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By S.P. Sullivan | NJ Advance Media for NJ.com
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on August 26, 2015 at 11:58 AM, updated August 26, 2015 at 12:27 PM
5 things to know about Christie's Exxon settlement
An aerial view of the Bayway Refinery in Elizabeth, seen in this 2008 file photo. (FRANK H. CONLON/THE
STAR-LEDGER)
S.P. Sullivan | NJ Advance Media for NJ.com
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New Jersey's decade-long fight over
contamination at former Exxon Mobil industrial
sites in the state came to a close Tuesday when a
judge approved a controversial settlement
agreement between the oil giant and Gov. Chris
Christie's administration.
The agreement has faced criticism and scrutiny
since it was disclosed earlier this year because
lawyers for the state, citing expert reports, had
argued the state was owed $8.9 billion for
decades of pollution at two north Jersey
refineries, known as Bayway and Bayonne.
State Superior Court Judge Michael Hogan, in an
81-page decision, called the deal "fair,
reasonable, in the public interest, and consistent
with the goals of the Spill Compensation and
Control Act."
It's a complicated case with a lengthy history.
Here are five takeaways from the decision.
1. It's the largest settlement in thestate's history."Adequately compensates." (pg 50)
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An excerpt from the judge's decision.
The $225 million agreement is the largest sum the state has ever recovered for so-
called natural resource damages, meant to compensate the public for lost use of vital
wetland habitat in and around two North Jersey refinery sites.
"The Christie Administration has not only secured the largest environmental damage
recovery in state history, but also cemented ExxonMobil's obligation to pay for the
complete clean-up and remediation of these sites on top of this landmark payout," said
Nicole Sizemore, a spokeswoman for the governor, in a statement Tuesday.
RELATED: What's at stake in the Exxon case? 16 other sites scrutinized
Opponents of the deal have argued that the case is the largest in state history because
the extent of the contamination was so large.
2. There will still be a cleanup.
As the governor's office said in the statement, Exxon remains on the hook for a remedial
cleanup required by a consent order between the oil giant and the state Department of
Environmental Protection.
But that cleanup will stop short of the full-scale restoration prescribed by the
state's experts at trial, which would seek to restore the contaminated areas to their
pre-pollution state at a cost of billions of dollars.
The remedial cleanup, which is still in its investigatory stages more than 20 years in, will
include caps, covers, pumps and other controls that will allow contamination to be kept
in place as long as it can be kept from spreading or directly affecting human health.
3. Exxon admits no wrongdoing.
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As part of the settlement, the company does not admit wrongdoing, and has maintained
throughout that it always acted appropriately and with the encouragement of state
regulators, providing permits and other documents to back up their actions at trial.
Ted Wells, an attorney for Exxon, said at a hearing last month that while the state
had claimed it was owed $8.9 billion, the oil giant's liability was exactly "zero dollars,"
calling the deal "a compromise being made after 11 years of hard-fought litigation."
The actual cost of the settlement will be significantly less than $225 million because
none of that sum was assessed as a penalty. Tax experts told NJ Advance Media
the company will likely be able to write it off as a business expense on its state and
federal taxes.
State lawmakers have indicated they want to change New Jersey's tax laws to
prevent such moves.
4. Most of the money won't be spent on the environment.$50M toward restoration. (pg 64)
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Budget language allows most of the money to be diverted to the state's general fund.
Because of budget language adopted earlier this year, any amount recovered by the
state over $50 million from environmental suits can be diverted to the state's general
fund, essentially serving to balance the budget.
That's slightly less than the $50.1 million that will go toward the state's outside
counsel, Kanner & Associates of New Orleans, which took up the case on a contingency
basis back in 2004, under former Gov. Jim McGreevey's administration. Nagel Rice, the
Roseland-based law firm that worked with Kanner early in the proceedings, will also
receive a cut, a representative there said.
The $50 million dedicated toward the environment will pay for "resource restoration"
projects. The DEP has said it would study how best to use the money once the
settlement had been paid.
5. Opponents will appeal
Environmental groups and elected officials who tried to block the deal were quick to
decry its approval Tuesday, and indicated they would continue to fight it.
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Sen. Ray Lesniak (D-Union), a vocal critic, told NJ Advance Media he found one
provision of the deal — an agreement to defer cleanup of contaminated Morses Creek,
which runs through the Bayway refinery, until after that facility shuts down — a "very
fatal" violation of state law.
"The indefinite deferral of Morses Creek — virtually forever, since that refinery has
been operating since 1909 — clearly violates the Spill Act's mandate to promptly clean
up contamination," Lesniak said.
The judge disagreed, writing in his decision that the Morses Creek deferral "gives the
court pause, though not fatally so." He wrote that the inevitable legal fight that would
erupt from rejecting the settlement would delay a Morses Creek cleanup even longer,
and at much greater cost.
Morses Creek. (pg 79)
Lesniak said he was "already working" on an appeal. A coalition of environmental groups
including NY/NJ Baykeeper, the Sierra Club and Environment New Jersey, also plan to
appeal the decision, calling it "a sweet deal for a multi-billion dollar oil giant."
S.P. Sullivan may be reached at [email protected]. Follow him on
Twitter. Find NJ.com on Facebook.
Exxon documents
Search...
Exxon Decision
State's opposition to motion for intervention
Attorney General, DEP letter to Assemblyman McKeon
Congressional delegation public comments
Exxon proposed settlement agreement
by TaboolaPromoted Links
Internal document: Exxon's report on NJ contamination
An internal document from Exxon entered into the public case file and
published by NY/NJ Baykeeper.
NJ post trial brief (full)
Exxon post-trial brief (full)
John Sacco Certifications
Exxon Bayonne Complaint 2004
Exxon internal doc: Site history
A July 1993 report on the history of the Bayway site.
Exxon internal doc: Site remediation visit agenda
Internal documents entered into case file and obtained by NY/NJ
Baykeeper.
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S.P. Sullivan | NJ Advance Media for NJ.com
TisReality
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The most important thing to know about the settlement is that the Christie administration, underthe guise of "representing the interests of the State", sold the State out.
There's not much that a judge could do about that without some brave State employees comingforward and letting the court know exactly what is going on.
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6. Exxon contributed generously to the RGA when Christie was its' head. Exxon's publicrelations firm has contributed generously to Christie's super PAC. (Of course, that should reallybe the No.1 thing to know about the settlement.)
1 Like Reply
So the money to be paid out for an environmental mess goes to...the lawyers. Brilliant.
2 Like Reply
If anyone is interested in some light lunch reading, here is the full text of the decision, with afew annotations that I embedded uptop: https://www.documentcloud.org/documents/2300322-exxon-decision.html
Since February I've been posting primary documents in this case, which I've embedded at thebottom of this post. Happy to answer any questions as well. --Sean.
Like Reply
A successful litigator once told me that you know you have a good settlement when nobody ishappy.
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52 minutes agonjnobody
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2 hours agonow is the time
@TisReality I think Exxon is VERY happy........they just can't admit it publicly. I'msure there's a huge party going on right now at XOM.
4 Like Reply
Just another sell out of NJ in Christie's delusional run for president .
7 Like Reply
1 hour agodoofus11
@now is the time The judge disagrees with your analysis.
Like Reply
8 minutes agoReader317
@doofus11 I think it would have been very hard to disapprove thesettlement. The big problem here is that the Christie administration, underthe guise of "representing the State," actually sold the State out.
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