Wednesday, November 14, 2007

ExxonMobil and Don Siegelman

We noted recently the curious fact that Don Siegelman (in Alabama) and Paul Minor (in Mississippi) had successfully fought the tobacco industry, and both now are in federal prison.

Let's follow that line of thinking to the recent Alabama Supreme Court ruling throwing out $3.5 billion in punitive damages against ExxonMobil. A trial court had found that the oil giant committed fraud that would have cost the state of Alabama about $1 billion in fees for natural-gas rights. The pro-business supreme court found that no fraud had been committed, so Alabama citizens saw $3.5 billion fly right out the window.

What about the history of this case? According to the Associated Press, the royalty dispute started with former Governor Fob James' second term (1995-99) when state conservation officials began to suspect oil companies weren't paying as much as they should be under the leases. James agreed to hire auditors to look into the issue.

But who really pushed the issue upon becoming governor in 1999? None other than Don Siegelman. He hired the Mobile law firm of Cunningham Bounds Yance Crowder and Brown to represent the state in lawsuits involving oil companies. The firm must have done a pretty good job because it won at trial--twice. And both times the verdicts were overturned by the Republican-packed Alabama Supreme Court.

What was Siegelman's response upon learning of the jury's verdict in the first trial? "This verdict is appropriate because it is against a company that tried to cheat the people out of more than $1 billion," he said.

Think the boys of big oil enjoyed hearing those words? I don't think so either.

So Siegelman was in the face of both the tobacco and the oil companies. And what about Minor? Well, I know one of his cases, Archie Marks, involved a company that operated oil rigs. And given the importance of oil and natural gas in Mississippi and Louisiana, I suspect Minor has tussled with "big oil" on more than one occasion.

Is there a lesson to be learned here? Perhaps it's this: You fight the oil and tobacco industries, and a pro-business justice department will put you in federal prison?

Is that what we've come to in George W. Bush's America? Those are the signals I'm picking up. We are going to be taking a close look at the ExxonMobil case shortly. Haven't gotten all the way through my review yet, but the stench already is starting to get strong. Stay tuned.

By the way, the ExxonMobil case illustrates a key theme here at Legal Schnauzer. When folks hear someone claiming they were wronged by a trial court, the response often is something like, "Stop whining, take it to appeal." Well, that assumes the appellate courts are honest. And they aren't. (That also assumes you can afford to take it to appeal; the appellate process is extremely expensive.)

We will show in the Legal Schnauzer case that Alabama's appellate courts are not honest. And I strongly suspect my review will show that to be the case with the ExxonMobil ruling.

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