The Supremes And Exxon-Mobile

The background:

Back during the administration of Republican Gov. Fob James, who served from 1995-1999, the state filed suit against Exxon Mobil claiming the company had cheated the state out of $1 billion in natural-gas royalties.

Once the case was tried, the state won, and the jury awarded it $11.9 billion – that’s right, billion. The judge who heard the case decided the amount was excessive and reduced it to $3.6 billion. Exxon Mobil said it was still excessive and pursued its appeal anyway. (Even at $3.6 billion, it was the highest award in state history.)

The case ended up in the Alabama Supreme Court three years ago, with the last brief filed more than a year ago. And still there is no word if the high court will even order oral arguments in the case.

The question in the news this morning:

Five of the nine justices on the all-Republican Supreme Court are up for election this year. Some people are beginning to question whether the Supreme Court is stalling because a ruling in favor of Exxon Mobil might anger the average voter and a ruling in favor of the state might upset business interests that contribute heavily to Republican incumbents.

Maybe the delay is political. We treat judges like politicians, so it ought not surprise us if they act like politicians. You reap what you sow. But let me offer another explanation.

What happened in this case is that the jury found in favor of Alabama and then did two things: Awarded Alabama the amount of money Alabama actually lost – 1 billion dollars – and, to deter future misconduct, also imposed 12 billion in punitive damages. (The trial court reduced the punitive damages to 3.6 billion.)

The issue now is whether the punitive damages were reasonable. That used to be a fairly straight forward matter of state law in which the appellate court would rubber stamp the results from the trial court. Scotus, however, changed all that in BMW v. Gore. Now punitive damage awards are subject to the limits of the due process clause. Justice Scalia dissented from that case, and this excerpt from his dissent may offer an explanation for the delay in the Exxon-Mobile case:

the Court identifies “[t]hree guideposts” that lead it to the conclusion that the award in this case is excessive: degree of reprehensibility, ratio between punitive award and plaintiff’s actual harm, and legislative sanctions provided for comparable misconduct. The legal significance of these “guideposts” is nowhere explored, but their necessary effect is to establish federal standards governing the hitherto exclusively state law of damages. . . .  

Of course it will not be easy for the States to comply with this new federal law of damages, no matter how willing they are to do so. In truth, the “guideposts” mark a road to nowhere; they provide no real guidance at all. As to “degree of reprehensibility” of the defendant’s conduct, we learn that “`nonviolent crimes are less serious than crimes marked by violence or the threat of violence,'”  and that “`trickery and deceit'” are “more reprehensible than negligence.” As to the ratio of punitive to compensatory damages, we are told that a “`general concer[n] of reasonableness . . . enter[s] into the constitutional calculus,'” – though even “a breathtaking 500 to 1” will not necessarily do anything more than “`raise a suspicious judicial eyebrow.'” And as to legislative sanctions provided for comparable misconduct, they should be accorded “`substantial deference,'” ibid. One expects the Court to conclude: “To thine own self be true.”

These criss-crossing platitudes yield no real answers in no real cases. And it must be noted that the Court nowhere says that these three “guideposts” are the only guideposts; indeed, it makes very clear that they are not – explaining away the earlier opinions that do not really follow these “guideposts”  on the basis of additional factors, thereby “reiterat[ing] our rejection of a categorical approach.” In other words, even these utter platitudes, if they should ever happen to produce an answer, may be overridden by other unnamed considerations. The Court has constructed a framework that does not genuinely constrain, that does not inform state legislatures and lower courts – that does nothing at all except confer an artificial air of doctrinal analysis upon its essentially ad hoc determination that this particular award of punitive damages was not “fair.”

In short, whether or not an award satisfies the constitution is an entirely subjective matter. So what we have now is nine judges all applying their own personal views to the facts of the Exxon-Mobile case in an attempt to decide what the award should be. Good luck ever getting a decision.

Explore posts in the same categories: Alabama Court Decisions, Appellate And Post-Conviction Issues, Scotus

8 Comments on “The Supremes And Exxon-Mobile”

  1. Dan Says:

    “We treat judges like politicians, so it ought not surprise us if they act like politicians. You reap what you sow. But let me offer another explanation.”

    Well said, wheeler.

  2. Cheif Many Typos Says:

    the state didn’t actually lose $1 billion. it lost $63.6 million, IIRC

  3. jnn Says:

    We don’t know that they are only looking at the amount of the award. They could be looking at the whole case.

    I cannot accept that this only has to do with the reduction of an award. They handle those kinds of cases often enough that it wouldn’t be that big a deal.

    I honestly think that they are going to reverse the whole thing again.

  4. […] judges? Filed under Elections, Corporate Empire, Law and courts permalink :: email author :: 3 comments Comments to “ChiefJustice” […]

  5. […] Thursday, October 26, 2006 Sue Bell and Drayton Dan on 2006-10-26 @ 12:59 am I guess we can just forget about the whole Alabama Judicial Oversight Committee Pledge about keeping the judicial elections clean. In the most expensive court race in the country, Drayton Nabers (R) and Sue Bell Cobb (D) have resorted to bickering about who the first person to throw the first punch was and who took more gambling money. Again, when we treat judges like politicians, we shouldn’t be surprised when they act like politicians. It seems like I’ve heard of a better way. Filed under Elections, Corporate Empire, AL govt at work, Law and courts permalink :: email author :: no comments […]

  6. […] I’ve already posted about this case, but what really caught my attention was the next part of the story: In a related matter, attorneys for dog track operator Milton McGregor have asked Nabers to step aside from hearing an appeal involving the legality of electronic sweepstakes machines at the Birmingham dog track. […]

  7. devo Says:

    The first time I heard of this case, it was the first in a stack against Ex/Mob for royalty scamming, was Feb. 2003. I can’t remember too clearly, but it seems as if something important happened in March por April of that year. I wonder if they were connected in any way?

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