High Court Nullifies Exxon Jury Verdict

posted on:
December 5, 2007

author:
Bob Martin

category:
Fraud

The Alabama Supreme Court, by tossing nearly 99 percent of a $3.6 billion verdict against ExxonMobil, the world’s, largest publicly traded oil company, has refused to play Santa to state taxpayers.

The court’s eight Republican justices rejected the state’s claim that ExxonMobil committed fraud against Alabama after two separate juries found it cheated state taxpayers out of millions in royalty payments. The lone member of the court to dissent was Democratic Chief Justice Sue Bell Cobb, who wrote: "Not only does the majority approve of the appropriation of our state’s resources by deceit, it undermines any individual or institution that would pursue honest business practices."

A Montgomery jury in 2003 returned a verdict of $102.8 million in actual damages and fined the company $1 1.8 billion in punitive damages, an amount later reduced by the trial judge to $3.5 billion. In its decision last week the court allowed only $51.9 million in actual damages to stand. The justices had also nullified an earlier jury verdict of $3.5 billion in 1999, sending it back for a new trial on a technicality.

ExxonMobil’s third quarter profit for 2007 totaled $9.41 billion. The company’s Alabama lawyer, David Boyd, said that the verdict "affirms what we have said along.. . that this was never a fraud case."

Jere Beasley, one of the state’s attorneys, called the verdict "a sad day for Alabama," and said the state will probably ask the court to reconsider its decision. Most observers believe such a reconsideration by the court’ to be highly unlikely.

My quick calculation shows that had the trial court’s verdict, which totaled about a third of the state’s annual budgets, been up-held the per capita gain for the state would have been about $783. With the reduction by the court, that amount was reduced to $11.

Not good news for Roy Johnson … The Birmingham News reports that the driver for former two-year college Chancellor Roy Johnson has told prosecutors that he created a bogus business that would bill college vendors and used their money to give Johnson cash and to pay contractors working on Johnson’s house, according to a plea agreement.

Robert Higgins, who worked as a college carpenter and painter when he met the former chancellor, admitted in the federal court filing that he sent false weekly invoices for as much as $7,000 each to vendors receiving work from two-year colleges. The two vendors already cooperating with prosecutors made the payments to Higgins so he could use it for Johnson, the plea states.

Higgins has agreed to plead guilty to obstruction of justice. He faces a maximum of 20 years in prison and a $250,000 fine. That charge is related to Higgins’ admission that he and Johnson came up with a plan, after they learned about the federal investigation, to lie about the payments from the college vendors, according to the plea agreement. Johnson, once a powerful legislator and Speaker Pro Tern of the State House of Representatives, has become a major target of the investigation into two-year college corruption court records show. Prosecutors have placed a lien on his $1.3 million Opelika house, saying he built it with kickbacks from college vendors.

Tibbets never wavered in defense of his mission … a Paul W. Tibbets, Jr., who etched his mother’s name, Enola Gay, on the nose of his B-29 bomber and piloted it to drop an atomic bomb on Hiroshima, never expressed remorse over his role in helping bring an end to World War 11. He died last week at his home in Columbia, Ohio. He was 92.

Gen. Tibbets never wavered in defense of his mission. "I was anxious to do it," he told an interviewer for the documentary "The Men Who Brought the Dawn," marking the 50th anniversary of the Hiroshima bombing.

"By dropping that bomb, the world has learned its lesson: what nuclear warfare is," his son Gene Tibbets of Montgomery recalled his father saying.

Main to seek Supreme Court seat … Jim Main, Gov. Bob Riley’s finance director, says he plans to seek the seat on the Alabama Supreme Court being vacated b$ Justice Harold See. Main will run as a republican.

The only other announced candidate is District Judge Deborah Paseur of Florence, a democrat.

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