Sunday, May 30, 2010

Oil disaster and Alabama AG race

Today I emailed or posted to Alabama attorney general candidates and to Alabama newspapers the following message:

From: RDShatt@aol.com
To: _____
Sent: 5/30/2010_____P.M. Central Daylight Time

Subj: Alabama attorney general race and the Gulf oil disaster


Dear _______,

The oil disaster in the Gulf of Mexico illuminates an important, but possibly not well recognized, issue in the Alabama Attorney General race.

For Congressional candidates this year, the contemplation of the long term devastating consequences of the Gulf oil disaster has led to prompt reactions.

Obvious issues that are presented include whether offshore drilling should be limited and whether increased regulation of oil industry operations is needed, and, further, a federal law passed after the Valdez oil spill that limits the liability of oil companies has become a Congressional election issue this year as a result of the disaster in the Gulf.

Regardless of the policy outcomes that ensue from public and legislative debate about offshore drilling, regulation of the oil industry, and the federal law limiting liability, there is one thing that is very wrong related to the oil disaster for which Congress is responsible and which is relevant to the Alabama attorney general election.

I think it is very wrong that hundreds of millions or billions of dollars are going to be paid to plaintiffs' lawyers (and defense lawyers) related to the determination and finalization of BP's liability and to whom the liability is owed.

I don't think it should cost more than $50,000,000 to determine the amount of the liability and to whom it is owed. Hundreds of millions or billions of dollars should not have to be paid to lawyers for their role, and most of those amounts would be much better spent as part of the compensation paid to persons who suffer losses from the oil disaster. The moneys could also be better spent by not being paid at all and being kept by BP (that had the misfortune of being a cause of the accident) and used in continuing its legitimate business of producing oil for the benefit of the county, providing jobs, and paying dividends to hundreds of thousands of stockholders, big and small, including retirement plans, who are dependent on and deserving of financial returns from their investments.

How is this question about plaintiffs' lawyers relevant to the Alabama attorney general election?

State attorneys general, along with legislators, governmental regulators and prosecuting attorneys, work on behalf of the public to design, implement and enforce laws and regulations and a regime of legal punishments to protect the public from intentional corporate wrongdoing, negligence, and dishonest commercial activities. These public officials are compensated on a salary basis and they are not biased in in their work by their compensation being geared to the dollar amount of economic activity that their work affects (i.e., legislators and regulators don’t get paid millions of dollars because they put into effect large governmental budgets, levy commensurate amounts of taxes, and write and enforce laws and regulations that affect billions of dollars of economic activity and that impose and allocate large economic costs on and among businesses, consumers and other parties; further regulators, prosecutors and state attorneys general are not compensated based on the amount of fines and penalties they get imposed on wrongdoers).The work of plaintiffs’ lawyers in class action lawsuits and other litigations is also effectively part of the design, implementation and enforcement of legal punishments to curtail commercial and other wrongdoings. Their compensation is huge and geared to the amounts of economic activity that the plaintiffs' lawyers work affects and to the economic costs they get shifted around among various parties; the larger the scope of the plaintiffs' lawyers' lawsuits and the greater the dollar amount of the costs they can get shifted around, the greater their compensation. This manner of compensation of plaintiffs’ lawyers creates very powerful incentives for them to seek the objectives of (i) expansion of harms or detriments for which a payment should be made, (ii) higher rather than lower amounts that should be paid, (iii) expansion of liability where there is no fault, (iv) disregard of distinctions between intentionally culpable, negligently culpable and faultless parties, especially in the context of corporations comprised of a conglomeration of employees, shareholders and customers, (v) disregard of culpability of plaintiffs in their own injuries and harms, (vi) not having clear rules in advance about what is wrongful and what is not wrongful, so that a person does not know what is wrongful and cannot make a decision not to do a wrongful act, and exposing every decision and action to an ex post facto determination that it was wrongful and for which there is liability, (vii) disregard of rational cost/benefit principles, (viii) the invocation of junk science, and (ix) usurpation by plaintiffs' lawyers and the courts of the powers of the legislative branch and the executive branch regulatory apparatus.

State attorneys general should understand the unsalubrious effect that plaintiffs' lawyers may have on the public good through their class action and other junk lawsuits, their lobbying in Washingon DC and state capitols (including Montgomery), and their procuring of the complicity of state attorneys general to, among other things, retain the plaintiffs' lawyers on a contingent fee basis to represent the state in litigation against businesses.

The candidates in the Alabama attorney general election owe it to the voters to state their views on these issues concerning plaintiffs' lawyers. As horrendous and saddening as the Gulf oil disaster is, and as important as it is for there to be focus on how to plug the leak and on the undertaking of the arduous and very protracted recovery efforts ahead, now is also the time to put a spotlight on plaintiffs' lawyers for the public to consider the good they do, or they do not do, in protecting the public from intentional wrongdoings, negligence, and dishonest commercial activities, and in obtaining proper and just compensation for harmed members of the public.

There are only two days until the primary election. To the extent Troy King, Luther Strange, James Anderson, Michel Nicrosi and Giles Perkins have told the voters their views on the foregoing issues concerning plaintiffs' lawyers, I compliment them. If I, as a citizen, can do anything to call these issues to the attention of voters prior to Tuesday, I compliment myself.

Sincerely,
Rob Shattuck
3812 Spring Valley Circle
Birmingham, AL 35223
(205) 967-5586

Friday, May 28, 2010

Email to ethics conference faculty

[Form of email sent to faculty of upcoming Managing Ethics in Organizations conference co-sponsored by Ethics and Compliance Officer Association and Center for Business Ethics at Bentley University.]

From: RDShatt@aol.com
To:
Sent: 5/28/2010 ____A.M. Central Daylight Time

Subj: To faculty: Managing Ethics in Organizations

Dear _______,

I am taking the opportunity, in connection with the upcoming Managing Ethics in Organizations program, to solicit information about whether there is anything further in the literature appertaining to the argumentation I have been attempting to purvey that is set forth in my article Does the Civil Liability System Undermine Business Ethics? .

During the past year, I have endeavored to find out more about this. Last fall I contacted the speakers at ECOA annual conference, but was not able to learn anything. (If you are interested, you may look at this link: http://robertshattuck.blogspot.com/2009/10/follow-up-report-on-ecoa-conference.html for further details.)

I also wrote an article in a more scholarly vein that I submitted for publication and that I corresponded with several professors about. I came away from that exercise believing that there was a dearth of ethicists having much interest in the civil liability system. (Again, if you are inrested, you may look at this link for further details: http://robertshattuck.blogspot.com/2009/09/i-am-attempting-scholarly-article.html).

As a matter of current topical interest two months ago I wrote an article "Will the Plaintiffs' Lawyers Make Goldman More Ethical?" that I submitted to The Wall Street Journal.

This month's news is that the plaintiffs' lawyers are in hot pursuit of BP regarding the Gulf of Mexico oil disaster. Whether they will make BP a better corporation or not ought to be of significant interest to ethicists. (In my view it also ought to be an issue in the 2010 elections, and I am trying to make it so. See http://robertshattuck.blogspot.com/search/label/L.%20Oil%20disaster%20in%20Gulf%20of%20Mexico ).

If you can help me out and can kindly cite me to further ethics literature addressing the civil law liability system or refer me to other ethicists you are aware of who have a special interest in the civil liability system, I will be very appreciative.

Thank you.

Sincerely,
Rob Shattuck

Emails to candidates in Alabama

From: RDShatt@aol.com
To: ____________
Sent: 5/28/2010 _______A.M. Central Daylight Time

Subj: 2010 elections and Gulf of Mexico oil disaster


Dear _________,

Following up on previous email communication with your campaign, please be advised that I have been sending letters to newspapers and posting on media websites and blogs the form of letter that is set forth below about the 2010 elections and the oil disaster in the Gulf.

[For your information website postings thus far include
http://climateprogress.org/2010/05/27/exxon-valdez-bp-oil-disaste/#comment-277712;
http://www.thenation.com/article/bp-oil-hits-louisiana-how-far-away-next-disaster#comment-427270
http://www.bizjournals.com/birmingham/stories/2010/05/24/daily22.html#disqus_thread
http://www.orangebeach.ws/blog/2010/05/27/local-anglers-fishing-is-still-good-baldwin-county-now/cpage/1.html#comment-45
http://www.montgomeryadvertiser.com/comments/article/20100525/OPINION01/5250302/Advertiser-Editorial-Increase-cap-on-oil-spill-damages
http://blog.al.com/live/2010/05/federal_judge_in_mobile_refuse.html#comments]

I hope your campaign has taken or will take a position on whether plaintiffs' lawyers should receive hundreds of millions or billions of dollars or whether much less should be paid to the lawyers with more being used to compensate victims for losses from the oil disaster (or even for being available to BP for use in its legitimate oil business from which customers, employees and shareholders gain legitimate benefits).

Thank you.

Sincerely,
Rob Shattuck

[form of letter to editors and posted on websites]
Re: 2010 elections and Gulf of Mexico oil disaster

Dear _______,

The oil disaster in the Gulf of Mexico is going to have devastating consequences for years to come.

We Alabamians can wish we did not have to think about them.We have to think about them, however.

There has already begun the work of government, charity and the law to deal with what has happened in the Gulf.

Candidates in this year's elections have reacted and have enunciated campaign positions concerning whether offshore drilling should be limited, whether increased regulation of oil industry operations is needed, and whether a federal law that limits the liability of oil companies should be changed.

Exercising my citizen's rights, I have had email correspondence with many candidates (in Alabama and outside of Alabama) about the oil disaster. In this correspondence, I advocated that, regardless of what the policy outcomes are regarding offshore drilling, regulation of the oil industry, and the federal law limiting liability, there is, in my view, one thing that is very wrong related to the oil disaster for which Congress is responsible.

I think it is very wrong that hundreds of millions or billions of dollars is going to be paid to plaintiffs' lawyers (and defense lawyers) related to the determination and finalization of BP's liability and to whom the liability is owing.

I don't think it should cost more than $50,000,000 to determine the amount of the liability and to whom it is owed. Hundreds of millions or billions of dollars should not have to be paid to lawyers for their role, and most of those amounts would be much better spent by society as part of the compensation paid to persons who suffer losses from the oil disaster. The moneys could also be better spent by not being paid at all and being available for use by BP and other companies who had the misfortune of contributing to the happening of the accident, in order that those parties can continue their legitimate business of producing oil for the benefit of the county, providing jobs, and paying dividends to hundreds of thousands of stockholders, big and small, including retirement plans, who are dependent on and deserving of financial returns from their investments.

Recovery from the oil disaster is going to be very onerous. I hope the candidates and the public will debate in the 2010 elections whether plaintiffs' lawyers should get paid hundreds of millions or billions of dollars as a result, or whether there is better use for the money in how our society recovers.

Sincerely,

Rob Shattuck
Birmingham, AL

Letters to editor, etc.

[I sent letters to the editor and did media website and blog postings in the form of the below composition on the subject of the 2010 elections and the oil disaster in the Gulf.]


Subj: 2010 elections and Gulf of Mexico oil disaster

Dear ______,

The oil disaster in the Gulf of Mexico is going to have devastating consequences for years to come.

We Alabamians can wish we did not have to think about them.

We have to think about them, however.

There has already begun the work of government, charity and the law to deal with what has happened in the Gulf.

Candidates in this year's elections have reacted and have enunciated campaign positions concerning whether offshore drilling should be limited, whether increased regulation of oil industry operations is needed, and whether a federal law that limits the liability of oil companies should be changed.

Exercising my citizen's rights, I have had email correspondence with many candidates (in Alabama and outside of Alabama) about the oil disaster. In this correspondence, I advocated that, regardless of what the policy outcomes are regarding offshore drilling, regulation of the oil industry, and the federal law limiting liability, there is, in my view, one thing that is very wrong related to the oil disaster for which Congress is responsible.

I think it is very wrong that hundreds of millions or billions of dollars is going to be paid to plaintiffs' lawyers (and defense lawyers) related to the determination and finalization of BP's liability and to whom the liability is owing.

I don't think it should cost more than $50,000,000 to determine the amount of the liability and to whom it is owed. Hundreds of millions or billions of dollars should not have to be paid to lawyers for their role, and most of those amounts would be much better spent by society as part of the compensation paid to persons who suffer losses from the oil disaster. The moneys could also be better spent by not being paid at all and being available for use by BP and other companies who had the misfortune of contributing to the happening of the accident, in order that those parties can continue their legitimate business of producing oil for the benefit of the county, providing jobs, and paying dividends to hundreds of thousands of stockholders, big and small, including retirement plans, who are dependent on and deserving of financial returns from their investments.

Recovery from the oil disaster is going to be very onerous. I hope the candidates and the public will debate in the 2010 elections whether plaintiffs' lawyers should get paid hundreds of millions or billions of dollars as a result, or whether there is better use for the money in how our society recovers.

Sincerely,

Rob Shattuck
Birmingham, AL

Tuesday, May 25, 2010

Replies of candidates to oil disaster email

I received many replies to my email to Congressional candidates about the oil disaster in the Gulf of Mexico. After I collected the replies, I sent the below form of email to the Congressional candidates or their staff members who had replied to me:

From: RDShatt@aol.com
To:
Sent: 5/23/2010 _____.M. Central Daylight Time

Subj: Re: Campaign question for you about Gulf of Mexico oil catastrophe: ...


Dear _____,

Thank you for your below reply to my email.

This election year is infused with anger and resentment against Congress. There is growing sentiment that the country's elected lawmakers in Washington have failed the American society.

I agree with that view, and I would like as many incumbents as possible to be thrown out of office and for someone else to be given the opportunity to do a better job for the country.

Voters who are angry with Congress have a variety of reasons.

My main reason is that I think our lawmakers are corrupt in being more interested in preserving themselves and their perks in office, rather than doing what is right for the country.

One example is the way Congress allowed the plaintiffs' lawyers to keep medical malpractice reform out of the health care law that was adopted earlier this year. Our lawmakers did not do right for the country there.

I emailed you and other Congressional candidates about the Gulf of Mexico oil disaster to raise another way our lawmakers do not do right by the country.

There is no question that the country, through non-corrupted lawmakers, needs to lay out rules in advance that reflect legitimate economic and social policy trade offs concerning regulatory oversight of oil industry operations and also concerning liability in the case of accidents. These rules could reasonably include no limitation of liability or they could provide for a limitation of liability. If Congress makea a policy decision in favor of the latter, Congress may then need to make a determination whether society as whole, through the use of tax revenues, should give financial aid to victims of the Gulf oil disaster that are not compensated because of a liability limitation.

Further, to the extent there will be liability for an accident, the country needs to have mechanisms, set up by non-corrupted lawmakers, for determining details of the liability under the law, including its amount and to whom the liability is owed.

In writing my email to you and other Congressional candidates, I had this question in mind: How much should it cost the country to determine the details of the liability in the Gulf oil catastrophe. Should it cost $500,000,000 to determine the details of that liability, or one billion dollars, or two billion dollars, or more?

I frankly don't think it should cost more than $50,000,000 to determine the details of the liability in the oil catastrophe in the Gulf.

I think a corrupt failure of our Congress is that it will allow hundreds of millions, or billions, of dollars to be paid to plaintiffs' lawyers (and defense lawyers) in the determination of the details of the oil disaster liability. Those moneys would be much better spent by society as part of the compensation paid to persons who suffer significant losses from the disaster. The moneys could also be better spent by not being paid at all and being available for use by BP and other parties who had the misfortune of being a cause of the accident, in order that those parties can continue their legitimate business of producing oil for the benefit of the county, providing jobs, and paying dividends to hundreds of thousands of stockholders, big and small, including retirement plans, who are dependent on and deserving of financial returns from their investments.

The lawyers are not deserving of hundreds of millions or billions of dollars being paid to them growing out of the Gulf oil catastrophe, but our Congress corruptly allows such things to happen.

There are many reasons for thinking the American society is ill served by its elected lawmakers in Washington and for wanting to throw incumbents out of office and giving others an opportunity to do a better job for the country.

This email indicates my reasons, and I hope tens of millions of other Americans will also act on their reasons for voting out incumbents in November.

Sincerely,
Rob Shattuck

Email to Congressional candidates re oil disaster

A couple of weeks ago I sent the below form of email to my working list of Congressional candidates:


From: RDShatt@aol.com
To:
Sent: _/__/2010 ____M. Central Daylight Time

Subj: Campaign question for you about Gulf of Mexico oil catastrophe:


The article at this link http://www.dailyfinance.com/article/federal-law-may-limit-bp-liability-in/1042217/ and other more recent articles indicate a federal law was passed following the Valdez oil spill that may limit BP's liability related to the Gulf of Mexico oil disaster.

The article also reports that Democratic Senators introduced legislation to raise the limit to $10,000,000,000.

Do you agree with the existing federal law? Do you think the limit should be raised?

Thank you.

Rob Shattuck
3812 Spring Valley Circle
Birmingham, AL 35223

Tuesday, May 4, 2010

Oil disaster in the Gulf

I live in Alabama. The unfolding catastrophe in the Gulf of Mexico is on track to have devastating economic, environmental and human consequences that will go on for years. One would prefer not to think about them.

As saddened as we all are by the event, there immediately begins the work out of how the public institutions of government, charity and the law will address what has happened.

This raises for debate what role the plaintiffs' lawyers should play in the work out.

This blog has made lengthy disquisition that the role of plaintiffs' lawyers should be lessened and society would be better served if the work out of the Gulf oil disaster was done more under the auspices of criminal prosecutors, regulators, state attorneys general and legislators.

Given the very large size of the Gulf oil event, and its currently unfolding status, it seems appropriate to make it a subject of periodic discussion in this blog.

A good starting point for discussion might be that federal law enacted as a result of the Valdez oil spill may limit recoverable damages against BP, as discussed in the below article.


Federal law may limit BP liability in oil spill
By ERICA WERNER
AP posted: 7:51 PM 05/03/10
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WASHINGTON -A federal law may limit how much BP has to pay for damages such as lost wages and economic suffering in the Gulf Coast oil spill, despite President Barack Obama's assurances that taxpayers will not be on the hook.

A law passed in response to the 1989 Exxon Valdez spill in Alaska makes BP responsible for cleanup costs. But the law sets a $75 million limit on other kinds of damages.

Economic losses to the Gulf Coast are likely to exceed that. In response, several Democratic senators introduced legislation Monday to raise the liability limit to $10 billion, though it was not clear that it could be made to apply retroactively.

White House press secretary Robert Gibbs said Monday the administration's commitment was for BP to pay for all costs associated with the spill.

Obama said the same thing during a tour of the area Sunday. "Let me be clear: BP is responsible for this leak; BP will be paying the bill," the president said.

Kenneth Baer, spokesman for the Office of Management and Budget, also noted that if BP were found to have acted negligently in the spill or to have violated federal laws, the damages cap under the Oil Pollution Act would be lifted.

Baer said BP could also be held liable under additional federal or state laws.

"You can be sure that BP will be held accountable to the full extent of the law," he said.

Nevertheless, the existence of the liability cap might complicate Obama's commitments to make BP pay for numerous costs anticipated in the Gulf such as shortened fishing seasons and lost tourism. It is not clear how high those costs could rise.

"We're glad that the costs for the oil clean up will be covered, but that's little consolation to the small businesses, fisheries and local governments that will be left to clean up the economic mess that somebody else caused," said Sen. Robert Menendez, D-N.J., a sponsor of the legislation raising the cap, which the administration said it supported.

BP issued a fact sheet Monday committing to pay "all necessary and appropriate cleanup costs" as well as "legitimate and objectively verifiable claims for other loss and damage caused by the spill." A company representative did not immediately return a phone message seeking comment on whether claims would be paid out over $75 million.

Beyond the $75 million in law, the federal government also maintains an Oil Spill Liability Trust Fund supported by industry fees. It can make a total of $1 billion in payouts per incident to individuals, businesses and governments.

Roughly 2.6 million or more gallons has spilled into the Gulf since the April 20 blast that sunk an oil rig and killed 11 workers.

On Monday afternoon top administration officials, including Interior Secretary Ken Salazar, Homeland Security Secretary Janet Napolitano, economic adviser Lawrence Summers and energy adviser Carol Browner, met with BP CEO Tony Hayward and BP America Chairman and President Lamar McKay at the Interior Department.

The 90-minute meeting was closed to reporters, but officials said discussion centered ongoing response efforts, as well as an update on BP's mitigation plans for potentially affected Gulf Coast states. It was the latest in a series of meetings between administration officials and BP.
BP officials said little as they left the session.

"Very constructive dialogue," Hayward told reporters as he and other BP officials got into a car.

Summers and Browner declined to comment.