Env TX Citizen Lobby v. ExxonMobil ( 2022 )

Case: 17-20545 Document: 00516452311 Page: 1 Date Filed: 08/30/2022
United States Court of Appeals
for the Fifth Circuit
United States Court of Appeals
Fifth Circuit
FILED
August 30, 2022
No. 17-20545 Lyle W. Cayce
Clerk
Environment Texas Citizen Lobby, Incorporated; Sierra
Club,
Plaintiffs—Appellees,
versus
ExxonMobil Corporation; ExxonMobil Chemical
Company; ExxonMobil Refining; Supply Company,
Defendants—Appellants.
Appeal from the United States District Court
for the Southern District of Texas
USDC No. 4:10-CV-4969
Before Davis, Costa, and Oldham, Circuit Judges.
Gregg Costa, Circuit Judge:
Environmental groups sued ExxonMobil under the Clean Air Act for
thousands of unauthorized emissions from the company’s complex in
Baytown, Texas. The first time we considered the case, we found Exxon
liable for many of those violations and remanded for the district court to
determine an appropriate penalty. When the case came to us again a few
years later, we primarily addressed whether the plaintiffs have standing to
seek redress for those violations. The case now returns to us after a limited
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No. 17-20545
remand for factfinding on traceability and Exxon’s affirmative defenses.
Finding no error in the district court’s fact-intensive analysis of standing or
penalty, we affirm.
I
This long-pending Clean Air Act suit stems from operations at
ExxonMobil’s massive Baytown complex. The complex, which houses a
refinery, a chemical plant, and an olefins plant, is heavily regulated by federal
permits that are enforced jointly by the Texas Commission on Environmental
Quality and the United States Environmental Protection Agency.
Environment Texas Citizen Lobby, Inc. v. ExxonMobil Corp. (ETCL I), 824 F.3d
507, 512 (5th Cir. 2016). The permits require Exxon to document, and
sometimes to report, certain instances of noncompliance. Exxon’s
substantive obligations and reporting requirements are explained in detail in
ETCL I, 824 F.3d at 512–22.
Environment Texas Citizen Lobby and Sierra Club, on behalf of their
members who live, work, and recreate near Baytown, sued Exxon under the
Clean Air Act’s citizen suit provision, 42 U.S.C. § 7604(a)(1), for thousands
of self-reported permit violations that occurred between October 2005 and
September 2013. After some litigation, Exxon stipulated to 16,386 days of
violations. Env’t Tex. Citizen Lobby, Inc. v. ExxonMobil Corp. (ETCL II), 968
F.3d 357, 363 (5th Cir. 2020); see also id. at 363 n.1 (explaining that “[i]f an
emissions event released multiple pollutants, each with its own emissions
standard, . . . each standard violat[ion] [counts] as a separate day of
violation”). Those violations fall into five categories, including unplanned
emissions, emissions exceeding authorized rates, and unsafe or unauthorized
flaring. See id. at 363 (describing the five types of violations).
After a bench trial, the district court found only a few of the violations
actionable and declined to assess a penalty against the company. Env’t Tex.
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Citizen Lobby, Inc. v. ExxonMobil Corp., 66 F. Supp. 3d 875, 895–902, 911–12
(S.D. Tex. 2014). We agreed with the environmental groups that the district
court erred in its analysis of Exxon’s substantive liability and abused its
discretion in addressing three of the factors that courts consider in assessing
civil penalties. ETCL I, 824 F.3d at 515–23 (liability), 524–33 (remedies); see
also 42 U.S.C. § 7413(e)(1) (listing the penalty factors). On remand, the
district court reconsidered the factors and fined Exxon $19.95 million dollars.
Env’t Tex. Citizen Lobby, Inc. v. ExxonMobil Corp., 2017 WL 2331679,
at*25−31 (S.D. Tex. Apr. 26, 2017).
Then Exxon appealed. The company asserted that the plaintiffs only
proved standing for a handful of violations and challenged the new penalty
determination. This panel determined that the organizational plaintiffs
established two out of the three requirements for Article III standing: injury-
in-fact and redressability. ETCL II, 968 F.3d at 367–68 (injury); id. at 371–
72 (redressability). We further explained that the district court should
analyze traceability by asking whether each violation (1) “causes or
contributes to the kinds of injuries” alleged by the plaintiffs and (2) has a
“‘specific geographical or other causative nexus’ such that the violation
could have affected their members.” Id. at 369–70 (quoting Sierra Club, Lone
Star Chapter v. Cedar Point Oil Co., Inc., 73 F.3d 546, 557, 558 n.24 (5th Cir.
1996) (internal quotation marks in first quotation omitted)). We remanded
for the limited purpose of determining which violations are fairly traceable to
Exxon’s actions 1 and reserved judgment on the appropriate penalty. Id. at
374–75.
1
We also directed the district court to consider whether Exxon proved its Act of
God defense for any of the violations. ECTL II, 968 F.3d at 373. The district court found
that it did not. Exxon does not challenge that determination.
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Our instructions had a significant impact on remand. Applying our
guidance, the district court determined that plaintiffs proved traceability for
only 3,651 of the 16,386 violation days. Env’t Tex. Citizen Lobby, Inc. v.
ExxonMobil Corp., 524 F. Supp. 3d 547, 565 (S.D. Tex. 2021). It then revised
its penalty calculation. It held that a penalty was appropriate because of the
size, duration, and seriousness of the violations as well as Exxon’s economic
benefit from noncompliance. Id. at 576. It ordered Exxon to pay $14.25
million dollars, lessening the penalty by more than five million dollars to
reflect the reduced number of justiciable violations. Id. at 577.
Because Exxon disagrees with both the standing and penalty
determinations, we now weigh in for the third time.
II
Only those disputes that meet the “irreducible constitutional
minimum” of standing can be heard in a federal forum. Lujan v. Defs. of
Wildlife, 504 U.S. 555, 560 (1992). The three components of standing are
familiar: injury-in-fact, traceability, and redressability. Id. at 560–61. Clean
Air Act plaintiffs must prove these elements for each claimed violation.
ETCL II, 968 F.3d at 365–67. We first consider whether the plaintiff
organizations met this burden.
A
After our last remand, the district court made additional findings on
traceability. Env’t Tex. Citizen Lobby, 524 F. Supp. 3d at 555−65. Exxon does
not challenge that factfinding. Instead, the company dedicates more than two
thirds of its brief to asking us to revisit our approach to standing. Exxon takes
two shots at our standing framework. First, it says that a recent decision from
the Supreme Court abrogates our finding of injury-in-fact. Second, it argues
that our traceability precedent is overly broad and risks exceeding the bounds
of Article III. Neither reason compels us to redo our prior opinion. Nor
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could we; our prior opinion is law of the case. White v. Murtha, 377 F.2d 428,
431–32 (5th Cir. 1967). The reason for that rule ring true in this long-running
case: Suits would never end “if a question, once considered and decided by
[a court] were to be litigated anew in the same cases upon any and every
subsequent appeal.” Id. at 431 (quoting General Am. Life Ins. Co. v. Anderson,
156 F.2d 615, 618 (6th Cir. 1946)). A prior ruling in a case thus can be
disturbed only if new evidence is substantially different, controlling authority
has changed, or maintaining the decision would result in manifest injustice.
Id. at 432. None of those exceptions apply.
1
Exxon first takes aim at our finding of injury-in-fact. We previously
determined that the plaintiffs “easily” met their burden of proving injury for
each alleged violation because “throughout the claims period, [they]
regularly saw flares, smoke, and haze coming from the complex; smelled
chemical odors; suffered from allergy-like or respiratory problems; feared for
their health; refrained from outdoor activities; or moved away.” ETCL II,
968 F.3d at 367–68. Exxon asserts that even if this holding was correct when
decided, TransUnion LLC v. Ramirez, 141 S. Ct. 2190 (2021), is an
intervening change in law that requires us to reconsider.
Of course, Supreme Court rulings can overrule our precedent. But we
cannot disregard our precedent simply because we think the Court might
someday disagree with it. See United States v. Alcantar, 733 F.3d 143, 146 (5th
Cir. 2013). Until the highest court “unequivocally” overrules our precedent,
we are bound by it. United States v. Zuniga-Salinas, 945 F.2d 1302, 1306 (5th
Cir. 1991). This aspect of the rule of orderliness rule promotes stability in the
law. United States v. Longoria, 958 F.3d 372, 378 (5th Cir. 2020).
In TransUnion, a class of consumers sued a credit reporting agency for
failing to reasonably ensure the accuracy of their credit files. 141 S. Ct. at
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2200. Although all of the plaintiffs had a cause of action under the Free
Credit Reporting Act, the Court held that only some of them had Article III
standing. Id. at 2201, 2209. The class members whose credit reports the
agency disseminated to potential creditors suffered a constitutional injury
because their reputations were harmed by the inaccurate disclosures. Id. at
2209. The others lacked standing because the mere inclusion of misleading
information in their files, without publication to any third party, was not a
concrete harm of the type “traditionally recognized as providing a basis for a
lawsuit in American courts.” Id. at 2204, 2209–10. Distinguishing between
the groups, the Court emphasized the “important difference” between a
statutory cause of action and actual injury and reiterated that the latter is
always required for federal jurisdiction. Id. at 2205.
TransUnion did not unequivocally overrule ETCL II or any of the
cases it relies on. The requirement that plaintiffs have a concrete stake in
federal litigation is not new. TransUnion merely reaffirmed the well-
established rule that a violation of a federal law alone is not an Article III
injury. See, e.g., Spokeo, Inc. v. Robins, 578 U.S. 330, 341 (2016) (“[A plaintiff]
could not . . . allege a bare procedural violation, . . . and satisfy the injury-in-
fact requirement of Article III.”); Summers v. Earth Island Inst., 555 U.S. 488,
496 (2009) (“[D]eprivation of a procedural right without some concrete
interest . . . is insufficient to create Article III standing.”). That rule was
canon in our court long before ETCL II. See, e.g., Lee v. Verizon Commc’ns,
Inc., 837 F.3d 523, 529–30 (5th Cir. 2016) (concluding that a “bare allegation
of incursion on [a] purported statutory right” is not a constitutional injury
absent an “allegation of a real risk” to the plaintiff).
Our prior opinion faithfully applied the fundamental rule that there is
no standing absent concrete injury. We distinguished between suits under
the False Claims Act, whereby uninjured citizens can sue to redress an injury
to the government, and environmental citizen suits, which are subject to the
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ordinary injury rule. ETCL II, 968 F.3d at 364 (“[U]nlike qui tam
relators . . . citizens suing under the bountyless environmental statutes must
meet the standing requirement in their own right.” (citations omitted)). We
then explained that the injuries suffered by the plaintiffs—interference with
recreation, breathing and smelling polluted air, and allergy-like or respiratory
problems—are concrete harms that have long been a basis for constitutional
standing. Id. at 368 (“Each of those experiences was an Article III injury.”).
Rather than overruling ETCL II, TransUnion supports it. To illustrate
the concrete harm requirement, TransUnion offered the example of two
people, a Maine citizen and a Hawaii citizen, each hoping to sue a Maine
factory for violations of a federal environmental law. 141 S. Ct. at 2205. The
Maine citizen, whose property was directly affected by the factory’s unlawful
pollution, could sue to redress that injury. Id. at 2205–06. But the Hawaii
citizen, whose interest in abating the nuisance was largely conceptual, lacked
the personal stake in the litigation our Constitution requires. Id. The present
plaintiffs are the Maine citizen: They live, work, and recreate near Baytown
and personally experience the effects of Exxon’s unauthorized emissions.
ETCL II, 968 F.3d at 368. They are not, as Exxon asserts, “merely seeking
to ensure [Exxon’s] ‘compliance with regulatory law.’” TransUnion, 141 S.
Ct. at 2206 (quoting Spokeo, 578 U.S. at 345 (Thomas, J., concurring)).
TransUnion did not upset our approach to injury-in-fact, 2 so our prior
holding controls: The plaintiffs satisfied the first requirement of standing.
2
Exxon also claims that TransUnion is relevant to our traceability analysis. That
cannot be. TransUnion is entirely about standing’s concrete harm requirement. Exxon
cites no court applying it to traceability analysis. If an opinion that does not even mention
a legal concept allows us to wipe away decades of precedent on that topic, our “unequivocal
override” standard is meaningless.
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2
Exxon takes a second shot at ETCL II’s standing framework, now
aiming for our holding on traceability. Again, it misses.
Our prior opinion provided the lower court detailed directions on how
to determine which of the 16,386 alleged days of violations are traceable to
Exxon’s actions. We explained that because injury must only be fairly
traceable to the challenged conduct, plaintiffs “need not ‘connect the exact
time of their injuries with the exact time of an alleged violation.’” ETCL II,
968 F.3d at 368 (quoting Texans United for a Safe Econ. Educ. Fund v. Crown
Petrol. Corp., 207 F.3d 789, 793 (5th Cir. 2000)). Consequently, we held,
Article III is satisfied if Exxon’s violations were “of a type that ‘causes or
contributes to the kinds of injuries alleged by the plaintiffs.’” Id. (quoting
Cedar Point, 73 F.3d at 557). Translating these principles to the Clean Air
Act context, we explained that the plaintiffs must show that each alleged
violation (1) “causes or contributes to the kinds of injuries” they allege and
(2) has a “‘specific geographic or other causative nexus’ such that the
violation could have affected their members.” Id. at 369–70 (quoting Cedar
Point, 73 F.3d at 557, 558 n.24 (internal quotation marks omitted from first
quotation)).
Exxon takes issue with this test. In the prior appeal, however, the
company objected to the district court’s traceability findings but did not
question our court’s approach to traceability. See id. at 368 n.4 (“Exxon does
not question the vitality of Cedar Point or our other decisions applying this
[traceability] standard . . . .”). Now it objects to ETCL II’s reading of Cedar
Point. But on this issue, Exxon does not even try to invoke an exception to
the law-of-the-case doctrine.
In any event, Exxon’s position is unconvincing. The company’s view
is that Article III requires plaintiffs to show that each challenged emission is
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a but-for cause of their injuries. But none of the cases Exxon cites support its
position. Although a but-for causal connection is sufficient to establish
traceability, see Duke Power Co. v. Carolina Env’t Study Grp., Inc., 438 U.S.
59, 74–78 (1978), the Supreme Court has never said such proof is required.
Consider Friends of the Earth, Inc. v. Laidlaw Env’t Servs. (TOC), Inc., 528
U.S. 167 (2000). There, citizen-suit plaintiffs had constitutional standing to
challenge 489 Clean Water Act permit violations that occurred between 1987
and 1995. Id. at 176, 180–88. The Court did not conduct a separate standing
inquiry for each violation, nor did it require the plaintiffs to connect their
injuries to specific unlawful discharges. Instead, it credited testimony that
the plaintiffs’ members no longer recreated near or waded in a river because
of their concerns about pollutants. Id. at 182–83. Exxon’s position cannot be
reconciled with Laidlaw. And Lujan v. Defenders of Wildlife, which Exxon
says is its best case, did not address the issue at all. See generally 504 U.S.
555.
Exxon’s position is also at odds with more than three decades of law
from this court holding that traceability “requires less of a causal connection
than tort law.” ETCL II, 968 F.3d at 368; Texans United, 207 F.3d at 793(“No relevant case law supports [the] argument that [plaintiffs] must
connect the exact time of their injuries with the exact time of an alleged
violation . . . .”); Cedar Point, 73 F.3d at 557, 558 n.24 (adopting the two-part
test described above); Save Our Cmty. v. EPA, 971 F.2d 1155, 1161 (5th Cir.
1992) (noting that traceability does not require plaintiffs to connect their
harms to the defendant’s actions by a “scientific certainty”) (quotation
omitted).
Other circuits agree. As then-Judge Alito explained, “Article III
standing demands ‘a causal relationship,’ but neither the Supreme Court nor
our Court has ever held that but-for causation is always needed.” Khodara
Env’t, Inc. v. Blakey, 376 F.3d 187, 195 (3d Cir. 2004); see also, e.g., Webb as
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next friend of K.S. v. Smith, 936 F.3d 808, 814 (8th Cir. 2019) (“[T]he fairly-
traceable inquiry is much more forgiving that the merits-based, tort-causation
inquiry.”); Friends of the Earth, Inc. v. Gaston Copper Recycling Corp., 204 F.3d
149, 161 (4th Cir. 2000) (en banc) (Wilkinson, C.J.) (“[T]he ‘fairly traceable’
standard is ‘not equivalent to a requirement of tort causation.’” (quoting
Pub. Int. Rsch. Grp. of N.J. v. Powell Duffryn Terminals, Inc., 913 F.2d 64, 72
(3d Cir. 1990))).
Even Exxon realizes that its position is an outlier. It acknowledged at
oral argument, acknowledging that but-for causation is not always
appropriate, even in the tort context, and ceded that it is enough that the
defendant’s conduct provide “at least some contribution” to the plaintiff’s
injury. The “causes or contributes to” test that we outlined in ETCL II
requires just that.
We are bound by our prior articulation of the test for traceability, and
we stand by it.
B
Having confirmed that the standing framework from ETCL II remains
good law, we now consider whether the district court applied it correctly on
remand. Exxon does not challenge any of the findings underlying the district
court’s justiciability determination. The company’s challenge is more
conceptual: It says that our prior opinion impermissibly restricted the district
court’s factfinding ability.
It did not. Initially, the district court found standing for all 16,386
violation days. 2017 WL 2331679, at *11. We affirmed its conclusions across-
the-board for injury and redressability. For traceability, however, we reached
a mixed result. As we explained:
1. For any violation that could cause or contribute to flaring,
smoke, or haze, the district court's findings have established
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traceability. The district court need only decide which violations fall
within this category.
2. For violations that could not contribute to flaring, smoke, or
haze, the district court should first consider whether the pollutant
emitted could cause or contribute either to (a) chemical odors or (b)
allergy-like or respiratory symptoms. If so, the district court will
conduct the geographic nexus inquiry described [previously], finding
it satisfied if the emission (i) violated a nonzero emissions standard,
(ii) had to be reported under Texas regulations, or (iii) is otherwise
proven to be of sufficient magnitude to reach Baytown neighborhoods
outside the Exxon complex in quantities sufficient to cause chemical
odors, allergy-like symptoms, or respiratory symptoms.
ETCL II, 968 F.3d at 371. We thus concluded that the then-existing
“findings have established traceability” for some categories of violations. Id.
But for other categories, we could not sustain the factfinding on the current
record and provided a framework for the district court to apply on remand.
That is not appellate court factfinding, it is ordinary appellate review of
factfinding that reached different conclusions for different types of
violations.
Plus, the outcome on remand belies Exxon’s contention that we left
the district court with a “vanishingly small” window for factfinding. The
district court reduced the number of justiciable violations by 12,735, which is
over 75% percent. See Env’t Tex. Citizen Lobby, 524 F. Supp. 3d at 565.
As a fallback, Exxon says that the district court erred by describing the
criteria it used to identify the traceable violations rather than listing each
justiciable violation individually. Following a bench trial, the district court
must “find the facts specially.” Fed. R. Civ. P. 52(a)(1). This show-your-
work requirement ensures that we have a meaningful record to review.
Garner v. Kennedy, 713 F.3d 237, 242–43 (5th Cir. 2013). But Rule 52 does
not require “punctilious detail” or “slavish tracing of the claims issue by
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issue.” Ratliff v. Governor’s Highway Safety Program, 791 F.2d 394, 400
(1986). The district court need only include “sufficient detail to enable the
appellate court to consider the findings under the applicable reviewing
standard.” Burma Navigation Corp. v. Reliant Seahorse MV, 99 F.3d 652, 657
(5th Cir. 1996).
The district court’s 10-page traceability analysis was thorough and
sufficiently explained. It conducted separate analyses for violations based on
category (flaring, smoke, haze, chemical odor, and asthma-like symptoms)
and explained how it evaluated traceability for each. Env’t Tex. Citizen Lobby,
524 F. Supp. 3d at 555–65. Take flaring, for example. The plaintiffs testified
that they could see flares from their homes and other part of Baytown, so we
found the geographic nexus requirement met for violations “that could cause
or contribute to flaring” and instructed the district court to identify those
instances. ETCL II, 968 F.3d at 371. The district court reviewed the
evidence and found 1,801 traceable flaring violations. Env’t Tex. Citizen
Lobby, 524 F. Supp. 3d at 557−58. It explained that plaintiffs did not prove
that every emission from a flare stack causes visible flaring. Id. at 557. But it
credited trial testimony that flaring occurs when a compressor trips or shuts
down. Id. It thus found traceability for the subset of flaring violations that
occurred at a flare stack and were caused by the failure of a compressor. Id.
One need only compare this description to the stipulated spreadsheet of
violations to determine which of the flaring events qualify.
The district court’s analysis of the other categories is similarly
detailed and rigorous. See id. at 558−65. It did not have to list all sixteen
thousand alleged violations and state whether each is justiciable or not. In
fact, we specifically said that it did not have to make “line-by-line findings
for the thousands of violations” and could instead “group violations by type
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and magnitude.” ETCL II, 968 F.3d at 371. The lower court faithfully
followed this instruction. Rule 52 is satisfied.
Our standing framework is legally sound. So are the district court’s
findings. The environmental organizations could sue for 3,651 days of
violations.
III
Several thousand violations are justiciable. And Exxon accepts
substantive liability for those claims. See ETCL II, 968 F.3d at 364
(explaining that Exxon appealed only standing, affirmative defenses, and
penalty). The remaining question, then, is whether the district court abused
its discretion in ordering a $14.25 million dollar penalty.
Courts may, but are not required to, assess civil penalties for Clean
Air Act violations. 42 U.S.C. § 7413(e)(2); see also ETCL I, 824 F.3d at 524.
In making that determination, they have a statutory obligation to consider:
the size of the business, the economic impact of the penalty on the
business, the violator’s full compliance history and good faith efforts
to comply, the duration of the violation as established by any credible
evidence (including evidence other than the applicable test method),
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). They must also account for “such other factors as
justice may require.” Id.The district court found that almost all of the statutory factors favor a
penalty. On the first two, it noted that because of Exxon’s large size and
profitability, only a large penalty would be meaningful. Env’t Tex. Citizen
Lobby, 524 F. Supp. 3d at 568. It also found that the duration and seriousness
of the many violations, as well as the significant economic benefit Exxon
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received from not meeting its Clean Air Act obligations, counseled against
the company. Id. at 570–76. One factor, however, weighed against a penalty.
The district court credited Exxon’s good faith and “substantial efforts to
improve environmental performance and compliance.” Id. at 569–71.
Balancing those considerations and deducting the $1.42 million dollars
Exxon already paid regulators for the violations, the court concluded that a
$14.25 million penalty is appropriate. Id. at 571, 576−77. Exxon challenges
the district court’s findings on the economic benefit, duration, and
seriousness factors.
We are highly deferential to the district court’s penalty assessment.
We review its application of the penalty factors for abuse of discretion and its
underlying findings for clear error. Cedar Point, 73 F.3d at 573; see also Tull
v. United States, 481 U.S. 412, 427 (1987) (noting the “highly discretionary”
nature of weighing the similar Clean Water Act penalty factors). The district
court did not err on either front, so we affirm the $14.25 million dollar
penalty.
A
We begin with the economic benefit factor. This consideration seeks
to prevent polluters from gaining a competitive advantage through
noncompliance with environmental laws. Benefit can be calculated in two
ways: by determining the cost of capital (what it would cost the polluter to
fund pollution prevention), or by determining the return on capital (what the
polluter earned on the funds it should have spent on pollution control but
instead invested elsewhere). ETCL I, 824 F.3d at 527 (citing United States ex
rel. EPA v. CITGO Petrol. Corp., 723 F.3d 547, 552 (5th Cir. 2013)).
Improvements that are “necessary to correct” the violations alleged
in the suit are benefits of noncompliance. ETCL I, 824 F.3d at 530 (quoting
CITGO, 723 F.3d at 552); see also United States v. Allegheny Ludlam Corp.,
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366 F.3d 164, 178 (3d Cir. 2004) (stating that the economic benefit
calculation “starts with the costs spent or that should have been spent to
achieve compliance [with the Clean Water Act]”). Plaintiffs need not tie the
projects to prevention of specific violations. ETCL I, 824 F.3d at 530 n.19.
Rather, the inquiry centers 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.” 3 Id.
The district court valued Exxon’s benefit of noncompliance at more
than fourteen million dollars ($11.75 million dollars at the time of the expert’s
report plus $61,000 per month after that) because the company delayed
implementation of four emission-reducing projects mandated by a 2012
agreement between Exxon and state regulators. Env’t Tex. Citizen Lobby,
Inc., 524 F. Supp. 3d at 573. Its conclusion that the projects are necessary to
correct the violations was not clear error. The projects represent “an effort
to reduce emissions and unauthorized emissions events” at the Baytown
complex. ETCL I, 824 F.3d at 530 (quoting Env’t Tex. Citizen Lobby, Inc., 66
F. Supp. 3d at 908). Such unauthorized emissions are the heart of the
violations alleged in this suit. The district court carefully compared the goal
of each of the four projects to the remaining violations and concluded that
each project “addressed the types of violations found traceable by this
3
Exxon says that this test is non-binding dictum because it is peripheral to the
holding in ETCL I. “A statement is not dictum if it is necessary to the result or constitutes
an explication of the governing rules of law.” Int’l Truck & Engine Corp. v. Bray, 372 F.3d
717, 721 (5th Cir. 2004). ETCL I’s footnote 19 meets this definition. It explicates the legal
standard “necessary to correct [noncompliance].” And it was necessary to ETCL I’s
holding that the district court should have considered Exxon’s benefit from delaying the
four projects: The plaintiffs did not attempt to tie those projects to preventing specific
violation days, so the footnote made clear that that kind of proof was not necessary.
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Court.” Env’t Tex. Citizen Lobby, Inc.,524 F. Supp. 3d at 573–74. Exxon does
not contest those determinations.
The company would have us reduce the value of its noncompliance
because the number of justiciable violation days is a fraction of the number of
violations previoulsy found. But that approach would give Exxon an
unwarranted discount. Exxon needed to invest $11.75 million dollars in
improvements to comply with its Clean Air Act obligations. That figure does
not depend on how many times Exxon violated its permits. Say, for example,
a plumber quotes you $250 to fix a leaky faucet. The repair cost would be the
same regardless whether you called the plumber after the first few drops or
waited for multiple buckets to fill. And the district court properly accounted
for the reduced number of violations in its final balancing of the statutory
factors, reducing the penalty multiplier from 50% of the value of
noncompliance to 10%. Id. at 577. The district court’s conclusion on
economic benefit stands.
B
Courts must also factor “the duration of the violation as established
by any credible evidence” into the penalty assessment. 42 U.S.C.
§ 7413(e)(1). We previously reserved judgment on whether this penalty
factor “requires scrutiny of the length of each individual violation or allows
for assessment of an overall violation period.” ETCL I, 824 F.3d at 531. The
district court took the latter approach. Finding that Exxon averaged more
than one violation per day across the eight years covered by the suit, it
concluded that the duration of the violation weighed in favor of a penalty.
Env’t Tex. Citizen Lobby, 524 F. Supp. 3d at 571.
We see no error in the district court’s analysis. Courts across the
country agree that “when multiple ‘intermittent’ violations over a span of
time are at issue, a court may consider the overall length of the period during
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which the violations occurred.” ETCL I, 824 F.3d at 531; see also, e.g., Pound
v. Airosol Co., Inc., 498 F.3d 1089, 1098 (10th Cir. 2007) (remanding for the
district court to consider that the defendant’s “violations lasted more than a
decade”); United States v. Vista Paint Corp., 1996 WL 477053, at *15 (C.D.
Cal. Apr. 16, 1996); United States v. B & W Inv. Props., Inc., 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
Const. Co., Inc., 1992 WL 245690, at *3 (D. Kan. Apr. 10, 1992) (all
considering the length of the violation period). No court has rejected the
overall-violation-period approach. See Env’t Tex. Citizen Lobby, 524 F. Supp.
3d at 570 n.5 (“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.”). And it makes sense in the
context of this suit. Exxon’s unlawful omissions occurred regularly for many
years. Considering the length of only select few of those thousands of
violations would not fully reflect the extent of Exxon’s unlawfulness. We will
not disturb the district court’s conclusion that the duration factor weighs for
a penalty.
C
Exxon next challenges the district court’s determination that its
violations were serious. See 42 U.S.C. § 7413(e)(1) (commanding
consideration of “the seriousness of the violation”). We previously observed
that other courts assess seriousness by looking at the risk the emissions
potentially pose to the environment as well as “the overall number and
quantitative severity of emissions or discharges.” ETCL I, 824 F.3d at 532
(citing Pound, 498 F.3d at 1099; Powell Duffryn, 913 F.2d at 79). The district
considered both. It first determined that Exxon’s violations posed a low risk
to the environment because the plaintiffs did not show that any individual
violation was concentrated enough to harm people or the planet. Env’t Tex.
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Citizen Lobby, 524 F. Supp. 3d at 575 n.121. But it concluded that the quantity
of emissions weighed the other way because the traceable violations emitted
over 1.5 million pounds of pollutants. Id. at 575–76. Exxon does not challenge
this finding, and we see no reason to find it clearly erroneous.
Exxon argues, as it did for the duration factor, that the court must
consider the seriousness of each violation individually. But the district court
did consider each violation; it found that the traceable violations involved
relatively high levels of emissions and necessarily considered the amount of
each violation when it added them up to reach the 1.5-million-pound figure.
Exxon does not offer any alternative definitions of “seriousness” that the
district court could have applied instead. There was no abuse of discretion
on the seriousness factor.
D
Finally, Exxon faults the district court for not assessing whether its
ruling might deter the industry from negotiating with regulators in the future,
a consideration the company believes is required in the interest of justice. See
42 U.S.C. § 7413(a) (allowing consideration of “other factors as justice may
require”). Any error on this factor lies with Exxon, not the district court.
Exxon did not offer this argument in its initial proposed findings to the
district court, 4 so it forfeited the ability to raise it on appeal. See Rollins v.
Home Depot USA, 8 F.4th 393, 397 (5th Cir. 2021).
4
The record belies Exxon’s claim that it made this policy argument below. Exxon
recommended detailed findings on each of the penalty factors, but never raised this
additional consideration. It did briefly express a concern about undermining the
government’s enforcement discretion, but that was in the context of its suggested approach
to calculating a penalty amount, not its assessment of the factors.
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***
This time, the district court got it right. It properly considered each
of the penalty factors and found that the many factors favoring a penalty
outweigh the one that does not. It also subtracted more than five million
dollars from Exxon’s bill in recognition of the reduced number of justiciable
violations. The district court’s penalty determination was well within its
wide discretion.
***
AFFIRMED.
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Andrew S. Oldham, Circuit Judge, dissenting:
This case is a jurisdictional mess. In fairness to my esteemed
colleagues in the majority, some of the mess predates our panel’s first
decision in this case. See Env’t Tex. Citizen Lobby, Inc. v. ExxonMobil Corp.
(“ETCL I”), 824 F.3d 507 (5th Cir. 2016). And in fairness to the esteemed
district court judge, most of the mess stems from our decisions, not the
district court’s. See ibid.; Env’t Tex. Citizen Lobby, Inc. v. ExxonMobil Corp.
(“ETCL II”), 968 F.3d 357, 375 (5th Cir. 2020) (Oldham, J., concurring in
part, dissenting in part, and concurring in the judgment). What’s clear is that
only our en banc court can clean this up.
I.
Some basics first. To invoke our jurisdiction, plaintiffs must satisfy the
familiar tripartite test for Article III standing by showing: (1) an injury in fact;
(2) that’s fairly traceable to the defendant’s conduct; and (3) that’s likely
redressable by a favorable decision. See Lujan v. Defs. of Wildlife, 504 U.S.
555, 560–61 (1992). Plaintiffs must show standing “with the manner and
degree of evidence required at the successive stages of the litigation.” Id. at
561. So “in a case like this that proceeds to trial, the specific facts set forth by
the plaintiff to support standing must be supported adequately by the
evidence adduced at trial.” TransUnion LLC v. Ramirez, 141 S. Ct. 2190,
2208 (2021) (quotation omitted). Plaintiffs thus must “prove standing by a
preponderance of the evidence.” ETCL II, 968 F.3d at 367; see also E.T. v.
Paxton, 41 F.4th 709, 714 (5th Cir. 2022).
The traceability requirement is particularly important here. The
Supreme Court has explained that a plaintiff can establish traceability
without establishing the tort requirement of proximate causation. See
Lexmark Int’l, Inc. v. Static Control Components, Inc., 572 U.S. 118, 134 n.6
(2014) (“Proximate causation is not a requirement of Article III standing,
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which requires only that the plaintiff’s injury be fairly traceable to the
defendant’s conduct.”). The Court has also said that a plaintiff need not
show but-for causation. See Khodara Env’t, Inc. v. Blakey, 376 F.3d 187, 195
(3d Cir. 2004) (Alito, J.) (“Article III standing demands ‘a causal
relationship,’ but neither the Supreme Court nor our Court has ever held that
but-for causation is always needed.”).
It’s nonetheless true that a plaintiff must establish, at a minimum,
causation in fact. See, e.g., Dep’t of Com. v. New York, 139 S. Ct. 2551, 2566
(2019) (“Because Article III ‘requires no more than de facto causality,’
traceability is satisfied here.” (quoting Block v. Meese, 793 F.2d 1303, 1309
(D.C. Cir. 1986) (Scalia, J.))). That is, the plaintiff must show that the
defendant’s action X did in fact cause the plaintiff’s injury Y. 1 Our sister
circuits have dutifully followed those instructions. 2
1
See, e.g., Allen v. Wright, 468 U.S. 737, 758 (1984) (holding that plaintiffs failed to
establish traceability because “it is entirely speculative . . . whether withdrawal of a tax
exemption from any particular school would lead the school to change its policies”—that
is, whether the tax exemption is the but-for cause of plaintiffs’ injuries); Duke Power Co. v.
Carolina Env’t Study Grp., Inc., 438 U.S. 59, 74–78 (1978) (holding that “a ‘but for’ causal
connection” between plaintiff’s injury and defendant’s act sufficed for traceability); Warth
v. Seldin, 422 U.S. 490, 505 (1975) (holding that Article III requires plaintiffs “to establish
that, in fact, the asserted injury was the consequence of the defendants’ actions”);
California v. Texas, 141 S. Ct. 2104, 2117 (2021) (“[T]he States also have failed to show
how this injury is directly traceable to any actual or possible unlawful Government conduct
in enforcing § 5000A(a).” (emphasis added)); TransUnion, 141 S. Ct. at 2203 (“the injury
was likely caused by the defendant” (emphasis added)); cf. Richard H. Fallon, Jr., Of
Justiciability, Remedies, and Public Law Litigation: Notes on the Jurisprudence of Lyons, 59
N.Y.U. L. Rev. 1, 17 n.91 (1984) (observing that the Supreme Court’s causation analysis
“replicate[s] the tort law concept of ‘cause in fact’ or ‘but for’ causation”).
2
See, e.g., Cmty. Nutrition Inst. v. Block, 698 F.2d 1239, 1247 (D.C. Cir. 1983) (“A
plaintiff need only make a reasonable showing that ‘but for’ defendant’s action the alleged
injury would not have occurred.”); Caraco Pharm. Lab’ys, Ltd. v. Forest Lab’ys, Inc., 527
F.3d 1278, 1292 (Fed. Cir. 2008) (“Such but-for causation is sufficient to satisfy the
traceability requirement of Article III standing.”); cf. Honeywell Int’l, Inc. v. EPA, 705 F.3d
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The Supreme Court also recently reaffirmed that “standing is not
dispensed in gross; rather, plaintiffs must demonstrate standing for each
claim that they press and for each form of relief that they seek (for example,
injunctive relief and damages).” TransUnion, 141 S. Ct. at 2208; see also, e.g.,
Town of Chester v. Laroe Ests., Inc., 137 S. Ct. 1645, 1650 (2017) (“Our
standing decisions make clear that standing is not dispensed in gross.”
(quotation omitted)). Trying to align with that principle, the ETCL II panel
explained that in the context of the Clean Air Act, we must do “a separate
standing inquiry for each violation asserted as part of that claim.” 968 F.3d at
365. That is, plaintiffs must show—for each violation, not just each claim—
an injury in fact that is fairly traceable to the violation and that is likely to be
redressed by a favorable judicial decision. And here, plaintiffs must do so with
trial-appropriate evidence and by the preponderance of the evidence.
II.
The majority opinion conflicts with these basic principles. I first
(A) explain how the majority dispenses standing in gross. I then (B) explain
how the majority overlooks plaintiffs’ failures to establish traceability.
A.
In recognition of our inability to dispense standing in gross, the ETCL
II panel concluded that a plaintiff must establish standing “for each violation
asserted as part of that claim.” 968 F.3d at 365. That conclusion was right.
But what the panel concluded next was wrong. It proceeded to define the
injury generically and create per se rules for when the district court must
irrebutably presume that the generic injury is traceable to a specific violation.
470, 472 (D.C. Cir. 2013) (Kavanaugh, J.) (“Honeywell’s injury is fairly traceable to the
now-permanent 2008 interpollutant transfers by Arkema and Solvay because the injury
would not have occurred but for the 2008 transfers.”).
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See id. at 371. In so doing, the panel allowed the very thing it sought to
forbid—standing in gross.
To show an injury in fact, plaintiffs must state “specific facts” and
back those facts up with adequate evidence. Lujan, 504 U.S. at 561. The
injury-in-fact requirement thus includes two different parts: The first
governs specification (or identification) of the injury, and the second governs
the level (or type) of proof required for that specified injury. The ETCL II
majority misunderstood both.
First, specification. The plaintiff must specify an injury that’s fairly
traceable and redressable. Here, given that plaintiffs must show standing for
each violation, traceability requires plaintiffs to specify their injuries with
some granularity. For example, they must trace their particular injuries to
particular violations on particular days. Otherwise, a court could not
determine whether a particular violation in fact caused a particular injury, or
instead whether plaintiffs seek to use one injury for standing in gross to
challenge violations that never injured them.
Consider, for example, plaintiffs’ alleged aesthetic injury: They say
they saw flares. The aesthetic injury of seeing a flare cannot be fairly traced
to the defendants without specifying: I saw a flare on Day A, which was
during Violation X; or I was in town on Day B, which was during Violation
Y. If plaintiffs do not show their injury in fact at that level of specificity, then
we cannot be sure that the traceability requirement is met—that is, plaintiffs
have not met their burden of showing that the violation “likely caused” their
injury. TransUnion, 141 S. Ct. at 2203. If plaintiffs instead specify their injury
as “aesthetic harms more generally,” then their injury could’ve occurred on
Day C, which was not during any violation, or on Day D, when plaintiffs were
out of town.
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Friends of the Earth, Inc. v. Laidlaw Environmental Services (TOC), Inc.,
528 U.S. 167 (2000), is not to the contrary. See ante, at 9. First, traceability
wasn’t at issue in Laidlaw, so the Court had no occasion to address how an
injury must be specified. See ETCL II, 968 F.3d at 377–78 (opinion of
Oldham, J.). That effectively makes Laidlaw a drive-by traceability ruling,
which doesn’t get much weight. Cf. Steel Co. v. Citizens for a Better Env’t, 523
U.S. 83, 91 (1998) (“drive-by jurisdictional rulings of this sort . . . have no
precedential effect”).
Second, the Supreme Court subsequently narrowed Laidlaw. In
Clapper v. Amnesty International USA, 568 U.S. 398 (2013), for example, the
Court construed Laidlaw to support standing only where the plaintiffs took
“preventive measures” to avoid “concededly ongoing” violations of the
Clean Water Act. Id. at 419 (quotation omitted). Here, by contrast, there’s
no adequate contention, backed by trial-appropriate evidence, that any of
plaintiffs’ members took reasonable preventive measures to avoid Exxon’s
violations, let alone measures that they would non-speculatively stop if the
violations did. Nor are there concededly ongoing violations for each type of
violation. At no point did plaintiffs clearly spell out, in this appeal or before
it, that each violation repeatedly reoccurred after the complaint was filed,
even though it has always been plaintiffs’ burden to do so. See E.T., 41 F.4th
at 718 n.2.
Second, plaintiffs’ burden. Traceability requires not just specification
but also non-speculative proof of causation. The majority contends it would
be impossible to prove causation on a per-violation basis. See ante, at 8–9;
ETCL II, 968 F.3d at 368 (“Requiring proof that specific is not consistent
with the traceability requirement, which requires less of a causal connection
than tort law (and even tort causation would not require such specific
proof).”). That may or may not be true, but it’s irrelevant. The Supreme
Court has been clear that standing is no “mere pleading requirement[] but
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rather an indispensable part of [plaintiffs’] case” and that plaintiffs’ burden
is the preponderance of the evidence. Lujan, 504 U.S. at 561; see also ETCL
II, 968 F.3d at 367 (recognizing as much). And as we’ve held, “analyzing
standing at this level of granularity can be tedious in a sweeping challenge like
this one. But it’s what Article III requires.” In re Gee, 941 F.3d 153, 165 (5th
Cir. 2019) (per curiam).
TransUnion illustrates the point. In that case, the plaintiffs argued that
they met their burden of showing their credit reports were sent to third
parties (the injury) by pointing to a stipulation governing other similarly
situated individuals. 141 S. Ct. at 2212. The Supreme Court rejected that
argument. Instead, the Court held “[t]he plaintiffs had the burden to prove
at trial that their reports were actually sent to third-party businesses. The
inferences on which the argument rests are too weak to demonstrate that the
reports of any particular number of the 6,332 class members were sent to
third-party businesses.” Ibid. The inferences were especially weak given that
the plaintiffs “presumably could have” put forth stronger evidence. See ibid.
(citing Interstate Cir., Inc. v. United States, 306 U.S. 208, 226 (1939) (“The
production of weak evidence when strong is available can lead only to the
conclusion that the strong would have been adverse.”)). The takeaway is that
the Court required the plaintiffs to prove standing—regardless of how
difficult that might be to do. In my view, we should’ve done the same thing
in this case.
B.
If we’d applied the rules properly, plaintiffs would have standing to
challenge violations on approximately 40 days, not 3,651.
The principal source of our legal error lies in ETCL II, which created
rigid per se rules that allowed plaintiffs to bypass the strictures of Article III.
This hypothetical explains why:
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To illustrate, consider a hypothetical plaintiff Bob who lives in
Baytown. Bob has asthma—that is, an injury. The question is
whether his asthma injury is traceable to Exxon’s illegal
emissions. From January 1 through January 10, Bob was visiting
his sister in France. Meanwhile:
• On January 2, Exxon emitted pollutants that could have
reached beyond the Exxon complex into the offsite areas
of Baytown where Plaintiffs’ members lived and
recreated.
• On January 5, Exxon released pollutants in excess of
nonzero emissions limits or that constituted a reportable
quantity under state regulations.
• On January 8, Exxon emitted pollutants that could have
caused or contributed to flaring, smoke, or haze, even if
the emission was of a small magnitude.
ETCL II, 968 F.3d at 378 (opinion of Oldham, J.) (quotation omitted). That
hypothetical should have yielded an obvious result: no standing. Bob
obviously wasn’t harmed by any of the violations when he was breathing
French air. So one would think that’d squelch any standing to recover for
such violations.
But alas, today’s majority says the proverbial Bob was injured, has
standing, and can recover. The relevant time period here is “October 2005
through September 2013.” Id. at 363. And the time after September 2012 is
critically similar to my hypothetical. Plaintiffs put on testimony from four of
their members. The only members (Marilyn Kingman and Diane Aguirre
Dominguez) who testified to suffering injuries after September 2012 did not
live in Baytown, and one of those members stopped visiting Baytown
regularly after March 2013 (Diane Aguirre Dominguez). See id. at 367; see also
Env’t Tex. Citizen Lobby, Inc. v. ExxonMobil Corp., No. CV H-10-4969, 2017
WL 2331679, at *7–8 (S.D. Tex. Apr. 26, 2017). And Kingman “was not able
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to correlate any of her experiences or concerns to specific [violations].” Id.
at *7. She also testified that from her home in Mont Belvieu, she could not
smell odors related to the chemical releases. Nor does she have any medical
problems or conditions related to the alleged violations. She at best “heads
to Baytown a few times a week to run errands, recreate, and go to church.”
ETCL II, 968 F.3d at 367. Plaintiffs provided no evidence showing which
days Kingman went into Baytown, even though such evidence surely existed.
So how can we say that Kingman more likely than not suffered from a
particular violation? See TransUnion, 141 S. Ct. at 2212 (recognizing that
“[t]he production of weak evidence when strong is available can lead only to
the conclusion that the strong would have been adverse” (quotation
omitted)).
Yet under the majority’s view, every violation after September 2012
(and even March 2013) is fairly traceable to some injury. That’s so even if
there is a violation every day from September 2012 to September 2013 and,
concededly, no member of plaintiffs was in Baytown every day. That’s hardly
a reasonable inference from the evidence. See Ctr. for Biological Diversity v.
EPA, 937 F.3d 533, 545 (5th Cir. 2019) (“At some point this common sense
observation becomes little more than surmise. At that point certainly the
requirements of Article III are not met.” (quotation omitted)); In re Gee, 941
F.3d at 164 (“Article III requires more than theoretical possibilities.”). If
anything, it’s equivalent to the very “conjecture” the majority previously
conceded was insufficient to establish standing. See ETCL II, 968 F.3d at 368
(“Traceability instead requires something more than conjecture (‘The
Exxon complex in Baytown emits pollutants, and I live in Baytown’).”).
In sum, the ETCL II majority sanctioned defining the injury in fact at
too high level of generality, making it impossible to properly assess
traceability. The majority then created per se rules and irrebuttable
presumptions for traceable injuries that, in fact, did not exist. The majority,
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for example, allowed a plaintiff who only suffered injuries three days of the
week to get relief for all seven. See Spokeo, Inc. v. Robins, 578 U.S. 330, 340
(2016) (“A ‘concrete’ injury must be ‘de facto’; that is, it must actually
exist.”). In so doing, the majority effectively “eliminate[d] traceability
altogether.” ETCL II, 968 F.3d at 375 (opinion of Oldham, J.). And it
dispensed standing in gross, in violation of TransUnion. 3
* * *
The implications of the majority’s approach are alarming. “By
permitting citizens to pursue civil penalties payable to the Federal Treasury,
the [Clean Air Act] . . . turns over to private citizens the function of enforcing
the law.” Laidlaw, 528 U.S. at 209 (Scalia, J., dissenting). And by easing or
eliminating the Article III minima for standing, today’s majority all but erases
3
There’s another problem lurking in all of this: redressability. Plaintiffs do not
receive any of the civil penalties; they all go to the U.S. Treasury. And although plaintiffs’
lawyers get attorney’s fees, it’s well-established that such fees can’t establish standing. See,
e.g., Uzuegbunam v. Preczewski, 141 S. Ct. 792, 801 (2021); Steel Co., 523 U.S. at 107; cf.
Thomas v. Reeves, 961 F.3d 800, 827–29 (5th Cir. 2020) (Oldham, J., concurring). So you
might be wondering how plaintiffs’ injuries are likely to be redressed when the most
apparent beneficiaries of these citizen suits are the lawyers and the federal fisc.
Laidlaw offers one answer. The Court there suggested that the redressability
requirement is met because the penalties for past violations and past injury can reduce future
violations and thus plaintiffs’ future injuries. See 528 U.S. at 185–88; contra id. at 202–09
(Scalia, J., dissenting). So maybe Laidlaw’s redressability holding compels finding
redressability in almost every citizen-suit case. But in my view, the better reading of the
opinion is that redressability remains a vital requirement in citizen suits, as in all others. See
id. at 187 (majority op.) (“In this case we need not explore the outer limits of the principle
that civil penalties provide sufficient deterrence to support redressability.”). And this case
appears to be a particularly good vehicle to consider the contours of Laidlaw’s
redressability holding. See, e.g., Env’t Tex. Citizen Lobby, Inc. v. ExxonMobil Corp., 524 F.
Supp. 3d 547, 569 (S.D. Tex. 2021) (finding, among other things, that “[d]espite 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” and that “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”).
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the distinction between private citizens and the government agencies that
otherwise enforce the Clean Air Act.
I respectfully dissent.
29