Oil Refinery Owner’s Convictions Related To Uncovered Equalization Tanks Reversed By Fifth Circuit

Yesterday, the Fifth Circuit reversed a petroleum company’s criminal convictions under the Clean Air Act and the Migratory Bird Treaty Act (“MBTA”).  The reversal vacated fines of $2 million under the Clean Air Act and $15,000 for each violation of the MBTA.

In an unannounced inspection of a Texas refinery in 2012, state environmental inspectors discovered 130,000 barrels of oil floating atop uncovered equalization tanks and cited the refinery for violating the Clean Air Act.  Under Subpart QQQ, all oil-water separators must have roofs.  The oil company argued on appeal that the equalization tanks were not oil-water separators, which are defined in the regulation as 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.”  The Fifth Circuit concluded that even though the equalization tanks had skimmers, it was undisputed that they did not have weirs, grit chambers, or sludge hoppers, and that therefore they were not oil-water separators under Subpart QQQ of the Clean Air Act.   The court emphasized that a different subpart of the statute (Subpart Kb) specifically governs storage vessels used in a wastewater treatment system (that subpart requires the storage vessels to be covered only if they have a vapor pressure above certain threshold amounts).

The court also vacated the MBTA convictions after agreeing with the Eighth and Ninth Circuits that a “taking” under the statute is limited to deliberate acts done directly and intentionally to migratory birds (these courts are in conflict with the Second and Tenth Circuits on this issue).  The court explained its rationale as follows: “There is no doubt that a hunter who shoots a migratory bird without a permit in the mistaken belief that it is not a migratory bird may be strictly liable for a ‘taking’ under the MBTA because he engaged in an intentional and deliberate act toward the bird.  A person whose car accidentally collided with the bird, however, has committed no act ‘taking’ the bird for which he could be held strictly liable.  Nor do the owners of electrical lines ‘take’ migratory birds who run into them.  These distinctions are inherent in the nature of the word ‘taking’ and reveal the strict liability argument as a non-sequitur.”