Round Two in Baytown for Clean Air Act Violations
Env't Tex. Citizen Lobby v. Exxonmobil Corp., 968 F.3d 357 (5th Cir. 2020)
By: Spring Gaines
In Baytown, Texas sits the largest petroleum and petrochemical complex in the nation. This ExxonMobil facility includes a refinery, a chemical plant, and an olefins plant. It is also responsible, according to Environment Texas Citizen Lobby and Sierra Club (“Plaintiffs”), for more than 16,000 violations of emission standards under the Clean Air Act (“CAA”).
The CAA allows for citizen suit challenges under the Article III "cases" or "controversies" requirement in which a plaintiff must suffer an injury caused by the defendant's conduct. It also allows citizens to help enforce requirements and seek civil penalties for repeated or ongoing violations. From calculations taken of emissions events from October 2005 through September 2013, Exxon did not challenge the nearly 4,000 emissions events that occurred in this period, which resulted in 16,386 days of violations.
These violations fell within five counts: (1) violation of a permit condition prohibiting "upset emissions," (2) violations of the Maximum Allowable Emission Rate Tables, (3) 18 days of violations of a 1,200 pound/hour limit on emissions of highly reactive volatile organic compounds, (4) 44 days of violations of visible emissions limitations from flares, and (5) 32 days of violations “of a rule requiring flares to operate with a pilot flame.”[1]
This court already had one go around with the case at hand. Initially, the district court found that “only a small fraction of the violations were ‘actionable’ because the Clean Air Act limits citizen suits to violations that were repeated in the past or ongoing at the time of the complaint”[2] and declined to assess a civil penalty against Exxon. On appeal, the Fifth Circuit previously vacated and remanded that decision. On remand, the district court determined that violations alleged in Counts 1-5 were actionable and imposed a $19.95 million civil penalty. In the present appeal, Exxon alleged lack of standing, affirmative defenses, and penalty factors.
First, Exxon argued that the Plaintiffs must prove standing for each alleged violation, not each? claim. In the CAA, the cause of action is for repeated violations, which means there must be at least two violations. However, there is no cap on number of violations, and a penalty may be assessed for each day of violation.[3] A cap does exist on the monetary amount for each day of violation; and because there are more than 16,000 days of violations in this case, the statutory cap exceeded $600 million. Hence, the dispute was whether the Plaintiffs must prove standing for each CAA violation. CAA penalties are tied to violations, not claims, and proving one injury does not necessitate the right to have all injuries redressed.
This case may be special for there are a number and variety of violations and pollutants involved. But, the Fifth Circuit did decide that the Plaintiffs must prove standing for each violation. However, it also agreed that separate proof is not needed for each violation, and the same testimony can be utilized to support standing for all violations.
In addressing the test for standing, the court agreed that there was demonstration of injury, traceability, and redressability, but ordered a limited remand for determination of “other violations could have contributed to Plaintiffs' members' injuries and then tabulate its findings.”[4]
Next, Exxon reasserted two affirmative defenses upon remand: "Act of God" and a statutory no-fault. As some of the alleged flaring occurred during the Hurricane Ike shutdown, the court remanded for findings on whether Exxon proved its Act of God defense for these flaring violations. Additionally, the court affirmed the district court’s rejection of Exxon's 52(b) motion.
Lastly, Exxon challenged the district court’s imposed penalties. Because this court remanded for determination of the number of violations for which Plaintiffs have standing, as well as whether Exxon proved its Act of God defense for the flaring violations, the district court also must reassess the penalties. The decision of the court was to vacate and remand to allow the district court to make additional findings on traceability and the Act of God defense.
[1] Env't Tex. Citizen Lobby v. Exxonmobil Corp., 968 F.3d 357, 363 (5th Cir. 2020).
[2] 66 F. Supp. 3d 875, 895-902 (S.D. Tex. 2014).
[3] 42 U.S.C. § 7413(e)(2) (2018).
[4] Env't Tex. Citizen Lobby v. Exxonmobil Corp., 968 F.3d 357, 371 (5th Cir. 2020).
