Item 1. Legal Proceedings
ITEM 1. LEGAL PROCEEDINGS
ExxonMobil has elected to use a $1 million threshold for disclosing environmental proceedings.
As reported in the Corporation’s Form 10-Q for the first quarter of 2021, ExxonMobil appealed to the U.S. Court of Appeals for the Fifth Circuit a judgment of the United States District Court for the Southern District of Texas entered on April 26, 2017, in a citizen suit captioned Environment Texas Citizen Lobby, Inc. et al. v. Exxon Mobil Corporation. The U.S. District Court had awarded approximately $20 million in civil penalties, payable to the United States Treasury. The suit, originally filed in December 2010, related to alleged violations by ExxonMobil of air operating permits, the Texas State Implementation Plan and the Clean Air Act at the Baytown Refinery in Texas, and claims related to alleged delay in the implementation of certain environmental improvement projects. On July 29, 2020, the Fifth Circuit vacated the U.S. District Court’s penalty award and remanded the case back to the District Court for further proceedings. On March 2, 2021, the U.S. District Court awarded $14.25 million in civil penalties, payable to the United States Treasury. ExxonMobil filed its appeal of the judgment in the U.S. Court of Appeals for the Fifth Circuit on April 12, 2021. On August 30, 2022, the Fifth Circuit affirmed the U.S. District Court’s revised penalty award of $14.25 million. On October 13, 2022, ExxonMobil filed a motion for rehearing en banc.
As reported in the Corporation’s Form 10-Q for the first quarter of 2022, on February 22, 2022, the Oil Conservation Division of the New Mexico Department of Energy, Minerals and Natural Resources (the “Department”) announced that it issued notices of violation and cumulative associated administrative civil penalties of $2.25 million to XTO Permian Operating, LLC (“XTO”) alleging XTO failed to comply with certain operational and reporting requirements relating to four salt water disposal wells. Effective August 15, 2022, XTO and the Department settled the notices of violation and additional self-reported potential violations for an administrative civil penalty of $1.77 million.
As reported in the Corporation’s Form 10-Q for the third quarter of 2020, the State of Texas filed a lawsuit against ExxonMobil Oil Corporation (EMOC) on August 19, 2020, seeking penalties and injunctive relief in connection with alleged unauthorized emissions events at EMOC’s Beaumont Refinery in Texas from 2017 to 2020. The lawsuit, captioned State of Texas v. ExxonMobil Oil Corporation, was filed in the 98th Judicial District Court of Travis County, Texas. At the time of the previous report, the State had not quantified the amount of the penalty sought. In October 2022, the State amended its petition to seek additional penalties for additional alleged violations and for an aggregate demand in excess of $1 million.
On January 3, 2022, the State of Texas, acting by and through its Attorney General, on behalf of the Texas Commission on Environmental Quality, (“State”), filed a lawsuit against the Corporation (captioned State of Texas v. Exxon Mobil Corporation) in Travis County, 126th Judicial District Court for alleged violations of the Texas Clean Air Act, ExxonMobil’s permits and promulgated regulations. The original complaint alleged that from December 21-23, 2021, a pipeline containing vaporized naphtha at the Baytown Refinery leaked, and that a spark in the course of repairs caused an explosion. In August 2022, the State amended its petition to seek additional penalties for additional alleged permit and regulatory violations in connection with unrelated subsequent emission events at the refinery, for an aggregate amount in excess of $1 million.
Refer to the relevant portions of Note 3 of this Quarterly Report on Form 10-Q for further information on legal proceedings.
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