Supreme Court Slashes Exxon Valdez Oil Spill Fine to One-Tenth of Original $5 Billion Ruling

The Supreme Court handed corporate America a major victory Wednesday when it sharply reduced the amount of money Exxon Mobil has to pay in punitive damages for the 1989 Exxon Valdez oil spill in Alaska.

The spill has been described as the worst environmental calamity in U.S. history. 11 million gallons of crude oil spilled into the fishing waters of Prince William Sound. It polluted about 1200 miles of Alaska’s shoreline.

An Alaskan jury had initially ruled Exxon should pay five billion dollars in punitive damages but in 2006, the 9th U.S. Circuit Court cut the award of punitive damages in half.

On Wednesday the Supreme Court cut the amount of punitive damages again and ordered Exxon Mobil to pay just $500 million in punitive damages – 1/10th of the original jury’s ruling.

The Supreme Court ruled that in maritime cases punitive damages should be no more than the actual damages. 32,000 Alaskan plaintiffs have been waiting for their compensation since 1994. The Supreme Court’s action will reduce the average award from $75,000 to about $15,000.

Last year Exxon Mobil made just over $40 billion in profits. This means the oil company will be able to pay the punitive damages in about four days. Sen. Patrick Leahy, chair of the Judiciary Committee, accused the court of giving Exxon Mobil a $2 billion windfall.

John Passacantando, executive director of Greenpeace USA, joins us in Washington.

John Passacantando, executive director of Greenpeace USA.

JUAN GONZALES: Welcome to all of our listeners and viewers around the country and around the world. The Supreme Court handed corporate America a major victory when it sharply reduced the amount of money ExxonMobil will have to pay in punitive damages for the 1989 Exxon Valdez oil spill in Alaska. This bill has been described as the worst environmental calamity in U.S. history: 11 million gallons of crude oil spilled into the fishing waters of Prince William Sound. It polluted about 1,200 miles of Alaskan shoreline. An Alaska jury had originally said $5 billion in punitive damages, but in 2006, the ninth U.S. circuit court cut the award of punitive damages in half. On Wednesday, the Supreme Court cut the amount of punitive damages again and ordered ExxonMobil to pay just $500 million in punitive damages, one-tenth of the original jury’s ruling.

AMY GOODMAN: The Supreme Court ruled, in maritime cases, punitive damages should be no more than the actual damages. 32,000 Alaska plaintiffs have been waiting for their compensation since 1994. The Supreme Court action will reduce the average award from $75,000 to about $15,000. Last year, ExxonMobil made just over $40 billion in profits. This means the oil company will be able to pay the punitive damages in about four days. Patrick Leahy accused the court of giving ExxonMobil a $2 billion windfall. John Passacantando, the executive director of Greenpeace USA, joins us now in Washington DC. Welcome to the show.

JOHN PASSACANTANDO: Pleasure to be here.

AMY GOODMAN: Can you talk about the Supreme Court decision?

JOHN PASSACANTANDO: What the Supreme Court did yesterday was, essentially, the crowning moment for the golden age of corporate polluters. ExxonMobil being the biggest corporate polluter, the most unaccountable company that was sort of justly punished by this jury many, many years ago with the $5 billion punitive award. And now with the Supreme Court rolling it back, they have essentially driven its own corporatist policy—written its own corporatist policy, from the bench of the Supreme Court. They are the lawmakers;’ they are the new legislature.

JUAN GONZALES: John, this has enormous ramifications, not just in this particular case, obviously, but throughout corporate America, in terms of the new rule there expounding for punitive damages. Can you talk about that?

JOHN PASSACANTANDO: Yes, it could. One of the things corporations have always wanted protection from, they have always wanted protection from juries, juries of our peers, who will inflict this kind of punitive damages on corporations that have acted wildly out of control. Corporations have sought to rig our legal system such this can be controlled and contained. The Supreme Court has now done that for them through their interpretation, a very radical interpretation of the maritime law. And now corporate lawyers are saying that this applies to all, not just maritime law. The corporations are going to try to use this to shield themselves from any kind of public pressure, public scrutiny. There are more fights to be had on this.

AMY GOODMAN: John Passacantando, you’ve had a long history with ExxonMobil. In fact, it led to anIRS audit of the organization. Can you talk about that history? Why they targeted you?

JOHN PASSACANTANDO: Yes, sure, Greenpeace has put pressure on ExxonMobil for a number of years, primarily because ExxonMobil has been the company that has funded the front groups to lie about global warming. When ExxonMobil tells you do not believe about global warming, you know not to believe them. But when they fund small groups with innocuous sounding names and pay those people to lie about global warming, they are more effective in sort of stalling the American public’s belief that we have to do something on global warming. So, we ran a campaign, and still do, to expose Exxon. The research site is called exxonsecrets.org, and you can see all the people they have paid to misinform the world about global warming.

Then the IRS came knocking one day and said we were being audited. We were told it was a political audit, and that they were going to try to take away for 501c3, the IRA’s designation that allows you to operate as a nonprofit group. It was later discovered, by a journalist for the Wall Street Journal, that ExxonMobil had funded a PR firm in Washington that then created another front group called Public Interest Watch. Its sole revenue that year was $200,000, and all they did that year was a fake report that saying that Greenpeace had laundered millions of dollars.

That is what brought on the IRS audit, which we passed with flying colors, by the way. Then the Wall Street Journal exposed that ExxonMobil had played this way. They used some quite dirty tactics. They have done damage from the local, this amazing sound in Alaska, damaging the livelihood of 30,000 people to global warming and helped bring global warming on the world and confusing the American public so we would not fight it in time. It is a very damaging company.

JUAN GONZALES: To get back to the Supreme Court decision, John, this took nearly 20 years to reach a final determination of the liabilities in the Exxon Valdez case. Can you talk about the repercussions in terms of the impacts on others who will go to court to battle some of these corporations, that it took so long to reach a final decision?

JOHN PASSACANTANDO: Yes, a big opponent like ExxonMobil wants to know if you’re going to engage them legally, they will stall, they will drive up costs, they will sort of drag you out for decades if they must. I think that one estimate said about 20% of the plaintiffs who will receive awards, these much smaller awards, but awards nonetheless, at least 20 percent of them have died in the intervening years since this happened in 1989. So, ExxonMobil knows it is to its financial benefit to stall as long as possible. It has its own legal teams in house and outside the corporation to do this indefinitely.

AMY GOODMAN: And the significance of the latest global warming report that we just talked about in headlines, the new high-level intelligence review concluding global warming will endanger U.S. operations abroad?

JOHN PASSACANTANDO: It to shows the contrast between reality of global warming which is bearing down on us now with real costs to our world, on ecological systems to people around the world, and the lies and disinformation that are still engaged in by many of our politicians at the behest of ExxonMobil and others. The U.S. has been the slowest to get its head around global warming and push for a solution. The debate in the senate several weeks ago was really quite a farce. We are still years away from doing what we need to do in terms of federal policy, to put a cap on how much global warming gases can be put out there and drive those numbers down.

AMY GOODMAN: John Passacantando, I want to thank you for being with us, executive director for Greenpeace USA. When we come back, we’re going to go to Haditha to talk about what it has happened in the cases against marines who were involved in the killing of 24 Iraqi civilians. We’re also going to have a debate on what is happening today in Zimbabwe this is Democracy Now!, democracynow.org, the War and Peace Report. I’m Amy Goodman.

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