The US District Court for the Southern District of Texas issued its third opinion on August 19 in the decade-long fight between Exxon Mobil Corporation (ExxonMobil) and the US government over who is responsible for the costs incurred in remediating ExxonMobil’s Baytown and Baton Rouge refineries and nearby chemical facilities (the plants), which were used to produce aviation fuel and rubber during World War II and the Korean War under extensive government control.
In Exxon Mobil Corporation v. United States of America, No. 10-2386, the court held a bench trial solely on the issue of allocation of past response costs and future costs, after previously deciding liability, statute of limitation, allocation methodology and various related issues in the long-running Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) action. US District Judge Lee Rosenthal presided over the bench trial, a portion of which was held virtually due to the coronavirus (COVID-19) pandemic. The court found that the government was responsible for certain allocated shares of past response costs incurred at the plants, and awarded ExxonMobil $20,328,670, and allocated a future share of response costs to the government.
BACKGROUNDExxonMobil sued the US government 10 years ago to recover more than $45 million in cleanup costs associated with groundwater contamination at the Baytown refinery, and in 2011, the company filed a second suit for costs associated with the Baton Rouge refinery. The cases were later consolidated. ExxonMobil alleged that the government was liable as a past operator of the plants due to the government’s substantial control and active involvement in activities there. In particular, ExxonMobil argued that because the government had imposed strict administrative controls over the oil and gas industry during World War II through the Petroleum Administration for War, including dictating that the refineries produce aviation gasoline, rubber, asphalt, and other materials necessary for the war effort, the government was liable under CERCLA for a portion of the costs spent to remediate pollution at the plants.
The litigation proceeded in three phases. In June 2015, the court first held that both ExxonMobil and the government were liable under CERCLA. In particular, the court found that the government was liable as a past operator at the plants because the government played a substantial role in overseeing day-to-day plant operations and made specific decisions about waste disposal and environmental compliance at the plants. The government's organization of, and direction over, operations at the plants, including disposal mechanisms, satisfied the US Supreme Court’s standard for past operator liability under CERCLA.[1]
In August 2018, Judge Rosenthal granted in part and denied in part cross-motions for summary judgment filed...
