High Court slashes Exxon Valdez fine

Exxon Mobil has good friends on the U.S. Supreme Court. This was evident on June 25. That’s when the high court justices handed the oil giant a big victory as they voted 5-3 to reduce the punitive damages’ award it had to pay in the Exxon Valdez lawsuit.

Five justices cut the oil giant’s punitive damages to $507 million from a lower court’s award of $2.5 billion. The lower amount is a drop in the bucket for Exxon Mobil Corporation, the world’s most profitable corporation, which made a record-breaking $40 billion in profits in 2007. These profits were garnered by charging the highest price on record for barrels of oil and by gouging consumers worldwide with exorbitant fuel prices.

The oil conglomerate could easily cover the high court’s damage award with four-and-one-half days of earnings from profits. (That’s only $107 million more than former Exxon Mobil Chairman Lee Raymond’s retirement package in 2006!)

For nearly 20 years, 32,677 plaintiffs—fishers and Indigenous community members, among others—were joined together in a class-action lawsuit to gain justice for the economic injuries they suffered in the worst oil spill in U.S. history and to hold the oil corporation accountable. They were outraged and devastated by the court’s ruling, which will give them each on average $15,000—much lower than the losses many suffered and one-fifth of what they would have received under the $2.5 billion award. Six thousand plaintiffs died waiting for the settlement.

The history of this case is rife with capitalist greed, corporate wrongdoing and refusal to take responsibility, and complicity by the courts.

The notorious disaster occurred on March 24, 1989, when the oil tanker Exxon Valdez hit Bligh Reef, off the Alaskan coastline, spilling 11 million gallons of crude oil into the waters of Prince William Sound and polluting 1,200 miles of Alaska’s seacoast. Within five months, the oil had spread, covering 10,000 square miles of water; it is still all over the beaches.

This environmental disaster impacted thousands of people who earn their living from the sea; many people lost everything they had. Coastal Indigenous subsistence communities were harmed; many couldn’t hunt and gather on beaches for years afterwards. Monumental and lasting damage was done to the ecosystem. Untold numbers of fish and other animals, including 500,000 birds and 4,500 sea otters, were killed.

Plaintiffs were awarded $287 million in compensatory or actual damages and $5 billion in punitive damages by an Alaska jury in 1994. Exxon Mobil appealed. A higher court cut the damages to $4 billion. The oil titans refused that settlement and appealed again. In 2006, the 9th U.S. Circuit Court cut punitive damages to $2.5 billion.

Driven by insatiable greed and with callous disregard for those affected by the disaster, Exxon Mobil appealed again, this time to their allies on the U.S. Supreme Court, seeking to eradicate all punitive damages. They were royally rewarded when the high court rolled back the damages award.

Showing unbridled greed, the oil giant even maneuvered to get 11 percent of the $507 million award given to them! (Anchorage Daily News, June 26)

Big business applauded the Supreme Court’s ruling. It set a legal precedent which can have far-reaching ramifications: The majority invented a rule that limits punitive damages against corporations in maritime cases to equal compensatory damages—$507 million in this case.

Dissenting Justices Stephen G. Breyer, Ruth Bader Ginsburg and John Paul Stevens said the court should not legislate rules limiting punitive damages to those of compensatory damages. (Justice Samuel Alito did not vote because he owns Exxon stock.)

Environmental and other progressive activists and attorneys fear this judgment will be used as precedent—to stop or limit lawsuits seeking to penalize and prevent any corporate wrongdoing and to give the go-ahead to corporate plunder of the earth with impunity.

The decision also strikes a blow against jury-awarded settlements. At every level, the courts sided with Exxon Mobil. That shows U.S. courts are not neutral arbitrators of class and political conflict, but a part of the state apparatus which intervenes solidly on the side of the capitalist class to protect private property.

The courts cannot be relied on to provide justice on issues like environmental destruction—nor on any issue. Only militant mass movements and people’s struggles will push them to make decent decisions and help restrain the corporations.

The capitalist class has no regard for protecting the environment or anything on the planet, including all life that inhabits it. Ravaging the earth is endemic within their system. Everything is about the insatiable drive for expansion and ever-greater profits. Nothing is sacrosanct except the almighty dollar—or billions of dollars.

Yet there is a system that makes respect for the planet and its residents the top priority; that is socialism.

Sources for this article include The Anchorage Daily News and ExxposeExxon.com.