TPT January 2008

From the AmericaS

aground in Alaskan waters in 1989. Even after reduction from the $5 billion awarded by a federal jury in Alaska in 1994, the $2.5 billion levy – approved by a federal appeals court for a group of nearly 33,000 individuals – is America’s largest-ever punitive damages award. The case was urged on the justices by a number of business interests including the US Chamber of Commerce, which said in 2006 that this Supreme Court is the most business-friendly in years. However, Justice Samuel A Alito Jr, who holds stock in ExxonMobil and did not take part in the decision to hear the case, may also take himself out of the deliberations. If the case is heard by only eight of the nine justices, and they break four-four, the award will stand. The high court will not consider whether the punitive damages award is so large that it violates the Constitution’s guarantee of due process, as ExxonMobil had requested. The justices will confine themselves to considering whether maritime law and the US Clean Water Act allow for punitive damages and, if so, whether the award is excessive. The question of how much punishment is too much for the world’s largest corporation by revenue ($377.6 billion in 2006) and by market capitalization ($517.92 billion as of mid-2007) is an interesting one. ExxonMobil argues that it has already paid $3.4 billion in cleanup costs and other penalties for the oil spill, which polluted 1,200 miles of the coastline of Alaska: an adequate punishment, in its opinion.

In the opposing view, the $2.5 billion award for punitive damages can seem almost negligible. The lawyer representing the petitioners against ExxonMobil’s appeal countered in his brief that it “represents barely more than three weeks of Exxon’s current net profits.”

The case is Exxon Shipping Co. v. Grant Baker (07-219).

› The circumstances of the worst oil spill in US history “which begat the costliest punishment in US history” were recapped by Robert Barnes of the Washington Post (Oct. 30): At the original 83-day trial in 1994, the group suing Exxon presented evidence showing that the ship’s captain was drunk at the time the Valdez ran aground in Prince William Sound, and had turned over control of the ship to someone unfamiliar with the bay’s reefs. More than 11 million gallons of oil were spilled. “Unlike any other ship-owner of which we are aware,” the plaintiffs claimed, “Exxon placed a relapsed alcoholic, who it knew was drinking aboard its ships, in command of an enormous vessel carrying toxic cargo across treacherous and resource-rich waters.” › In other news of Exxon Mobil, the company has said it intends to build a second chemicals factory in Singapore to meet rising demand in Asia. The plant will cost “several billion dollars” and will start up in 2011, a company spokeswoman based in Singapore said Sept. 6. At the heart of the new plant is a cracker, which processes naphtha, an oil product, into ethylene for plastics manufacture. The installation is also expected to produce polyethylene and polypropylene.

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J anuary 2008