WASHINGTON — It's getting harder for ordinary people to sue big corporations in an effort to hold them accountable for gross misconduct, one of the plaintiffs in the Exxon Valdez lawsuit told the Senate Judiciary Committee on Wednesday.
The committee was examining the fairness of several recent Supreme Court decisions, including its opinion in the lawsuit filed by 32,000 fishermen and Alaska natives who sued ExxonMobil for its role in the 1989 Exxon Valdez oil spill. Last month, the Supreme Court cut the punitive damages award in the case to $507 million from $2.5 billion. Exxon is resisting paying interest in the case, which could bring the total payout to $1 billion.
Although the Supreme Court decision applies solely to maritime law, the justices also suggested that when juries assess punitive damages for corporate wrongdoers, they use a one-to-one ratio based on the compensatory damages awarded.
Alaskans, including Osa Schultz of Cordova, said that the one-to-one ratio set by the Supreme Court is not only unfair, but also a symbol of the "corrupt and divisive influence" of corporate power.
The compensatory damages were low in the case because the court failed to take into account the long-term effect of losing a way of life, said Schultz, who fished with her husband in Prince William Sound at the time of the spill. Schultz said she'd rather see punitive damages assessed on corporate profits, for example.
"Exxon stands to pay pennies on the dollar," Schultz testified. "If our highest court in America fails to hold them accountable, how will they ever be forced to take responsibility for their destructive actions?"
Schultz and other plaintiffs had a sympathetic listener in the committee chairman, Sen. Patrick Leahy, D-Vt., who likened the effect of Exxon's payout on its bottom line to that of an ordinary American paying a parking ticket.
"If Congress had wanted to cap the punitive damages for disasters that impact thousands of Americans, of course we could have done so," Leahy said, "but we didn't."
The consequence of reckless conduct has been reduced to a small cost of doing business, Leahy said, calling it yet another example in a string of cases in which the Supreme Court has misconstrued congressional intent to shield large corporations from accountability.
However, Patricia Millett, a partner at the Akin Gump law firm who argued more than two dozen cases in front of the Supreme Court as a litigator for the U.S. solicitor general, said in her testimony that the recent court term was a "mixed bag" for corporate interests. Of the 24 cases that involved business concerns (about a third of the court's docket for the term), the court split fairly evenly, she said: Thirteen cases could be described as pro-business; 11 could be deemed as less business-friendly.
She also said that the court left open a window in the Exxon case: If there's proof that a corporation's bad conduct was intentional, or that the corporation profited from it, plaintiffs can apply for greater punitive damages than the one-to-one ratio.