Env't Tex. Citizen Lobby, Inc. v. E XxonMobil Corp.

47 F.4th 408

ENVIRONMENT TEXAS CITIZEN LOBBY, INCORPORATED; Sierra Club, Plaintiffs—Appellees,

v.E XXONMOBIL CORPORATION; E xxonMobil Chemical Company; E xxonMobil Refining; Supply Company, Defendants—Appellants.

No. 17-20545

United States Court of Appeals, Fifth Circuit.

FILED August 30, 2022

Philip Harlan Hilder, Hilder & Associates, P.C., Houston, TX, Charles Craig Caldart, Esq., National Environmental Law Center, Seattle, WA, Joshua Robert Kratka, National Environmental Law Center, Boston, MA, David A. Nicholas, Newton, MA, for Plaintiffs—Appellees.

Russell S. Post, Fields Alexander, Beck Redden, L.L.P., Houston, TX, Keith Alan Courtney, McGinnis Lochridge, L.L.P., Austin, TX, Eric J. R. Nichols, Butler Snow, L.L.P., Austin, TX, Bryon A. Rice, Hicks, Davis & Wynn, P.C., Houston, TX, for Defendants—Appellants.

Aaron Michael Streett, Baker Botts, L.L.P., Houston, TX, for Amici Curiae American Fuel and Petrochemical Manufacturers, BCCA Appeal Group, Chamber of Commerce of the United States of America, National Association of Manufacturers, Texas Association of Business, Texas Chemical Council, Texas Oil & Gas Association

Suzanne Reddell Chauvin, Esq., City of Houston, Legal Department, Houston, TX, for Amicus Curiae City of Houston.

Michael Robert Hull, Senior Assistant County Attorney, County Attorney's Office for the County of Harris, Houston, TX, for Amicus Curiae Harris County Attorney Vince Ryan.

Kelly Leigh Haragan, Esq., University of Texas School of Law, Environmental Law Clinic, Austin, TX, Emma C. Cheuse, Earthjustice Legal Defense Fund, Washington, DC, for Amicus Curiae Air Alliance Houston.

Before Davis, Costa, and Oldham, Circuit Judges.

Gregg Costa, Circuit Judge:

Environmental groups sued ExxonMobil under the Clean Air Act for thousands of unauthorized emissions from the company's complex in Baytown, Texas. The first time we considered the case, we found Exxon liable for many of those violations and remanded for the district court to determine an appropriate penalty. When the case came to us again a few years later, we primarily addressed whether the plaintiffs have standing to seek redress for those violations. The case now returns to us after a limited remand for factfinding on traceability and Exxon's affirmative defenses. Finding no error in the district court's fact-intensive analysis of standing or penalty, we affirm.

I

This long-pending Clean Air Act suit stems from operations at ExxonMobil's massive Baytown complex. The complex, which houses a refinery, a chemical plant, and an olefins plant, is heavily regulated by federal permits that are enforced jointly by the Texas Commission on Environmental Quality and the United States Environmental Protection Agency. Environment Texas Citizen Lobby, Inc. v. ExxonMobil Corp. (ETCL I) , 824 F.3d 507, 512 (5th Cir. 2016). The permits require Exxon to document, and sometimes to report, certain instances of noncompliance. Exxon's substantive obligations and reporting requirements are explained in detail in ETCL I , 824 F.3d at 512–22.

Environment Texas Citizen Lobby and Sierra Club, on behalf of their members who live, work, and recreate near Baytown, sued Exxon under the Clean Air Act's citizen suit provision, 42 U.S.C. § 7604(a)(1), for thousands of self-reported permit violations that occurred between October 2005 and September 2013. After some litigation, Exxon stipulated to 16,386 days of violations. Env't Tex. Citizen Lobby, Inc. v. ExxonMobil Corp. (ETCL II) , 968 F.3d 357, 363 (5th Cir. 2020) ; see also id. at 363 n.1 (explaining that "[i]f an emissions event released multiple pollutants, each with its own emissions standard, ... each standard violat[ion] [counts] as a separate day of violation"). Those violations fall into five categories, including unplanned emissions, emissions exceeding authorized rates, and unsafe or unauthorized flaring. See id. at 363 (describing the five types of violations).

After a bench trial, the district court found only a few of the violations actionable and declined to assess a penalty against the company. Env't Tex. Citizen Lobby, Inc. v. ExxonMobil Corp. , 66 F. Supp. 3d 875, 895–902, 911–12 (S.D. Tex. 2014). We agreed with the environmental groups that the district court erred in its analysis of Exxon's substantive liability and abused its discretion in addressing three of the factors that courts consider in assessing civil penalties. ETCL I , 824 F.3d at 515–23 (liability), 524–33 (remedies); see also 42 U.S.C. § 7413(e)(1) (listing the penalty factors). On remand, the district court reconsidered the factors and fined Exxon $19.95 million dollars. Env't Tex. Citizen Lobby, Inc. v. ExxonMobil Corp. , 2017 WL 2331679, at*25–31 (S.D. Tex. Apr. 26, 2017).

Then Exxon appealed. The company asserted that the plaintiffs only proved standing for a handful of violations and challenged the new penalty determination. This panel determined that the organizational plaintiffs established two out of the three requirements for Article III standing: injury-in-fact and redressability. ETCL II , 968 F.3d at 367–68 (injury); id. at 371–72 (redressability). We further explained that the district court should analyze traceability by asking whether each violation (1) "causes or contributes to the kinds of injuries" alleged by the plaintiffs and (2) has a " ‘specific geographical or other causative nexus’ such that the violation could have affected their members." Id. at 369–70 (quoting Sierra Club, Lone Star Chapter v. Cedar Point Oil Co., Inc. , 73 F.3d 546, 557, 558 n.24 (5th Cir. 1996) (internal quotation marks in first quotation omitted)). We remanded for the limited purpose of determining which violations are fairly traceable to Exxon's actions¹ and reserved judgment on the appropriate penalty. Id. at 374–75.

Our instructions had a significant impact on remand. Applying our guidance, the district court determined that plaintiffs proved traceability for only 3,651 of the 16,386 violation days. Env't Tex. Citizen Lobby, Inc. v. ExxonMobil Corp. , 524 F. Supp. 3d 547, 565 (S.D. Tex. 2021). It then revised its penalty calculation. It held that a penalty was appropriate because of the size, duration, and seriousness of the violations as well as Exxon's economic benefit from noncompliance. Id. at 576. It ordered Exxon to pay $14.25 million dollars, lessening the penalty by more than five million dollars to reflect the reduced number of justiciable violations. Id. at 577.

Because Exxon disagrees with both the standing and penalty determinations, we now weigh in for the third time.

II

Only those disputes that meet the "irreducible constitutional minimum" of standing can be heard in a federal forum.

Lujan v. Defs. of Wildlife , 504 U.S. 555, 560, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992). The three components of standing are familiar: injury-in-fact, traceability, and redressability. Id. at 560–61, 112 S.Ct. 2130. Clean Air Act plaintiffs must prove these elements for each claimed violation. ETCL II , 968 F.3d at 365–67. We first consider whether the plaintiff organizations met this burden.

A

After our last remand, the district court made additional findings on traceability. Env't Tex. Citizen Lobby , 524 F. Supp. 3d at 555–65. Exxon does not challenge that factfinding. Instead, the company dedicates more than two thirds of its brief to asking us to revisit our approach to standing. Exxon takes two shots at our standing framework. First, it says that a recent decision from the Supreme Court abrogates our finding of injury-in-fact. Second, it argues that our traceability precedent is overly broad and risks exceeding the bounds of Article III. Neither reason compels us to redo our prior opinion. Nor could we; our prior opinion is law of the case. White v. Murtha , 377 F.2d 428, 431–32 (5th Cir. 1967). The reason for that rule ring true in this long-running case: Suits would never end "if a question, once considered and decided by [a court] were to be litigated anew in the same cases upon any and every subsequent appeal." Id. at 431 (quoting General Am. Life Ins. Co. v. Anderson , 156 F.2d 615, 618 (6th Cir. 1946) ). A prior ruling in a case thus can be disturbed only if new evidence is substantially different, controlling authority has changed, or maintaining the decision would result in manifest injustice. Id. at 432. None of those exceptions apply.

Exxon first takes aim at our finding of injury-in-fact. We previously determined that the plaintiffs "easily" met their burden of proving injury for each alleged violation because "throughout the claims period, [they] regularly saw flares, smoke, and haze coming from the complex; smelled chemical odors; suffered from allergy-like or respiratory problems; feared for their health; refrained from outdoor activities; or moved away." ETCL II , 968 F.3d at 367–68. Exxon asserts that even if this holding was correct when decided, TransUnion LLC v. Ramirez , ––– U.S. ––––, 141 S. Ct. 2190, 210 L.Ed.2d 568 (2021), is an intervening change in law that requires us to reconsider.

Of course, Supreme Court rulings can overrule our precedent. But we cannot disregard our precedent simply because we think the Court might someday disagree with it. See United States v. Alcantar , 733 F.3d 143, 146 (5th Cir. 2013). Until the highest court "unequivocally" overrules our precedent, we are bound by it. United States v. Zuniga-Salinas , 945 F.2d 1302, 1306 (5th Cir. 1991). This aspect of the rule of orderliness rule promotes stability in the law. United States v. Longoria , 958 F.3d 372, 378 (5th Cir. 2020).

In TransUnion , a class of consumers sued a credit reporting agency for failing to reasonably ensure the accuracy of their credit files. 141 S. Ct. at 2200. Although all of the plaintiffs had a cause of action under the Free Credit Reporting Act, the Court held that only some of them had Article III standing. Id. at 2201, 2209. The class members whose credit reports the agency disseminated to potential creditors suffered a...