Jacob Hornberger: Obama, BP, and the Rule of Law

I pointed out that President Obama exercised brute dictatorial powers in dictating to BP to hand over $20 billion of corporate money to federal officials, who plan on distributing the loot to victims of the BP oil spill.

Most everyone is familiar with the term “the rule of law.” Many people, however, don’t understand what it really means. They think that it means that people should obey the law.

But that’s not what the rule of law means. What it means is this: In a free society, people should never have to answer to the arbitrary dictates of government officials. That type of society is described as one based on the “rule of men.” It is what dictatorship is all about. In a society based on the rule of law, people have to answer only to well-defined and pre-existing laws that have been duly enacted by the legislature.

As the Nobel Prize winning libertarian economist Friedrich Hayek pointed out in his book The Constitution of Liberty, the rule of law is a necessary prerequisite for a free society.

At the time of the BP oil spill, the law provided that BP would be required to pay for all clean-up costs but was liable for a maximum of $75 million to private parties who suffered losses because of an oil spill.

Now, obviously that liability cap violated fundamental principles of responsibility. People should be fully responsible for all the damages they cause. The $75 million cap was likely enacted as part of the cozy corporatist relationship that has long existed between big corporations and federal politicians.

One thing is for sure: The liability cap almost certainly played an important role in BP’s safety precautions. After all, when a company thinks that its maximum liability for an oil spill will be only $75 million, as compared to the possibility of facing unlimited liability for an oil spill, that is going to cause the company to act differently when it comes to deciding how many precautions to take and how much money to spend on safety precautions.

In any event, the reasons the $75 million cap were enacted are irrelevant when it comes to BP’s liability. The rule of law entitles BP to the full protection of the law, no matter how distasteful the results.

The $75 liability cap did provide exceptions to the cap in cases where the company could be shown to be guilty of gross negligence or willful misconduct.

But a system based on the rule of law requires such issues to be litigated in a court of law. Victims of the disaster must go into court and convince a jury (or judge) by a preponderance of the evidence that BP was guilty of gross negligence or willful misconduct. They must also document with sworn testimony their financial losses.

That’s what the rule of law requires.

Instead, what Obama did was effectively declare: “Well, I don’t like the law and I wish it had never been enacted because it is a bad law. I’m going to decree that the law will not apply in this case. I am summoning BP executives to my office and dictating what BP must do, beginning with the delivery of a down payment of $20 billion dollars in corporate money to a political commission that I am appointing. That commission will dole out money to victims of the oil spill based on criteria that I deem appropriate.”

Notice that there is no judicial process concerning how the loot is going to be distributed. That is how things are handled in a society based on the rule of men, a society based on dictatorship. The dictator simply dictates and the person being dictated to is expected to submit and obey.

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