New Jersey

Decision on Exxon Mobil-New Jersey Settlement Weeks Away

A judge is weeks away from deciding whether to allow a disputed environmental contamination settlement between New Jersey and Exxon Mobil Corp., he said Thursday during a hearing on the deal.

Judge Michael Hogan said he expects to rule no sooner than late August on whether to accept the $225 million deal struck by the company and the administration of Gov. Chris Christie following 11 years of litigation over pollution caused by the company, particularly at sites in Linden and Bayonne.

Environmental groups and critics of the Republican governor say it amounts to a giveaway for the company, considering that the case went to trial, with the state asking for $8.9 billion in damages, before the settlement was reached in the natural resources damage case.

In state Superior Court on Thursday, lawyers for the state and Exxon — longtime adversaries on the issue — were making their case that the deal is in the best public interest.

Acting Attorney General John Hoffman said there had been years of settlement efforts, but a deal could not get done previously.

"In 2012, we asked Exxon for $325 million, Exxon came back with a reply of $20 million," he told Hogan, "so we said, 'Fine we're going to trial.'"

He said the deal is worthy because it includes damages related to pollution at about 1,700 gas station sites — which on their own he said would not have been worth pursuing in litigation. A lawyer for Exxon Mobil said the company believes the statute of limitations for suits over contamination at the stations has expired.

Hoffman also noted that the settlement would cover only damages. Exxon Mobil would still be on the hook for the cost of cleaning up the involved sites; that cost is unknown.

Ted Wells, a lawyer for Houston-based Exxon, said that during negotiations with the administration of Democratic Gov. Jon Corzine several years ago, the state was offering a deal for $350 million to $400 million — more than the settlement but still a small fraction of the amount requested in court. "If $350 million or $400 million was some kind of gift, Exxon Mobil would have grabbed the gift," Wells said.

Under state law, at least $50 million of the settlement would have to go toward environmental causes. Another $50 million would pay lawyers' fees. The remaining $125 million could go to the state's general fund.

Selena Kyle, a lawyer of the Natural Resources Defense Council, said the judge should discount the state government's argument that the settlement makes sense because it risked getting even less from Exxon if the judge had ruled on the trial. "To say that there's litigation risk is not the same thing that $225 million is a reasonable settlement" in a case where the possible cost could have ranged from nothing to nearly $9 billion.

She also rejected the state's argument that settling the case would encourage other companies also to settle rather than fight claims from the state. "What other corporate polluters will see if Exxon has been rewarded for its aggression."

Also during Thursday's hearing, Hogan denied a request from environmentalists to delay it. The judge said one reason for the denial is that his ruling isn't imminent.

Environmental groups are seeking to have appeals judges include them as interveners in the case.

Copyright AP - Associated Press
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