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Volume XIII, Number 39

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Split Fifth Circuit Panel Upholds $14.25 Million Clean Air Act Decision Hinging on Standing Issues

Standing is a major issue in nearly all environmental citizen suit cases. A split panel of the US Fifth Circuit Court of Appeals upheld a district court’s award of a $14.25 million Clean Air Act (CAA) penalty against a petroleum company which had been found liable for “thousands” of separate violations at a Texas petrochemical complex.

Standing and Environmental Suits 

Standing is usually one of the primary defense to claims in the environmental space. Context is often outcome determinative regarding standing. In its 2016 Spokeo v. Robins decision, the US Supreme Court held that plaintiffs needed more than allegations of “bare procedural violation[s to] satisfy the injury-in-fact requirement of Article III” to have standing. 

In Environment Texas Citizen Lobby v. ExxonMobil Corporationthe Fifth Circuit wrestled with whether the non-governmental organizations’ (NGOs) allegations were “bare procedural allegations” or something more. In a prior appeal in this matter, the Fifth Circuit held that plaintiffs had standing if the alleged violations were “of a type that ‘causes or contributed to the kinds of injuries alleged by the plaintiffs.’” Here, the Fifth Circuit credited the lower court’s categorical analysis of types of violations (e.g., flaring, smoke, haze, chemical odor, and asthma-like symptoms) and found that the district court “did not have to list all sixteen thousand alleged violations and state whether each is justiciable or not.”

The court used flaring as an example of how plaintiffs could establish standing through categorical injuries:  

  • plaintiffs testified that they could see flares from places including their homes;

  • that flaring violations occurred when compressors trip or shut down; 

  • and that, if an alleged flaring violation correlated with a compressor shut down, plaintiffs’ alleged claims are concrete enough to have standing since visually seeing flares represented a form of “aesthetic” injury.

The main lesson regarding standing is that “standing” in the environmental context can be broadly established, at least in the eyes of two judges on the Fifth Circuit. In this panel’s view, plaintiffs who alleged broad injuries (e.g., the facility’s illegal emissions made plaintiffs less likely to recreate in an area), however, do not need to demonstrate that any particular individual violation caused such injuries. Instead, they can allege merely that their injuries stemmed from the overall pattern of violations that affected them.  

Notably, here, a dissenting judge on the panel that the Fifth Circuit should require plaintiffs to describe how they were injured by each individual violation. This split is emblematic of how courts across the country have addressed similar issues.

Additional Considerations

While much of the decision is focused on standing, the Fifth Circuit’s decision touches on two additional issues worth noting for the regulated community:

The Court Was Not Required to Proportionately Reduce the Penalty Amount to Reflect Fewer Violations.  

In addition to standing, a second issue in the decision is whether the district court’s $14.25 million penalty constituted an abuse of discretion. 

Here, the lower court based its penalty calculation on the cost to Exxon to “ameliorate the kinds of general problems that have resulted in at least some of the permit violations” upon which plaintiffs sued. Even though the lower court found that the NGOs only had standing to pursue around a quarter of their claims, it only reduced the penalty amount by around $5 million dollars because of the benefit Exxon received in delaying implementation of modifications planned by a 2012 agreement with state regulators fundamentally drove penalty calculations. The Fifth Circuit affirmed this calculation.  

Administrations Change, but Data Lasts Forever. 

This case is rooted in self-disclosed permit violations from October 2005 to September 2013. Generally, the claimed violations involved air emissions alleged to be unplanned, unsafe, or unauthorized. When they filed this litigation, the NGOs used self-reported data to support their claims.  

One of the primary tools the Biden Administration has deployed as part of its environmental justice initiatives is so-called “fenceline monitoring.” 

“Fenceline monitoring,” along with increased use of unannounced inspections, can be used by regulators to protect “environmentally overburdened communities.” (See discussion here.) An example of this is provided by a recent US Environmental Protection Agency (EPA) settlement with chemical manufacturer Chevron, which requires Chevron to regularly post air monitoring data taken from near three Texas chemical plants on a public website. (See discussion here.)  

Like many things on the Internet, this data will presumably be available indefinitely where interested parties could use it — as did the plaintiffs here — to support environmental claims.  

© 2023 ArentFox Schiff LLPNational Law Review, Volume XII, Number 255
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About this Author

J. Michael Showalter, Litigator, Schiff Hardin LLP
Associate

Mike Showalter is a litigator whose practice is focused on resolving complex disputes. Mr. Showalter's past clients span diverse industries including manufacturing, mining, power generation and transmission, oil and gas, the financial and insurance sectors, and process outsourcing.

Mr. Showalter's practice has focused on distilling complicated technical information into a format where it can be understood by decision makers. He has worked with experts in fields including medicine, economics, history, physical sciences, industrial hygiene, toxicology, environmental engineering and...

312-258-5561
Sarah L. Lode Antitrust Attorney Schiff Hardin Chicago, IL
Associate

Sarah has worked on numerous matters pertaining to antitrust law, products liability, general civil litigation, and patent law. She has drafted memoranda; orders for cases involving social security disability benefits, Section 1983, and state-law tort claims; and motions for summary judgment, motions to dismiss, and discovery requests for federal and state courts.

Sarah’s experience as the first line of contact for veteran clients as a PILI graduate fellow and in her work for a solo practitioner honed her ability to swiftly absorb key case facts, understand client goals, and quickly...

312-258-5622
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