Justice delayed is justice denied. After the 1989 Exxon Valdez oil disaster, Exxon was found guilty by an Alaska jury and ordered to pay about $5 billion in punitive damages ? this was about one year’s profit for the oil giant. Eleven years later, Exxon has not paid a dime of the punitive damage award. Even the Rand Institute for Civil Justice, funded in part by insurance companies, recently noted the importance of such penalties, “Punitive damages are designed to punish a defendant for grossly inappropriate action and, in so doing, to deter further such actions by signaling that their consequences can be severe.”
In a March 25, 1999 letter to Exxon CEO Lee R. Raymond the National Association of Attorneys General said, “Each year Exxon delays payment of its obligation it earns an estimated $400 million from the difference between the statutory interest rate on judgments of 6 percent and the company’s internal rate of return of about 14%.”
For the 40,000 human victims of the oil spill and for environmentalists everywhere this civil fine was modest for a corporate wrong that resulted in a massive spill of 11 million gallons of oil over Alaska’s waters and more than 1300 miles of shoreline.
The spill was extremely hard on the Alaska Natives on Prince William Sound and the long Alaska coast. Their subsistence and cultural lives that had existed for millennia were severely disrupted. The lives of commercial, fishermen and their historical communities were rocked.
Eleven years later one can kick over rocks on the shore of Prince William Sound and find Exxon crude oil. Much of the clean up was superficial.
When the Supreme Court decision was announced, many observers of corporate misdeeds were surprised that the fine was still unpaid. On the tenth anniversary of the spill, Exxon mounted a campaign with some supportive scientists to convince the world that all damage had been contained, and the Sound had returned to its pristine state. Mendacity often abounds when big oil companies talk about their oil spills. More than 200,000 birds and 2,000 sea otters died after the spill. Many scientists, including Dr. Ricki Ott, believe the damage to bird species, fish, and sea mammals is permanent. Some bird and salmon species essential to the region and its inhabitants are said to be “recovering,” while others, like the common loon, cormorant, harbor seal and harlequin duck are faring less well.
More over, the chairman of the federal-state oil spill commission, Walt Parker, decried the failure of oil companies or the state and federal government to implement recommendations of the spill commission designed to prevent new disasters.
Despite the recent denial of an appeal by Exxon to the US Supreme Court, Exxon company spokesman Tom Cirigliano said, “This is just one of several issues that needs to be resolved by the courts. It leaves our case very strong.”
Exxon engaged in a legal war of attrition while thousands of Alaskans and others suffered. Exxon media flaks and other corporate “spin masters” often call litigation “frivolous” when they are defendants. What is truly frivolous is Exxon’s legal foot dragging in this case.
Federal and state government officials could have encouraged Exxon to pay the punitive fine when the oil giant wanted to merge with Mobil. No such pressure emerged from Alaska state officials, the Alaska Congressional delegation, or the Clinton administration. Adding insult to injury Alaska’s governor Tony Knowles worked hard to pass a tort “deform” bill that made sure that big punitive damage awards for future spills would have to meet even higher standards of proof than the ones applied by the federal court in the Exxon case. As the head of the oil support firm, appointed by Governor Knowles’ citizen’s task force, remarked to the head of an oil-and -gas lobbying group, “We don’t want any more Exxon Valdez Jury Awards.”
The tobacco, pharmaceutical, auto, oil, chemical, and health care industries, and their insurers, have fought to limit peoples’ rights to sue and to further limit their own liability for the damages they cause innocent victims.
The civil justice system provides our society with its moral and ethical fiber. When the rights of injured consumers are vindicated in court, our society benefits in countless ways: by compensating injured victims and shattered families for unspeakable losses (and saving taxpayers from having to assist them); by preventing future injuries by removing dangerous products and practices from the marketplace and spurring safety innovation; by educating the public to unnecessary and unacceptable risks associated with some products and services through disclosure of facts discovered during trial; and by providing authoritative judicial forums for the ethical growth of law where the responsibility of perpetrators of trauma and disease can be established.
Exxon’s negligence is almost matched by its shameless use of dilatory legal tactics.