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The Supreme Court rules that damages awarded due to the Valdez accident should be reduced.

 

U.S. Supreme Court orders reduction in Exxon Valdez award

 

By Mark H. Anderson

 

WASHINGTON (MarketWatch) -- The U.S. Supreme Court, in a fractured ruling, said punitive damages are allowed in a lawsuit over the 1989 Valdez oil spill but that lower courts should reduce the $2.5 billion award.

 

Justice David Souter, in the court's majority opinion, said the punitive damages award should be brought into line with $287 million in compensatory damages awarded against Exxon in the lawsuit. "The award here should be limited to an amount equal to compensatory damages," Souter wrote.

The high court otherwise split evenly 4-4 on an important maritime law question in the case but concluded that federal environmental laws don't bar punitive damages against the oil giant.

 

The Exxon Valdez spilled millions of gallons of oil into Alaska's Prince William Sound almost 19 years ago in one of the largest environmental accidents in U.S. history. The company has paid over $3.4 billion in remediation, fines, compensation and other costs.

 

The case before the court was brought separately by a class of 32,677 fishermen and other interests that had business disrupted by the oil spill. The case has been in litigation for 13 years, a timeframe in which the plaintiffs allege 20% of those eligible for damages have died.

 

Exxon Mobil had attacked the award on several fronts, arguing that maritime law doesn't allow punitive damages awards and that the federal Clean Water Act, which guided more than $900 million in sanctions and fines related to the spill, also bars the punitive damages award. Neither argument appeared likely to prevail in the eventual Supreme Court ruling.

 

The lawsuit before the court began in 1994, almost five years after the Valdez supertanker dumped 258,000 barrels of oil into the Prince William Sound. After a lengthy trial, a jury awarded those harmed by the spill $287 million in compensatory damages and $5 billion in punitive damages.

The 9th U.S. Circuit Court of Appeals in San Francisco first ruled in the case in 2001 when it upheld damages against Exxon Mobil but ordered the trial court to reduce the award. A second appeal to the Ninth Circuit was decided in 2006 that upheld the $2.5 billion in punitive damages.

 

The case is Exxon Shipping Co. and Exxon Mobil Corp. v. Baker, 07-219.

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Reduce a 2.5 billion dollar punitive damage award? Exxon's 2007 profit was 40+ billion dollars. Not income... profit.

 

Does anyone know what punitive damages are, and what they are supposed to accomplish?

 

Punishing someone for destroying a coast by making them pay < 6% of a single year's profit isn't going to affect the way they do business. This amount was a gift... and it's getting reduced.

 

Nice.

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They've paid way less than the actual cost of the spill.

 

What was the actual cost of the spill? How much have they paid? They definitely should pay for the cost of the spill, and I agree with the court that punitive damages should be paid, but the amount of punitive damages in this case was ridiculous. I may be wrong, but aren't punitive damages generally assessed when someone knowingly does something wrong multiple times. Valdez was an isolated incident, and it was not the board of directors or the stockholders who ran the ship aground. Again, I think they should pay 100% of the clean up cost, possibly some punitive damages, if they knew the captain was an idiot, but the amount of the punitive damages is just stupid.

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Reduce a 2.5 billion dollar punitive damage award? Exxon's 2007 profit was 40+ billion dollars. Not income... profit.

 

Does anyone know what punitive damages are, and what they are supposed to accomplish?

 

Punishing someone for destroying a coast by making them pay < 6% of a single year's profit isn't going to affect the way they do business. This amount was a gift... and it's getting reduced.

 

Nice.

 

Yes, because Exxon deliberately spilled oil. How can a company, any company be responsible for everything their employees do? You can try your best, but you can't monitor employees 24 hours a day. You run background checks, you do periodic drug testing etc.., but people screw up, is that a company's fault?

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Yes, because Exxon deliberately spilled oil. How can a company, any company be responsible for everything their employees do? You can try your best, but you can't monitor employees 24 hours a day. You run background checks, you do periodic drug testing etc.., but people screw up, is that a company's fault?

Yeah... I kind of think it is.

 

If people got poisoned because some cat in a spam plant was smoking crack at lunch - the company in responsible for the damages

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Yes, because Exxon deliberately spilled oil.

 

The guy was hammered on the job, and Exxon knew it was a problem. Hence, why they lost the lawsuit. The facts are not in dispute.

 

How can a company, any company be responsible for everything their employees do? You can try your best, but you can't monitor employees 24 hours a day. You run background checks, you do periodic drug testing etc.., but people screw up, is that a company's fault?

 

I do not accept as an excuse "The company was too f'n big to run itself properly". Sorry.

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Yeah... I kind of think it is.

 

If people got poisoned because some cat in a spam plant was smoking crack at lunch - the company in responsible for the damages

 

If the company knows the cat is smoking crack, then I would agree with you, but if the company doesn't then how are they responsible and not the individual. It seems that most of the people that want to jump on corporations to take responsibility are the same ones that rarely hold individuals responsible, and 99% of the time it is individuals that screw up, and cause harm. I can see going after the individuals both in civil and criminal court, and possibly management if management had prior knowledge, but going after corporations for the acts of individuals they employee is crazy. Go after the people that did the wrong, not the stock holders, which is who will be paying when a corporation is sued.

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The guy was hammered on the job, and Exxon knew it was a problem. Hence, why they lost the lawsuit. The facts are not in dispute.

 

 

 

I do not accept as an excuse "The company was too f'n big to run itself properly". Sorry.

 

Maybe if you had to manage an organization you would feel otherwise. You can't know what all of your people are doing all of the time. People make stupid mistakes. Based on your theory, anyone who has haver done drugs, or ever been drunk should be either unemployed or self employed.

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If the company knows the cat is smoking crack, then I would agree with you, but if the company doesn't then how are they responsible and not the individual. It seems that most of the people that want to jump on corporations to take responsibility are the same ones that rarely hold individuals responsible, and 99% of the time it is individuals that screw up, and cause harm. I can see going after the individuals both in civil and criminal court, and possibly management if management had prior knowledge, but going after corporations for the acts of individuals they employee is crazy. Go after the people that did the wrong, not the stock holders, which is who will be paying when a corporation is sued.

what if your dad's company build a tower that fell to the ground causing a great loss of life and property damage and it happened because the guy in charge had a drug or alcohol problem.

 

whether the company knew about the guys issue or not... what would happen to your dad's company.

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what if your dad's company build a tower that fell to the ground causing a great loss of life and property damage and it happened because the guy in charge had a drug or alcohol problem.

 

whether the company knew about the guys issue or not... what would happen to your dad's company.

 

My first question would be why did it fall to the ground?

 

What is going to happen is we are going to get sued, along with the trade contractors involved in what ever failed, the architects, and the engineers, and regardless of who was at fault, more than likely everyones insurance company is going to settle. I'm not saying what will or will not happen, but what should or should not happen. If our company does random drug tests, and the guy comes up clean every time tested, and we have no knowledge of it my question is why should we be penalized beyond actual damages?

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Those are the same thing. Leave the financial jargon to us financial nerds. TIA

 

Income, refers to consumption opportunity gained by an entity within a specified time frame, which is generally expressed in monetary terms.[1] Usage of the term may, however, be somewhat ambiguous. For households and individuals, "income is the sum of all the wages, salaries, profits, interests payments, rents and other forms of earnings received... in a given period of time."[2] For firms, income generally refers to net-profit: what remains of revenue after expenses have been subtracted.[3]

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If our company does random drug tests, and the guy comes up clean every time tested, and we have no knowledge of it my question is why should we be penalized beyond actual damages?

 

The cost of doing business?

 

...and how can you put a cost on certain actual damages. Like in Alaska... the loss of animal life... the hit to the fisherman.... the enviromental damages, etc

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Maybe if you had to manage an organization you would feel otherwise. You can't know what all of your people are doing all of the time. People make stupid mistakes. Based on your theory, anyone who has haver done drugs, or ever been drunk should be either unemployed or self employed.

Respondeat superior, my man. The master is responsible for his agents. While there are certainly exceptions to that general rule, that's still the rule.

Edited by yo mama
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