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Only Half a Billion
Today the U.S. Supreme Court cut a punitive damage award against Exxon for the 1989 Prince William Sound oil spill from $2.5 billion to $500 million. The original award, which had already been reduced by the appeals court, was $5 billion, 10 times the corresponding compensatory damages. In the majority opinion, Justice David Souter (joined by Roberts, Scalia, Kennedy, and Thomas) concludes that a 1-to-1 ratio of punitive to compensatory damages is an appropriate limit in cases like this one, involving the application of maritime law.
That question is different from the constitutional issue addressed by the Court in other cases dealing with punitive damages. In those cases, the Court has ruled that excessively high punitive damages violate the Due Process Clause, and it has indicated that multiples in the double digits are inherently suspect. In this case, by contrast, the Court sought to further the goals of maritime law by reining in "outlier punitive damages awards," thereby making judgments more consistent. The unpredictability of high punitive awards "is in tension with the function of the awards as punitive," says Souter, "because of the implication of unfairness that an eccentrically high punitive verdict carries." Since "most accounts show that the median ratio of punitive to compensatory awards remains less than 1:1," he says, that's a sensible upper limit.
Picking a ratio is inherently arbitrary, but less so than the highly variable judgments rendered by unconstrained judges and juries. "The real problem," Souter says, "is the stark unpredictability of punitive awards." He cites data indicating wide variability and "anecdotal evidence" suggesting that it is not justified by differences in the underlying facts. Maybe so, Justice John Paul Stevens says in his dissent, but this is a problem for Congress to fix. "While maritime law 'is judge-made law to a great extent,'" he writes, "it is also statutory law to a great extent; indeed, '[m]aritime tort law is now dominated by federal statute.'"
I tend to agree that legislation is a more appropriate response to the problems raised by arbitrary, unpredictable punitive awards, and many state legislatures already have imposed limits on punitive damages in the form of ratios or monetary caps. I'd prefer to see states and the federal government abolish punitive damages altogether, keeping civil lawsuits focused on compensation and imposing punishment for especially egregious conduct under criminal law. (Many of the people who said Exxon should pay billions in punitive damages conflated these two goals, arguing that victims of the Exxon Valdez spill were never adequately compensated, which is a separate issue.) But if we must have a parallel system of punishment, it's better to have one with statutory standards like those that govern criminal penalties.
I discussed the Exxon Valdez case in a column last fall.
|6.25.08 @ 6:29PM|#
If a telecom or ISP hands over any info pertaining to you, why shouldn't there be unlimited punitive damages? Better to sting the pocketbook of that specie of tortfeasor who would invade your privacy to curry favor with Caesar. Even if it means financial ruin.
|6.25.08 @ 6:45PM|#
"The real problem," Souter says, "is the stark
unpredictability of punitive awards."
See, I thought the real problem was the consequences of
irresponsible behavior being so low that Exxon could write them off
as a cost of doing business, rather than changing their
behavior.
Punitive damages are supposed to hurt and deter. Ergo, the relevant
figure to compare them to is not the compensatory damages, but the
bad-actor's bottom line. If a company comes within moments of
putting pluotonium in the LA water supply, and is saved at the last
second by Die Hard heroics, what are the actual damages? Should
that be the limit of their responsibility?
|6.25.08 @ 6:50PM|#
So basically the court is slowly destroying the concept of
punitive damages as a deterrent to being a bad actor.
What nonsense. There should not be any caps on punitive damages.
The point of punitive damages is to deter bad actors and to not let
a company do a cost benefit analysis to decide whether or not to it
is financially better to not be a bad actor.
|6.25.08 @ 6:50PM|#
How about state actors that intentionally violate your
constitutional rights?
Say the Federal Bureau of Inquisition, in league with certain
mobsters, arranges for the arrest, prosecution and imprisonment of
innocent men charged with murder, in order to shield the guilty
parties who are allied with the mobsters. After the innocent men
have served 30 years in jail, the truth is brought to light after
several of the mobsters and FBI "heroes" are indicted.
Should there be any cap on the COMPENSATORY damages that the
government must pay?
Should the aggrieved parties be able to get any punitive
damages?
The sad facts are (1) both the feds and the states have caps on the
amount of compensatory damages available to the victims as against
the feds or the state itself and (2) punitive damages are not
available against the governmental entity. The cap on compensatory
damages is generally $100,000.00-a lousy hundred grand.
Sure, one can sue the individual state actors. Reality tells us
that this is no real remedy as the individual state actor is often
protected by the judicially created doctrines of good faith
immunity or absolute immunity.
Bottom line: If the state messes with your rights, it should face
ruinous damages. Ditto for the individual state actor.
|6.25.08 @ 6:51PM|#
See, I thought the real problem was the consequences of
irresponsible behavior being so low that Exxon could write them off
as a cost of doing business, rather than changing their
behavior.
Exactly. Exxon makes enough revenue in one afternoon to cover 500
million. You think this paltry sum is going to motivate them to be
more responsible? Hardly.
|6.25.08 @ 6:55PM|#
See, I thought the real problem was the consequences of
irresponsible behavior being so low that Exxon could write them off
as a cost of doing business, rather than changing their
behavior.
Exactly. Exxon makes enough revenue in one afternoon to cover 500
million. You think this paltry sum is going to motivate them to be
more responsible? Hardly.
I think I have found the mythical Hit and Run echo
chamber...strangely it is not a libertarian one.
|6.25.08 @ 6:57PM|#
So basically the court is slowly destroying the concept of
punitive damages as a deterrent to being a bad actor.
We can only hope. What a wonderful world it would be if things were
actually priced at what markets value them at.
|6.25.08 @ 6:58PM|#
Joe- A different scenario
If you rear-end me going 2 mph and I have no injureis, do not miss
any work and have 500 bucks in damage to my rear bumper, I should
only get 500 bucks.
Your conduct was negligent and only slightly negligent at that.
Yes, you should be responsible for the 500 bucks in damages-but
that's it. Even if a cop rear-ended me going 2 mph, it still should
be the same result as the cop was not acting under the color of law
while depriving me of my liberty.
Kolohe|6.25.08 @ 6:58PM|#
As I say most of the times on these issues, people can't have it
both ways. Either you need
1) A permissive regulatory regime where regress for damages are
pursued by other private parties and are adjudicated on a case by
case basis - with high variability.
2) A strict regulatory regime which indemifies market participants
as long as they follow the regs; departing from the regs is a
criminal action, but following the rules is an absolute defense
from criminal and civil liability.
a mismash of both is simultaneously bad for business and bad for
the law.
|6.25.08 @ 6:58PM|#
Its pretty clear they finally got an attorney with the "right"
connections. Clearly the "judge" ended up with a brief case full of
cash! Corruption is bliss!
http://www.FireMe.To/udi
|6.25.08 @ 7:00PM|#
I think I have found the mythical Hit and Run echo
chamber...strangely it is not a libertarian one.
Is being for punitive damages to deter things like spilling tons of
oil into the sea inherently un-libertarian?
|6.25.08 @ 7:13PM|#
Kolohe-
This is a tough issue. I know my first two posts on this thread
concern punitive damages in the violation of one's constitutional
rights context. Putting aside Exxon Valdez and other cases that
deal with egregious negligence not involving the state, how could
it ever be good to have a systen of limited compensatory damages
and no punitive damages for those who have had the pleasure of
having their rights violated by the state?
Elemenope|6.25.08 @ 7:24PM|#
We can only hope. What a wonderful world it would be if
things were actually priced at what markets value them
at.
So, um, what's the "market value" for dumping loads of sweet light
crude into the Alaskan shoreline?
Oh, wait, even Christians rarely say they can find Jesus in fucking
food objects. Why does a libertarian under every fucking rock need
to find a market?
Geotpf|6.25.08 @ 7:35PM|#
Punitive damages should only be issued when the conduct was extremely egregious. So, liberty mike's example is bad, because the conduct was not extremely egregious. A better example would be if you were drunk and high and drove your car through a playground, killing several children (as opposed to a minor fender bender). And, when issued, such damages should punish the offender (hence the name). A $500 million dollar award does not punish Exxon Mobil much.
Pilobious|6.25.08 @ 7:50PM|#
Is being for punitive damages to deter things like spilling
tons of oil into the sea inherently un-libertarian?
In short, yes.
The real wingnut Libertarians believe that the consumer should
punish Exxon (in this case) - not some regulatory agency.
Never mind the natural havoc.
Of course, 99% of consumers don't give a fuck.
dpsc|6.25.08 @ 8:03PM|#
My first thought when I saw this on the news was "whoah-
nineteen years ago? Am I really that old?" (I'm self-absorbed like
that, and remarkably vain given my looks.) I had a look at my birth
certificate and it turns out that I am in fact now aged. I'll have
to hide that thing so my girlfriend never stumbles across it. I had
to admit that I was over 21 when I bought her friends liquor right
before her junior prom (which was a blast, btw... really takes me
back), but I'm drawing a line in the sand there.
As for this decision, I think it is a good outcome in this
particular case, but possibly bad precedent. As the helpful Exxon
spokesman pointed out on the nightly news, Exxon has spent more
than 3 billion on clean-up, compensation, and fines. On top of that
they took an enormous PR hit, and have had to litigate this case
since I was... well, that's for me to know and no one else to ever,
ever find out. I'd say that that is a sufficient deterrent, in this
case, in much the same way that cyanide in random foodstuffs is a
sufficient weight-loss aid, one way or another.
The difficulty here is that I do not trust the state, and I do not
trust corporations, but I also don't trust my neighbors (i.e. the
jury). I trust them all about as far as I can throw them.
It should be noted that I could throw an average neighbor tens of
feet if they were compressed into a shape that was more aerodynamic
and easier to get a grip on (it's my incessant discus practice that
keeps me young-looking). The average multinational- honestly, I
doubt I could even lift one without a strong wind in my
favor.
But the feds... well, in this case it is strictly a question of how
far they could throw me, and the answer is "to the moon, baby, one
of these days, right to the moon."
Kolohe|6.25.08 @ 8:20PM|#
how could it ever be good to have a systen of limited
compensatory damages and no punitive damages for those who have had
the pleasure of having their rights violated by the
state?
fwiw, i wasn't responding to you directly, i composed my comment
without reading any others.
As for your example (and keep in mind I am by no means the
anarchist you are) I would beg the question. A minarchist or
classically liberal state (which is closer to where I'm at) would
make it so that violations of the rights of individuals by state
agents would be itself a violation of the regulations - hence no
indemity, and thus subject to civil and criminal penalties.
Obviously in practice this is a lot harder in theory. A lot of it
depends on being able to do a version of 'piercing the corporate
veil' on agents of the state, while trying not to create scapegoats
nor witchhunts. A tough nut to crack, as you say.
Here's sort of an example. Environmental regulations from the EPA
state that if your ship discharge oily waste directly into the
harbor, on purpose or by accident, you will be subject to a fine
based solely on the volume discharged. What is interesting is that
this fine is assessd directly and personally on the master/captain
of the vessel, and regardless of whether the vessel is civlilian or
military. So consequently, there is a big incentive for Commanding
Officers and Masters to train their crews how not to dump oil in
the harbor. And it applies equally if your in charge of a 30 ft day
cruiser, a 10K ton freighter, or the USS Nimitz - so you can't hide
behind your corporation or government, but likewise the corp/govt
has little incentive to help you cover stuff up.
dpsc|6.25.08 @ 8:38PM|#
Kolohe: A minarchist or classically liberal state (which is
closer to where I'm at) would make it so that violations of the
rights of individuals by state agents would be itself a violation
of the regulations - hence no indemity, and thus subject to civil
and criminal penalties.
You're stepping onto marshy ground here, I think, though, to your
credit, you admit both that you are begging the question and
that:
A lot of it depends on being able to do a version of 'piercing
the corporate veil' on agents of the state, while trying not to
create scapegoats nor witchhunts. A tough nut to crack, as you
say.
The basic problem is this: if you hold that the state is necessary,
or inevitable (and I believe both propositions, though the first
follows easily from the second) you must also grant that it is
exceptional, to some degree (if it is not, what makes it the
state?). The state cannot act without actors, and this means that
you must grant that they are exceptional as well.
The law has long recognized that the state, in isolation, is only
liable to the degree to which it agrees to be liable. In the
presence of a strong state non-state actors are also only liable to
the degree that the state agrees that they are liable. This is not
exactly the same thing, though...
|6.25.08 @ 10:54PM|#
liberty mike,
I hear you. And yet, I'm always hearing about taxpayer dollars
theft-ed from the productive by menwithguns. When you sue the
government, you're suing your neighbors, to exactly the same degree
you are stealing from them by collecting Social Security.
You really can't see an argument for limiting the liability of the
taxpayers?
Elemenope|6.25.08 @ 11:11PM|#
You really can't see an argument for limiting the liability
of the taxpayers?
Why? We *are* liable if our government, which we have failed to
control through ballot *or* bullet, harms one of its citizens (in a
redressable manner).
If we are all, to some degree, responsible, shouldn't we all
pay?
dpsc|6.25.08 @ 11:13PM|#
joe says: See, I thought the real problem was the
consequences of irresponsible behavior being so low that Exxon
could write them off as a cost of doing business
and:
joe says: You really can't see an argument for limiting the
liability of the taxpayers?
Maybe you're overlooking the deterrent effect, though that seems
unlikely given your earlier comments.
dpsc|6.25.08 @ 11:38PM|#
lmnop says: "Why? We *are* liable if our government, which we
have failed to control through ballot *or* bullet, harms one of its
citizens (in a redressable manner).If we are all, to some degree,
responsible, shouldn't we all pay?"
This is also problematic. Take the issue of slavery reparations,
for instance. Many people would argue that because of the history
of slavery in the US we ought to be paying large reparative sums to
the descendants of slaves, regardless of how well they are doing in
the modern US.
As the US becomes post-racial (i.e. truly mixed) this will resonate
less and less. Intuitively, it doesn't make much sense to ask
Cambodian refugees to pay slavery reparations. Less intuitively, it
makes no sense to ask people who had no part in slavery, and who
have received no tangible benefit from it to make such
payments.
Between asking that the state be not liable at all and that the
state be liable for all there is a middle ground. Fixing that
ground is the issue for most people who don't take extreme
positions.
Elemenope|6.25.08 @ 11:43PM|#
This is also problematic. Take the issue of slavery
reparations, for instance. Many people would argue that because of
the history of slavery in the US we ought to be paying large
reparative sums to the descendants of slaves, regardless of how
well they are doing in the modern US.
As the US becomes post-racial (i.e. truly mixed) this will resonate
less and less. Intuitively, it doesn't make much sense to ask
Cambodian refugees to pay slavery reparations. Less intuitively, it
makes no sense to ask people who had no part in slavery, and who
have received no tangible benefit from it to make such
payments.
I don't disagree (much) but you took the argument and ran exactly
the wrong way with it. The real problem with slave reparations is
that the actual harm visited directly by the state was perpetrated
against those who cannot be made whole (because they are long since
dead). Slave reparations actually made a fuck-ton of sense when
they amounted to forty acres of farmland and a mule, y'know, a few
months after slavery was ended in the rebel states. Mootness
applies.
It is far less problematic a case when the bad actor is present and
accounted for, and the harmed individual is available to be made
whole. Given those two conditions, I see nothing wrong whatsoever
with a government of the people being liable to suit and judgments
paid out of tax dollars.
Elemenope|6.25.08 @ 11:49PM|#
Between asking that the state be not liable at all and that
the state be liable for all there is a middle ground. Fixing that
ground is the issue for most people who don't take extreme
positions.
Whoa, BTW, false dilemma. There are precious few who argue that the
state should be liable for *everything*, and you are not likely to
find them hanging around hereabouts.
The state is on the hook insofar as some bad actor uses the cloak
of the state and acts under the color of its authority to
perpetrate those bad acts, and the state for its part either is
negligent in preventing the abuse or gives covert and/or overt
assent to the actions either through willful disregard or material
and official support.
If a cop beats the shit out of a suspect, the cop ought to be
liable. To any extent that bad policies of the police department
regarding use of force, blue wall of silence action, actions of
superiors to ameliorate responsibility, or corruption occurs, the
state is, to that extent *only*, responsible in a liability
sense.
dpsc|6.25.08 @ 11:50PM|#
lmnop" I don't disagree (much) but you took the argument and ran exactly the wrong way with it.
|6.25.08 @ 11:51PM|#
Elemenope - slavery reparations, though, is really just
shorthand for "discriminatory polices by the US Government" against
American blacks, which go through the 1960s (or so).
I am not sure any black person really thinks it's really
reparations for slavery so much as it's reparations for
"Hey, Government, you fucked us over for a minute there. Pony up,
bitches."
|6.26.08 @ 12:01AM|#
While I don't know if there's an inherently libertarian position on this issue, most libertarians I know seem to champion the Constitution, and the big issue with punitive damages is a constitutional one. While I'm sure many of you are aware of this, it has yet to be discussed in this thread so I'll summarize it now. Basically, criminal defendants are afforded certain protections that civil defendants are not (e.g. a criminal defendant must be proven guilty beyond a reasonable doubt while a civil defendant need only be proven liable by a preponderance of the evidence). Punitive damages straddle the line between civil and criminal, so the issue is what safeguards should be put in place (or rather what safeguards the Constitution requires be put in place) to ensure punitive damages are reasonable. So I suppose the question is if you're pro punitive damages, why do you see that as preferable to simply making certain acts illegal and subject to criminal fines? At least in that situation the windfall goes to the state instead of one individual who will already receive compensatory damages...
dpsc|6.26.08 @ 12:02AM|#
Oops, I hit the wrong button. I had intended to respond at
length but instead I will limit this comment to one point, and
respond at length in another comment:
lmnop says: false dilemma. I would agree if I had offered
those extreme positions as the only available choices. Instead I
presented them as extreme positions, and suggested that the
moderate position was to choose an intermediate value. I even
suggested that deciding on where that value fell on the scale was
the main difficulty.
Elemenope|6.26.08 @ 12:11AM|#
false dilemma. I would agree if I had offered those extreme
positions as the only available choices. Instead I presented them
as extreme positions, and suggested that the moderate position was
to choose an intermediate value. I even suggested that deciding on
where that value fell on the scale was the main
difficulty.
True enough. I realized that about five seconds after I had posted
(damn you, preview button!). You are right, it isn't a false
dilemma. It was more of a *strawman* since nobody in sight was
defending one of the aforementioned "extreme positions" (namely,
the one where the state is on the hook for everything under the
sun). That's not entirely correct either, since you do not exactly
proffer an argument that logically follows from the assertion of
the entire continuum.
I guess it just plain irritated me. Pay me no mind. ;)
Elemenope|6.26.08 @ 12:16AM|#
I am not sure any black person really thinks it's really
reparations for slavery so much as it's reparations for "Hey,
Government, you fucked us over for a minute there. Pony up,
bitches."
I'm right there with you up until "minute".
As far as post-slavery discrimination, especially post-Civil Rights
Act 60's and 70's, most unfriendly fucking of black people happened
outside the sanction of the law.
Thus, it would be much harder to assign liability to the state
directly (though endemic corruption or racism amongst certain
organizations of individuals, like police departments, could still
be a point of liability).
More often, it is a singular bad actor or a small group of such
actors acting outside the bounds of the law, and can be brought to
heel within the power structure as it exists. So long as there is
no significant foot-dragging or negligence, the state is off the
hook.
dpsc|6.26.08 @ 12:23AM|#
Actually, it's not even a strawman. I offered up a continuum. I
believe that almost all of the commenters on this thread fall
somewhere on that continuum. For it to have been a strawman it
would have to be the case that no serious commenter had fallen
anywhere on that continuum.
You're probably correct that you were just frustrated. I've found
that masturbating on a picture of the Pope helps with that.
|6.26.08 @ 12:25AM|#
More often, it is a singular bad actor or a small group of
such actors acting outside the bounds of the law, and can be
brought to heel within the power structure as it exists. So long as
there is no significant foot-dragging or negligence, the state is
off the hook.
Heh...how about we just charge the whole lot of 'em with enterprise
corruption? That oughta take care of that.
dpsc|6.26.08 @ 12:34AM|#
Ayn_Randian: Heh...how about we just charge the whole lot of
'em with enterprise corruption? That oughta take care of
that.
The problem is that that would pretty much dissolve our government.
If you charged them all on the basis that we charge conspiracies
for other crimes, as they deserved, you'd be left with pages and
interns running things. And not even very many of those.
|6.26.08 @ 12:38AM|#
dpsc - I'm at a loss as to why you'd classify that outcome as a "problem". I think of it more as "the solution".
Elemenope|6.26.08 @ 12:49AM|#
The problem is that that would pretty much dissolve our
government. If you charged them all on the basis that we charge
conspiracies for other crimes, as they deserved, you'd be left with
pages and interns running things. And not even very many of
those.
Oh, now that's just melodrama. Conspiracy requires the actors
involved to have a hand in planning future bad acts, if not carry
out an overt act furthering the bad act as planned. I seriously
doubt the poor fuckers over at Dept. of Agriculture were in on the
plot to gentrify neighborhoods in south central Detroit.
So, we'd lose the Dept of Justice (no big loss), perhaps Defense,
maybe State. Some federal regulatory agencies could go, too. But
many would remain untouched, as it is hard to imagine any proximate
bad act of the government that would require collaboration of *all*
its arms. Heck, even getting two departments to work together *at
all* is a chore.
Though, like Ayn_Randian, if you did happen to be right, I'd be
hard pressed to figure how on balance it would be such a bad
thing.
dpsc|6.26.08 @ 12:52AM|#
Ayn_Randian: I'm at a loss as to why you'd classify that
outcome as a "problem". I think of it more as "the
solution".
Look upthread. I believe that it is not possible to get rid of the
state given current conditions. If you dissolve it you'll wind up
with a state run by one faction- the faction that wins the war of
dissolution.
Note that Ilya Somin cites Pirates and Feudalists as his models for
anarchy. I prefer Albania, as it's more modern. I would rather live
in the States now than be a Pirate or a Peasant, let alone an
Albanian.
Elemenope|6.26.08 @ 1:01AM|#
Look upthread. I believe that it is not possible to get rid
of the state given current conditions. If you dissolve it you'll
wind up with a state run by one faction- the faction that wins the
war of dissolution.
That would be true only in the case of a true power vacuum. But the
United States, as the name implies, is composed of many sovereigns,
all fifty of which I am sure would be eager to step each into their
own little piece of the gap opened by the fed's rotting
corpse.
And given that I think that the fed collapsing due to a few RICO
suits is melodramatic hogwash, a skeleton state at least would
remain to coordinate trade and business among the fifty
sovereigns.
You know, like a confederation; they could even have articles, if
they want.
dpsc|6.26.08 @ 1:06AM|#
lmnop: Oh, now that's just melodrama.
You have a funny tendency to call things the opposite of what they
are. That is not melodrama. It is a dry acceptance of the simple
truth that agents of the state are judged by a separate set of
standards.
I mean, let's talk about melodrama- you've got Balko who is somehow
convinced that black guys are more likely to be sentenced to death,
for instance. Pure melodrama.
I'll stand by my statement. The only people in politics who are
not, to one degree or another, complicit in payoffs, are pages and
interns.
Elemenope|6.26.08 @ 1:24AM|#
I'll stand by my statement. The only people in politics who
are not, to one degree or another, complicit in payoffs, are pages
and interns.
You have to stretch "payoff" to an untenable degree of distortion
to come close to the standards for civil liability, and since we're
talking about bankrupting the fed with civil suits, it just doesn't
fly. It's melodrama to call a salary a "payoff", for example, which
seems to be what you are implying.
More to the point, it is melodrama *precisely because* it is
impossible to imagine, given any reasonably just system of laws and
justice, for an agent of one disparate part of the government being
held to account for another. It does not matter whether or not
"agents of the state are judged by a separate set of standards",
since that set of standards could never include the Agriculture
secretary being sued for HUD's shenanigans. And since the budgets
are compartmentalized, there is insulation from a runaway take from
the coffers.
Absent that, only portions of the government (probably for the most
part police agencies) are likely to have liability outstanding that
would, in our hypothetical world where the fed is sued for its
civil misdeeds, face action and possible bankruptcy.
And this, in the final analysis, is all rather academic. My
original point was only that there is nothing *morally repugnant*
in penalizing citizens who at least nominally support their
government by
1. voting considerably often
2. following most of its laws dutifully
3. not rising as one to slay the agents of the state
for their complicity through inaction or ineffectual action of the
civil torts and criminal acts of the state by making them pay,
through taxation, for the errors of their duly sworn agents.
dpsc|6.26.08 @ 1:53AM|#
You have to stretch "payoff" to an untenable
degree
No, you really don't. You can just look at who received an
unreasonable advantage and also gave a lot to politicians. I'd
start with peanut farmers and the sugar industry. I'd move on to
"low sulphur" coal producers. By the time I was done with _really
obvious payoffs_ I would have recovered more than one trillion
dollars. Sorry if that's a bit too melodramatic for you, but it's
true.
There are no secret conspiracies, but there sure as hell are a lot
of outight I'm going to fuck you cartels.
|6.26.08 @ 4:23AM|#
Is being for punitive damages to deter things like spilling
tons of oil into the sea inherently un-libertarian?
Seeing as how oil spills are down and Exxon did not get the big of
punitive damages you think are necessary your theory that higher
punitive damages are necessary to deter spills is in a bit of
jeopardy.
Almost as if an invisible hand steered an industry to be more
responsible. Imagine that.
|6.26.08 @ 4:32AM|#
joe says: See, I thought the real problem was the
consequences of irresponsible behavior being so low that Exxon
could write them off as a cost of doing business
and:
joe says: You really can't see an argument for limiting the
liability of the taxpayers?
Maybe you're overlooking the deterrent effect, though that seems
unlikely given your earlier comments.
Government should never be deterred...Government is a force of good
and the more powerful it is the better off we all are.
|6.26.08 @ 4:39AM|#
I do like how the same people who think Exxon should pay more
then their fair share, also think irresponsible lenders and home
buyers should pay less then their fair share.
Can a sense for moral hazard be schizophrenic? Or is this just a
case of willful cognitive dissonance?
|6.26.08 @ 7:59AM|#
dpsc, LMNOP,
Don't you think the chain of liability that runs through
cop->supervisor->city manager->city council-> taxpayers
change the math on the deterrence issue, compared to
captian->manager->Exxon?
|6.26.08 @ 8:05AM|#
This is relevant both the moral issue of responsibility, but also to efficacy of deterrence. Exxon is in a much stronger position to control the behavior of its ships' crews than the taxpayers are to control the behavior of individual government employees.
Elemenope|6.26.08 @ 8:08AM|#
Don't you think the chain of liability that runs through
cop->supervisor->city manager->city council-> taxpayers
change the math on the deterrence issue, compared to
captain->manager->Exxon?
Not really. Additional layers of bureaucracy should not render
additional protection from liability; if people are on the hook for
what their cops do, this becomes an incentive for people to take
measures bringing them more in direct *control* of those cops and
their policies.
I could care less how removed from the proximate agent the
ultimately responsible party happens to be; if they are responsible
for the actions of their organization (as citizens are in a
democratic government, or stockholders are for a corporation) then
they should get it in the teeth.
Elemenope|6.26.08 @ 8:09AM|#
This is relevant both the moral issue of responsibility, but
also to efficacy of deterrence. Exxon is in a much stronger
position to control the behavior of its ships' crews than the
taxpayers are to control the behavior of individual government
employees.
Call it an incentive to develop such control.
|6.26.08 @ 8:15AM|#
joshua corning doesn't know the difference between endangering
other people and not.
Please, lecture us more on fine moral issues, Ghandi.
Elemenope|6.26.08 @ 8:18AM|#
No, you really don't. You can just look at who received an
unreasonable advantage and also gave a lot to politicians. I'd
start with peanut farmers and the sugar industry. I'd move on to
"low sulphur" coal producers. By the time I was done with _really
obvious payoffs_ I would have recovered more than one trillion
dollars. Sorry if that's a bit too melodramatic for you, but it's
true.
Gee, thanks for proving my point. Let's be generous and say that of
"the really obvious stuff" you could win 50% of those cases. OK, so
that's a hook for 500 Billion; chump change in the big picture of
the federal budget (one-sixth of federal outlays not including
ongoing war spending.)
As the cases get less "really obvious" the probability of a suit's
success plummets. If I were to be really generous, let's say of all
suits obvious or otherwise, one were able to take the fed for a
cool Trillion.
At almost exactly *one-third* of the total budget, that wouldn't
even come close to your apocalyptic "pages and interns" prediction.
Melodrama indeed.
|6.26.08 @ 8:38AM|#
I'm very much anti-punitive damages, because what you're
basically saying is "a judge or group of 12 people believe that you
have been so negligent that you must pay lots of money to a
relatively few people"
What?!? That doesn't make any sense. If the problem was egrarious,
it should be up to the regulatory agencies to impose fines, not
some random, industry uneducated judge or equally uninformed pool
of 12 random people. There is no scientific basis for how to arrive
at punitive number figures and therefore no way to argue against
them except as either being "enough or too much" (depending whether
you're the plaintiff or defendant). I would do away entirely with
that concept and simplify civil court litigation to just
compensatory damages, which are straightforward and can be
understood by judges and juries. If a company needs to be punished
any more for their actions, it should up to a society
representative agency such as a governmental regulatory agency or,
yes, the consumer.
Elemenope|6.26.08 @ 9:04AM|#
I would do away entirely with that concept and simplify
civil court litigation to just compensatory damages, which are
straightforward and can be understood by judges and
juries.
I hope you're kidding. Punitive Damages are too
complicated for judges (!) and juries? Well, there goes the
entire criminal justice system; if they can't be trusted with mere
dollars, how on Earth could they be trusted with peoples'
lives?
There is nothing especially complicated about explaining to twelve
average folk that punitive damages are to discourage the bad actor
from repeating his bad action and also to deter by making too
expensive such a choice for similar actors. That's *way* simpler
than your average white collar criminal case, for sure.
Nigel Watt|6.26.08 @ 9:06AM|#
The main problem with the 5 billion was that that number was so high that, as Exxon had to put up a bond for the money to appeal it, the interest was so high that they could pay for fighting the decision completely with interest from money they had to put up anyways. They couldn't afford not to fight it.
|6.26.08 @ 9:14AM|#
Exxon is in a much stronger position to control the behavior
of its ships' crews than the taxpayers are to control the behavior
of individual government employees.
Folks, our work is done here. In his attempt to rationalize
liability caps for the state, joe has stumbled upon one of the
biggest reasons not to hand over gobs of power to the state in the
first place.
Our baby's all growns up!!!! It's like an angel has just earned
it's wings! I'm so proud!
joe, you can pick your decoder ring up any time between 10AM and
3PM in Room 302 of the Milton Friedman Building. Welcome!
|6.26.08 @ 9:26AM|#
Too many weirdos hanging out by the entrance with stacks of mimeographed pages, doctor. I'll pass.
Lost_In_Translation|6.26.08 @ 9:35AM|#
LMNP, I am not joking in the slightest. The punitive damage
system in civil litigation is the worst invention ever. It is an
impractical, unfair system created because some businesses acted
badly when some people were put in danger. It would have been easy
enough to punish these companies with penalties assesed by the
government, but someone decided that individual judges should be
able to decide the economic fate of companies based on single
instances. Its a horrible system.
There is nothing especially complicated about explaining to
twelve average folk that punitive damages are to discourage the bad
actor from repeating his bad action and also to deter by making too
expensive such a choice for similar actors. That's *way* simpler
than your average white collar criminal case, for
sure.
The complication comes in determining what punitive damage would be
appropriate to not shut the business down entirely (and if your
whole goal is to shut it down anyway, just have the government
revoke their permits to operate).
..and as Nigel said, it behooves Exxon to continue fighting
punitive damages indefinitely because paying lawyers to litigate is
cheaper than the damages in the long run.
|6.26.08 @ 9:38AM|#
Did I miss something? There seems to be only one comment here
(by ClubMedSux) that actually discusses the legal issues involved.
And even that comment was off base, since it was referring to the
Due Process problem of punitive awards, which wasn't an issue here
because:
Today's enquiry differs from due process review because the case arises under federal maritime jurisdiction, and we are reviewing a jury award for conformity with maritime law, rather than the outer limit allowed by due process;
Nick M|6.26.08 @ 9:58AM|#
Picking a ratio is inherently arbitrary
I disagree. Here's a Rothbardian analysis.
If you intentionally knock out my tooth. Then you should have to
pay to have my tooth fixed.
[compensatory action]
But, since you robbed my of not just my tooth, but also my
rights to my own tooth then the balance of rights is
reinstated by me taking an equal portion of your rights to one your
teeth (i.e. I get to knock out one of your teeth).
[punitive action]
Therefore, reason dictates that a 1:1 ratio be the upper limit on
punitive to compensatory penalties.
However, it should be noted that, in this analysis, both halves
(punitive and compensatory) are owed to the victim.
Nobody owes anything to the state. And so the victim would be able
to waive his or her right to exact either penalty.
|6.26.08 @ 10:06AM|#
Nick,
So in the worst case (intential and belligerent), the penalty for a
company should be no more than an amount equal to the compensatory
damages. I could probably live with that because very few incidents
are deliberate by the companies and therefore should be less.
Nigel Watt|6.26.08 @ 10:08AM|#
By the way, my post above was what a friend at Exxon told a relative of mine fifteen years ago. They were going to take it to SCOTUS no matter what, because they had to or shareholders would have roasted them.
Nick M|6.26.08 @ 10:17AM|#
Lost_In_Translation | June 26, 2008, 10:06am | #
Nick,
So in the worst case (intential and belligerent), the penalty for a
company should be no more than an amount equal to the compensatory
damages.
Yes. And, according to the Rothbardian analysis, if the
transgression was 100% unintentional, then there
could only be compensatory action. Because the punitive action is
to counteract the taking of rights, and, in an accident,
you could say that, while the property was taken, the
rights weren't so much taken as, well, transferred by
fate.
dpsc|6.26.08 @ 1:20PM|#
LMNOP: Gee, thanks for proving my point. Let's be generous
and say that of "the really obvious stuff" you could win 50% of
those cases. OK, so that's a hook for 500 Billion; chump change in
the big picture of the federal budget (one-sixth of federal outlays
not including ongoing war spending.)
OK, here's the problem: I'm talking about an abstract principle
(what it would cost them/us if punitive damages were assessed
against them/us across the board in line with how the were in the
Exxon case), while you are talking about the likely effects of
taking away the cap on damages assessed against the feds, and
limiting your analysis to the feds.
You're right that the practical effect of taking away that cap
would be negligible. I think you're being very optimistic when you
say that I might win 50% of those cases. The average juror/citizen
is a lot more like Joe than he is like me (for which you should be
thankful if you have teenage daughters). At any rate I'm certainly
not against removing that cap, and I don't think that doing so
would lead to the collapse of Western Civ, mainly because I don't
think that damages would be assessed in line with the way they are
assessed against non-state actors.
But, and I hate to say it, joe is half-right about the chain of
responsibility. I'd much rather see cops and their immediate
supervisors jailed or driven to ruin when they do terrible things
than see municipalities bankrupted (and unlike the fed, punitive
damages in line with the Exxon damages could bankrupt a small
community in just one case). But beggars can't be choosers and I
would take either situation over the current one that allows cops
to act badly with near impunity.
As for your argument about the states stepping in to fill the
vacuum, that is just pushing the problem off. It's like answering
all cosmological questions with "God created it."
The postman brought me a new MIDI controller this morning, and I've
been building new patches and writing parts in expectation of its
arrival for the last little while so I have to go dick around with
them a bit. Rejoice! Otherwise I would have another choice several
thousand words to say on the subject ;).
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