The U.S. Supreme Court has ruled against ExxonMobil (XOM) in its effort to overturn a $14.25 million civil penalty that a judge imposed in a long-running lawsuit concerning air pollution at its Texas oil refinery.
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ExxonMobil had petitioned the Supreme Court to take up the case after a lower court upheld the largest penalty ever assessed in a citizen-initiated lawsuit accusing an oil producer of contributing to air pollution. The lawsuit against ExxonMobil was filed under the U.S. “Clean Air Act” environmental law.
The lawsuit, which was initially filed back in 2010 by the Environment Texas Citizen Lobby and the Sierra Club, focused on ExxonMobil’s operation in Baytown, Texas, which is the largest petroleum and petrochemical refinery in America. The plaintiffs successfully argued that the refinery exceeded limits under the Clean Air Act on emissions of harmful air pollutants.
Court Battle
A Houston, Texas-based judge in 2017 issued a $19.95 million penalty against ExxonMobil, ruling the company was responsible for the pollution from the Baytown complex between 2005 and 2013, and that the health of people who live and work nearby has been impacted by toxic, carcinogenic, and ozone-forming chemicals from the complex.
ExxonMobil had argued unsuccessfully that the ruling sets a dangerous precedent for energy companies operating in the U.S. On appeal, the fine was lowered to $14.25 million. However, ExxonMobil took the matter all the way to the U.S. Supreme Court. The highest court rejected ExxonMobil’s arguments and has upheld the air pollution penalty levied against the crude oil producer.
XOM stock has gained 2% so far this year.
Is XOM Stock a Buy?
The stock of ExxonMobil has a consensus Moderate Buy rating among 15 Wall Street analysts. That rating is based on nine Buy and six Hold recommendations issued in the last three months. The average XOM price target of $123.40 implies 15% upside from current levels.
