The NAM joined the American Chemistry Council in an amicus brief urging the Supreme Court to overturn an award of $17.5 million in punitive damages against a manufacturing plant in Phenix City, Alabama. This case involves the release of “carbon black” in the neighborhood of the plant which caused property damage but no harm to individuals. Our brief argued that the large punitive damages award is unconstitutionally excessive because, under established Supreme Court precedent, it is so much larger than other state penalties that might realistically be imposed for comparable misconduct.
Not only did the Alabama Department of Environmental Management (ADEM) impose no civil penalties on the company for the release of carbon black, but the most it could have fined the company was $250,000 for every group of ten violations. To reach an unrealistic multi-million civil penalty the Eleventh Circuit believes ADEM could have imposed, ADEM would have had to issue at least eight separate orders (based on a total of at least eighty separate violations). Neither the record nor common sense supports the court’s unstated assumption that the company would have continued to engage in violations and to incur successive $250,000 penalties after receiving the maximum punishment from ADEM. That assumption ignores the duties owed by the company to its shareholders and is refuted by the record evidence showing that the company took various steps to identify and remedy the causes of the carbon black emissions.
On June 27, 2008, the Supreme Court declined to hear this appeal.