Exhausting Exxon air pollution suit expires at SCOTUS

By Kennedy Maize

The U.S. Supreme Court Monday (June 30) refused to grant a petition from ExxonMobil Corp. seeking to reverse an appeals court loss in a massive, 15-year dispute over air pollution at the oil giant’s Baytown, Texas petrochemical complex. Exxon now faces a $14.25 million penalty, the largest ever in a Clean Air Act citizen suit.

The case began in 2010, when the Sierra Club and Texas Citizens Lobby filed citizen suits after thousands of repeat violations of Exxon’s Environmental Protection Agency air pollution permits at the  3,400-acre facility next to the Houston Ship Channel. The local Baytown residents claimed they suffered “physical, psychological, curtailment, and aesthetic injuries,” as the Fifth Circuit Court of Appeals summarized last year in upholding lower court rulings against the giant oil company,

The case first went to trial in the U.S. District Court for the Southern District of Texas in 2014. The plaintiffs sought civil penalties to be paid to the U.S. Treasury as a deterrent to future conduct. After a 13-day trial, the district court ruled that the local citizens had standing to sue, which Exxon had challenged. The court then ruled that only a few of Exxon actions were “actionable” and declined to impost civil penalties.

The local citizens appealed to the Fifth Circuit in New Orleans. An appeals panel ruled that the district court had defined “actionable” too narrowly and kicked the case back to that court.

On remand, Exxon again raised the issue of standing. The district court reiterated its judgment that the citizens did have a right to bring the suit, holding that Exxon was liable for 16,386 days of violations of the air permits and imposed a $16.5 million penalty.

Next, of course, Exxon again appealed, raising standing and claiming that the finding was faulty and the penalty excessive. The appeals court, in a 2-1 ruling, again upheld the district court but ordered a “limited remand” to refine the “traceability” of the violations.

In that 2017 remand, the district court, using the appeals court’s methodology, found Exxon responsible for 3,651 days of violations and lowered the penalty to $14.25 million.

Exxon…hold your breath…again appealed to the Fifth Circuit. The appeals court wrote, “and the same divided panel of this Court affirmed.” The appeals court then ordered an “en banc” hearing before the full  Fifth Circuit 17-member batting order of justices.

Again, Exxon pushed the standing issue, arguing that the local citizens had only “correlated” their injuries to five violations over a 40-day period. The company said it had taken “corrective action” and remedied the five violations, calling on the court to dismiss the case.

The appeals court heard oral arguments in May 2023. In December 2024, the Fifth Circuit, the most conservative and business friendly of the 13 U.S. appeals courts, was badly splintered. No majority ruling was forthcoming.

The appeals court punted, issuing a “per curiam” (“for the court”) decision, affirming the 2021 decision of the district court. Announcing the stalemate, Judge W. Eugene Davis wrote, “Had we known that it would take a year and a half after en banc oral argument to issue an opinion, we would not have granted en banc rehearing.”

Seven judges, led by Davis, would have gone beyond the district court in ruling against Exxon. Seven would have overturned the district court and ruled in favor of the oil company on standing. Judge Edith Jones, among the dissenters, added, “Two judges chart independent paths to affirm the district court.”

168 pages of the 170-page Fifth Circuit decision were taken up with the arguments of the fractured court about why the judges took their various positions.

One of those taking  the independent path was James Ho, who said that if he had been on the three-judge panel that ruled 2-1 in favor of the plaintiffs, he would have voted against them on the merits. He wrote, “But because no one on the en banc court has been able to garner a majority in support of their views, I would dismiss the order granting rehearing en banc as improvidently granted, and reinstate the prior decisions of the three-judge panel.”

Ho also took a shot at Jones and her allies and a filing by Texas Republican Gov. Gregg Abbott in Exxon’s favor. “The dissenters deny that they’re favoring corporate litigants over ordinary citizens” he wrote.  “But they find it ‘strange’ that we would not grant en banc review just to protect ‘one company’ from paying civil penalties.  What I find ‘strange’ is the notion that our legal system should never penalize a corporation.”

Predictably, Exxon appealed to the U.S. Supreme Court. The U.S. Chamber of Commerce, on behalf of the American Farm Bureau Federation, the National Association of Manufacturers, and fossil fuel interests, filed a brief in support of certiorari at the court on the grounds of standing. The Chamber argued that “citizen suits were designed to supplement, not supplant, agency enforcement of environmental statutes.”

Commenting on the high court’s decision to duck the case, Neil Carman, clean air director of the Sierra Club’s Lone Star Chapter, said, “Our members in Baytown knew Exxon might fight this case all the way to the Supreme Court, but we matched Exxon’s persistence so the company could not escape responsibility for its years of illegal air pollution.”

The Supreme Court doesn’t comment on decisions denying certiorari. But it’s not farfetched to think that the court looked at the decade and a half record in the case and concluded it is a haunted house best avoided.

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