Judge Hears Arguments on an Exxon Settlement

But in a daylong hearing in the Burlington County courthouse, Judge Hogan seemed to save many of his toughest questions for a lawyer arguing on behalf of environmental groups, who had filed a friend-of-the-court brief.

Referring to the deference that a court normally gives government officials negotiating settlement in a civil case, and to the risks of taking the case against Exxon to a final ruling, Judge Hogan asked Selena Kyle, a lawyer with the Natural Resources Defense Council, about whether to second-guess the acting attorney general, John J. Hoffman, for New Jersey’s decision to strike a deal with Exxon.

“All these risks,” the judge said, citing potential courtroom developments that could derail the state’s ability to win damages, “they add up to a big risk.”

“How much risk, your honor?” Ms. Kyle replied, questioning the judge on the state’s math: Did the risks justify a deal “98 percent less” than $8.9 billion?

Judge Hogan said that the risks were high “enough for Exxon to shell out $225 million and the state to accept it.”

Theodore V. Wells Jr., a lawyer for Exxon, noted that the company had already spent hundreds of millions of dollars in “remediation” to repair damaged sites, and that the company has long said it owed “zero” dollars in damages.

He said Exxon had decided to pay out more than it wanted to under the settlement because it sought to end a protracted case — one that was fraught with risks if it went to a final decision on damages before a judge.

“We wanted to end this 10 years of slogging it out,” Mr. Wells said. “We recognize that if we don’t settle this case, this case could go on for another 10 years.”

If approved by the judge, the settlement, negotiated secretly and first disclosed by The New York Times in February, would end a decade of litigation.

During a nearly packed hearing held in an oak wood courtroom, Judge Hogan also challenged the lawyers for the state and Exxon. During the morning session, he asked Allan Kanner, an outside lawyer hired by the state to litigate the case, “How do you respond to people saying it is a 98 percent discount from $8.9 billion?”

“That is how you settle the cases,” Mr. Kanner said. “The first thing you do is you give up your aspirations for the highest possible number.”

Mr. Kanner also told Judge Hogan that he believed some of the most vociferous criticism of the proposed settlement amounted to “politics” aimed at Mr. Christie. The hearing came a month after the governor announced that he was seeking the Republican nomination for president.

The proposed settlement came just as Judge Hogan appeared to be poised to rule on damages in the case. About 16,000 comments were received by the state’s Department of Environmental Protection during a two-month comment period, the agency has said. The administration of Mayor Bill de Blasio of New York also weighed in, saying that the proposed deal “appears wholly inadequate” and asking that it be rejected.

But Mr. Christie and other state officials staunchly defended the agreement, calling it fair and in the public interest. “This settlement will result in the largest recovery of natural resource damages in state history,” the Christie administration told Judge Hogan in a brief.

Do you like this post?

Be the first to comment