Torts Aren't Enough
I have a friend, good Republican that he is, that believes that we should have very little government regulation. He believes that the tort system is good enough to keep companies in line. They do something wrong, sue the pants off 'em.
We can debate the merits of that stance in theory, but in practice, a big company can tie up legal judgements for years in appeals. Take Exxon, for example. Eighteen years ago, an Exxon oil tanker piloted by a drunk captain ran aground in Prince William Sound and dumped 11 million gallons of oil into the waters of a prime fishing area.
Eighteen years ago. Exxon paid $2.3 billion in cleanup costs, though only about 10% of the oil spilled is estimated to have been cleaned up. They have not paid on a $5 billion punitive damages class-action suit they lost 13 years ago. That number may sound high, but it was based on one year's worth of profits back then.
Exxon's profits last year? $36 billion. Think they can afford a team of lawyers to keep this thing tied up indefinitely?
Without punitive damages, big companies can just make cost-benefit analyses about safety and protecting the environment. They'll make estimates about the cost of damages, and may conclude that it's cheaper to roll the dice and pay the damages if they lose than to pay money up front to lessen the risk of creating the damage in the first place. They'll estimate the cost of cleaning up the environment, without taking into account that environmental damage of this magnitude basically can't be cleaned up. Punitive damages are necessary to disrupt that calculation.
But if the company can keep the judgement tied up for this long, the calculation hasn't been disrupted. Exxon paid $300 million in actual damages. Think that's enough to make them be more careful?
We can debate the merits of that stance in theory, but in practice, a big company can tie up legal judgements for years in appeals. Take Exxon, for example. Eighteen years ago, an Exxon oil tanker piloted by a drunk captain ran aground in Prince William Sound and dumped 11 million gallons of oil into the waters of a prime fishing area.
Eighteen years ago. Exxon paid $2.3 billion in cleanup costs, though only about 10% of the oil spilled is estimated to have been cleaned up. They have not paid on a $5 billion punitive damages class-action suit they lost 13 years ago. That number may sound high, but it was based on one year's worth of profits back then.
Exxon's profits last year? $36 billion. Think they can afford a team of lawyers to keep this thing tied up indefinitely?
Without punitive damages, big companies can just make cost-benefit analyses about safety and protecting the environment. They'll make estimates about the cost of damages, and may conclude that it's cheaper to roll the dice and pay the damages if they lose than to pay money up front to lessen the risk of creating the damage in the first place. They'll estimate the cost of cleaning up the environment, without taking into account that environmental damage of this magnitude basically can't be cleaned up. Punitive damages are necessary to disrupt that calculation.
But if the company can keep the judgement tied up for this long, the calculation hasn't been disrupted. Exxon paid $300 million in actual damages. Think that's enough to make them be more careful?
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