Exxon Mobil’s $225M Cleanup Agreement With N.J. Survives Appeal

Photographer: Michael Nagle/Bloomberg

• Largest natural resource damage settlement in New Jersey history upheld

• No requirement that $225 million settlement be deposited into state Superfund

By Peter Hayes

Exxon Mobil’s record-setting settlement of natural resource damage claims under the New Jersey Superfund law survived a challenge by environmental groups Feb. 12.

The ruling upholds the largest NRD settlement in New Jersey history, reached in February 2015.

The $225 million settlement proceeds need not be deposited into the Spill Act fund—the state Superfund—under the law as it existed at the time, a New Jersey appeals court ruled.

Nor does the state Department of Environmental Protection need authorization by the Environmental Protection Agency to decline prosecution of an environmental claim, the Superior Court of New Jersey, Appellate Division held.

The court did find that the environmental groups had standing to challenge the settlement on appeal, even though they were not parties in the suit, in a procedural victory for them.

The NRD settlement stems from contamination at two oil refineries in Bayonne and Linden, N.J.

Environmental groups decried the settlement, including the Sierra Club, which called it “a huge financial giveaway” to Exxon Mobil.

A New Jersey constitutional amendment that took effect Dec. 7, 2017—after the settlement was approved—specifies how natural resource damage settlements are to be held and spent.

The amendment will nevertheless assure that the funds are spent for natural resource damage restoration, despite the ruling in the case, New Jersey Sierra Club Director Jeff Tittel said in a statement.

The groups challenging the settlement are New Jersey Sierra Club, Clean Water Action, Environment New Jersey, and Delaware Riverkeeper.

Judge Carmen Messano wrote the opinion, joined by Judges Francis J. Vernoia and Amy O’Connor.

Kanner & Whiteley LLC represented New Jersey DEP.

Paul, Weiss, Rifkind, Wharton & Garrison LLP represented Exxon Mobil.

Columbia Environmental Law Clinic and Morningside Heights Legal Services represented the environmental groups.

The case is New Jersey DEP v. Exxon Mobil Corp., N.J. Super. Ct. App. Div., No. A-0668-15T1, 2/12/18.

To contact the reporter on this story: Peter Hayes in Washington at PHayes@bloomberglaw.com

To contact the editor responsible for this story: Steven Patrick at spatrick@bloomberglaw.com