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Chris Christie’s Exxon Giveaway

There’s a reason they call it the Chemical Coast. Starting in the 19th century, New Jersey’s wetlands along the shores of the Arthur Kill and Newark Bay were heavily developed as manufacturing and chemical storage sites; most notably, in 1907, the corporate predecessor to Exxon Mobil started an oil refinery between Elizabeth and Linden; the company later opened another facility in Bayonne.

Fast forward a century or so, and those sites, and the surrounding areas, have taken some hard use. Oil spills and chemical dumping have left feeder creeks decorated with what has been described as “a gelatinous, oily emulsion overlying grey silt.” Before cleanup operations began (as the result of a court order to the company) in 1991, according to former Judge Ross R. Anzaldi, “at least some seven million gallons of oil ranging in thickness from 7 to 17 feet [were] contained in the soil and groundwater underlying a portion of the former Bayonne site alone.”

The Exxon Discount

The state brought suit against Exxon in 2004 to recover damages caused by its releases. By 2008, writes longtime journalist and activist Robert Hennelly, “the foundation was set for what promised to be a substantial damages award after a Union County judge ruled that Exxon was indeed liable for the contamination in Bayonne and Linden.” The damages to New Jersey’s resources, ecosystem, and economy were estimated at $9 billion; the state press release issued at the time noted that “the specific amount of money owed by the company will be determined at trial.”

Just recently, that specific amount of money that New Jersey is proposing to settle for was made public. If finalized, the deal struck with New Jersey Governor Chris Christie’s administration would have Exxon pay $225 million—less than 3 cents on the dollar. What’s worse, only $50 million—barely half a cent on the dollar—would go to restoration of the injured resources.

Here’s the background: Natural Resources Damages (NRD) claims against polluting companies are supposed to produce funds that will be used to pay for cleanups, to improve the value of commons, and to generally undo the sort of damage that the companies caused in the first place. That’s how federal NRD statutes are written. New Jersey is unusual: it’s one of a handful of states that litigate NRD claims under state laws.

This enabled Governor Christie to insert a conveniently timed item into the 2014-15 budget stipulating that any NRD claims in excess of $50 million would be diverted to the general fund. The upshot of the whole deal, then, is that Exxon gets a sweet discount, and Christie gets a cool $175 million extra in the general fund—minus tens of millions of dollars in outside counsel fees the state owes. And the precedent for the diversion of NRD funds would be set for Jersey—and perhaps beyond.

Citizens have a critical opportunity here to speak up and force a more reasonable resolution by participating in a 60-day public comment period held under the auspices of the state’s Department of Environmental Protection. It is NJDEP that ultimately will make a report to the state judge who is overseeing the settlement. In the event that the deal goes through unaltered, the public has recourse through the state court system to appeal the settlement.

The Legal Commons

The legal precept on which Exxon’s liability is based—the idea of the commons—has deep roots in Roman law and English common law. And those roots were affirmed in the context of American law in a case that—in an elegantly serendipitous spin of history—revolved around the ownership of an oyster bed under the surface waters of New Jersey’s Raritan Bay.

In the 1842 U.S. Supreme Court decision in Martin v. Waddell, Chief Justice Roger Taney (in one of his better moments) wrote that “by the law of nature these things are common to all mankind—the air, running water, the sea and consequently the shore of the sea.” These commons cannot be sold off piecemeal to (or be destroyed or damaged by) private interests, the logic goes, but must be held in trust for the citizens.

This was the affirmation in America of the modern form of the “public trust” doctrine: the idea that there are kinds of property, certain places and types of resources, that fall into a special category: they are in essence our commonwealth. But this commonwealth will not be preserved unless citizens fight for it.

In the context of earlier societies—medieval England, for example—the emphasis in this doctrine of the commons was on the right of ordinary people, who were not property owners, to fish (for example) along the shores of a river. In modern context, this scenario would all too easily lead to what Garrett Harden has called the “tragedy of the commons”—what no one owns, no one has the incentive to manage well; you’d get overfishing in a hot minute. And so Chief Justice Taney articulated an approach to the commons that was in keeping with the conditions that, even in the 19th century, made New Jersey a far cry from the old country: the conditions of a lively, busy, increasingly densely populated harbor.

Chief Justice Taney articulated the idea that the sovereign—in the case of the U.S. that would be the people, acting through their agent the state—has the duty to act in the interest of all to preserve those common resources for the use of, and enjoyment by, all.

In other words, the commons would neither be the site of an anarchic free-for-all, nor the private property of a natural person or corporation. This public trust doctrine was in effect codified by the passage of the Natural Resource Damages (NRD) provisions of the federal and state Superfund Law (CERCLA) and the Oil Pollution Act in the second half of the 20th century. Under these statutes, and the underlying common law principles, the government is trustee of the protected natural resources. In this case Governor Christie’s designated trustee has a fiduciary duty to protect, and seek full recovery for damages to and losses of, these resources.

The Harbor Restoration

At the time of the Martin v. Waddell decision, the whole of the Hudson River Estuary—including Newark Bay—were still rich fisheries, though overfishing was beginning to take its toll. These highly biodiverse environments were based around the oyster reefs that were characteristic of the region.

When Henry Hudson sailed the Half Moon into the Harbor in 1609, he was hazarding his ship’s hull on more than 220,000 acres of reefs. By filtering the water—one gallon per adult oyster per hour—and providing habitat, these oysters were the basis for an ecosystem that was one of the most biologically diverse and productive on the planet. Through the early part of New York and New Jersey’s history, the oyster was a mainstay of local cuisine, and even as late as the year 1885, 765 million oysters were harvested.

But by 1970, the Harbor was effectively dead. Overfishing, combined with essentially nonexistent sewage treatment and the kinds of industrial uses of which the Bayonne and Linden refineries provide a prime example, had brought an end to this natural bounty. Certainly it was not industrial pollution alone that caused the collapse of the Harbor’s ecosystem, but the effects of the refineries’ discharge on the local bodies of water—on Arthur Kill and on the marshes of Newark Bay—are straightforward enough. Moreover, the cumulative effects of pollution, of which these refineries’ discharge is representative, is just as certainly part of the larger picture of environmental damage in the Hudson River estuary.

The fairly dramatic comeback that the estuary has made since the passage of the Clean Water Act in 1971, related state laws, and the later NRD statutes, highlights the positive role that appropriate laws, vigorously enforced, can play in rehabilitating a commons. The Harbor is no longer everybody’s dumping ground; the legally mandated corporate clean-ups combined with the natural healing that has taken place since the ‘70s has provided the opportunity for groups like New York/New Jersey Baykeeper to take a more active role in restoring the ecosystem—by reintroducing the doughty bivalve that had been the keystone species of the Harbor for so long.

Baykeeper began pioneering oyster restoration efforts in the late 1980s—efforts that at the time included pouring tons of oyster shells off a barge by the Statue of Liberty. They soon developed more sophisticated and successful reefs in New Jersey, and also created a New York City-wide oyster gardening program that partnered with community groups and local schools.

Beginning in 2003, these partners included New York Harbor School, a public high school that provides a college preparatory education built on New York City’s maritime experience, teaching practical environmental stewardship and the skills associated with careers on the water. For the next decade, Harbor School and Baykeeper collaborated on restoration; in 2013, Harbor School inherited the New York part of the restoration program, and in the Spring of 2014, they publicly launched the Billion Oyster Project.

BOP is a long-term, large-scale effort to restore a billion oysters to New York Harbor by 2035, while in the process teaching New York public school students the various maritime and scientific skills they need to carry out such a restoration project. Students at Harbor School, and at the growing number of middle schools involved in BOP, have already restored 11.5 million oysters to the Harbor, and the work continues.

The Stakes of the Settlement

This work counts among the many other public goods threatened by the impending decision in New Jersey. It’s not just that Jerseyites (and their neighbors across the Hudson) shouldn’t have to take the hit for Exxon’s years of irresponsible use of their sites; it would set a terrible precedent for most of the relative pittance that Exxon would be required to pay under the unacceptable proposed settlement to not even be earmarked for environmental restoration efforts.

This appears to be a gross violation of Governor Christie’s fiduciary responsibility to protect and restore the injured resources. Perhaps even more alarming, though, is the missed opportunity to fund the restoration of the wetlands and marshlands in the Newark Bay—a step that would make the coastlines of both states more resilient in the face of sea-level rise and coming superstorms.

It was just this kind of violation of the public trust that the Martin decision and later statutes were meant to prevent. Modern scientific understanding of the precise impact of pollution on an ecosystem has refined, but cannot alter, the proper application of the principle of natural justice that Taney cited in 1842.

Robert F. Kennedy Jr., environmental attorney and president of Waterkeeper Alliance, founds his characterization of the proposed Exxon settlement on just this principle of natural justice. “We own these wetlands,” wrote Kennedy. “It’s like saying to a gang that robs a bank that they just have to pay back 3 cents of every dollar they stole.” Exxon made its shareholders billions, he points out, while ravaging the commons.

It remains to be seen whether the legal commons—the common-law principles themselves—will be as effectively trashed as were the physical common of the Harbor during the bad old days. If the New Jersey precedent is allowed to stand, removing the ensuing legal sludge might well take the work of another few generations of Harbor dwellers. Assuming they can tolerate the stink.

Public comment has been opened on this issue and will run through June 5; comments may be sent to [email protected] referencing “Exxon Mobil Bayway Settlement” in the subject line.

Susannah Black is a writer and a native New Yorker. She lives in Queens.

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