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United States v. CITGO Petroleum Corp. - 801 F.3d 477 (5th Cir. 2015)

Rule:

A court applies the same interpretive framework to regulations as to statutes. The discussion begins, as it always must, with the regulation's text. Further, where a regulatory violation carries criminal penalties, the regulation must be strictly construed and cannot be enlarged by analogy or expanded beyond the plain meaning of the words used.

Facts:

In the 1980s, the Environmental Protection Agency (EPA) exercised its authority under Section 111 of the Clean Air Act to regulate oil refinery wastewater treatment systems. After a surprise inspection in March 2002 revealed 130,000 barrels of oil floating atop the uncovered equalization tanks, Texas environmental inspectors cited CITGO for violating the Clean Air Act. Under Subpart QQQ, which resulted from the EPA's push to limit VOC emissions from oil refineries, all oil-water separators must have roofs. Because the equalization tanks contained such a large amount of oil, Texas authorities concluded CITGO was using Tanks 116 and 117 as oil-water separators. And because those tanks were uncovered, authorities concluded that CITGO was violating Subpart QQQ. In 2007, a grand jury returned a 10-count indictment accusing CITGO in two counts of knowingly operating Tanks 116 and 117 as oil-water separators without emission control devices and taking migratory birds in violation of the Migratory Bird Treaty Act of 1918 (MBTA). A jury found CITGO guilty on the two counts. CITGO moved to set aside the verdict, arguing, inter alia, that the district court's jury instruction misinterpreted Subpart QQQ. The district court denied the motion. In the nonjury phase of the trial, the district court found CITGO guilty of three (out of five) counts for "taking" migratory birds. The district court denied CITGO's motion to vacate these convictions and sentenced CITGO to a $2 million fine for the Clean Air Act counts and $15,000 for each MBTA violation. CITGO appealed.

Issue:

Did the trial court err in its decision?

Answer:

Yes

Conclusion:

The Court reversed and remanded the case, holding that an oil company did not violate the Clean Air Act by using uncovered equalization tanks at a refinery to separate oil from water because equalization tanks did not contain the parts listed in the definition of an oil-water separator under the law and thus were not oil-water separators, which meant that the requirement to cover oil-water separators did not apply to the equalization tanks. The Court further held that the accidental deaths of migratory birds that landed on the uncovered tanks did not constitute takings, which adopted the common law definition of "take" and thereby excluded negligent and unintentional acts. The oil company did not violate the Migratory Bird Treaty Act of 1918 and could not be punished under 16 U.S.C.S. § 707(a), even if the bird deaths were foreseeable.

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