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Fifth Circuit Affirms $81 Million Clean Water Act Civil Penalty
Last month, in U.S. v. CITGO Petro. Corp., 711 Fed. Appx. 237 (5th Cir. 2017), the United States Court of Appeals for the Fifth Circuit affirmed an $81 million civil penalty assessment under the federal Clean Water Act (“CWA”) against CITGO Petroleum Corp. (“CITGO”), for unpermitted wastewater discharges from its plant in Lake Charles, Louisiana when a severe rainstorm caused two storage tanks to fail and over 2 million gallons of oil to be discharged into local waterways. In the underlying case before the United States District Court for the Western District of Louisiana, CITGO conceded liability, and therefore, the only issue for trial was the total penalty to be assessed. After a two-week bench trial, the District Court determined that CITGO had failed to properly maintain its wastewater storage tanks and allowed sludge and waste oil to accumulate in the tanks, which lessened their total storage capacity and ability to withstand a storm surge. The District Court ultimately assessed a $6 million civil penalty against CITGO, which EPA appealed.
