More legal moves ahead in New Jersey's settlement with Exxon

Geoff Mulvihill, Associated Press
Carlos Javier Sanchez

TRENTON, N.J. (AP) — For a decade, New Jersey and Exxon Mobil Corp. were adversaries in a lawsuit the state filed seeking to make the oil giant pay for environmental damage it did at two sites where it operated refineries.

But on Thursday, the state government and the company were working together in court trying to persuade a judge to accept a $225 million settlement that covers damage not only to the refinery sites but to 1,700 other locations around New Jersey, mostly gas stations.

Environmental groups are trying to stop the deal, saying it's not in the public interest, partly because the state was suing for 40 times as much — $8.9 billion.

Following is a look at the case and where it stands.

THE SUIT

Back in 2004, New Jersey sued Exxon Mobil for natural resources damage.

The idea is to hold the company responsible not only for cleaning up polluted areas but to compensate the public for the harm.

New Jersey has settled other cases of the same kind but has not prevailed in court in the three cases that went to trial.

The Exxon case went to trial last year, but the settlement was struck before a judge issued a ruling. It covers properties such as the gas stations that were not part of the lawsuit. The deal calls for the oil company to pay for environmental remediation at the sites for an as-yet-unknown cost.

Environmental advocates complain that the amount of cleanup the company must do is less under the settlement than it would have been if the state had prevailed in the lawsuit. For instance, a state expert said the cleanup and restoration of one site would have come to $2.7 billion. But under the agreement, the company could do a lower-cost remediation rather than a full restoration.

THE RISK

Environmentalists and critics of Gov. Chris Christie contend the deal would be a giveaway for a major company.

The state and Exxon portray it as a fair deal given the risk both sides face.

In Superior Court in Mount Holly on Thursday, Exxon contended that if the court decided to exclude testimony from just one key expert witness, the state could end up getting nothing.

And a lawyer for the state said that the settlement is not far off the $350 million to $400 million it proposed in 2012 — and saw rejected by the company.

A lawyer for the Natural Resources Defense Council told the judge that the fact that the state faced risk at the trial didn't mean that the $225 million settlement is appropriate.

WHAT'S NEXT

Judge Michael Hogan said he expected to rule in late August on whether to accept the settlement.

Meanwhile, an appeals court is weighing a request from environmental groups to intervene in the case — something Hogan denied earlier.

The groups say they may try to delay Hogan's decision on the settlement while their request to intervene is pending.

Being designated interveners could also give the organizations stronger standing to appeal if the settlement is allowed.

If the settlement is rejected, the state and Exxon could appeal, or they could rely on a judge to sort out the damages.

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