Friday, December 29, 2006

A Very Interesting Thing Happened on the Way to Justice

This particular interesting thing relates to Exxon and the ages-ago Exxon Valdez oil spill across a goodly part of the coast of Alaska. Seems their captain went aground with a tanker and, the next thing we knew, people were up there mopping ecosystems and sponging (as best they could) crude oil off the feathers of various and sundry birds.


Exxonvaldezbird This particular interesting thing relates to Exxon and the ages-ago Exxon Valdez oil spill across a goodly part of the coast of Alaska. Seems their captain went aground with a tanker and, the next thing we knew, people were up there mopping ecosystems and sponging (as best they could) crude oil off the feathers of various and sundry birds.

Before Exxon went to trial, they agreed to settle a laundry-list of damage claims, that included

  • Paying the State of Alaska and the United States $900 million over a 10-year period. This money would be used for restoration and would be administered by six government Trustees; three federal, three state.
  • In settlement of criminal charges, Exxon would pay a fine of $250 million. Two "restitution funds" of $50 million each were established, one under state control and one under federal authority.
  • Against strong opposition from many Alaskans, $125 million of the balance was forgiven due to Exxon's cooperation during the cleanup, and upgraded safety procedures to prevent a reoccurrence. The remaining $50 million was divided between the Victims of Crime Act account ($13 million) and the North American Wetlands Conservation Fund ($12 million).

Exxonspill That’s about $1.125 billion over ten years for a company (at that time) earning about $16 billion a year. So much for the agreed-upon damages.

There were punitive damages sought and exhibits, testimony and other good things spread out in front of a jury—a veritable smorgasbord of proofs attended by experts on both sides of the table, tucking in to the evidential goodies. Punitive damages are money amounts awarded because a company or person is charged able to avoid the damage they caused—and didn’t.

The jury was selected as juries are, from among registered voters. The process provides ample opportunity for either side to object (or strike without objection) their requisite number of jurors. It’s imperfect, but as perfect as it can be made.

Exxoncleanup The Exxon Valdez trial, 12 years past now, took a long time. Exxon defended itself as best it could from charges of bad captaining and creating a hell of a gooey mess along some 1,500 miles of Alaskan coast. After all the testimony was presented

  • The jury was instructed by the judge of the choices open to them
  • That same jury deliberated, well or badly, as juries are wont to do
  • The jury found, as they were allowed to find, an award of punitive damages in the amount of $5 billion

and then the fun began. 

Justice We live with the myth of trial by jury in this country, but it ain’t necessarily so. What we have is trial by appeal, where the process is only accessible to the rich. The jury is composed of appointed judges, once one has risen above the lower courts. These judges are appointed by (surprise!) the rich.

If you’re rich, or powerful or (best of both worlds) rich and powerful, the storied juries of our mythology are merely a starting point. Winners and losers walk out of court frowning or smiling at the jury’s decision and the real judgmental process begins—that of the topsy-turvy world of the appellate courts.

Money_3 Just a quick word about the appellate process. In order to appeal a verdict, the individual (or corporation) has to put up an amount equal to the total award in escrow (a third party who holds the money). In essence, that means if you are of moderate means, you are withheld from the appeal process by circumstance. Even if you are the loser, to appeal, you must put up an amount equal to what the winner won. Justice may be blind, but it peeks out of the corner of its blindfold in the direction of the wealthy.

Interestingly, for the 12 years the Exxon award has been bouncing around the appellate courts, it’s been earning a dandy amount of interest. $90,000 an hour while in escrow, about $2 million a day, $800 million a year and that means $9.6 billion so far.

How punitive is that, for a company that earned $36 billion last year?

But that’s not my complaint. The rich live by different rules and always have. My complaint is that we have justice in this country, not by a jury of our peers, as has long been taught in civics classes, but by justices appointed to various levels of appellate courts. We don’t even elect these guys. They are appointed by governors and presidents and they get the job because they play ball with the power structure.

The ability to appeal judgments made in error is a cornerstone of American justice. But the overturn of jury awards just because the loser thinks the amount is too high disarms us in punishing the guilty, particularly when the guilty are rich. Tobacco and pharmaceutical companies come to mind, as do investment banks and savings and loan organizations.

To be disarmed in the very courts where we seek redress is to be made a mockery. The current halving of Exxon damages is just such a mockery. In dissent, appellate court Judge James Browning ruled that $5 billion verdict should remain intact, writing there ''is no principled means by which this award should be reduced.''

Adding insult to injury, Exxon is presently considering the appeal of even that award.
___________________________________________________
Media comment;

DICK CHENEY'S FINGERPRINTS, the book, by Jim Freeman