DOJ and Pipeline Operator spar over the proper way to calculate a Clean Water Act penalty
On October 8, 2014, the U.S.
Department of Justice (the “DOJ”) filed a
motion regarding the proper way to calculate a Clean Water Act (“CWA”)
penalty. The dispute turns on whether the penalty for a prohibited
discharge of oil should be based simply on the amount of oil discharged or
instead on the amount of discharged oil that makes its way into a navigable
body of water. In its motion, the DOJ argues that the plain language of
the CWA calls for penalties based on the amount of oil “discharged” without any
requirement that the oil reach a navigable body of water. The pipeline
operator has previously argued in court filings that such a measure improperly
extends the CWA beyond its terms and would represent a Congressional overstep
of the Federal government’s Commerce Clause authority.
While at its heart the dispute is a
matter of statutory interpretation and constitutional law, its result may well
have major impacts on the rest of the litigation. If the court determines
that the DOJ’s reading of the CWA is correct, proving the amount of oil
discharged may not be too complicated. The DOJ could prove the amount by,
for example, showing the volume of oil pumped into the pipeline and the volume
of oil that reached its intended destination, with the difference approximating
the amount of oil discharged. However, if the court follows the pipeline
operator’s reading of the CWA, the DOJ will likely be presented with
significant evidentiary challenges, because once the oil was discharged, it
likely dispersed in complex, difficult-to-track ways.
The dispute is currently before the
U.S. District Court for the Eastern District of Arkansas.
This post was written by Barclay Nicholson (barclay.nicholson@nortonrosefulbright.com or 713 651 3662) and Jim Hartle (jim.hartle@nortonrosefulbright.com or 713 651 5695) from Norton Rose Fulbright's Energy Practice Group.
