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US court cuts Exxon Valdez damages by $2 billion
Breaking Legal News | 2006/12/23 21:49

A federal appeals court on Friday cut in half a $5 billion jury award for punitive damages against Exxon Mobil Corp. in the 1989 Valdez oil spill that smeared black goo across roughly 1,500 miles of Alaskan coastline.

The case, one of the nation's longest-running, non-criminal legal disputes, stems from a 1994 decision by an Anchorage jury to award the punitive damages to 34,000 fishermen and other Alaskans. Their property and livelihoods were harmed when the Valdez oil tanker struck a charted reef, spilled 11 million gallons of crude oil.

It's the third time the appeals court ordered the Anchorage court to reduce the $5 billion award, the nation's largest at the time, saying it was unconstitutionally excessive in light of U.S. Supreme Court precedent.

This time, in its 2-1 decision, the court ordered a specific amount in damages, while its previous rulings demanded a lower court to come up with its own figures.

"It is time for this protracted litigation to end," the court said.

U.S. District Judge H. Russel Holland of Anchorage begrudgingly complied in 2002, reducing damages to $4 billion. Irving, Texas-based Exxon again appealed.

The following year, the appeals court ordered Holland to revisit his decision, this time balancing it against a new 2003 Supreme Court ruling that said punitive damages usually could not be more than nine times general damages. The Anchorage jury awarded $287 million in general damages -- and issued punitive damages that were 17 times that amount.

Holland, appointed by President Reagan in 1984, declared Exxon's conduct "reprehensible" and set the figure at $4.5 billion plus interest, ruling that the Supreme Court's precedent did not directly apply to the case.

Exxon again appealed, and argued that it should have to pay no more than $25 million in punitive damages, which are meant to punish a company for misconduct.

The company, whose $36.1 billion in earnings last year were the highest ever by any U.S. corporation, said it has spent more than $3 billion to settle federal and state lawsuits and to clean the Prince William Sound area. The company earned about $5 billion when the spill occurred.

In October, Exxon Mobil reported earnings of $10.49 billion in the third quarter, the second-largest quarterly profit ever recorded by a publicly traded U.S. company.

In 1994, a federal jury found recklessness by Exxon and the captain of the Valdez, Joseph Hazelwood, who caused the tanker to run aground. That finding of malfeasance made Exxon liable for punitive damages.

The plaintiffs alleged Hazelwood ran the ship into a reef while drunk and Exxon knew he had a drinking problem, but left him in command of tankers.



Bush pardons 16 in year-end round
Court Watch | 2006/12/23 16:31

President Bush granted pardons to 16 people on Thursday, including some convicted of drug crimes and others who were involved in fraud and kickback schemes. Bush additionally commuted the sentence of another man who had been convicted of drug offenses.

Bush has issued a total of 113 pardons in his six years as president, the fewest issued by any president since World War II. Former Presidents Clinton, Bush, and Reagan issued 457, 77, and 406 respectively during their tenures in office.



Iraqis launch Oil-For-Food lawsuit in US court
Breaking Legal News | 2006/12/23 15:48

Several Iraqi citizens sued a leading European bank and Australia's wheat exporting agency in New York federal court Friday for corporate misconduct facilitating the corruption of the Iraq Oil-for-Food program which bilked Iraqis out of humanitarian aid while simultaneously enriching the Saddam Hussein regime. French bank BNP Paribas and the Australian Wheat Board (AWB) face a claim for $200 million in damages brought by seven Iraqis seeking class-action status for Iraqi residents of Irbil, Dokuk and Sulaimaniyah who were allegedly deprived of humanitarian aid by the Oil-for-Food kickbacks. The plaintiffs are suing under RICO, the Foreign Corrupt Practices Act and the International Emergency Economic Powers Act.

Just last month the Australian government determined that AWB worked directly with Hussein's government to orchestrate the kickbacks that netted the company over an estimated $220 million and recommended charges against the company]. Iraq no longer permits AWB wheat imports. BNP Paribas is believed to have made nearly $1.5 billion in kickbacks.



Lawyer blog award
Legal Marketing | 2006/12/22 23:46
The Featured Blog section on Breaking Legal News highlights the most exciting and useful law blogs on the Internet. Each blog that is determined to be worthy of being recognized will receive a dedicated page on breakinglegalnews.com with a description of the blog, bio of blog organizer, and any information concerning the blog. Each blog page will have its own dedicated link that will be available for life on.

Breaking Legal News Blog


If a blog is chosen for the Featured Blog section, they will receive a banner to be put on their blog page showcasing the fact that they have been featured by Breaking Legal News. They will also be able to submit one article per month pertaining to a specific legal matter. They will also be able to submit one article per month pertaining to a specific legal matter.


Mercedes-Benz Fined for Clean Air Act Violation
Environmental | 2006/12/22 11:11

Mercedes-Benz USA and its parent corporation, DaimlerChrysler AG (Mercedes), have agreed to pay $1.2 million in civil penalties to resolve allegations that they violated the Clean Air Act by failing to promptly notify the Environmental Protection Agency (EPA) about defects in the air pollution controls installed on numerous 1998 to 2006 Mercedes model vehicles, the Justice Department and the EPA announced today.

The Clean Air Act requires auto manufacturers to promptly inform the EPA of defects in emission-related components so that the government can consider whether the defect will cause emission standards to be exceeded and whether a recall is necessary. Both the complaint and the settlement were filed in the U.S. District Court in Washington, D.C.

In response to the EPA's investigation into the matter, Mercedes began voluntary recalls for two of the defects at issue and notified owners that it would extend the warranty coverage to address a third defect, at an estimated cost of about $59 million. Under the terms of the consent decree, Mercedes will also be required to improve its emissions defect investigation and reporting system to ensure future compliance, at an estimated cost of approximately $1 million per year.

Reliable and effective automobile pollution control systems are essential to protect human health and the environment from harmful automobile emissions, said Sue Ellen Wooldridge, Assistant Attorney General for the Justice Department's Environment and Natural Resources Division. Mercedes' failure to alert EPA to a number of defects in emission-related components over a multi-year period is a serious violation because it deprived EPA of the opportunity to promptly determine whether emission standards would be exceeded and whether to order a recall of any of these vehicles.

"These defect reporting requirements are a critical part of EPA's program to reduce air pollution by ensuring that vehicles on the road comply with the Clean Air Act's emissions standards," said Catherine R. McCabe, Principal Deputy Assistant Administrator for the Office of Enforcement and Compliance Assurance.

The vehicles subject to the voluntary recalls and extended warranties have defective catalytic converters or defective air pumps. The voluntary recalls and extended warranty will reduce the emissions of harmful pollutants caused by the defects by over 500 tons cumulatively. These pollutants include nonmethane hydrocarbons (NMHC), nitrogen oxides (NOx) and carbon monoxide (CO). NMHC and NOx are key ingredients in the production of ozone, a major contributor to cancer-causing smog. CO impairs breathing and is especially harmful to children, people with asthma and the elderly.



SEC settles with former Tyco exec, charges 2 others
Law Center | 2006/12/22 11:09

Former Tyco executive Richard "Skip" Heger reached a $450,000 settlement on financial reporting and record-keeping charges, the US Securities and Exchange Commission announced  Thursday. The charges are connected to a fraud case in which Tyco agreed to pay a $50 million civil penalty and a $1 disgorgement fee for fraudulent accounting procedures used between 1996 through 2002. Heger, who at the time was in charge of the company's fire and security services division finances, was accused of approving financial results that he knew, or should have known, were inflated; he reached the settlement without entering a plea on the charges. Two other former executives, Richard Power and Edward Federman, were charged with fraud in overstating Tyco's operating income by hundreds of millions of dollars through the use of a sham transaction.

In the sham transaction, Tyco imposed a $200 “dealer connection fee” that it purportedly required independent dealers to pay. Tyco simultaneously increased the price it paid each dealer by the same $200, the SEC said. The transaction had no economic substance, but boosted income because the connection fee was recognised immediately as income and the $200 dealer payment was treated as a capital expenditure that was amortised over 10 years, the SEC said.

The April settlement allowed Tyco to avoid admitting any of the allegations in the SEC's complaint. According to the SEC, Tyco executives inflated key figures - including its operating income by more than $567 million and its cash flow by $719 million - in official reports to the SEC. Former Tyco CEO Dennis Kozlowski and former CFO Mark Swartz were found guilty of looting the company and its shareholders out of more than $150 million in unauthorized personal compensation, and have been sentenced to prison for 8 to 25 years. The company still faces a likely onslaught of shareholder litigation, which analysts predict could cost the company up to $4 billion.

The SEC said that PricewaterhouseCoopers LLP, Tyco’s outside accountant, raised concerns about the $200 payment to dealers. In response, Tyco stopped calling the $200 payment a “growth bonus” and repackaged the payment as a $200 increase in the purchase price for each monitoring contract, the SEC said.



New Jersey civil unions bill signed into law
Breaking Legal News | 2006/12/22 11:02

New Jersey Governor Jon Corzine signed into law Thursday legislation providing legal recognition to same-sex civil unions. The New Jersey Legislature passed the civil unions bill last week in response to an October New Jersey Supreme Court ruling that same-sex couples must be given equal rights. The court said the state legislature must decide within 180 days whether the state would recognize same-sex marriage or another form of civil partnership. The civil unions law will take effect February 19. AP has more.

Currently, Massachusetts is the only US state to allow full same-sex marriage, which was legalized when the Supreme Judicial Court of Massachusetts ruled in 2003 that a ban on such marriages was unconstitutional.



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