about this, surely this is one of the worst drunken incidents of all time. I still remember Exxon playing PSAs about all the oil-soaked birds that they washed by hand, while the oil sank to the bottom of Prince William Sound and they steam-vacced the oil off the beaches in a previously pristine environment! And the clean-up costs would presumably be deductible as expenses, as opposed to the fine, which may be considered against public policy to deduct as a cost of doing business (although $2.5 B for a company of Exxon's size and profits cannot be considered excessive).

[bmaz]

This is disgusting. Here is another good one: Fresh off the WaPo website:

"The State Department promised Blackwater USA bodyguards immunity from prosecution in its investigation of last month's deadly shooting of 17 Iraqi civilians, The Associated Press has learned."

I am coming to believe that one of the factors most degrading our society is that there is such little accountability for the wrongs committed at the top. Sure there are a few throw away high profilers that go down here and there, but overall, pretty disconcerting.

[Sparkles the Iguana]

The wheels of justice, they do a-grind slowly. I remember 1989 well....Tienamen Square in June, the Berlin Wall coming down in November.....can't remember what was on TV, though. I didn't have one.

[Sparkles the Iguana]

OT (random bitch) - I can't believe the Chicago Public Library system only has one copy of Jack Goldsmith's The Terror Presidency - wtf??

[Mad Dogs]

EW, I know this is OT from your post and way, way EPU'd from your post about the State Department's perfidy with Blackwater, but I just had to post it, not least for our serial doubter lil' joe:

from the AP today at http://news.yahoo.com/s/ap/blackwater_prosecutions - Charges uncertain in Blackwater shooting

"The State Department promised Blackwater USA bodyguards immunity from prosecution in its investigation of last month's deadly shooting of 17 Iraqi civilians, The Associated Press has learned."

~snip~

"Three senior law enforcement officials said all the Blackwater bodyguards involved — both in the vehicle convoy and in at least two helicopters above — were given the legal protections as investigators from the Bureau of Diplomatic Security sought to find out what happened. The bureau is an arm of the State Department."

[Mad Dogs]

Dagnabbit, bmaz beat me to it. *g*

[P J Evans]

Ish
One of the things they learned is that steam-cleaning does more damage than not cleaning at all. (Doesn't do anything for the critters that died, though.)
---
Exxon's original fine could be paid by them from the profits they made last year, never mind the reduced fine they're appealing. I really, really hope they lose.

[emptywheel]

Mad Dog

bmaz AND I beat you to it!

;-p

[phred]

Ishmael -- My memory is not all that good, so I may have this wrong, but a lot of the drunk driving business was hooey -- an attempt by Exxon to put all the blame on their captain, rather than admitting to using old substandard equipment. At the time, oil tankers should have been double-hulled to minimize the occurrence of oil spills. IIRC though, as usual grandfather clauses were written in to the requirements which allowed Exxon to keep using older single-hulled tankers like the Valdez. I think there were other things that came into play as well, but it's the double v. single hull issue that I remember best (admittedly hazily).

[Mad Dogs]

Jeebus EW, now I'm gonna have to go hide in my doghouse. LOL!

[MarkH]

OT

Could someone check to see if there is an investigation of off-shore banking involving Patrick Fitzgerald and indirectly Senator Hillary Clinton?

I have no way to find this myself and wouldn't even know where to begin.

It's a rumor I've seen on the net and I'm wondering if it's true or just a fantasy rumor.

[readerOfTeaLeaves]

Alaska has weird psychology, and unbelievably corrupt politics.
The damage was not 'cleaned up'; the chemical interactions are far too complex to explain in a comment. Shorter: much of the oil sunk to the lower regions of Prince William Sound, where it continues to produce silent, dull havoc on biological systems.

The rich estuaries of Prince William Sound have implications for global fisheries, particularly salmon and herring. Both species are important for the food chains of the oceans, so extrapolate about how far reaching this damage has been -- like most scary things, it's hard to spin out all the ramifications and losses... this was a disaster larger than any human mind can grasp. And its consequences continue.

We are evidently living in times when people operate in such complex organizations that they lose their sense of personal responsibility, and are able to fairly easily 'opt out' of any sense of personal culpability. I fully anticipate that Exxon has framed this so narrowly (as 'maritime' law) that they'll weasel out of any legal culpability.

Corporations are amoral; that's why they're so efficient in marketplaces.
Until we alter those dynamics, we're impacting the biological underpinnings of life.

Movie tip: Go see Michael Clayton (with George Clooney and Sidney Pollack). It's all connected to this general topic, and well worth your time if the whole topic of 'corporate responsibility' theme is of interest.

[readerOfTeaLeaves]

In addition, Michael Clayton includes scenes of corporate wiretapping, and corporate 'black ops'. Well worth viewing for any TNH regulars, as it deals with many themes discussed on the threads here.

[endgame]

EW....

If a decision is rendered... a 4 to 4 non-decision, who wins? And hasn't the amount of the fine been accrueing interest since the original fine was levied?

Alaska is the oil industry's fireplug....and Big Oil is the Big Dog, showering us with their disdain.

[emptywheel]

If it's a tie, the lower court's ruling stands (so they pay).

[bmaz]

ROTL - Yep, the incredible lack of morality and accountability in the current corporate mindset is exactly part and parcel with the discussion a week or so ago about how to reset things on the corporate end. With ever more conglomeration and globalization, the problem is only going to get worse if something is not done.

[mainsailset]

MarkH-your question leads via Google to a scam artist site...not really recommending you go there..."tomflocco.com" The sensationalistic story claims they have footage of Hillary sashaying into a Grenada Bank. It's a poorly written tale and not worth a plug nickel.

[earlofhuntingdon]

Limiting or doing away with punitive damage claims is a bete noire for Cheney. He has pushed for severe limitations on them for some time. This issue is tied at the hip with the GOP's fight against class action suits and the plaintiffs' lawyers (often Democratic Party leaning and supporting) who bring them - and the average Americans they are designed to help.

The GOP mislabels this campaign as a fight for "tort reform". Its real purpose is to defund Democrats, punish some of their most electorally popular candidates and richest supporters (eg, Paul Minor). Only incidentally does it protect defendant corporations by making it harder to sue them and by lowering their costs, which minimizes their punishment for negligent or intentionally wrongful conduct. (A lifelong quest for Lil' George.) That increases the likelihood that companies will continue to produce more faulty goods and services, "externalizing" the harm onto other actors such as customers, suppliers or the general public.

Punitive damages only have utility if they are high enough to deter unsafe conduct. How high depends on the resources of the bad actor. In Exxon Mobil's case, that's pretty high. $2.5 billion is material, but not heartbreaking. Their former chairman received about $400 million in compensation his last year in command.

[joel hanes]

and this is one of the reasons that I have not, to my knowledge, spent even one dollar on Exxon or Mobil products in eighteen years.

[readerOfTeaLeaves]

Phred, the Capt (Hazelton) was indisputably, undeniably drunk. He'd been identified as being Under the Influence on prior jobs, but they let him continue to pilot ships through storms in environmentally significant waters. (One would like to think that a major corporation would insist on a sober person at the helm of a ship representing millions in 'investment' for them, but I guess that makes me 'a dreamer'.)

In addition, the ship hit a well-known reef that's been in the spot at the north tip of Bligh Island for millenia. Not like it jumped out at the ship. Not like it suddenly appeared mysteriously, uncharted, by magic. And for today's Trivia Moment: 'Bligh Island' is named after the very Bligh, who was a junior officer on Capt James Cook's ship in the late 1700s. They first mapped the region and claimed it for England. Bligh later ended up in the South Pacific, and he's the same 'Bligh' who became notorious in Mutiny on the Bounty. As for Capt Cook's navigational skills, they must have been extraordinary. But equally important, he used the latest medical knowledge and INSISTED that his men eat lemons or limes each day. Hence, the English sailor became 'a limey', and was able to survive long voyages with enough Vitamin C to fend off scurvy and rickets.

Back to Bligh Island in spring 1987: double-hulled tankers had been proposed for oil tankers, but the oil companies got our Congressmen to give them a loophole. (Conclude safely that the shipyards needed the work, but the oil companies owned more Congressmen). And a key point man was our illustrious "Toobz" Stevens, he of the corruption cases. Yessirrreee...!

I'm not alone in assuming that the oil companies have owned Toobz Stevens gonads since Jesus was an infant. Nuf said. Sen. Toobz, so frequently the topic of EW's insightful posts, did his legislative best to ensure that single-hulled tankers filled with oil could toil through arctic waters laden with 'black gold' through narrow straits in biologically fragile environments. Oh, and that Bligh Island location where it went aground...? Notorious for vicious winds, riptides, and dangerous reefs.

Sen Toobz still lives to legislate drilling in ANWR. That notion is not yet dead, and has the lifespan of a zombie.

So the Supremes are gonna listen to the oil companies come right in and wanker away on a narrowly crafted 'maritime' law?
God help the human race, as that sounds like the toxicologists, wildlife biologists, fisheries bios' won't be included in the testimony about an enviromentally reprehensible event.

Here's the problem; things don't just 'bounce back'.
They simply don't.
The reason that Valdez became an oil tanker port was its 'deep harbor'. Which means there's a lot of surface bottom, very deep, for little clusters of nasty bits of heavy oil to fall into, onto, and drift around slowly beneath high pressures. They don't all just 'float up' and wash away; it may take years for those little toxic bundles to find their way up to the (relatively) warmer zones, where they are then nibbled by critters that are then eaten by other critters that you and I probably like to eat.

But WTF: it's all about 'maritime law', with no biological implications, evidently.
And SCOTUS is allowing it.
Glad to know those oil corporation attorneys are earning their big bucks.

[phred]

ROTL -- thanks for filling in the details and for the historical bits about Bligh and Stevens. My apologies for being glib about the captain's drunken state, I know he was drunk and should not have been a ship captain period. The "hooey" was intended to be directed at Exxon for trying to pin the entire disaster on the captain, when in fact there were significant other failures due to Exxon's business practices that contributed in large measure to the scope of the problem.

[readerOfTeaLeaves]

Phred, what a kind comment ;-)

Yeah, pathetic of Exxon to blame the ship's captain, although 'drunkeness' is just about as Alaskan as 'snow' (pun intended); rates of substance abuse in Alaska almost guarantee that some tragedy or another would (and will continue to) occur. Given the scale of technologies like oil tankers, disaster on a massive scale was inevitable -- or so many of us thought. (Correctly, as it happens.)
So it goes.

[Ed*ard Teller]

My son, now a college freshman was born in Palmer, Alaska as the spill was coming through some of he most beautiful places on earth, killing hundreds of thousands of animals. One of my friends nicknamed Alex "Slick," to note the spill....

[Ed*ard Teller]

phred and others - three points:

At a conference in Anchorage, in May, 1978, about impending regulatory change on PWS, as they were getting set to begin running the oil through, the late ornithologist Pete Isleib predicted "There will by a spill on the sound, either at Potato Point, Bligh Reef or Seal Rocks. It will most likely happen by 1988 or 1989.

The evening of the spill, as the Exxon Valdez headed down Valdez Arm, gaining speed, Oceonagrapher Rikki Ott, giving a talk to environmentalists in Valdez, when asked about the possibility of a spill stated "It isn't a matter of' if,' but one of 'when."'

A year and a half before the spill Exxon had in place an employee Assistance Program, designed to make sure that a trained substance abuse counselor could show up at any port visited by Exxon anywhere on the planet, any time. This is the only way those maritime industry programs had proven to work over the years. The program was cancelled in early 1988 to save $1.5 million (estimate) annually. That worked, eh?

[readerOfTeaLeaves]

Ed*ard Teller, good to see you here. You, too, must know some of the old sourdoughs (who made their own hootch, along with their own dried venison and dried (stinky!!!) herring roe), eh?

There are not yet laws for'biocide', but that's my term for events like the Exxon Valdez spill, and our media are not at all equipped to report well on them; these events need to be covered over time, and at every level of scale from weather patterns at 35,000 ft down to human blood cells. Explaining it all is a huge challenge, that's certain.

Word out of Tatitlek village, as well as Valdez and Cordova, was that the first thing Exxon did was hire every single float plane, every single boat, every single transport vehicle so they were all tied up and paid for before the MSM arrived to report on the scene. I gather that a whole lot of impacted Alaskans made a ton of unforeseen money on 'clean up' efforts.

I don't have clear stats on the cancer rates along Prince William Sound since 1987, so can't state the human cost in those terms. But knowing some of the substance abuse and education levels in Alaska, I infer that people exposed themselve to petrochemical toxins pretty innocently. They're used to be around boat oils and chemicals, and evidently they didn't realize the extent of the longer term impacts on their health.

Because of the lower population, and the inability of the MSM to get out early and really SEE and describe the extent of the initial spills, the Exxon Valdez wasn't as 'visual' as Katrina. I assume that you and I agree that it was an earlier event in the same alarming processes that involves the impacts of chemical (and nuclear) pollutants long-term on habitats, organisms, and -> moving forward in time -> soils, climates, oceanography, fisheries, and hydrological cycles.

A few photos of oil soaked birds don't even begin to tell the story of what happened in the Exxon Valdez spill; the MSM should have been giving monthly updates for the subsequent five years. But then, I'm a dreamer.

Meanwhile, the substance abuse issues in the oil industry, from my tiny view into that world, are huge. I've heard a few tales about West Texas that are just eye-popping. Same in Alaska; and insidious corruption in both places. And rising cancer rates.