Exxon Mobil Corporation (NYSE:XOM) is challenging the $2.6 million fine imposed against it by a judicial ruling earlier this year. The company has filed an appeal against the ruling to see if the ruling can be reversed.
Exxon Mobil Pipeline Company, a subsidiary of Exxon Mobil Corporation has filed legal documents that challenge the fine imposed by the Safety Administration Authority. The company was fined due to a rupture on the Pegasus pipeline that caused the spillage of heavy crude oil into a Mayflower division. The incident took place in March 2013. According to a report filed by The Arkansas Democrat-Gazette earlier this week, Exxon Mobil plans to try to convince the 5th U.S. Circuit Court of Appeals to overrule the $2.6 million fine that the company had already paid earlier this year.
The firm is currently awaiting a response from the Administration which is expected to respond on September 16. The lawyers from Justice Department presented a counter argument claiming that the firm failed to conform to its own procedures during the assessment of the Pegasus pipeline. When the leak happened, the crude oil spilled into a Mayflower subdivision in ditches and it ultimately spread into a Lake Conway cove. Attorneys from the government claim that the leakage caused property damage worth more than $57 million.
The compliance-order requirement issued by the safety agency is supposed to guide the company through the revision process for all the electric-resistance-welded pipes. This is particularly intended for the pipelines laid down before 1970 throughout the entire pipeline. Exxon Mobil operates more than more than 1,000 miles of pipeline and it is regulated by the federal agency.
“PHMSA found violations in this case only after a release occurred,” claimed Exxon in a statement.
The court filings claim that the agency has failed to come up with any objections to the analysis carried out by the company especially that the Pegasus pipeline could suffer failure. The company claimed that the civil penalty will be too high even if the court discovered that that the agency acted within its authority.