Formosa agrees to pay $50 million in plastic pellet lawsuit

Ronnie Hamrick, a member of the San Antonio Bay Estuarine Waterkeeper, holds some plastic pellets he found along the shorelines of Lavaca Bay and Cox Creek the week of Feb. 11, 2019.

Formosa Plastics agreed to pay $50 million for polluting waterways Tuesday, setting a record for the largest settlement of a Clean Water Act lawsuit brought by private individuals.

“It has been four long, hard years getting to this place, and to see it in writing, with signatures and filed, is the most satisfying feeling I have ever had,” an ecstatic Diane Wilson said Tuesday.

In addition to the $50 million, which will fund environmental mitigation in the region around the Point Comfort facility, Formosa also agreed to comply with future “zero discharge” standards for all plastics and clean up existing pollution.

“The conditions agreed to in this settlement demonstrate Formosa’s commitment to manufacturing our products in a safe and environmentally friendly manner,” Ken Mounger, the Formosa Plastic Corp., USA executive vice president, said in a news release.

Wilson, a longtime environmental activist who has spent most of her life shrimping and fishing in the Lavaca Bay, said the “zero discharge” agreement is the best part of the settlement. She said she never thought she would see Formosa reach an agreement of this caliber.

“It is very surprising to have dedicated volunteers like I had and a legal team like I had and a judge who heard us and saw the truth in the evidence,” she said. “It is a perfect storm of all the pieces – it is beautiful. I really think it is beautiful.

“And it sends a notice to the rest of the plastic companies in the country that this should be the standard now, and I am very proud to be a part of that.”

Wilson and the San Antonio Bay Estuarine Waterkeeper members, represented by private co-counsels David Bright of Corpus Christi and David Frederick of Austin, filed the lawsuit against Formosa in July 2017.

The settlement came 13 days before the punishment phase of the trial was set to begin, in which Formosa could have been ordered to pay a fine up to $101 million to the government.

U.S. District Judge Kenneth M. Hoyt, who already gave his ruling after hearing the liability phase of the case, has 45 days to approve the settlement agreement between the plaintiffs and Formosa.

Calhoun County Judge Richard Meyers declined to comment on the settlement until it gets a stamp of approval from the Department of Justice.

The petrochemical company, described by Hoyt as a “serial offender” of the law in his violation ruling, discharged billions of plastic pellets into Lavaca Bay and Cox Creek.

Wilson and members of Crossroads environmental activist group San Antonio Bay Estuarine Waterkeeper collected 2,428 samples of pellets and plastic powders and brought them to the Victoria County Courthouse last March to prove that they were not mere trace amounts of plastic pollution.

Julie Teel Simmonds, an attorney with the Center for Biological Diversity, echoed Wilson’s hope for the settlement.

“It’s great news that Formosa Plastics is finally being held accountable for polluting Texas waterways with plastic pellets,” she said. “The zero plastic discharge requirement this settlement won should be the standard for all plastic plants across the country.”

Erin Gaines, a Texas RioGrande Legal Aid attorney who represents Wilson, said the settlement could not have come at a better time. It is five times the previous record for a settlement in a Clean Water Act suit brought by private individuals, which was in Public Interest Research Group of New Jersey v. Witco Chemical Corp. in the 1990s.

“A settlement of this size sends a powerful message to corporate polluters – there’s a steep price to pay for flagrant, chronic violations of laws that protect our environment,” she said. “And with plastics pollution of our oceans at a crisis, the message comes at a vital time.”

The $50 million will be paid during the course of five years into a fund that will support projects aimed at reversing the effects of water pollution in Calhoun County.

Those projects will include:

  • $20 million to create a cooperative geared toward revitalizing depleted marine ecosystems and develop sustainable fishing, shrimping and oyster harvesting.
  • $10 million for environmental development of Green Lake Park into an environmentally sound public park.
  • $2 million to control erosion and restore beaches at Magnolia Beach.
  • $5 million for environmental research of San Antonio and Matagorda Bay systems and river deltas that feed into them.
  • $1 million to support the “Nurdle Patrols” at the University of Texas’s Mission-Aransas National Estuarine Research Reserve and to give scholarships to allow persons throughout the Gulf coast to attend Nurdle Patrol conferences.
  • $750,000 to the YMCA for camps for children to study and learn how to be good stewards of the local marine environment.
  • $11.25 million to the Matagorda Bay Mitigation Trust, which is established in the settlement to research, protect and restore the water bodies and surrounding ecosystems.

The settlement details how and when Formosa will make improvements to its plant to eliminate the discharge of plastic pellets.

Citizens who sued will be allowed to review decisions and make objections throughout the process – from the hiring of an engineer to design the improvements to the monitoring of Formosa to achieve zero discharge.

Both the plaintiffs in the suit and any concerned citizens, for example, will have the option to submit documentation of any future discharge or violation to a monitor for review.

One particular issue that Wilson anticipates being addressed is drainage and flooding problems at the facility.

“We definitely will be monitoring. We’re working together (with Formosa), but we will still be monitoring,” Wilson said. “We still have dedicated volunteers taking pictures daily, so that will not let up at all.”

Currently, about five former Formosa employees are volunteering with Wilson, she said.

If the plant is found to be in violation again, the company will have to pay for every documented discharge back into the settlement fund. Payments will start at $10,000 per discharge this year and increase in annual increments to more than $54,000 per discharge.

“Through reporting requirements, an independent monitor, site visits and other accountability requirements, we will have access to the process to determine whether Formosa is living up to its side of the bargain,” said Bob Lindsey, a plaintiff and member of the San Antonio Bay Estuarine Waterkeeper. “We will have the power to make sure Formosa fulfills its promises.”

Throughout the lawsuit and Wilson’s fight against plastic pollution, she and former Formosa employees who testified faced pushback from members of their own community, which is heavily employed by the plant. She said she hopes the outcome will encourage others to tell their truth.

“There will always be people who are naysayers and think you shouldn’t rock the boat,” she said. “Hopefully this will be a model for these guys and people to see the good that can come from speaking up.”

Kali Venable is an investigative and environmental reporter for the Victoria Advocate. She can be reached at 361-580-6558 or at kvenable@vicad.com.

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Investigative & Environmental Reporter

"I am a Houston native and 5th generation Texan, with a degree in journalism and minor in creative writing from the University of Texas at Austin. I care deeply about public interests and the community I serve.”

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