Remember Kiobel v. Royal Dutch Petroleum, argued before the Supreme Court last term? It’s back – the Court will hear argument again Monday – and bigger than before.
A brief recap: For decades, Shell has extracted oil from the Niger Delta, causing extensive environmental degradation. The government of Nigeria, with the alleged support of Shell, cracked down on protests by the local residents, the Ogoni tribe, by executing their leader, Ken Saro-Wiwa, and eight others in 1995. Members of the Ogoni, including Esther Kiobel, the widow of one of the executed men, sued Shell in U.S. federal court, claiming that it aided and abetted the Nigerian government in its violations of human rights law. They relied on the Alien Tort Statute (ATS), a law enacted by the First Congress in 1789, which gives federal courts jurisdiction over claims by aliens arising from torts committed in violation of international law.
In 2010, the Second Circuit put the brakes on their effort by holding that corporations can neverbe liable under the ATS because corporations can never violate international law. Other circuit courts disagreed, as did many commentators. So when the Supreme Court issued cert. in 2011, the plaintiffs had reason to be cautiously optimistic that they would prevail.
But after oral argument in early 2012, the Court surprised everyone by dramatically changing the issue, from corporate liability to extraterritoriality. Specifically, it set the case for another round of briefing and argument on whether the ATS applies to any suits against any defendant for violations occurring within foreign territory. As I wrote in March, that raised the stakes for human rights advocates. Plaintiffs could try to work around a “can’t sue corporations” rule by suing individual corporate officials. But there may not be many foreign human rights claims of any kind – against corporations, individuals, or governments – that will survive if the rule is “can’t sue for anything that happens in another country.”Full text
With considerable media flourish, the Department of Justice (DOJ) announced Tuesday the first and so far only criminal charges related to the BP Deepwater Horizon catastrophe that killed 11 workers, and did profound violence to the Gulf of Mexico and the local economies dependent up on it. One Kurt Mix, 50, an engineer involved in designing the failed “top kill” remedy, was indicted for obstruction of justice. More specifically, he's accused of deleting text messages from his phone that he knew were to be collected as evidence in the case..
Prosecutors made Mix do a perp walk for reporters, with the New York Times reporting that he “surrendered” in Houston, “wearing a light purple shirt and pair of khakis without a belt.” Several legal experts, including Professors Richard Lazarus (former executive director of the Oil Spill Commission) and David Uhlmann (former chief DOJ environmental crimes prosecutor) predicted that the arrest of Mix would help prosecutors build cases against those further up the food chain. With all due respect to these hopeful—really wishful—predictions, it’s way too soon for DOJ to take a victory lap.
For one thing, Attorney General Eric Holder has amassed an underwhelming track record in prosecuting perpetrators of unspeakable and fatal health, safety, and workplace crimes, including Don Blankenship, former chief executive officer of Massey Energy, whose obsession with “digging coal” without pausing to ensure safety requirements are met, led to extraordinarily hazardous working conditions at the Upper Big Branch mine, where 29 miners died in the worst disaster in 40 years; and Stewart Parnell, the chief executive of the Peanut Corporation of America, whose decision to ship peanut paste that tested positive for salmonella killed nine and sickened hundreds. Elsewhere in the regulatory arena, Holder has not yet delivered on prosecuting financial crimes documented in two dozen books, television programs, and movies.Full text
I spent last Friday – the second anniversary of the BP Blowout – in the vast basement of the Orleans Parish Criminal District Court building, shifting in my metal chair, ignoring the talk-show chatter from the flat screens, and keeping an eye on the red digit counter to know when my number was up.
I'd been called for jury duty.
Whether I will eventually be deployed is up to the gods, but until then I had resolved to study (with the help of this building's creaking Wi-Fi system) all 2,000 pages of the proposed multibillion-dollar settlement in the Deepwater Horizon case – the settlement made public last week by BP and thousands of Gulf Coast residents and businesses. (I blogged earlier when the broad outline of this settlement was first announced here.)
Now some of you may wish to savor the details, poring over the documents page-by-page between sips of Courvoisier. But for the rest, I've got the bottom line [SPOILER ALERT]: The proposed settlement rewards plaintiffs' hard bargaining, puts a crimp in federal and state hopes for a speedy trial, and demonstrates once again that despite the size of this deal, the main course is yet to come, in the form of federal civil fines and possible criminal prosecution.Full text
House GOP leaders may vote as early as this week on legislation that would eliminate the Independent Payment Advisory Board (IPAB), a cost-saving measure that was established as part of the national health care reform Congress passed in 2010. House leaders have also attached national restrictions on the right of patients to recover damages for medical malpractice (H.R. 5) to the IPAB bill, with the joint bill being called H.R. 5. The sponsors of the bills allege that the savings from tort reform will replace the money that would be lost if the cost savings board is eliminated. The combination of the two measures is pure politics. Repeal of the cost-savings board enjoyed some bipartisan support before GOP leaders attached the tort restrictions to it. Democrats are unwilling to vote for a bill that also limits the rights of tort victims. GOP leaders therefore hope to get the Democrats on record as voting against both issues.
The Republicans will claim that the Democrats oppose limiting the rights of medical malpractice victims because of support they receive from trial lawyers who represent the victims of medical malpractice. This conveniently ignores the fact that the Republicans receive support from the insurance and health care industries, which favor limiting the rights of malpractice victims. Once we turn to the merits of H.R. 5, it is apparent that it makes one bad idea (elimination of the IPAB) worse by adding another bad idea (tort reform).
The chief proponent of H.R. 5, Representative Phil Gingrey (R-GA) recently claimed in the Atlanta Journal-Constitution that his bill would save $70-126 billion per year by limiting "frivolous lawsuits." In a recent CPR White Paper, my coauthors and I explained this estimate comes from a flawed study by Daniel Kessler and Mark McClellan, two health economists. The study has been thoroughly debunked by the Congressional Budget Office (CBO), the Government Accountability Office (GAO), and several academics as a reliable estimate of the savings that could be achieved if Congress were to reduce the rights of medical malpractice victims. In fact, the savings to be achieved by medical malpractice “reform” is at best a tiny percentage – less than one percent – of the total cost of medical care, as our report details.Full text
Last week, the Supreme Court heard oral argument in Kiobel v Royal Dutch Petroleum, the case asking whether corporations can be liable in federal court for violations of international human rights law. In the decision under review, the Second Circuit – unlike every other circuit court to consider the question – had held that they could never be liable. So one might think that a logical way for the petitioners to begin their oral argument would be to give an example or two where international law had recognized corporate liability. And, in fact, Justice “Swing Vote” Kennedy hit the attorney for the petitioners with that very question before he had completed his opening statement.
It wasn’t a good sign when the attorney didn’t come up with any examples. (He might have pointed out that after World War II, the Allies broke up IG Farben because of its contributions to Nazi crimes – as Richard Posner noted in his opinion for the Seventh Circuit.) As a result, a general feeling after the oral argument was that the Supreme Court would probably affirm the Second Circuit by a 5-4 margin, with Kennedy in the majority.
But on Monday, the Court threw a spanner in the works, upset the apple cart, and stuck a spoke in the wheels of those expectations. More specifically, it scheduled the case for rehearing next term, asking the parties to address “Whether and under what circumstances the Alien Tort Statute, 28 U.S.C. § 1350, allows courts to recognize a cause of action for violations of the law of nations occurring within the territory of a sovereign other than the United States.”Full text
The BP Oil Spill case settled! Well, part of it. The smaller part. But, still, we must count this a victory for U.S. District Judge Carl Barbier, whose reported 72 million pages of assigned reading will inevitably be shaved down. (Does this man have an iPad?)
On Friday evening the court announced that BP had reached a settlement with the steering committee that represents thousands of private plaintiffs in the case. Judge Barbier postponed the trial indefinitely while the remaining parties, including the federal government, regroup. According to news reports, the settlement would cover claims for economic loss and medical harm. BP estimated that the settlement, which has no firm cap, might total $7.8 billion; the actual number would depend on how many plaintiffs accept the deal and how much they’re ultimately paid. Plaintiffs displeased with the offer could opt out and stay in the litigation. And all private claims against Transocean and other defendant companies remain.
On balance, the settlement appears to be a good thing. But this plate is just the appetizer. The main course—a pepper pot of federal civil claims and criminal charges—has yet to come. And that’s a dish that could really bust a gut.Full text
With a reverential nod to maverick economist Jeff Madrick, who wrote a popular book of the same name, I begin today a series of blog posts entitled “The Age of Greed” that is designed to shine a bright spotlight into the dark corners where Washington lobbyists are busy looting the protection of public health, worker and consumer safety, and the environment. Business-as-usual efforts to stall or derail regulation won’t make it into this space. Rather, behavior has to be demonstrably and extraordinarily egregious to qualify for ridicule here. My first candidate: The largely successful efforts by the American Chemistry Council (ACC) and the American Forest and Paper Association (AFPA) to derail the Environmental Protection Agency’s (EPA) study of the devastating health effects of dioxin—you read that right, dioxin!—for more than two decades, capped last week by its letter to EPA Administrator Lisa Jackson deliberately misreading an appropriations rider in the Omnibus budget bill as a further excuse to suppress this basic science.
Everyone knows dioxin is terrible stuff. The chemical first became a household word in the 1970s when Vietnam veterans exposed to Agent Orange staggered home with the symptoms of dioxin exposure, among other debilitating health effects. In 2006, the National Research Council (NRC), normally a staid, hide-bound group of blue ribbon scientists more accustomed to scolding EPA than supporting it, opened its report on EPA’s star-crossed, two-decade effort to issue a final dioxin assessment under its Integrated Risk Information System (IRIS) program as follows:
2,3,7,8-Tetrachlorodibenzo-p-dioxin (TCDD), also called dioxin, is among the most toxic anthropogenic substance ever identified. TCDD and a number of similar polychlorinated dioxins, dibenzofurans, and coplanar polychlorinated biphenyls (dioxin-like compounds [DLCs]) have been the subject of intense scientific research and frequently controversial environmental and health policies. Animal studies have demonstrated potent effects of TCDD, other dioxins, and many DLCs on tumor development, birth defects, reproductive abnormalities, immune dysfunction, dermatological disorders, and a plethora of other adverse effects. Because of their persistence in the environment and their bioaccumulative potential, TCDD, other dioxins, and DLCs are now ubiquitous environmental pollutants and are detected at low concentrations in virtually all organisms at higher trophic levels in the food chain, including humans. Inadvertent exposures of humans through industrial accidents, occupational exposures to commercial compounds (primarily phenoxyacid herbicides), and through dietary pathways have led to a wide range of body burdens of TCDD, other dioxins, and DLCs, and numerous epidemiological studies have attempted to relate exposures to a variety of adverse effects in humans.
If environmental cases had their own Olympics, the dispute between Chevron and Ecuador would be a contender for multiple gold medals. It seems to have a shot not only at winning the award for the largest damages, but also for running the longest and appearing in the most courtrooms.
To recap: Residents of the Amazon have been trying for nearly 20 years to receive compensation for massive environmental damage Chevron’s predecessor, Texaco, allegedly caused in Ecuador in what’s been called the “Rainforest Chernobyl.” In February, their efforts culminated in an $8.6 billion judgment by an Ecuadorian court against Chevron. Chevron attacked the decision on several fronts, including by appealing to a higher Ecuadorian court and by suing the plaintiffs in U.S. federal court to stop them from enforcing the judgment.
Last week, Chevron suffered setbacks in both courts. On Tuesday, the Ecuadorian appellate court affirmed the judgment. If Chevron doesn’t publicly apologize to Ecuador, the award will be doubled, to nearly $18 billion. Chevron responded by saying that the decision “is another glaring example of the politicization and corruption of Ecuador's judiciary that has plagued this fraudulent case from the start.” As I’ve noted before, this is ironic. The plaintiffs originally sued in U.S. federal court, and it was Chevron (still Texaco at the time) that persuaded the court to dismiss the case in favor of the Ecuadorian judicial system. In response to the plaintiffs’ warnings that Ecuadorian courts were “subject to corrupt influences” and “incapable of acting impartially,” Chevron persuaded Judge Rakoff in the Southern District of New York and, on appeal, the Second Circuit, that Ecuadorian courts would be just fine. Chevron had argued (among other things) that “because these cases will be the subject of close public and political scrutiny, as confirmed by the Republic’s involvement in the litigation, there is little chance of undue influence being applied.” Oh well, Chevron might add today, we were mistaken about that. Oops.Full text
In Daubert v. Merrell-Dow Pharmaceutical, General Electric. v. Joiner, and Kumho Tire v. Carmichael the U.S. Supreme Court sought to bring principles for reviewing expert testimony in line with the Federal Rules of Evidence. The opinions sought to ensure that legal arguments would better comport with the pertinent science needed for the legal cases at issue. To achieve this goal the court gave trial judges a greter duty to review expert testimony for relevance and reliability before plaintiffs could bring their case to a jury. Despite these goals, lower courts have struggled with reviewing scientific testimony and evidence. Some courts so restricted expert testimony and its scientific foundation that scientists found it difficult to present basic scientific evidence about the toxicity of chemicals in a courtroom.
An outstanding decision by the First Circuit Court of Appeals this March in Milward v. Acuity Specialty Products (639 F.3d 11 (2011)) contravened numerous mistaken views about scientific methodology, evidence evalualtion and constraints on testimony that had emerged from defendants’ presentations and other courts over time. This decision is precedent for courts in the First Circuit and stands as an example of an excellent analysis of scientific testimony and the role of trial courts for other appellate jurisdictions. As one who had argued in the scholarly literature for the conclusions the court adopted and who served as the scientific methodology expert in this case, it is especially encouraging to see this change in the law.Full text
This coming April 20 will mark the one-year anniversary of the first day of the BP Oil Spill – a three-month polluta-polluza that eventually became the largest accidental marine oil spill in the history of the world. That was the night that a long series of failures finally came to a head: failures aboard the Deepwater Horizon by BP and its contractors, failures in the enforcement of regulations intended to prevent such disasters or at least limit the damage from them, failures in the crafting of the regulations governing the process by which BP won approval to drill, and failures in the drafting of the legislation from which flowed the regulations.
For the 126 workers on the Deepwater Horizon that night, the sounds and images of those failures must have been terrifying beyond imagining. Eleven of them didn’t make it home alive, and another 17 were severely injured. The rest escaped in lifeboats or by jumping into oily seawater while a fire raged overhead. Nearly three months later, after an estimated 4.9 million barrels of oil had spewed into the Gulf of Mexico, the damage spanned hundreds of miles of shoreline and thousands of square miles in the Gulf. Clean-up efforts continue to this day, and will for some time, although oil along the bottom of the ocean is unreachable.
The BP Oil Spill was not just a really unlucky break, as the oil industry would like us to think it was, but was the product of corner-cutting by industry, with the tacit approval of government. If the agency then called the Minerals Management Service (MMS) had been serious about its job of reviewing safety plans to make sure they would work, BP might never have gotten approval to drill. But that wasn’t how MMS worked. It saw its role as helping to keep the oil flowing, not making sure that BP and the rest of the industry took their safety obligations seriously.
There were other regulatory failures, as well, and CPR Member Scholars have meticulously documented them in our October 2010 report, Regulatory Blowout: How Regulatory Failures Made the BP Disaster Possible, and How the System Can Be Fixed to Avoid a Recurrence. But there’s another failure, an ongoing failure, at work in the Gulf as well, one that’s making it harder for the victims of the BP Spill – the survivors, the relatives of those killed, businesses and employees who lost their livelihoods as a result of the damage, and others – to recover.
For years, the “tort reform” movement has worked to undercut the nation’s civil liability laws, making it more difficult for victims to sue the companies that have done them harm. In this movement, tort reform consists of limiting or rolling back existing opportunities for victims to sue in court, and the business trade associations behind the movement have had some success. As a result, the survivors and economic victims of the spill are confronted with significant constraints on their ability to seek compensation in court for the harm done to them.
A new report issued this morning by CPR, The BP Catastrophe: When Hobbled Law and Hollow Regulation Leave Americans Unprotected, notes that U.S. law relies on two complementary approaches to deter companies from taking the risks that led to the disaster in the Gulf: regulations establishing environmental and worker safety standards, and civil liability that serves both to discourage reckless corporate behavior and to compensate its victims. In the case of the BP spill, lax regulation and enforcement made the spill possible, and outdated, overly corporate-friendly statutes could significantly limit what victims can force BP to pay in damages.Full text