Exxon Shipping v. Baker

We'll hear argument this morning in case 07219, Exxon Shipping Company versus Baker et al.

Hey everyone, this is Leon Napok from Fiasco and Slowburn.

On today's episode of 5-4, Peter, Rhannon, and Michael are discussing Exxon Shipping v.

Baker, a case in which Alaska's residents and businesses sued for damages after the Exxon Valdez oil spill.

It was the worst environmental disaster in United States history, killing more wildlife than any other previous catastrophe.

On top of that, some 60,000 Alaskans, most involved in fishing, say the oil spill hurt their lives and livelihood.

The court cut the amount of punitive damages owed by Exxon to one-tenth of what was originally awarded by the jury and effectively capped damages in similar cases.

This is 5-4, a podcast about how much the Supreme Court sucks.

Welcome to 5-4, where we dissect and analyze the cases that have swarmed American life like locusts over a grassy plain.

I am Peter.

Twitter's the lawboy.

I'm here with Michael.

Hey, everybody.

And Rhiannon.

Hello.

And today we are discussing Exxon Shipping v.

Baker, a case about the famous Exxon Valdez oil spill of 1989.

The Exxon Valdez spill, it happens in Alaska's Prince William Sound in 1989 and was at the time the worst oil spill in American history.

And I think generally speaking, spills from oil tankers were like a huge environmental concern until about 2010.

when British Petroleum figured out a way to cut out the middleman and pump oil directly from the Earth's crust into our oceans.

Oh, no.

That's what innovation looks like.

Okay.

So, this is a case about damages.

Exxon was sued for the spill by Alaskan residents and others who depend on the area for their livelihoods.

Not Prince William himself, despite the sound being named after him.

I don't know why.

Abstained.

Exxon loses a trial, and they are ordered to pay $5 billion in punitive damages.

That amount gets lowered by the Ninth Circuit Court of Appeals to $2.5 billion.

And here, the Supreme Court held that even that was too much, lowering the damages to $500 million, which is about 10% of the original amount.

And in the process, they effectively capped the punitive damages available in maritime, aka seafaring cases.

This is another case where the court sort of just pulls a rule out of its ass, and that rule just so happens to benefit the interests of wealthy and powerful people.

As we'll discuss in a bit, limiting the ability of plaintiffs to recover damages in litigation has long been a key part of the conservative effort to limit the liability of corporations,

keep their costs down.

And it's predicated in a very real belief held by corporatist conservatives that the American legal system is biased not against any marginalized groups, but against corporations.

Authoring the majority opinion here is David Souter,

a complete non-entity who's mostly

notable for being nominated by George Bush Sr.

and then sort of ending up being a liberal.

This was back in the late 80s when

Republicans were just not very cutthroat about nominations.

They were running scared.

They had had a couple go poorly and one fail completely.

And as a result, they nominated some pretty centrist-y folks, and Souter ended up being the farthest left.

The only other real notable thing about him is that he is, by a very solid margin, the worst writer of the last 30 or so years, I think, on the court.

Absolutely.

Awful.

Yeah, I think one thing to know about Souter is that, like, if you were in law school at the time and you were like, oh, yeah, like I need to name like the nine justices on the Supreme Court you're always going to forget Souter that's right yeah he's not you're going to be like who's that other white guy dumbass it's not going to come to you that's right

so

yeah I mean I guess nothing else interesting to say about him he's you know he was usually on the liberal side certainly good as far as Republican nominated justices go yeah sure but uh he mostly sucked just like the rest of them he's dead right No.

I don't think Souter's still alive.

No, I think he just retired.

Yeah, well, he definitely retired.

I thought he also died.

Hold on, I'll check.

No, that's Stevens.

Stevens died.

Well, I know.

Stevens was 150, but

he's alive.

Yeah.

Souter's alive?

I thought he was still doing stuff like Emeritus, or I don't know how to pronounce that word.

I think it's Emeritus.

Emeritus.

No, but like O'Connor was doing it for a while, too.

I think he still hears cases in the D.C.

circuit, no?

Or am I making that up?

I don't don't know.

I mean, obviously, I don't know.

I thought he was dead.

He's 81.

Yeah, he's not that old.

When did he retire?

09?

Yeah.

All right.

So I think we should get into the background here.

So, Rhiannon, walk us through the Exxon Velti's oil stuff.

Yeah.

Really excited about this because if you thought this podcast was only about human suffering, well, today we're talking about like oil-drenched sea otters and dead free willies.

So,

you know, just mixing it it up a little bit.

Spread it around.

Right, right.

This case comes out of the famous Exxon Valdez oil spill, like Peter said.

It happened in March 1989 when the Exxon Valdez oil tanker ran into a reef in the Prince William Sound off the coast of Alaska.

Like Peter said, it's now the second largest oil spill in U.S.

waters, but many scientists say that in terms of environmental impact, this is the worst one in history.

So, how millions of gallons of oil are spilled into the ocean is, of course, about corporate greed.

But the particular facts and background are important here, I think, because, like, after years of lawsuits, investigation, a lot of really good investigative journalism that uncovered what really happened, what led to this disaster, it becomes clear that Exxon's like sheer disdain for the law, their ducking of accountability, and their overall unbending commitment to their bottom line are at the heart of this environmental catastrophe.

And the Supreme Supreme Court rushes in here in this case to protect them.

And by them, I mean Exxon motherfucking mobile, like the oil company.

Okay.

The court says in this case that they're quote worse than negligent, but less than malicious.

And I think a quick rundown of the facts that I'm about to tell you, like that gives you everything that a kindergartner could use to determine that this corporation absolutely fucking sucks to its core and they suck on purpose with no regard for the consequences to any species, human or not.

So the ship was carrying more than 50 million gallons of oil and about 11 million gallons were spilled into the Prince William Sound.

But it's not a freak accident.

It was actually highly foreseeable.

First, there are issues with individual crew members.

The captain, first of all, was widely reported to have been drinking heavily that night and he was sleeping off his bender when the ship struck the reef.

The third mate, who was at the controls was fatigued and overworked and he failed to properly maneuver the vessel.

Now, third mate.

I've heard of first mates.

That's the right-hand guy.

By the time you get to the third, that's like bring your child to work day.

Yeah.

You know, you got the intern, daddy, what can I do?

And he's like, you're the third mate, little buddy.

Yep, they got that guy driving 50 million gallons of oil.

But moving to like what the corporation did, Exxon Shipping Company, it was determined after the collision, had failed for a long time to adequately supervise the captain of the ship.

And they also failed to provide a rested and sufficient crew for the ship.

The oil industry had also previously promised, but never installed, this sort of high-tech iceberg monitoring equipment on the ships.

And the company also failed to maintain the collision.

avoidance radar system on the ship.

If that piece of equipment had been functional, it would have indicated to the third mate that a collision was impending because it would have detected radar reflectors that were placed in the Prince William Sound for like literally this exact purpose of avoiding such collisions.

And the radar system, it turns out, wasn't even turned on at the time of the collision because it was fucking broken and it had been broken for a year.

No radar and they're just out there winging it.

Out there.

They're just out there shooting.

50 million gallons of oil in the fucking Arctic.

And they're like, no, no, we can just, we'll do this blind.

Yeah, watch.

Let me know if you see any ice cream.

They can do it with no eyes.

Watch.

That's how they're doing this.

And like documents reveal afterwards that the radar system had been broken for a year and it's just expensive to maintain and to fix.

And so they left it fucking broken.

Fuck it.

This, right.

This accident happened because the Exxon Valdees had left the normal shipping channel to avoid ice flows.

And that's like a common occurrence, but it's not what was supposed to happen that night.

They're supposed to stay in the channel and just slow down.

But of course, time is money, right?

And this is about the bottom line.

So, of course, 11 million gallons of oil is like...

It's an unbelievable amount of oil spilled.

But what made this particularly disastrous was Exxon's complete, completely incompetent handling of the disaster immediately following the collision.

So I guess something that's widely known in the industry is that ships just like whoopsie-daisy crash all the time and oil spills are like to some degree inevitable.

So a responsible party would invest in their cleanup and containment capabilities and equipment.

It turns out literally 10 months before this disaster, at a meeting of the six oil companies that own Alaska's oil, a chief of operations warned that it was, quote, not possible to contain an oil spill in the center of the Prince William Sound, which if you're paying attention is exactly where this happened.

Yeah.

Where were you, Prince William?

Where were you that night?

And that same chief of operations requested millions of dollars for spill containment equipment.

This is equipment that was required by law, and it had already been promised by the companies to regulators.

But at that meeting, the proposed spending was voted down by the oil companies.

Look, as someone who's talked to regulators on behalf of companies from time to time, I feel that.

Got that.

Gotcha.

Fully four years before the Exxon-Valdez collision, the oil group's Valdez port commander warned the company in a confidential letter that, quote, due to a reduction in manning, age of equipment, limited training, and lack of personnel, serious doubt exists that we would be able to contain and clean up effectively a medium or large size oil spill.

And according to that port commander, there had already been a spill at Valdez before this one, but it was, of course, much smaller.

And when he went to report it to the government, he said that he was told by his supervisor not to submit the notice.

And he was told, quote, you made a mistake.

This was not an oil spill.

So just

a little Orwellian flavor for you.

And as to smaller spills that happened before this collision, even when they were reported to the government, they could have alerted regulators that the oil containment system was not functional.

But a lab technician reported after this that she was routinely ordered by management to change test results to eliminate oil in water readings.

So she was instructed.

That's the most important

reading, is my guess.

Is that right?

Yeah, yeah, yeah.

That's one of the things.

Is there oil in the water?

Yeah.

She was instructed to dump out oily water and refill the test tubes that were taken from oil spills from a bucket of clean ocean water.

And they literally called it the miracle barrel.

That can't be an accurate way to measure this.

No, no, I don't think so.

This is not a scientifically sound system they have set up.

So this is a lot, I know, but it needs to be absolutely clear how fucking wrong they were.

And I don't know how the wormy elf David Souter can fix his lips to say that this shit wasn't malicious.

But I think if you're lying about test results and the test is on a subject matter that's for sure going to come up again, and the risk of failing the test is that you devastate thousands of miles of coastline and you murder millions of animals and you kill Bill, Achilles heel slice, a local economy, like I think it's safe to say that you did that shit on purpose, you know, like there was malice in your fucking heart.

And so moving on to the effects,

just in a couple days after the spill, literally thousands of sea otters were killed, hundreds of thousands of seabirds were dead.

And because of the bungled cleanup and containment efforts, there is literally still oil on that coastline.

And reports say actually that only 10% of the oil was actually cleaned up.

In addition, local groups of killer whales lost what some estimate is 40% of their population.

It's believed that one group will now just die out soon.

Our producer, Katya, you cannot cut out the fact about killer whales because I fucking love killer whales.

And this is important to me personally.

Have I ever told you guys about seeing killer whales in real life?

Like how I reacted?

I mean, they're majestic creatures.

No, they're fucking incredible in every way, better than human beings for sure.

And when I saw them...

Can you like cry?

Don't they actively torture seals for sport?

Yeah.

Like to train their children.

Yes, they do.

So when I saw them in real life, it was like two weeks after graduating from law school.

And I saw them in real life off the coast of Washington in the San Juan Islands.

And I not only cried, I freaked the fuck out.

I was crying so intensely and like hyperventilating and like jumping up and down that a child on the boat got scared and asked his mom if we were going to sink.

I was having that much of an emotional reaction to seeing them that like I was literally scaring children.

They thought our lives were in danger.

I was going to say, I'm picturing like Kristen Bell with a sloth, sort of like.

Yes, yes, yes, yes.

That's me plus killer whales.

Perfect.

I think if there's ever like a really good movie made about the Exxon Valdez spill, a good scene would be like a series of cuts where you have someone on the ship, the spill just happens, and they're frantically making a call to some guy in a corporate office.

He calls an even more important guy.

He calls an even more important guy.

All of a sudden, it's clearly a boardroom.

And then he calls a less important guy and a less important guy.

And they're all just silently answering the phone, and you can't hear what they're saying.

And the last one hangs up and walks outside, and he's at a gas station, and he just raises the price by 25 cents.

He's like, problem solved.

I got this, guys.

Yeah.

Okay, so how this case comes to the Supreme Court.

Peter said, Exxon Exxon is sued in Alaska and a jury awarded about $500 million in compensatory damages and $5 billion in punitive damages, which we'll talk about the difference between those things in just a second.

True to their evil core, Exxon appealed that verdict and the Ninth Circuit did order that the punitive damages should be reduced.

When it got back to the trial judge, Russell Holland in Alaska, he reduced the punitive damages to $4 billion, emphasizing that this was not an egregious figure based on the facts of the case, based on the damage that was done by this oil spill.

Exxon turns around and appeals that decision.

The Ninth Circuit again ordered it back down to Judge Holland.

And that time, Judge Holland increased the punitive damages to $4.5 billion plus interest.

What a fucking king.

Yeah, Judge Holland is the only cool judge to have ever existed.

Anyway, so Exxon appeals it again.

The Ninth Circuit ordered the the punitive damages to be reduced to 2.5 billion, and that's when it went to the Supreme Court.

Now,

just one more point, because they're so fucking evil.

Just to emphasize again how this rotten piece of shit, satanic corporation is absolutely evil to its core.

Exxon's official position was that punitive damages against them should be no more than $25 million

because it had spent an estimated $2 billion on the cleanup.

But you have to note that they recovered a significant portion of the costs of cleanup and litigation through insurance claims.

And also in 1989, a few months after the accident, Exxon sued the state of Alaska, saying that the state had not given Exxon permission to use oil dispersant chemicals in the cleanup until a couple of days after this bill.

So it was apparently Alaska's fault why the cleanup was bad.

Alaska's response, by the way, they said that Exxon didn't need permission to use the chemicals.

They're like, I don't know why you're asking us.

And in fact, Exxon didn't have enough, and that's why they were blaming the delay on the state of Alaska.

Also,

the chemicals used in the cleanup caused liver, kidney, lung, nervous system, and blood disorders among the cleanup crews.

I love my life.

I love this case.

I love the world we live in.

Skip back to the law.

Maybe they should have needed approval to use those chemicals.

You can throw that out there.

All right.

So that was, wow, that's a lot.

I feel like I learned a lot about Exxon.

I will be getting my gas from Gulf only from now on.

Gulf, the oil supplier you can trust.

Yeah, yeah.

You got it.

Let's lock that ad down.

Let's lock it.

It's time to start bringing in the big ones.

You can sleep easy tonight.

They're probably fucking owned by Exxon.

Right, yeah.

It's either them or BP, I'm sure.

Right.

All right, so the first thing to note about the law here, it's not that important for understanding the case, but it is sort of fun.

We're talking about maritime law, which is the law that applies on the water,

on the open ocean.

And the reason that maritime law is like that it's a separate thing is mostly a jurisdictional thing.

Like if you're on a ship, you are not necessarily under the jurisdiction of any given state.

So you need a separate set of laws and rules to govern you.

And it's also this sort of historic thing that carries back from these old ancient rules and the waters around Britain and all that.

It's just every maritime law case, even modern ones, read like they're from the 17th.

Yes.

It's very bizarre.

The more important thing to understand about this case is that we're talking about two types of damages.

One is compensatory, which are meant to compensate someone for any damage that they actually took.

And the other, the one that's being contested here, is punitive damages.

And those are meant to punish the wrongdoer and deter others from engaging in the same type of conduct.

So if you burn someone's house down due to your own recklessness, you could be sued for the value of the house.

But they could also ask for punitive damages, basically saying you're an asshole and there should be a punishment for being an asshole.

Right.

So you have to pay this amount of money.

So the court here is holding that the punitive damage amount was excessive and that Exxon should not have to pay as much as it was ordered to pay, which at this point was $2.5 billion down from an original jury award of $5 billion.

So it's already half of what it once was.

And to remind you, this money, the damages, would have gone to a bunch of local Alaskans who were suing because their livelihoods were impacted by the spill.

Right.

Right.

Another thing we should note before we get into this: there are a ton of different opinions in this.

There's different sections of the opinion, and different justices sign on to different sections of the opinion.

We're going to ignore almost all of that.

Just focus on what David Souter wrote and the controlling majority for the most part.

And I will make one other note, which is that Justice Alito recused himself because he owned too much Exxon stock.

Oh, my God.

Fucking embarrassing.

Yeah.

All right, let's go to a fucking ad.

So,

getting into the opinion itself, first,

Souter starts out with this unbelievably dull exploration of like the origins of punitive damages in the law.

And it, holy shit, is it boring, guys.

It's just like, in 1683, Sir Collinsworth of Yorkshire first noted the wisdom of punitive damages in his famous letter from Emmsworth Castle.

It's like, oh, just shut the fuck up.

David Seward.

It's so fucking terrible.

It has a literal reference to fucking Hammurabi's code.

Punitive damages for like stealing a goat from a freed man.

That's in there.

So we have citations to fucking Babylonia.

in this opinion.

And as I'm reading it, I'm gearing up to be like, here's another case of the fucking Supreme Court just basing his decision on all this bullshit that doesn't matter because it doesn't matter.

But then Sutherland's like, none of this matters.

He like literally is like, regardless, that's how he fucking punctuates this whole history.

Regardless, this is the current state of the law and this is what we're working with.

And it's like, why the fuck are you wasting everybody's time with this discursive historical discussion?

It's meaningless.

I feel like I went on a little journey journey to Babylon.

No, it's absolutely like when you needed to write like a 2,000 word essay and you're like around 1,800 words and you're just like, fuck, like, what do I, how do I.

History of punitive damages.

They used to be called exemplary damages.

That is also in the opinion and an explanation of why.

Yeah, it's like a little trivia about punitive damages.

So awkward.

All right.

So he like makes this quick note about how punitive damages are limited to, quote, cases of enormity where the wrongdoing is particularly severe.

And he never really says it, but you can tell he's sort of hinting at the idea that this isn't one of those cases.

And it's like,

I do feel like that's pretty offensive.

Like how many fucking seals you have to kill for it to be a case of enormity.

Yeah.

And so he also points out that like, look, punitive damages, they're more common and more generous in America than they are in other countries.

And he's like, Look, you know, in Canada and the UK, there are these caps and some countries in Europe forbid them all together and even will like, you know, shield their native corporations from punitive damage judgments gotten against them in foreign courts.

And it's like, okay, except you can't talk about like foreign legal systems like that without also including all the other ways that they regulate and police corporate behavior, right?

Like sports damages, that's just one piece.

They're like safety regulations and government oversight, which are just all different pieces of the larger scheme that like societies decide, you know, how to police corporate malfeasance.

And it's like not illuminating to just shear off one piece of the scheme and like compare it to another.

I've done business in Germany and those corporations are a lot more restrained in like what they have to do because they're heavily regulated.

And it might make sense in that scheme to have, you know, more limited punitive damages, but it doesn't make any sense here

where you basically have corporations who just want it both ways, right?

They want little to no front-end government restraints, but they also want no liability on the back end either.

Like

exactly.

I want to note that I've also done business in Germany.

I bought Hashish

in Berlin in 2018.

So Souter then starts talking about how research shows that punitive damages are not out of control, that they're usually pretty stable, but he says there's a real problem.

That's that they're very unpredictable.

They can vary in size.

They've got large standard deviations from one to the next and all that.

And so he's bringing up this big concern, and this is the central premise of the entire argument he's making.

How can the people and corporations who are being sued for their reckless wrongdoing predict the exact amount of punitive damages they might have to pay?

And the answer is they can't.

And Souter is very concerned about that.

And I think our retort to that is pretty simple.

Why does it matter at all?

Right, right.

It's like,

Souter says that it's important that like bad actors know the stakes so that they can properly weigh the consequences.

But that's fucking batshit crazy.

It's completely backwards.

Allowing corporations to do the math so that they can figure out exactly how much litigation will cost so that they can do like a cost-benefit analysis on dumping oil on a fucking baby seal.

That's not a worthy goal.

That's terrible.

It's a truly awful thing.

And to think that it is actually

a great outcome is like beyond me.

I think the primary purpose of having these sorts of damage awards that are meant to punish the wrongdoer is to deter big companies, especially, from engaging in this sort of activity.

And having unpredictable damages serves as a good deterrent, right?

They might fear that they're going to get sued for whatever environmental pollution they cause and actually get their shit together, right?

Maybe start investing in safety protocols, et cetera.

But if they know that the amount will be fairly small, they can just build that into their calculus

and maybe decide that polluting or being reckless with respect to their pollution is, in fact, the way to go.

Right.

So, in other words, Souter treats the unpredictability of punitive damages as if it's a bug, but in reality, it's a feature.

It forces companies to invest in safety and public safety and public health, and it keeps them on their toes in such a way where we don't have to worry that they are behind the scenes, sort of calculating how best to fuck all of our shit up.

Exactly.

I think a really

personally offensive part of the opinion for me is when he says that this is analogous to in criminal law, where there are minimum and maximum ranges of punishment.

So people know, like it's predictable that there's like this system in place where you know the maximum, the maximum amount of time, for instance, that you would serve in prison for committing a certain crime.

That's so absurdly stupid

that it's like it may make it a lot of fun.

The maximum criminal punishment is death.

Right, exactly.

The maximum criminal punishment is, say, it's even life, right?

Say it's a life sentence.

There's a natural cap on it because that's the natural end of what a person can give, you dumbass piece of shit.

And that's not meant to give criminals the opportunity to figure out whether it's worth it.

Right, exactly.

The second thing is that

you're like, he's counterintuited that point by saying, like,

corporations need to know the maximum like that

you're sorry like the maximum sentence in the criminal world is that you pay the ultimate price you give your fucking life right for something bad that you did right but here he's flipping it to say like it should be predictable and like manageable the amount of punishment that a corporation gets rather than saying a corporation needs to pay the ultimate price for fucking shit up and and like even citing to cases and statutes and stuff that are like punitive damages should not not bankrupt corporations.

Right.

Like, that's like the last thing you want with punitive damages is to just totally, but like, that is the equivalent, right?

Fucking

ExxonMobil, raise it to the ground.

Fuck them.

Right.

You know?

Right, exactly.

Exactly.

I mean, if you're going to compare it to criminal law, then the same logic should apply.

If you're willing to kill a human being for what they've done, in some cases, as we mentioned in our Tyson Viezone episode, in some cases where that person didn't even kill anyone, if you're willing to do that, then surely bankrupting a company can't be a bridge too far.

Exactly.

But, you know, fucking, whatever.

A couple episodes ago, we made fun a little bit of the field of law and economics.

And I think that this decision is part of the rot caused by that trend in legal academia.

There's an assumption built into a lot of law and economics reasoning that if someone does damage to someone else, they can just pay the monetary equivalent and all is good.

Yeah.

And that really ignores how these things work in reality.

If someone burns down your house and then hands you the cash value of everything you lost, you're not like, oh, okay.

Right.

Never mind.

Like, we're good.

Right.

You know,

the situation has not been fully addressed.

And more generally, you know, some damages are hard to quantify or hard to prove.

And here we have both, right?

Money can maybe help undo some of the damage Exxon caused, but can it really fix it, right?

Like how many animals were killed?

How many habitats were destroyed or rendered uninhabitable for a long period of time?

How many people had their livelihoods interrupted for years and years on end?

You can't rely on companies who break the law simply paying out cash to fix everything.

They need to be actively deterred with the prospect of big penalties.

Exactly.

You can't just wait for something to happen and say, okay, now they can pay you for whatever they did.

There needs to be a way to actually prevent them from doing it in the first place.

The law and economics approach, what it does is reduce human suffering and animal suffering and environmental damage to a matter of mathematics.

Yeah.

But it's not that simple and concrete.

Sometimes large wealthy corporations need to face significant consequences in situations where the damage done can't be readily repaired.

And when you say the companies need to be able to easily predict how much they'd pay, you're playing into a game where they can use their resources to strategically weigh their risk and reward and avoid liability for their wrongdoing.

Exactly.

And like the court is acting like facing big penalties is like this horrible burden on these companies.

And one of the big ironies here is that this oil spill happened in 1989.

This case happened in 2008.

Right.

So here we are 19 years later.

Exxon is still challenging their liability in court.

The very existence of this case is proof that these corporations will fight tooth and nail to avoid the consequences of their actions.

Absolutely.

So, Souter, in the opinion, is basically saying, Look, defendants shouldn't have to be worried about paying a bunch of money just because they single-handedly endangered the orca species, right?

Instead, we're going to create a rule: punitive damages can't be higher than the compensatory damages in maritime cases.

So, Exxon had been ordered to pay about $500 million as compensation, and the $5 billion was the punitive damages portion.

The Ninth Circuit cut the $5 billion in half, like we said, and the Supreme Court then reduces it by an additional 80%.

down to 500 million, one-tenth of what the original jury found.

And this outcome and the rule that punitive damages can't be higher than the compensatory damages, that is completely arbitrary.

It's literally just the court saying, look, that's unfair.

It's just too much money.

You can't make Exxon pay that.

That's it.

Like, that's the legal analysis that's behind this.

We talk a lot on this podcast about how selectively the court applies the concept of judicial restraint.

Justices will say, look, it's not the duty of the court to step in here, but that's just when it suits them.

Here, they're making a completely unfiltered judgment call that Exxon had to pay too much money in damages for a massive oil spill.

Yeah.

And then, as usual, we have some criticism for the liberals in dissent as well.

And so Stevens in particular, he writes this dissent, and it's very focused on like sort of the judicial restraint question.

And it's like, well, look, this isn't really our job.

And so he sort of talks about how like maritime law is like one of the few areas where the Supreme Court actually gets to sit as a court in common law and make up the law, but it does it in sort of parallel with Congress and that Congress has legislated a lot.

And this is really should be statutory.

Congress has like spoken on limiting damages in some cases and the fact that it isn't here, they should respect that and blah, blah, blah.

And it's like well argued, but completely unpersuasive.

Completely absent from the entire discussion is everything we've talked about, the damage, the just utter destruction of this wildlife,

this habitat, these people's livelihoods, which is like, that's the core issue.

Nobody's going to really care whether or not the Supreme Court is like overstepping its bounds.

What people care about is whether this

monetary award is ridiculous.

Is it out of step with reason?

Is it something that we socially think is inappropriate?

And all the arguments about that are about how reckless Exxon was and how damaging this spill was.

And Stevens has nothing to say about that at all.

Right.

It's just so fucking weak and disconnected.

Yeah.

It's like ivory tower bullshit at its peak.

Yeah.

Yeah.

Right.

So it's important to understand that this case fits into a broader political objective spearheaded by Republicans to limit damages in civil cases, right?

To limit damages in lawsuits.

Yes.

And they want that because their political allies, large corporations, would benefit from it.

Obviously, big corporations are frequently sued.

And so putting caps on damages or otherwise limiting them helps those corporations tremendously.

Right.

And so a lot of this stems from a familiar refrain on this podcast.

A lot of this stems from right-wing efforts to roll back legal and policy gains that the left made in the 60s and 70s.

And in this area, there were a number of

stuff that pissed off conservatives.

Just a few examples are

this was the first time commercial actors started having affirmative duties put on them to protect consumers.

This was also the time when contributory negligence was eliminated as a complete defense.

So it used to be if there was like a car accident and one party was 95% at fault and the other party was 5% at fault.

Too bad.

That 5%.

eliminates you from claiming anything in court.

And that changed.

And corporations hated this shit.

And so, you know, what did they do?

They funneled a bunch of money into the Republican Party and right-linning think tanks like the Heritage Foundation.

And you had this whole movement.

Ronald Reagan campaigned on it.

It was a tort reform.

Torts are like, that's when you just sue someone for negligence or assault or things like that.

That was a big thing in 94 when the Republicans took over the House.

It was part of their contract with America.

They passed a big law in the 90s, and Bill Clinton vetoed it in 96, 96 and Bob Dole ran on it in that election.

Bob Dole.

And so the corollary to this, of course, is that then like plaintiffs' lawyers started funneling a bunch of money to Democrats and are like one of the most important donor bases for Democrats.

So it's like a sharply partisan, well-moneyed issue on both sides of the political divide.

And now this has been going on since the 80s.

You have an entire generation of politicians, policy guys, conservative lawyers and judges who've just been immersed in this culture for their entire lives, for decades, right?

That's how they came up in.

That's all they know.

It's penetrated popular culture in a lot of ways.

The idea that we are a litigious society is basically, it borders on being common sense in the view of a lot of people.

And the idea that there are like people in this country who are willing to sue about anything.

And, you know, the hot coffee case where the lady spilled McDonald's coffee on herself and was a laughingstock of talk show host,

only recently has the rhetorical tide turned back where people were like, actually, that woman was severely burned, right?

Yeah, exactly.

It would surprise a lot of people to know that it's not just that those things are oversimplified or wrong.

They are right-wing talking points that successfully made their way into living.

room conversation.

Yeah, that's such a good point.

And it goes back to what Michael said up top, which is like, this is the the system that we have here, right?

Like we have corporate accountability built into a system of litigation where you can sue to hold people and companies accountable.

Like that's not a bad thing, you know?

Right, right.

That's part of the deal here, right?

Exactly.

You have laissez-faire economics on the front end where you have less regulations, but on the back end, you know, you have to pay up if you fuck up.

Exactly.

And the McDonald's case, I didn't learn this until law school.

Again, taken in by like the right-wing talking points that like, I didn't know McDonald's was like purposely making the coffee like insanely hot that they knew was

dangerous and certainly not drinkable because they had research saying, well, look, people buy it at the drive-thru and they don't drink it for like 10 minutes.

So we need it so fucking hot that 10 minutes later when they get to destination, it's like still warm and like the right drinking.

So yeah, she fucking burned her skin off like because they were purposely making a dangerous product.

Exactly.

And, you know, this wasn't ever public either.

And I don't remember if this is 100% accurate, but like the way they calculated damages in that case was taking like the profit that McDonald's makes off of just coffee sales for like one day.

Right.

Right.

So just, you know, a millions of dollars total award amount seemed like so crazy, but it was actually incredibly reasonable for that corporation, right?

Right.

Right.

What this conservative movement led to is an ideological framework that I think would sound crazy to the average person, but just about any practicing lawyer can tell you is true.

Conservatives genuinely believe that the legal system is unfair, not to minorities or the poor, but to corporations.

And this is because corporations find themselves in litigation frequently, and litigation is very expensive.

Corporations are full of guys in boardrooms who are looking at the books, and they have this big fucking book of legal costs and they're just like, God damn, this is too much.

So they lobby to keep those costs down.

And the amount of times I've heard people that like work at or for businesses in the law say like that their real problem is like frivolous lawsuits.

It's unbelievable.

They really truly believe it.

And obviously this ignores the reality that like the legal system's reliance on money to drive litigation benefits corporations, of course, right?

For the very simple reason that they have a lot of it and they are absolutely crushing like very meritorious claims like this one.

Yes.

I mean, we've got a case here where 20 years later,

the plaintiffs are trying to recover punitive damages and the court is still fucking with it.

And like Exxon is still trying to do their best to fight at every single turn and winning because they're rich, because their interests align with the powerful people who make the decisions.

This decision comes from that ideological foundation.

Corporations believe that their legal costs are generally excessive, so they fight them at every stage, all the way up to the Supreme Court.

And they often win because, as we want to say on this podcast, the Supreme Court sucks.

Yep.

That's right.

Next week, we are talking about qualified immunity, the doctrine that protects police officers and other government officials from civil liability when they are sued by people who they smack in the head with batons and so forth.

Yeah, good stuff.

They don't even have normal policing business.

Yeah.

Follow us on Twitter at 54Pod.

Retweet our episodes.

Tell your friends about us.

Tell your parents about us.

I think they'd like us.

Yeah, dads love me.

5-4 is presented by Westwood One and Prologue Projects.

This episode was produced by Kacha Kumkova with editorial oversight by Leon Napok and Andrew Parsons.

Our artwork is by Teddy Blanks at Chips and Why, and our theme song is by Spatial Relations.

from the Westwood One Podcast Network.