Why Exxon’s $20 million Clean Air Act penalty assessment loss is really a victory

Types : Bylined Articles

ExxonMobil Corp. was hit with the largest civil penalty assessment ever seen in a Clean Air Act citizen suit when the U.S. District Court for the Southern District of Texas on April 26 assessed a nearly $20 million civil penalty against the company. Yet that penalty represents a victory for Exxon, partially through good advocacy, but mainly through the hard and consistent work of Exxon’s environmental compliance staff, which prioritized compliance long before the case was even filed.

While the size of the penalty will cause Exxon’s shareholders consternation, the important take-away is that the significant environmental compliance work Exxon does on a day-to-day basis matters, and resulted in a significantly lower penalty assessment than it otherwise would have faced for non-compliance with its CAA permits. The case presents important lessons for regulators and regulated parties alike. The judgment also provides encouragement to citizens groups to take on bigger and more sophisticated operations with some prospect for success.

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Timothy J. Bergère of Montgomery McCracken Walker & Rhoads LLP in Philadelphia analyzes how the multi-million dollar civil penalty imposed on ExxonMobil Corp. for violations of the Clean Air Act could have been a lot worse. To read the full analysis in the July issue of Westlaw Journal Environmental, please click here.