Court hears Exxon case

Before a capacity crowd that included Alaskan fishermen and others affected by the 1989 the Exxon Valdez oil spill, the Supreme Court heard arguments in a case that will determine whether Exxon Shipping Company should pay $2.5 billion in punitive damages for the conduct of the ship’s captain, a relapsed alcoholic who was inebriated and violated protocol before the ship ran aground and spilled 11 million gallons oil off the Alaskan coast.

The punitive damage issue in Exxon Shipping Co. v. Baker, No. 07-219, remains in dispute nearly 14 years after a jury awarded $287 million in compensatory damages and $5 billion in punitive damages to the fishermen who suffered economic loss from the spill. Years later on appeal, the punitive award was reduced to $2.5 million by the 9th Circuit Court of Appeals, working out to roughly $75,000 per plaintiff.

Walter Dillinger, representing the oil company, argued that there is no basis in maritime law for imposing punitive liability on a company based on the actions of a ship’s captain because he is too far down the corporate chain. Chief Justice John G. Roberts, Jr., like other justices, wondered just where that line fell.

“Do you have to have a shareholder driving the boat before you can assess liability?” Roberts asked Dillinger. “Where do you draw the line between the CEO and the cabin boy?”

“One has to be in authority to set company policy,” Dillinger argued.

Justice Anthony Kennedy noted the autonomy vested in ship captains. “A captain can decide when [the ship] leaves,” Kennedy said. “He decides the course.”

But, Dillinger said, “he is unable to set the policy” for any of these issues. You are a company actor, he argued, “when you are advancing the policies of the company.”

Jeffrey L. Fisher, arguing on behalf of the plaintiffs in the case, argued that the captain of a supertanker like the Exxon Valdez essentially “runs a business unit” of the company.

“He was the person in charge of deciding it was safe to leave,” Fisher said, adding later: “I don’t think [the issue] should rest on [job] labels.”

Justice Antonin Scalia seemed skeptical. “I doubt that a captain is high enough” on the corporate ladder to be a corporate actor, he said.

More on this case later on this blog, tomorrow on the Lawyers USA website, and in the next issue of Lawyers USA.

EPA defends waiver denial to lawmakers

Today the head of the Environmental Protection Agency defended the agency’s decision to deny a waiver that California and a dozen other states asked for, which would have allowed them to implement tougher greenhouse gas emissions standards.

Testifying before a Senate Environment and Public Works Committee panel today, EPA Administrator Stephen L. Johnson said: “I am bound by the criteria in the Clean Air Act, not people’s opinions.”

“The Clean Air Act does not require me to rubberstamp waiver decisions,” Johnson said. “It was my conclusion that California didn’t meet the criteria, or at least all of the criteria.”

The Committee is investigating the agency’s decision to deny the waiver, and California filed a lawsuit challenging the EPA’s waiver denial. Committee chairwoman Sen. Barbara Boxer blasted Johnson during today’s hearing.

“You’re going against your own agency’s mission and you’re fulfilling the mission of some special interests,” she said.

But ranking Republican member Sen. James Inhofe defended the agency. “I think that the Energy bill just passed means that Congress has already spoken to this issue,” he said. “That law represents the will of Congress on fuel economy standards. If California legislators thought otherwise, why did not one of them offer an amendment to address the issue?”

Friday morning docket: Auld Lang Syne edition

Good morning - here’s the last ‘Friday morning docket’ of the year:

The winter recess for Congress and the U.S. Supreme Court continues. The justices of the Court will gather a week from today for a closed-door conference before resuming oral arguments on Jan. 7 - kicking off the year by hearing arguments on whether the three-drug cocktail used in lethal injection executions amounts to unconstitutionally cruel and unusual punishment.

Meanwhile:

Sen. Arlen Specter and Rep. Patrick Kennedy were scheduled to meet with former Pakistan Prime Minister Benazir Bhutto yesterday evening. Bhutto was slain in an attack just hours before the scheduled meeting, and the U.S. lawmakers were advised to leave the country for their own safety. Specter described the mood in Pakistan, where mourners openly wept for the slain leader, as reminiscent of America after the slaying of Kennedy’s uncle, Robert Kennedy. (AP via Yahoo! News).

Not everybody is feeling the pain of the subprime crisis. In the foreclosure real estate business, things are jumping. (WaPo).

The Environmental Protection Agency has signaled it will release documents supporting its decision to deny California and a dozen other states the ability to impose tight restrictions on tailpipe emissions. California Gov. Arnold Schwarzenegger is appealing the EPA’s waiver denial. (AP via NYT).

Postage for all the mailings members of the U.S. House of Representatives sent to their constituents in 2007: $20.3 million. Bragging about your accomplishments on the taxpayers’ dime: priceless. (AP via Yahoo! News).

EPA nixes states’ plan to limit greenhouse gases

The Bush administration has denied a request by California and more than a dozen other states to impose the toughest automobile greenhouse gas emissions standards to date.

The denial by the Environmental Protection Agency of a waiver allowing the states to regulate auto emissions came after President George W. bush signed into law an energy bill - a move the agency said takes care of the issue. The new law requires automakers to cut emissions by 25 percent by 2009 and by 40 percent by 2020.

The law provides “clear national solution — not a confusing patchwork of state rules,” said EPA administrator Stephen Johnson according to a Reuters report.

The denial of a waiver came after California sued the EPA in a move for force the agency to allow the states to move forward with the stricter standard. Gov. Arnold Schwarzenegger vowed an appeal. “California sued to compel the agency to act on our waiver, and now we will sue to overturn today’s decision and allow Californians to protect our environment,” he said in a statement.

Conservation Law Foundation President Philip Warburg decried the EPA’s decision. “Yet again the Bush Administration and its Environmental Protection Agency have failed to live up to the greatest environmental challenge of our generation: global warming,” Warburg said. “This decision not only violates federal law but also shows a frightening disregard for the health and safety of Americans and our environment.”

Arnold to EPA: I said ‘I’d be baahck’ - with a lawsuit

Saying that he’s tired of waiting for the Environmental Protection Agency to rule on a waiver request for California’s greenhouse gas emissions regulations for cars and automobiles - the toughest state standards to date - Gov. Arnold Schwarzenegger filed a lawsuit on behalf of the state against the agency in the U.S. District Court for the District of Columbia.

In the suit, joined by 14 other states seeking to impose the same standards as the Golden State, California alleges that the EPA has dragged its feet in granting the state a waiver so it can impose stricter greenhouse gas rules on cars and light trucks.

“Our air quality, our health and our environment are too important to delay any longer, and it is not just the people of California who are waiting,” Schwarzenegger said. “Those states that want to follow our lead cannot do so until federal permission is granted.” (For a video of Schwarzenegger’s comments - because the quotes are so much better with the accent - see California’s multimedia press release).

Schwarzenegger had put EPA on notice six months ago - after the U.S. Supreme Court’s ruling in Massachusetts v. EPA [PDF file] - that a lawsuit would be filed if the agency failed to act in a timely fashion.

More on the lawsuit, including links to the complaint, the Federal Clean Air Act standards and more, can be found on Jurist.

Green groups get first power plant CO2 victory

As Lawyers USA reported, environmentalists have had no success trying to use the Supreme Court decision in Massachusetts v. EPA to push energy companies to curb carbon dioxide emissions at power plants.

Until now.

The Kansas Department of Health and Environment rejected a permit for a new power plant based on enironmenal concerns over CO2 emissions. The Washington Post has more.