Source: http://www.northjersey.com, February 27, 2015
By: Scott Fallon and James O’Neill
The Christie administration’s reported settlement of an $8.9 billion lawsuit against Exxon Mobil Corp. for just $250 million drew a wide range of criticism Friday against a governor who has leaned heavily on the fossil fuel industry for money to boost his national stature.
Lawyers for the state reportedly settled an 11-year-old lawsuit last week just before a state Superior Court judge was set to rule on the amount Exxon would be penalized for contaminating more than 1,500 acres of wetlands, marshes and meadows in Bayonne and Linden, where it ran oil refineries for decades.
The former state official who brought the lawsuit against Exxon in 2004 called the reported settlement a “betrayal of environmental law enforcement” because state courts had already found Exxon liable for the damage. The only issue remaining was the amount the oil giant would be compelled to pay.
“If these reports are true and the administration has settled for less than 3 cents on the dollar after winning nearly every round in 10 years of litigation, it’s really an outrage,” said Bradley Campbell, a former commissioner of the state Department of Environmental Protection.
“All settlements involve compromise … but the state’s own experts put the damages at $8.9 billion,” he said. “The state’s own filings spoke eloquently to the damage that’s been done by over 9 million cubic yards of tar left by Exxon’s operations.”
The reason for a settlement remained unclear on Friday.
A spokesman for the state Attorney General’s Office declined to comment, saying the office doesn’t publicly discuss pending litigation. A spokesman for Christie did not return a request for comment. And an Exxon spokes­man also declined to comment.
Political observers and environmentalists were quick to offer a number of possible explanations. Some said it was a gift from Christie to an industry that could help his presidential ambitions. Others said it was a quick and much-needed infusion of cash to the state’s coffers.
Some environmental attorneys thought the settlement was fair — noting it may be one of the largest ever secured by the state.
To be sure, the practice of settling environmental claims for far less is not unusual in New Jersey. The state sought as much as $5 billion in a decade-old suit against Passaic River polluters and settled in recent years for $355 million.
Christie has long been a supporter of the fossil fuel industry, having backed several projects in New Jersey and having raised millions from oil, gas and utility companies for the Republican Governors Association while he was chairman last year. He has supported the expansion of natural gas pipelines, including the Tennessee Gas Pipeline through the Highlands. He has twice vetoed bipartisan bills that would have banned the processing of fracking waste in New Jersey, citing federal interstate commerce rules. And in recent months, he has spoken strongly in favor of the Keystone XL pipeline from Canada to the Gulf Coast as he tries to increase his visibility to a national audience.
Christie raised nearly $18 million for the Republic Governors Association from oil, gas and utility industries in the first nine months of 2014 while he was chairman. That included $500,000 from Exxon. An in-house attorney for Exxon also donated to the RGA a few times for a total of $3,200.
Assemblywoman Annette Quijano, a Democrat whose district includes Union County, said she was “confounded” by the settlement, reported Friday by The New York Times.
“Residents in my district and the surrounding areas have seen their quality of life altered by damage that will likely never be undone — contaminated groundwater, petroleum-slicked marshlands, ‘sludge lagoons,’Ÿ” she said. “This settlement figure does not even come close to restoring these lands to their natural state.”
Some believe the settlement was approved in order to ease the burden on the stressed state budget. Language in the current state budget allows Christie to divert all but the first $50 million of any environmental damage settlement to the general fund to help balance the budget. That means $200 million from this settlement could go to the general fund.
“The primary motivation is to get money for the budget and let Exxon off the hook,” said Jeff Tittel, director of the New Jersey Sierra Club. “Even if we didn’t get $9 billion, we could have gotten way more than this. It’s so off the charts, it’s a giveaway.”
Other cases have also been settled for less. In the suit involving the pollution in the Passaic River, the state originally sued three companies — Occidental Chemical Corp., Maxus Energy Corp. and Tierra Solutions Inc. — to force them to clean up the river or pay three times the cleanup costs in damages. That would have been about $5 billion, based on the U.S. Environmental Protection Agency’s proposed $1.7 billion cleanup.
The state settled the cases for a combined $355 million. Christie diverted more than $288 million of those settlement funds to balance the state budget, a move that drew criticism from several environmental groups.
According to budget documents, New Jersey expects to collect more than $280 million in settlements of lawsuits for the current fiscal year, which ends June 30, according to budget documents released Tuesday. The Exxon settlement could be included in that estimate, although it likely won’t receive final approval for several months including a 30-day public comment period and review by a judge.
In their case against Exxon, state officials have said Exxon discharged a sea of oil, tar and harmful chemicals for much of the 20th century throughout hundreds of acres near its refineries in Linden and Bayonne. Exxon has remediated some of the sites as part of a previous agreement with the state DEP. The 1,300-acre Bayway Refinery in Linden is now run by Phillips 66. The 288-acre refinery in Bayonne closed years ago.
Based on the amount of pollution, Debbie Mans, executive director of NY/NJ Baykeeper, believes the state could have pushed for a much higher settlement.
“It still begs the question, why didn’t he go for more if they had such a solid case?” Mans said. “This settlement is like a drop in the bucket for reducing the structural budget deficit.”
Still, several environmental attorneys, some of whom have worked for the state in the past, praised the settlement as a victory for cases involving natural resource damages claims, in which a polluter essentially has to pay damages for taking pristine land and water away from the public’s use.
Steven Gray, a former deputy attorney general who now practices environmental law privately, thought the state reached too far with its “astronomical” $8.9 billion claim against Exxon.
“I don’t think this says the state is not serious about litigating environmental cases,” he said. “That Exxon settled indicates they thought they had exposure — you don’t pay out $250 million just on the risk of litigation.”
Superior Court Judge Michael J. Hogan, who heard the case in Mount Holly, must still approve the reported settlement. If it is rejected, attorneys for both sides will have to go back and rework the settlement.