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

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The Supreme Court handed corporate America a major victory this week 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. An Alaskan jury had initially ruled Exxon should pay $5 billion in punitive damages, but in 2006 the 9th US 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 — one-tenth of the original jury’s ruling. [includes rush transcript]

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This is a rush transcript. Copy may not be in its final form.

JUAN GONZALEZ: The Supreme Court handed corporate America a major victory Wednesday when it sharply reduced the amount of money Exxon Mobil will have 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 US history. Eleven million gallons of crude oil spilled into the fishing waters of Prince William Sound. It polluted about 1,200 miles of Alaska’s shoreline.

An Alaskan jury had originally ruled Exxon should pay $5 billion in punitive damages, but in 2006 the Ninth US 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 — 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. Thirty-two thousand 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. Senator Patrick Leahy, chair of the Senate Judiciary Committee, accused the Court of giving Exxon Mobil a $2 billion windfall.

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

Welcome to Democracy Now!, John.

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, Exxon Mobil 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, the Supreme Court has essentially driven its own corporatist policy — written its own corporatist policy from the bench of the Supreme Court. They’re the new lawmakers; they’re the new legislators.

JUAN GONZALEZ: And John, this has enormous ramifications, not just in this particular case, obviously, but throughout corporate America, in terms of the new rule that they’re expounding for punitive damages. Could you talk about that?

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

AMY GOODMAN: John Passacantando, you’ve had a long history with Exxon Mobil. In fact, they led to an IRS audit of your organization. Can you talk about that history, why they targeted you?

JOHN PASSACANTANDO: Yes, sure. Greenpeace has put pressure on Exxon Mobil for a number of years, primarily because Exxon Mobil has been the company that has funded the front groups to lie about global warming. When Exxon Mobil tells you, “Don’t believe in 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’re more effective in sort of stalling the American public’s belief that we have to do something on global warming. So we ran a whole 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 we found that — 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 our 501(c)3. That’s the IRS designation that allows you to operate as a nonprofit. It was later discovered by a journalist for the Wall Street Journal that Exxon Mobil had funded a PR firm in Washington that then created another front group called Public Interest Watch. And its sole revenue that year was $200,000, and all they did that year was a fake report 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. And then the Wall Street Journal exposed that Exxon Mobil had played this way. They use some quite dirty tactics.

So they’ve done damage from the local, this amazing sound in Alaska, damaging the livelihoods of 30,000 people, to global warming and helped bring global warming on the world and confusing the American public so we wouldn’t fight it in time. It’s a very damaging company.

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

JOHN PASSACANTANDO: Yes. You know, a big opponent like Exxon Mobil wants you to know that 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 one estimate said that about 20 percent of the plaintiffs who will receive awards, these much smaller awards, but will still receive awards nonetheless from these punitive damages, at least 20 percent of them have died in the intervening years since this happened in 1989. So, Exxon Mobil knows that it is to its financial benefit to stall as long as possible. And it, you know, has its own legal teams in house and outside of 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 US intelligence review concluding global warming will endanger US operations abroad?

JOHN PASSACANTANDO: Well, it just shows you the contrast between the reality of global warming, which is bearing down on us now with real costs to our world, our ecological systems, people around the world, and the lies and misinformation that are still engaged in by many of our politicians at the behest of Exxon Mobil and others. The US has been the slowest industrialized nation to get its head around global warming and get serious about it and actually push solutions. The debate in the Senate several weeks ago was really quite a farce. We are still years away of 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 of Greenpeace USA, speaking to us from Washington, DC.

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