Clean Air Act Ruling Highlights Standing In Citizen Suits

On Aug. 30, in Environment Texas Citizen Lobby Inc. v. ExxonMobil Corp., a split panel of the U.S. Court of Appeals for the Fifth Circuit upheld the U.S. District Court for the Southern District of Texas' $14.25 million Clean Air Act penalty against a petroleum company that had been found liable for thousands of separate violations at a Texas petrochemical complex.

Exxon moved this week for en banc rehearing, seeking further clarity from the Fifth Circuit on how the standing doctrine applies to environmental cases filed in its constituent courts. No matter what happens related to Exxon's request for further review, the case highlights the importance of standing in environmental litigation.

Standing is a major issue in nearly all environmental citizen suit cases. Because standing is a necessary predicate to filing litigation, the height of the hurdle imposed by standing has a direct effect on the total number of claims.

Though the U.S. Supreme Court has increasingly focused on standing as a device to limit claims in nonenvironmental cases, and though the Fifth Circuit found in this case that the plaintiffs lacked standing for some of their claims, it believed it was bound by its own precedent to permit use of "categorical" standing. The petition for en banc review seeks to have a broader group of judges reconsider the continued viability of Fifth Circuit precedent in this area.

The Aug. 30 decision also illustrates how self-reported data is used in environmental litigation to form the basis for private party claims. Such data, which is increasingly available, can be used by interested parties to support their claims.

Case Background

In 2010, the Environment Texas Citizen Lobby and the Sierra Club filed suit against Exxon for operations at a complex in Baytown, Texas, alleging harms on behalf of themselves and their members. Exxon's complex giving rise to the claims includes an oil refinery, a chemical plant and an olefins plant, all of which are regulated by federal air permits.

Under those permits, Exxon had a duty to report, in some instances, its noncompliance with the permit conditions. These self-reported permit violations formed part of the basis for the plaintiffs' claims, which were filed using the Clean Air Act's citizen suit provisions alleging noncompliance with relevant operating permits. 

While the history of this case is long and winding since its filing in 2010, the Fifth Circuit's most recent decision stems from Exxon's challenge to the district court's decision that the plaintiffs had proved standing for 3,651 of the 16,836 violation days stipulated by the parties.

Specifically, Exxon argued that the plaintiffs had failed to prove one of the three elements of standing — traceability — for each alleged violation that occurred during those 3,651 days. The Fifth Circuit disagreed, creating precedent that could expand the basis on which entities in the future could successfully allege standing.

Standing and Environmental Suits

Standing is usually one of the primary defenses to claims in the environmental space. Context is often outcome determinative regarding standing.

In its 2016 Spokeo v. Robins decision, the U.S. Supreme Court held that plaintiffs needed more than allegations of "bare procedural violation[s]" to "satisfy the injury-in-fact requirement of Article III" and have standing.

In Environment Texas Citizen Lobby, the Fifth Circuit wrestled with whether the nongovernmental organizations' allegations concerned bare procedural violations or something more. In a prior appeal in this matter, the Fifth Circuit had held that the plaintiffs had proved the traceability element of standing if the alleged violations were "of a type that 'causes or contributed to the kinds of injuries alleged by the plaintiffs.'"

This traceability analysis is important, as the standing doctrine is rooted in separation of powers concerns. While the executive branch has the broad ability to enforce laws passed by Congress, courts' abilities are more limited.

Courts are allowed only to act on cases and controversies brought by parties who have a material stake in the dispute's outcome. A generalized grievance has traditionally resulted in a lack of standing, because the plaintiff's proper recourse is through action on their behalf by political branches, not through the courts.

In its 2022 decision, 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, noting that:

  • The plaintiffs testified that they could see flares from places including their homes;
  • Flaring violations occur when compressors trip or shut down; and
  • If an alleged flaring violation was correlated with a compressor shutdown, then the plaintiffs' claims were concrete enough to have standing, because visually seeing flares represented a form of "aesthetic" injury.

The main lesson regarding standing is that, in the environmental context, standing can be broadly established, at least in the eyes of two judges on the Fifth Circuit. In this panel's view, however, plaintiffs who allege broad injuries — e.g., the facility's illegal emissions made plaintiffs less likely to recreate in an area — do not need to demonstrate that any particular individual violation caused such injuries.

Instead, plaintiffs can allege merely that their injuries stemmed from the overall pattern of violations that affected them. But notably here, a dissenting judge on the panel thought that the Fifth Circuit should require the 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. Allowing for more generalized or categorical claims to serve as a proper basis for standing claims could lead to more claims by NGOs — and greater risk to companies.

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 the plaintiffs sued. The lower court found that the NGOs only had standing to pursue around a quarter of their claims.

But it only reduced the penalty amount by around $5 million, because 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 that were 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.

An example of this is provided by a recent U.S. Environmental Protection Agency settlement with chemical manufacturer Chevron Phillips Chemical Co. LP, which requires the company to regularly post air monitoring data taken from near three Texas chemical plants on a public website.

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.

Originally published by Law360. (Subscription required)


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