Protecting the Guilty, Punishing the Innocent
Wednesday, June 9th, 2010
As plumes of oil continue to spread in the Gulf of Mexico, the calls to raise or eliminate the liability cap on oil spills are getting louder.
This week, the White House came out in support of legislation that would raise the $75 million liability cap on economic damages to $10 billion. This is money that will be needed in a variety of ways, from building back tourist businesses to replacing the lost wages of shrimp boat workers.
Note that these liability damages do not include the cost of cleaning oil from the beaches, a point that has confused many commentators. The liability here is for economic damage suffered by individuals and businesses because of the oil spill.
The $75 million cap was low 20 years ago; now it’s absurd. It is is imposed by the Oil Pollution Act, legislation written in response to the Exxon Valdez oil spill of 1989, so let’s look at that disaster for a moment.
At this point many people probably think the oil spilled from the tanker Exxon Valdez in 1989 is all cleaned up and the damage gone away. On his April 29 radio program, Rush Limbaugh said,
“What was that place up in Alaska where the guy was drunk, ran a boat aground? (interruption) Prince William Sound. They were wiping off the rocks with Dawn dishwater detergent and paper towels and so forth. The place is pristine now.”
However, according to Kate Gordan, vice president for Energy Policy at the Center for American Progress, Exxon Valdez oil is still polluting the shores of Prince William Sound. “In its 2009 status report, the Exxon Valdez Oil Spill Trustee Council found that as much as 16,000 gallons of oil remains in the sound’s intertidal zones today,” Gordon testified to Congress. The fishing industry of the coastal towns has never recovered. Many families and small businesses were economically devastated.
On the other hand, Exxon made a $3.8 billion profit in 1989 and $5 billion in 1990.
Once again, the “system” protects the guilty and punishes the innocent. In 1990 Congress was so concerned about the welfare of the corporate giant Exxon that it enacted a ridiculous $75 million liability cap for economic damages caused by oil spills into law. The ones who paid for the Exxon Valdez disaster, beside wildlife, were the small businesses and families of Prince William Sound.
This injustice is not limited to oil spills versus fishermen. A great many industries have signed on to a campaign to protect themselves at the expense of employees, customers, the environment, and often small business. This campaign is called “tort reform.”
What’s called “tort reform” boils down to a misinformation campaign designed to manipulate the American people into giving away their right to seek damages in court. The campaign was begun in the 1980s by big tobacco companies facing lawsuits from lung cancer sufferers. It was soon joined by asbestos manufacturers, whose employees were getting sick with mesothelioma, an especially deadly cancer.
In recent years the “tort reformers” tried to connect rising health care costs to malpractice litigation. State after state was stampeded into reforming personal injury laws to get health care costs under control. Yet these “reforms” have yet to put even a dent in rising health care costs in any state.
In the next post I want to look more closely at the legal questions surrounding damage caps and the Deepwater Horizon spill now fouling the Gulf of Mexico.
