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Fifth Circuit Rejects Government's Overreach in the Prosecution of Environmental Crimes

In U.S. v. Citgo Petroleum Corporation, the United States Court of Appeals for the Fifth Circuit reversed convictions out of the United States District Court for the Southern District of Texas, holding that the District Court erroneously instructed the jury about the scope of a regulation concerning "oil-water separators" and misinterpreted the Migratory Bird Treaty Act (MBTA) of 1918.

In March of 2002, CITGO's Corpus Christi refinery was subject to a 'surprise' inspection which revealed 130,000 barrels of oil floating atop two uncovered equalization tanks. These two equalization tanks were downstream from two "Corrugated Plate Interceptor oil-water separators" at CITGO's refinery. Since the tanks contained such a high content of oil, Texas authorities concluded that CITGO was improperly using the equalization tanks as oil-water separators. Additionally, because the tanks were uncovered, the Texas authorities alleged CITGO was in direct violation of Subpart QQQ which regulates the standards of performance for "Volatile Organic Compounds" emissions from petroleum refinery wastewater systems under 40 CFR Part 60. The government went one step further also indicted CITGO on 'taking' migratory birds in violation of the MBTA, 16 U.S.C. § 703 on a suspected theory that birds had died in these uncovered equalization tanks. Environmental inspectors cited CITGO for violating the Clean Air Act (CAA) and CITGO was indicted on ten (10) different counts in total.

The trial occurred in two parts. During the first trial, a jury exonerated the defendants on three CAA counts, but found CITGO guilty of two counts of knowingly operating the equalization tanks as oil-water separators without emissions control devices in violation of 42 U.S.C. § 7413(c)(1) and 40 C.F.R. § 60.692.4. The jury instructions quoted Subpart QQQ's definition of an oil-water separator, and also added: "[t]he definition of oil-water separator does not require that [it] have any or all of the ancillary equipment mentioned such as forebays, weirs, grit chambers, and sludge hoppers….An oil-water separator is defined by how it is used." Clean Air Act Opinion, 2011 WL 1155684 at 3. Post-trial, and on appeal CITGO challenged the jury instruction on the basis that Subpart QQQ defines an oil-water separator by how it is used and by its constituent parts, and therefore the jury instruction was improper. CITGO contended that the equalization tanks were not required to be covered, since Subpart QQQ only applies to oil-water separators and not equalization tanks. In the non-jury trial phase, the District Court found CITGO guilty on three (out of five) counts for the 'taking' of migratory birds in violation of MBTA, 16 U.S.C. § 703. CITGO also appealed this conviction, contending that the Court erred in interpreting the MBTA statute. Specifically, that illegally "taking" migratory birds only applies to conduct intentionally directed at birds such as hunting and trapping, and not to unintentional and indirect acts.

The Fifth Circuit Court of Appeals reversed the trial convictions, holding that Subpart QQQ "only regulates equipment conventionally, not merely functionally, known as oil-water separators, along with specifically described ancillary equipment." The Fifth Circuit stated that the equalization tanks at CITGO's Corpus Christi refinery had skimmers, but did not have weirs, grit chambers, or sludge hoppers, therefore the tanks were not oil-water separators, and as such Subpart QQQ did not apply. Additionally, the Appellate Court held that Congress' intent for the MBTA's ban on "takings" only prohibits intentional acts (and omissions) that directly (not indirectly or accidentally) kill migratory birds. The Court noted that millions of birds are killed each year by communication towers, cars, and even domestic cats. If the government's preferred strict interpretation of the MBTA, i.e. that it prohibits all acts or omissions that "directly" kill birds and where bird deaths are foreseeable, then the scope of the government power to prosecute for every activity that proximately caused bird deaths would be virtually limitless and lead to absurd results.

To read a copy of the Fifth Circuit's decision click here.

For more information about the Court's decision and how it may apply to specific facts and circumstances, please do not hesitate to contact us at info@chaloslaw.com.

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