Petition for Writ of Certiorari — ExxonMobil Corporation, et al., Petitioners v. Environment Texas Citizen Lobby, Incorporated, et al.
Supreme Court briefMar 11, 2025
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No. ______
In the
Supreme Court of the United States
EXXONMOBIL CORPORATION; EXXONMOBIL
CHEMICAL COMPANY; EXXONMOBIL REFINING &
SUPPLY COMPANY,
Petitioners,
V.
ENVIRONMENT TEXAS CITIZEN LOBBY, INCORPORATED;
SIERRA CLUB,
Respondents.
ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
PETITION APPENDIX
VOLUME II OF II (327a-554a)
GREGORY G. GARRE
Counsel of Record
ROMAN MARTINEZ
JORDAN R. GOLDBERG
CHRISTINA R. GAY
LATHAM & WATKINS LLP
555 Eleventh Street, NW
Suite 1000
Washington, DC 20004
(202) 637-2207
gregory.garre@lw.com
Counsel for Petitioners
RUSSELL S. POST
BECK REDDEN LLP
1221 McKinney
Suite 4500
Houston, TX 77010
TABLE OF CONTENTS
VOLUME I
Page
Opinion of the United States Court of Appeals
for the Fifth Circuit, Environment Texas
Citizen Lobby Inc. v. ExxonMobil Corp.,
123 F.4th 309 (5th Cir. 2024) .............................1a
Second Revised Findings of Fact & Conclusions
of Law of the United States District Court
for the Southern District of Texas,
Environment Texas Citizen Lobby Inc. v.
ExxonMobil Corp., 524 F. Supp. 3d 547
(S.D. Tex. 2021)...............................................201a
Opinion of the United States Court of Appeals
for the Fifth Circuit, Environment Texas
Citizen Lobby Inc. v. ExxonMobil Corp., 47
F.4th 408 (5th Cir. 2022) ................................256a
Opinion of the United States Court of Appeals
for the Fifth Circuit, Environment Texas
Citizen Lobby Inc. v. ExxonMobil Corp.,
968 F.3d 357 (5th Cir. 2020) ..........................290a
VOLUME II
Revised Findings of Fact & Conclusions of Law
of the United States District Court for the
Southern District of Texas, Environment
Texas Citizen Lobby Inc. v. ExxonMobil
Corp., No. H-10-4969, 2017 WL 2331679
(S.D. Tex. Apr. 26, 2017), ECF No. 258 .........327a
ii
TABLE OF CONTENTS—Continued
Page
Opinion of the United States Court of Appeals
for the Fifth Circuit, Environment Texas
Citizen Lobby Inc. v. ExxonMobil Corp.,
824 F.3d 507 (5th Cir. 2016) ..........................423a
Findings of Fact & Conclusions of Law of the
United States District Court for the
Southern District of Texas, Environment
Texas Citizen Lobby Inc. v. ExxonMobil
Corp., 66 F. Supp. 3d 875 (S.D. Tex. 2014) ....473a
Order Granting Petition for Rehearing En
Banc, No. 17-20545, Environment Texas
Citizen Lobby Inc. v. ExxonMobil Corp.
(5th Cir. Feb. 4, 2023), ECF No. 313-3 ..........547a
42 U.S.C. § 7604 ....................................................549a
42 U.S.C. § 7413(e) ................................................551a
327a
[2017 WL 2331679]
UNITED STATES DISTRICT COURT,
S.D. TEXAS, HOUSTON DIVISION
Civil Action No. H-10-4969
ENVIRONMENT TEXAS CITIZEN LOBBY, INC. AND SIERRA
CLUB,
Plaintiffs,
v.
EXXONMOBIL CORPORATION, EXXONMOBIL CHEMICAL
COMPANY, AND EXXONMOBIL REFINING AND SUPPLY
COMPANY,
Defendants.
Signed 04/26/2017
Attorneys and Law Firms
Heather A. Govern, Joshua R. Kratka, National
Environmental Law Center, Boston, MA, Philip
Harlan Hilder, Hilder & Associates, P.C., Houston,
TX, Charles C. Caldart, National Environmental Law
Center, Seattle, WA, David A. Nicholas, Attorney at
Law, Newton, MA, for Plaintiffs.
Jefferson Gregory Copeland, Kathleen E. Weir,
Tynan Buthod, Baker Botts LLP, Bryon A. Rice,
Fields Alexander, Russell Stanley Post, Jeffrey M.
Golub, William Bradley Coffey, Beck Redden LLP,
Rebecca Rentz, Winstead PC, Houston, TX, Albert R.
Axe, Jr., Keith A. Courtney, Winstead PC, Eric J.R.
Nichols, Beck, Redden & Secrest, L.L.P, Austin, TX,
for Defendants.
328a
REVISED FINDINGS OF FACT &
CONCLUSIONS OF LAW1
DAVID HITTNER, United States District Judge
On February 10, 2014, this Court commenced a
non-jury trial in the above-entitled matter. During
the course of the thirteen-day proceeding, the Court
received evidence and heard sworn testimony.2 On
December 17, 2014, having considered the evidence,
testimony, and oral arguments presented during the
trial, along with post-trial submissions3 and the
1 As explained further below, the Fifth Circuit vacated the
Court’s prior judgment as expressed in the initial Findings of
Fact and Conclusions of Law. However, the Fifth Circuit upheld
the Court’s findings as to Count VII; the denial of a declaratory
judgment, permanent injunction, and appointment of a special
master; and the CAA penalty factor for compliance history and
good faith efforts to comply. The Court’s initial findings as to
Counts V and VI, and the following penalty factors—the size of
the business and payment by the violator of penalties previously
assessed for the same violation—were unaddressed and
undisturbed by the Circuit’s opinion. Because the Court’s prior
judgment was vacated in whole and not in part, where the
Court’s prior findings were undisturbed or upheld by the Fifth
Circuit, the Court reincorporates the prior findings into the
Revised Findings of Fact and Conclusions of Law. Part II of the
revised findings of fact and conclusion of law adopts the previous
Part II in its entirety, as the Circuit did not hold the Court made
any clearly erroneous factual finding.
2 The parties submitted 1,148 exhibits that span thousands
of pages, and 25 witnesses testified.
3 The post-trial submissions considered by the Court
include the plaintiffs’ and the defendants’ original proposed
findings of fact and conclusions of law, which are 455 pages and
361 pages in length, respectively. On remand, the Court
considered the revised proposed findings of fact and conclusions
of law, and where relevant, the pre-appeal proposals (both the
original and revised).
329a
applicable law, the Court entered its initial findings
of fact and conclusions of law pursuant to Federal
Rule of Civil Procedure 52(a). The judgment was
appealed. The Fifth Circuit vacated the Court’s
judgment and remanded the case for the
determination of a new judgment as consistent with
the Circuit’s opinion. Accordingly, the Court issues
the following revised findings of fact and conclusions
of law, as consistent with the instructions on remand
from the Fifth Circuit following the vacatur of the
Court’s initial judgment. Any finding of fact that
should be construed as a conclusion of law is hereby
adopted as such. Any conclusion of law that should be
construed as a finding of fact is hereby adopted as
such.
I. BACKGROUND
On December 13, 2010, Plaintiffs Environment
Texas Citizen Lobby, Inc. (“Environment Texas”) and
Sierra Club (“Sierra Club”) (collectively, “Plaintiffs”)
brought suit under the citizen suit provision of the
federal Clean Air Act (the “CAA”), 42 U.S.C. § 7604,
against Defendants ExxonMobil Corporation,
ExxonMobil Chemical Company, and ExxonMobil
Refining and Supply Company (collectively, “Exxon”).
The case concerns Exxon’s operation of a refinery,
olefins plant, and chemical plant located in Baytown,
Texas (the “Complex”), which is a suburb of Houston
and within Harris County. Plaintiffs seek a
declaratory judgment, penalties,4 injunctive relief,
4 Plaintiffs
originally requested $1,023,845,000 in
penalties, but they later reduced their request to $642,697,500
to account for overlapping violations alleged in the various
counts of the complaint. On remand, Plaintiffs only seek
$40,815,618 in penalties.
330a
and appointment of a special master for events at the
Complex involving unauthorized air emissions or
deviations from one of the Complex’s air permits,
during a period spanning from October 14, 2005, to
September 3, 2013.
On December 17, 2014, the Court issued its initial
findings of fact and conclusions of law.5 Plaintiffs
appealed the decision to the Fifth Circuit. On May 27,
2016, the Fifth Circuit issued an opinion vacating the
Court’s judgment and remanding for assessment of
penalties based on the violations actionable as
consistent with its opinion.6 Specifically, the Circuit
held: (1) as to Count I, the Court erred as a matter of
law in treating the count as alleging violations of
Maximum
Allowable
Emission
Rate
Table
(“MAERT”) limitations rather than special conditions
38 and 39; (2) as to Count II, the Court erred in
requiring Plaintiffs to show repeated violations of the
same numerical threshold per pollutant per emission
point, rather than violations per pollutant per
emission point, even if the numerical limitations
varied due to amendment or renewal; (3) as to Counts
III and IV, the Court erred in requiring corroboration
for violations it explicitly found were uncontested;
and (4) in assessing the penalty factors, the Court
erred in failing to enter findings as to whether
an economic benefit was received by delaying
environmental improvement projects and abused its
discretion in treating violations of shorter duration as
5 Findings of Fact & Conclusions of Law, Document No.
225.
6 Env’t Tex. Citizen Lobby, Inc. v. ExxonMobil Corp., 824
F.3d 507 (5th Cir. 2016).
331a
offsetting longer duration violations and less serious
violations as offsetting more serious violations.
On August 29, 2016, the Court ordered the parties
to submit revised proposed findings of fact and
conclusions of law consistent with scope of remand
from the Fifth Circuit. The Court instructed the
parties that it would not revisit any finding of fact or
conclusion of law upheld in or left undisturbed by the
Fifth Circuit’s opinion. The parties submitted their
proposals on October 31, 2016, and filed responses to
the respective opposing party’s proposal on November
21, 2016. Having considered the Fifth Circuit’s
opinion, the parties revised proposals and responses
thereto, the Court revises its initial conclusions of
law, as follows, on Counts I-IV; the economic benefit,
duration, and seriousness penalty factors; enters
conclusions of law in the first instance on the
affirmative defenses asserted in Exxon’s revised
proposal; and its judgment on the amount of penalties
to be assessed.7
II. FINDINGS OF FACT
The following facts have been established by a
preponderance of the evidence:
A. Exxon and the Complex
1. ExxonMobil
Chemical
Company
and
ExxonMobil Refining and Supply Company are wholly
7 The Court deems abandoned any argument asserted in
the initial proposed finding facts and conclusions of law that was
not re-urged on remand in the revised proposals or the responses
thereto.
332a
owned subsidiaries of ExxonMobil Corporation.8
ExxonMobil Corporation is the largest publicly traded
oil company in the world as measured by market
evaluation.9 In addition, it is one of the largest
publicly traded companies in the world measured by
both revenue and market capitalization.10 Total aftertax profits of ExxonMobil Corporation were $41
billion in 2011 and $44 billion in 2012.11
2. Exxon owns and operates the Complex, which
consists of a refinery, olefins plant, and chemical
plant.12 The Complex is one of the largest and most
complex industrial sites in the United States.13
Specifically, it is the largest petroleum and
petrochemical complex in the United States.14 It sits
on approximately 3,400 acres, with a circumference of
approximately 13.6 miles.15 It has the capacity to
process more than 550,000 barrels of crude oil per
day and to produce about 13 billion pounds of
petrochemical products each year.16 These products
8 Defendant ExxonMobil Corporation, ExxonMobil Chemical
Company, and ExxonMobil Refining and Supply Company’s
Original Answer, ¶¶ 12-13.
9 Trial Transcript at 5-61:6-9.
10 Trial Transcript at 5-60:5-21.
11 Trial Transcript at 5-61:11-13.
12 Defendant
ExxonMobil Corporation,
ExxonMobil
Chemical Company, and ExxonMobil Refining and Supply
Company’s Original Answer, ¶¶ 11-13.
13 Trial Transcript at 3-74:21-25,4-171:21 to 4-172:6,4-
173:3-5.
14 Plaintiffs’ Exhibit 556 at 25.
15 Trial Transcript at 3-71:14 to 3-72:6-9,8-50:20-22.
16 Trial Transcript at 3-77:5 to 3-80:1.
333a
range from jet fuel to plastic.17 The Complex has a
vast array of equipment, including roughly 10
thousand miles of pipe, 1 million valves, 2,500 pumps,
146 compressors, and 26 flares.18 It employs over
5,000 people.19
3. The Complex is located in Baytown, Texas,
which is a suburb of Houston. The nearby area in
which the Complex operates is populated with
numerous other refineries, petrochemical plants, and
industrial facilities.20
B. Title V Permits
4. The Complex is governed, in part, by operating
permits issued by the Texas Commission on
Environmental Quality (the “TCEQ”) pursuant to
Title V of the CAA.21 The Title V permits incorporatetypically by reference-numerous regulatory requirements, such as United States Environmental
Protection Agency (“EPA”) air pollution regulations
and State of Texas air pollution regulations, as well
as other permits, such as New Source Review permits
and Prevention of Significant Deterioration
permits.22 Taking all permit conditions together, the
Complex is regulated by over 120,000 permit
17 Trial Transcript at 3-56:2-18, 3-60:16-18.
18 Trial Transcript at 3-24:19-21, 3-25:4-5, 3-250:5-11, 7-
238:23 to 7-239:10, 3-72:20 to 3-73:24.
19 Trial Transcript at 3-75:15-18.
20 Trial Transcript at 11-33:19 to 11-39:16.
21 Trial Transcript at 2-207:18 to 2-208:9, 2-212:1-3; see 30
Tex. Admin. Code § 122.142(b).
22 Trial Transcript at 1-245:9-17, 2-208:13 to 2-209:13.
334a
conditions related to air quality, each of which is
tracked by the Complex for compliance purposes.23
C. Reportable Events, Recordable Events, and
Deviations
5. Exxon
documents
noncompliance
and
indications of noncompliance with its Title V permits
in three ways.24 First, the TCEQ requires Exxon to
document and submit to the TCEQ-via a State of
Texas Environmental Electronic Reporting System
(“STEERS”) report-information about “emissions
events” that release greater than a certain threshold
quantity of pollutants, called “reportable emissions
events.”25 Second, the TCEQ requires Exxon to
document information about “emissions events” that
release less than the aforementioned threshold
quantity of pollutants, called “recordable emissions
events;” documentation of recordable emissions
events are kept on-site at the Complex and are not
submitted to the TCEQ via a STEERS report.26 Third,
the TCEQ requires Exxon to document and submit to
the TCEQ information about Title V “deviations”
in semi-annual Title V “deviation reports.”27 It is
undisputed Exxon complied with the TCEQ’s
aforementioned reporting and recording require23 Trial Transcript at 3-81:9 to 3-82:1.
24 Trial Transcript at 2-205:13 to 2-206:14, 2-216:3-20.
25 30 Tex. Admin. Code §§ 101.1(88), 101.201; Trial
Transcript at 2-232:13-20, 2-236:3-24, 12-164:11-23.
26 30 Tex. Admin. Code §§ 101.1(71), 101.201(b); Trial
Transcript at 2-232:21 to 2-233:16, 12-164:11-23. The terms
“non-reportable emissions event” and “recordable emissions
event” are interchangeable.
27 30 Tex. Admin. Code §§ 122.10(6), 122.145(2); Trial
Transcript at 2-217:4 to 2-218:19.
335a
ments. Plaintiffs and Exxon stipulated to the contents
of Exxon’s STEERS reports of reportable emissions
events, records of recordable emissions events, and
Title V deviation reports covering the time period at
issue in this case, which is October 14, 2005, to
September 3, 2013.28 These stipulations are
contained in Excel spreadsheets spanning hundreds
of pages, admitted at trial as Plaintiffs’ Exhibits lA
through 7E. Specifically, at issue are 241 reportable
emissions events (the “Reportable Events”), 3,735
recordable emissions events (the “Recordable
Events”), and 901 Title V deviations (the “Deviations”) (collectively, the “Events and Deviations” or
the “Events or Deviations”).29
D. Investigation, Enforcement, and Corrective
Actions
6. The TCEQ investigates each reportable
emissions event.30 Following an investigation, the
TCEQ determines whether it will initiate
enforcement based, in part, on whether the event was
“excessive” and whether the applicable statutory
affirmative defense criteria were met.31 Similarly, the
TCEQ reviews the records of recordable emissions
events and takes enforcement action should it
28 Trial Transcript at 1-246:3-15.
29 Plaintiffs’ Exhibits 1A-7E.
30 Defendants’ Exhibit 546 at 8, ¶ 24; Trial Transcript at 2-
241:14-21, 2-244:10-18, 4-5:21-23, 8-85:11-16.
31 30 Tex. Admin. Code § 101.222; Defendants’ Exhibit 546
at 3-4, ¶ 10, 4-5, ¶ 12; Trial Transcript at 2-242:19-25, 12-160:2
to 12-162:8; see Trial Transcript at 12-161:10 to 12-162:8.
336a
determine the records reflect an inappropriate
trend.32
7. In addition to the TCEQ’s investigation, for
each of the Reportable Events, Exxon conducted an
extensive internal investigation, evaluated the root
cause of the event, and implemented corrective
actions to try to prevent recurrence.33 Similarly, for
the Recordable Events and Deviations, Exxon
analyzed the records for trends and ways to improve,
identified root causes, and implemented corrective
actions.34 A root cause analysis requires
consideration of a number of factors, including the
type of equipment involved, the component of the
equipment that may have failed, and human
interaction with the equipment.35 A root cause
analysis is necessary-as a factual matter in this caseto determine whether the Events and Deviations
resulted from a recurring pattern, and to determine
whether improvements could have been made to
prevent recurrence.36 The number of events involving
a certain type of equipment, a certain unit, or a
certain type of issue (such as leaks) does not alone
mean that any of the Events or Deviations resulted
from a recurring pattern or were preventable.37
32 Defendants’ Exhibit 546 at 5-7, ¶¶ 13-18.
33 Trial Transcript at 3-114:25 to 3-117:4,4-26:4-16.
34 Trial Transcript at 3-117:5-22, 10-39:24 to 10-40:8, 10-
219:11 to 10-220:13.
35 Trial Transcript at 10-231:15 to 10-232:14.
36 Defendants’ Exhibit 546 at 6, ¶¶ 16-17.
37 Defendants’ Exhibit 546 at 6, ¶ 17; Trial Transcript at
10-232:15 to 10-233:10, 10-234:25 to 10-277:15, 11-5:17 to 1121:18.
337a
8. After investigating, the TCEQ assessed
$1,146,132 m penalties against Exxon for some of the
Events and Deviations.38 In addition, Harris County
assessed $277,500 in penalties for some of the Events
and Deviations.39 Thus, in total, Exxon has paid
$1,423,632 in monetary penalties for Events and
Deviations at issue in this case.40 Along with those
penalties, the TCEQ required Exxon to take certain
corrective actions or document the corrective actions
already taken.41
9. Moreover, after investigating, the TCEQ
elected not to pursue enforcement on 97 Reportable
Events because the TCEQ determined the applicable
affirmative defense criteria were met.42 Such
applicable affirmative defense criteria include finding
that the unauthorized emissions could not have been
prevented, were not part of a recurring pattern, and
did not contribute to a condition of air pollution.43
Also, after investigating, the TCEQ elected to pursue
enforcement but not impose penalties or require
further action on 55 Reportable Events because
Exxon either agreed to take certain corrective actions
38 Plaintiffs’ Exhibit 337.
39 Defendants’ Exhibit 502 at 1-10.
40 Exxon claims it has paid $2,022,288 in penalties, while
Plaintiffs claim Exxon has paid $1,423,632 in penalties. After
thoroughly reviewing all of the evidence submitted to support
each amount, the Court finds Plaintiffs’ claim ($1,423,632) to be
better supported by the evidence.
41 E.g., Defendants’ Exhibits 472 at 3-4, 475 at 2, 486 at 2,
488 at 2.
42 Defendants’ Exhibits 18-20; Trial Transcript at 3-202:14
to 3-206:3.
43 30 Tex. Admin. Code § 101.222.
338a
or had already taken corrective actions.44 An example
of one such Reportable Event occurred on August 30,
2006, at the Butadiene Unit due to operator error.45
Exxon’s root cause analysis determined the event
occurred because a technician misunderstood a
request via radio from a computer console operator
and opened the wrong valve.46 The incorrect action
was corrected within 12 minutes, and Exxon used the
event as an example to its employees to reinforce the
importance of effectively communicating via radio
and repeating field expectations before performing
action.47 Another example of one such Reportable
Event occurred on April 11, 2007, at the BOP-X
Expansion Flare when the methanator shut down
resulting in flaring.48 Exxon’s root cause analysis
determined the methanator shut down because of a
high temperature swing in the furnace crossover
temperature during the feed-in of steam shortly after
the furnace completed a routine decoke cycle.49 That
event was the first time in the 10 years the
methanator had been in service that such an incident
had occurred, which was 1 out of approximately 1,000
feed-ins.50 To prevent similar events from occurring,
Exxon increased the methanator trip point from 700
to 800 degrees and modified its operating procedures
44 Defendants’ Exhibits 24-29; Trial Transcript at 3-200:9
to 3-202:13.
45 Defendants’ Exhibits 26, 26E.
46 Defendants’ Exhibit 26E.
47 Defendants’ Exhibit 26E.
48 Defendants’ Exhibits 26, 26I.
49 Defendants’ Exhibit 261.
50 Defendants’ Exhibit 261.
339a
in three ways: operating windows for crossover
temperatures, dimethyl sulphide injection prior to
feed-in, and removal of 225 pounds of steam prior to
feed-in.51
10. The distinction the TCEQ makes between
reportable emissions events and recordable emissions
events demonstrates the agency’s belief that
emissions from recordable emissions events are less
serious and less potentially harmful to human health
than emissions from reportable emissions events.52
Of the 3,735 Recordable Events, 43% were 112 an
hour or less in duration, 55% were 1 hour or less in
duration, 62% were 2 hours or less in duration, 73%
were 5 hours or less in duration, 82% were 12 hours
or less in duration, and 89% were 24 hours or less in
duration.53 Further, 58% had total emissions of 20
pounds or less, 80% had total emissions of 100 pounds
or less, 87% had total emissions of 200 pounds or less,
and 93% had total emissions of 500 pounds or less.54
For example, Exxon tracked, as a Recordable Event,
smoke that emanated from a power receptacle due to
an electrical issue when an extension cord was
plugged in, which lasted such a short time that the
duration was recorded as 0 hours and which emitted
a total of 0.02 pounds of emissions.55 As another
51 Defendants’ Exhibit 261.
52 Trial Transcript at 12-164:11-23.
53 Defendants’ Exhibit l007A at 1; see Plaintiffs’ Exhibits
1B, 2B, 2D, 2F.
54 Defendants’ Exhibit 1007A at 2; see Plaintiffs’ Exhibits
1B, 2B, 2D, 2F.
55 Plaintiffs’ Exhibit 1B at row 800; Trial Transcript at 10-
216:17 to 10-218:6, 12-234:3-12.
340a
example, Exxon tracked, as a Recordable Event, a fire
in a cigarette butt can that lasted less than one
minute and emitted a total of 0.02 pounds of
emissions, the corrective action for which was to pour
water in the cigarette butt can.56
11. Of the 901 Deviations, 45% involved no
emissions whatsoever.57 The Deviations not involving
emissions typically relate to late reports or
incomplete reports.58 For example, Exxon recorded,
as Deviations, failure to maintain a record of a drain
inspection; late submission of a report of an engine’s
hours of operation; and failure to perform a quarterly
engine test due to engine malfunction, the corrective
action for which was testing the engine upon repair
and startup.59 Of the 493 Deviations that involved
emissions, 78 involved emissions occurring in the
normal course of operations, and thus those emissions
are not at issue in this case.60 The emissions from the
remaining 415 Deviations are categorized as either a
Reportable Event or Recordable Event depending on
the amount of emissions, and thus those emissions
are addressed in the Court’s findings related to
Reportable Events or Recordable Events.61
56 Plaintiffs’ Exhibit 2D at row 2432.
57 Trial Transcript at 3-118:9-13, 10-204:11-13, 10-208:1-8.
58 Trial Transcript at 10-208:9 to 10-209:17; see Plaintiffs’
Exhibits 7A-E.
59 Plaintiffs’ Exhibit 7C at row 36, 142; Trial Transcript at
10-207:1-7.
60 Trial Transcript at 10-209:18 to 10-210:1.
61 Trial Transcript at 10-203:11 to 10-204:10, 10-210:7-12.
341a
E. Agreed Enforcement Order
12. On February 22, 2012, Exxon and the TCEQ
agreed on an enforcement order regarding the
Complex (the “Agreed Order”).62 The Agreed Order,
inter alia: (1) resolved enforcement for certain past
reportable emissions events; (2) established
stipulated penalties for future reportable emissions
events, while precluding Exxon from asserting the
applicable affirmative defense; (3) required specified
emissions reductions; and (4) mandated implementation of 4 environmental improvement projects.63 The
environmental improvement projects are as follows:
a. Plant Automation Venture. Install
computer applications to improve real-time
monitoring, identification, diagnostics and
online guidance/management of operations.
The project is intended to provide early
identification of potential events and/or
instrumentation abnormalities, allowing
proactive response.
* * *
b. Fuels North Flare System Monitoring/
Minimization.... Additional instrumentation,
including monitoring probes and on-line
analyzers are intended to improve the
identification and characterization of flaring
events.
The
development
of
flare
minimization practices ... are intended to
reduce loads on the flare system.
62 Defendants’ Exhibit 222.
63 Defendants’ Exhibit 222 at ¶¶ I.13, III.3, III.4, III.10,
III.12; Trial Transcript at 3-32:25 to 3-40:5, 12-205:15 to 12207:8.
342a
* * *
c. BOP/BOPX Recovery Unit Simulators.
Develop, implement and use high-fidelity
process training simulators ... intended to
improve operator training and competency,
resulting in reduced frequency and severity
of emissions events.
* * *
d. Enhanced Fugitive Emissions Monitoring
.... The program will use infrared imaging
technology to locate potential VOC and
HRVOC leaks....64
The Agreed Order states these projects “will reduce
emissions at the Baytown Complex, including
emissions from emissions events....”65 Indeed, the
Agreed Order requires certain amounts of emissions
reductions.66 Exxon could not have been required to
undertake these projects under existing laws and
regulations.67 Implementation of these projects will
cost approximately $20,000,000.68 They must be
implemented within 5 years of the date of the Agreed
Order, and Exxon must submit semi-annual reports
to the TCEQ that provide information on the progress
of these projects.69 In addition, Exxon must submit
annual reports to the TCEQ that identify emissions
reductions, including “an explanation of how recent
64 Defendants’ Exhibit 222 at ¶ III.12.
65 Defendants’ Exhibit 222 at ¶ III.12.
66 Defendants’ Exhibit 222 at ¶ III.10.
67 Defendants’ Exhibit 222 at ¶ III.12; Trial Transcript at
3-190:6-24, 12-177:12 to 12-178:6.
68 Trial Transcript at 3-32:25 to 3-40:5.
69 Defendants’ Exhibit 222 at ¶¶ III.12, 13.
343a
air emissions performance continues the overall
emissions reduction trends at the Baytown Complex,”
and provide information on activities undertaken to
improve environmental performance.70
F. Efforts
to
Improve
Environmental
Performance and Compliance
13. The Complex has a governing philosophy that
all employees work toward plant reliability and
environmental compliance.71 It has a Safety Security
Health and Environmental (“SSHE”) group
comprised of approximately 75 employees, including
approximately 30 dedicated to environmental
compliance, with an annual budget of$25 million in
2014.72 Over the past several years Exxon has spent
more than $1 billion on regulatory compliance and
environmental improvement projects at the
Complex.73 Specifically, for the years at issue in this
case, Exxon spent the following on maintenance and
maintenance-related capital projects at the Complex:
$464 million in 2005, $539 million in 2006, $519
million in 2007, $599 million in 2008, $642 million in
2009, $598 million in 2010, $583 million in 2011, $607
million in 2012, and $685 million in 2013.74
14. The Complex employs a wide variety of
emissions-reduction equipment such as wet gas
scrubbers, selective catalytic reduction, amine
70 Defendants’ Exhibit 222 at ¶ III.14.
71 Trial Transcript at 3-82:2 to 3:83:20, 3-273:20 to 3-
274:20.
72 Trial Transcript at 2-195:1-2, 2-203:8-12, 3-89:22 to 3-
90:9, 12-214:19 to 12-215:5, 12-226:4-13.
73 Trial Transcript at 12-239:22 to 12-240:6.
74 Defendants’ Exhibit 413.
344a
treating towers, flares, flare gas recovery systems,
external floating roof tanks, sulfur recovery units, a
regenerative thermal oxidizer, and more than one
hundred low nitrogen oxide (“NOx”) burners; the
Complex also employs emissions-detection equipment
such as continuous emissions monitoring systems and
forward-looking infrared cameras.75 Approximately
half of the flares at the Complex are connected to flare
gas recovery compressors.76 All of the flares have flow
rate velocity meters and are monitored for vent
gas heat content, and Exxon takes steps to ensure
each flare operates in compliance with applicable
regulatory requirements.77 Exxon has also generated
and implemented a flare minimization plan to reduce
flaring at the Complex.78 Further, Exxon’s
maintenance policies and procedures conform or
exceed industry standards and codes.79
15. Both the TCEQ and the EPA recognize it is
not possible to operate any facility-especially one as
complex as the Complex-in a manner that eliminates
all emissions events and deviations.80 Despite good
practices, at any industrial facility there will always
be mechanical failure and human imperfection
75 Trial Transcript at 10-47:5 to 10-78:19.
76 Trial Transcript at 10-56:13-16.
77 Trial Transcript at 10-61:5-17.
78 Trial Transcript at 12-231:16 to 12-232:1.
79 Trial Transcript at 7-225:3-14, 11-274:25 to 11-275:7, 12-
15:4 to 12-16:9, 12-20:15-20, 12-25:14-25, 12-26:16-23.
80 Defendants’ Exhibit 190 at 7-8, 14-15; Defendants’
Exhibit 546 at 11, ¶¶ 32-34; Trial Transcript at 3-112:2-8.
345a
leading to noncompliance with Title V permit
conditions.81
G. Improvement
16. In the Agreed Order, the TCEQ recognized the
Complex’s historical reductions in emissions when
making the following finding of fact:
The annual emissions inventory reports that
ExxonMobil has submitted for the Baytown
Complex under 30 Tex. Admin. Code § 101.10
reflect a positive trend of reductions in actual
emissions, including unauthorized emissions
associated with emissions events and
scheduled MSS activities, from Baytown
Complex. From 2000 to 2010, ExxonMobil
has reported a 60 percent reduction in
aggregate emissions of VOC, HRVOC, CO,
S02 and NOx from the Baytown Complex.
Over that same time period, reported
emissions of VOC from the Baytown
Complex have dropped by 44 percent,
reported emissions of CO have dropped by
76, and reported emissions of NOx have
dropped by 63 percent.82
Likewise, evidence in this case shows the total
amount of emissions at the Complex generally
declined year-to-year over the years at issue in the
case.83 In addition, the annual amount of
unauthorized emissions of criteria pollutants at the
81 Defendants’ Exhibit 190 at 7-8, 14-15; Defendants’
Exhibit 546 at 11, ¶¶ 32-34; Trial Transcript at 3-112:2-8.
82 Defendants’ Exhibit 22 at ¶ I.12.
83 Defendants’ Exhibits 1004, 1008.
346a
Complex decreased by 95% from 2006 to 2013.84
Similarly, the annual number of Reportable Events
that occurred at the Complex decreased by 81%
percent from 2005 to 2013.85 Flaring at the Complex
has been reduced by 73% since 2000.86
17. In addition, each year at issue, total emissions
were far below the annual emissions limits.87 For
example, in 2012, the annual emissions limit of
volatile organic compounds (“VOCs”) was 7,778.4
tons, but the Complex only emitted 2,958.1 tons of
VOCs in that year.88 Also, each year at issue,
unauthorized emissions were a very small percentage
of total emissions and an even smaller percentage of
the annual emissions limits.89 For example, in 2012,
of the total VOCs emitted, only 54.9 tons were
unauthorized, which is only 1.9% of the Complex’s
total VOC emissions that year and only 0.7% of the
annual VOC emissions limit.90
H. Plaintiffs and Plaintiffs’ Members
84 Defendants’ Exhibit 1002. Under the CAA, the EPA
establishes minimum air quality levels in the form of “national
ambient air quality standards” for six pollutants (known as
“criteria pollutants”) to protect public health. 42 U.S.C. § 7409.
The six criteria pollutants are sulfur dioxide, particulate matter,
carbon monoxide, ozone, oxides of nitrogen/nitrogen dioxide, and
lead. 40 C.F.R. §§ 50.4-17.
85 Defendants’ Exhibit 1000 at 1.
86 Defendants’ Exhibit 547 at 12:11-12.
87 Defendants’ Exhibits 1004, 1008. Emissions from “event
emissions” are at issue in this case, not “permitted emissions.”
88 Defendants’ Exhibit 1004 at 1.
89 Defendants’ Exhibits 1004, 1008.
90 Defendants’ Exhibit 1004 at 1.
347a
18. Environment
Texas
is
a
non-profit
corporation with a purpose “to engage in activities,
including public education, research, lobbying,
litigation, issue advocacy, and other communications
and activities to promote pro-environment political
ideas, policies and leaders.”91 It has approximately
2,900 dues-paying members in Texas.92 Similarly,
Sierra Club is a non-profit corporation with a purpose
to protect humanity, the environment, and the ability
to enjoy the outdoors.93 The Lone Star (Texas)
Chapter of the Sierra Club has approximately 25,000
members.94 Plaintiffs called four members of either
Environment Texas or Sierra Club to testify.
19. First, Diane Aguirre Dominguez is a member
of Environment Texas and Sierra Club.95 She grew up
in Baytown at her parents’ home, which is about a
mile and a half from the Complex.96 The Complex is
the closest industrial facility to her parents’ home.97
She lived in Houston from 2006 through 2013 while
attending college and working, during which time she
regularly visited her parents’ home in Baytown.98 In
March 2013, she moved to Oakland, California.99 She
has returned to Baytown to visit her family at her
91 Plaintiffs’ Exhibit 338 at ¶ II(2); Trial Transcript at 1-
227:16-25.
92 Trial Transcript at 1-234:24 to 1-235:4.
93 Trial Transcript at 2-125:11-22.
94 Trial Transcript at 2-125:23 to 2-126:4.
95 Trial Transcript at 1-192:2-22.
96 Trial Transcript at 1-193:8 to 1-194:16.
97 Trial Transcript at 1-194:17-20.
98 Trial Transcript at 1-196:6 to 1-199:9.
99 Trial Transcript at 1-199:8-9.
348a
parent’s home, and she has plans to visit Baytown
again for the holidays in 2014.100 While growing up in
Baytown, she often smelled odors at her parents’
home and other places in Baytown, and she had
allergies characterized by running nose, watery eyes,
and chest constriction, for which she took
medication.101 These symptoms improved when she
moved away from Baytown and she was able to stop
taking medication, but the symptoms return
whenever she visits her family in Baytown.102
However, she cannot correlate any of these symptoms
to specific Events or Deviations at issue in this
case.103 Further, she has seen flares, smoke, and a
brownish haze over the Complex.104 She finds these
sights and smells worrisome because she thinks they
indicate Exxon is emitting harmful chemicals; she is
also concerned about the risk of explosion from an
emergency condition at the Complex.105 However, she
understands some flaring is a normal, permitted part
of the operation of the Complex, and she does not
know of a time when she observed unpermitted
flaring.106 Lastly, she enjoys running outdoors, but
when she is visiting Baytown, she refrains from doing
100
Trial Transcript at 1-199:10-25.
101
Trial Transcript at 1-200:1 to 1-201:15,1-205:6-25,1219:1-14.
102
Trial Transcript at 1-205:19 to 1-206:11.
103
Trial Transcript at 1-207:25 to 1-209:23, 1-220:1 to 1-
222:4.
104
Trial Transcript at 1-202:2 to 1-203:8, 1-218:6-17.
105
Trial Transcript at 1-203:9 to 1-204:9.
106
Trial Transcript at 1-218:3-24.
349a
so because she experiences labored breathing and an
abrasive feeling in her throat and lungs.107
20. Second, Marilyn Kingman is a member of
Sierra Club.108 She lives in a town that neighbors
Baytown, but she shops, banks, attends church, and
conducts other activities several times a week in
Baytown, including nearby the Complex.109 She has
smelled a chemical smell around the Complex, seen
flares at the Complex, and seen a gray or brown haze
over the Complex.110 The odors she has smelled,
which she attributes to the Complex, cause her to be
concerned for her health.111 She limits her outdoor
activities in Baytown when she smells odors or sees
haze.112 Also, flaring at the Complex concerns her
because she is afraid of explosion and because she
believes flaring indicates something is wrong.113
However, she does not claim to have any physical
ailments or health conditions that she attributes to
anything happening at the Complex.114 Also, she was
not able to correlate any of her experiences or
concerns to specific Events or Deviations at issue in
this case.115
107
Trial Transcript at 1-204:10 to 1-205:5.
108
Trial Transcript at 6-69:11-14.
109
Trial Transcript at 6-71:3 to 6-75:6.
110
Trial Transcript at 6-75:2 to 6-76:15.
111
Trial Transcript at 6-76:16-23, 6-83:6-12.
112
Trial Transcript at 6-76:24 to 6-77:24.
113
Trial Transcript at 6-78:13 to 6-80:5.
114
Trial Transcript at 6-95:14-20.
115
Trial Transcript at 6-91:23 to 6-95:9. On February 13,
2014, Kingman smelled an odor she attributed as emanating
from the Complex, and a Recordable Event occurred that day;
350a
21. Third, Richard Shae Cottar is a member of
Sierra Club.116 From April 2010 through September
2012, he lived a quarter of a mile from the
Complex.117 Since September 2012, he has lived
approximately two miles from the Complex.118 While
living at the closer address, he saw or heard flaring
events at the Complex from his home that were
audibly disruptive, woke him up, rattled the windows
of his house, involved plumes of black smoke, involved
large flames, and lasted for several hours in
duration.119 He also smelled strong, pungent odors
that, on occasion, caused him headaches and awoke
him in the night.120 He attributed odors at his home
to being caused by the Complex because when the
wind was blowing from the Complex towards him
during flaring events, he smelled the odors, but when
the wind was blowing towards the Complex away
from him during flaring events, he did not smell the
odors.121 He has also smelled odors that became
more intense the closer he got to the Complex
while driving.122 His asthmatic symptoms were
exacerbated when living at the closer address, and
since moving further from the Complex, his asthmatic
however, February 13, 2014, is outside the time frame of this
case.
116
Trial Transcript at 1-98:18 to 1-99:13.
117
Trial Transcript at 1-102:7 to 1-103:6.
118
Trial Transcript at 1-102:3-4, 1-106:5-11.
119
Trial Transcript at 1-108:5-24, 1-109:12-20, 1-118:1324, 1-121:7 to 1-123:18, 1-128:2-3.
120
Trial Transcript at 1-109:21 to 1-112:3, 1-131:5 to
1-132:4,1-176:6-9.
121
Trial Transcript at 1-119:5-18.
122
Trial Transcript at 1-111:10-20.
351a
symptoms have decreased.123 He moved further away
from the Complex out of concern for his health and
safety.124 When visiting the nature center next to the
Complex, he does not stay if he sees emissions.125 He
does not want to breathe unauthorized emissions, and
his concerns about air quality would be lessened if
Exxon were to reduce its unauthorized emissions.126
However, he understands that certain emissions and
flaring are allowed by permits.127 In total, he was able
to credibly correlate three flaring events he observed
to specific Events or Deviations, one of which woke
him up from noise and involved a “sweet odor” outside
his home.128
22. Fourth, Sharon Sprayberry is a member of
Sierra Club.129 She lived in Baytown from 2004 until
June 2012, about one mile from the Complex.130
While living in Baytown, she heard flares at the
Complex from inside her home, saw smoke coming
from the flares, saw haze over the Complex, and
smelled a chemical odor outdoors when the wind was
blowing from the Complex towards her or when she
123
Trial Transcript at 1-148:3 to 1-149:19, 1-187:12 to 1-
188:1.
124
Trial Transcript at 1-144:21 to 1-145:17.
125
Trial Transcript at 1-152:11-21.
126
Trial Transcript at 1-153:9-20.
127
Trial Transcript at 1-153:9-13, 1-169:3-18.
128
Trial Transcript at 1-123:19 to 1-131:1, 1-168:17 to 1-
181:12.
129
Trial Transcript at 6-5:19-23.
130
Trial Transcript at 6-11:23 to 6-13:13, 6-37:2-5, 6-40:3-10.
352a
saw flares.131 These smells concerned her because she
was afraid they were toxic or harmful.132 While living
in Baytown, she also experienced respiratory
issues.133 Her respiratory problems went away within
a few weeks of moving to a different city—McGregor,
Texas.134 She would like to return to Baytown to visit
friends and attend events, but she is unlikely to
return because during her last visit the air quality
affected her breathing.135 She would have retired
in Baytown if the air quality were better.136 She
understands not all flares involve unauthorized
emissions because some flares and emissions are
authorized by permit.137 In total, she was able to
credibly correlate two events she observed to Events
or Deviations.138
I. Baytown Residents Called by Exxon
23. Exxon called three residents of the Baytown
community to testify. First was Fred Aguilar, who has
lived approximately eight blocks from the Complex for
35 years.139 He has no health issues or concerns that
he attributes to the Complex, does not worry about
living near the Complex, and has never had any
131
Trial Transcript at 6-15:18 to 6-16:19, 6-33:12 to 6-
36:13.
132
Transcript at 6-36:16 to 6-37:1.
133
Trial Transcript at 6-15:7-17.
134
Trial Transcript at 6-37:9-24.
135
Trial Transcript at 6-38:2-19.
136
Trial Transcript at 6-38:20-22.
137
Trial Transcript at 6-50:12-20.
138
Trial Transcript at 6-17:7 to 6-23:8,6-45:20 to 649:16,6-65:20 to 6-67:24.
139
Trial Transcript at 10-130:11 to 10-131:9.
353a
concerns about any emissions events or flares that
have occurred at the Complex.140 He has only rarely
heard very loud noise from flaring, the last time being
six or seven years ago, and such noise never affected
his ability to enjoy his property.141
24. Second was Billy Barnett, who has lived across
the street from the Complex for 17 years and in close
proximity to the Complex for a total of 37 years.142
He does not “feel impacted or influenced” by his close
proximity to the Complex.143 Specifically, he has had
no health issues that he attributes to living across the
street from the Complex, flaring at the Complex has
not disturbed his enjoyment of his property, and he
has not had problems with loud noises coming from
the Complex.144 He has smelled substantial odors a
couple of times in 37 years but does not characterize
the odors as overpowering.145
25. Third, Gordon Miles has lived very close to the
Complex for 28 years.146 He has never experienced
any problems with flaring, odors, or noises coming
from the Complex; has no health problems that he
140
Trial Transcript at 10-140:8-24, 10-142:1-6, 10-155:4-12.
141
Trial Transcript at 10-142:7-18.
142
Trial Transcript at 11-101:8 to 11-102:3, 11-104:10-19.
143
Trial Transcript at 11-114:13-18.
144
Trial Transcript at 11-113:7-11, 11-114:19 to 11-115:1,
11-115:10-14.
145
146
Trial Transcript at 11-115:5-9.
Defendants’ Exhibit 545; Trial Transcript at 12-82:11
to 12-86:5.
354a
attributes to anything happening at the Complex; and
has no complaints about Exxon as a neighbor.147
III. CONCLUSIONS OF LAW
A. Standing
1. An organization “has standing to bring suit on
behalf of its members when: (1) its members would
otherwise have standing to sue in their own right; (2)
the interests it seeks to protect are germane to the
organization’s purpose; and (3) neither the claim
asserted nor the relief requested requires the
participation of individual members.” Texans United
for a Safe Econ. Educ. Fund v. Crown Cent. Petroleum
Corp., 207 F.3d 789, 792 (5th Cir. 2000). Exxon does
not contest the second and third requirements, and
the Court finds these requirements are met. At issue
is the first requirement.
2. In order for a member to have standing to sue
in his or her own right, (1) he or she must have
suffered an actual or threatened injury, (2) that is
fairly traceable to the defendant’s action, and (3) the
injury must likely be redressed if the plaintiff prevails
in the lawsuit. Id. The plaintiff has the burden to
prove these requirements by the preponderance of the
evidence. Lujan v. Defenders of Wildlife, 504 U.S. 555,
561 (1992); Envtl. Conservation Org. v. City of Dallas,
No. 3-03-CV-2951-BD, 2005 WL 1771289, at *4 n.2
(N.D. Tex. July 26, 2005). Each requirement is
addressed in turn.
a. Injury-in-Fact
3. To satisfy the injury-in-fact requirement, the
plaintiff must prove injury to himself or herself, not
147
Trial Transcript at 12-89:22 to 12-90:14, 12-96:13-22.
355a
injury to the environment. Friends of the Earth, Inc.
v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167, 181
(2000). There is a “low threshold for sufficiency
of injury” to confer standing. Save Our Cmty. v. EPA,
971 F.2d 1155, 1161 (5th Cir. 1992). For an
environmental plaintiff, effect to his or her
recreational or aesthetic interests constitutes injuryin-fact. Laidlaw, 528 U.S. at 183. Also, “breathing and
smelling polluted air is sufficient to demonstrate
injury-in-fact and thus confer standing under the
CAA.” Texans United, 207 F.3d at 792; Concerned
Citizens Around Murphy v. Murphy Oil USA, Inc.,
686 F. Supp. 2d 663, 670-71 (E.D. La. 2010).
4. In this case, four members of either
Environment Texas or Sierra Club testified. As
detailed supra in paragraphs II.19-22, while living or
visiting near the Complex during the time period at
issue in this case, at least one of these members
experienced the following, inter alia: allergies;
respiratory problems; the smell of pungent odors,
which occasionally caused headaches; audibly
disruptive noise; and visions of flares, smoke, and
haze. In addition, at least one of these members was
worried about the risk of explosion after seeing flares
and worried about his or her health after seeing
flares, smoke, and haze.148 Because of at least one of
the aforementioned experiences or worries, at least
one of these members made the following changes in
his or her life, inter alia: refrained from running
outdoors, limited outdoor activities when odors were
smelled or haze seen, left the nature center next to
148
Supra ¶¶ II.19-22.
356a
Complex early, and moved away from Complex.149
Collectively, these experiences, worries, and changes
satisfy the injury-in-fact requirement.
b. Traceability
5. So long as there is a fairly traceable connection
between a plaintiffs injury and the defendant’s
violation, the traceability requirement of standing is
satisfied. Comer v. Murphy Oil USA, 585 F.3d 855,
864 (5th Cir. 2009). To confer standing, the plaintiffs
injury does not have to be linked to exact dates that
the defendant’s violations occurred, and the plaintiff
does not have to “show to a scientific certainty that
defendant’s [emissions], and defendant’s [emissions]
alone, caused the precise harm suffered by the
plaintiffs.” Texans United, 207 F.3d at 793; Save Our
Cmty., 971 F.2d at 1161 (internal quotation marks
omitted); see Tex. Campaign for the Env’t v. Lower
Colo. River Auth., No. H-11-791, 2012 WL 1067211, at
*4-5 (S.D. Tex. Mar. 28, 2012) (Miller, J.). Rather,
circumstantial evidence of traceability suffices, such
as observation of smoke coming from the defendant’s
plant while at the same time smelling odors, and
expert evidence that on certain days when the
defendant’s violations occurred, excess emissions
were detectable in the plaintiffs neighborhood.
Texans United, 207 F.3d at 793.
6. Even though Plaintiffs’ members’ injuries do
not have to be linked to exact dates that the Events
and Deviations occurred, Plaintiffs’ members
correlated some of the experiences described supra,
such as odor and noise, to five Events or
149
Supra ¶¶ II.19-22.
357a
Deviations.150 Also, Plaintiffs’ members have seen
flares, smoke, and haze over the Complex.151 Some of
the members smelled odors at their homes while
living very close to the Complex, particularly when
the wind was blowing towards their homes from the
Complex, and the Complex was the closest industrial
facility to their homes.152 One member who lived a
quarter of a mile from the Complex saw or heard
flaring events at the Complex from his home, and he
smelled odors that became more intense the closer
he got to the Complex while driving.153 Some of
the members’ allergies and respiratory problems
decreased when they moved away from the
Complex.154 Additionally, Plaintiffs submitted
evidence of the potential health effects caused by the
types of pollutants emitted during the Events and
Deviations, and some of these potential health effects
match some of the experiences of Plaintiffs’
members.155 All the aforementioned evidence suffices
to establish a fairly traceable connection between
Plaintiffs’ members’ injuries and the Events and
150
Supra ¶¶ II.19-22 (Dominguez-0, Kingman-0, Cottar-3,
and Sprayberry-2).
151
Supra ¶¶ II.19-22.
152
Supra ¶¶ II.19, 21-22.
153
Supra ¶ II.21.
154
Supra ¶¶ II.19, 21-22.
155
For example, hydrogen sulfide can smell badly and
cause headaches, and one of Plaintiffs’ members smelled strong,
pungent odors that, on occasion, caused him headaches.
Plaintiffs’ Exhibit 476 at 38-39; Plaintiffs’ Exhibit 540 at 1, 4, 10;
Trial Transcript at 7-89:25 to 7-91:9,9-161:24 to 9-162:8; supra
¶ II.21.
358a
Deviations at the Complex. Accordingly,
traceability requirement is satisfied.
the
c. Redressability
7. A plaintiff must prove redressability “for each
form of relief sought.” Laidlaw, 528 U.S. at 185. Relief
that prevents or deters violations from reoccurring
satisfies the redressability requirement. Id. at 185-86.
Here, Plaintiffs request penalties for the Events and
Deviations, an injunction enjoining Exxon from
violating the CAA, a special master to monitor
compliance with the injunctive relief, and a
declaratory judgment that Exxon violated its Title V
permits. Civil penalties in a CAA citizen suit satisfy
the redressability requirement of standing because
they deter future violations. Texans United, 207 F.3d
at 794; Laidlaw, 528 U.S. at 185-86.156 An injunction
requiring the defendant to cease its violations also
satisfies the redressability requirement of standing.
Texans United, 207 F.3d at 794; Envtl. Conservation
Org., 2005 WL 1771289, at *4. Because the purpose of
the special master in this case would be to ensure
violations do not recur, the request for a special
master in this particular case also satisfies the
redressability requirement. Lastly, because a public,
court-ordered declaratory judgment that Exxon has
violated its Title V permits would help deter Exxon
156
To the extent the redressability requirement in a CAA
case is only satisfied as to penalties for ongoing violations, not
wholly past violations, the Court notes Exxon has some ongoing
violations. See infra ¶¶ III.9-48 (finding that because Exxon
violated some of the same emission standards or limitations both
before and after the complaint was filed, those violations are
considered ongoing under the CAA and are thus actionable in a
citizen suit).
359a
from violating in the future, the request for a
declaratory judgment in this particular case satisfies
the redressability requirement. Accordingly, the
redressability requirement is satisfied as to all relief
sought.
8. Because the injury-in-fact, traceability, and
redressability requirements are satisfied, Plaintiffs’
members have standing to sue in their own right, and
Plaintiffs have standing.
B. Actionability
9. It is undisputed Exxon violated some emission
standards or limitations under the CAA.157 The issue
is whether such violations are actionable under the
CAA as a citizen suit. The CAA provides citizens may
bring a civil action “against any person ... who is
alleged to have violated (if there is evidence that the
alleged violation has been repeated) or to be in
violation of ... an emission standard or limitation
under [the CAA].” 42 U.S.C. § 7604(a)(1). The plaintiff
must prove these requirements by a preponderance of
the evidence. Carr v. Alta Verde Indus., Inc., 931 F.2d
1055, 1061, 1063-64 (5th Cir. 1991).158 The plaintiff
157
Specifically, Exxon does not dispute that the alleged
violations under Counts II, III, IV, and V of Plaintiffs’ complaint
constitute violations of an emission standard or limitation.
However, Exxon does dispute that the alleged violations under
Counts I, VI, and VII constitute violations of an emission
standard or limitation.
158
Carr is a Clean Water Act (“CWA”) case. The “to be in
violation” provision in the CAA is identical to the “to be in
violation” provision in the CWA. Compare 42 U.S.C. § 7604(a)
(CAA), with 33 U.S.C. § 1365(a)(1) (CWA). Interpretations of the
CWA provision are instructive when analyzing the CAA
provision. See United States v. Anthony Dell’Aquilla, Enters. &
Subsidiaries, 150 F.3d 329, 338 n.9 (3d Cir. 1998).
360a
can prove a person is “in violation,” otherwise known
as proving on going violation, in one of two ways: first,
“by proving violations that continue on or after the
date the complaint is filed, or [second] by adducing
evidence from which a reasonable trier of fact
could find a continuing likelihood of recurrence in
intermittent or sporadic violations.” Id. at 1062. Proof
of one post-complaint violation is conclusive that the
corresponding pre-complaint violation is actionable.
Id. at 1065 n.12; Natural Res. Def Council, Inc. v.
Texaco Ref & Mktg., Inc., 2 F.3d 493, 502 (3d Cir.
1993). The plaintiff can prove “a continuing likelihood
of recurrence” in one of two ways: “[f]irst, by proving
a likelihood of recurring violations of the same
parameter; or second, by proving a likelihood that the
same inadequately corrected source of trouble will
cause recurring violations of one or more different
parameters.” Texaco Ref, 2 F.3d at 499. In summary,
the plaintiff must prove by the preponderance of the
evidence one of the following in a CAA citizen suit:
(1) “to have violated”: repeated violation of the
same emission standard or limitation before
the complaint was filed; or
(2) “to be in violation”:
(a) violation of the same emission standard or
limitation both before and after the
complaint was filed; or
(b) continuing likelihood of recurrence:
(i) likelihood of recurring violations of the
same parameter; or
(ii)likelihood that the same inadequately
corrected source of trouble will cause
361a
recurring violations of one or more
different parameters.
See 42 U.S.C. § 7604(a)(1); Carr, 931 F.2d at 1062;
Texaco Ref, 2 F.3d at 499; see also Env’t Tex. Citizen
Lobby, Inc. v. ExxonMobil Corp., No. H-10-4969, ECF
No. 126 at 10-13 (S.D. Tex. Apr. 3, 2013) (Smith,
Mag.) (memorandum and recommendation on motion
for summary judgment in this case), adopted by ECF
No. 135 (S.D. Tex. May 2, 2013) (Hittner, J.) (order
adopting the memorandum and recommendation).
The definition of “emission standard or limitation”
includes any “standard,” “limitation,” “schedule,”
“term,” or “condition” in a Title V permit. 42 U.S.C.
§ 7604(f)(4).
10. Here, Plaintiffs claim Exxon either (1)
repeatedly violated the same emission standards or
limitations in its Title V permits before the complaint
was filed, or (2)(a) violated the same emission
standards or limitations in its Title V permits both
before and after the complaint was filed. Plaintiffs do
not claim satisfaction of the third method of proving
actionability: method (2)(b) continuing likelihood of
recurrence.159
159
Because Plaintiffs do not claim a continuing likelihood
of recurrence for purposes of actionability, the Court declines to
address in detail this method of proving actionability. However,
the Court does find that the preponderance of the credible
evidence does not support such a finding. The number of Events
and Deviations does not alone prove a likelihood of recurring
violations. See supra ¶ II.7; infra ¶¶ 111.60-61. The testimony of
Keith Bowers, particularly his opinion that the Events and
Deviations had “common causes,” is not persuasive to prove the
same inadequately corrected source of trouble will cause
recurring violations of different parameters. See infra ¶ 111.61
n.224. There is no credible evidence that any of the Events or
362a
11. Title V permits incorporate numerous,
different regulatory requirements, and the Complex
is regulated by over 120,000 permit conditions.160
Plaintiffs must prove Exxon repeatedly violated an
emission standard or limitation, which includes a
standard, limitation, schedule, term, or condition
in one of Exxon’s Title V permits. See 42 U.S.C.
§ 7604(a)(1), (f)(4). Thus, it is insufficient to prove
violation of one standard or limitation followed by
violation of a different standard or limitation.
ExxonMobil Corp., ECF No. 126 at 13 (holding that
the CAA allows citizen suits for a wholly past
violation so long as there is a second violation of the
same emission standard or limitation) (citing Patton
v. Gen. Signal Corp., 984 F. Supp. 666, 672 (W.D.N.Y.
1997)) (citing Satterfield v. J.M Huber Corp., 888 F.
Supp. 1561, 1564-65 (N.D. Ga. 1994)). Similarly, it is
Deviations resulted from the same root cause. Infra ¶ III.61.
Accordingly, none of the Events or Deviations are actionable due
to a continuing likelihood of recurrence.
Exxon contends that to be actionable, the law requires the
violations to have involved the same equipment, the same
emissions point, and the same root cause. Such considerations
may be applicable to one way to prove actionability: method
(2)(b) continuing likelihood of recurrence, particularly method
(2)(b)(ii) likelihood that the same inadequately corrected source
of trouble will cause recurring violations of one or more different
parameters. However, such considerations are not required to
prove actionability the other two ways: method (1) repeated
violation of the same emission standard or limitation precomplaint, or method (2)(a) violation of the same emission
standard or limitation both before and after the complaint. For
additional background on why violations are not required to
have involved the same equipment, the same emissions point,
and the same root cause to be actionable, see ExxonMobil Corp.,
ECF No. 126 at 11-13.
160
Supra ¶ II.4.
363a
insufficient to prove repeated violation a Title V
permit, without showing which specific standard,
limitation, schedule, term, or condition in the Title V
permit was repeatedly violated.
12. As evidentiary support for the actionability of
the alleged violations in each count of their complaint,
Plaintiffs cite to the stipulated spreadsheets of Events
and Deviations;161 spreadsheets created by Plaintiffs
that correspond to the stipulated spreadsheets, the
only difference being a column added containing
Plaintiffs’ “number of days of violation” calculations;
and tables that tally the alleged number of days of
pre-complaint and post-complaint violations from
the aforementioned spreadsheets.162 The Court
addresses each count of Plaintiffs’ complaint in turn.
a. Count I
1. Special conditions 38 and 39 are standards
or limitations within the meaning of the
CAA
13. Plaintiffs contend the language in flexible
permit 18287’s special conditions 39 and 39 stating
upset emissions are “not authorized” is a standard or
limitation under the CAA. Exxon contends that
special conditions 38 and 39 are not standards or
limitations under the CAA because the term “not
authorized” exempts upset emissions from the permit.
14. The Court’s initial opinion found Plaintiffs
failed to provide corroborating evidence of violations
161
Plaintiffs’ Exhibits 1A-7E; see supra ¶ II.5. These
stipulated spreadsheets span hundreds of pages and contain
thousands of rows of alleged violations. The Court has reviewed
the details of all these spreadsheets.
162
Plaintiffs’ Exhibits 9-15.
364a
of special conditions 38 and 39 because the evidence
provided in support of Count I failed to specify which
standards and limitations were allegedly violated. To
the extent Plaintiffs did allege a violation of air
containment conditions or limitations, the Court
found the evidence did not prove a repeated violation
of the same, specific limitation. On appeal, the Circuit
held the Court conflated its analysis of Count I with
the alleged MAERT limitation violations in Count II.
As a matter of law, the Circuit held Count I
sufficiently alleged an alternate theory from Count II,
that every emissions event at the refinery constitutes
a violation of the “no upset emissions” provision in
special conditions 38 and 39. The Court’s judgment on
Count I was vacated and remanded. The Circuit
determined the Court “appl[ied] the wrong law to the
events set forth” by using the incorrect permit
provisions in its analysis. The Court, therefore, must
in the first instance examine whether violations of
special conditions 38 and 39 are actionable under the
CAA, and if so, what the statutory scope of liability is
for each upset event.163
163
The Fifth Circuit remanded the case because it
determined the Court applied the wrong law. The Court
acknowledged in its original opinion (as did the Fifth Circuit
opinion) that it did not reach the legal question of whether any
violation was actionable under the CAA. Instead, the Court had
determined it did not need to address that legal question
because, even if the emission events were actionable under the
CAA, Plaintiffs did not meet their burden of proof. Exxon
contends that because the Fifth Circuit only remanded to this
Court with instructions to treat Count I as alleging violations of
special conditions 38 and 39, and not MAERT violations, any
language in the opinion pertaining to the validity of Exxon’s
theory that the permits do not govern upset emissions is not
binding on remand. To the extent Exxon is correct-that any
365a
15. The Court first turns to whether special
conditions 38 and 39 are an “emission standard or
limitation” within the meaning of CAA. An “emission
standard or limitation” is defined as “any standard,
limitation or schedule established under any permit
issued pursuant to subchapter V of this chapter or
under any applicable State implementation plan
approved by the Administrator, any permit term or
condition, and any requirement to obtain a permit as
a condition of operations.” 42 U.S.C. § 7604(f)(4).
Permit 18287 is a Title V permit within the meaning
of the CAA.164 Therefore, liability turns on whether
the “not authorized” language in special conditions 38
and 39 is a limitation in the permit or an exemption
from the permit.
16. On its face, the language in special conditions
38 and 39 is a limitation within the meaning of the
CAA. The relevant provision in the special conditions
states: “This permit does not authorize upset
emissions, emissions from maintenance activities
that occur as a result of upsets, or any unscheduled/
unplanned emissions associated with an upset. Upset
emissions are not authorized, including situations
where that upset is within the flexible permit
discussion by the Fifth Circuit pertaining to Exxon’s argument
that upset emissions are not governed by permits is dicta-the
Court notes that it has independently undertaken an analysis of
the argument. The Court (as addressed in detail below) agrees
with the Fifth Circuit’s analysis of Exxon’s argument. As such,
the Court finds it not necessary to address which portions of the
Fifth Circuit’s opinion as to Count I may be dicta, and therefore,
not binding on the Court on remand.
164
Title V permit 01229 incorporates permit 18287.
366a
emission cap or an individual emissions limit.”165 The
term “not authorized” cannot be interpreted in
isolation from the surrounding text. The modifying
language within the text, that this provision applies
even when an upset is “within the flexible permit
emission cap or an individual emissions limit,”
clarifies any ambiguity as to whether the term “not
authorized” should be interpreted as a limitation.
Rather than exempting upset emissions from the
permit, the terminology provides a further limitation
on standards and limitations found elsewhere in the
permit.
17. Exxon’s contention the phrasing of general
condition 15 indicates that each special condition
would need to explicitly state failure to comply with a
limit in a permit is a “violation” where an emission is
“not authorized” is unavailing. General condition 15
states: “The permit holder shall comply with all the
requirements of this permit. Emissions that exceed
the limits of this permit are not authorized and are
violations of this permit.”166 The phrase “are not
authorized and are violations of the permit” modifies
the first part of the sentence “[e]missions that exceed
the limits of this permit.” The “not authorized”
terminology from special condition 38 and 39 does not
parallel the modifying “not authorized and ...
violations of the permit” language in general
condition 15, such that the term should not be
interpreted as violations unless explicitly deemed
such. Special conditions 38 and 39’s language is best
165
Plaintiffs’ Exhibit 176, Special Condition ¶¶ 38, 39
(emphasis added).
166
Plaintiffs’ Exhibit 176, General Condition ¶ 15
(emphasis added).
367a
classified as instead defining when an upset event
“exceeds the limits of this permit.” As discussed
above, by the special conditions’ terms, any upset
emission-even one within the flexible permit emission
cap or an individual emissions limit-exceeds the
limits of permit 18287.
18. The cases Exxon cites in support of holding
that special conditions 38 and 39 exempt upset
emissions from the permit are inapposite. The
analysis of the distinction between “authorizing” and
“prohibiting” an event in Association of Civilian
Technicians v. FLRA, 269 F.3d 1112, 1116 (D.C. Cir.
2001), turned on an agency’s reliance on a nonapplicable statute to interpret a collective bargaining
provision and its interpretation that the lack of
authorization in that inapplicable statute prohibited
an expenditure. The statutory provision at issue did
not use the term “not authorized.” Id. As such, the
D.C. Circuit was not even interpreting the term “not
authorized” and differentiating the term from
“prohibiting”; any discussion of a lack of authorization
merely pertained to the general principle that an
expenditure is not authorized unless affirmatively
recognized by a law or regulation. Id. The special
conditions at issue here tum on the definition of the
explicit term “not authorized.” Cabazon Band of
Mission Indians v. Wilson, 37 F.3d 430, 433 (9th Cir.
1994), involved a statute that did not confer authority
to tax, but neither did the statute prohibit taxation if
another source of authority for taxing power could be
shown. Here, Exxon has not directed the Court to an
alternate authority source that authorizes upset
368a
emissions.167 Additionally, in context of the entire
text of the provision at issue in special conditions 38
and 39, the term “not authorized” on its face prohibits
upset emissions.
19. Nor does Exxon find support for its position m
the regulatory framework. Special conditions 38 and
39 pertain to “upset emissions.” As permit 18287 does
not define the term, the Court turns to the definition
found in Texas’s regulatory framework. An “upset
event” is defined under Texas law as “[a]n unplanned
and unavoidable breakdown or excursion of a process
or operation that results in unauthorized emissions
....”168 30 Tex. Admin. Code § 101.1 (110).
“[U]nauthorized
emissions”
are
defined
as
“[e]missions of any air contaminant except water,
nitrogen, ethane, noble gases, hydrogen, and oxygen
that exceed any air emission limitation in a permit,
rule, or order of the commission or as authorized by
Texas Health and Safety Code, § 382.0518(g).” Id.
§ 101.1(108). The regulations themselves refer back to
the limitations set out in a permit. Exxon has not
pointed the Court to a regulation that governs upset
167
168
Infra ¶¶ III.19-20.
In full, the definition states: “Upset event—An
unplanned and unavoidable breakdown or excursion of a process
or operation that results in unauthorized emissions. A
maintenance, startup, or shutdown activity that was reported
under § 101.211 of this title (relating to Scheduled Maintenance,
Startup, and Shutdown Reporting and Recordkeeping
Requirements), but had emissions that exceeded the reported
amount by more than a reportable quantity due to an unplanned
and unavoidable breakdown or excursion of a process or
operation is an upset event.” 30 Tex. Admin. Code § 101.1(110).
369a
emissions that would potentially conflict with special
conditions 38 and 39.169
20. The Court has not found any ambiguity as to
whether the term “not authorized” in special
conditions 38 and 39 pertains to a limitation. The
Court found the language in the relevant special
conditions is plain on its face and is a limitation
within the meaning of the CAA. Even if there were to
be ambiguity, however, the evidence Exxon cites from
the TCEQ and the purported applicability of Auer
deference is unpersuasive. The Agreed Order states:
“Emission events and MSS activities, other than
planned MSS activities, are not subject to permitting
under 30 Tex. Admin. Code Chapters 106 or 116, and
are regulated under 30 Tex. Admin. Code Chapter 101
and Tex. Health & Safety Code§§ 382.0215, 382.0216
and 382.085.”170 Chapter 106 pertains to permits by
rule. See 30 Tex. Admin. Code § 106.4. Chapter 116
pertains to permitting for new construction or
modification. See 30 Tex. Admin. Code § 116.10. The
Agreed Order is best interpreted as stating Exxon
cannot receive a permit allowing emissions events or
unplanned MSS activities by rule or during new
construction and modification. Emissions events and
unplanned MSS activity is not exempted from a
permit; instead, Exxon is prohibited from receiving a
169
30 Texas Administrative Code § 101.1 merely sets out
the definitions for terms used in air quality rules; section 101.1
does not provide any affirmative regulation pertaining to those
definitions. Even if Exxon were able to direct the Court to such
a provision, general provision 13 in permit 18287 states the
special conditions in the permit may be more restrictive than the
requirement of Title 30 of the Texas Administrative Code. See
Plaintiffs’ Exhibit 176, General Condition ¶ 13.
170
Defendants’ Exhibit 222, Finding ¶ I.2.
370a
permit allowing emissions events and unplanned
MSS activities pursuant to those chapters. The
Agreed Order prohibits issuing a permit that allows
emissions events and unplanned MSS activities, and
states the events and activities are additionally
subject to the cited regulatory schemes. A permit
could still include a provision that prohibits emissions
events and unplanned MSS activities and would be
consistent with the Agreed Order.
22. Exxon further contends the trial evidence
establishes agency regulatory policy considers special
conditions 38 and 39 not to be stand-alone emissions
standards or limitations, and the agency’s treatment
of these special conditions is entitled to Auer
deference.171 At trial, Karen Olson (“Olson”), a former
TCEQ permit reviewer and manager, testified that
special conditions 38 and 39, “define what is within
the scope of the permit and what is not within the
scope of the permit as handled through Chapter
101.”172 However, there was no testimony that
specifically stated whether upset emissions were
within the scope of the permit or not.173 Even if the
171 Auer deference is the proposition that, where an
agency’s regulation is ambiguous, courts “defer to an agency’s
interpretation of its regulations, even in a legal brief, unless the
interpretation is plainly erroneous or inconsistent with the
regulations or there is any other reason to suspect that the
interpretation does not reflect the agency’s fair and considered
judgment on the matter in question.” Talk Am., Inc. v. Mich. Bell
Tel. Co., 546 U.S. 50, 59 (2011) (internal quotations omitted).
172
173
Trial Transcript, 11-149:5 to 150:15.
Further, the Court sustained Plaintiffs’ objection to
Exxon’s tender of Olson for the purpose of “establish[ing] the
TCEQ’s understanding of the permit, the regulations that apply
to the permit, and how the TCEQ views permit and permitting
371a
Court were to interpret Olson’s testimony as stating
the agency did not consider special conditions 38 and
39 as stand-alone limitations, Auer deference would
not apply to that testimony. See Paralyzed Veterans of
Am. V. D.C. Arena L.P., 117 F.3d 579, 587 (D.C. Cir.
1997), abrogated on other grounds by Perez v. Mortg.
Bankers Ass’n, 135 S. Ct. 1199 (2015) (“A speech of a
mid-level official of an agency, however, is not the sort
of ‘fair and considered judgment’that can be thought
of as an authoritative departmental position.”).
Olson’s testimony would be the equivalent of a speech
by a mid-level official in Paralyzed Veterans, which
the Court would not-without more-ascribe authority
to as a departmental position. Auer deference,
therefore, is inapplicable. Accordingly, the Court
finds that special conditions 38 and 39 are standards
and limitations within the CAA.
2. Violations of Special Conditions 38 and 39
23. Plaintiffs contend that each pollutant emitted
during an upset event is a separate violation. Exxon
does not address this contention. The Court did not
reach the question in its initial opinion as to whether
violations are determined per upset event or on a
contaminant-by-contaminant basis.
24. Interpretations of the CWA provision are
instructive when analyzing a CAA provision. See
United States v. Anthony Dell’Aquilla, Enters. &
Subsidiaries, 150 F.3d 329, 338 n.9 (3d Cir. 1998). The
CWA utilizes a pollutant-by-pollutant analysis in
determining violations. See Texaco, 2 F.3d 493, 49899 (discussing that one unresolved source of trouble
issues, and how they interpreted those rules.” Trial Transcript,
11-127:8 to 128:5.
372a
can result in violations of multiple parameters, all of
which are actionable in citizen’s suit). Additionally,
the language of special conditions 38 and 39 refers to
“upset emissions” not “upset events.”174 As discussed
above, under Texas’s regulatory framework “upset
events” are defined as resulting in “unauthorized
emissions.”175 The Court determines that the
statutory framework and language of the special
conditions indicate a pollutant-by-pollutant approach
should be adopted here. Accordingly, the Court will
count each emission of a separate pollutant during an
upset event as an individual violation.
25. The evidentiary support cited for violations of
Count I is Plaintiffs Exhibits lA and lB (stipulated
spreadsheets), 587 and 588 (Plaintiffs’ corresponding
spreadsheets), and 9 (tallied table).176 These exhibits
all reference permit 18287. The information
contained within the spreadsheets pertaining to the
date, time, duration of release, and amount released
is undisputed. The Court found that pursuant to
special conditions 38 and 39 these emissions were not
authorized in any amount, even if the emissions fell
within an emissions cap or individual emission
174
Plaintiffs’ Exhibit 176, Special Condition ¶¶ 38, 39.
175
Supra ¶ III.19.
176
On remand, Plaintiffs submitted resorted versions of
Plaintiffs’ Exhibits 587-94. Description of Re-Sorted Versions of
PlaintiffS’ Exhibits 587-594, Document No. 253, Exhibit 3. The
resorted versions show how repeated violations of specific
emissions were identified and calculated, as well as grouped by
duration. The spreadsheets were submitted to the Court in
native format. The Court has reviewed the resorted exhibits and
finds they are consistent with the spreadsheets initially
submitted at trial.
373a
limit.177 Therefore, the hourly emission limit is zero.
Plaintiffs spreadsheets comport with the Court’s
analysis of special conditions 38 and 39.
26. Each day of violation is subject to a civil
penalty under the CAA. See 42 U.S.C. § 7413(b); 40
C.F.R § 19.4. Neither party has directed the Court to
a definition within a statute or permit for the term
“day.” The Court adopts the definition of “day” as a
twenty-four hour period, as has been adopted in the
context of the CWA. See San Francisco Baykeeper v.
W Bay Sanitary Dist., 791 F. Supp. 2d 719, 762 (N.D.
Cal. 2011) (noting the twenty-four hour period
calculation, as opposed to a calendar day definition,
was more favorable to the defendant, the non-moving
party). As the Court found each separate emission of
a pollutant during an upset event is a separate
violation, to the extent multiple violations by the
same pollutant occur on the same calendar day, those
violations are counted as separate violations.
However, a continuous violation of pollutant resulting
from one upset event utilizes the twenty-four hour
period definition in calculating days of violations.
27. The Court has reviewed the spreadsheets and
tallied table submitted by Plaintiffs relevant to Count
I and agrees with the methodology used in calculating
the total violations per pollutant listed therein. The
evidence shows the refinery emitted twenty-four
177
To the extent the spreadsheets reference MAERT
limits the Court will consider those violations in the alternative
under Count II. The Court will analyze permit 18287 violations
individually under each count. To the extent Counts I and II
overlap-and as consistent with the Circuit’s instructions on
remand-the Court will not double count any violations under
Counts I and II in calculating the penalties.
374a
different pollutants in continuing or repeated
violations totaling 10,583 days of violations.
Accordingly, the Court finds under Count I, Plaintiffs
have proven 10,583 days of repeated or continued
violations of special conditions 38 and 39 by a
preponderance of the evidence.
b. Count II
28. Plaintiffs contend-given the Fifth Circuit’s
holding that even if the numerical limits per pollutant
within a permit vary due to amendment or renewal,
exceeding those differing limits qualifies as a
violation of the same permit-the violations in
Count II are undisputed. Exxon contends it merely
stipulated the data in the evidentiary spreadsheets
supporting Count II was correct, but did not concede
that entries on those spreadsheets listing the
emission limit as zero or not authorized were
violations.
29. The Court’s initial opinion found Plaintiffs’
spreadsheets supporting their allegations of
violations of the hourly MAERT limits needed to
reference and provide corroborating evidence of
repeated or continuing violations of a specific permit
condition. Additionally, the Court found where the
numeric limit for a specific permit varied, each
numeric violation constituted a separate permit for
purposes of showing repeated violations. Only as to
the chemical plant permits, did the Court find the
spreadsheets corroborated repeated violations of the
same, specific hourly emission limitation.178 The
178
The Court found sixteen violations of Count II utilizing
that interpretation of violating the same, specific permit
375a
Fifth Circuit held the Court erred in treating
variations in numerical limits for a pollutant within a
permit due to amendment or renewal as different
conditions or limitations. “[W]ith respect to specific
limits on particular pollutants from particular
sources that change numerically due to amendments
or renewal ... such limits constitute the same
‘standards or limitations’ for purposes of determining
whether violations are ‘repeated’ or ‘ongoing’ under
the CAA citizen suit provision.” Env’t Tex. Citizen
Lobby v. ExxonMobil Corp., 824 F.3d 507, 519 (5th
Cir. 2016) (citing 42 U.S.C. §§ 7604(a)(1) & (f)(4)). The
Court was instructed on remand to calculate the
correct number of actionable Count II violations using
the correct definition of the “same standard or
limitation.”
30. Exxon contends the Fifth Circuit only vacated
in part the Court’s initial conclusions of law for Count
II. Undisturbed by the Circuit’s opinion, Exxon
argues, are the Court’s initial conclusions of
law paragraphs 19, 22, and 25. These paragraphs
originally found that where certain emissions were
listed as “not specifically authorized” or authorized by
the particular permit, the spreadsheets did not
corroborate violations of “specific conditions.” As
such, Exxon contends it is free on remand to challenge
the sufficiency of entries on the spreadsheets that use
the notations “not specifically authorized” or an
hourly emissions limit rate of zero, to prove repeated
violations. Exxon is mistaken. Footnote five of the
Circuit’s opinion forecloses any argument on remand
as to whether these entries constitute violations. In
condition. See Findings of Fact and Conclusions of Law,
Document No. 225, Appendix.
376a
that note, the Circuit addresses Exxon’s argument on
appeal “that it ‘never admitted’ any entries under
Count II were violations, ‘and the district court
plainly understood that position since it did not find
liability on all of the allegations in’ that count.” Env’t
Tex., 824 F.3d at 518 n.5. Holding that Exxon
conceded that filing a reportable STEERS event is a
violation, the Circuit explained this Court’s finding of
no liability on some events did not necessitate the
Court having adopted Exxon’s position. Id. Because
the CAA requires proving repeated violations, the
existence of a single reported violation does not create
per se liability under the CAA. Id. The Court noted in
its initial findings (which the Circuit’s opinion cited)
that Exxon “[did] not dispute that the alleged
violations under Count II ... of Plaintiffs complaint
constitute violations of an emission standard or
limitation.”179 The Circuit’s opinion did not find any
error with the finding that the Count II violations
were undisputed. Therefore, the Court declines on
remand to revisit that conclusion. Accordingly, the
Court finds, as to Exxon’s contention it is entitled to
contest on remand whether entries for which the limit
is listed as zero or not specifically authorized are
violations, the Courts initial findings forecloses that
argument on remand.180
31. The Circuit’s analysis of Counts III and IV is
instructive to the extent Exxon contends the Court’s
initial conclusion, that entries with limitations listed
179
Findings of Fact and Conclusions of Law, Document
No. 225, 111.9, 111.9 n.153.
180 Supra ¶ III.9 n.153; Findings of Fact & Conclusions of
Law, Document No. 225, ¶ III.9 n.153.
377a
as “not specifically authorized” or zero were not
corroborated and therefore not proven, was not
vacated. The Circuit interpreted the Court’s initial
conclusions of law paragraphs 19, 22, and 25 as not
being corroborated as to the “same limit”-not that an
entry listing the limit as “not authorized” or zero
required additional corroboration. Env’t Tex., 824
F.3d at 521. The term corroboration referred not to
additional evidentiary proof that an entry was a
violation, but instead to whether such a violation was
repeated or continuous such that it would be
actionable under the CAA.181 Accordingly, the Court
181
To the extent the Court’s initial conclusions could be
interpreted to support Exxon’s theory, the Court finds any such
interpretation is foreclosed by the Fifth Circuit’s opinion.
Specifically, the opinion states: “[T]he district court clearly
assumed each Count II event counted by Plaintiffs was
undisputed as a violation because it limited its focus in its
findings of fact and conclusions of law to whether identical
numerical permit limits were present in Plaintiffs’ tables such
that repeated or ongoing violations of the same limits were
‘corroborated.’” Env’t Tex., 824 F.3d at 524. Whether this
characterization of the Court’s initial conclusions simplified any
nuances in that opinion is immaterial on remand. The Circuit
vacated Count II in its entirety, not in part. Exxon is attempting
on remand to assert arguments the Circuit specifically found
were waived. In repeated footnotes, in regards to Count II, the
Circuit stated: “Exxon never contested those emissions as
violations below, and the district court rightly understood there
was no dispute on the point.” Id. at 524 n. 9; see also, id. at 518
n.5 (noting Exxon did not contest on the record whether “specific
entries in which the emission quantity-standing alone-would
appear to fall below the applicable listed threshold were not
shown to be violative of MAERT limits”). The Court interprets
these notes as instructing it to consider each entry on Count II
as an undisputed violation and that any interpretation
otherwise would be error. On remand, the Circuit did give Exxon
leave to contest whether an entry on the spreadsheet was
378a
finds as consistent with the Circuit’s opinion, that
where a limit is listed as zero or “not authorized,” that
term refers to a limitation within the CAA and any
entry on the spreadsheet listed as such is a violation.
In calculated the number of violations, the Court
below will note the permit conditions the Plaintiffs
allege were violated and the spreadsheets providing
the evidentiary support documenting those
violations.182
32. General condition 8 and special condition 1 of
each of Exxon’s state-issued permits identify a
MAERT. For each pollutant, the MAERT identifies
the pollution source, termed the “emission point.”
Flexible permits contain a single hourly emission
limit for a pollutant-a cap-governing all sources in
aggregate. 30 Tex. Admin. Code § 116.715(c)(7).
attributable to planned MSS activity. Id. at 519. In other words,
Exxon was free on remand to direct the Court to which entries
were attributable to authorized MSS activity (essentially to
assert which violations were subject to affirmative defenses).
Violations that result from planned MSS activity are an
affirmative defense pursuant to 30 Texas Administrative Code§
101.222. Except to the extent Exxon has addressed MSS activity
in its briefing on the affirmative defenses, Exxon has not
otherwise directed the Court to which violations could be
attributable to planned MSS activity. Accordingly, the Court on
this count will treat all violations as uncontested and then
determine when it addresses Exxon’s affirmative defenses
whether all the repeated violations provide a basis for liability
under the CAA.
182
As noted in the previous footnote, the following
subsections calculate the repeated violations in total. The Court
will address in the section on affirmative defenses whether all
the repeated violations proven in Count II give rise to liability
under the CAA prior to calculating the base number used in
determining the amount of a penalty to assess.
379a
Standard permit MAERTs list the hourly emission
limit per pollutant for each source.183 “An exceedance
of the flexible permit emission cap(s) or individual
emission limitations is a violation of the permit.” Id.
§ 116.715(b). MAERTs, and any other special
conditions listed in a permit, govern the emission
limits for flexible permits. Id. § 116.715(c)(7) (stating
only those sources of emissions and air contaminants
listed in the table are permitted). The corollary of the
MAERT defining the universe of sources and
contaminants a permit allows within the limits set
forth is, that ifan emission is not listed in the MAERT,
it is not allowed by permit and not authorized.
Therefore, the effective limit for that unauthorized
contaminant is zero.
33. Plaintiffs submitted spreadsheets in native
format sorted based on the information provided in
the stipulated spreadsheets. The Court has reviewed
Plaintiffs’ spreadsheets and determined that
violations are properly counted, based on the above
findings, where the emissions rate is “not specifically
authorized,” zero, or where portions of an emission is
authorized, but the emission exceeds the applicable
pounds/hour rate limit, without any additional
corroboration needed. As with Count I, the Court
concludes the use of a twenty-four hour period, as
opposed to a calendar day, to calculate days of
violation is appropriate.
i. Refinery Flexible Permit 18287184
183
184
See e.g., Plaintiffs’ Exhibit 139 at ETSC 076146-47.
Count II violations involving 18287 are calculated here
without respect to the Court’s findings on Count I. The Count II
violations are to an extent duplicative of the Count I violations.
380a
34. Refinery Flexible Permit 18287 provides for
MAERT limitations in general conditions 8 and 15,
special condition 1, and the table set forth in
accordance with those conditions.185 General
condition 8 provides, in relevant part, that “[f]lexible
permitted sources are limited to the emission limits
and other conditions specified in the table attached to
the flexible permit.”186 General condition 15 requires
the permit holder to comply with all requirements
of the permit, and states emissions exceeding the
limits thereof are not authorized and are permit
violations.187 Special condition 1 provides that “[t]his
permit covers only those emissions from those points
listed in the attached table entitled ‘Emission
Sources—Emission Caps,’ and the facilities covered
by this permit are authorized to emit to the emission
rate limits and other conditions specified in this
permit.”188
35. The evidentiary support cited for MAERT
violations of permit 18287 is Plaintiffs Exhibits 2A
and 2B (stipulated spreadsheets), 589 and 590
(Plaintiffs’ corresponding spreadsheets), and 10
(tallied table). The Court has reviewed the
spreadsheets and tallied table submitted by Plaintiffs
relevant to Count II, permit 18287, and agrees with
the methodology used in calculating the total
In calculating the amount of a penalty to assess, the Court will
use the violations in Count I, as special conditions 38 and 39 are
more restrictive than the MAERT limitations in Count II, and
encompass the Count II violations.
185
Plaintiffs’ Exhibit 176 at ETSC 077534.
186
Plaintiffs’ Exhibit 176, General Condition ¶ 8.
187
Plaintiffs’ Exhibit 176, General Condition ¶ 15.
188
Plaintiffs’Exhibit 176, Special Condition ¶ 1.
381a
violations per pollutant listed therein. The evidence
shows the refinery emitted twenty-four different
pollutants in continuing or repeated violations
totaling 7,920 days of violations. Accordingly, the
Court finds as to permit 18287, Plaintiffs have proven
7,920 days of repeated or continued violations of
MAERT limits by a preponderance of the evidence.189
ii. Olefins Plant Flexible Permit 3452
36. Olefins Plant Flexible Permit 3452 provides for
MAERT limitations in general condition 8, special
condition 1, and the table set forth in accordance with
those conditions.190 General condition 8 provides,
that “[t]he total emissions of air contaminants from
any of the sources of emissions must not exceed the
values stated on the table attached to the permit
entitled ‘Emission Sources—Maximum Allowable
Emission Rates.’”191 Special condition 1 provides that
“[t]his permit authorizes emissions only from those
points listed in the attached table entitled ‘Emission
Points, Emission Caps,’ and Individual Emission
Limitations.”192
37. The evidentiary support cited for MAERT
violations of permit 3452 is Plaintiffs Exhibits 2C and
2D (stipulated spreadsheets), 591 and 592 (Plaintiffs’
corresponding spreadsheets), and 10 (tallied table).
The Court has reviewed the spreadsheets and tallied
table submitted by Plaintiffs relevant to Count II,
189
The Court finds the Count II violations as to permit
18287 in the alternative to any violations found as to that permit
in Count I.
190
Plaintiffs’ Exhibit 132 at ETSC 076033 et seq.
191
Plaintiffs’ Exhibit 133, General Condition ¶ 8.
192
Plaintiffs’ Exhibit 133, Special Condition ¶ 1.
382a
permit 3425, and agrees with the methodology used
in calculating the total violations per pollutant listed
therein. The evidence shows the plant emitted
fourteen different pollutants in continuing or
repeated violations totaling 4,038 days of violations.
Accordingly, the Court finds as to permit 3452,
Plaintiffs have proven 4,038 days of repeated or
continued violations of MAERT limits by a
preponderance of the evidence.
iii. Chemical Plant Permits: 4600 (Flare
Stack 23), 5259 (Furnaces), 20211 (Flare
Stack 12, Butyl Units, Aromatics Units),
36476 (Flare 28, Syngas Fugitives), and
No Permit Authorization193
38. The Chemical Plant permits provide for
MAERT limitations in general condition 8, special
condition 1, and the tables set forth in accordance
with the conditions of permits 4600, 5259, 20211,
36476. General condition 8 of permits 4600, 5259, and
36476 provides, that “[t]he total emissions of air
contaminants from any of the sources of emissions
must not exceed the values stated on the table
attached to the permit entitled ‘Emission Sources—
Maximum Allowable Emission Rates.’”194 General
193
The Court in its initial findings of fact and conclusions
of law did find repeated violations of the Chemical Plant permits
on Count II. However, as the Circuit determined the Court used
an erroneous definition of the term “same permit,” the Court
reanalyzes the Chemical Plant permits anew using the correct
standard. This necessitates entering entirely new findings as to
these permits.
194
Plaintiffs’ Exhibit 140, General Condition ¶ 8;
Plaintiffs’ Exhibit 144, General 8; Plaintiffs’ Exhibit 139,
General Condition Condition ¶ 8.
383a
condition 8 of permit 20211 provides, in relevant part,
that “[f]lexible permitted sources are limited to the
emission limits and other conditions specified in the
table attached to the flexible permit.”195 Special
condition 1 of permits 4600 and 36476 provides that
“[t]his permit authorizes emissions only from those
points listed in the attached table entitled ‘Emission
Sources—Maximum Allowable Emission Rates’ and
facilities covered by this permit are authorized to emit
subject to the emission rate limits on that table and
other operating conditions specified in this permit.”196
Special condition 1 of permit 5259 states that “[t]his
permit covers only those sources of emissions listed in
the attached table entitled ‘Emission Sources—
Maximum Allowable Emission Rates,’ and those
sources are limited to the emission limits and other
conditions specified in the attached table.”197 Special
condition of permit 20211 provides, in relevant part,
that “the facilities covered by this permit are
authorized to emit subject to the emission rate limits
on the maximum allowable emission rates table
195
Plaintiffs’ Exhibit 123, General Condition ¶ 8.
196
Plaintiffs’ Exhibit 140, Special Condition ¶ 1; Plaintiff’s
Exhibit 139, Special Condition 139. The MAERT table for permit
4600 is located at Plaintiffs’ Exhibit 140 at ETSC 76161 et seq.
The MAERT table for permit 36476 is located at Plaintiffs’
Exhibit 140 at 076146 et seq.
197
Plaintiffs’ Exhibit 144, Special Condition ¶ 1. The
MAERT table for permit 5259 is located at Plaintiffs’ Exhibit 140
at ETSC 76187.
384a
(MAERT) table and other requirements specified in
Special Condition Nos. 54 through 68.”198
39. The evidentiary support cited for MAERT
violations of the Chemical Plant permits is Plaintiffs
Exhibits 2E and 2F (stipulated spreadsheets), 593
and 594 (Plaintiffs’ corresponding spreadsheets), and
10 (tallied table). The Court has reviewed the
spreadsheets and tallied table submitted by Plaintiffs
relevant to Count II, chemical plant permits, and
agrees with the methodology used in calculating the
total violations per pollutant listed therein. The
evidence shows the plant emitted different pollutants
in continuing or repeated violations totaling 1,671
days of violations. Accordingly, the Court finds as to
the Chemical Plant permits, Plaintiffs have proven
1,671 days of repeated or continued violations of
MAERT limits by a preponderance of the evidence.
c. Count III
40. Under Count III, Plaintiffs allege thirteen
violations of the rule that limits plant-wide emissions
of highly reactive volatile organic compounds to no
more than 1,200 pounds per hour (the “HRVOC
Rule”).199 The evidentiary support cited to is
Plaintiffs’ Exhibits 3 (stipulated spreadsheet), 595
(Plaintiffs’ corresponding spreadsheet), and 11
198
Plaintiffs’ Exhibit 120, Special Condition ¶ 1. The
MAERT table for permit 20211 is located at Plaintiff’s Exhibit
120 at 075736 et seq.
199
Plaintiffs’ Proposed Findings of Fact and Conclusions
of Law, Document No. 218 at 100.
385a
(tallied table). Plaintiffs divided this count by plant
for the purpose of proving repeated violations.200
41. The Court in its initial opinion determined that
Plaintiffs provided corroborating evidence sufficient
to prove nine violations. The Fifth Circuit held the
Court erred in requiring corroboration of the Count
III violations, as the Court had expressly found the
violations under Counts II, III, IV, and V were
undisputed. On remand, the Court was instructed to
include in its tally of Count III violations, those
violations which it had previously deemed
uncorroborated.
42. For each plant, the Court finds that Plaintiffs’
Exhibit 3 establishes either at least two violations of
the HRVOC rule prior to, or at least one violation
proceeding and following, the complaint’s filing. As
the Court found that violations in Count III were
undisputed, and the Circuit held that no
corroboration of the undisputed violations was
required, all of the alleged violations are actionable.
Accordingly, the Court finds as to the HRVOC rule
violations, Plaintiffs have proven thirteen repeated or
continued violations, totaling eighteen days of
violation, by a preponderance of the evidence.201
d. Count IV
43. Under Count IV, Plaintiffs allege forty-two
violations of the rule that prohibits visible emission
from flares except for periods not to exceed five
200
Plaintiffs’ Exhibit 11. Only violations at the olefins and
chemical plant are listed; no violations at the refinery are listed.
201 As with the prior counts, the Court will later address
the applicability of any affirmative defenses to the Count III
violations.
386a
minutes in two consecutive hours (the “Smoking
Flares Rule”).202 The evidentiary support cited to is
Plaintiffs’ Exhibits 4 (stipulated spreadsheet), 596
(Plaintiffs’ corresponding spreadsheet), and 12
(tallied table). Plaintiffs divided this count by plant
for the purpose of proving repeated violations.
44. The Court in its initial opinion determined that
Plaintiffs provided corroborating evidence sufficient
to prove twenty-eight violations. The Fifth Circuit
held the Court erred in requiring corroboration of the
Count IV violations, as the Court had expressly found
the violations under Counts II, III, IV, and V were
undisputed. On remand, the Court was instructed to
include in its tally of Count IV violations, those
violations which it had previously deemed
uncorroborated.
45. For each plant, the Court finds that Plaintiffs’
Exhibit 4 establishes either at least two violations of
the Smoking Flare rule prior to, or at least one
violation proceeding and following, the complaint’s
filing. As the Court found that violations in Count IV
were undisputed, and the Circuit held that no
corroboration of the undisputed violations was
required, all of the alleged violations are actionable.
Accordingly, the Court finds as to the Smoking
Flare rule violations, Plaintiffs have proven forty-two
repeated or continued violations, totaling forty-four
202
Plaintiffs’ Proposed Findings of Fact and Conclusions
of Law, Document No. 218 at 101.
387a
days of violation, by a preponderance of the
evidence.203
e. Count V
46. Under Count V, Plaintiffs allege violations of
the rule that requires flares to operate with a pilot
flame present at all times (the “Pilot Flame Rule”).204
The evidentiary support cited to is Plaintiffs’
Exhibits 5 (stipulated spreadsheet), 597 (Plaintiffs’
corresponding spreadsheet), and 13 (tallied table).
Plaintiffs divided this count by plant for the purpose
of proving repeated violations.205 Violation of this rule
is corroborated by these spreadsheets for all of
the Events and Deviations counted by Plaintiffs as
at least one day of violation. The violations are
corroborated because the spreadsheets contain
verbiage that pilot outages occurred under one of
two “cause reported” columns. For example, for the
Event or Deviation starting March 25, 2010, the
spreadsheets report, “[h]igh winds extinguished flare
pilots.”206 For each plant, there are either (1) at least
two corroborated violations of the Pilot Flame Rule
that occurred before the complaint was filed, or (2)(a)
at least one corroborated violation of the Pilot Flame
Rule both before and after the complaint was filed.
Therefore, Plaintiffs have met their burden to prove
203
As with the prior counts, the Court will later address
the applicability of any affirmative defenses to the Count IV
violations.
204
Plaintiffs’ Proposed Findings of Fact and Conclusions
of Law, Document No. 218 at 101.
205
Plaintiffs’ Exhibit 13.
206
Plaintiffs’ Exhibits 5 at row 17, 597 at row 17.
388a
all of the alleged violations of the Flame Pilot Rule
under Count V are actionable.207
f. Count VI
47. Under Count VI, Plaintiffs allege fugitive
emissions are actionable. Specifically, Plaintiffs
contend violations of permits 18287, 3452, 20211,
28441, 36476, and 9571; general conditions 8 and
14115; special condition 1; and MAERT limits for
emissions of various air contaminants.208 Exxon
disputes that the events under Count VI constitute
violations of an emissions standard or limitation. The
evidentiary support cited to by Plaintiffs is Plaintiffs’
Exhibits 6 (stipulated spreadsheet), 598 (Plaintiffs’
corresponding spreadsheet), and 14 (tallied table). As
in Count I and parts of Count II, violation of the
aforementioned conditions cannot be corroborated by
these spreadsheets. The spreadsheets reference the
aforementioned permit numbers, such as 18287, in a
column entitled “plant (refinery/olefins/chemical);”209
however, listing a permit number associated with
plant does not mean that permit was violated.
Regardless, the spreadsheets do not appear to
reference any specific conditions of the permits.210
207
All the violations listed in Plaintiffs’ Exhibit 5 are
actionable. The Court is not required to revisit its methodology
in determining that all violations are actionable because the
Fifth Circuit did not address Count VI on appeal.
208
Plaintiffs’ Proposed Findings of Fact and Conclusions
of Law, Document No. 218 at 102; Plaintiffs’ Revised Proposed
Findings of Fact and Conclusions of Law, Document No. 222 at
58-59; Plaintiffs’ Exhibit 14 at 1.
209
Plaintiffs’ Exhibits 6 (capitalization omitted), 598
(capitalization omitted).
210
See Plaintiffs’ Exhibits 6, 598.
389a
The spreadsheets list emissions limits, but Plaintiffs
claim all emissions limits should be considered zero
under this Count, which conflicts with the limits
listed on the spreadsheets.211 At most, the
spreadsheets corroborate that fugitive emissions of
various contaminants occurred; however, the
spreadsheets do not corroborate violations of any
specific standards or limits of a Title V permit.
Further, Plaintiffs have not provided any other
persuasive evidence that the emissions listed in the
spreadsheets violate the Title V permit conditions or
limits referenced under this Count. For these reasons,
Plaintiffs have not met their burden to prove either
repeated violation pre-complaint or violation both
before and after the complaint of the same emission
standard or limitation under Count VI.212
g. Count VII213
48. Under Count VII, Plaintiffs allege Exxon’s
Deviations are actionable.214 Exxon disputes that the
Deviations under Count VII constitute violations of
an emissions standard or limitation. The CAA citizen
suit provision requires Exxon “to have violated ... or
to be in violation of ... an emission standard or
limitation.” 42 U.S.C. § 7604(a)(1). However, a
deviation is defined as “[a]ny indication of
211
Plaintiffs’ Exhibit 598.
212
The Court notes that Plaintiffs recognize violations
under Count VI overlap with violations under other counts.
213
The Fifth Circuit affirmed the Court’s judgment as to
Count VII, and the Court instructed the parties it would not
revisit its findings as to this Count on remand.
214
The evidentiary support cited to is Plaintiffs’ Exhibits
7A-7E
(stipulated
spreadsheets),
599-603
(Plaintiffs’
corresponding spreadsheets), and 15 (tallied tables).
390a
noncompliance with a term or condition of the
permit....” 30 Tex. Admin. Code§ 122.10(6) (emphasis
added).215 “A deviation is not always a violation....
Included in the meaning of deviation [is] ... [a]
situation where process or emissions control device
parameter values indicate that an emission limitation
or standard has not been met....” 40 C.P.R. §
71.6(a)(3)(iii)(C) (emphasis added). Plaintiffs have not
met their burden to show how, in light of these
provisions, the Deviations at issue in this case are
actual violations and not merely indications of
noncompliance. Accordingly, Plaintiffs have not met
their burden to prove any of the Deviations under
Count VII are actionable.
D. Affirmative Defenses
49. The Court addresses the applicability of
Exxon’s asserted affirmative defenses prior to
addressing the relief sought by Plaintiffs, because if
an affirmative defense is proven applicable to a
violation, the Court in its assessment of the penalty
factors will not consider that violation. In the initial
findings of fact and conclusions of law, the Court
declined to address Exxon’s affirmative defenses as it
had found no penalties or other relief warranted. In
vacating and remanding that judgment, the Fifth
Circuit recognized the Court would likely be called to
rule upon the applicability of the affirmative defenses
on remand. Exxon contends Hurricane Ike was an Act
of God that shields it from liability for emissions
violations occurring during the duration of Governor’s
proclamation and that it is entitled to affirmative
215 See also Trial Transcript at 10-203:3-13, 10-209:7-14
(discussing how deviations are indications of noncompliance
with a permit condition).
391a
defenses under 30 Texas Administrative Code
Chapter 101.222. Plaintiffs contend the defenses are
not available as a matter of law or are not supported
by sufficient proof.
1. Hurricane Ike Defenses
50. Exxon contends the Texas Governor’s
proclamation prior to Hurricane Ike’s landfall, and
the TCEQ’s guidance that the proclamation
abrogated a need to seek prior approval for
exceedance of emission limits directly related to the
hurricane response, precludes liability for ten
reportable events resulting violations. Plaintiffs
contend the CAA does not contain an Act of God
defense, and therefore, the defense is not available
because Exxon has not met its burden to show any
such provision was incorporated in Texas’s State
Implementation Plan (“SIP”).216
51. A state regulatory defense “must itself be
authorized or permitted by the SIP.” Sierra Club v.
Tenn. Valley Auth., 430 F.3d 1337, 1346-50 (11th Cir.
2005) (explaining why a state provision that provided
a defense that the “EPA has never sanctioned ... and
has yet to accept or reject [the defense] as a proposed
SIP revision” is inapplicable). Texas Water Code §
7.215 provides: “If a person can establish that an
event that would otherwise be a violation of a statute
within the commission’s jurisdiction or a rule adopted
or an order or a permit issued under such a statute
216
Exxon contends Plaintiffs did not previously raise the
argument that § 7.251 of the Texas Water Code is not included
in the Texas SIP. That is incorrect. See Plaintiff’s Revised
Proposed Findings of Fact and Conclusions of Law, Document
No. 218, ¶ 42.
392a
was caused solely by an act of God, war, strike, riot,
or other catastrophe, the event is not a violation of
that statute, rule, order, or permit.” Tex. Water
Code § 7.251 (enacted in 1997 and current through
the end of the 2015 Regular Session of the 84th
Legislature). Exxon contends that because Texas’s
SIP incorporates § 7.251’s predecessor statute, which
includes an Act of God provision, the Act of God
defense is recognized by Texas’s SIP. See 40 C.P.R.
§ 52.2270(e) (incorporating Texas Clean Air Act
(Article 4477-5), Vernon’s Texas Civil Statutes, as
amended by S.B. 48 of 1969). The problem with this
argument is that the SIP incorporates a previous
version of the statute, not the current provision. A
state regulatory defense has to be specifically
authorized or permitted by the state SIP. Exxon is
claiming a state regulatory defense pursuant to Texas
Water Code § 7.251. Section 7.251 is not specifically
authorized or permitted by the SIP; its predecessor is.
There is no indication in the record or the statutory
provisions cited that EPA has ever sanctioned § 7.251
or considered the provision as a proposed SIP
revision.217 Accordingly, the Court finds as a matter
of law that Exxon’s Act of God defense is inapplicable
and Exxon is subject to liability under the CAA for the
events purportedly covered by this defense.
2.
217
30 Texas Administrative Code § 101.222
Affirmative Defenses
Nor is there any provision in the SIP adopting the
Governor’s Hurricane Ike proclamation. The CAA does not
provide an Act of God defense. Without specific authorization in
the CAA or Texas’s SIP, the Act of God defense is inapplicable
here.
393a
50. Exxon contends affirmative defenses under 30
Texas Administrative Code § 101.222 apply to ninetyeight of the events. Plaintiffs contend Exxon did not
set forth specifically how the statutory criteria are
met for each event for which an affirmative defense is
asserted, but that Exxon instead impermissibly relied
on TCEQ’s acceptance of the asserted affirmative
defenses.
51. The burden to show the applicability of an
affirmative defense rests on the party seeking
entitlement to the defense. Luminant Generation Co.
LLC v. US. E.P.A., 714 F.3d 841, 855 (5th Cir. 2013).
That party must prove the “enumerated factors,
including that the period of excess emissions was
minimized to the extent practicable and that the
emissions were not due to faulty operations or
disrepair of equipment.” Id. (quoting 75 Fed. Reg. at
68,992 and citing 30 Tex. Admin. Code § 101.222(b),
(c)) (rejecting the contention that a defendant only
need make a prima facie showing of applicability and
that the burden will then shift to the plaintiff to show
the defense does not apply).
52. Pursuant to 30 Texas Administrative Code §
101.222(b), non-excess upset events are subject to
affirmative defenses in enforcement actions, where
the “owner or operator proves all of the
following:”
(1) the owner or operator complies with
the requirements of § 101.201 of this title
(relating to Emissions Event Reporting and
Recordkeeping Requirements)....;
(2) the unauthorized emissions were
caused by a sudden, unavoidable breakdown
394a
of equipment or process, beyond the control
of the owner or operator;
(3) the unauthorized emissions did not
stem from any activity or event that could
have been foreseen and avoided or planned
for, and could not have been avoided by
better operation and maintenance practices
or technically feasible design consistent with
good engineering practice;
(4) the air pollution control equipment or
processes were maintained and operated in a
manner consistent with good practice for
minimizing emissions and reducing the
number of emissions events;
(5) prompt action was taken to achieve
compliance once the operator knew or should
have known that applicable emission
limitations were being exceeded, and any
necessary
repairs
were
made
as
expeditiously as practicable;
(6) the amount and duration of the
unauthorized emissions and any bypass of
pollution control equipment were minimized
and all possible steps were taken to minimize
the impact of the unauthorized emissions on
ambient air quality;
(7) all emission monitoring systems were
kept in operation if possible;
(8) the owner or operator actions m
response to the unauthorized emissions were
documented by contemporaneous operation
logs or other relevant evidence;
395a
(9) the unauthorized emissions were not
part of a frequent or recurring pattern
indicative of inadequate design, operation, or
maintenance;
(10) the percentage of a facility’s total
annual operating hours during which
unauthorized emissions occurred was not
unreasonably high; and
(11) the unauthorized emissions did not
cause or contribute to an exceedance of the
national ambient air quality standards
(NAAQS),
prevention
of
significant
deterioration (PSD) increments, or to a
condition of air pollution.
30 Tex. Admin. Code § 10 1.222(b) (emphasis added).
53. The evidentiary support cited for the
affirmative defenses is Defendant’s Exhibits 18, 19,
and 20, and the corresponding STEERS reports
attached thereto. Exxon also directs the Court to
paragraphs 476 through 687 of its initial proposed
findings of facts and conclusions of law.218 Therein,
Exxon cites to expert testimony of Dr. Christopher S.
Buehler, Dr. Lucy Fraiser, and Mr. David Cabe.219
54. The Court finds that Exxon has not met its
burden to demonstrate that the eleven statutory
criteria are met as to the ninety-eight events. The
Court has reviewed paragraphs 476 to 687 in full. As
to each STEERS event, Exxon cites to a finding by the
TCEQ that an affirmative defense applies to that
218
Proposed Findings of Fact and Conclusions of Law,
Document No. 216, Exhibit 1.
219 Proposed Findings of Fact and Conclusions of Law,
Document No. 216, Exhibit 1,¶¶ 677-86.
396a
event. However, the TCEQ’s determination of the
applicability of an affirmative defense at best rises to
the level of prima facie proof. Reliance on the TCEQ’s
determination is not sufficient to meet Exxon’s
evidentiary burden at trial to demonstrate all eleven
criteria are met. Neither is Exxon’s general citation to
the testimony of its experts sufficient to demonstrate
all ninety-eight STEERS events are subject to
affirmative defenses. Exxon has the burden to
demonstrate that all eleven criteria are met for
each specific event to which an affirmative
defense would apply. Exxon did not, for each
purported STEERS event for which an affirmative
defense was asserted, direct the Court to the
evidentiary testimony from the experts that
demonstrated each of the eleven criteria were met as
to that specific event.220 Accordingly, the Court finds
Exxon has not met its burden to show the
applicability of 30 Texas Administrative Code §
101.222 under the eleven enumerated factors to each
of the relevant STEERS events.
220
For example, while Dr. Buehler testified in his opinion
the criteria were met as to all the events, he did not testify as to
whether all the criteria were met, as Mr. Cabe and Dr. Fraiser
testified as to the air quality criterion. Trial Transcript, 11241:24 to 242:22. The Court would then further have to refer
back to respective expert reports and next piece together any
testimony and information from the reports to match that
evidence the respective STEERS events. Rather than direct the
Court to pinpointed testimony and supporting documentation in
the expert reports for the eleven criteria for each separate
STEERS event, Exxon has only provided a general citation to the
testimony and record. The Court finds this is not sufficient to
prove each of the enumerated factors as to each STEERS event.
397a
C. Declaratory Judgment
55. Plaintiffs request a “declaratory judgment that
Exxon violated its Title V permits and thus the
CAA.”221 The Court declines to issue such declaratory
judgment because the issue in a citizen suit is
not solely whether the defendant violated the
CAA. Indeed, it is undisputed Exxon violated some
emission standards or limitations. Rather, the issue
is whether any such violations are actionable under
the CAA as a citizen suit. As such, the issue is
whether there was repeated violation pre-complaint,
violation both before and after the complaint, or a
continuing likelihood of recurrence.222 The Court has
already made these findings.223
D. Penalties
56. Having found on remand, that a majority of
events are actionable under the CAA’s citizen suit
provision, the Court will exercise its discretion to
conduct a penalty assessment for those events.
57. “In determining the amount of any penalty to
be assessed under” the CAA in a citizen suit, the
Court “shall take into consideration (in addition to
such other factors as justice may require)” the
following penalty assessment factors:
the size of the business,
the economic impact of the penalty on the
business,
221
PlaintiffS’ Proposed Findings of Fact and Conclusions
of Law, Document No. 218 at 405; PlaintiffS’ Revised Proposed
Findings of Fact and Conclusions of Law, Document No. 222 at 58.
222
Supra ¶¶ III.9-12.
223
Supra ¶¶ III.13-48.
398a
the violator’s full compliance history and
good faith efforts to comply,
the duration of the violation as established
by any credible evidence ..., payment by
the violator of penalties previously
assessed for the same violation,
the economic benefit of noncompliance, and
the seriousness of the violation.
42 U.S.C. § 7413(e)(1).
58. The Court is not required to assess a penalty
for violations. 42 U.S.C. § 7413(e)(2) (“A penalty may
be assessed for each day of violation.” (emphasis
added)); Luminant, 714 F.3d at 852 (“[T]he penalty
assessment criteria ... are considered by the courts ...
in determining whether or not to assess a civil penalty
for violations and, if so, the amount.” (emphasis
added)); see also 42 U.S.C. § 7413(e)(1) (“In
determining the amount of any penalty to be
assessed....” (emphasis added)); Envtl. Conservation
Org. v. City of Dallas, 529 F.3d 519, 530 (“[E]ven in
the event of a successful citizen suit, the district court
is not bound to impose the maximum penalty afforded
under the statute.”).224 Rather, the amount of any
penalty, the analysis of the factors, and the process of
weighing the factors are “ ‘highly discretionary’ with
the trial court.” Sierra Club, Lone Star Chapter v.
Cedar Point Oil Co., 73 F.3d 546, 576 (5th Cir. 1996)
224
Because the penalty provisions in the CAA are similar
to the penalty provisions in the CWA, “CWA cases are
instructive in analyzing [penalty] issues arising under the CAA.”
Pound v. Airosol Co., 498 F.3d 1089, 1094 n.2 (lOth Cir. 2007)
(citing United States v. Anthony Dell’Aquilla, Enters. &
Subsidiaries, 150 F.3d 329, 338 n.9 (3d Cir. 1998)).
399a
(quoting Tull v. United States, 481 U.S. 412, 427
(1987)); United States ex rel. Adm’r of EPA v. CITGO
Petroleum Corp., 723 F.3d 547, 551 (5th Cir. 2013).
Each of the penalty assessment factors are considered
in turn.
a. Size of the Business and Economic Impact
of the Penalty on the Business
59. Plaintiffs contend the large size and
profitability of Exxon weigh towards imposing a
penalty. Specifically, Plaintiffs contend Exxon will
only be impacted by a large penalty and has the
ability to pay the alleged maximum penalty. Exxon
does not dispute these contentions, and the Court
agrees given the facts found supra in paragraph ILl.
Accordingly, both the size and economic impact
factors weigh towards assessing a penalty.
b. Violator’s Full Compliance History and
Good Faith Efforts to Comply
60. Quantitatively, the number of Events and
Deviations at issue in this case is high: 241
Reportable Events, 3,735 Recordable Events, and 901
Title V Deviations.225 Thus, based on the total
number of Events and Deviations alone, Exxon’s
compliance history appears to be arguably
inadequate. However, the Complex is one of the
largest and most complex industrial sites in the
United States.226 Therefore, there are numerous
opportunities for noncompliance, and the number of
Events and Deviations alone is not the best evidence
225
See supra ¶ II.5.
226
Supra ¶ II.2.
400a
of compliance history.227 In other words, the number
of Events and Deviations must be considered with
respect to the size of the Complex. For example, in
2012 the refinery averaged one pin hole leak for every
167 linear miles of pipe.228
61. Moreover, the number of Events and
Deviations does not alone mean Exxon did not make
a good faith effort to comply. Despite good practices,
it is not possible to operate any facility-especially one
as complex as the Complex-in a manner that
eliminates all Events and Deviations.229 Based on
the facts expounded supra in paragraphs II.12-14,
the Court finds Exxon made substantial efforts to
improve environmental performance and compliance,
including
implementing
four
environmental
improvement projects to reduce emissions and
employing a vast array of emissions-reduction and
emissions-detection equipment. Likely due to Exxon’s
substantial efforts, the Complex achieved significant
reduction in the number of Reportable Events, the
amount of unauthorized emissions of criteria
pollutants, and the total amount of emissions over the
years at issue in this case.230 For reasons explained
227
See Trial Transcript at 10-220:14 to 10-223:16.
228
Trial Transcript at 10-221:24 to 10-222:10.
229
Supra ¶ II.15. The Court understands impossibility is
not a defense to penalties, except as it might apply to the
applicable affirmative defense criteria. The Court does not
consider the fact that it is not possible to operate the Complex in
a manner that eliminates all Events and Deviations as a reason
to not impose penalties. Rather, the Court notes this fact only to
explain that the number of Events and Deviations does not alone
mean Exxon did not make a good faith effort to comply.
230
Supra ¶ 11.16.
401a
infra in footnote 240, the Court is not persuaded by
Keith Bowers’s opinion that certain capital
improvements or additional spending on maintenance
would have prevented the Emissions and Deviations.
In addition, the Court does not accept Plaintiffs’ view
that the number of events involving a certain type of
equipment, a certain unit, or a certain type of issue is
alone adequate to support a conclusion that any of the
Events or Deviations were preventable.231 Rather, as
expounded supra in paragraph 11.7, a root cause
analysis is necessary to determine whether the
Events and Deviations resulted from a recurring
pattern and to determine whether improvements
could have been made to prevent recurrence.
Plaintiffs did not put forth any credible evidence that
any of the Events or Deviations resulted from the
same root cause.232 Therefore, there is no credible
evidence that any of the Events or Deviations resulted
from a recurring pattern or that improvements could
have been made to prevent recurrence. For each of the
Reportable Events, Exxon conducted an extensive
internal investigation, evaluated the root cause of the
231
Supra ¶ II.7.
232 In particular, the Court finds Bowers’s testimony
regarding the Events and Deviations having “common causes” is
neither credible nor persuasive. For example, the Events and
Deviations that Bowers categorizes as having the same common
cause of “power supply failures” include the following: moisture
got into the connections of improperly installed lightening
arresters, causing them to short out; a squirrel bypassed animal
traps, causing some electrical equipment to short circuit; and a
hawk dropped a snake on top of Substation One, causing an
electrical power disruption. Defendants’ Exhibits 1020C, 1020I0; Trial Transcript at 10-244:17 to 10-253:17. Categorizing such
varied events together does not prove the events had a common
cause, resulted from a recurring pattern, or were preventable.
402a
event, and implemented appropriate corrective
actions to try to prevent recurrence.233 Similarly,
for the Recordable Events and Deviations, Exxon
analyzed the records for trends and ways to improve,
identified root causes, and implemented corrective
actions.234 Additionally, Exxon’s maintenance
policies and procedures conform or exceed industry
standards and codes.235 The Court finds the opinion
of Dr. Christopher S. Buehler, a chemical engineer,
that the Complex ranks at or near the top of
petrochemical facility “leaders in maintenance and
operation practices” is persuasive and credible.236
Lastly, the Court finds the opinions of John Sadlier,
the former Deputy Director of the Office of
Compliance and Enforcement at the TCEQ who dealt
with Exxon for 20 years while working at the TCEQ,
persuasive and credible when he opined that he
“always felt and continue[s] to feel today that Exxon
had always made a concerted effort to comply[,] that
their dealings with [the TCEQ] were straightforward
frank discussions,” that Exxon is “[a]bsolutely not” a
“bad actor,” and that he has no reason to not believe
Exxon “will earnestly try to achieve the goals” in the
Agreed Order of reducing emissions.237 After
evaluating all the evidence, the Court finds the
preponderance of the credible evidence shows Exxon
233
Supra ¶¶ 11.7-9.
234
Supra ¶ II.7.
235
Supra ¶ 11.14.
236
Trial Transcript at 12-16:10-20.
237
Defendants’ Exhibit 546 at 14-15, ¶¶ 40-44.
403a
made good faith efforts to comply with the CAA.238
Accordingly, Exxon’s full compliance history and good
faith efforts to comply weigh against assessing a
penalty.
c. Duration of the Violation
62. The Fifth Circuit’s opinion held the Court
abused its discretion by viewing violations of a longer
duration as offset by violations of a shorter duration.
The Circuit’s opinion also indicated the Court should
revisit its approach as to, whether in calculating the
duration of a violation, a court should look to the
duration of each individual violation or the period of
time over which the violations occurred. See Env’t
Tex., 824 F.3d at 531. The Court was instructed on
remand, if it continued to consider durations of the
violations individually, to determine whether any
violation standing alone was sufficient to justify
imposing a penalty.239
63. The Court first turns to the proper standard
for determining whether this factor requires
examining the length of an individual violation or the
period of time over which the violations occurred.
Exxon does not address the case law cited by
238
In addition to the aforementioned issues, Plaintiffs
contend Exxon’s policy of always asserting the affirmative
defense to penalties to the TCEQ is, in itself, bad faith. Based on
the greater weight of the credible evidence, the Court disagrees
such policy is in bad faith. Although Exxon initially asserts the
affirmative defense when reporting an event to the TCEQ, the
TCEQ, after investigation, determines whether the affirmative
defense actually does apply.
239 Exxon contends the Court should continue to look to
duration of the violations standing alone in analyzing this factor.
However, Exxon cites no case law to support this proposition.
404a
Plaintiffs, and referred to by the Fifth Circuit, that
indicates the Court should consider the period of time
over which the violations occurred on this factor. See
United States v. Vista Paint Corp., No. EDCV 94-0127
RT, 1996 WL 477053, at *15 (C.D. Cal. Apr. 16, 1996);
United States v. B & W Inv. Props., Inc., No. 91 C
5886, 1994 WL 53781, at *4 (N.D. Ill. Feb. 18, 1994);
United States v. Midwest Suspension & Brake, 824 F.
Supp. 713, 736-37 (E.D. Mich. 1993); United States v.
A.A. Mactal Constr. Co. Inc., Civ. A. No. 89-2372-V,
1992 WL 245690, at *3 (D. Kan. Apr. 10, 1992). Nor
does Exxon argue that the plain meaning of the
phrase “duration of the violation” requires examining
each individual violation as opposed to the period of
time over which the violations occurred. The Court, in
light of the Fifth Circuit’s notation of the authority
supporting the position, adopts the interpretation of
this factor that examines the period of time over
which the credible evidence establishes the violations
occurred.
64. The Court next turns to, whether looking to the
period of time over which the violations occurred, the
duration factor supports imposing a penalty. The
credible evidence establishes the violations at issue
occurred over an eight-year period. During that eightyear time period, Exxon averaged more than one
violation per day. Accordingly, the Court finds the
duration factor weighs in favor of assessing a
penalty.240
240 The Court finds even under its previous interpretation of
this factor, looking to the individual violation’s duration, there
are individual violations of a sufficient duration to weigh in favor
of assessing penalties. The Court previously found that any
longer violations where balanced out by the numerous cursory
405a
d. Payment by the Violator of Penalties
Previously Assessed for the Same Violation
65. Exxon has paid $1,423,632 in monetary
penalties for the Events and Deviations at issue in
this case to either the TCEQ or Harris County.241
Plaintiffs accede this amount should be deducted from
the total penalty determined by the Court, and the
Court agrees. Accordingly, $1,423,632 will be
deducted from any penalty otherwise warranted.242
e. Economic Benefit of Noncompliance
66. Generally, economic benefit of noncompliance
is the financial benefit obtained by “delaying capital
expenditures and maintenance costs on pollutioncontrol equipment.” CITGO Petroleum Corp., 723
F.3d at 552 (emphasis added). “[T]here are two
general approaches to calculate economic benefit: (1)
the cost of capital, i.e., what it would cost the polluter
to obtain the funds necessary to install the equipment
necessary to correct the violation; and (2) the actual
return on capital, i.e., what the polluter earned on the
capital that it declined to divert for installation of the
violations. The Circuit held utilizing the balancing methodology
for analyzing the duration factor was an abuse of discretion. As
directed by the Circuit on remand, the Court now looks to the
actionable violations and determines that a sufficient quantity
of violations of a sufficient duration occurred to weigh in favor of
assessing penalties. For example, under Count II, there were 138
actionable violations that were more than forty-eight hours in
duration. See Plaintiffs’ Exhibits 589, 590, 591, 592, 593 & 594.
241
242
Supra ¶ II.8.
Plaintiffs contend on remand this amount should be
reduced given the Court’s finding on Count VII; however, as this
issue was not appealed or part of the Fifth Circuit’s instructions
on remand, the Court will not revisit the issue.
406a
equipment.” Id. (internal quotation marks omitted). A
district court must make a reasonable estimate of
economic benefit of noncompliance. Id. at 552-53.
67. The Fifth Circuit held this Court erred in
failing to enter findings as to whether Exxon received
an economic benefit in delaying implementation of the
four environmental improvement projects from the
Agreed Order.243 Although the Circuit upheld the
Court’s rejection of Bower’s expert testimony on this
issue as not credible,244 the Circuit held that
243
Supra ¶ II.12.
244 As to Bower’s testimony, the Court’s initial opinion made
the following findings, in paragraphs 41–42 of the Court’s
Findings of Fact and Conclusions of Law, Document No. 225:
41. Plaintiffs claim Exxon’s economic benefit of
noncompliance is $657 million as of June 2014. This
number is based on Bowers’s opinion that the Events
and Deviations would not have occurred if (1) if Exxon
would have spent $90 million more annually on
maintenance and (2) if Exxon would have installed
certain capital equipment (an additional sulfur unit
costing $100 million, an additional sour gas flare
costing $10 million, and two additional compressor
stations costing $50 million each). Plaintiffs offered
the testimony of an economist, Jonathan Schefftz, who
used Bowers’s inputs as to maintenance and capital
expenditure costs delayed to calculate present-day
economic benefit using the weighted-average cost of
capital. The Court finds Schefftz’s method of
calculating economic benefit to be reliable. However,
Schefftz made it very clear that he had no opinion as
to the reliability of the inputs given to him by
Bowers. For reasons explained infra, the Court finds
Bowers’s inputs to be neither reliable, credible, nor
persuasive. Therefore, Schefftz’s economic benefit of
noncompliance figure is equally unreliable.
407a
Plaintiffs elicited testimony on this issue from Shefftz
that was independent of Bower’s testimony. Env’t
Tex., 824 F.3d at 529, 529 n.17. The Circuit noted this
Court found Shefftz’s method for calculating the
economic benefit reliable. On remand, the Court was
instructed that “the economic benefit estimate must
‘encompass every benefit that defendants received
42. Bowers is a retired refinery and chemical plant
engineer. Bowers’s opinions and the bases for his
opinions were vague and undetailed. Of the $90
million Bowers opined should have been spent on
maintenance, Bowers opined half of the $90 million
needed to be spent to hire 900 new employees to “run[
] around inspecting things” and “[j]ust do more”
maintenance and “stuff that needs to be done.” He
opined the remainder of the $90 million needed to be
spent on “material.” He said his estimate was a “crude
estimate,” and he did not create a detailed budget of
the type that he would have created when he was a
project manager. Neither Bowers nor any other
evidence credibly demonstrated that spending an
additional $90 million on maintenance would have
prevented any of the Events or Deviations. Similarly,
neither Bowers nor any other evidence credibly
demonstrated that any of Bowers’s suggested capital
improvements would have prevented any of the
Events or Deviations. Instead, the preponderance of
the credible evidence shows Bowers’s suggested
capital improvements would not help reduce
emissions. Moreover, Exxon has spent a substantial
amount of money on maintenance, emissionsreduction and emissions-detection equipment, and
capital improvement projects in an effort to reduce
emissions and unauthorized emissions events. This
includes four environmental improvement projects
costing approximately $20 million that Exxon was not
required to undertake under law, and over $500
million on maintenance and maintenance-related
capital projects each year at issue.
408a
from violation of the law’ regardless of the inherently
speculative nature of the inquiry.” Id. at 530 n.19
(citing United States v. Gulf Park Water Co., 14 F.
Supp. 2d 854, 864 (S.D. Miss 1998)). Further, after
making such findings, the Court was instructed to
consider whether those four improvement projects
were necessary to correct the violations. The Circuit
noted the evidence indicated the projects “appear to
be correlated in at least a general way” and the
Court’s inquiry on remand “should center on whether
the projects will ameliorate the kinds of general
problems that have resulted in at least some of the
permit violations upon which Plaintiffs have sued.”
Id. at 530, 530 n.19.
68. The Court interprets the Fifth Circuit’s opinion
as instructing it to do a two-step analysis on remand:
(1) enter findings based on Shefftz’s testimony as to
the economic benefit Exxon received from delaying
implementation of the projects245; and (2) enter
findings on the “necessary to correct” prong as to
whether the four improvement projects would
generally ameliorate the violations on which the
Plaintiffs have sued, without requiring a showing
that the projects are specifically tied to the prevention
of each violation.
245 The Court interprets the Circuit’s opinion as holding that
Shefftz’s testimony alone is sufficient to carry Plaintiff’s burden
of proof on the first step. To the extent Exxon contests the
sufficiency of Shefftz’s testimony, in regards to the interest rate
chosen in the calculations and because he failed to account for
the cost of delay by ignoring the increase in equipment expense,
the Circuit instructed the Court to consider “every benefit ...
regardless of the inherently speculative nature of the inquiry.”
Env’t Tex., 824 F.3d at 530 n.19 (emphasis in original).
409a
69. On the first step, the Court turns to Shefftz’s
testimony as to any economic benefit Exxon received
from delaying implementation of the four projects in
the Agreed Order. The Court previously found
Shefftz’s methodology reliable. Shefftz calculated
the economic benefit to Exxon from delaying
implementation as $11,746,234 as of November 22,
2013 (the date of Shefftz’s report).246 The economic
benefit would increase by $61,066 per month until the
economic benefit was disgorged in the form of a civil
penalty.247 It is now April 2017, which is forty-one
additional months from the date of Shefftz’s report.
Therefore, the economic benefit would encompass an
additional $2,503,706 and the total economic benefit
from delay is $14,249,940. Accordingly, the Court
finds Exxon received an economic benefit of
$14,249,940 from the delayed implementation of the
improvement projects.248
246
Trial Transcript 5-57:14 to 58:13; Plaintiffs’ Exhibit
556 at 1, 18-21.
247
Plaintiffs’ Exhibit 556 at 14, 19. Trial Transcript, 549:5-9,5-52:6-10.
248 Plaintiffs also contend on remand that because the
Circuit instructed the Court to consider every benefit, the one
billion dollars the Court found demonstrated Exxon’s good faith
efforts to comply should now be included in the calculation of the
economic benefit from delay. The scope of the Circuit’s remand
was clear that its instructions pertained to the Shefftz’s
testimony about the four projects and every benefit derived from
the delaying the projects’ implementation. Even if Plaintiffs’
contention were within the scope of remand, the Court finds the
evidence cited insufficient to support even a highly speculative
inquiry, and additionally, the argument is waived because it was
not raised in any of the previously filed proposed findings of fact
and conclusions of law.
410a
70. The Court now turns to the Circuit’s direction
on the second step, whether a delayed project is
“necessary to correct” the types of violations in the
complaint. The Circuit has articulated a general
correlation standard to utilize in analyzing this
step.249 As an example of the general correlation
standard, the Circuit notes that “one project aims to
‘more effectively monitor and troubleshoot’ a refinery
flare system in order to ‘improve the identification
and characterization of flaring events’ (Count IV) and
the order estimates that the projects will specifically
achieve reductions in HRVOC emissions (Count III).”
Env’t Tex., 824 F.3d at 530. Given the Fifth Circuit’s
holding that at least one project meets the general
correlation standard, the Court finds the Plaintiffs
have met their burden as to at least one project on the
“necessary to correct” step. Additionally, the Circuit
noted this Court had previously recognized in its
order the “projects reflect ‘an effort to reduce
emissions and unauthorized emissions events’ at the
Baytown complex.”250 Id. As the Fifth Circuit
instructed the Court to analyze the “necessary to
correct” step at a high level of generality, the Court
finds Plaintiffs have carried their burden of
proof.251 Plaintiffs have demonstrated that: (1) the
Plant Automation Venture “is intended to provide
early identification of potential events and/or
249
Supra ¶ III.67.
250
Supra ¶ II.12.
251
To the extent Exxon argues the projects were voluntary
and not required for compliance, and therefore, not a proper
basis for determining delayed economic benefit, the Court notes
the Fifth Circuit directed it to use those projects on remand in
its analysis of the factor.
411a
instrumentation abnormalities, allowing proactive
response”252; (2) the Fuels North Flare System
Monitoring/Minimization Project is intended to “more
effectively monitor and troubleshoot” the refinery
flares253; (3) the BOP/BOPX Recovery Unit
Simulators Project is intended to “improve operator
training and competency, resulting in reduced
frequency and severity of emissions events”254; and
(4) the Enhanced Fugitive Emissions Monitoring
Project is a program to locate VOC and HRVOC
leaks.255 Accordingly, under the generally correlated
standard articulated by the Fifth Circuit, the Court
finds the four improvement projects were “necessary
to correct” the violations at issue in this suit.
71. The Court has found Exxon received an
economic benefit of $14,249,940 by delay four
implementation of four improvement projects that
were necessary to correct the violations at issue in
this suit. Accordingly, the Court finds the economic
benefit of noncompliance factor weighs in favor of
assessing a penalty.
f. Seriousness
72. The CAA does not define “seriousness” in
relation to the penalty assessment factors. See 42
U.S.C. § 7413(e)(1). Some circuit courts, not including
the Fifth Circuit, have held that “a court may still
impose a penalty if it finds there is a risk or potential
risk of environmental harm” even if there is “a lack
of evidence on the record linking [a defendant’s]
252
Defendants’ Exhibit 222, ¶ 12.a.
253
Defendants’ Exhibit 222, ¶ 12.a.
254
Defendants’ Exhibit 222, ¶ 12.b.
255
Defendants’ Exhibit 222, ¶ 12.d.
412a
CAA violations to discrete damage to either the
environment or the public.” Pound, 498 F.3d at 1099
(citing Pub. Interest Research Grp. of N.J., Inc. v.
Powell Duffryn Terminals Inc., 913 F.2d 64, 79 (3d
Cir. 1990)). The Fifth Circuit, however, did not issue
any guidance in its opinion as to the proper definition
of the term. Instead, the Fifth Circuit held the Court
abused its discretion in viewing the violations it found
to be more serious as offset by the numerous less
serious violations. In doing so, the Circuit notedwithout explicitly adopting-courts have recognized
that “the overall number and quantitative severity of
emissions or discharges may properly be relied upon
as evidence of seriousness.” Env’t Tex., 824 F.3d at
532 (citing Pub. Interest Research Grp. of N.J., Inc. v.
Powell Duffryn Terminals Inc., 913 F.2d 64, 79 (3d
Cir. 1990)).
73. In light of the Circuit’s guidance, the Court
looks to the overall number and quantitative severity
of the emissions or discharges.256 The overall number
256
The Court maintains its findings from its initial
findings of fact and conclusions of law that most the violations
were not serious from a public health and environmental
perspective. As is necessary for parts of the Court’s initial
judgment left undisturbed by the Fifth Circuit’s opinion, which
relied on those findings, the Court reiterates here paragraphs 47
and 48 from the Findings of Fact and Conclusions of Law,
Document No. 225:
47. Plaintiffs claim the Events and Deviations
were serious because they adversely affected public
health. To support this claim, Plaintiffs submitted
evidence of the potential health effects caused by the
types of pollutants emitted during the Events and
Deviations. For example, hydrogen sulfide, which
smells like rotten eggs or feces, can cause sore throat,
cough, fatigue, headaches, nausea, and poor memory
413a
at low concentrations. Factors affecting potential risk
of harm from pollutants include duration of exposure
and concentration of pollutants. As discussed supra,
the Events and Deviations differ tremendously
in terms of duration and amount. Plaintiffs’
aforementioned evidence of the potential health
effects caused by the types of pollutants emitted does
not include credible evidence that any of the specific
Events and Deviations were of a duration and
concentration to—even potentially-adversely affect
human health or the environment. Although
Plaintiffs’ evidence of potential health effects provides
some support of a potential risk of harm to human
health, this evidence in this case is too tenuous and
general to rise above mere speculation.
48. Plaintiffs also claim the Events and
Deviations were serious because they created
“nuisance-type impacts” to the community that
interfered with daily life. Four Plaintiffs’ members
experienced impacts to their life while living or
visiting near the Complex, including pungent odors,
allergies, respiratory problems, disruptive noise from
flaring, concerns for their health after seeing haze
believed to be harmful, and fears of explosion after
seeing flares. However, these impacts could have been
caused by Exxon’s authorized emissions or other
companies’ emissions, because certain emissions and
flares are authorized by permit and the nearby area
in which the Complex operates is populated with
numerous other refineries, petrochemical plants, and
industrial facilities. Indeed, unauthorized emissions
were a very small percentage of total emissions at the
Complex for each year at issue. Plaintiffs’ members
were only able to correlate some of the impacts, such
as odor and noise, to five Events or Deviations at
issue in this case. Moreover, Plaintiffs’ members’
testimonies regarding impacts were controverted by
persuasive testimony from three other residents of the
community who have lived very close to the Complex
for many years. These residents testified the Complex
414a
of violations weighs in favor finding the violations
serious. 16,386 days of violations are supported by the
evidence.257 As to the quantitative severity of the
emissions, approximately ten million pounds of
pollutants were released into the atmosphere as a
result of the violations in this case.258 Accordingly,
the Court finds given the number of days of violations
and the quantitative amount of emissions released as
a result, the seriousness factor weighs in favor of the
assessment of a penalty.
g. Balancing the Factors
74. The maximum penalty for each day of violation
is $32,500 for violations occurring before January 13,
2014, and $37,500 for violations occurring on January
13, 2009, and thereafter. 42 U.S.C. § 7413(e)(2); 40
C.P.R. § 19.4. Plaintiffs contend the total maximum
penalty, after deducting for overlapping violations, is
$573,510,000. However, Plaintiffs are only seeking
$40,815,618 in penalties on remand.259 Exxon
contends it should not be assessed a penalty.
has not impacted their lives, including that they have
had no health problems they attribute to the Complex
and that they have not experienced any problems with
flaring, odors, noises, or emissions coming from the
Complex. For all these reasons, the proposition that
the Events or Deviations were serious because they
created nuisance-type impacts on the surrounding
community is not supported by the preponderance of
the credible evidence.
257
Days of violations per count are as follows: (1) Count 1:
10,583 days; (2) Count II: 5,709 days; (3) Count III: 18 days; (4)
Count IV: 44 days; and (5) Count V: 32 days.
258
259
Plaintiffs’ Exhibit 609.
Plaintiffs’ Proposed Findings of Fact and Conclusions
of Law Following Remand, Document No. 253, Exhibit 1, ¶ 52.
415a
75. After carefully considering all of the penalty
assessment factors discussed above, the Court
determines a penalty is appropriate in this case.260
The size and economics factor, duration factor,
economic benefit from noncompliance factor, and
seriousness factor, all weigh towards assessing a
penalty. While Exxon’s compliance history weighs
against assessing a penalty, that factor is not
sufficient to outweigh the factors supporting
assessing a penalty. Any penalty assessed will deduct
the $1,423,632 Exxon was already penalized from the
amount.
76. The CAA does not prescribe a specific method
for determining appropriate penalties. Some courts
use the top-down approach, in which the court starts
at the maximum penalty allowed by law and reduces
downward as appropriate considering the factors as
mitigating factors. CITGO Petroleum Corp., 723 F.3d
at 552. Other courts employ the bottom-up approach,
in which the court starts at the economic benefit of
noncompliance and adjusts upward or downward as
appropriate considering the factors. Id. Rejecting a
requirement that a district court must employ either
the top-down or bottom-up approach, some circuit
courts have held the district court can “simply rely[ ]
upon [the] factors to arrive at an appropriate amount”
without starting at a specific amount because
“[t]he statute only requires that the [penalty] be
consistent with a consideration of each of the factors.”
United States v. Anthony Dell’Aquilla, Enters. &
260 Exxon did not contend in its initial proposed findings of
fact and conclusions of law that the Court should consider the
“justice so requires” factor. Therefore, the Court declines to
address those arguments on remand.
416a
Subsidiaries, 150 F.3d 329, 339 (3d Cir. 1998); see
Pound, 498 F.3d at 1095. “The [Fifth] [C]ircuit has
never held that a particular approach must be
followed” and has left such decision to the discretion
of the district court. CITGO Petroleum Corp., 723 F.3d
at 552, 554.
77. Plaintiffs calculate the maximum penalty as
follows261 : (1) Count I: 10,583 days of violation with
a $370,405,000 penalty; (2) Count II: 7,920 days of
refinery violations with a $277,200,000 penalty, 4,038
days of olefins violations with a $141,330,000 penalty,
and 1,671 days of chemical plant violations with a
$58,485,000 penalty; (3) Count III: 18 days of
violations with a $630,000 penalty; (4) Count IV: 44
days of violations with a $1,540,000 penalty; and (5)
Count V: 32 days of violations with a $1,120,000
penalty. The Court agrees with this calculation. As
the Court found Exxon liable on the refinery
violations in Count I, it will not include the refinery
violations in Count II when calculating the maximum
penalty. The total maximum penalty, therefore, is
$573,510,000.
78. Plaintiffs have submitted proposed findings
of fact and conclusions of law that adopt a bottomup approach, which calculates the penalty at an
amount that is fifty percent higher than the
261
Plaintiffs apply a penalty rate of $35,000 per day across
the board, given that approximately half the violations occurred
when the rate was $32,500 and half when the rate was $37,500.
Defendants do not contest this specific point in determining the
maximum penalty. Therefore, as it is uncontested, the Court
adopts this methodology as well.
417a
economic benefit from noncompliance.262 Therefore,
as the Court has discretion as to which method to
follow, the Court adopts the method proposed by
Plaintiffs. The Court determined the economic benefit
from noncompliance to be $14,249,940.263 Using
Plaintiffs’ proposed methodology for calculating the
penalty (which includes a 50% multiplier), the
resulting penalty is $21,374,910. The Court
determines, considering its finding that Exxon made
a good faith effort to comply, the amount is sufficient
to account for the factors that weighed towards
assessing a penalty. The majority of the factors weigh
towards imposing a penalty, which the Court
determines justifies an increase from the base
economic benefit from noncompliance number.
Subtracting the $1,423,632 already paid by Exxon in
penalties, the resulting penalty amount is
$19,951,278.
E. Injunctive Relief
79. “The party seeking a permanent injunction
must meet a four-part test. It must establish (1)
success on the merits; (2) that a failure to grant the
injunction will result in irreparable injury; (3) that
said injury outweighs any damage that the injunction
will cause the opposing party; and (4) that the
262
Plaintiffs’ Proposed Findings of Fact and Conclusions
of Law Following Remand, Document No. 253, Exhibit 1, ¶ 52.
263
Plaintiffs’ proposed findings of fact and conclusions of
law utilized a higher base amount (approximately $28 million);
however, as the Court rejected Plaintiffs’ theory that led to the
higher base amount, the Court uses the amount in the actual
finding to calculate the penalty. Supra ¶ III.69, III.69 n.248;
Plaintiffs’ Proposed Findings of Fact and Conclusions of Law
Following Remand, Document No. 253, Exhibit 1, ¶ 52.
418a
injunction will not disserve the public interest.” VRC
LLC v. City of Dallas, 460 F.3d 607, 611 (5th Cir.
2006). “Other Fifth Circuit authority recognizes that
the inadequacy of monetary damages also is a factor
in the analysis.” Reservoir, Inc. v. Truesdell, No. 4:122756,2013 WL 5574897, at *7 (S.D. Tex. Oct. 9, 2013)
(Atlas, J.) (citing ITT Educ. Servs., Inc. v. Arce, 533
F.3d 342, 347 (5th Cir. 2008)). “[A]n injunction is a
drastic and extraordinary remedy, which should not
be granted as a matter of course.” Monsanto Co. v.
Geertson Seed Farms, 561 U.S. 139, 165 (2010). It is
within the court’s discretion to grant or deny
injunctive relief. Weinberger v. Romero-Barcelo, 456
U.S. 305, 320 (1982). Even if a plaintiff prevails in a
citizen suit, the court does not have to award any
injunctive relief. Envtl. Conservation Org. v. City of
Dallas, 529 F.3d 519, 530 (5th Cir. 2008).
80. Plaintiffs request Exxon be enjoined for five
years from violating the emission standards and
limitations found by this Court to be actionable. The
CAA provides that district courts have jurisdiction to
enforce emission standards or limitations. 42 U.S.C.
§ 7604(a). However, “[t]he grant of jurisdiction to
ensure compliance with a statute hardly suggests
an absolute duty to do so under any and all
circumstances, and a federal judge sitting as
chancellor is not mechanically obligated to grant an
injunction for every violation of law.” Weinberger, 456
U.S. at 313. “Denial of injunctive relief does not
necessarily mean that the district court has concluded
there is no prospect of future violations for civil
penalties to deter.” Friends of the Earth, Inc. v.
Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167, 193
(2000). Rather, the court in a “citizen suit properly
may conclude that an injunction would be an
419a
excessively intrusive remedy, because it could entail
continuing superintendence of the permit holder’s
activities by a federal court-a process burdensome to
court and permit holder alike.” Id. In addition, an
injunction ordering a party to obey the law allows for
a possible contempt citation and threat of judicial
punishment should the party disobey the law. See
Schmidt v. Lessard, 414 U.S. 473, 476 (1974). In
determining whether to grant injunctive relief, the
court may consider the “attitude and laudable efforts”
of a defendant “in continuously trying to improve the
level of emissions.” See Ala. Air Pollution Control
Comm’n v. Republic Steel Corp., 646 F.2d 210, 214
(5th Cir. Unit B 1981) (internal quotation marks
omitted).
81. Enjoining Exxon from violating CAA
standards and limitations would do nothing more
than require Exxon to obey the law in the future. The
Court finds that such an injunction is unnecessary
and that Plaintiffs have not established injury to the
public outweighs damage to Exxon. Exxon-without an
injunction ordering it to comply with the CAA-already
faces threat of TCEQ enforcement actions, including
penalties, and threat of citizen suits should it not
comply with the CAA. The Court believes any
additional benefit the public would gain from Exxon
having the additional threat of judicial contempt and
punishment for violation of a court order is minimal.
Additionally, for reasons explained supra in footnote
251, the greater weight of the credible evidence does
not support a finding that the Events or Deviations
were harmful to the public or the environment, and
there is no evidence that any potential future
emissions events or deviations will be more harmful
to the public or the environment than past Events and
420a
Deviations allegedly were. To the contrary, the
number of Reportable Events, the total amount of
emissions, and the amount of unauthorized emissions
of criteria pollutants have all decreased over the years
at issue.264 This is likely due to Exxon’s substantial
efforts to improve environmental performance and
compliance.265 Moreover, proving compliance with
the CAA to this Court for five years would be unduly
burdensome on Exxon. Likewise, ensuring Exxon’s
compliance with the CAA for five years would be
unduly burdensome on this Court. For these reasons,
the Court finds Plaintiffs have not established denial
of the requested injunction will cause injury to the
public that outweighs damage the injunction would
cause Exxon. Accordingly, Plaintiffs have not
established the third requirement for injunctive
relief, and injunctive relief is denied.
F. Special Master
82. Plaintiffs request the Court appoint a special
master to monitor compliance with the injunctive
relief granted in this Order. Plaintiffs request the
special master be paid for by Exxon; have full access
to the Complex, its personnel, and records; and be
able to retain services of professional and technical
people as needed. Having found no injunctive relief is
warranted, a special master to monitor compliance
with injunctive relief is consequently not warranted.
83. Moreover, even if the Court had granted the
requested injunctive relief, a special master would
still not be warranted. Plaintiffs did not show by the
preponderance of the credible evidence that a special
264
Supra ¶ II.16.
265
See supra ¶¶ II.12-14.
421a
master could do a better job at reducing emissions
events and deviations than the Complex’s existing
workforce. In addition, a special master would
be excessively intrusive to Exxon’s operations.
Accordingly, Plaintiffs’ request that the Court appoint
a special master is denied.
G. Attorneys’ Fees
84. Plaintiffs request an award of attorneys’ fees,
expert witness fees, and costs pursuant to 42 U.S.C. §
7604(d).266 Exxon has not responded in opposition to
this request. The Court finds an award of reasonable
attorneys’ fees, expert fees, and costs is appropriate
as the Plaintiffs have substantially prevailed.
Plaintiffs have ninety days to file their costs. The
Plaintiffs are directed to file an appropriate and
timely application for fees following the entry of
judgment.
IV. CONCLUSION
Based on the foregoing, the Court hereby
ORDERS that Plaintiffs Environment Texas
Citizen Lobby, Inc. and Sierra Club’s requests in this
case for a declaratory judgment, injunctive relief, and
appointment of a special master, are DENIED.
Plaintiffs’ request for penalties against Defendants is
GRANTED IN THE AMOUNT OF $19,951,278.
Further, the Court
266
Addendum to Plaintiffs’ Proposed Findings of Fact and
Conclusions of Law Following Remand, Document No. 254.
Exxon did request attorneys’ fees and costs in its proposal; as
Exxon is not the substantially prevailing party, the Court denies
that request.
422a
ORDERS that Plaintiffs’ request for attorneys’
fees, expert witness fess, and costs is GRANTED.
The Court further
ORDERS that Defendants’ request for attorneys’
fees and costs is DENIED.
The Court will issue a separate Final Judgment.
SIGNED at Houston, Texas, on this 26 day of
April, 2017.
/s/ David Hittner
David Hittner
United States District Judge
423a
[824 F.3d 507]
UNITED STATES COURT OF APPEALS,
FIFTH CIRCUIT
No. 15–20030
ENVIRONMENT TEXAS CITIZEN LOBBY, INCORPORATED;
SIERRA CLUB,
Plaintiffs–Appellants,
v.
EXXONMOBIL CORPORATION; EXXONMOBIL CHEMICAL
COMPANY; EXXONMOBIL REFINING & SUPPLY
COMPANY,
Defendants–Appellees.
Filed May 27, 2016
Appeal from the United States District Court
for the Southern District of Texas.
Philip Harlan Hilder, Hilder & Associates, P.C.,
Houston, TX, Charles Craig Caldart, Esq., National
Environmental Law Center, Seattle, WA, Heather A.
Govern,
Joshua
Robert
Kratka,
National
Environmental Law Center, Boston, MA, David A.
Nicholas, Newton, MA, for Plaintiffs– Appellants.
Russell S. Post, Fields Alexander,
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