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Texas Federal Judge Imposes Maximum $2 Million Fine On Felony Pollution Counts

CORPUS CHRISTI, Texas — (Mealey’s) A Texas federal judge on Feb. 5 imposed fines totaling more than $2 million on convictions stemming from oil/water separation tanks that had been operated without the required covers for nearly 10 years, polluting the air and causing the deaths of migratory birds (United States v. CITGO Petroleum Corp., et al., No. CR-06-563, S.D. Texas, Corpus Christi Div.). 

Senior U.S. Judge John D. Rainey of the Southern District of Texas imposed the statutory maximum fine of $500,000 on each of two felony Clean Air Act convictions against CITGO Petroleum Corp., according to a minute entry in the court’s docket.  Judge Rainey imposed identical fines on the same counts against CITGO Refining and Chemicals Co. LLP.  In addition, the judge imposed $15,000 fines for each of three misdemeanor violations of Migratory Bird Treaty Act against the latter company, according to the entry. 

A jury in 2007 convicted the two CITGO entities on the Clean Air Act counts for the period it operated tanks 116 and 117 without roofs and pollution-control devices in violation of federal air pollution regulations 42 U.S. Code Sections 7413(c)(1) and 7411(e) and 40 U.S. Code of Federal Regulations Section 60.692-4.  At a bench trial the same year, Judge Rainey convicted CITGO of violating the Migratory Bird Treaty Act, a class B misdemeanor.  


Judge Rainey deferred a ruling on restitution to residents of Corpus Christi’s Hillcrest neighborhood, whom he designated victims under the Crime Victims’ Rights Act (CVRA).  The government had asked Judge Rainey to exceed the statutory maximum fines and to order the company to pay restitution in the form of relocation payments to Hillcrest residents. 

Judge Rainey had initially denied the government’s petition for inclusion of more than 300 area residents as victims under the CVRA, saying the residents' alleged injuries were too vague to be considered a direct result of pollution emanating from the tanks.  He also denied as untimely a subsequent petition by the neighbors, who claimed that they were raising issues the government had neglected.  But the Fifth Circuit U.S. Court of Appeals held that there is no time limit for CVRA status and instructed the court to consider the neighbors' new arguments. 

The residents previously asked the court to create a trust fund for future injuries, including medical monitoring for illnesses stemming from exposure to benzene and other hydrocarbons, as a condition of sentencing on the company's criminal pollution convictions.  


CITGO is represented by Dick DeGuerin of DeGuerin and Dickson in Houston; Catherine Louise Baen and Matt Hennessy of Houston; James B. Blackburn Jr. of Blackburn Carter in Houston; Chad J. Doellinger and Nathan P. Eimer of Eimer, Stahl, Klevorn & Solberg in Chicago; Ralph F. Meyer of Royston Rayzor in Corpus Christi; and Robert Brager of Beveridge and Diamond in Baltimore.

 The government is represented by Howard P. Stewart of the U.S. Department of Justice, Environmental Crimes Section in Washington, D.C.; James L. Turner of the U.S. Attorney's Office, Financial Litigation Division, in Houston; Kenneth A. Cusick of the U.S. Attorney's Office in Corpus Christi; Lary Cook Larson of the U.S. Department of Justice in Washington; and William Robert Miller of the Environmental Protection Agency in Houston. 

Hillcrest residents are represented by Paula Pierce of Texas Legal Services Center in Austin, Texas, and Paul G. Cassell of the Appellate Clinic, Quinney College of Law in Salt Lake City.

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