About 6 weeks ago an Atty girl friend of mine discussed the pros and cons of limiting civil liability on corporations and we disagreed why government should not limit the exposure of corporations for their conduct.
I argued, that putting caps on damages is always a bad idea because corporations will do a cost benefit analysis, calculating their exposure (liability) while disregarding the lives of others in favor of profits. Damages should be determined by a Jury and not the government.
During the 1970’s Ford Motor Company was aware of a major design flaw in their Pinto which allowed its fuel tank to be easily damaged in a rear end collision resulting in deadly fires but refused to make a necessary redesign due to the limits of liability, it was more economically feasible to pay claims than to retrofit the Pinto model.
While corporations such as British Petroleum (BP) will legitimately pass on their overhead, labor costs, increases in taxes and other miscellaneous costs to the consumer in the form of higher prices, at the same time corporations must remain competitive in the market place. Should BP have higher prices for a substantially the same product sold by “BCD Energy Corporation” the average consumer will patronize the latter corporation to purchase the similar product because the former corporation isn’t competitive.
What does basic consumer economics have to do about “Obama’s Katrina” which has been spewing millions of barrels of crude oil into the Gulf of Mexico, resulting in unknown Billions of Dollars in damages to private companies and individuals in the affected areas?
Thanks to Democrats that controlled the 101st Congress in 1990 as part of the Oil Pollution Control Act 33 USCA 2701, et. seq. subsequent to the Exxon Valdez oil spill, legislation was enacted that mitigated economic damages of oil companies to removal costs and $75 million dollars in liability.
Removal costs by definition “means, the cost of removal that are incurred after a discharge of oil has occurred or, in any case in which there is a substantial threat of discharge of oil, the cost to prevent, minimize, or mitigate oil pollution from such an incident.”
Section 1003–Defenses of Liability:
(a) Complete Defense–A responsible party is not liable for removal costs or damages under Sec. 1002 if a responsible party establishes by a preponderance of the evidence that the discharge or substantial threat of a discharge of oil and the resulting damages or removal costs were caused by—(3) an act or omission by a third party…”
Disingenuous: It really was of no surprise that Mr. Obama would cast all blame upon BP but also Transocean and Halliburton for the the Gulf of Mexico oil disaster. Subsequent to the testimony of Ross Pillari, CEO of BP Oil Company and the other Executives, President Obama said that it was a ridiculous spectacle and he promised Americans that his Administration will be “tough” on the industry compared to his predecessors (Republicans and the Bush Administration) When will Barack Obama begin accepting responsibility for his own failures and those of his party which controlled Congress in 1990 enacting legislation that limited liability of companies such as BP?
Today the only concerns that Americans have is: (a) the economic liability of business and individuals that have suffered damages as a result of the “Deepwater Horizon” oil spill disaster; (b) who will pay for clean-up costs; (c) preventing a such a disaster in the future.
Since everything that one does has an element of risk to it, government can not guarantee that no harm will occur in the future for anything.
However thanks to the Democrats that controlled 101st Congress which capped damages in 1990 we do know who is to blame for that action and why the American Taxpayers will ultimately be paying the costs for the Gulf of Mexico oil spill catastrophe.