Judges uphold controversial $225 million Exxon pollution settlement

A three-judge panel on Monday struck down an appeal by advocacy groups to block a controversial $225 million pollution settlement between ExxonMobil with the state that the groups argued was far too low given the environmental damage caused by the oil company.

While the groups were vying for the $9 billion the state originally sought, the appeal provided a small victory.

It helped delay the payment of the $225 million until after voters in November approved a constitutional amendment that prevents governors from using such settlement funds for anything other than restoring damaged land and water along with legal fees.

Previously: NJ in legal battle with Exxon over groundwater pollution (12/2/15)

Intervention: Environmental groups try to block controversial Exxon pollution deal with N.J.

Editorial: Christie shifts pollution settlement funds (7/6/17)

Environmentalists had feared that Christie would divert the Exxon settlement money to balance the budget as he had done with more than $100 million from other such settlements over the course of his eight-year tenure, which ended last month.

The settlement, announced in February 2015, was for environmental damage to 1,800 acres of wetlands around Exxon's refineries in Linden and Bayonne. The state had originally sought $9 billion under the McGreevey administration. The Corzine administration proposed to settle for $550 million, which Exxon rejected in 2008.

Under Christie, lawyers for the Department of Environmental Protection settled for $225 million prompting critics to claim it was a giveaway to a company accused of dumping hundreds of chemicals around its plants and even pouring kerosene on wetlands to combat mosquitoes.

In August 2015, Superior Court Judge Michael Hogan approved the Exxon settlement, writing that the deal was "fair, reasonable, in the public interest, and consistent with the goals of the Spill Compensation and Control Act," the law under which the state had originally sued Exxon.

New Jersey Sierra Club, Clean Water Action, Delaware Riverkeeper and Environment New Jersey along with former state Sen. Ray Lezniak, D-Union, sued to void the settlement.

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Attorney Edward Lloyd, representing the environmental groups, argued before the Appellate Division last year that Exxon should not have been given "a 97 percent discount" by the Christie administration.

On Monday, the appeals panel sided with Judge Hogan's approval of the settlement since he oversaw the entire trial.

"Although the environmental groups assert a laudable goal, we find no authority prohibiting the transfer of the settlement proceeds or limiting their use, nor any authority that permits this court to wade into the budgetary waters," the judges wrote.

Jeff Tittel, executive director of the New Jersey Sierra Club, said the ruling was disappointing but at least most of the money will go where it should. About $175 will be used for restoration while $50 million will go to legal fees.

"Instead of being victimized twice by Exxon, the people who suffered from its pollution will at least see some of the money go to the right places," he said.