Wednesday, June 25, 2008

Notes from the Right-Wing: Buttclowns in Silly Black Dresses Get It Wrong Again

I'm Joeverkill, and this is Notes from the Right-Wing.

Those clowns in black dresses on the Supreme Court have done it again. In a 5-3 decision, the Court decided to cut Exxon-Mobil some slack. Why? Beats me. From the AP:

The Supreme Court on Wednesday slashed the $2.5 billion punitive damages award in the Exxon Valdez disaster to $500 million, a decision that could have broader implications for limiting how much courts can order businesses to pay....
Justice David Souter wrote for the court that punitive damages may not exceed what the company already paid to compensate victims for economic losses, $507.5 million, an amount equal to about four days worth of Exxon Mobil Corp.'s profits last quarter.

Are you kidding me?

By passing this judgment, the court has overstepped their bounds and imposed a punitive damages limit on every case litigated in American courts from now onward. As Justice Ginsberg stated, "The new law made by the court should have been left to Congress."

What effect will this ruling have? Suppose a company -- let's say DHL, for example -- decides to save some dollars by hiring multi-count violent convicts as delivery men. Let's say one of these guys delivers your package four hours late on a Friday, and then decides to rape and murder your wife, mutilate your kids, and cut off all of your limbs. DHL loses the case in court because they're obviously negligent in this situation. Damages come out to about a million dollars, including medical bills and lost wages. (Not very much, but the accountants double-check the math and that's what it comes out to). And yay! the court awards the maximum punitive award possible, which is another one million dollars. Maybe you're happy with two million dollars. Probably not. But I tell you who is happy: DHL. Two million dollars is a drop in the bucket compared to what they make in a day, and in fact it turns out they saved about a hundred million by hiring all those convicts. So their stockholders open up some champagne as your mutilated children take you home and help you eat through a straw for the rest of your life.

Limiting punitive damages hurts smaller businesses and helps larger businesses. Corporations with deep pockets can now afford to be negligent, and that is terrifying.

Moreover, the Court's ruling is discriminatory. Assume, for example, two separate cases: one in which an poisoned can of Coke kills a Red Cross worker, and one in which a can of Pepsi kills Alex Rodriguez, the best shortstop in baseball. Alex Rodriguez's wife brings a lawsuit against Pepsi, the damages are assessed at about 400 million dollars (including lost wages at about $24 million per year over about 6 more years, plus endorsement deals, etc.). The Red Cross worker's wife brings a lawsuit against Coke and the damages are assessed at about $400,000 (including the guy's $12,000/year salary and the cost of a therapist for his wife). So the Red Cross worker's wife gets a maximum of $800,000. Alex Rodriguez's wife, who is already a multimillionairess, gets a maximum of about $800,000,000.

So why should Alex Rodriguez's wife get one hundred times as much money for an identical lawsuit? Moreover, why should Pepsi get away with paying 1/100th of what Coke paid?

It makes no sense. Setting firm limits on punitive damages in relation to compensatory damages is completely unjust and illogical. How about we let the judges and juries decide how plaintiffs get? What doesn't make sense about that?

I'm Joeverkill, and this has been Notes from the Right-Wing.

3 responses:

the analyst said...

dude, clearly, the more rich you are, the more important you are for society.

also, congrats on making the first post this week.

minotauromachy said...

Great post Joe, especially the interesting point you made about discrimination in your analysis. I would like to add that there has been a pronounced pro business shift in the attitude of the Supreme Court towards punitive damages that is a huge change from the hey day of punitive damages cases in the 70s when Ralph Nader took on Ford.

Check this NY times magazine article called Supreme Court Inc. - http://www.nytimes.com/2008/03/16/magazine/16supreme-t.html

The extent of this slant on both sides of the ideological schism in the courts's membership is obvious from the fact that this verdict came about despite the fact that Alito, one of the conservatives on the bench, recused himself because he owned Exxon stock. This is definitely not a court that enforces corporate accountability.

A couple of less serious points. DHL is probably the company least likely to hire an ex con. I tried applying for a shitty summer gig and they had the most extensive questionnaire I have ever filled for a part time gig including among their queries - a list of every place I have resided in for the last ten years. It just made me smile a little when you used them as an example.

the analyst said...

actually, i think dhl does that now because they got into a shit-heap of trouble before for their hiring practices. or it could be another one of those lesser parcel companies...this is just stuff i remember hearing from my dad, who worked at ups for ~30 years.