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Friday, July 25, 2008

Senate Judiciary Committee Investigates Disturbing Court Trend

It’s not often the Senate Judiciary Committee convenes to discuss the repercussions of a drunk driving case, but on Wednesday, they did just that. Of course, the Exxon-Valdez oil spill, caused by a drunken ship captain, is more than your typical DUI. And in the end, the consequences of the recent Exxon v. Baker Supreme Court case—which the hearing was centered around—may have effects as destructive and long-lasting as the oil spill itself. Here’s the quick rundown on Exxon: $5 billion punitive damage award is cut in half by the Ninth Circuit Court of Appeals, and further reduced to just $507 million, bringing the ratio of compensatory to punitive damages to a mere 1:1. And now, Exxon is fighting tooth and nail to further swindle the Alaskans that were adversely affected by the spill, claiming they shouldn’t have to pay interest on the sum.

This claim becomes even more outrageous when you consider the enormous financial toll the spill has taken on the fish industry and on tens of thousands of Alaskan citizens—it didn’t just destroy habitats and wildlife, it destroyed livelihoods as well.

It was a decision with a decidedly pro-business bent, and the hearing (entitled “Courting Big Business: The Supreme Court’s Recent Decisions on Corporate Misconduct and Laws Regulating Corporations”—say that three times fast) was a necessary step. It provided a forum for the voices of Alaskans to be heard, as Osa Schultz, a fisherman from Cordova, took the mic and spoke out against the decision. “As great as our losses are, and they are significant, equating punishment to a multi-billion dollar corporation with the losses of self employed fishermen such as my husband and me, is in no way punishment or deterrent, much less justice,” she said. Schultz added that “Exxon stands to pay pennies on the dollar” for their gross negligence.

Schultz gave a face to the 32,000 Alaskans that filed suit and articulated the economic predicament, as well as the outright pain, they have suffered. The compensatory damages awarded hardly seem compensatory when you listen to what Schultz has to say—the spill didn’t just ruin a few years worth of catches, it completely devastated the fishing industry, possibly beyond the point of recovery. Even with the interest paid, Schultz said, the current ruling will still net huge losses on investments made in the industry by many Alaskans before the spill. And in an ironic twist of fate, even when some waters around the accident became fishable years ago, the loss of capital that resulted from the bankruptcy of many processing plants prevented that income from being generated. The oil spill just kept adding injury to more injury.

As heart-wrenching as Schultz’s testimony was, the Exxon case was really just a jumping off point for this hearing, which considered business practices ranging from un fair pay (and Ledbetter v. Goodyear) to pre-emption and arbitration. It’s nothing we haven’t heard before, but Harvard law professor Elizabeth Bartholet and former arbitrator gave a fresh viewpoint on the subject. Everyone on the bench , she testified, feels the institutional pressures that can help generate pro-business decisions: For example, if a judge wants a credit card, she had better rule in favor of the credit card company.

In the end, however, it was committee chairman and thespian Patrick Leahy (D-VT) who simplified the discussion. When the courts stop looking out for the American citizen, he said, it’s time to rethink some things. “The scales of justice appear to be tilting too quickly one way,” he said. “If anything, it may be a warning shot that some of the laws we've written are not being followed.”

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