The Supreme Court is weighing the $2.5 billion punitive damage award against Exxon arising out of an oil spill, which occurred as a result of employee negligence it had no control over, and which it spent enormous amounts of money to clean up and remedy, including $2.1 billion for clean-up alone.
The Ninth Circuit Court of Appeals upheld this mindbogglingly big award. In the National Journal, Stuart Taylor describes how unwarranted the damage award was. As Judge Alex Kozinski noted in dissent, “Shippers everywhere” are now “on notice: if your vessels sail into the vast waters of the Ninth Circuit, a jury can shipwreck your operations through punitive damages and the fact that you did nothing wrong won’t save you.” In a characteristically persuasive dissent, Kozinski pointed out that maritime law doesn’t even permit punitive damages in this sort of case to begin with, even if an employee on board the ship was in fact reckless.
Stuart Taylor’s column also took aim at the lawsuits brought by the ACLU and trial lawyers against the phone companies, like Verizon and AT&T, for cooperating with the government’s antiterrorism surveillance program. Dozens of such lawsuits seek billions of dollars in damages. Congress is considering whether to immunize the phone companies against such suits.
What is particularly perverse about these lawsuits is the double standard they rely on. Under the “state-action” doctrine, it’s generally the government, not private parties, which is bound by the Constitution. And it’s the government that bears principal responsibility for making sure its surveillance programs comply with the Constitution, not private phone companies that are not privy to all the details about, or needs behind, such programs.
But even if the program is unconstitutional, the government will never pay a penny. The government itself is not subject to constitutional damage claims (so-called Bivens claims only apply against individual federal employees, not the government itself), and individual government officials can defeat a damage claim by raising the defense of “qualified immunity,” which shields them from liability for constitutional violations unless the law was so clear that only a “plainly incompetent” official would not have realized that what he was doing was unconstitutional.
By contrast, the phone companies and their employees, who acted in good faith, cannot rely on the defense of qualified immunity, which the courts have refused to extend to private parties sued in constitutional lawsuits. So they face risks of liability even if they simply were trying to help out their country in fighting terrorism. Even if qualified immunity can’t be applied to private employees, some other form of good faith immunity should be available based on the country’s national security needs and the chilling effect of lawsuits on achieving those needs.