It's beginning to look like ExxonMobil
This, as many Fools recall, goes back to 1989, when the Exxon Valdez, a tanker operated by the company, went aground in Alaska. At the time, the ship was under the command of Capt. Joseph Hazelwood, who was accused of being tipsy at the time of the accident but was later cleared of the charge in court.
The Valdez slid along Bligh Reef, which obviously was named for another notorious skipper, spilling about 11 million gallons of crude oil on 1,500 miles of Alaskan coast. Exxon ended up paying numerous fines, along with about $3.4 billion in cleanup costs.
But a group consisting of fishermen, landowners, local governments, and Native Americans sued the company, claiming that they had suffered economic damages. They were originally awarded a $5 billion judgment. The award was later halved by a federal court, although the remaining amount is still the highest punitive damage award in the history of American jurisprudence.
Exxon maintains that the award bears no relationship to actual damages, that the company has already paid plenty in the cleanup effort, and that past precedent limits the amount of punitive awards. It also invokes a long-standing maritime law protecting ship owners from the acts of ship masters who disregard the owner's own rules and policies.
All this comes at a time when Alaska's governor is pushing Exxon, along with BP
So if Merrill Lynch thinks it has problems, my suggestion is that it spend one day in the skin of a major oil company. Whether dodging barbs from Hugo Chavez or Vladimir Putin, or various constituencies in Alaska, these guys can't buy a break. And with global demand for crude oil beginning to outstrip supply, their challenges aren't likely to abate soon.
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Fool contributor David Lee Smith can't stop writing about the companies mentioned above long enough to buy shares. He does welcome your feedback. Berkshire Hathaway is an Inside Value selection. The Motley Fool has a disclosure policy.