Tuesday, October 23, 2007

Are Punitive Damages A Fraud?

"It has been nearly two decades since the Exxon Valdez ran aground in Alaska. ... The $2.5 billion award in Valdez raises obvious and important questions of excessiveness--it is larger than the total of all punitive damages awards affirmed by all the federal appeals courts in history", Theodore Boutros, a Gibson, Dunn & Cruther partner in the WSJ, 23 October.

I remember Exxon applauded the jury which awarded $287 million in compensatory damages, then rebuked the jury for its $5 billion punitive damages (PD) award. How did Exxon avoid paying the judgment for over a decade? In 2005 and 2006 Exxon made $36 and $39 billion repectively, what makes $2.5 billion excessive? Exxon's current market cap is $507 billion. Does Boutrous compare the PD award to say, a social security recipient's average annual payment? What does Boutrous claim is not excessive? $1? That federal appeals courts did not confirm $2.5 billion in total PD awards in history shows PD are a hollow threat. Let's get out our violins and crying towels for Exxon. Joe Schmoe can get 25 to life in California for stealing a pizza if it's his third "strike" and Exxon complains about "Due Process"? This is disgusting. This case has become a Seventh Amendment issue. We need new civil procedure rules. After appeal, the original jury should be reconvenied and shown all the appellate papers and rulings and permitted to affirm or reject the appellate court's holdings!

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