Wednesday, June 25, 2008

Exxon Gets "Craps" for Valdez Oil Spill

When the jury issued a $5 billion punitive damage award against Exxon for its role in fouling 1,200 miles of Alaskan coastline with 11 million gallons of oil, the oil company rolled the legal appeals dice. The first toss occurred at federal appeals court and Exxon won, slashing the award in half to $2.5 billion. The firm knew lady luck, as in a Bush appointed Supreme Court, was on its side and doubled down. Craps again! The U.S. Supreme Court reduced an original $5 billion award to a paltry $500 million.

Exxon made over $40 billion in 2007 and expects another gusher year. That equates to $110 million per day. The Supreme Court's fine amounts to less than five days of profit. Bloomberg reported it equals 12 hours of Exxon's sales. How punitive is one work week's profits or a half day of revenue? Not very, so expect another bad case of caveat emptor, otherwise known as buyer beware. From big oil to pharmaceuticals to financial markets, there's little to no penalty for bad acts, especially under a 90% corporate oriented Supreme Court. Only 10% of the people's will got enacted. Now that sounds familiar!