585 United States v. CITGO Petroleum Corp.
Friday, February 5th, 2016
The following is not a legal opinion. You should consult your attorney if the case may be of significance to you.
United States v. CITGO Petroleum Corp. held that uncovered wastewater treatment tanks resulting in dead birds was not a criminal violation of either the Clean Air Act or the Migratory Bird Treaty Act. Oil refinery wastewater treatment systems may emit dangerous levels of volatile organic compounds (“VOCs”). Wastewater is collected through a series of lateral sewers and treated at multiple stages designed to separate the oil from the wastewater and to treat the water before release. The first stage is called an oil-water separator. The oil-water separator causes oils and solids to separate from the water, allowing between 50% to 99% of the oils and solids to be skimmed away. After passing through the oil-water separator, the wastewater is allowed to pool in equalization tanks, which act as a holding system for wastewater to control the flow to the other downstream treatment processes. While in the equalization tanks, gasses are pumped into the wastewater to generate bubbles which attach to oils in the wastewater, allowing more oil to be skimmed off and recycled. The wastewater then flows through biological treatment and a clarifier before being released. CITGO’s oil-water separators had roofs, but the equalization tanks did not. An inspection revealed 130,000 barrels of oil floating on the top of the equalization tanks and the remains of five pelicans and several dozen ducks.
Oil-water separators are required under the Clean Air Act to have a roof, and Subpart QQQ of the regulations (“Subpart QQQ”) defines an oil-water separator as wastewater treatment equipment:
. . . used to separate oil from water consisting of a separation tank, which also includes the forebay and other separator basins, skimmers, weirs, grit chambers, and sludge hoppers. Slop oil facilities, including tanks, are included in this term along with storage vessels and auxiliary equipment located between individual drain systems and the oil-water separator. This term does not include storage vessels or auxiliary equipment which do not come in contact with or store oily wastewater.
Inspectors determined that CITGO was utilizing the equalization tanks as oil-water separators and cited CITGO for failing to have roofs on the equalization tanks. The issue was whether an equalization tank can be an oil-water separator.
The EPA argued that equipment “used to separate oil from water” included the equalization tanks (an argument that the court said would include the whole wastewater treatment process). The court focused on a plain reading of the definition of oil-water separator and concluded that the regulation was not directed solely at the process but at the process and specific equipment. Specifically, the court stated that the relative pronoun “which” refers to the noun immediately preceding it – “separation tank.” In other words, the definition of an oil-water separator includes all of the spaces in which separation occurs, and thus all components of the oil-water separator (forebay, separation tank, outlet basin) must be covered, but not the equalization tanks.
The court bolsters its conclusion by pointing out that Subpart Kb of the Clean Air Act (“Subpart Kb”) governs the operation of storage vessels used in the wastewater treatment process, requiring them to have roofs, if they emit VOCs above a certain threshold. To interpret Subpart QQQ to include equalization tanks would be to eliminate the force of Subpart Kb’s vapor pressure trigger.
The Migratory Bird Treaty Act of 1918 makes it “unlawful at any time, by any means or in any manner, to pursue, hunt, take, capture, kill, attempt to take, capture or kill . . . any migratory bird,” in violation of regulations and permits. The act imposes strict liability on violators, punishable by a maximum $15,000 fine and six months imprisonment. CITGO was indicted for “taking” the birds, not for “killing” them. The court compared numerous cases and analyzed the split in opinion among the circuit courts. Generally, the Second and Tenth Circuits hold oilfield equipment operators to be guilty when birds die as a result of operations. The Eighth and Ninth Circuits do not. In this case, the Fifth Circuit joined the latter and held that a “taking” is limited to deliberate acts done directly and intentionally to migratory birds.
The court reasoned that “to take” or “to kill” migratory birds required some affirmative action. The court cited various sources in noting that the Migratory Bird Act protects approximately 836 species of birds, and, each year, as many as 976 million birds are killed by running into windows, 60 million birds are killed by cars, and, just in Wisconsin, 39 million birds are killed by domesticated cats. It would be absurd to conclude that Congress intended for someone to pay $15,000 and serve six months for each of those deaths.
The significance of the case is the holding in the Fifth Circuit that illegally “taking” migratory birds involves only conduct intentionally directed at birds, such as hunting and trapping, not commercial activity that unintentionally and indirectly causes migratory bird deaths. The rejection of the EPA’s expansion of the obligation to enclose tanks is mostly significant as a strict reading of an existing regulation, which the EPA has the power to amend and expand.