Wake Up and Smell the Oil

The Exxon Valez oil spill occurred in Prince William Sound, Alaska on March 28th 1989, the oil tanker bound for California hit a reef and spilled an estimated 10.8 million gallons of rare crude oil into the waters of Prince William Sound. It is still considered to be one of the most devastating environmental disasters ever to occur in history.

Prince William Sound's remote location (accessible only by helicopter, plane and boat) made government and industry response efforts difficult and severely taxed existing plans for response. The region is a habitat for salmon, sea otters, seals and a large variety of seabirds.

The oil spill eventually covered 1,300 miles of coastline and 11,000 square miles of ocean.

Both the long- and short-term effects of the oil spill have been studied and are still being studied 20 years after the accident.

Thousands of animals died immediately; the best estimates include 100,000 to as many as 250,000 seabirds, at least 2,800 sea otters, approximately 12 river otters, 300  harbor seals, 247 bald eagles, and 22 orcas, as well as the destruction of billions of salmon and herring eggs. The effects of the spill continued to be felt for many years afterwards. Overall reductions in population have been seen in various ocean animals, including stunted growth in pink salmon populations. Sea otters and ducks also showed higher death rates in following years, partially because they ingested prey from contaminated soil and from ingestion of oil residues on hair due to grooming.

In the case of Baker vs Exxon an Anchorage jury awarded $287 million for actual damages and $5 billion for punitive damages. The punitive damages amount was equal to a single year's profit by Exxon at that time. To protect itself in case the judgment was affirmed, Exxon obtained a $4.8 billion credit line from J.P. Morgan & Co. This in turn gave J.P. Morgan the opportunity to create the first modern credit default swap in 1994, so that J.P. Morgan would not have to hold so much money in reserve against the risk of Exxon's default.
Meanwhile, Exxon appealed the ruling, and the 9th U.S. Circuit Court of Appeals ordered the original judge, Russell Holland, to reduce the punitive damages. On December 6, 2002, the judge announced that he had reduced the damages to $4 billion, which he concluded was justified by the facts of the case and was not grossly excessive. Exxon appealed again and the case returned to court to be considered in light of a recent Supreme Court ruling in a similar case, which caused Judge Holland to increase the punitive damages to $4.5 billion, plus interest.
After more appeals, and oral arguments heard by the 9th Circuit Court of Appeals on January 27, 2006, the damages award was cut to $2.5 billion on December 22, 2006. The court cited recent Supreme Court rulings relative to limits on punitive damages.

Exxon appealed again. On May 23, 2007, the 9th Circuit Court of Appeals denied Exxon Mobil's request for a third hearing and let stand its ruling that Exxon owes $2.5 billion in punitive damages. Exxon then appealed to the Supreme Court, which agreed to hear the case. On February 27, 2008, the Supreme Court heard oral arguments for 90 minutes. Justice Samuel Alito, who at the time, owned between $100,000 and $250,000 in Exxon stock, excused himself from the case. In a decision issued June 25, 2008, Justice David Souter issued the judgment of the court, vacating the $2.5 billion award and remanding the case back to a lower court, finding that the damages were excessive with respect to maritime common law. Exxon's actions were deemed "worse than negligent but less than malicious."
In 1998 Exxon and Mobil complete their $83 billion merger, forming Exxon Mobil Corporation. Cost savings from the merger are tallied at $4.6 billion.
The bottom line here folks is that 20 years after an Exxon ship spilled millions of gallons of oil into the ocean. They have averaged close to 25-30 billion dollars a year in profits.
To date, Exxon has only paid out less than $300 million dollars for actual damages to 11,000 individuals and businesses in Alaska and not a dime for punitive damages, after spending 20 years appealing their case all the way to the US Supreme Court and dishing out God knows how much in attorney fees during the process.
The point is that the oil spill in the Gulf of Mexico from a BP platform rig will affect the sea life in that area for decades to come. Not to mention the businesses that depend on the fishing industry that supply a third of the seafood in the US. Many of the same people who were able survive and rebuild their livelihoods after hurricane Katrina five years ago, may end up bankrupt after this summer. We have already seen some affect on the local economies in and around the Gulf that depend on tourism.
Bottom line…BP will fight tooth and nail with residents, businesses and even the Federal Government when damages and clean-up costs are evaluated and attempted to be collected from their company!
It’s all about the money!