Environment Texas Citizen Lobby, Inc. v. ExxonMobil Corp., No. 17-20545 (5th Cir. July 29, 2020) (Davis, Costa) (Oldham, J., concurring in part, dissenting in part, and concurring in judgment)

In Texas, primary responsibility for Clean Air Act enforcement falls on the Texas Council on Environmental Quality and the EPA. Rather than leave CAA enforcement up to them entirely, Congress also permitted citizens to bring civil actions in federal court to seek redress for certain CAA violations. 42 U.S.C. § 7604. This case deals with the constitutional limits on such citizen suits.

Grounded in Article III's cases or controversies limitation on federal jurisdiction, the standing doctrine permits courts to decide claims only when a plaintiff has suffered a concrete injury that is fairly traceable to the defendant’s wrongdoing. An important corollary of this principle prevents a plaintiff injured by one of the defendant’s violations from leveraging that claim to challenge other violations that didn't injure him.

Plaintiffs' claims in this case seem designed to test these constitutional constraints on federal jurisdiction. Before getting into the details, though, here is Judge Costa's primer on the mechanics of CAA citizen suits, which I have lifted straight from the majority opinion:

Using reports that ExxonMobil submitted to TCEQ and records that the company maintained, plaintiffs sued ExxonMobil for thousands of violations across an almost eight-year period. To demonstrate traceability, plaintiffs offered testimony linking their alleged injuries to five of the emissions events that transgressed the CAA. There was no dispute that evidence supported plaintiffs' standing to challenge those five events, but plaintiffs were far more ambitious and convinced the district court to permit them to challenge 16,386 days' worth of alleged violations, without requiring plaintiffs to demonstrate traceability as to the vast majority of those. The result? The largest penalty in the history of CAA citizen suits: $19.95 million.

The Majority Opinion

Standing on a Violation-by-Violation Basis?

The primary question on appeal was whether the district court should have required the plaintiffs to demonstrate standing for each violation they alleged. The Fifth Circuit held that the answer was yes. Plaintiffs' position to the contrary, the Judge Costa explained in his opinion for the panel majority, "runs up against the principle that one injury does not entitle a litigant to right other wrongs that did not injure it." The Court acknowledged that "no court appears to have found standing for some Clean Air Act violations but not others"--a reality that gave the panel "some pause"--but that was because no prior case had confronted the number and variety of claims that the plaintiffs had brought in this case.

Having decided that plaintiffs were required to prove standing for each violation, the Court asked whether plaintiffs had, in fact, done so. The Court addressed each element of standing--injury in fact, causation (traceability), and redressability--but the core of the dispute centered on traceability. Plaintiffs, the Court held, "view traceability too loosely in contending that proving it for one violation proves it for all." But "Exxon views this element too strictly when it comes to how specific the proof must be." Simply put, Exxon insisted that plaintiffs needed to demonstrate a particular injury linked to a particular violation on a particular day. The Court explained that "[r]equiring 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)." (citing Friends of the Earth, Inc. v. Gaston Copper Recycling Corp., 204 F.3d 149, 153 (4th Cir. 2000) (“[T]he ‘fairly traceable’ standard is ‘not equivalent to a requirement of tort causation.’” (quoting Pub. Interest Research Grp. of N.J. v. Powell Duffryn Terminals, Inc., 913 F.2d 64, 72 (3d Cir. 1990))).

The right balance? According to Judges Costa and Davis, "[t]raceability instead requires something more than conjecture ... but less than certainty." The majority went on to describe the "showing as requiring evidence that the defendant’s violations were of a type that 'causes or contributes to the kinds of injuries alleged by the plaintiffs.” (quoting Sierra Club, Lone Star Chapter v. Cedar Point Oil Co. Inc., 73 F.3d 546, 557 (5th Cir. 1996), which, in turn, was quoting Powell Duffryn, 913 F.2d at 72). While the district court "outlined in general terms how Exxon's violations had injured Plaintiffs' members[,] it did not assess traceability as to each violation." Accordingly, the panel remanded for the Court to perform the proper traceability analysis.

Detail on the Traceability Standard

The Court provided a helpful overview of the showings plaintiffs must make in this regard. First, "that each violation in support of their claims 'causes or contributes to the kinds of injuries' they allege." (quoting Cedar Point, 73 F.3d at 557, which, in turn, was quoting Powell Duffryn, 913 F.2d at 72). Given the findings the district court had already made, the panel added, "a violation will satisfy that standard if it (1) created flaring, smoke, or haze; (2) released pollutants with chemical odors; or (3) released pollutants that cause respiratory or allergy-like symptoms."

Second, plaintiffs must demonstrate "the existence of a 'specific geographic or other causative nexus' such that the violation could have affected their members." (quoting Cedar Point, 73 F.3d at 558 n.24). For this point, the majority added a "cf." cite to their dissenting colleague's recent opinion in Center for Biological Diversity v. EPA, 937 F.3d 533, 538-39 (5th Cir. 2019) (Oldham, J.) (holding that plaintiffs could not establish injury based on their general use of parts of the Gulf of Mexico to challenge drilling permits for specific areas of that vast body of water).  More on that later.

The Court goes on to explain that "[i]n making this geographic nexus inquiry, the district court should distinguish between two kinds of violations." First, for "small-magnitude emissions events that constituted violations only because Exxon's permits established zero-emissions standards," the district court "must decide whether evidence shows that the emitted pollutants could have reached beyond the Exxon complex into the offsite areas of Baytown where Plaintiffs’ members lived and recreated." Second, for "other violations involve Exxon’s releasing pollutants in excess of nonzero emissions limits," "it is an easier inference that the pollutants escaped the Baytown complex."

The panel offered two other clarifications. First, as with violations of non-zero emissions limits, emissions in "reportable quantity" under state regulations also require no evidence confirming that the pollutants in question could have reached beyond the Baytown complex. And second, the Court added that "the geographic nexus inquiry is unnecessary for any violation that could have caused or contributed to flaring, smoke, or haze, even if the emission was of a small magnitude." Summing up, the panel offered the following to "guide the district court's inquiry":

Throughout its explanation of this standard, Judge Costa repeatedly emphasized that "there is no need for scientific certainty," and that "it does not follow from the need to establish standing for each violation that separate proof of standing is needed for each violation."  

Merits and Ferrets

Because plaintiffs clearly had standing to pursue their claims related to at least some of the violations alleged, however, the Court proceeded to the merits.  First up was a dispute regarding Exxon's affirmative defenses. Exxon had asserted an "Act of God" defense as well as certain statutory defenses. The Fifth Circuit held that the district court erred in rejecting Exxon's Act of God defense, but it agreed with the district court's refusal to consider Exxon's statutory defenses.

In support of its statutory defenses, Exxon had submitted 200 paragraphs of proposed findings containing "brief descriptions of 97 emissions events, and references to the reports and trial testimony of experts." The district court ruled that Exxon had "failed to meet its burden because it did not identify evidence establishing it met the relevant criteria for each individual emissions event." The Fifth Circuit agreed, explaining that

[t]he trial testimony Exxon cited did not examine particular events; it instead opined that all the criteria were met for each violation, across the board. And Exxon did not pinpoint pages of the expert report, instead referring to hundreds of pages of reports in their entirety.

In other words, the panel emphasized, "Judges are not ferrets!" (quoting Nicholas Acoustics & Specialty Co. v. H&M Const. Co., 695 F.2d 839, 847 (5th Cir. 1983)). This anti-ferreting doctrine reinforces the district court's "'broad discretion in managing [its] docket'" by "permit[ting] a district court to refuse to do a litigant's work for them." (quoting Sims v. ANR Freight Sys., Inc., 77 F.3d 846, 849 (5th Cir. 1996)).

Exxon had also challenged the penalty imposed by the district court, but the because the panel was already remanding for the district court to determine the number of violations plaintiffs have standing to challenge, the district court would "have to reassess penalties" on remand anyway. The panel concluded that it would be premature to address those issues now.

The Court concluded as follows:

Judge Oldham's Separate Opinion

Judge Oldham concurred in part, dissented in part, and concurred in the judgment. While he agreed "that the district court's judgment must be vacated" and that a remand for additional proceedings was in order, he "wr[o]te separately to emphasize that our precedents in this area are a mess" and that "[e]ventually, our en banc court should clean up this confusion."

"The mess started in 1990," Judge Oldham explained, "when the Third Circuit created a threepart standard for determining traceability in citizen suits under the Clean Water Act." (citing Pub. Interest Research Grp. of N.J., Inc. v. Powell Duffryn Terminals Inc., 913 F.2d 64, 72 (3d Cir. 1990)). Under the Powell-Duffryn standard, a plaintiff must show that the defendant has

1) discharged some pollutant in concentrations greater than allowed by its permit; 2) into a waterway in which the plaintiffs have an interest that is or may be adversely affected by the pollutant; and that 3) this pollutant causes or contributes to the kinds of injuries alleged by the plaintiffs.

Accodring to Judge Oldham, however, the Third Circuit made that standard up out of whole cloth and cited nothing to support it.

Judge Oldham was particularly critical of the third prong of the test. In his veiw, requiring a plaintiff to show only that the pollution at issue causes or contributes to "the kinds of injuries" alleged "eliminates traceability altogether" because it jettisons any requirement of but-for causation:

Nevertheless, Judge Oldham acknowledged that in Cedar Point, the Fifth Circuit applied the Powell-Duffryn test. 73 F.3d at 557-58. Judge Oldham lamented the fact that Cedar Point "did not even cite--much less analyze--the Supreme Court's canonical decision on Article III standing in Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992). In his view, Cedar Point's embracing of plaintiffs' theory of "threatened injury" ignored Lujan's requirement that the injury be “concrete,” “imminent,” and “certainly impending.”

Yet even Cedar Point recognized that "a literal reading of Powell Duffryn may produce results incongruous with our usual understanding of the Article III standing requirements.” (quoting Cedar Point, 73 F.3d at 558 n.24). According to Judge Oldham, that should have convinced the Court to ignore Powell Duffryn's made-up three-part test altogether. Instead, the Court "utilized a more amorphous approach to Article III standing that turned on things like whether the relevant waterway is 'large.'”

Judge Oldham also recognized that the Fifth Circuit is not alone in ignoring "the fallacies inherent inherent in" the Third Circuit's three-part test. Indeed, "some courts have extended its illogic." To illustrate this point, Judge Oldham began with the Fourth Circuit's decision in Friends of the Earth, Inc. v. Gaston Copper Recycling Corp., 204 F.3d 149, 161 (4th Cir. 2000), which "relied on both cases to hold that the 'fairly traceable' standard is 'not equivalent to a requirement of tort causation.'” To the extent the Fourth Circuit meant that "that a plaintiff can establish traceability without establishing the tort requirement of proximate causation," Judge Oldham had no problem with that holding. (citing 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, which requires only that the plaintiff’s injury be fairly traceable to the defendant’s conduct.”)). But other courts have invoked Gaston Copper to support eliminating but-for causation as well. Judge Oldham's criticism of this line of cases in particular is worth reading in full:

The troubling "Powell Duffryn-Cedar Point-Gaston Copper-Parsons standard" (Judge Oldham cleverly adds additional elements to this cobbled-together label for the standard as he goes) had apparently been on Judge Oldham's mind for some time. He reminds us, for instance, that in Center for Biological Diversity v. EPA, his opinion for the Court carefully "limited [those decisions' applicability] to 'a case involving a small body of water, close proximity, well-understood water currents, and persistent discharges." (quoting 937 F.3d 533, 545 (5th Cir. 2019)).

In light of all this, Judge Oldham would have held that the Powell Duffryn-Cedar Point-Gaston Copper-Parsons didn't apply in this case at all. And even if that doctrine did apply, he adds, "the en banc court should revisit it." Judge Oldham ends with a hypothetical to illustrate his concern:

Some Thoughts

It was a real treat to read the dueling opinions in this case from Judges Costa and Oldham. To say the subject of their dispute is important is an understatement. Citizen-suit standing lies at the convergence of environmental policy and constitutional constraints on judicial power under Article III. It should come as no surprise, then, that it has been the battleground for several landmark SCOTUS on standing doctrine. And this opinion makes very clear that another storm is brewing in the Fifth Circuit. I'll conclude with some thoughts on the battle to come.

As I see it, the key difference between Judges Costa and Oldham is that Judge Costa seems comfortable with permitting traceability in these cases to turn on "general causation." By that, I mean he would only require plaintiffs to demonstrate that the violation at issue can cause or contribute to the type of injury alleged. Judge Oldham, by contrast, insists that requiring only general causation dispenses with traceability altogether. In his view, "specific causation," i.e. the violation at issue did in fact cause or contribute to the particular injury alleged.

This may seem like a subtle difference, but the consequences of choosing one view or the other are vast because in many modern citizen suits, it is simply impossible for plaintiffs to nail down but-for causation in the way Judge Oldham has in mind. I'm sure he would acknowledge that reality. And I'd bet he'd argue that's not a bug but a feature of his theory. Standing, after all, is grounded in separation-of-powers norms that ensure courts only decide "cases or controversies," leaving more abstract political questions to be worked out in the political branches.

Critics of that view would argue that by permitting citizen suits in various environmental statutes, Congress opened the federal courthouse doors a bit wider. Because Article III only requires that the plaintiff's injury be "fairly traceable" to the defendant's violation, the argument goes, setting the bar for standing in citizen suits as high as Judge Oldham would have it doesn't promote separation-of-powers values at all. Indeed, some would argue that Judge Oldham's aggressive approach to standing actually undermines separation of powers by over-reading the traceability requirement to impinge on Congress's plain intent that "any person" to sue polluters under the CAA.

I'll admit that I tend to favor Judge Oldham's view on this question. That said, I do sometimes worry that if we go too far in demanding a robust demonstration of causation so early on in a case, we may end up requiring of plaintiffs the sort of evidentiary showing that, in other contexts, would be considered appropriate only at a later stage of litigation.  

Environment Texas Citizen Lobby, Inc. v. ExxonMobil Corp., No. 17-20545 (5th Cir. July 29, 2020)
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