UPDATE 1-US court cites Murphy refinery for air pollution

* Judge rules Murphy violated law 21 times

* Ruling part of lawsuit alleging over 100 violations

* Residents talking with Murphy for settlement

(Adds Murphy unavailable, attorney comment, details of lawsuit, background, resident comment)

By Erwin Seba

HOUSTON, Feb 4 (Reuters) - Murphy Oil Co (MUR.N) violated the U.S. Clean Air Act 21 times by exceeding pollution limits set for its Meraux, Louisiana, refinery between 2004 and 2009, a federal judge ruled on Wednesday, according to a decision accompanying the ruling.

For each violation of the Clean Air Act, Murphy could face penalties of up to $32,000 per violation per day the violation occurred.

A Murphy representative did not reply to requests for comment about Wednesday's ruling.

U.S. District Court Judge Sarah Vance issued the summary judgment in an ongoing lawsuit brought by an organization of neighbors of the suburban New Orleans refinery.

In the 47-page decision explaining the ruling, Vance wrote that 19 of the violations were undisputed by Murphy and two others could not be claimed as malfunctions, which would allow exceptions to the pollution limits.

"To a large extent, the ruling is a vindication of what they have been saying that this refinery was not in compliance with the law," said Adam Babich, director of the Tulane University Environmental Law Clinic, which brought the lawsuit on behalf of Concerned Citizens Around Murphy.

Concerned Citizens Around Murphy brought the lawsuit and has been in negotiations with the 120,000 barrel per day (bpd) refinery since 2007 to resolve problems caused by air pollution from the plant's production units.

Failing an agreement between Murphy and Concerned Citizens to resolve the lawsuit, a trial on more than 100 other alleged Clean Air Act violations could go forward to trial in the U.S. District Court for the Eastern District of Louisiana.

One officer of Concerned Citizens said the residents of the neighborhood had high expectations when they returned following the cleanup after Hurricane Katrina in 2005, which also unleashed a spill of 25,000 barrels of mixed crude oil and water from a storage tank at the Murphy refinery.

"We've strived to rebuild smarter, stronger and safer, not for us, but for future generations," said Suzanne Kneale, secretary of Concerned Citizens. "Businesses and heavy industry which chose to return to do business are also expected to operate on a more responsible level."

Murphy negotiated a $330-million settlement in 2007 with 3,800 residents affected by the 2005 oil-water spill. (Editing by Marguerita Choy)