Anchorage Daily News

WASHINGTON - It's getting more difficult for ordinary people to use lawsuits to hold big corporations accountable for gross misconduct, one of the plaintiffs in the Exxon Valdez lawsuit told the Senate Judiciary Committee.

The committee today looked at the fairness of several recent Supreme Court decisions, including the outcome of the lawsuit filed by 32,000 fishermen and Alaska Natives who took on Exxon Mobil for its role in the 1989 Exxon Valdez oil spill. Last month, the Supreme Court cut the punitive damages award in the case from $2.5 billion to $507 million. Exxon is fighting 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 to punish corporate wrongdoers, they use a 1-to-1 ratio based on the amount of compensatory damages awarded.

Alaskans, including Osa Schultz of Cordova, testified that the 1-to-1 ratio set by the Supreme Court is not only unfair but 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 would rather see punitive damages be 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 of a line of cases where the Supreme Court has misconstrued congressional intent to shield large corporations from accountability.

But 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, pointed out in her testimony that the recent court term was a "mixed bag" for corporate interests. Of the 24 cases involving business concerns (about one-third of the court's docket for the term), the court split fairly evenly. Thirteen cases could be described as pro-business; 11 could be deemed as less business friendly.

She also pointed out that the court left open a window in the Exxon case: If there is proof that the bad conduct of a corporation was intentional, or that a corporation profited from it, there is an opportunity to apply for higher punitive damages beyond the 1-to-1 ratio.

After the hearing, Schultz acknowledged that other than a sympathetic ear, it's not clear what sort of effect her testimony will have on future laws governing punitive damages - or the outcome of future court cases.

"It's probably not going to do a damn thing for us," she said. But she added that it was important for the people who make laws to associate real people with the effects of the Exxon Supreme Court decision.

Leahy said after the hearing that he called it because he is "one of those lawyers who believes the scales of justice appear to be tilting too quickly one way."

"It's tilting too fast," Leahy said. "If anything, it may be a warning shot that some of the laws we've written are not being followed."

Find Erika Bolstad online at adn.com/contact/ebolstad or call her in Washington, D.C., at 1-202-383-6104.

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