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At least one environmental group is threatening to appeal a judge's decision approving New Jersey's settlement of a pollution lawsuit with ExxonMobil Corp. (NYSE:XOM) in which the company would pay the state $225 million, a small fraction of the $8.9 billion that was first sought.
A court found on Aug. 25 that Exxon, which owned and operated oil refineries in northern New Jersey near Bayonne, had contaminated the waters, fields and wetlands in the area. The two sides had been litigating the case for 11 years until they agreed on a proposed settlement in February.
Environmental groups and their allies complained that the administration of Gov. Chris Christie was letting Exxon off easy, given the breadth of the contamination. Eight such groups, along with New Jersey State Sen. Raymond Lesniak, were denied the right to intervene in the case.
In his 81-page ruling, State Superior Court Judge Michael Hogan noted that the ruling also appeared to lack popular support. During a 60-day period of public comment, most of the 16,013 individuals who submitted their opinions to the court opposed the deal, it said.
Nevertheless, Hogan approved the deal, calling it "the product of arm's-length, adversarial negotiations between two highly motivated, sophisticated parties."
"[A]lthough far smaller than the estimated $8.9 billion in damages," Hogan wrote, "Exxon's payment represents a reasonable compromise given the substantial litigation risks" – that is, the likelihood of an appeal.
In fact, the New Jersey Sierra Club has promised just that. Jeff Tittel the group's director, called the decision a "sellout." He issued a statement saying, "Instead of protecting the environment and the taxpayers, the Christie Administration wants to protect Exxon."
Nicole Sizemore, a spokeswoman for Christie, called the settlement "fair and historic," adding, "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 cleanup and remediation of these sites on top of this landmark payout."
Yet during the trial in 2014, the state argued vehemently for billions – not millions – of dollars in compensation. In one court brief filed last November, the Christie administration argued in a brief that "the scope of the environmental damage resulting from the discharges is as obvious as it is staggering and unprecedented in New Jersey."
But in his ruling, Hogan brushed aside arguments that Christie's legal team had made an "abrupt change of course," noting that negotiations on the size of the settlement had begun eight years ago, long before Christie became governor. During that time, the opinion said, "Exxon repeatedly responded to the state's olive branches with only token offers."
Hogan wrote that New Jersey's initial demand for billions in compensation was merely "an aggressive trial strategy ... to bring reluctant parties to the table, and the state employed this tactic with success."