After watching Howard Dean admit that the reason tort reform isn’t part of the ObamaCare bill is because the Democrats don’t have the energy to take on the trial lawyers (read: they don’t want to lose one of the Dems’ highest campaign contributors), I started thinking about the power state courts have over our lives. Too often, we focus on high-profile Supreme Court nominations while ignoring what is happening in our own backyard.
You’d be surprised by how much power state courts have. For an especially scary example, in New Jersey, an appellate court recently legislated from the bench and instituted a special kind of judicial green-dealism. Basically, the New Jersey court mangled statutory law to hold companies responsible for “natural resource damages” on privately-held land.
In plain English, natural resource damages are the cost of restoring polluted land to its “pristine” state as it was found 3,000 years ago, before evil industrialists rudely civilized the country and gave us indoor plumbing. Keep in mind that these companies have already paid multi-million dollar clean-up costs under federal and state regulations. However, in today’s current world of enviro-hysteria, courts are actively looking to squeeze as much money as possible out of Big Oil, economy be damned.
Enter natural resource damages. In 2007 this New Jersey court forced ExxonMobil to settle for millions for the public’s “loss of enjoyment” of private land. Basically, the court, with helpful suggestions from the New Jersey EPA, invented a new way to punish progress.
You may be thinking, “That doesn’t sound all bad; after all, the companies being punished are polluters!”
Not necessarily.
Take the New Jersey case. ExxonMobil purchased the land in the early 1900s, during the Industrial Era, to build a refinery. This was before the advent of environmental regulations, so the refinery, which polluted the land, did so legally.
Enter the government, some 75 years later. Through arguably ex post facto laws, New Jersey created statutory liability for companies with polluting factories, requiring them to pay to restore private land to “pristine” condition. The court interpreted “pristine” to mean that the companies had to pay for the public’s loss of use and enjoyment of private property.
Interpretation: even though many companies had already paid millions to clean up after behavior that was completely legal (and created jobs) at the time the behavior occurred, the land still doesn’t look like it did in 1600, so the companies were forced to pay even more money to the state.
In hushed voices, people call this “judicial blackmail,” because ExxonMobil can’t afford to challenge the court’s twisted interpretation of the statute out of fears that, even though the court’s ruling is unconstitutional and statutorily invalid, the New Jersey Supreme Court might decide to put the environment before the Constitution and rule the same way. If the New Jersey Supreme Court were to decide against ExxonMobil, New Jersey’s EPA would have a new standard to apply and would be able to extract even more money out of ExxonMobil by going after every factory and refinery that the company has in the state.
Even more disconcerting for ExxonMobil is the prospect of allowing a court to determine the dollar amount of the damages. Since natural damages can’t be quantified — how can a court determine how much it would cost to make the environment perfectly pristine again? — there’s no telling how large any given damages penalty would be. Therefore, ExxonMobil is forced to settle each case brought by the New Jersey environmental agency because doing so is cheaper than accepting the heavy cost of going to trial and the risk of a large damages penalty. So even though it is legally in the right, ExxonMobil is forced to settle for tens of millions of dollars rather than risk losing hundreds of millions in court.
What does this mean for you, the consumer? It means that ExxonMobil will pass this cost on to you in the form of higher gas prices. And not just in New Jersey — ExxonMobil will spread the cost of these settlements across the nation.
Angry yet? Of course, there’s a moral to this story. It’s not just medical-malpractice tort reform that impacts your everyday life. State courts also have an incredible effect on your day-to-day life and business, as evidenced above.
So the next time you go to vote for your state court justices, remember to do the extra research to determine whether they’re the type that would, in the name of the environment, blackmail Fortune 500 companies into paying unnecessary damages to the state, resulting in increased costs to you as the consumer.
Shauna Moser, a student at the Wake Forest School of Law, is a regular contributor to The D.C. Writeup.
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