Federal appeals court upholds $14.25 million fine against Exxon for pollution in Texas

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A federal court on Wednesday affirmed a federal judge’s 2021 ruling imposing a $14.25 million penalty on Exxon Mobil for thousands of violations of the federal Clean Air Act at the company’s refinery and chemical plant complex in Baytown.

The decision by a majority of the Fifth Circuit Court of Appeals rejects Exxon’s latest appeal, closing over a decade of litigation since the Sierra Club and Environment Texas sued the company in 2010.

“This ruling affirms a bedrock principle of constitutional law that people who live near pollution-spewing industrial facilities have a personal stake in holding polluters accountable for non-compliance with federal air pollution limits, and therefore have a right to sue to enforce the Clean Air Act as Congress intended,” Josh Kratka, managing attorney at the National Environmental Law Center and a lead lawyer on the case, said in a statement.

From 2005 to 2013, a federal judge found in 2017, Exxon’s refinery and chemical plants in Baytown released 10 million pounds of pollution beyond its state-issued air permits, including carcinogenic and toxic chemicals. U.S. District Judge David Hittner ordered Exxon to pay $19.95 million as punishment for exceeding air pollution limits on 16,386 days.

“We're disappointed in this decision and considering other legal options,” an Exxon spokesperson said in response to the ruling.

Baytown sits 25 miles outside of Houston, with tens of thousands of people living near Exxon’s facility.

Exxon appealed and asked Hittner to re-examine how the fine was calculated, including by considering how much money the company saved by delaying repairs that would've prevented the excess air emissions in the first place. The company also argued that it had presented sufficient evidence to show that emissions were unavoidable.

In 2021, Hittner reduced the fine to $14.25 million — the largest penalty imposed by a court out of a citizen-initiated lawsuit under the Clean Air Act, according to Environment Texas. Exxon appealed again, challenging the plaintiffs’ standing to bring the lawsuit.

While a majority of the Fifth Circuit Court of Appeals affirmed Hittner’s 2021 decision on Wednesday, seven members of the 17-judge panel also said they would have upheld the $19.95 million fine.

“The principal issue before the en banc Court is whether Plaintiffs’ members, who live, work, and recreate near Exxon’s facility, have a sufficient ‘personal stake’ in curtailing Exxon’s ongoing and future unlawful emissions of hazardous pollutants,” the judges wrote in a concurring opinion. “We conclude that the district court correctly held that Plaintiffs established standing for each of their claims and did not abuse its discretion in awarding a penalty of $19.95 million against Exxon to deter it from committing future violations.”

The Sierra Club and Environment Texas sued Exxon under a provision in the federal Clean Air Act that allows citizens to sue amid inaction by state and federal environmental regulators. The Texas Commission on Environmental Quality rarely penalizes companies for unauthorized air emissions, a Texas Tribune investigation found.

“People in Baytown and Houston expect industry to be good neighbors,” Luke Metzger, executive director of Environment Texas, said in a statement. “But when companies violate the law and put health-threatening pollution into neighborhoods, they need to be held accountable.”

Disclosure: Exxon Mobil Corporation has been a financial supporter of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune's journalism. Find a complete list of them here.