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Exxon Valdez $2.5 billion oil spill ruling overturned

Discussion in 'Political Discussion' started by Holy Diver, Jun 25, 2008.

  1. Holy Diver

    Holy Diver Rookie

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    (cough) uuuuuuummmmm.......EXCUSE me?

    http://news.yahoo.com/s/nm/20080625/bs_nm/exxon_valdez_court_dc_5

    WASHINGTON (Reuters) - The U.S. Supreme Court on Wednesday overturned the record $2.5 billion in punitive damages that Exxon Mobil Corp (XOM.N) had been ordered to pay for the 1989 Exxon Valdez oil spill off Alaska.

    The nation's highest court ruled that the punitive damages should be limited to an amount equal to the total relevant compensatory damages of $507.5 million.

    In the court's opinion, Justice David Souter concluded that the $2.5 billion in punitive damages was excessive under federal maritime law, and should be cut to the amount of actual harm.

    By a 5-3 vote, the justices overturned a ruling by a U.S. Court of Appeals that had awarded the record punitive damages to about 32,000 commercial fishermen, Alaska natives, property owners and others harmed by the nation's worst tanker spill.

    Soaring oil prices have propelled Exxon Mobil to previously unforeseen levels of profitability in recent years, posting earnings of $40.6 billion in 2007.

    It took the company just under two days to bring in $2.5 billion in revenue during the first quarter of 2007.
  2. Real World

    Real World Moderator Staff Member

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    I don't know the nuts and bolts of the case, so I can't offer an opinion on the ruling itself, but BDS in the other thread, and these two lines in the article you provided, stick out to me. What bearing does Exxon's profit have to do with the legality of the case brought against them? The case is supposed to be judged according to the law, and wha's right or wrong. The ruling isn't supposed to be based on how much money Entity X takes in, or how much profit Company Y made last year. There is no reason for Reuters to have even put that in the article. It's irrelevent to the case. The only reason they did so, is to tag into the negative emotion that exists against Exxon. Basically what Reuters is subtly implying is that the court ruling is wrong cuz Exxon took in $2.7 Billion last quarter, and made $40 Billion last year. That's ridiculous. The court should base everything on right & wrong. Period.
  3. PressCoverage

    PressCoverage Banned

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    just another example whereby a corporation doesn't learn a thing because it doesn't have to pay enough to feel a pinch in the wake of destruction upon the environment... how many times have we seen it before?

    to an unethical corporation, what it always comes down to is, "will the fine be cost effective in comparison to a recall or cleanup? if so, fine us. we'll keep doing what we do."
  4. shmessy

    shmessy Maude Staff Member PatsFans.com Supporter

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    #75 Jersey


    Excellent point, RW. But then WHY do I read in there that Souter's rationale for lowering the settlement was NOT based on the legality, but on the dollar amount? You just said that dollars shouldn't dictate the case, only the legality - - but Souter rationalized that the punitives should not be larger than 1x the damages - - isn't that a monetary rationale also?
  5. otis p. driftwood

    otis p. driftwood Rookie

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    Excessive under the law, Shmess. Why has this gotten under your skin so hard?
    :confused:
  6. Real World

    Real World Moderator Staff Member

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    Thanks paul. Also, the dollar amount of the penalty in question, is directly linked to the case. The dollar amount in question is related to the damages sought. What Exxon made has nothing to do with any of that. If you run me down with your car, and I sue, are your earnings 20 years later relevent to the judgement, or legality, of the case? Absolutely not. The only dollar amounts that matter would be the amount I am seeking from you.

    Let me repeat that I don't know the case specifics, and am in no way saying the ruling is just or not. I'm simply taking exception to the notion that Exxon making money means they should be guilty.
  7. PressCoverage

    PressCoverage Banned

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    it's interesting that "federal maritime law" excuses a corporation from punitives...

    somehow, i doubt $500M remotely adds up to the suffering people and animals endured, ever since, in that region....
  8. otis p. driftwood

    otis p. driftwood Rookie

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  9. shmessy

    shmessy Maude Staff Member PatsFans.com Supporter

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    #75 Jersey


    I dunno, something about the Supreme Court's stated job being ruling on what is or isn't Constitutional.

    Maybe someone can help me here, but when did the SC get into the business of legislating settlement amounts?

    Can they now pass laws and sign treaties with foreign countries?
    Last edited: Jun 25, 2008
  10. PressCoverage

    PressCoverage Banned

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    You mean the nine ringwraiths? They only do Sauron's bidding.
  11. shmessy

    shmessy Maude Staff Member PatsFans.com Supporter

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    #75 Jersey


    I agree with you 100% on the irrelevance (legally) of the profits of Exxon in this case. No argument there.

    Why then (warning: irony approaching) is Souter rationalizing this decision based on the "excessiveness" of the dollar amount in comparison to the penalty?????

    Read clearly here: The Supreme Court (which to my very basic understanding from Civics classes as a kid) is to rule on the Constitutionality of arguments - - not set subjective monetary penalty limits. When did they get into the financial penalty assessment business?
  12. otis p. driftwood

    otis p. driftwood Rookie

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    Didn't he offer an explanation based on maritime law? I haven't looked at the decision, just the yahoo link provided.
  13. DarrylS

    DarrylS PatsFans.com Supporter PatsFans.com Supporter

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    Articulated well, the big companies do pretty much as they please and if caught a slap on the wrist.
  14. shmessy

    shmessy Maude Staff Member PatsFans.com Supporter

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    #75 Jersey

    Doesn't matter. He can offer up as many legal precedents as he wants - - his job is to interpret the Constitution.

    I'm no legal expert, so please, someone enlighten me if I'm wrong when saying 'setting financial punishment parameters is NOT what the Supreme Court is tasked to do'.
  15. reflexblue

    reflexblue PatsFans.com Supporter PatsFans.com Supporter

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    #91 Jersey

    If it cost 500+million to clean up the mess originally imo Exxon should just have to pay that plus a small penalty maybe another 500 mill. I know they have the money, but just because they have the money to pay 2.5 billion is inconsequential.
    Last edited: Jun 25, 2008
  16. shmessy

    shmessy Maude Staff Member PatsFans.com Supporter

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    #75 Jersey

    Once again, I agree that their overall business success should have no bearing on the punishment.

    The other question to ask is "If it cost $500 million in damages in 1989, and Exxon delayed paying the punitives until 2008, then shouldn't they be penalized at LEAST the 1989 value in TODAY'S dollars for their delay? I.E. if $500 million in 1989 is the equivalent to $1.2 billion today (using approx. 4% inflation average over the past 19 years).

    ......or was that the Exxon strategy all along - - delay through the courts for a couple of decades so that the fine gets eaten down by inflation?
    Last edited: Jun 25, 2008
  17. otis p. driftwood

    otis p. driftwood Rookie

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    So you're not into all this touchy feely international law crap that some of them have gotten into huh?
  18. reflexblue

    reflexblue PatsFans.com Supporter PatsFans.com Supporter

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    #91 Jersey

    I can see your point but it HAPPENED in '89,not 2008,so why should they be penalized at the '08 real dollar amount. The only reason i can think of is that they Exxon kept appealing the original ruling and dragged it out for 19 years. And the final ruling is takes place in '08.
    Last edited: Jun 25, 2008
  19. Real World

    Real World Moderator Staff Member

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    I couldn't answer that because I don't know the case specifics, and haven't read the decision. I'm not a lawyer mind you (always wanted to be), but an explanation might offer an idea as to why. It's an interesting question, and I'm sure it's one that there's an answer to.
  20. Real World

    Real World Moderator Staff Member

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    According to the article they've already dished out $3.4 Billion.

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