October 13, 2004
by Dennis T. Avery
John Edwards may not be the only Democrat running for high elective office this fall on a record of questionable legal merit. Alaska's U.S. Senate candidate, Tony Knowles, is claiming he would pass a new federal law against Exxon, over the still-rancorous Exxon Valdez oil spill.
Edwards, campaigning to become John Kerry's Vice President, made tens of millions of dollars through telling judges and juries that obstetricians caused his infant clients to suffer cerebral palsy. He said they should have delivered his client babies through Caesarean section.
The American College of Obstetricians and Gynecologists and the American Academy of Pediatrics both say that cerebral palsy is rarely caused by anything done in the delivery room. Their case is bolstered by the fact that the percentage of U.S. Caesarean births has recently been driven up from 6 percent to 26 percent by fears of lawsuits-with no reduction in the percentage of cerebral palsy births. The public is left with all its cerebral palsy victims and lots of needless surgeries that run up insurance costs and puts the mother at greater risk.
Knowles has announced that as a Senator he would introduce federal legislation to short-cut the legal process and make Exxon pay billions of dollars in contested punitive damages before its legal appeals are exhausted.
Such a law would be popular in Alaska, where the public hates Exxon and the memory of the oil spill. More than 32,000 people are actually waiting for Exxon checks. But Exxon has long since paid $2 billion in cleanup costs, and another $1 billion in federal and state awards for actual damages to fishermen, Eskimo communities, resorts, etc.
What's at issue is a record-breaking jury award of $5 billion levied against Exxon in 1994 for punitive damages-reflecting rather vague psychological impacts of the spill such as severe depression, generalized anxiety, social and community conflicts and new cases of substance abuse.
Exxon said when the Anchorage, Alaska, jury made the award they considered it outrageous, and promised to appeal it through the whole court system. The court fight has dragged on now for a decade, and the $5 billion has compounded with interest into $7 billion. However, a federal appeals court has now ruled that the original award was, indeed, too high, and cut it to $4 billion, plus interest.
Exxon is still fighting.
Knowles says, "It's unconscionable that the world's most profitable company can delay paying its debts and as your U.S. Senator, I will introduce legislation that will force Exxon to settle these legitimate claims by removing the company's incentive to keep foot-dragging in the courts."
But how does Exxon owe a debt while the award is still under appeal?
Russian President Putin is now paying a heavy price for grabbing the assets of its biggest oil company, Yukos, in a tax dispute that was settled by government fiat. Foreign investors are staying away in droves, fearing the grabber-barons in the Kremlin. Prices for Russian assets are depressed and Russian economic growth is languishing-because the Putin government violated its own legal processes.
I learned in high school civics class that the U.S. Constitution forbids making something illegal after it's been done. Is Knowles proposing an ex post facto law? How long would that constitutional issue drag through the courts?
It's bad enough when the legal process lets trial lawyers impose millions of dollars in unwarranted costs on the public through "junk medicine" and unproven science. But passing special laws to impose additional penalties on politically-incorrect corporations could too soon turn America into a banana republic.
The Democrats say they revere our legal processes more than the Republicans. They sometimes have strange ways of showing it.
Dennis T. Avery is based in Churchville, VA, and is director of the Hudson Institute's Center for Global Food Issues.
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