Friday, November 2, 2007

ExxonMobil 1, Alabama 0

Many Alabamians must have awakened this morning with soreness in their hindquarters.

That's because we took one up our collective wazoo from the corporate yes-men on the Alabama Supreme Court. Maybe this case will wake Alabamians up to what it means to mindlessly vote for Republicans to staff our appellate courts.

And for those who study the case, it should bring appreciation for former Governor Don Siegelman, now in federal prison on a corruption conviction that appears to be politically motivated.

The state's high court overturned a 2003 circuit-court ruling that ExxonMobil had committed fraud and owed the state $3.5 billion in punitive damages in a dispute over natural-gas royalties. In an 8-1 decision, the court awarded Alabama $51.9 million (plus interest) in compensatory damages and threw out all punitive damages, which made up most of the $3.6 billion verdict.

Guess who cast the lone dissenting vote on the high court? It's only Democrat, Sue Bell Cobb.

The Alabama Conservation Department had sued ExxonMobil, saying it had intentionally underpaid the state for royalties due from natural gas wells the company drilled in state-owned waters along the Alabama coast. The company argued that no fraud was involved, and the case was an ordinary contract dispute.

In 2003, a Montgomery jury agreed with the state's arguments and returned a verdict of $102.8 million in compensatory damages and $11.8 billion in punitive damages. Circuit Judge Tracy McCooey, citing U.S. Supreme Court guidelines, cut the punitive damages award to $3.5 billion.

The Alabama Supreme Court, in yesterday's ruling, slashed the compensatory damages to $51.9 million and threw out all of the punitive damages.

"When a powerful and politically influential corporate giant can get away with what Exxon did to the citizens of our state, it's truly a sad day for Alabama," said Jere Beasley, one of the state's attorneys.

This is a complex case, one that requires considerable study to understand. But my initial research indicates there was ample evidence of fraud, and the $3.5 billion punitive damages award should have been upheld.

Even the legal advisor for Republican Governor Bob Riley was shocked at the result. "I am extremely surprised at the decision, because under the facts of the case, I was relatively certain that there was fraudulent conduct, which would result in punitive damages," Ken Wallis said. "I'm shocked that the court found no fraud."

Why should Wallis be shocked? Corporate interests, the same ones who support Bob Riley, have bought and paid for our appellate courts. For Ken Wallis to say he's shocked at this result, is mindblowingly disingenuous. My guess? Riley and Wallis knew it was coming, and they are fine with it.

In fact, if Riley's hand-picked choice as chief justice (Drayton Nabors) had not been beaten by Cobb, the vote would have been 9-0.

Our previous governor, Don Siegelman, was not fine with it. He committed significant resources to fighting the case on the state's behalf. Of course, Siegelman can't do much about yesterday's verdict. He's busy cleaning toilets in a Louisiana federal prison.

The Riley administration shocked? Just how stupid do they think Alabama voters are?

Will Alabama voters ever wake up? Hard to tell. But this ruling is going to become a source of major attention on our blog, along with the Siegelman case, the Paul Minor case in Mississippi, and my own Legal Schnauzer case.

By the way, my case involved some absurdities related to punitive damages. We will outline how Alabama's high court reacts to punitive damages assessed (wrongly) against a regular citizen compared to such damages assessed (probably correctly) against a corporate giant.

Way too many issues are involved in this ExxonMobil ruling to go into today. But this should be a profoundly important wakeup call to our state. And if the Alabama Democratic Party cannot take this case and use it politically to install some balance on our appellate courts, God help us all. They should use this case like a sledgehammer on the heads of Republican judicial candidates.

For those interested in learning more about the Exxon case, there is a ton of information out there. A good place to start is at the Web site of the Mobile law firm of Cunningham, Bounds, Crowder, Brown & Breedlove. That's the firm that Siegelman engaged to help Alabama fight for the money it was owed. Background on the case can be found here.


Anonymous said...
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Anonymous said...

"Just follow the money". Those Republican Judges are depending on more major campaign contributions in exchange for their verdict. It cost a lot of money to keep dishonest politicians in office.

Robby Scott Hill said...

Yep, the cold, hard truth is that even if they are voted off the bench due to public outrage, they will all get enough dollars in campaign contributions to run for something else or become the kingmaker of another politician who will be owing to them when they are eventually appointed to the corporate boardroom.

Anonymous said...

The $11 Billion damage award was nonsense. Pure and simple.

This was a simple contract dispute concerning the deductions for some gathering costs. No fraud - Exxon told the state about it. Probably Exxon was justified in deducting the costs - however what kind of a verdict can be expected in a state court vs. a very large corp?

I like the comment about "follow the money." That is exactly what you can do - the lawyers who stood to get over $1.5 Billion from the verdict are supporters of the Govenor and AG who gave themm the job.

The verdict with the punitive damages amounted to more than the total value of the oil and gas produced. That production was caused by a huge investment by Exxon. What a nonsense judgement that deserves to be held up as on of the all time greatest examples of juror incompetence.

Anonymous said...

exxon valdez destroyed ten thousands of lives and towns of the prince william sound weather any body wants to believe it or not this was casued by a relapesed drunking capatian that they new had a drinking problem I do not have any sympathy for exxon they do not do business well in alasa rake us over the coal all theway to barrels of oil and gas we half to survive its not a healthy enviroment for what exxon caused