McKeon Measure Opposing Proposed $225 Million Settlement in Exxon Lawsuit, Urging Court to Reject it Clears Assembly

Measure is the General Assembly’s public comment submission regarding settlement

(TRENTON) – A measure sponsored by Assemblyman John McKeon (D-Essex/Morris) opposing the proposed $225 million settlement between the state and ExxonMobil, which shortchanges New Jersey residents and fails to hold Exxon accountable for the extent of the damage caused by decades worth of contamination, was approved Thursday by the General Assembly.

“It has been two months since the settlement with Exxon was unceremoniously announced by the administration and I am still struggling to see what is ‘really good’ about it,” said McKeon. “When we asked for documentation related to the Exxon lawsuit to better understand the administration’s decision and take appropriate action moving forward, we were stonewalled. While the governor tries to assure us that this is a good deal, the numbers prove otherwise. The state originally asked for almost $9 billion in damages. Settling for a fraction of that is slap in the face for New Jersey residents, especially those who live in the areas affected by the contamination, but barely a slap on the wrist for Exxon. On behalf of New Jersey residents, we oppose this settlement which only serves the interest of Exxon, and urge the responsible parties to hold Exxon accountable for the real value of the damage it created.”

The resolution (AR-242) opposes the proposed $225 million settlement in the lawsuit brought by New Jersey against ExxonMobil for natural resource damages at Bayway and Bayonne oil refinery sites and certain other sites in the state. The resolution respectfully urges the court presiding over the proposed settlement to reject it because it “shocks the conscience in light of undisputed evidence of significant damage to, and loss of, the state’s natural resources caused by pollution at the Bayway and Bayonne oil refinery sites and at certain other ExxonMobil sites in New Jersey.”

The resolution also asserts that the governor has a duty to protect the natural resources of the state, and therefore must ensure that the proposed settlement is withdrawn and the maximum compensation possible for the devastating environmental damage incurred by Exxon be obtained.

According to the resolution, around 2001, the New Jersey Department of Environmental Protection (DEP) undertook a comprehensive effort to address more than 4,000 potential claims for natural resource damages. The state made 151 claims for natural resource damages between 2004 and 2009. Since Gov. Christie took office in 2010, only one such claim has been made.

Since the 19th century, ExxonMobil Corporation or its predecessors have operated oil refineries and associated facilities in Linden and Bayonne, which has resulted in large, damaging and documented discharges to the environment. During the course of operations at these facilities, millions of gallons of crude oil and refined products, seven to 17 feet thick in some cases, and containing hazardous substances such as polycyclic aromatic hydrocarbons (PAHs), chromium, and arsenic, were lost through improper disposal of wastes, spills and leaks. In 1977 alone, at least seven million gallons of oil were released into the soil and groundwater underlying a portion of the Bayonne site.

The resolution points out that the NJ DEP’s own experts have estimated that restoration of former wetlands, meadows, forests, and intertidal habitat, and compensation for decades of contamination, at the Bayway and Bayonne sites would cost $8.9 billion, including $2.6 billion for primary restoration and $6.3 billion for compensatory damages, and $1.2 million for assessment costs.

Instead, the state and Exxon agreed to a $225 million settlement, which not only exempts Exxon Mobil from all natural resource damages claims and liability from the Bayway and Bayonne facilities, but 16 other different facilities owned or operated by Exxon throughout the state.

The resolution contends the proposed settlement is inadequate because it fails to address the decades-long contamination of important ecological resources surrounding major metropolitan areas, and does not fairly compensate the state and the public for that contamination. The resolution also argues the administration has not fully disclosed the rationale for settling the case for approximately three percent of the $8.9 billion calculated by the DEP as the value of the natural resource damages, and no verifiable rationale has been offered for the inclusion of the 16 ExxonMobil sites and the approximately 1,700 retail service stations unrelated to the litigation in the proposed settlement.

“This is our formal comment about the settlement before the public comment period ends on June 5. If the governor does not see fit to withdraw the settlement and really get the state what it deserves in damages, then we hope the court will,” said McKeon. “Accepting this settlement would put an oil giant before the best interests of our residents and that would be a terrible precedent to set.”

The resolution was approved 45-16-9 by the General Assembly.