In Exxon Shipping v. Baker five Supreme Court Justices proved to be dancing puppets of corporations that control all branches of government. The Court thumbed its nose at American citizens and granted "Get Out of Jail Free" cards to corporations to trash America, American citizens and their natural resources carte blanche in the single-minded pursuit of increased profits.

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In Exxon Shipping v. Baker five Supreme Court Justices proved to be dancing puppets of corporations that control all branches of government.

The Court thumbed its nose at American citizens and granted "Get Out of Jail Free" cards to corporations to trash America, American citizens and their natural resources carte blanche in the single-minded pursuit of increased profits.

On June 25 in Exxon Shipping v. Baker, No. 07-219, the Supreme Court squarely avoided opportunities to rationally and impartially rule on two issues: Whether (1) a District Court finding that punitive damages that actually would be punitive were justified and appropriate for twelve years of blatant fraud committed by high-level management of Exxon, or (2) whether punitive damages previously imposed were excessive and could be negated by a court-written statute as being "not in the best interests of a well-functioning legal system".

On both issues, the Court ruled squarely against the interests of its human citizens, in order to provide more important corporate citizens with limits on and predictability of punishment for intentional, malicious wrongdoing undertaken for increased profits.

Justice Alito recused himself due to ownership of over $100,000 of Exxon stock. Five Justices ignored mountains of evidence and established case law supporting multiple rulings of the District and Circuit Courts, refused to honor the discretion of both the trial judge and the District Court of Appeals, overturned a jury's legitimate findings based on the evidence and in effect wrote a new statute based on an infantile attempt at statistical analysis and flimsy or non-existent excuses desperately grabbed from thin air.

In the process five Justices blatantly displayed themselves to be nothing more than obedient, fawning and dancing puppets of corporations that control America and all three branches of its government. The Court in effect thumbed their noses at American citizens and granted "Get Out of Jail Free" cards to corporations to trash America, American citizens and their natural resources carte blanche as required or desired in the single-minded pursuit of increased profits, resulting harm be damned but not punished.

In July 1957 a commercially viable oilfield was discovered in the Swanson River area of Alaska, within the Kenai National Wildlife Refuge. Kenai was established by President Roosevelt in 1941 to protect habitat of a large population of moose and over 200 other species, including Bald Eagles, Trumpeter Swans, brown and black bear and wolves. Oilmen did not view the refuge's environmental sensitivity as a major stumbling block to development.

This discovery established that Alaska could support itself through privatized exploitation of natural resources without being a burden on the federal budget. Statehood quickly followed, in July 1958. As did the first Alaskan oil and gas lease sale in 1959 and initial commercial oil production from Swanson River in 1961. By June 1962, fifty wells had been drilled.

Discovery of a major oil field at Prudhoe Bay on the North Slope was announced in March 1968 by Humble Oil, which was 98-percent owned by Standard Oil of New Jersey, now called Exxon Mobil. Oil was to be collected from over 3,300 wells and transported through a 48-inch diameter 800-mile long pipeline to a tanker terminal to be built at Valdez, at the head of Prince William Sound.

Environmentalists predicted disaster and filed a lawsuit in April 1970. Gasoline shortages occurred in the United States following the October 1973 Yom Kippur War. Congress responded with passage of the Trans-Alaska Pipeline Authorization Act in January 1974, which exempted the pipeline project from legal challenges on environmental grounds. Construction of the $8-billion Trans-Alaska Pipeline began in April 1974 and was completed in May 1977.

On March 24, 1989 the predicted disaster occurred. The oil tanker Exxon Valdez, owned by an Exxon subsidiary, ran aground at Bligh Reef in Prince William Sound. About 10.8 million gallons of crude oil were released in the worst oil spill in history. A 3,000-square mile oil slick quickly resulted. Eventually, 11,000 square miles of ocean were covered with oil, stretching 470 miles southwest to the village of Chignik.

About 1,300 miles of shoreline were contaminated. Hundreds of thousands of birds and marine animals, including harbor seals, sea otters, river otters and orca whales died. Best estimates are that between 250,000 and 500,000 birds were killed, including 250 bald eagles.

Of particular importance to the Chugach Natives of the Valdez community, who depended on fishing for their livelihood, billions of pink salmon and herring eggs were destroyed.

Damages to natural resources were amicably "resolved". In September 1991 Alaska and the federal government signed a consent decree with Exxon that released all present and future claims against Exxon for damages to natural resources, in return for Exxon's payment of $90 million annually for ten years. Exxon recovered a significant portion of the settlement through insurance claims and tax deductions, which in effect treated the disaster as a "legitimate business expense" to be paid by American taxpayers. Settlement allowed Exxon's CEO to boast: "

The company... voluntarily compensated more than 11,000 Alaskans and businesses.

"

The amount of Exxon's liability for future or then-undiscovered damages to natural resources was capped at $100 million. This cap was based on Exxon's claim that "the area recovered quickly" and that claims of severe, continuing environmental damage "are simply untrue". These claims in turn were based on "scientific" studies that Exxon contracted for, paid for and controlled. Local residents could not successfully counter these studies with their own investigations because they had no money. Because Exxon had destroyed their local economy and their livelihoods.

Exxon's claims proved untrue. Nineteen years after the incident, an estimated 85 tons of oil residue remain in area beaches and sea bottom. The aroma resulting from kicking rocks on local beaches eerily resembles that emanating from south Texas oil refineries. Recent studies predict this oil will remain, be readily detectable and harm wildlife for decades to come.

Worse, two years after the settlement herring, which had been scooped up by the millions by local fishermen, disappeared. Recent studies indicate the herring population may never regenerate. This was an economic disaster for the local population of Chugach Natives, who earned their livings in the fishing industry. Soon after the spill, the fishing fleet decreased by half. Three of the five canneries in Valdez filed bankruptcy. A former mayor, upset by the destruction, committed suicide.

Today, the fishing boats are permanently harbored or have been sold or repossessed. The herring processing plants and canneries have been closed and may never reopen.

The natives asked Exxon for compensation sufficient to buy boats and rebuild their villages. Exxon produced more studies to "prove" there was no link between the spill and destruction of the local fish population. The Natives were offered pennies on the dollar for their claims, take it or leave it and wait twenty years for payment of any court-ordered settlement. To survivors. Exxon warned:

"Exxon is immortal. Natives die."

Commercial fishers, seafood processors, cannery workers, landowners and business owners filed suit. In 1994 in Baker vs. Exxon, a jury in Anchorage awarded 32,677 plaintiffs $287 million in actual damages and $5 billion in punitive damages.

Most of the Chugash Natives didn't take part in this award. Years earlier, many took Exxon's threats seriously and settled, for $22.6 million.

Exxon appealed. And funded research by economists that "proved" that juries aren't competent to rule in punitive damage cases like the one at bar and are incapable of making fair awards.

The Ninth Circuit Court of Appeals ordered the District Court judge to reduce the amount of punitive damages. In December 2002 the trial judge announced a reduction to $4 billion, which he concluded was justified by the facts of the case.

Exxon again appealed. The Circuit Court ordered the District Court to consider the amount of punitive damages in light of a recent ruling by the Supreme Court. The judge complied and increased the punitive damages to $4.5 billion, plus interest.

Exxon again appealed. In December 2006 the Circuit Court reduced punitive damages to $2.5 billion, in conformance with holdings of the Supreme Court in Due Process cases.

Exxon appealed to the Supreme Court, which ruled on June 25 that punitive damages must be limited to the amount previously paid for economic losses, or $507.5 million. Equivalent to $15,531 per person for malicious, permanent destruction of plaintiff's economic livelihoods and their traditional way of life.

Payment will be distributed to plaintiffs or their estates. Over six thousand of the original plaintiffs have died, including over one-third of the Native seal hunters and fishermen. Their families will receive 10 percent of what would have been their share had they survived nineteen years of lives ruined by Exxon.

The Supreme Court held that Exxon's actions were "worse than negligent but less than malicious". This holding requires a detailed look at Exxon's actions.

The publicly stated cause of this accident was widely accepted. Captain Joseph Hazelwood admitted he was drunk at the time of the accident and was asleep (or passed out) in his cabin. Hazelwood admitted to "having some alcoholic drinks" earlier. Before the ship left port, Captain Hazelwood was seen drinking at least five double martinis in a local bar - enough that a non-alcoholic would have passed out. Experts testified that at the time of the accident, Hazelwood's blood-alcohol level must have been about 0.241 - slightly over three times what is required for a legal finding of intoxication.

This was not Hazelwood's first unfortunate experience with alcohol. Hazelwood was a drunk, and had been for years. Four years earlier, Hazelwood admitted to drinking while on his ship and to returning to his ship while drunk. Over a three-year period, Hazelwood drank with employees on 33 occasions that were documented. The actual number is thought to be higher.

Hazelwood completed an alcohol treatment program but dropped out of a prescribed follow-up program, stopped attending AA meetings and resumed drinking, among many other places in parking lots, at ports and aboard Exxon oil tankers. Exxon executives, knowing Hazelwood had started drinking again, ignored repeated warnings and placed him in charge of the Exxon Valdez.

At trial Exxon claimed Hazelwood was "the most highly monitored person in the Exxon fleet". Exxon was unable to provide the jury with so much as a single scrap of paper documenting this astounding claim. In fact, Exxon was unable to document that it monitored Hazelwood at all, in spite of numerous reports of Hazelwod's drinking, including one lodged one week before the accident.

At the time of the accident, Hazelwood's driver's licenses had been revoked in two states for multiple drunk driving convictions. Hazelwood wasn't even allowed to drive a compact Chevrolet six blocks to the neighborhood grocery. This is the man Exxon placed in charge of its largest oil supertanker in an environmentally sensitive area.

Exxon fired Hazelwood and claimed it should not be held legally responsible for his actions. Exxon executives, the parties actually responsible for this disaster, weren't fired. Instead, they received raises and bonuses.

Many Americans would claim the facts of this case support a finding of maliciousness and justify the $5 billion award. But this sordid history of Captain Hazelwood doesn't explain the true cause of the disaster.

Within eight years after beginning operations, over 800 million barrels of oil had been shipped through Valdez, establishing that the real estate under the tanker terminal was worth several hundred million dollars.

In 1969 Humble Oil officers, being capitalists, had offered to purchase the tank terminal site. The Chugach Natives, being humane, offered to sell the site for $1 and refused to accept a higher payment. With one condition: That Humble promise to protect their fishing and hunting grounds from contamination.

In 1971 specific safeguards were agreed upon. Humble promised to have them incorporated into federal law. These promises were written into the 1974 Trans-Alaska Pipeline Authorization Act, which allowed shipment of oil from Valdez. The commitments were crucial to enactment. The bill passed the Senate only because of a tie-breaking vote cast by Vice President Agnew.

Exxon promised to use modern on-board radar. At the time of the accident the radar wasn't turned on. The "modern radar unit" had been broken for over a year. Exxon management knew but refused to make repairs, to save Exxon money.

Exxon promised to use only double-hull tankers. The Exxon Valdez was a single-hull ship that could not legally even enter Prince William Sound.

Exxon promised to use local pilots when transiting the sound. The local pilot exited the Exxon Valdez shortly after the ship sailed, to save Exxon money.

Exxon promised that escort tugs would be provided for all tanker trips. No escort tugs had been provided, to save Exxon money.

Exxon promised to have equipment readily available to contain and capture a 200,000-barrel spill. The equipment was not maintained and kept readily available because it had never even been purchased, to save Exxon money.

Exxon promised to maintain spill-response teams in a state of readiness around the clock. Local Chugach Natives were hired, trained and then fired two years later, in 1979. State inspectors were deceived by creation of sham emergency response teams, listing names of workers at the tank farm. Those workers were never trained on the equipment that was never purchased and in some cases were never even told of their duties or responsibilities.

Two minutes before the accident, while the ship was making a tricky course correction maneuver, Hazelwood turned on the autopilot, increased the ship's speed and left an unlicensed, inexperienced third mate in charge while he "retired to his cabin to do paperwork".

The third mate was in violation of federal law that required he have six hours off-duty in the 12-hour period prior to beginning his watch. The National Transportation Safety Board determined crew fatigue to be a contributing factor to the accident. Partially because Exxon reduced tanker crew size from four to three, to save money, and didn't add a fourth crew member until four years after the accident.

The Supreme Court ignored this mountain of evidence, retried the case for the District Court and concluded Exxon's conduct over a 12-year period was not malicious, was not intentional and was not undertaken primarily for financial gain. The Court was clearly wrong on all three counts.

Then the Court noted that a majority of states allow punitive damages to be three times actual damages. This rule of the majority was thrown out because some states did not, leading to inconsistent results. A ratio of one rather than three was deemed "appropriate".

The Court decreed that consistency is an adequate substitute for fairness and then decreed that low awards are more fair than high ones, ignoring the possibility that high awards may be justified. Particularly to punish conduct such as exhibited by Exxon.

The Court properly noted the intent of punitive damages is to punish the defendant and deter similar actions in the future. The Court then reduced the punitive damages to such an extent that Exxon will be neither punished nor deterred.

The District Court that actually tried the case and heard the evidence determined punitive damages should be $5 billion, $4 billion and $4.5 billion plus interest. The District Court of Appeals determined punitive damages should be $2.5 billion.

In the interest of "predictability", the Supreme Court reduced Exxon's punitive damages to $502.5 million. But the economic destruction occurred 19 years ago. Using a 6 percent interest rate, the value of $1 increases to $3.02 after 19 years. Meaning the damages can be paid now with roughly $166 million placed in escrow when the disaster occurred. This is less than half the $351 million golden parachute awarded to Exxon CEO Lee Raymond in April 2006 following his retirement - roughly 20 times the $8.2 million in donations made by Exxon employees to Republicans since 1990, the year after the disaster occurred. In 2000, Exxon was the second-largest contributor to George Bush's campaign. Exxon was outbid by Enron.

This decision wasn't a matter of imposing "fair and reasonable" punitive damages. This was a matter of brazenly legislating from the bench to protect the interests of America's richest corporation at the expense of America's much less rich citizens. Some would say a sellout: Yet more evidence the "independent" third branch of the federal government has become an enemy of the people. I and millions of other American patriots would agree. azchuck

Authors Bio:
The author is a retired professional civil and structural engineer, reformed attorney, fierce Progressive, policy junkie, vociferous reader, lifelong learner, aspiring writer and author of the crime-thriller "The Geronimo Manifesto".

He is also a law-abiding but avid proponent of progressing America back to its earlier ideals of freedom, fairness, justice and opportunity for all.