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Tuesday, May 11, 2010

U.S. Code, Title 33:40:I:2704:(a):(3)--On the Immorality of the $75M Liability Cap

The BP Oil Spill, Exxon Valdez, and "Tort Reform"

I remember how pleased I was on February 5, 2005, when I heard President George Bush advocate for tort reform in his State of the Union speech.  It was and is a fact some lawsuits are argued so well that juries and judges award damages far in excess of what is just.  Such excessive awards lead to higher insurance premiums for all affected by those damages.  Insurance companies always will try to protect their profit margins, for they are in the business of profit.

In the current case of the BP oil spill, we now learn of the arbitrary ceiling on liability damages of $75M.  That upper limit is the result of the Exxon Valdez spill which, at the time, had a much lower limit on liability damages.  Now some Democrats are calling for a higher ceiling due to the as yet unknown total costs of the current oil spill.  And, of course, the three corporations involved--the platform owners, BP, and Halliburton--are preparing their cases on how to blame each other, to limit their respective liability.

I have been thinking the past several days about all the fishermen and other business people and this arbitrary limit.  Let us say there are 75 fishermen, each who draws from the ocean $1M worth of shrimp or other fish.  Let us exclude all the thousands of other businesses harmed or ruined.  Once the liability questions have been answered, as to who will pay, the money still be stopped when the $75M is paid.

I have heard stories that attorneys for the corporations have been circulating among some of the people affected, asking and insisting they sign liability limit releases.  Some persons live along the shores, others work for the corporations.  Some have signed in order to get the small amount of money promised, because their families are under financial pressures due to no income.  I am sure that every corporation doing business already had limited their risks, before the spill, by obtaining signatures from everyone they could who might later bring a suit against damages.

Seeing Tort Reform in a Moral Light

I now see that the "higher insurance premium" argument, which seemed and seems good to Americans, actually was backed by President Bush, Sen. Mitch McConnell, and others, including some Democrats, to help protect their corporate friends.  I am rather ashamed I did not see this before.  All the talk--by people well-connected with corporate financiers--was and is intended to control risks of financial payouts.  When the federal government passes laws that put an arbitrary ceiling on liability, this frees corporations from paying any more than the laws allow, regardless of their harms to the American people.

I took a little time to read existing federal laws with liability ceilings in several areas.  The numbers look impressive to average Americans.  Most would be ruined if they had to pay $250,000, let alone millions.  So when the news is released that their government has passed laws "raising the stakes against harmful companies," most citizens are impressed their lawmakers have legislated "harsh warnings" on their behalf.

Yet the current limit of $75M was raised only after the Exxon Valdez spill.  Why?  Public outcry demanded some kind of governmental response.  Public pressure, not government conscience, empowered the change.  Now that we think about 75 fishermen example--and do not consider the thousands of people whose careers and lives have been destroyed--Americans can see how the arbitrary ceiling has no connection with actual damages done.

All the corporations involved in this harm will fight even paying their portions of the $75M.  Their corporate legal teams will succeed, in some measure, in reducing whatever will be paid out.  There is little doubt all their expertise will produce something good for their owners.  Yet even if public outcries result in awards up to the liability ceiling, there is no doubt, no doubt, that the corporations will walk away in gratitude for the U.S. Congress's cooperation in setting a ceiling in the first place.

A damages ceiling guarantees that justice--if justice calls for the complete restoration of harmed parties--will never be done, if justice requires payments exceeding a liability ceiling.

Again the American People are Fodder

In the past several years, the American taxpayer was strapped with the burden of paying for corporate excesses in the banking, automotive, and insurance industries.  Bailout money was loaned, with little or no accountability for where or to whom it went, by the U.S. Congress.  And Americans were told this all was necessary for the "good of the nation."  The average American knows only what he or she is told.  The average American actually trusts what elected officials tell him or her.  So millions, who were worried their banks would fail, swallowed hard and accepted what they were told, though with some grumbling and with some protesting in the streets.

The recent oil spill is one more illustration that national and transnational corporations control the U.S. Congress's laws when they apply to corporations and corporate harm to average people.  If we look at the history of federal laws in the U.S.--including the laws concerning Indian nations, African slaves, child and woman labor, workplace safety, products safety--we see a consistent pattern that today's problems run throughout our nation's history.

Why have average people allowed centuries of such laws in the "land of the free and home of the brave"?  Why have they accepted whatever their leaders have told them of "the protections" put in place for their good?  The first answer is basic.  The majority of Americans always are unaffected directly by harms and abuses.  So long as they themselves are not harmed, corporations and the federal legislators they control and influence know they can write laws within the boundaries of majority experience. 

Therefore, I do not expect that the results of the current oil spill, just like the results of the current financial debacle on Wall Street, will produce justice for the people actually harmed.  If hundreds of millions of Americans could be duped into accepting that their children and grandchildren ought to pay for corporate abuses against themselves, they will accept anything offered in the future related to this last oil spill.

The one thing I think about all the time is how corporate owners and federal legislators sleep at night.  They do these things--just as their forebears did to previous generations--to their fellow citizens, as well as to innocent wildlife in the case at hand.  And then I also wonder, as I imagine that most of them are not atheists but have some religious membership somewhere, what their God must think of their crimes.

But being a former clergyman myself, and knowing how comforting and consoling my clergy colleagues can be to their members, who pay their salaries, I also know how few clergy actually tell their congregations exactly what the Bible teaches against such crimes and sins.  No, they give a lying and false comfort to their people, since they want to offend no one who might walk away with their money.  And then, there also are a majority of "conservative" clergy who themselves are the naive dupes of politicians they trust, whenever the clergy hear the sacred mantra, "God and Country" or "Free Market Enterprise."

The only consolation I myself take, with the faith I have, is the important distinction I learned several decades ago.  There is a difference between theoretical atheism and practical atheism.  A person can believe in his or her "heart and mind" in a God--the theoretical belief in God--but then go on to disregard every divine teaching ever given against harming and plundering the poor, the widow, and the stranger.  A person's behavior can reveal practical atheism; that is, deciding and living directly against God's will.  And when the clergy in any religion mainly emphasize "love and grace and forgiveness" and ignore "divine punishment and wrath" against sins that harm the innocent, they too have their share in practical atheism.  For they are false prophets.

Be you Jew, Christian, or Muslim, or have some other religion teaching moral accountability and love for the neighbor and the innocent, whether you are a business owner or a victim of business, perhaps there is something in the essay above that is constructive. Yet I have no delusion that whatever has been written will change the story of history, how the rich exploit the vulnerable, in every nation, including the United States of America.  JDW

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