Petition for Writ of Certiorari — McGowan v. Department of Environmental Quality of Louisiana

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FILED

No. A-854 JUN 19 1988

CER

———

In The

Supreme Court of the United States

October Term, 1989

ey ee

JOHN W. McGOWAN,

Petitioner,

VS.

DEPARTMENT OF ENVIRONMENTAL QUALITY,

STATE OF LOUISIANA,

Respondent.

PETITION FOR WRIT OF CERTIORARI TO THE

SUPREME COURT OF THE

STATE OF LOUISIANA

eS eS ae

GARY L. BOLAND

HUNTER AND BOLAND

7911 Wrenwood Blvd.

Suite A

Baton Rouge, LA 70809

(504) 924-6881

Attorney for Petitioner

QUESTIONS PRESENTED

A state administrative agency assessed

a civil penalty against petitioner, a

mineral interest owner, while he was doing

necessary work to produce oil from his

mineral estate. At the hearing, the Hear-

ing Officer refused to allow petitioner to

challenge the scientific and constitutional

validity of the regulations and increased

his penalty on the grounds that petitioner

was recalcitrant for making that challenge.

The reviewing judicial court refused to

allow petitioner the right to supplement

the record, to make oral arguments and did

not review or consider evidence challenging

those regulations. Under the circum-

stances:

1. Was McGowan given a fair and impartial

hearing at the administrative agency

level pursuant to procedural due pro-

cess rights afforded him by the Four-

teenth Amendment when he was not al-

lowed to challenge the constitutional

and scientific validity of regulations

which deprived him of the use and

enjoyment of his oil and gas proper-

ties;

Since McGowan was not allowed to make

an oral presentation, present evidence,

cross-examine and confront witnesses on

contested issues of fact in challenging

the constitutional and scientific sup-

portability of those regulations and

the discretionary interpretation of

those regulations by the Department of

Environmental Quality (DEQ) at the ad-

ministrative hearing, was McGowan

deprived of Fourteenth Amendment pro-

cedural due process rights;

Since McGowan was not allowed to defend

himself and to protect his property by

challenging the scientific and con-

iii

stitutional validity of the regulations

during the hearing, was he denied

Fourteenth Amendment procedural due

process rights in not being afforded

the right to a complete record for

review on appeal;

Was McGowan deprived of constitutional

due process rights protected by the

Fourteenth Amendment when the reviewing

court ruled on the case with the know-

ledge that they did not have a complete

record of McGowan's challenge of the

scientific and constitutional validity

of the regulations depriving him of the

use and enjoyment of his oil and gas

properties;

Was. McGowan deprived of due process

rights afforded him by the Fourteenth

Amendment when the reviewing court

denied him the right to make oral argu-

ments, present evidence, and cross-

examine and confront witnesses on the

scientific and constitutional validity

of regulations which deprived him of

the ability to use his property to

produce oil since the Hearing Officer

below had determined that McGowan could

only question the validity of the

regulations in a court of law on ap-

peal;

Was McGowan denied due process and

equal protection rights guaranteed by

the Fourteenth Amendment in that the

DEQ through the police power of the

state has promulgated regulations which

are scientifically unsupportable and

excessive and were enforced without

procedural safeguards and guidelines

which deprived McGowan of the ability

to economically develop, use, and enjoy

his private property mineral interest

and violated the Takings Clause of the

Fifth Amendment; and

Was McGowan denied due process rights

guaranteed by the Fourteenth Amendment,

as that clause incorporates First

Amendment type protection of liberty of

expression without fear of reprisal

when he was threatened with fines up to

$1 million if he proceeded with the

administrative hearing and was denied

the right to challenge the scientific

and constitutional validity of the DEQ

regulations at the hearing and by the

reviewing court on appeal?

PARTIES INVOLVED

Petitioner, John W. McGowan, was the

respondent in the hearing before the

Department of Environmental -Quality

(referred to as DEQ), appellant in the

First Circuit Court of Appeals’ of

Louisiana, and Petitioner in application

for Writs of Review and Certiorari filed in

the Supreme Court of Louisiana. Respon-

dent, Department of Environmental Quality,

was plaintiff in the hearing before the

Department of Environmental Quality, appel-

lee in the First Circuit Court of Appeals

of Louisiana, and respondent in the Supreme

Court of Louisiana.

vii

TABLE OF CONTENTS

Page

QUESTIONS PRESENTED ... s © «© © 2 » i

PARTICO tmveuvee «6 koe Se ew ek ee BE

OPINIONS AND ORDERS BELOW ...... l

JL ee Gee 6 kere 4 eee 8 eS 2

CONSTITUTIONAL, STATUTORY, AND REGULATORY

PROVISIONS INVOLVED . ; 3

Constitutional Provisions 3

Statutory Provisions 4

Regulatory Provisions 4

STATEMENT Ae eee ee ee oe Pee a 2

A. General Background. ... . 5

_- Pre-Hearing Events . . 9

Te DEQ Field Actions and- the

Saltwater Leak (no effect

on State water and no damage

to environment) . . 9

xa DEQ Field Actions and the

Oil Spills (no effect on

State waters and no damage

to environment) .... ll

3. DEQ Actions (waters of the

State are polluted even

though oil and saltwater

never reached water). . 13

ae The Hearing Officer violated

McGowan's Constitutional Due

Process Rights to challenge the

constitutional validity of a

regulation which takes or

deprives him of the enjoyment

and ability to produce oil from

his mineral lease. ..... 17

viii

The Reviewing Court did not

afford McGowan his Due Process

Rights protected by the

Comstitution. ... ore ea fj

REASONS FOR GRANTING PETITION . . . 34

The Hearing Officer denied

McGowan the right to have a fair

and impartial hearing before an

impartial tribunal with the right

to challenge and make a record of

that challenge of the constitu-

tional validity of a regulation

which deprived him of the ability

to use his property to produce

et Se are ae OA eee et eer e ee ee |

This Court should grant McGowan's

Petition because the Court re-

viewing the agency ruling violated

McGowan's constitutional right to

a fair and impartial hearing by

not allowing him to present

evidence challenging the consti-

tutional validity of regulations

which deprived him of the enjoy-

ment of property in the Hearing

Bete <= uk ok ee SS ke ee are ee

This Court should grant McGowan's

Petition because the regulations

complained of exceeds the police

power of the state and amounts to

a taking of McGowan's right to use

his property to produce oil with-

out compensation. ...... 49

This Court should grant McGowan's

Petition because the Agency and

reviewing court denied McGowan an

opportunity to be heard or to

assert his defenses in the agency

hearing and in the reviewing court

and to defend the taking of his

property rights in a fair proce-

dure without being subjected to

the exposure of excessive fines

which was a violation of his First

Amendment rights. ...... 63

COMCTAIBTOM 2 tw tt th tht th hl hl hl hl tl tlh

APPENDICES:

Excerpts from "Facility Inspection

Forms", Inspectors observations from

January 31, 1986, February 28, 1986,

March 6, 1986, and April 17, 1986 of

Facility Inspection Forms reported by

Kirk Manuel; and January 31, 1986

Complaint Form filled out by Kirk

Manuel and signed on February 12, 1986.

Re er ae ae eet ee ee app. 1

May 23, 1986 Letter from J. Dale Givens

to John W. McGowan with Proposed Pen-

alty Notice Attached.

APp.

Louisiana Statutes and Regulations

app. 14

September 4, 1986, Statement of Charges

; app. 3

January 16, 1987, Findings of Fact

and Penalty Martha A. Madden, Secre-

tary, Department of Environmental!

Quality; adopting Proposed Findings of

Fact, Conclusions of Law, and Recom-

mended Penalty made by Richard J.

Brazan, wei, Hearing Officer on

December ll, 1986.

- haar ee acer -app. 36

Selected Excerpts from Original Brief

timely filed by John W. McGowan (oral

arguments requested) July 21, 1987

showing constitutional issues raised

and preserved and Assignment of Errors.

; app. 5l

Selected Excerpts from Original Brief

on Behalf of Department of Environ-

mental Quality, August 10, 1987, Oral

Arguments Requested.

app. 64

Selected Excerpts from Reply Brief

filed on behalf of John W. McGowan,

timely filed October 1, 1987, Oral

Arguments requested, showing con-

stitutional issues, raised and

preserved, Constitutional arguments

briefed, headings only.

Se ee ee ee app. 66

October 1, 1987, Letter to Clerk of

Court and Motion and Order to Submit

Supplemental Evidence filed pursuant to

Louisiana Revised Statute 49:964(E)

showing request for evidence to be

considered prior to arguments of the

case on merits.

app. 76

January 10, 1987, Memorandum in Oppos-

ition of Appellee's Motion to Strike

timely filed showing that McGowan

preserved his right to present evidence

on the constitutional issues.

app. 79

October 12, 1988, Opinion of the

Supreme Court of Appeals of Louisiana

rendered without considering McGowan's

right for oral argument and consider-

ation of Supplemental Evidence

presented.

‘ app. 88

Selected Excerpts from the Original

Brief to the Supreme Court of Louisiana

filed December 30, 1988 showing con-

stitutional issues raised and preserved

for Louisiana Supreme Court and by

reference to Reply Brief preserving

Constitutions raised.

. app.112

February 17, 1989, Decision of the

Supreme Court of Louisiana, Writs

Denied. : app.141

Selected References from Agency

Hearings and Pleadings. .. . app.142

xii

TABLE OF AUTHORITIES

Page

Cases

Brock v. Roadway Express, Inc.,

1D? &.Ct. 1740 (1987) . ke wt tl

First English Evangelical Lutheran

Church of Glendale v. County of

Los Angeles, California, 107

i, BS ks BEL : ) PR

Hodel v. Irving, 107 S.Ct. 2076 (1987)

eas a ee 5 el eae

Mathews v. Eldridge, 424 U.S. 319

-. 3). 5 eee eee 36

In re Murchison, 349 U.S. 133 (1965). . 35

Nollan v. California Coastal Commission,

107 &.Ct, 3241 C1987) . . + % -«-jecerwe

Ohio Valley Water Co. v. Ben Avon Borough,

253 0.8. 287 (i920) « 2 2 & #- 8 40,43

Pennsylvania Coal Co. v. Mahon, 260

N.8. 393 (1922) . « ss & 0 eo ae

St. Joseph Stock Yards Co. v. United

States. 298 U.S. 38 (1936). . + «+ « 41

Save Ourselves, Inc.,et al v. The

Louisiana Environmental Control

Commission, 452 So.2d 1152

(La. 1984) Oe ba ve. aie Ss na

Withrow v. Larkin, 421 U.S. 35 (1975) . 35

Constitutional Provisions

First Amendment to the United States

Constitution... o : ‘ ; 4

Xlii

Fifth Amendment to the United States

Constitution .... ; Brea. 4

Fourteenth Amendment to the United

states Constitution ......... 3

Statutory Provisions

Ss 4,27,28

Meme eCe@Oeeny . , ww wwf wl 4

OPMEMOEOMINEEGEP OS, . . , fgg, li, 4

OOOO... wl www wl; 4

OS 4

MOOOMOUOMMO, 5 . . www, 4,54

La.R.S. 49:964(E) ee sa0, 31

MeMCUMOOMOEIGD) . . www www 4

Regulatory Provisions

Rule 2 of the Stream Control Commission

Amended January 27, 1953. ..... .4,58

Rule 6 of the Stream Control Commission

Amended January 27, 1953. ...... 4

Rule 7 of the Stream Control Commission

Amended January 27, 1953. ..... pa, 98

Rule 8 of the Stream Control Commission

Amended January 27, 1953. ...... 4

Xiv

Order of the Stream Control Commission,

Effective July 1, 1968. ...... . 4,99

Water Quality paariensatis

Sec. Lit s 27% Sue ee Aire 4

Water Quality senha

Sec. VEG se eecs ee ee ek 4

Water Quality seemaainde

See. VITiGi£ Oe ss gt ta 4 ee 4

Water Quality sac wail

Sec. VEE heer or acakig Wa es ee se 4

Water Quality Standards,

Sec. X ores er re ee 4

Notification Regulations and Procedures

for Unauthorized Discharges,

Gee: 09.8 ooo a ek Moe ee eee

Notification Regulations and Procedures

for Unauthorized Discharges,

Sec, $.3.6.. . « «<< ks ee ae Bee eet

Louisiana Water Pollution Control

Regulations, Sec. 2.1.B ...+.+. : .4,56

Louisiana Water Pollution Control

Regulations, Sec. 3.I1.D ...+-+-s : PY

IN THE SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1989

7 NO. A-854

JOHN W. MCGOWAN,

PETITIONER,

DEPARTMENT OF ENVIRONMENTAL QUALITY

PETITION FOR WRIT OF CERTIORARI TO THE

SUPREME COURT OF THE STATE OF LOUISIANA

Petitioner, John W. McGowan, prays that

a petition of certiorari be issued to

review the denial by the Supreme Court of

Louisiana of an Application for Writs of

Review and Certiorari from the decision of

the Louisiana First Circuit Court of Ap-

peals.

Opinions and Orders Below

The order of the Louisiana Supreme

Court denying McGowan's application for

Review and Certiorari on February 17, 1989

(App.M,p.141) is reported at 537 So.2d

1168. The opinion of the Louisiana First

Circuit Court of Appeals on October hes

1988 and denial of rehearing on November

30, 1988 (App.K,pp.88-11l) is reported at

533 So.2d 999. The First Circuit Court

determined that the DEQ hearing officer's

actions in increasing the penalty assess-

ment to $56,000 was arbitrary, capricious,

and an abuse of discretion, but that

McGowan polluted the waters of the State.

The Findings of Fact and the Order dated

January 16, 1987 asserting a penalty of

¢56,000 by the Secretary of the DEQ and the

Proposed Findings of Fact, Conclusions of

Law, and Recommended Penalty of $56,000

dated December 11, 1986 by Hearing Officer

is attached thereto (App.E,pp.36-50) and

is not reported. The Proposed Penalty of

$5,000 by the Secretary of the DEQ on May

23, 1986 was assessed without formal hear-

ing (App.B,pp.7-13) and is not reported.

JURISDICTION

The judgment of the Louisiana

First Circuit Court of Appeals (App.k,

pp.88-11l1l) was entered on October 12, 1988.

A petition for rehearing was denied on

November 30, 1988 (App.K,pp.88). Appel-

lants' Application for Writs of Review and

Certiorari was denied by the Louisiana

Supreme Court on February 17, 1989. On

April 25, 1989, Associate Justice Byron R.

White extended the time within which to

file a petition for certiorari to June 19,

1989. The jurisdiction of this Court is

invoked under 28 U.S.C. 1257(a).

CONSTITUTIONAL, STATUTORY, AND

REGULATORY PROVISION INVOLVED

Constitutional Provisions

The Fourteenth Amendment to the United

States Constitution provides:

"No State shall make or enforce any

law which shall abridge the privi-

leges or immunities of citizens of

the United States; nor shall any

State deprive any person of life,

liberty, or property, without due

Process of law; nor deny to any

person within its jurisdiction the

equal protection of the laws."

The Fifth Amendment to the United

States Constitution provides in pertinent

part.

"Nor shall private property be

taken for public use, without just

compensation."

The First Amendment to the United

States Constitution provides in pertinent

part.

"Congress shall make no law ...

abridging the freedom of speech,

or the right of the people

to petition the Government for a

redress of grievances."

Statutory Provisions

Louisiana Revised Statutes 30:1072(C),

1073(E), 1073(J), 1092, 1093(4), 1093(5),

1095, and 1096, 49:964(E) and 964(G) are

reproduced in the appendix to this pet-

ition (App.C, pp.14-23).

Regulatory Provisions

In addition to the statutes, the following

state regulations are included: Rules 2,

6, 7, and 8 of the Stream Control Commis-

sion Amended January 27, 1953; Order of

the Stream Control Commission effective

July 1, . 19648; Water Quality Standards,

Sections III, VII.C, VII.C.2, VIII.A, and

X: Notification Regulations and Procedures

for Unauthorized Discharges, Sections

9.3.5 and 9.3.6; and Louisiana Water Pol-

lution Control Regulations, Sections 2.1.B

and 3.I.D, are reproduced in the appendix

to this petition (App.C, pp.23-32).

STATEMENT

A. General Background.

Petitioner, John W. McGowan, is an

operator and producer of oil and gas pro-

duction leases who has been buying aban-

doned and played out oil and gas fields

for over 25 years.

On September 1, 1985, petitioner, John

W. McGowan purchased oil, gas, and mineral

interest property leases in Jefferson

Davis Parish, Louisiana which included

properties in the Roanoke field referred

to as Kratzer, Taylor, and Devilbis prop-

erties. The Kratzer mineral lease con-

Sists of 163.32 acres, the Taylor mineral

lease consists of 170 acres, and the

Devilbis mineral lease consists of 160

acres. McGowan also owns and occupies

5.18 acres of the surface estate upon

which the Devilbis Lease is located, as

well as, the 160 acre mineral lease previ-

ously mentioned.

In Louisiana an oil, gas, and mineral

lease is recognized as an incorporeal,

immovable property interest estate which

grants the lessee the right to explore for

and produce minerals from the land. The

lessee has the right to use an area of the

surface estate necessary to drill for oil

and gas in order to reduce it to his phys-

ical possession. The mineral lease owner

may move a drilling rig onto the surface,

dig pits and drainage ditches, erect stor-

age tanks, construct pipelines and tele-

phone lines, build roads for ingress and

egress, etc., in order to reduce the min-

erals to his physical possession for sale.

The drilling of an oil well may utilize

from one to three acres of the land sur-

face area. The reworking of a well may

require up to one acre's use of the land

surface area. The reworking of the wells

is required every few years or so to main-

tain the continued productivity of oil

from the wells. During workover activity,

oil and saltwater is spilled on the lease-

hold estate as necessary work is performed

to continue and maintain the productivity

of the well.

Over the years McGowan has developed

innovative scientific methods that enable

him to efficiently and profitably extract

Oil and gas from these abandoned fields.

The revitalization of these old oil fields

ls messy work, requires considerable sums

of capital, scientific expertise and ex

perience, and may require up to two years

of McGowan's dedicated time to perfect the

recovery of a given played out field.

When reworked properly, some of these

“played out" fields may produce oil and

gas for an additional 25 to 30 years.

Although McGowan's system costs more to

perfect, it is environmentally safer than

industry standards because oil and salt-

water spills are virtually eliminated.

The spills are eliminated because

McGowan's saltwater disposal system is a

closed system involving gravity fed injec-

tion of saltwater into approved subsection

formations without the use of high pres-

sure pumps.

On October 1, 1985, McGowan took pos-

session of the Roanoke oil field and

started reworking the wells. The Devil-

bis, Kratzer, and Taylor wells were

reworked, the old and leaking equipment

was replaced, and innovative, improved

scientific technology was employed to

recover the minerals profitably. During

this time oil and saltwater was spilled on

the leasehold workover area. McGowan

eliminated the existing above Ground salt

water and oil collecting pits which most

of the oil industry still uses. McGowan

designed and installed his closed salt

wacer disposal] System, and his present

System now has ten times more disposa]

Capacity than the old System did, and

ls not above ground.

B. Pre-Hearing Events.

1. DEQ Pield Actions and the Saltwater

Leak (no effect on State Water and no

damage to environment noted by DEQ

inspector).

On January 27, 1986, David Russell, a

McGowan employee, who is a_ biologist

a geologist, was inspecting the newly

acquired leases. An above ground sa}?

water pit which had been utilized by thi

Previous owners as 4a dumping pit ¢t

lect oil and Saltwater from the w

located on the Devilbis lease. McGowal

also owned the surface estate

Devilbis Pit. Russell noted that

leading from the pit was leaking water.

He observed two small puddles of water,

one was located near the pipe, and the

second puddle was 200 yards from the pipe,

but this puddle was 200 yards from Gum

Gully, the nearest waters of the State.

He further noted that the vegetation

around the leak was not damaged but was

growing. The leaking pipe was immediately

repaired.

On January 31, 1986, four days after

the leak at the Devilbis pit had been

stopped, Kirk Manuel, a DEQ inspector,

inspected the Devilbis lease and _ took

water samples. Manuel noted that the

leaks from the pipe did not “effect the

waters of the state” and no damage was

done to the environment. For a corrective

measure he suggested that a lock and chain

be put on the valve. Manuel inspected the

leases on February 28 and March 6 accord-

ing to DEQ records, but he did not note

any further violations or damage to the

growing vegetation on those subsequent in-

spections of the Devilbis lease on the

Facility Inspection forms (App.A, pp.3-6).

Zz DEQ Field Action and the Oil

Spills (no effect on State waters

and no damage to environment).

On February 24, 1986, a faulty flow

Switch at the Taylor lease malfunctioned

and ten barrels of oil flowed into a

depression in the pasture next to the

well. Eight of the barrels were sucked up

and recovered by McGowan. McGowan used

hay to absorb the remaining two barrels

which was contained on the lease near the

well 1/4 mile away from the nearest waters

of the state.

On February 28, 1986 four days after

the spill on the Taylor lease had been

cleaned up and contained, DEQ Inspector

Manuel inspected the lease. Manuel indi-

cated that no state waters were effected

by the spill and the nearest state waters

were 1/4 mile away. He instructed

McGowan's men to pick up the hay and dis-

pose of it, and they did. Manuel also

noted that 1/2 of a barrel of oil had been

spilled at the Kratzer lease, but no prob-

lems were noted. No problems were noted

at the Devilbis lease (App.A,pp.3-5).

On March 6, 1986, Manuel reinspected

the Taylor and Kratzer leases. On that

visit he again wrote that the oil “spills

did not effect the State waters". He

concluded that "the clean up was complete

on the Kratzer lease" and "99% complete on

the Taylor lease". No problems were noted

at the Devilbis lease (App.A,p.5).

On March 18, 1986, John Herlihy, one of

McGowan's engineers, called Manuel to

ascertain if the inspection from Manuel's

March 6 visit to the Roanoke leases re-

quired additional attention. Herlihy was

told that he would be receiving something

from the DEQ soon, but that he was satis-

fied that nothing else needed to be done.

ae DEQ Office Actions (waters of the

State are polluted even though oil

and saltwater never reached

water).

On April 10, 1986, the Assistant

Secretary of DEQ sent a "compliance order"

to McGowan charging him with polluting

State waters and failing to notify the DEQ

of the oil spills on Taylor and Kratzer

and of the saltwater leak on Devilbis.

McGowan was requested to submit a full,

written report on the violations charged.

In light of the previous discussions with

the DEQ field inspector and notations on

the three lease facility inspection re-

ports which indicated that the spills did

not effect State waters, McGowan was per-

plexed. He assumed that the DEQ had made

an error. In order to clear up the error

McGowan invited the DEQ to inspect his

leases and to verify that no water pollu-

tion or contamination of waters had oc-

curred, and that the cleanup was completed

pursuant to Manuel's March 6-— report

(App.A,p.5).

On April 17, 1986, Thomas’ Killeen

(Manuel's supervisor) and Manuel of DEQ

inspected the Devilbis, Kratzer, and

Taylor leases at McGowan's request. No

deficiencies were noted or pointed out

(App.A,p.5-6).

On May 1, 1986, an informal hearing

between DEQ officers Kirk Manuel, Tom

Killeen, and Marion Fannerly and McGowan

representatives was held at the DEQ of-

fices. McGowans' representatives went

over the information requested by the DEQ

and verified that the new saltwater separ-

ators and closed system gravity fed dis-

posal wells were operational. They es-

timated capital improvements in new equip-

ment alone to be over $200,000, and since

the new equipment was now operational,

future spills would virtually be elim-

inated.

McGowan's representatives admitted that

saltwater and oil spills had occurred on

the leases during the reworking of the

wells. Manuel admitted that all such

spills were contained, cleaned up, and did

not contaminate any waters of the State.

Manuel's Facility Inspection Reports were

referenced as verification for this infor-

mation. When asked about violations of

water pollution and waters of the State,

the DEQ officials would not or could not

cite the specific sections of the regula-

tions charged. Since the spills were con-

tained on the lease, never reached the

water, and were cleaned up without causing

harm, McGowan wanted to know what events

triggered the requirement to notify the

State of water pollution. McGowan was

told that the law allowed the DEQ to re-

quire him to notify them if pollutants

entered the waters of the State. He was

told that they would write him a letter.

On May 23, 1986, DEQ sent a Proposed

Penalty Notice to McGowan fining him

$5,000 for the discharge of oilfield

wastes into waters of the State and for

McGowan's failure to notify the State of

the spills into the waters of the State

(App .B,pp.8-13).

On June 4, 1986, McGowan timely re-

quested an adjudicatory hearing to contest

the penalty notice and fine.

On September 4, 1986, McGowan was sent

a Statement of Charges and was notified

that an adjudicatory hearing would be held

November 3, 1986 before a hearing officer

appointed by the DEQ (App.D,pp.33-35). In

the DEQ's Statement of Charges, McGowan

was accused of allowing oil and saltwater

from his oilfield production site to pol-

lute the waters of the State and for fail-

ure to notify the State of the violations

committed on January 31, 1986 and on

February 8, 1986. The February 8 date was

incorrect.

On October 27, 1986, at the prehearing

conference, the DEQ offered to reduce the

penalty to $3,000 if McGowan would plead

guilty to all of DEQ's charges since no

environmental harm had occurred. An ad-

mission of guilt is used by the DEQ in

assessing future penalties and is a public

record to be used against respondents in

future DEQ actions. When McGowan refused,

the DEQ officials threatened him with the

maximum fines which the DEQ could assess,

i.e. up to $1 million.

Ci The Hearing Officer violated

McGowan's Constitutional Due Pro-

cess Rights to challenge the con-

stitutional validity of a regu-

lation which takes or deprives him

of the enjoyment and ability to

produce oil from his’ mineral

lease.

In the Statement of Charges (App.D,

pp.33-35), McGowan was charged with pol-

luting the waters of the State and of not

notifying the government of those events.

McGowan requested a hearing so he could

present scientific evidence to have a fair

and impartial adjudication of the validity

of the regulations. He noted that the

definitions of "pollution", "WATERS OF THE

STATE", “Significant impairment", "quanti-

tative" and "qualitative" amounts of sub-

stances, etc. should be subjected to the

challenge of scientific proof so that the

working producer in the oil field could

avert future infractions. The pertinent

statutes and reguiations are set out in

full in App.C,pp.14-32, and the discussion

of the regulations and statutes is in part

C, under Reasons for Granting Petition,

infra.

During the hearing McGowan learned from

the State's attorney in her opening state-

ment that the State was prosecuting him

for water pollution violations for his

Devilbis saltwater leak, the oil spills

contained on his lease at Kratzer and

Taylor, and failure to notify in two of

the three instances. He was surprised

that he was being prosecuted by the Water

Pollution Control Division on the grounds

that the substances had entered the waters

of the State as defined in La.R.S:1093.

McGowan's attorney asserted that

McGowan would prove by scientific and

probative evidence that he had not broken

the law, that nothing was discharged into

the waters of the State that required

notification, and that no penalty should

be assessed. It was clear that McGowan

was seeking clarification of the defini-

tions. He was seeking a judicial inter-

pretation of the DEQ regulations and he

was challenging the scientific validity

and authority of the regulations because

they infringed upon his constitutionally

protected right to enjoy and use his pri-

vate property mineral interest. In doing

so he was protecting his investment, and

his right to earn a living without causing

harm to anyone.

During the hearing from November 3

through November 6, 1986, the Hearing

Officer refused to allow McGowan to chal-

lenge the constitutional validity of the

regulations. He refused to allow McGowan

to introduce scientific evidence that

would prove that the regulations which

McGowan was charged with violating are not

scientifically supportable and are vague

and arbitrary. The Hearing Officer deter-

mined that the constitutional validity of

the regulations could not be questioned or

challenged during an administrative hear-

ing. He therefore refused to allow

McGowan or his experts the opportunity to

make an oral presentation, to confront and

cross-examine witnesses, and to present

evidence on the constitutional validity of

the DEQ regulations with a record for

appeal (App.E, pp.36-40 and App.N,

Bm. 133,236) «

McGowan asserted that the rules and

regulations were enforced in an arbitrary

and capricious manner by inspectors who

are free to use their personal discretion

without definitive limits as to the volume

or amounts of saltwater and oil which, in

their opinion, “significantly impairs" the

use of the water for its intended purpose

and thus causes water pollution. The DEQ

official who was responsible for writing

up the fines testified during the hearing

that the regulations were clear and unam-

biguous and that when one glass of salt-

water falls on the ground, it will cause

water pollution (App.N, pp. 151,152,155).

In the words of Justice Holmes, "this

regulation goes too far".

The Hearing Officer repeatedly held

that the adjudicatory hearing is not the

proper forum to question the constitution-

al validity of a DEQ regulation or to

present scientific evidence refuting the

scientific validity of those regulations

(App.N, pp.143-144,152-154,157-158,164,

167,182). The Hearing Officer did allow

some of McGowan's scientific evidence to

be introduced showing no harm to the en-

vironment had occurred and that the salt-

water leak and the oil spill had not

1 Pennsylvania Coal Co., v Mahon,

260 U.S. 393, 415 (1922).

reached or effected the state waters.

However, when he perceived that the rules

were being questioned or challenged, he

would refuse to allow further testimony tc

be heard or a complete record to be made

on the grounds that the validity of ad-

ministrative rules can not be challenged

Or questioned except in a court of law

(App.N, pp.153,182). He refused to allow

McGowan to present evidence or make

record to appeal for judicial review

show what the industry's standard of car

pertaining to the drilling for oil and +}

reworking of wells entailed. By

allowing McGowan to introduce this

dence, McGowan was unable to make 3 rec

to show that the economic, social,

constitutional property interests

individual and the State had been proper],

Dalanced.

The Hearing Officer's attitude on the

subjective connotation of what pollution

is and that the regulations can not be

challenged can be summed up in the fol-

lowing excerpt from the transcript of the

hearing:

HEARING OFFICER:

"Sustained. Mr. Boland,

again, if you want to attack defi-

nitions, if you want to attack the

Statute, if you want to attack the

procedures, I don't believe this is

the right forum. If you don't like

the way they do things, that's

fine. Go to a court of law that's

appropriate jurisdiction and attack

it as unconstitutional, ineffi-

cient, whatever you want. I don't

think I'm here or do I think that I

have the authority to rule on any

procedures and law that they have,

or even on the definitions. I'm

here to determine whether or not,

as i appreciate it, some type of

pollution occurred, and if it oc-

curred, whether a fine should be

levied, and if you could limit

yourself to those issues, I really

would appreciate it. I understand

where you're headed, I understand

what you're trying to do, but I

don't think I'm the right forum to

attack definitions, to attack

statutory provisions, to attack the

way the Department does things,..."

MR. BOLAND:

"What I'm having a_ problem

with is you apparently know what

pollution is."

HEARING OFFICER:

"It's sort of like porno-

graphy, I know it when I see it."

(App.N, pp. 153-154).

Pollution does not lend itself to a

subjective connotative interpretation like

pornography. Materials determined to

cause pollution can be scientifically

measured, identified, and tested for their

propensity to cause harm by experts. Messy

looking oil and saltwater dropped on the

ground does not constitute water pollu-

tion, if the oil and saltwater is con-

tained on private property and disposed of

before it ever reaches water, it can not

cause water pollution. In the case at

bar, the Hearing Officer determined that

no harm was caused to state water by

McGowan's spills contained on his lease,

but he determined from the regulations

that the spills caused water pollution.

McGowan's experts were not allowed to

testify about definitions and interpreta-

tions of the regulations by the hearing

officer, because the testimony challenged

the constitutional and the _ scientific

validity of the regulations.

On November 6, 1986, the hearing was

concluded. After the hearing the Hearing

Officer submitted his Proposed Findings of

Fact, Conclusions of Laws, and Proposed

Penalty on December 11, 1986 (App.E,pp.41-

50). The Hearing Officer determined that

McGowan was recalcitrant for challenging

the scientific and constitutional validity

of the DEQ regulations and increased the

penalty from $3,000.00 to §56,000.00

(App.F,pp.46,50). He further determined

that the oil and saltwater leak had

entered the waters of the State. He

decided that the oil spill caused no harm

to the environment, but he opined that the

saltwater could have caused harm if some-

one knew how long the leak had occurred or

how much saltwater had leaked out.

D. The Reviewing Court did not afford

McGowan his Due Process Rights protect-

ed by the Constitution.

On February 18, 1987, McGowan filed a

motion to appeal to the Louisiana First

Circuit Court of Appeals for review of the

case and listed his "Assignment of Errors"

pursuant to statute (App.F, pp.53-60).

Louisiana Revised Statute 30:1072(C) of

the Environmental Quality Act provides

that a person aggrieved by final decision

of the DEQ must appeal to the First Cir-

cuit Court of Appeals which is an appel-

late court instead of a trial court

(App.C,p.14). This statute provides that

the standards for judicial review from

rulings of the Secretary of DEQ adminis-

trative agency would not follow the scope

of review provided in the Louisiana Ad-

ministrative Procedures Act set out in

Louisiana Revised Statute 49:962 and 964

(App.C,pp.21-23). The Court of Appeals is

an appellate court and does not have the

administrative mechanism to protect due

process rights guaranteed by the Constitu-

tion when a trial de novo is required with

all of the protective rights of an eviden-

tiary hearing. However, the Louisiana

Supreme Court in reviewing the scope of

judicial review of the Appellate Court in

reviewing DEQ decisions and orders has

determined that La.R.S. 30:1072(C) is not

so limited.

"There is no substantial difference

between the standards of review

provided by § 964 and our. own

jurisprudential rules pertaining to

judicial review....Accordingly,

since the use of the LAPA statutory

scheme in environmental cases pro-

motes clarity of analysis, we will

continue to apply the standards of

judicial review provided by § 964

by analogy.

On July 21, 1987, McGowan timely filed

his brief to support his Assignment of

Errors which he had previously filed (App.

P, Be. 22-62) « On the first page of

McGowan's brief, he requested oral argu-

ments and on the last page of the brief he

requested leave of Court to submit addi-

tional evidence and to supplement evidence

and testimony at the oral arguments pur-

suant to statute (App.F, pp.51,63). In

the jurisdictional statement McGowan al-

leged that the DEQ had violated rights

protected by the following United States

Constitutional Provisions: Article III,

Fourth Amendment, Fifth Amendment, Sixth

Amendment, Ninth Amendment, and Fourteenth

Amendment (App.F, p.52).

2. Save Ourselves, Inc., et al v. The

Louisiana Environmental Control Commission,

452 So.2d 1152, 1158 (La. 1984).

On August 7, 1987, the State filed its

reply brief denying that McGowan's due

process constitutional rights had been

violated and that water courses included

dry ditches (water course would include

McGowan's workover lease estate up to the

wellhead). The State made a request to

increase the penalty to $62,000. Oral

Arguments were also requested by the State

(App.G,p.65).

On October 1, 1987, McGowan timely

filed his Reply Brief (App.H,p.66-75). He

also filed a compilation of Non-Louisiana

cases cited in his brief, a Motion and

Order authorizing McGowan to Present Sup-

plemental Evidence to Support his Substan-

tive Due Process Challenge - on the

Scientific and Constitutional Validity of

the Regulations at the oral arguments

(App.I, pp.77-78). He also filed Supple-

mental Scientific Documentary Evidence

along with his Motion and Order to be con-

sidered at oral arguments. The materials

were filed pursuant to La.R.S. 49:964E.

All of these aforementioned materials and

pleadings were timely filed with the Ap-

pellate Court on October 1, 1987.

In McGowan's Reply Brief, he reaffirmed

his request for oral argument and chal-

lenged the DEQ rules and regulations as

violating his substantive and procedural

due process constitutional rights (App.H,

pp.66-75). Mcgowan's constitutional chal-

lenge reiterated and _ referenced his

challenge from the original brief. Rebut-

tal arguments in parts A, B, and C of the

arguments raised and preserved the federal

questions raised in the State's Reply

Brief.

On October 16, 1987, the State filed a

Motion to Strike McGowan's Reply Brief and

his Motion and Order for Supplemental

Evidence to be considered at the oral

arguments when the case was to be heard.

On January 10, 1988, McGowan filed his

"Memorandum in Opposition of Appellee's

Motion to Strike" and again preserved and

raised the federal questions (App.J,pp.79-

87).

In April of 1988, McGowan received a

docket of the cases to be heard by the

Court. McGowan's case was designated by

the Court to be heard without oral argu-

ment on May 3, 1988. Since a ruling on

the Motion to Present Supplemental Evi-

dence had not been received by McGowan's

attorney, he called the clerk's office to

determine if the case or the motion was to

be decided on May 3, 1988. McGowan's

attorney was told by the Clerk of the

Court that the Court had not ruled on his

motion yet and it would review all of the

issues before it prior to a ruling.on the

case.

On October 12, 1988, the Louisiana

First Circuit Court of Appeals rendered

its judgment of McGowan's appeal. It

determined that the DEQ Secretary was

arbitrary, capricious and had abused her

discretion in increasing McGowan's penalty

for requesting and having an administra-

tive hearing. The Court also determined

that the quantity of oil and saltwater was

sufficient to pollute~the waters of the

State.

The Court did not rule on McGowan's

Motion to Present Supplemental Evidence or

allow him to be heard regarding his chal-

lenge of the scientific and constitutional

validity of the DEQ regulations or on the

Motion to Present Evidence of that chal-

lenge (App.K, pp.88-111).

McGowan filed “an application for Writs

of Review and Certiorari from the First

Circuit Court of Appeal", but the

Louisiana Supreme Court excercised its

discretionary jurisdiction and refused to

consider the case (App.M, p.14l). All

federal questions involving the constitu-

tional issues were preserved and raised

and were referenced in McGowan's brief

(App.L, pp.112-140).

REASONS FOR GRANTING THE PETITION

The decision of the Court of Appeals

raises fundamental questions about impor-

tant and recurring issues regarding the

conduct of an agency hearing and the

proper role of courts in reviewing the

procedural aspects of the agency's conduct

of that hearing. When government action

deprives a respondent of a fundamental

constitutionally protected property right,

such as the right to produce oil on his

mineral lease estate, then there is a

requirement that the governmental process

must be fair and impartial. This Court

has continually held that "a fair trial in

a fair tribunal is a basic requirement of

due process."? This requirement applies to

agencies and government hearing officers

as well as judges. McGowan has been

deprived of constitutionally protected

rights set out by this Court in Mathews.

They are:

First, the private interest that

Will be affected by the official

action; second, the risk of an er-

roneous deprivation of such inter-

est through the procedures used,

and the probable value, if any, of

additional or substitute procedural

safeguards; and finally, the

Government's interest, including

the function involved and the fis-

cal and administrative burdens that

3, In re Murchison, 349 U.S. 133,136

(1965).

4. Withrow v. Larkin, 421 U.S. 35,

46 (1975).

—

the additional or substitute prq-

cedural requirement would entail.

McGowan has met the criteria and guide-

lines by this Court in Mathews, © in the

administrative hearing and in the review-

ing court when he was deprived of his

property and deprived by the Hearing Of-

ficer and the reviewing court of a forum

in which he could present evidence chal-

lenging the scientific and constitutional

validity of the regulations which deprived

_him of his property. Under Brock, ? this

court had to search for a constitutionally

protected property right. In McGowan's

case he is being deprived of his oil, gas,

and mineral estate and the right to pro-

duce minerals from that estate by the

> Mathews v. Eldridge, 424 U.S. 319,335

(1976).

6 td.

LA Brock v. Roadway Express, Inc.,

107 S. Ct. 1740 (1987).

government's interpretation of its regula-

tions. This interpretation prevents

McGowan from producing oil and gas from

his mineral estate because he can not

produce oil without spilling oil and salt-

water on his lease during workovers.

(Supra at p.7). The enforcement of the

State's regulations as interpreted amounts

to a taking of his mineral estate without

compensation.

McGowan meets this Court's guidelines

and criteria for a taking in Pennsylvania

Coal® Hodel ? Nollan 10 and First English

8 Pennsylvania Coal Co. v. Mahon,

4200 U.S. 393 tl$972).

<A Hodel v. Irving, 107 S.Ct. 2076

(1987).

10 Nollan v. California Coastal]

Commission, 107 S.Ct. 3141 (1987).

11 First English Evangelical

Lutheran Church of Glendale v. County

of Los Angeles, California, 107 S.Ct.

2378 (1987).

in that this Court has identified several

factors. They are:

.the economic impact of the

regulations, its interference with

reasonable investment backed ex-

pectations, and the amelie © aa

the governmental action -

When McGowan was deprived of the right

to present evidence at the hearing, he was

denied the right guaranteed by the United

States Constitution to prove that the ad-

ministrative agency exceeded the police

power of the state in interpreting or

enforcing regulations which are not con-

stitutionally valid or scientifically

supportable. A hearing officer, in order

to give the respondent his day in court,

should not prevent the respondent from

presenting a defense which proves that he

has not violated the law. A respondent

should have the right to present a defense

12) yodel v. Irving, 107 S.Ct. 2076,

2082 (1987).

and evidence in an evidentiary hearing in

order to receive his due process due even

if that defense challenges the constitu-

tional validity of the regulations. When

a respondent's property is threatened by a

taking by the state agency's interpreta-

tion of the regulations, a full eviden-

tiary hearing with all of the contested

issues of fact and law must be granted

with a complete record preserved for ap-

peal. McGowan was denied this right.

McGowan, aS a mineral interest property

owner, has standing before this Honorable

Court to assert his constitutional rights.

He has raised and preserved the federal

constitutional questions at each stage of

the State proceeding even when the agency

enforcement proceeding had a chilling

effect on his First Amendment rights.23

13 Supra at p.l7.

After the Louisiana Supreme Court exer-

cised its discretion and declined to take

jurisdiction of this case, McGowan was

denied his last opportunity in Louisiana

to receive his day in court to challenge

the enforcement and the constitutional

validity of the DEQ regulations.

Further, since McGowan has been denied

the right to present evidence challenging

the scientific supportability and the

constitutional validity of DEQ regulations

which have deprived him of the use of his

mineral estate, we ask this Court to order

the Louisiana First Circuit Court of Ap-

peals to hold a trial de novo on these

issues pursuant to the holding by this

Honorable Court in Ben Avon.14

Since the Hearing Officer determined

that the agency hearing was not the proper

14 Ohio Valley Water Co. v. Ben

Avon Borough, 253 U.S. 287 (1920).

forum to entertain a constitutional chal-

lenge to its action and McGowan did not

get his day in court, McGowan asserts that

this is a "clear case" unlike St. Joseph. 15

McGowan's only remedy is a trial de novo.

A. The Hearing Officer denied McGowan the

right to have a fair and impartial

hearing before an impartial tribunal

with the right to challenge and make a

record of that challenge of the con-

stitutional validity of a regulation

which deprived him of the ability to

use his property to produce oil;

It is averred that McGowan should have

the same due process right to challenge an

unconstitutional regulation depriving him

of the use of his property before an ad-

ministrative agency as any litigant in a

court of law charged with breaking the law

and risking fines of a million dollars

would have. Since McGowan was risking

fines up to $1 million and the right to

15 st. Joseph Stock Yards Co. v.

United States, 298 U.S. 38 (1936).

produce oil from his property, he in fact

does have those same rights.

In such a case McGowan's constitutional

due process rights requires a full eviden-

tiary hearing including: (1) to be in-

formed of the basis of the-State'’s en-

forcement action with proper citations to

the regulations violated; 1® (2) a neutral

decision maker at the hearing;2/ (3) an

opportunity to make an oral presentation

on the constitutionally challenged regula-

tions; 18 (4) an opportunity to present

evidence on the validity of the constitu-

tionally challenged regulations; 1!9 (5) an

opportunity to confront and cross-examine

16 app. N, pp.142-143

17 App.K, p.110 where secretary was

arbitrary, capricious and abused discretion.

18 App.E, p.46, McGowan was recal-

citrant for challenging the regulations in

the agency hearing.

19 Id.

witnesses on the validity of the constitu-

tionally challenged regulations; 29 and (6)

an opportunity for a trial de novo2lif the

aforementioned rights have been denied

him.

Additionally, because all of McGowan's

aforementioned rights were denied by the

Hearing Officer, the record is incom-

plete22 McGowan's defense and evidentiary

challenge involved facts which were dis-

puted by men of reasonable intelligence.

Definitions and interpretations of the

regulations by qualified experts which

questioned the State's position were not

allowed to be introduced. The property

right which McGowan was defending was the

use and enjoyment of being able to produce

20 td.

21 Ohio Valley Water Co. v. Ben Avon

Borough, supra.

App.E, supra, note 18.

oil from his leases on his leases. The

regulations as interpreted by the DEQ and

the adoption by the reviewing court of

that interpretation deprives McGowan of

the right to extract minerals from his

lease on his leases.

McGowan is asking this Court not to

give deference to this administrative

agency's findings of fact and conclusions

of law because this agency omitted the

respondent's evidence challenging the

constitutional validity and scientific

truth of contested questions of law and

fact involving the validity of those regu-

lations.

B. This Court should grant McGowan's Peti-

tion because the Court reviewing the

agency ruling violated McGowan's con-

stitutional right to a fair and impar-

tial hearing by not allowing him to

present evidence challenging the con-

stitutional validity of regulations

which deprived him of the enjoyment of

property in the Hearing below.

This case raises fundamental questions

about the proper role of courts in review-

ing agency decisions when: (1) the con-

stitutional validity of agency rules and

regulations have been challenged, (2) the

a tribunal was found to be arbitrary and

capricious, and (3) respondent was

prevented from presenting the evidence

supporting his challenge to the validity

and the interpretation and constitutional-

ity of the regulations and statutes.

McGowan had reserved the right to have

oral arguments and present evidence de

novo on the constitutional challenge of

the DEQ regulations in his original brief

to the Court. McGowan was entitled to

have his “Motion to Present Supplemental

Evidence to the Court" ruled on prior to

the Court's consideration of the case on

the merits. Because he had been denied

that right, the record was not adequate to

rule on the scientific supportability and

constitutionality of the DEQ regulations.

Without the consideration and presenta-

tion of this evidence, as well as, a

record of this evidence and a record of

the refused evidence challenging the con-

stitutional validity of the regulations,

the Court had no basis for determining

that McGowan had not broken the law by

polluting the waters of the State.

The reviewing judicial court which is

the First Circuit Court of Appeals refused

to allow petitioner the right to be heard

or make oral arguments. The Court did not

review or consider or rule on McGowan's

Motion to Present Scientific Evidence

filed October 1, 1987. In doing this the

Reviewing Court denied petitioner a jud-

icial forum to have a fair and impartial

trial to have the constitutional issues

challenging the validity of the DEQ's

regulations and the validity of the

enforcement of those regulations to be

heard. This action was taken by the Re-

viewing Court with the knowledge that the

Hearing Officer had determined that

McGowan's proper forum to challenge the

constitutional validity of the rules was

reserved to the reviewing Court on appeal.

Additionally, the Reviewing Court was

also aware that: (1) no evidence and no

record of any evidence which the Hearing

Officer considered to be a challenge of

the constitutional validity of the regula-

tions was allowed, (2) no opinion dif-

ferent from the Department's interpreta-

tion that “waters of the State" included

dry ditches and depressions in fields was

allowed or considered, (3) no evidence of

the amounts of the quantities and qual-

ities of substances causing “no signif-

icant impairment" of the water was al-

lowed, and (4) no evidence showing that

pollution of water did not occur if the

substances did not reach water was al-

lowed. The Reviewing Court in order to be

fair and impartial should have considered

McGowan's evidence supporting his argu-

ments that he had broken no laws. The

Reviewing Court did determine that the

Hearing Officer's decision and penalty of

$56,000 was arbitrary, capricious, and an

abuse of discretion and reduced it to

$5,000. -

McGowan is entitled to a judicial trial

de novo on the limited issues pertaining

to the constitutional validity of the DEQ

regulations because of the incomplete

trial and record of those issues below.

McGowan's due process rights would be

further violated if he were to be remanded

to the same hostile agency and Hearing

Officer to present his additional evi-

dence. The Hearing Officer was determined

by the Reviewing Court to be arbitrary,

capricious, and had abused his discretion.

The Hearing Officer is not and was not an

impartial tribunal.

McGowan was denied a forum to challenge

the constitutional validity and enforce-

ment of the agency regulations by the

hearing officer in the hearing, by the

reviewing judicial court in the First

Circuit Court of Appeals, and by the

Louisiana Supreme Court when it refused to

accept jurisdiction of the case.

C. This Court should grant McGowan's Peti-

tion because the regulations complained

of exceeds the police power of the

state and amounts to a taking of

McGowan's right to use his property to

produce oil without compensation.

McGowan recognizes that the state holds

title to land under navigable waters with-

in its limits. He also recognizes the

authority of the Federal Government under

the Commerce Clause to regulate commerce.

He recognizes the authority of the State

pursuant to its police power to protect

the water for the health, safety, and

welfare of its people. The Louisiana

Supreme Court in interpreting this goal

has determined:

Thus, the constitution does not

establish environmental protection

as an exclusive goal, but requires

a balancing process in which en-

vironmental costs and benefits must

be given full and careful con-

sideration along with fronomic,

social and other factors.

The DEQ has determined that saltwater

and oil are pollutants, that if any quan-

tity of oil and saltwater falls on the

ground, it will ultimately enter’ the

waters of the State. The DEQ has deter-

mined that if oil and/or saltwater enters

a ditch then the ditch is waters of the

State. The quantum leap which the DEQ has

23 save Ourselves v. Louisiana

Environmental Control Commission, 452

So.2d 1152,1157 (La.1984).

utilized in usurping authority over pri-

vate property is based on its use of

definitions of waters of the State from

the statutes quoted out of context.*? The

DEQ has seized on water course to mean any

place from which water may course. Thus,

if a glass of water falls on the ground,

it will seek lower ground. The courses

which the water takes becomes a water

course. Finally, when oil or saltwater

falls on the ground, even though the

ground was dry before the "pollutants" hit

the ground, after the pollutants hit the

ground and start to course, they become

waters of the State capable of being con

taminated.

It has been painfully pointed out in

the “Statement of Facts" that no mineral

lease owner can use his lease to extract

minerals from the ground without spilling

24 App.C, pp.14-32.

Oil and saltwater on his lease on the

ground.

The DEQ and the reviewing court preven-

ted McGowan from presenting evidence show-

ing that the oil and gas industry could

not drill for oil, could not continue to

produce oil, and could not rework th:

wells or change equipment on the wells

without spilling oil and saltwater on the

ground. The DEQ's interpretation of

waters of the State would’ include

McGowan's lease whether that water was

within 1/4 of a mile or a thousand miles

of his lease. This encroachment of power

by the DEQ exceeds the police power of the

state when: (1) it can not show that the

quantities and quality of the oil and

saltwater complained of does cause harm or

water pollution, (2) when the definition

of waters of the State is so broad that it

would prevent McGowan from being able to

extract minerals from his mineral estate

because no oil company or oil and gas

operator can produce oil without spilling

it on the ground, and (3) the DEQ's defi-

niticn of waters of the State is the

ground. Under the DEQ's definition of

waters of the State the economic impact of

the regulation interferes with McGowan's

reasonable investment backed expectations

to the extent that the enforcement of the

DEQ regulations deprives him of his prop-

erty. The character of the government's

action is completely unwarranted. McGowan

proved that the quantitative and qualita-

tive amounts of oil and saltwater did not

kill the vegetation, did not cause con-

tamination, and did not cause water pollu-

tion, but the government refused to allow

him to utilize scientific evidence to

challenge the constitutional validity of

the DEQ regulations to prove that those

regulations were null and void.

The proscribed behavior alleged in

McGowan's case are discharges into waters

of the State as included in La. R.S.

30:1096. Section 1096 states: that "any

substance of any kind that would tend to

cause water pollution in violation of any

regulation, is proscribed, when discharged

into any waters of the state.” This did

not happen! No harm to the environment

occurred, and no water pollution occurred

from McGowan's saltwater leak and oil

spills.

The language in § 1096, "that would

tend to cause water pollution" and the

difficulty with the term “water pollu-

tion" as applied to an open field and a

dry drainage ditch, when the spill was

contained and was being picked up is ob-

vious. "Tends to cause" water pollution

is also an arbitrary and vague term with-

out quantitative evidence to show that

water pollution or harm to the water

actually occurred.

Marion Fannerly who testified that he

had helped write the regulations for the

Department opined that he could not

identify the particular regulations which

applied to the DeVilbis Lease regarding

notice unless significant quantities were

discharged into the waters of the state.

He and Mr. Killeen of the department tes-

tified that one glass was significant to

him (App.N, p.155). However, na quanti-

tative amounts are listed in any of the

regulations, and the interpretation of

significant quantities is left to the

discretion of the inspector in the field.

Kirk Manuel, the DEQ Inspector who

inspected the lease, testified that he did

not know which laws or regulations ap-

plied to the DeVilbis Lease, but that he

just wrote up what he saw and others in

the Department interpreted what he had

written up (App.N,p.143). If the inspec-

tor who works for the Department of En-

vironmental Quality can not’ properly

identify the laws or regulations broken by

McGowan, then there is a grave miscarriage

of justice in allowing officials who have

never even seen the leases to guess at the

law. In fact, Manuel testified that there

were no regulations relating to a quantity

of salt water for a spill like the DevVil-

bis Lease (App.N,p.143).

Water Pollution Control Regulation

Section 2.1.B provides that no pollutant

can be discharged into the waters of the

state without a permit. The tests per-

formed by the DEQ show that there was no

contamination in the area around the

leaking valve. Additionally, the DEQ

canna anaemia

inspector's facility inspection reports

indicate that the leak from the DeVilbis

Lease did not reach the waters of the

state, therefore, no permit was required

and no violation occurred. McGowan's

experts confirmed that there was no harm

to the soil or the water caused by pollu-

tion by the amounts of the spills in-

volved, and, therefore, this rule was not

broken.

Section 3.1.D prohibits a discharge of

any pollutant in quantities exceeding

permitted limits, however, there are no

quantitative standards or amounts set out

which allows anyone to know what a per-

mitted limit is. The key word to this

section is whether or not the leak from

the lease was a "pollutant". No evidence

was introduced by the State to verify that

the discharge was a pollutant, con-

taminant, or that any harm resulted from

the spill. However, the Agency Hearing

Officer prevented McGowan from proving

that the amounts complained of could not

cause water pollution or harm.

The scientific evidence which McGowan

was allowed to introduce clearly proved

that neither spill ever reached water or

ever caused harm to the’ environment

(App.N, p.155-182).

The Stream Control Commission Regula-

tions adopted January 27, 1953 is a

general rule pertaining to the discharge

of oil and salt water in the oil field.

Rule 2 provides that "no oil shall be

allowed to flow on the ground ... from the

Original lease or allowed to flow into a

stream". The oil on the Taylor Lease

stayed on the original lease and did not

enter the “waters of the state". The

discharge from the DeVilbis Lease also

stayed on the lease and did not enter the

waters of the state. Therefore, Rule 2

was not violated, and the Hearing Officer

and the Court of Appeals erred in ruling

that these rules were broken.

Rule 7 prohibits "the discharge of oil

field brine into any stream...ditch or

surface drainage leading to any stream...

when it is determined that the discharge

would affect the palatability of a source

of potable water to an appreciable

degree". No evidence was introduced by

the State to show that the water from the

leaking valve ever got into the water

supply since the leak had stopped 200

yards from the nearest uninterrupted body

of water, so this regulation was not

broken by McGowan.

The order of the Stream Control Commis-

sion effective July 1, 1968 prohibits the

drain or flow of salt water into the

waters of the State of Louisiana except:

"(1) salt water may be disposed of in

normally saline waters, tidally affected

waters, brackish waters, or other waters

unsuitable for human consumption or agri-

cultural purposes”. The order provides

for individual judgment to be exercised

where the water is not clearly brackish,

etc. In the case at bar, it was deter-

mined that the receiving waters, if the

leak had ever gotten that far, was primar-

ily used for agricultural purposes. The

state's witnesses however stated that the

receiving waters were not affected at all.

The DEQ requires notification if pollu-

tants enter the WATERS OF THE STATE in the

following cases: (1) if the discharge is

“sionificant”® (sec. 9.1.3); (2) if the

discharge is "reasonably expected" to

result in violation of Louisiana water

quality standards (sec. 9.3.6); and (3) if

the discharge may "reasonably be ex-

pected” to result in “significant impair-

ment" of "designated water usage" (sec.

3.2.8).

One can determine from all of these

rules, that you can not judge pollution by

its "tendency" to cause "water pollution";

or by its “adverse affect on the palata-

bility” of potable water; or by its im-

pairment of lawful use of water; or where

aquatic life may be destroyed or injured.

No proof was introduced by the DEQ to show

that McGowan violated 9.3.5. Additionally,

the Hearing Officer would not allow

McGowan to prove that the amounts of the

substances cited in the amounts’ found

could cause water pollution.

In the case at bar, words like “sub-

stantially increase", “appreciably injure

human life", “materially injure or inter-

fere with reasonable animal or plant life

Or property” ail are quite ambiguous; that

ambiguity is surpassed only by Louisiana's

Water Control Regulations. Such words as

"significant", “reasonably expected to be

a violation", and "designated water uses"

all purport to instruct a possible viola-

tor as to when he needs to notify the

Department of Environmental Quality of an

improper spill into WATERS OF THE STATE.

(9.3.6 of Notification Requirements).

In McGowan's case we have conflicting

and indefinite regulations that attempt to

identify what water pollution is and what

an infraction is as the first step to

notification. Because “waters of the

State" has been so arbitrarily assigned

definitions by the DEQ, the notification

procedures' ambiguity, the facts and the

jurisprudence simply do not support a

finding that McGowan violated DEQ's regu-

lations. The Court of Appeals' findings

and penalty if not reversed by this Honor-

able Court is a taking of McGowan's prop-

erty.

D. This Court should grant McGowan's Peti-

tion because the Agency and reviewing

court denied McGowan an opportunity to

be heard or to assert his defenses in

the agency hearing and in the reviewing

court and to defend the taking of his

property rights in a fair procedure

without being subjected to the exposure

of excessive fines which was a viola-

tion of his first amendment rights.

It is averred that the DEQ's threat to

seek the maximum penalties up to one mil-

lion dollars if McGowan would not piead

guilty and accept a reduced fine of

$3,000, had a “chilling effect" on his

freedom of speech rights to be heard be-

fore a fair and impartial tribunal. When

the hearing officer refused to let McGowan

testify and make a record at the agency

hearing of his challenge of the scientific

and constitutional validity of the regula-

tions, McGowan was denied his freedom of

speech rights again. When the reviewing

court refused to allow oral arguments to

be made and refused to allow McGowan the

opportunity to present evidence at the

reviewing court on the constitutional

issues, McGowan's freedom of speech rights

were violated again. No record of what

McGowan wanted to say challenging the

scientific and constitutional validity of

the regulations was made a part of the

record for the Louisiana Supreme Court to

consider. When the Louisiana Supreme

Court refused to exercise its discretion

and hear McGowan's case in the Louisiana

Supreme Court, McGowan was denied his

First Amendment Freedom of Speech Right to

be heard and to petition the Government

for a redress of the grievances to which

he was subjected.

CONCLUSION

The facts of this case demonstrates

that John McGowan's property was. taken

when the DEQ exercised its police power to

penalize McGowan's use of his oil and gas

properties. He asked for “his day in

court" to show that the DEQ rules and

regulations were unconstitutional and not

scientifically supportable, and that the

DEQ unreasonably interpreted the rules,

particularly in its interpretation of

“waters of the State". The Hearing Of

ficer and the reviewing judicial court

denied McGowan the right and opportunity

to challenge the validity and interpreta

tion of the rules and regulations, and

therefore those tribunals did not fairly

balance the use of the state's police

power versus the property interests of the

individual. McGowan's procedural due

process rights were denied, his constitu

tionally protected property rights were

taken, and he asks this Honorable Court

grant certiorari so that he may be af

forded his day in court.

ee aaa..._L_._QqQQ a

App. l

APPENDIX A

Excerpts Taken from "Facility Inspection

Form," January 3l, 1986

Inspection by DEQ Inspector Kirk Manuel of

Devilbis Lease.

Manuel's Observation:

"Inspector's observations, problems,

remarks, verbal commitments from facility

representatives:

Inspect facility re compliant from

conservation department inspector Pat

Sarsfield about salt water discharges from

the above tacility - No discharge at time

of inspection - Inspection showed evidence

of previous discharge from 3" valve & line

from oil salt water pit. (undetermined

amount) - Mr. Herlihy said that he was

unaware of the discharge which may have

occurred - Photos taken of discharge pipe

& ditch to drainage ditch - sample taken of

water (standing) in drain ditch & level -

conductivity (Mx) from drain ditch adjacent

discharge valve was

~16,000 umHos sal - ~8.8ppt.

1/4 mile drain ditch cond - 15,000 umHos

sal - 8.9ppt

downstream receiving waters (canal)

cond 130 umHos sal - .O070ppt

upstream receiving waters (canal)

cond 128 umHos sal - .070ppt

No effect noted on Receiving water

(drainage canal)"

p.2

"Inspectors observations, problems,

remarks, verbal commitments from facility

representatives (continued):

App. 2

This facility was recently purchased by

the above operator around 10-85. Bought

from Tenneco ~- Inspection of the facility

showed that progress has been made in

cleaning up housekeeping problems around

these old leases - all of the salt water

disposal wells (4) are being reworked &

Will be able to handle ~ 1C times the

expected salt water production of the

field-

No other problems observed in other

leases - Small drainage canal downstream

from discharge area showed no effect caused

by salt water discharge - a strong flow was

noted in drainage canal at time of

inspection - all salt water would have been

flushed out by flow - it was clearly

obvious that the discharge had occurred

several days prior this inspection.

Mr. Heriihy was fully aware of reg's on

salt water discharge & he stated that he

waS unaware of how discharge occurred.

I recommend that a lock be put on

Devilbis in pipe from pit.

Conservation Department agent Steve

Culpepper said they would be’ seeking

enforcement action against McGowan for this

& other violations of conservation dept.

regs at this facility."

Excerpts from "Complaint Form" filed by

DFO, Water Pollution Control Division,

Written by Kirk Manuel on February 12,

1986.

"Investigator's Preliminary Assessment:

Report to Follow:

Inspect facility with company man - Mr.

Herlihy - found 3" pipe with valve in levee

of large salt water pit. Evidence of

discharge of salt water in small drain

ditch adjacent pipe & valve - reddish

discoloration of soil & water indicative of

App. 3

high chloride content - Photos taken of

discharge area-

conductivity in ditch - ~16,000 umHos

sal. 8.9ppt

samples taken of drain ditch for Cl

analysis

conductivity in receiving water (canal

downstream of discharge area)

cond - ~130,umHos’ sal - .070ppt

upstream discharge

cond - ~128,umHos’ sal - .0O70ppt

Receiving water (drainage canal) had strong

flow at time of inspection."

Excerpts Taken from "Facility Inspection

Form", February 28, 1986

Inspection by DEQ Inspector Kirk Manuel of

Taylor and Kratzer lease.

Manuel's observations:

"Inspector's observations, problems,

remarks, verbal commitments from facility

representatives:

Inspect Facility re call from

Conservation Dept. Agent Sarsfield about

oil spills noticed at above 2 leases.

ie Kratzer lease - evidence of oil in

spill drain ditch behind tank battery -

drain ditch had few spots of standing oil

& some oily residue on vegetation & soil in

ditch - contamination extends down drain

ditch for approximately 1/2 mile

diminishing with distance - amount spilled

could not be determined as was evident by

amount & age of the oil on the ground

vegetation - probably less than 1/2 BBL -

App. 4

spoke by phone to J. Herlihy and informed

him of findings; he said they would clean

material up.

— 2. Taylor lease - 2-24-86 on oil spill

caused by tank overflow - amount spilled

estimated at less than 10 BBLs - (by this

inspector)."

p.2

"Inspector's observations, problems,

remarks, verbal commitments from facility

representatives:

This oil flowed into a small depression

in a large cow pasture - oil flowed over

350 to 400 yds of this depression ~10 ft.

Wide and over about 1 acre of land adjacent

tank battery - an attempt at cleanup was

made by using hay as absorbent and covering

some with soil in depression area -

**Mr. Smith said that some of the oil was

recovered by pump & hose.' Remainder was

covered by hay and some remains standing in

depression - cleanup was not complete as

some oil -(about 2 BBLs) still remains

visible in the depression - This oil could

flow to State Waters & cause problems with

any rainfall (main drainage canal ~1/4 mile

away ) .

*Recommended to Mr. J. Herlihy by phone

that this oil spill be completely cleaned

up to prevent contamination to State Waters

-oily waste & absorbent material should be

disposed of properly - Mr. Herlihy said he

would clean it up.

This spill was not reported to La. DEQ

Water Pollution Control.

App. 5

*Recommended to Mr. Herlihy by phone that

all oily material and absorbent material be

cleaned up from these sites so as to

prevent any storm water contamination.

I will return upon completion to verify

cleanup.

PHOTOS TAKEN & AVAILABLE"

Excerpts taken from "Facility Inspection

Form", March 6, 1986

Inspection by DEQ Inspector Kirk Manuel of

Roanoke Field.

Manuel's observations:

"Inspector's observations, problems,

remarks, verbal commitment from facility

representatives:

Inspect cleanup of oil spill reported

by Conservation dept. at property operated

by above company. Spill did not affect

State Waters.

Taylor lease - oil removed from ground -

some small pockets of standing oil visible

after rainfall worked some of material from

ground. ,

Mr. Smith will remove remaining pockets

formed [sic] from standing water at Taylor

lease -cleanup 99% complete.

Kratzer lease - small drain ditch cleaned

& cleanup complete."

Excerpts taken from "Facility Inspection

Form", April 17, 1986

App. 6

Inspection by DEQ Inspectors Kirk Manuel

and Thomas Killeen (Manuel's supervisor) of

Devilbis, Taylor, and Kratzer leases in

Roanoke field.

Manuel's and Killeen's observations:

"Inspector's observations, problems,

remarks, verbal commitments from facility

representatives:

Followup inspection of above leases

addressed in compliance order #WC86047, as

per Mr. McGowan's request. At present no

more salt water was observed at Devilbis

lease - ditch showed no further signs of

Salt water discharges.

Taylor lease oil spill was observed - some

oil contaminated soil observed in ditch -

it appears that the soil was incorporated

into the ditch area - tank battery fire

wall still heavily contaminated. with oily

material.

Kratzer lease - oil spill area cleaned up.”

—————

App. 7

APPENDIX B.

May 23, 1986

Mr. John McGowan NO. WC-86-047

P.O. Box 55809 CERTIFIED MAIL

Jackson, MS 39296 (P113230570)

RETURN RECEIPT

REQUESTED

Dear Mr. McGowan:

Attached, please find a_ Proposed

Penalty Notice issued to John W. McGowan,

as a result of violations of the Louisiana

Environmental Quality Act at your oilfield

Sites identified as the Devilbis Lease No.

19, Sll, TO9S, RO4W; the Taylor Lease No.

3, S12, TO9S, RO4W; and the Kratzer Lease

No. 1, S12, TO92, RO4W; all in the Roanoke

Field of Jefferson Davis Parish,

Louisiana. Please contact Mr. Tom Killeen

if you have any questions concerning this

matter.

Sincerely,

/s/

J. Dale Givens

Assistant Secretary

JDG/TBK/avn

App. 8

STATE OF LOUISIANA

DEPARTMENT OF ENVIRONMENTAL QUALITY

IN THE MATTER OF:

JOHN W. MCGOWAN PROPOSED

PENALTY NOTICE

PROCEEDINGS UNDER THE

ENVIRONMENTAL QUALITY

ACT, LA.R.S. 30:1051 ET SEQ

The following PROPOSED PENALTY NOTICE

is issued to JOHN W. MCGOWAN, (Respondent)

by the Secretary, Louisiana Department of

Environmental Quality, under authority

granted by the Louisiana Environmental

Quality Act, (La.R.S. 30:1051 et seq.,

hereinafter referred to as “the Act"), and

particularly by Section 1073 E of the Act.

FINDINGS OF FACT

Respondent operates oilfield production

sites identified as the Devilbis Lease No.

19, the Taylor Lease No. 3 and the Kratzer

Lease No. 1; all located in the Roanoke

Field of Jefferson Davis Parish,

Louisiana. Respondent is not authorized

7 —E

App. 9

to discharge any waste substances into the

waters of the State.

Investigation by employees of the

Department has disclosed that on or about

January 31 and February 8, 1986,

Respondent did cause or allow the

discharge of oilfield wastes (i.e. oil,

saltwater) from the above described sites

in violation of the Louisiana Water

Pollution Control Regulations, Section

2.1.B. and 3.1.D.; the Regulations of the

Stream Control Commission governing

disposal of waste oil, oilfield brine, and

all other materials resulting from the

drilling, production, and transportation

of oil, gas or sulphur adopted January 27,

1953; the Order of the Stream Control

Commission effective July 1, 1968; and

Sections 1095 and 1096 of the Louisiana

Environmental Quality Act.

App. 10

Lid.

Investigation by employees of the

Department has disclosed that Respondent

failed to notify this agency of the above

mentioned discharges, in violation of the

Department's Notification Regulations and

Procedures for Unauthorized Discharges and

Section 1073 and 1096 of the Act.

IV.

Having considered the factors set forth

in Section 1073 of the Act, and in light

of all presently known facts and

circumstances in this matter, a civil

penalty in the amount of $5,000 would be

appropriate, equitable, and justified.

ORDER

Based on the foregoing FINDINGS OF

FACT, Respondent is hereby ORDERED to be

on notice that:

App. ll

An assessment of a penalty in the

amount of $5,000 is hereby proposed and

shall become effective, final, and not

subject to further review, unless, no

later than twenty (20) days after receipt

of this document, Respondent files with

the Secretary a written request for a

hearing. /

LE.

Failure to timely request a hearing as

provided in Paragraph I of this ORDER

constitutes a waiver of Respondent's right

to a hearing under the provisions of

Section 1073 E of the Act for’ the

violations described hereinabove.

Upon failure to request a hearing as

provided in Paragraph I of this ORDER,

Respondent must make payment in full of

the civil penalty set herein, or make

arrangements satisfactory to the

App. 12

Department for payment, no later’ than

fifteen (15) days after the assessment

becomes final.

IV.

Upon the penalty assessed _ herein

becoming final because of Respondent's

failure to timely file a request for a

hearing, and upon Respondent's failure to

pay the civil penalty provided herein or

to make arrangements satisfactory to the

Department for such payment, this matter

shall be referred to the Attorney General

for collection of the penalty plus all

costs associated with the collection.

Upon timely filing of a request for a

hearing, this ORDER, including the

assessment of penalty, shall be rescinded

and this matter shall be scheduled by the

Secretary of the Department of

Environmental Quality for de novo

App. 13

determination of the appropriate

enforcement actions, including the

assessment of civil penalties through the

adjudicatory and discovery processes

provided in the Administrative Procedure

Act (La.R.S. 49:950 et seq.) and the

provisions of the Act, particularly

Section 1073 E(3)(a) thereof, or referral

to the Attorney General's office for

judicial enforcement.

This ORDER is effective on receipt.

Done at Baton Rouge, Louisiana, on this

22nd day of May, 1986.

fs/

PATRICIA L. NORTON,Secretary

Department of Environmental

Quality

App. 14

APPENDIX C

LOUISIANA STATUTES AND REGULATIONS

STATUTES

Louisiana Revised Statutes 30:1072(C)

“or Any person aggrieved by a final

decision or order of the secretary may

appeal therefrom to the Court of Appeal,

First Circuit, if a motion for an appeal

is filed with the secretary within thirty

days after the final decision or order is

served upon the respondent. Any

preliminary, procedural, or intermediate

ruling or decision by the secretary is

subject to supervisory jurisdiction of the

appellate court as provided by Article V,

Section 10 of the Constitution of

Louisiana. The Court of Appeal, First

Circuit, shall promulgate rules of

procedure to be followed in taking and

lodging such appeals. The provisions of

R.S. 49:962 and 964 shall not apply to

decisions and orders of the secretary."

Louisiana Revised Statutes 30:1073(E)

"(1) Any person found to be in

violation of any requirement of this

chapter may be liable for a civil penalty

to be assessed by the commission, the

secretary, the assistant secretary, or the

court of not more than one million dollars

or the cost of any cleanup made necessary

by such violation and a penalty of not

more than twenty-five thousand dollars for

each day of violation and may be subject

to the revocation of suspension of any

permit, license, or variance which has

been issued to said person. Any person

found to be in violation of this Chapter

shall be liable for legal interest from

App. 15

the date of the assessment of a civil

penalty until paid.

(2) Any person to whom a compliance

order or a cease and desist order is

issued pursuant to R.S. 30:1073(C) who

fails to take corrective action within the

time specified in said order shall be

liable for a civil penalty to be assessed

by the commission, the secretary, the

assistant secretary, or the court of not

more than fifty thousand dollars for each

day of continued violation or

noncompliance.

(3)(a) In determining whether or not a

civil penalty is to be assessed and in

determining the amount of the penalty or

the amount agreed upon in compromise, the

following factors shall be considered:

(i) The history of previous

violations or repeated noncompliance.

(ii) The nature and gravity of the

violation.

(iii) The gross revenues generated

by the respondent.

(iv) The degree of culpability,

recalcitrance, defiance, or indifference

to regulations or orders. ,

(v) The monetary benefits realized

through noncompliance.

(vi) The degree of risk to human

health or property caused by the

violation.

(vii) Whether the noncompliance or

violation and the Surrounding

circumstances were immediately reported to

the department and whether the violation

Or noncompliance was concealed or there

was an attempt to conceal by the person

charged.

(viii) Whether the person charged

has failed to mitigate or to make a

App. 16

reasonable attempt to mitigate the damages

caused by his noncompliance or violation.

(ix) The costs of bringing and

prosecuting an enforcement action,

including staff time, equipment’ usSe,

hearing records, expert assistance, and

such other items as the commission finds

to be a cost of the action.

(b) The secretary may supplement such

criteria by rule. In the event that the

order with which the person failed to

comply was an emergency cease and desist

order, no penalty shall be assessed if it

appears upon later hearing that said order

was issued without reasonable cause.

(4) No penalty shall be assessed

without the person charged being given

notice and an opportunity for a hearing on

such charge. The person charged may waive

a hearing on the issue of whether or not a

violation has occurred, his culpability

for such a violation and any other

ultimate issue. When a hearing on the

violation is waived, a decision may be

rendered upon the uncontested facts.

(5S) After submission for a _ penalty

determination at 4 hearing, the

commission, secretary, or assistant

secretary shal] provide an opportunity for

relevant and material public comment

relative to any penalty which may be

imposed."

Louisiana Revised Statutes 30:1073(J)

"Any person who discharges, emits, or

disposes of any substance in contravention

of any provision of this Chapter or the

regulations or of any permit or license

terms and conditions issued thereunder,

upon learning of the discharge, emission,

App. 17

or disposal, shall immediately, or in

accordance with regulations adopted under

this Chapter, notify the department, the

Department of Public Safety and

Corrections, and local law enforcement

authorities as to the nature and amount

thereof and the circumstances surrounding

same. The secretary shall adopt and

promulgate rules and regulations

establishing procedures for making such

notification. Any failure to make this

notification required herein shall

constitute a separate violation, and shall

be in addition to any other violations of

this Chapter."

Louisiana Revised Statute 30:1092

"The legislature finds and declares

that the waters of the state of Louisiana

are among the state's most important

natural resources and their continued

protection and safeguard is of vital

concern to the citizens of this state. To

insure the proper protection and

maintenance of the state's waters, it is

necessary to adopt a system to control and

regulate the discharge of waste materials,

pollutants, and other substances into the

waters of the state."

Louisiana Revised Statute 30:1093(4)

"Water pollution" means the

introduction into waters of the state by

any means, including dredge and fill

operations, of any substance in

concentrations which tend to degrade the

chemical, physical, biological, or

radiological integrity of such waters,

including, buy not limited to, the

discharge of brine from salt domes which

are located on the coastline of Louisiana

and the Gulf of Mexico into any waters off

App. 18

said coastline and extending therefrom

three miles into the Gulf of Mexico."

Louisiana Revised Statute 30:1093(5)

"Waters of the state" means both the

surface and underground waters within the

state of Louisiana including all rivers,

streams, lakes, groundwaters, and all

other water courses and waters within the

confines of the state, and all bordering

waters and the Gulf of Mexico."

Louisiana Revised Statute 30:1095

"No person shall conduct any activity

which results in the discharge of any

substance into the waters of the state

without the appropriate permit or license

required under the regulations of the

commission adopted pursuant to this Part."

Louisiana Revised Statute 30:1096

"A, (1) No person shall discharge or

allow to be discharged into any waters of

the state:

(a) any waste or any other

substance of any kind that will tend to

cause water pollution in violation of any

rule, order, or regulation; or

(b) any substance, the discharge

of which violates any term, condition, or

limit imposed by a permit.

(2) The provisions of this Part

shall not apply to any unintentional

nonpoint-source discharge resulting from

or in connection with the production of

raw agricultural, horticultural, or

agquacultural products.

(3) No person shall violate any

rule or regulation adopted under this Part

of the terms of any permit or order issued

under authority of this Chapter.

(4) No person shall cause or allow

to be discharged within Louisiana any

trash, garbage, sewage, or sewage sludge

in contravention of any rules or

regulations adopted pursuant thereto and

authorized by R.S. 30:1094(B)(7).

B. No person engaged in a logging

operation shall discharge or leave, or

allow to be discharged and left, in any of

the navigable waters of the state any

trees or treetop. For the purpose of this

Subsection, the term "treetop" shall be

defined as that topmost portion of a tree

trunk, with limbs attached, measuring in

excess of three inches at the base of the

treetop stem.

C. No person shall discharge brine

from salt domes which are located on the

coastline of Louisiana and the Gulf of

Mexico into any waters off said coastline

and extending therefrom three miles or

more into the Gulf of Mexico when it

becomes evident to the office that said

discharge is damaging or threatens to

damage the aquatic life in the waters of

the state. The office may require that

any brine disposal be monitored in

accordance with rules and regulations.

D. Any person who discharges, emits,

or disposes of any substance into the

waters of the state in contravention of

any provision of this part of the

regulations or of the terms and conditions

of a permit or license issued thereunder,

upon learning of the discharge, emission,

or disposal, shall immediately, or in

accordance with regulations adopted under

App. 20

this Chapter, notify the offices as to the

nature and amount of the discharge and the

circumstances surrounding the discharge.

The secretary shall adopt and promulgate

rules and regulations establishing

procedures for making such notifications.

Any failure to make this notification or

any attempt to conceal or actual

concealment of the discharge, emission, or

disposal shall be a violation of this

Part. Each day of failure to give the

notification required herein shall

constitute a separate violation and shall

be in addition to any other violations of —

this Chapter.

E. Any person who knowingly makes any

false statement, representation,

certification in any application, record,

report, plan, or other document filed or

required to be maintained under this Part

or who falsifies, tampers with, or

knowingly renders inaccurate any

monitoring device or method required to be

maintained under this Part shall upon

conviction be punished by a fine of not

more than twenty-five thousand dollars or

by imprisonment for not more than six

months, or both.

F. No person shall discharge into any

underground waters of the state any

hazardous waste as defined in R.S.

30: LL 330275 The provisions of this

Subsection are not intended to impair the

implementation or administration of those

programs authorized by R.S. 30:4(C)(16),

R.S. 30:1091, and R.S. 30:1136(A)(6), as

long as permitted injections are conducted

in strict adherence to the terms and

conditions of a valid permit issued

thereunder or under the rules and

regulations adopted thereunder.

App. 21

G.(l1) The legislature of lLouisiana

hereby finds that a significant portion of

the phosphate fertilizer and wet-process

Phosphoric acid manufacturing industry is

located in the state of Louisiana, that

the manufacture of wet-process phosphoric

acid results in the generation of

byproduct waste gypsum, and heretofore

such gypsum has been disposed of by

impoundment on land or by discharge into

the Mississippi River. The Mississippi

River is a valuable natural resource that

must be protected against unnecessary

degradation in order to protect and

preserve the public health and welfare,

drinking water quality, and major sectors

of the economy including tourism. and

seafood industries, and the environment.

(2) No person shall discharge

byproduct waste gypsum from the production

of phosphate fertilizer or wet-process

Phosphoric acid into’ the Mississippi

River. This prohibition shall not apply

to authorized discharges of waste waters

Or rainfall runoff containing dissolved

Gypsum or suspended gypsum when such

discharge is in compliance with state and

federal permits and the discharge is not

for the primary purpose of disposing of

byproduct waste gypsum."

Louisiana Revised Statutes 49:964(A)

we A person who is aggrieved by a

final decision or order in an adjudicatory

proceeding is entitled to judicial review

under this Chapter whether or not he has

applied to the agency ffor rehearing,

without limiting, however, utilization of

or the scope of judicial review available

under other means of review, redress,

relief, or trial de novo provided by law.

App. 22

A preliminary, procedural, or intermediate

agency action or ruling is immediately

reviewable if review of the final agency

decision would not provide an adequate

remedy and would inflict irreparable

injury."

Louisiana Revised Statutes 49:964(E)

a If, before the date set for

hearing, application is made to the court

for leave to present additional evidence,

and it is shown to the satisfaction of the

court that the additional evidence is

material and that there were good reasons

for failure to present it in the

proceeding before the agency, the court

may order that the additional evidence be

taken before the agency upon conditions

determined by the court. The agency may

modify its findings and decision by reason

of the additional evidence and shall file

that evidence and any modifications, new

findings, or decisions with the reviewing

court.”

Louisiana Revised Statutes 49:964(F)

"FEF. The review shall be conducted by

the court without a jury and shall be

confined to the record. In cases of

alleged irregularities in procedure before

the agency, not shown in the record, proof

thereon may be taken in the court. The

court, upon request, shall hear. oral

argument and receive written briefs."

Louisiana Revised Statutes 49:964(G)

"G. The court-may affirm the decision

of the agency or remand the case for

further proceedings. The court may

reverse or modify the decision ff

substantial rights of the appellant have

been prejudiced because the administrative

App. 23

findings, inferences, conclusions, or

decisions are:

(1) In violation of constitutional or

statutory provisions;

(2) In excess of the statutory

authority of the agency;

(3) Made upon unlawful procedure;

(4) Affected by other error of law:

(5) Arbitrary or Capricious or

characterized by abuse of

discretion or clearly unwarranted

exercise of discretion; or

(6) Manifestly erroneous in view of

the reliable, probative, and

substantial evidence on the whole

record. In the application of the

rule, where the agency has the

Opportunity to judge of the

credibility of the witnesses by

first-hand observation of demeanor

on the witness stand and the

reviewing court does not, due

regard shall be given to the

agency's determination of

credibility issues."

LOUISIANA REGULATIONS

Rule 2 of Stream Control Commission

Amended January 27, 1953

"No oily fluids shall be discharged to, or

allowed to flow on the ground, or be

carried from the original lease in open

ditches, or discharged or allowed to flow

into any stream, lake or other body of

water."

App. 24

Rule 6 of Stream Control Commission

Amended January 27, 1953.

"No salt water shall be discharged from a

lease until all oily waste has_ been

completely separated therefrom, except in

cases where the transfer of such salt

water from the lease to a central treating

plant has been approved in writing by the

Stream Control Commission or one of its

agents. Separating pits or other equally

effective device, for separation of oily

wastes from oil field brine shall be

constructed and operated such that no oily

waste will be carried from the lease,

except to central treating plants, and

shall meet any reasonable minimum

requirements set up in any particular

field or lease by the Stream Control

Commission. In oil field brine discharged

to streams the oil content shall not

exceed 30 p.p.m."

Rule 7 of Stream Control Commission

Amended January 27, 1953

"No oil field brine shall be discharged

into any stream, lake, or other body of

water, or into any ditch or_ surface

drainage leading to any stream, lake, or

other body of water when it is determined

by the Stream Control Commission that such

discharge would adversely affect’ the

palatability of a source of potable water

to an appreciable degree, or would be

deleterious to the Public Health, or to

the prosecution of an industry or lawful

occupation for which or in which any such

waters may be lawfully used or employed,

or whereby the carrying on of = any

agricultural pursuit may be injuriously

affected or whereby the lawful conduct of

any livestock industry or the use of any

such waters for domestic animals may be

App. 25

prevented, injuriously affected or

impaired, or whereby any lawful use of any

such waters by the State of Louisiana, or

by any political subdivision, or by any

corporation, association, partnership, or

person, or any other legal entity may be

lessened or impaired, or materially

interfered with, or whereby any fish life,

or any beneficial animal or vegetable life

in said waters may be destroyed, or the

growth or propagation thereof prevented or

injuriously affected; provided that oil-

free brine may be discharged under maximum

dilution ratios prescribed for any

particular stream or field by the Stream

Control Commission, or during any

particular period in which such discharge

is determined by the Commission to be free

from pollution hazard, or necessary in the

public interest."

Rule 8 of Stream Control Commission

Amended January 27, 1953

"Wherever possible, disposition of oil

field brine shall be accomplished by

discharge through disposal wells to

underground horizons below the fresh water

level, such wells to be so drilled, cased,

cemented, equipped, and operated that no

fresh water horizon shall be polluted;

provided that this rule shall not apply in

fields or areas where it is determined by

the Stream Control Commission that

disposal of the brine is or may be

accomplished by discharge into water

bodies normally or seasonably sufficiently

Saline as to preclude any actual or

potential pollution hazard due to such

discharge."

App. 26

Order of Stream Control Commission

July 1, 1968

"Effective July 1, 1968, it shall be the

order of the Louisiana Stream Control

Commission that no oil field wastes,

including salt water, produced by gas or

oil field operations in the State of

Louisiana shall be allowed to drain or

flow into waters of the state except:

(1) Salt water may be disposed of in

normally saline waters, tidally affected

waters, brackish waters or other waters

unsuitable for human consumption oF

agricultural purposes. Where quality of

receiving waters is not clearly brackish,

saline or tidally affected, or unsuitable

for human consumption or agricultural

purposes individual judgment shall be

rendered by the Stream Control Commission;

and

(2) As further provided under the

applicable Rules and Regulations of the

Department of Conservation.

Nothing herein contained is intended

to repeal, modify or otherwise effect

existing regulations of this Commission."

Water Quality Standards, Sec.III,

definitions, Louisiana Register, p.746,

Oct. 20, 1984

"Water pollution" means the

introduction into the waters of the state

by any means, including dredge and fill

operations, of any substance in

concentration which tends to degrade the

chemical, physical, biological,

radiological integrity of such waters,

including, but not limited to, the

discharge of brine from salt domes which

are located on the coastline of Louisiana

and the Gulf of Mexico into any waters off

said coastline and extending therefrom

three miles into the Gulf of Mexico."

App. 27

Water Quality Standards, Sec.iit,

definitions, Louisiana Register, p.746,

Oct. 20, 1984

"Waters of the State" means both the

surface and underground waters within the

State of Louisiana including all rivers,

Streams, lakes, groundwaters, and all

other watercourses and waters within the

confines of the state, and all bordering

waters of the Gulf of Mexico."

Water Quality Standards, sec. Vii .c,

Louisiana Register, p.749, Oct. 20, 1984

"Numerical Criteria-Numerical criteria

identified in the numerical criteria

tables apply to the specified waterbodies,

and their tributaries, distributaries, and

ancillary streams and waterbodies if they

are not specifically named therein. Those

waterbodies which are officially approved

and designated by the state and EPA as

intermittent streams or man-made

watercourses are excluded. Numerical

criteria specifically apply to water

quality conditions of the surface waters

of the state that are attributed to waste

discharges or activities of man as opposed

to natural conditions."

Water Quality Standards, Sec Vit. .2.

Louisiana Register, p.750, Oct. 20, 1984

"Chlorides, Sulfates, & Total Disscived

Solids-Numerical criteria for these

parameters generally represent the

arithmetic mean of the nearest existing

data plus one standard deviation. For

estuarine stream segments in the numerical

criteria tables which have no. listed

criteria (i.e. designated N/A), criteria

will be established on a case-by-case

situation based on field determination of

ambient conditions and the designated

App. 28

water uses. Some stream segments have

been assigned interim numerical criteria

pending the coilection of long term data.

Interim criteria, however, shall be the

applicable standard until long term data

becomes available. Revised criteria for

these segments wil] be provided as this

data becomes available. Criteria may

eventually be set lower or higher

depending on results of data analyses.

Interim criteria are denoted by = an

asterisk (*) in the numerical tables. For

tributary, distributary and = ancillary

streams and waterbodies not specifically

listed in numerical criteria tables,

increases over background levels of

chlorides, sulfates and total dissolved

solids may be permitted. Such increases

will be at the discretion of the Office on

a case-by-case basis and shall not cause

instream concentrations to exceed 250, 250

and 500 mg/L for chlorides, sulfates and

total dissolved solids, respectively.

Such increases, in addition to background

conditions shall consider effects. on

resident biota and downstream waterbodies.

Under no circumstances, shall an allowed

increase induce a violation of any

numerical criteria in any listed waterbody

or a violation of any other general or

numerical criteria in either listed or

unlisted waterbodies."

Water Quality Standards, Sec.VIII.A,

Louisiana Register, pp. 751-752,0ct. 20,

1984.

"Background-Water Quality Standards set

forth in this document specify

concentrations of water constituents

which, if not exceeded, are expected to

result in an aquatic ecosystem suitable

for the highest designated uses given.

These values (criteria) are derived for

| i

App. 29

individual water segments based upon the

designated use or uses of the segment and

the natural qualities of the waters.

An established water quality value

(criterion) represents the maximum

concentration (with exception of dissolved

oxygen and pH) of a constituent in a

stream segment that is allowed by the

state. For some toxic substances,

however, criteria represent both maximum

and average or chronic’ concentrations

allowed. Criteria apply at all times

except where natural conditions cause them

to be exceeded. All uses, non-point

pollution sources, natural conditions and

the water quality criteria are considered

in the Office's determination of

appropriate permit limits for each waste

water discharge to a stream segment."

Water Quality Standards, Sec.X, Louisiana

"NUMERICAL CRITERIA UNIT DEFINITIONS

CL - Chlorides in mg/L

SO, - Sulfates in mg/L

DO - Dissolved Oxygen in mg/L

PH Range - Range of pH Units

BAC - Bacterial Criteria (See Below)

TEMP - Temperature in °C

TDS - Total Dissolved Solids in mg/L

N/A - Not applicable at Present

* - Interim Numerical Criteria for Cl, SO,

and TDS, Subject to Change, See Text

Bacterial Criteria (BAC)

Primary Contact Recreation

Secondary Contact Recreation

Public Water Supply

Shellfish Propagation

wm CO DN Fe

Designated Water Uses

App. 30

Primary Contact Recreation

Secondary Contact Recreation

Propagation of Fish and Wildlife

Public Wate: Supply

Shellfish Propagation

Agriculture

Outstanding Natural Resource Waters"

QO mm TNwWSYS

Notification Regulations-~ and Procedures

for Unauthorized Discharges, Section

9.1.1, November 19, 1985

we § the event that a significant

unauthorized discharge into the air, land

or water environment of the State as

defined by the guidelines in this part

occurs , but does not constitute = an

emergency condition, the discharge shall

notify the Department or appropriate

Division promptly, but in no case more

than twenty-four (24) hours after learning

of the unauthorized discharge, by

telephone or other -verbal communication

means, or in person, in accordance with

the notification procedures in Part IV of

this regulation.”

Notification Regulations and Procedures

for Unauthorized Discharges, Section

9.3.5, November 19, 1985

"Any unauthorized discharge within a

twenty-four (24) hour period which exceeds

one (1) barrel of crude oil, or refined

petroleum products not listed in the

pollutant list in Part V_ of this

regulation except where Sections 9.3.2,

9.3.3, or 9.3.4, above apply."

Notification Regulations and Procedures

for Unauthorized Discharges, Section

9.3.6, November 19, 1985

App. 3l

"Any unauthorized discharge which does not

result in an emergency condition buy does

or may reasonably be expected to result in

violation of the Louisiana Water Quality

Standards and/or significant impairment of

designated water uses."

Louisiana Water Pollution Control

Regulations, Section 2.1.B., November 20,

1985

a TS FP Without first obtaining a

LWDPS permit from the Office of Water

Resources, (with the exceptions noted in

Sections D and F below), no person shall:

l. Discharge or allow to be

discharged any pollutants into the

waters of the State from any

facility or activity;

Zs Construct any new facility or

undertake a new activity, the

operation or conduct of which

would result in a discharge into

the waters of the State;

zi Construct, install, operate, or

alter any facility or activity or

any extension or modification

thereof or addition thereto, the

Operation or conduct of which

would cause increases in the

quantity of degradation in the

quality of the discharge of

pollutants into the waters of the

State or which would otherwise

alter the physical, chemical, or

biological properties of any

waters of the State in any manner

not already lawfully authorized;

4. Construct or use any new outlet

for the discharge of any

App. 32

pollutants into the waters of the

State."

Louisiana Water Pollution Control

Regulations, Section 3.1.D, November 20,

1985

"3.1.D. The discharge of any pollutant

in quantities exceeding permitted limits

or a discharge from a source or at a

location not authorized by a permit shall

be a violation of the Act."

App. 33

APPENDIX D

STATE OF LOUISIANA

DEPARTMENT OF ENVIRONMENTAL QUALITY

ENVIRONMENTAL QUALITY ACT,

LA.R.S. 30:1051 ET SEQ.

IN THE MATTER OF: *

JOHN W. MCGOWAN * STATEMENT

* OF

PROCEEDINGS UNDER LOUISIANA * CHARGES

JOHN W. McGOWAN, hereinafter referred

to as "the Respondent", is hereby charged

with the following violations of the

Louisiana Environmental Quality Act,

La.R.S. 30:1051 et seq., hereinafter

referred to as "the Act". |

On or about January 31, 1986,

Respondent did cause or allow the

discharge of brine from an oilfield

production site identified as the Devilbis

Lease No. 19. On or about February 8,

1986, Respondent did cause or allow the

discharge of oil from an _e oilfield

production site identified as the Taylor

App. 34

Lease No.3 and the Kratzer Lease No. l.

All of the above sites are located in the

Roanoke Field of Jefferson Davis Parish,

Louisiana. The cited unauthorized

discharges are in violation of the

Louisiana . Water Pollution Control

Regulations, Section 2.I.B and 3.1.C; the

Regulations of the Stream Control

Commission governing disposal of waste

oil, oilfield brine, and all other

materials resulting from the drilling,

production, and transportation of oil,

gas, or sulphur adopted January 27, 1953;

the Order of the Stream Control Commission

effective July 1, 1986; and Sections 1095

and 1096 of the Louisiana Environmental

Quality Act.

rhs

Respondent failed to notify the

Department of Environmental Quality of the

discharges at the Devilbis and Taylor

App. 35

Leases, in violation of the Department's

notification regulations and _ procedures

for unauthorized discharges and Sections

1073 and 1096 of the Act.

Doneon this 4th day of September, 1986,

at Baton Rouge, Louisiana,

/s/

PATRICIA L. NORTON, Secretary

Department of Environmental

Quality

PLN: ACC:dla

App. 36

APPENDIX E

STATE OF LOUISIANA

DEPARTMENT OF ENVIRONMENTAL QUALITY

IN THE MATTER OF: *

JOHN W. McGOWAN *

P.O. BOX 55809 * ASSESSMENT

JACKSON, MISSISSIPPI 39216 * OF

* PENALTY

PROCEEDINGS UNDER THE *

LOUISIANA ENVIRONMENTAL *

QUALITY ACT, LA.R.S. 30:1051*

ET SEQ. *

In the following ASSESSMENT OF PENALTY

issued to JOHN W. McGOWAN (hereinafter

referred to as "the Respondent") by the

Secretary, Department of Environmental

Quality (hereinafter referred to as “the

Department") under authority granted by

the Louisiana Environmental Quality Act,

Om ee 30:105] et.seq. (hereinafter

referred to as "the Act") and particularly

by Section 1073 E of the Act.

FINDINGS OF FACT

App. 37

Respondent owns and _ operates. oil

production facilities in the Roanoke Filed

known as the Devilbis, Kratzer and Taylor

Leases.

On or about January 31, 1986, a

discharge of slat water from a salt water

pit into a ditch occurred at the Devilbis

Lease.

On or about February 24, 1986, an

overflow. of oil in the amount of 10

barrels, more or less, occurred on the

Taylor Lease. This discharge was

confirmed or noted by Department of

Environmental Quality personnel in = an

inspection on February 28, 1986.

IV.

No notice was given to the Louisiana

Department of Environmental Quality of the

discharges noted in paragraph II and III,

App. 38

as required by La.R.S. 30:1073 and

30:1096(D) of the Act and the Department's

Notification Procedures for Unauthorized

Discharges.

The actions of Respondent constituted

violations of the Water Pollution Con’ ro]

Regulations Section 2.1.B. and 3.1.D.,

Regulations of Stream Control Commission

concerning the disposal of waste oil, oil

field brine, and all other materials

resulting from the drilling, production

and transportation of oil, gas, or sulfur,

adopted January 27, 1953; The Order of the

Stream Control Commission effective July

1, 1968, and Sections 1095 and 1096 of the

Louisiana Environmental Quality Act.

VI.

A Proposed Penalty Notice of $5,000 was

issued to Respondent on May 22,1986.

Respondent requested a hearing on the

App. 39

violation and that hearing was held

Monday, November 3, 1986, before Richard

J. Brazen, Jr., Hearing Officer.

Vil,

Based upon the attached findings of the

Hearing Officer, it has been determined

that Respondent did allow discharges of

Oilfield wastes into the waters of the

State without an appropriate license or

permit. The Hearing Officer has submitted

proposed findings of fact, conclusions of

law and a recommended penalty which are

attached here to and hereby incorporated

herein by reference as if repeated in

their entirety.

ORDER

Based on foregoing FINDINGS OF FACT,

and the Hearing Officer's proposed

FINDINGS OF FACT, CONCLUSIONS OF LAW and

RECOMMENDED PENALTY, it is hereby ORDERED

that:

App. 40

Respondent is hereby assessed a penalty

of $56,000 for the violations cited

herein.

Payment of this assessment shall be

made in full within twenty (20) days of

receipt of this ORDER.

Failure of Respondent to timely pay

this penalty shall result in further

enforcement action, including, but not

necessarily imited to, referral of this

assessment to the Attorney General's

Office for judicial collection together

with al] costs and expenses” related

thereto. This ASSESSMENT is effective on

f ( pt

Done at Baton Rouge, Louisiana this

l6th day of January, (1986).(should be

Martha A. Madden, Secretary

Department of Environmental

Quality

App. 41

STATE OF LOUISIANA

DEPARTMENT OF ENVIRONMENTAL QUALITY

IN THE MATTER OF: *

JOHN W. MCGOWAN *

P.O. BOX 55809 *

JACKSON, MISSISSIPPI 39216 *

PROCEEDINGS UNDER THE *

LOUISIANA ENVIRONMENTAL *

QUALITY ACT, LSA-R.S.30:1051*

PROPOSED FINDINGS OF FACT,

CONCLUSIONS OF LAW AND RECOMMENDED

PENALTY

FINDINGS OF FACT

John W. McGowan owns and operates oil

production facilities in the Roanoke Fieid

known as the Devilbis, Kratzer and Taylor

Leases.

A. On January sl, 1986, on the

Devilbis Lease, a discharge of salt water

from a salt water pit occurred. No notice

of this discharge was ever given to the

keer

App. 42

Department of Environmental Quality or any

other state agency.

B. On the Kratzer Lease a discharge

of less than 1/2 barrel of oil occurred.

This charge has been dismissed, and there

was no charge of failure to notify.

C% On February 24, 1986, an overflow

of oil on the Taylor Lease of less than 10

barrels occurred. On February 28, 1986,

an inspection by Department of

Environmental Quality personnel confirmed

this spill. No notification was ever

given to the Department of Environmental

Quality nor any other state agency.

iG ©

A. At the Devilbis Lease, a pipe used

to carry salt water had been leaking for

an undetermined period of time. Sait

water was discharged into a ditch that

ultimately leads into a body of flowing

water. A minimum of 170 gallons of water

App. 43

per day were being discharged into the

environment. The testimony of the expert

produced by the defendant, McGowan, clearly

indicated if every lease holder in the

State discharged that amount of salt water

into the environment on a daily basis it

would be detrimental for the environment.

B. An oil discharge of less than 10

barrels occurred on the Kratzer Lease and

was ultimately cleaned. No notice was ever

given. The Respondent felt that since the

oil was contained on the lease it was not

necessary to notify the Department.

C. A discharge of salt water did

occur on the Devilbis Lease and a discharge

and spill of oil did occur on the Kratzer

Lease. No attempt was made to notify the

Department of Environmental Quality or any

other state agency because of the

interpretation of the laws by McGowan.

McGowan contended that as long as any spill

. App. 44

was contained on his lease he would have no

obligation to report it to any agency.

While the testimony did not determine how

much saltwater had been discharged into the

environment, it is unknown when the leak

commenced. The leak has been stopped. The

discharge occurred for a number of days

previous to the finding of the leak.

CONCLUSIONS OF LAW

The actions of Respondent constituted

violations of the Water Pollution Control

Regulations Section 2.I1.B. and 3.1.D.,

Regulations of Stream Control Commission

concerning the disposal of waste oil, oil

field brine, and all other materials

resulting from the drilling, production,

and transportation of oil, gas, or sulfur,

adopted January 27, 1953,; The order of the

Stream Control Commission effective July l,

1968, in Sections 1095 and 1096 Louisiana

Environmental Quality Act.

App. 45

RECOMMENDED PENALTY

In establishing the amount of penalty,

the following criteria under’ sections

1073(E)(a) are considered:

Bas

History of previous violations or

repeated noncompliance.

Response:

There is no history of previous

violations or repeated

noncompliance.

The nature and gravity of the

violation.

Response:

a. The discharge at the Devilbis

Lease was a grave violation

because large amounts of salt

water were being discharged

or spilled.

S. The Taylor Lease discharge

was a minor violation because

such a small amount of oil

} e &

liv.

App. 46

was spilled and the spill was

cleaned.

Gross revenues generated by the

Respondent.

Response:

Gross revenues were considered but

are deemed confidential and

therefore will not be listed here.

The degree of culpability,

recalcitrance, defiance, and

indifference in the regulation or

order.

Response:

a. John McGowan seems totally

recalcitrant, and defiant,

and indifferent, to the rules

and regulations of the State

of Louisiana. It is obvious,

even though this is not the

proper forum to attack the

Rules and Regulations of the

vi.

App. 47

Department, Mr. McGowan chose

this forum to do so.

The monetary benefits were

realized because they were not in

compliance.

Response:

There were very little monetary

benefits realized by McGowan

through noncompliance.

The degree of risk to human health

and property caused by the

violation.

Response:

a. It unknown whether there is

Significant risk of public

health and property because

of the Devilbis Lease

violation due to the fact

that it is unknown how long

the discharge occurred and

how much salt water brine was

Vil.

App. 48

in fact discharged into the

environment.

b. There was no risk to human

health and property caused by

the violation at the Kratzer

Lease.

Whether noncompliance or violation

and the surrounding circumstances

were immediately reported to the

Department and whether the

violation or noncompliance was

concealed or there was an attempt

to conceal by the person charged.

Response:

While there was no attempt to

conceal the discharges, there was

definitely no reporting of the

discharges. The unrealistic

interpretation of the law and

notification regulations by

McGowan amounted to an intentional

refusal to notify the Department.

viii.

App. 49

Whether the person charged has

failed to mitigate or to make a

reasonable attempt to mitigate the

damages caused by. his

noncompliance or violation.

Response:

Respondent did attempt to mitigate

the damage by cleaning up the oil

and stopping the flow of oil and

salt water in the future.

Respondent did nothing to clean up

the residue of the salt water

discharge. McGowan did ultimately

destroy the pit.

The cost of bringing and

prosecuting an enforcement action

including staff time, equipment

use, hearing records, expert

assistance and such other items as

the commission finds to be the

cost of the action.

Response:

Done

App. 50

It cost the Department $3,575 and

cost the respondents $34,386.50 to

defend this particular allegation.

Recommended penalties in this

matter

a. Salt water discharge at the

Devilbis Lease: $5,000.

b. Failure to notify the

Department of said salt water

discharge : $25,000.

e. Oil spill on the Kratzer

Lease: $1,000.

a. Failure to notify the

Department of said oil spill:

$25,000.

this 11 day of December, 1986.

lan)

Richard J. Brazan, Jr.

Hearing Officer

App. 5l

APPENDIX F

Selected Excerpts from Original Brief.

COURT OF APPEAL

FIRST CIRCUIT

STATE OF LOUISIANA

NO. CA 87 0677

JOHN W. MCGOWAN

VERSUS

DEPARTMENT OF ENVIRONMENTAL QUALITY

ON APPEAL FROM THE

PROPOSED FINDINGS OF FACT,

CONCLUSIONS OF LAW AND

RECOMMENDED PENALTY SIGNED BY

RICHARD J. BRAZAN, JR., HEARING

OFFICER FOR DEPARTMENT OF

ENVIRONMENTAL QUALITY ON DECEMBER 11, 1986

AND FROM THE FINDINGS OF FACT

AND ORDER SIGNED BY THE

SECRETARY OF THE DEPARTMENT OF

ENVIRONMENTAL QUALITY, M. A. MADDEN

ON JANUARY 16, 1987

APPEALED TO THE FIRST CIRCUIT COURT

OF APPEAL PURSUANT TO LA. REVISED

STATUTE 30:1072 AND RULE 2 OF THE

LA. COURT OF APPEAL, FIRST CIRCUIT

CIVIL CASE

ORIGINAL BRIEF ON BEHALF OF

PLAINTIFF/APPELLANT, JOHN W. MCGOWAN

GARY L. BOLAND

HUNTER & BOLAND

7911 Wrenwood Blvd., Suite A

P. O. Box 80551

Baton Rouge, LA 70898-0551

(504) 924-6881

ATTORNEYS FOR PLAINTIFF/

APPELLANT, JOHN W. MCGOWAN

(ORAL ARGUMENT REQUESTED)

App. 52

TABLE OF CONTENTS

JURISDICTION... « «..4-G)eee eee

SYLLABUS . . oo st 3a eee ee

STATEMENT OF THE CASE ae . 4

SPECIFICATION OR ASSIGNMENT “OF ERROR

AND ISSUES FOR REVIEW ...... 11

ARGUMENT ..... . [0 ee. be eee

JURISDICTION

Louisiana Revised Statutes 30:1072;

Rule 2 of the Louisiana Court of Appeal,

First Circuit; United States

Constitutional Provisions: Article ITI,

Fourth Amendment; Fifth Amendment, Sixth

Amendment, Ninth Amendment, Fourteenth

Amendment ; Louisiana Constitutional

Provisions: Article l, Sections 2, 13,

16 and 22.

App. 53

SPECIFICATION OR ASSIGNMENT OF ERROR

AND ISSUES FOR REVIEW

In compliance with R.S. 30:1072 and

Rule 2 of the Louisiana Court of Appeal,

First Circuit, John W. McGowan, lists the

following as his Assignment of Errors:

a The Secretary of the Department of

Environmental Quality erred in fining

McGowan $1,000.00 for an oil spill of

less than one-half barrel on the Kratzer

Lease, and $25,000.00 for failure to

notify the Department of Environmental

Quality of the spill.

2. The Secretary of the Department of

Environmental Quality erred in fining

McGowan $5,000.00 for the salt water

discharge at the Devilbis Lease _ and

$25,000.00 for failing tto notify the

Department of Environmental Quality of

the discharge.

App. 54

. The Secretary of the Department of

Environmental Quality erred in finding

McGowan was required to notify the

Department of Environmental Quality of

the oil spill of less than ten barrels on

the Taylor Lease when the oil was

contained, cleaned up, and did not affect

the waters of the state.

4. The Secretary of the Department of

Environmental Quality erred in finding

that McGowan violated Water Control

Regulation Section 2.1.B. and 3.I1.D.

a The Secretary of the Department of

Environmental Quality erred in finding

that McGowan violated Regulations of the

Stream Control Commission concerning the

disposal of waste oil, oil field brine,

and all other materials resulting from the

drilling, production and transportation of

oil, gas, or sulphur adopted January 27,

1933.

bieieeeeneeieiaeieeneeneinnenenenenaemeameemananiidimiaaieaaaainn

App. 55

6. The Secretary of the Department of

Environmental Quality erred in finding

that McGowan violated the Order of the

Stream Control Commission effective July

1, 1968.

- The Secretary of the Department of

Environmental Quality erred in finding

that McGowan violated Sections 1095 and

1096 of the Louisiana Environmental

Quality Act or of any other law, statute

or regulation pertaining to the alleged

violations by John McGowan.

8. The Secretary of the Department of

Environmental Quality erred in concluding

that the discharge at the DeVilbis. Lease

waS a grave violation because large

amounts of salt water were being

discharged or spilled and that harm

resulted or that the leakage ever got

into or affected the waters of the state.

App. 56

9. The Secretary of the Department of

Environmental Quality erred in

considering McGowan's gross revenueS aS a

factor in assessing its fines.

10. The Secretary of the Department

of Environmental Quality erred in

presuming that McGowan was guilty due to

his questioning of the interpretation of

the Department of Environmental Quality’'s

Rules and Regulations by requesting a

hearing on the merits.

se The Secretary of the Department

of Environmental Quality erred in finding

that McGowan realized monetary benefits

through non-compliance with Department of

Environmental Quality Rules and

Regulations in that the evidence showed

that money was expended in cleaning up

the spills, replacing new equipment and

new technology was installed to insure

App. 57

that the environment would be protected.

In fact, no monetary gain was realized.

L2. The Secretary of the Department

of Environmental Quality erred in

determining that any harm resulted in the

salt water leakage or discharge on the

DeVilbis Lease.

The Secretary of the Department

of Environmental Quality erred in finding

that there was a need to clean up the

residue of the salt water leak or

discharge on the DeVilbis Lease when the

evidence showed that no harm resulted

from the leak and that the leak did not

reach or affect the waters of the state.

14. The Secretary of the Department

of Environmental Quality erred by

applying rules and regulations over the

property in question by improperly

finding that the materials spilled

App. 58

resulted in harm to the environment or

violated the law.

i? The Secretary of the Department

of Environmental Quality erred by fining

John McGowan when the Department of

Natural Resources had already assessed a

$5,000.00 penalty for the same offenses

as the Department of Environmental Quality

did and after notification by the

Department of Natural Resources of these

same alleged violations.

16. The Secretary of the Department

of Environmental Quality erred in

recommending a penalty which was an abuse

of discretion and was arbitrary and

capricious in the manner of assessing the

penalty and in the assessing of the

amount of the penalty.

Bis The Secretary of the Department

of Environmental Quality erred in not

taking into account the amount of money

App. 59

spent on improvements to the lease, the

replacement of equipment, and the

introduction of more efficient and safer

technology to the leases so that future

spills would be fewer.

iF The Secretary of the Department.

of Environmental Quality erred in its

interpretation and definitions concerning

oil and salt water spills such as: the

definitions of "waters of the state<

contaminants, pollutants, etc.", and in

its arbitrary and capricious.

interpretation of the statutes and

regulations concerning oil and salt water

spills or leaks and whether harm resulted.

i? The Secretary of the Department

of Environmental Quality erred in

applying rules and regulations which have

not been properly promulgated which do

not quantitatively or qualitatively define

App. 60

harmful amounts of salt water and oil to

require notification when the salt water

and oil have been contained, cleaned up,

and present no harm to the public or

environment and do not reach or affect

the waters of the state.

20. The Secretary of the Department

of Environmental Quality erred in

interpreting the law and regulations

concerning the alieged violations and in

improperly applying the law to facts not

determined by the evidence in the case.

21. The statutes under which the

Department of Environmental Quality have

charged John McGowan with numerous

violations are vague, arbitrary, and

capricious.

App. 61

CONCLUSION

In summary, John McGowan’ through

undersigned counsel, requests this

Honorable Court to overrule the

Secretary's penalties assessed against

John McGowan on the salt water leak at

the DeVilbis Lease for $5,000.00 because

no pollution occurred and no harm was

suffered by the environment; to overrule

the assessed penalty of $25,000.00

against John McGowan for failing to

notify the Department of the leak, because

the waters of the state were not

polluted, affected, or discharged into and

therefore no notice was required. It is

further urged that’ the penalties of

$26,000.00 assessed for the oil spill and

failure to notify the Department of said

oil spill be overruled involving the

Kratzer Lease because no statutes, laws,

Or regulations were breached or violated.

App. 62

Since no laws or regulations were violated

regarding the Kratzer Lease, the penalty

should be nullified. John McGowan would

also request that no new fines be levied

against actions pertaining to the Taylor

Lease on the grounds that no laws or

regulations in connection with the Taylor

Lease were violated. We would further

request this Honorable Court that waters

of the state be strictly defined for the

Department of Environmental Quality

Control, so that the Department cannot

take jurisdiction under a definition so

broad that "whenever a drop of water

falls on the ground it becomes waters of

the state”. We ask this Court for

guidance in requiring the Department to

set up scientific quantitative and

qualitative standards supportable by

science and technology which will give

the oil industry guidance in exploring for

App. 63

and producing oil. When accidental and

necessary spills occur in the oil field

and are contained and cleaned up so that

no environmental harm results to the

environment or to the public, no penalties

should be assessed!

Counsel requests leave of Court to

submit additional evidence to this

Honorable Court if the need arises.

Counsel requests leave of Court at the

oral arguments to supplement evidence and

testimony pursuant to statute.

Respectfully submitted,

/s/

GARY L. BOLAND

7911 Wrenwood Blvd., Suite A

Baton Rouge, LA 70809

(S04) 924-6881

App. 64

APPENDIX G

Selected Excerpts from States Original

Brief.

COURT OF APPEAL

FIRST CIRCUIT

STATE OF LOUISIANA

NO. CA 87 0677

STATE OF LOUISIANA,

DEPARTMENT OF ENVIRONMENTAL QUALITY

JOHN W. MCGOWAN

ADMINISTRATIVE HEARING UNDER THE LOUISIANA

ENVIRONMENTAL QUALITY ACT

EAST BATON ROUGE PARISH

ON APPEAL FROM THE PROPOSED FINDINGS OF FACT,

CONCLUSIONS OF LAW AND RECOMMENDED PENALTY

SIGNED BY RICHARD J. BRAZAN, JR, HEARING

OFFICER FOR THE DEPARTMENT OF ENVIRONMENTAL

QUALITY ON DECEMBER 11, 1986 AND FROM THE

FINDINGS OF FACT AND ORDER SIGNED BY THE

SECRETARY OF THE DEPARTMENT OF

ENVIRONMENTAL QUALITY, MARTHA A. MADDEN

ON JANUARY 16, 1987

APPEALED TO THE FIRST CIRCUIT COURT OF

APPEAL PURSUANT TO LOUISIANA REVISED

STATUTE 30:1072 AND RULE 2 OF THE

LOUISIANA COURT OF APPEAL,

FIRST CIRCUIT

CIVIL CASE

ORIGINAL BRIEF ON BEHALF OF THE STATE OF

LOUISIANA DEPARTMENT OF ENVIRONMENTAL

QUALITY

(PLAINTIFF /APPELLEE)

ANN C. COCO

Senior Attorney

Louisiana Department of Environmental

Quality

P.O. Box 44066

Baton Rouge, LA 70804

(504) 342-1240

WILLIAM J. GUSTE, JR.

Attorney General

WARREN E. BYRD,II

Assistant Attorney General

Louisiana Department of Justice

7434 Perkins Road

Baton Rouge, LA 70808

(504) 922-0187

ATTORNEYS FOR THE STATE OF

LOUISIANA, DEPARTMENT OF

ENVIRONMENTAL QUALITY

( PLAINTIFF /APPELLEE)

(ORAL ARGUMENT REQUESTED)

App. 66

APPENDIX H

Selected Excerpts from Reply Brie

COURT OF APPEAL

FIRST CIRCUIT

STATE OF LOUISIANA

NO. CA 87 0677

IN THE MATTER OF

JOHN W. MCGOWAN

ON APPEAL FROM THE

PROPOSED FINDINGS OF FACT,

CONCLUSIONS OF LAW AND

RECOMMENDED PENALTY SIGNED BY

RICHARD J. BRAZAN, JR., HEARING

OFFICER FOR DEPARTMENT OF

ENVIRONMENTAL QUALITY

ON DECEMBER 11, 1986

AND FROM THE FINDINGS OF FACT

AND ORDER SIGNED BY THE

SECRETARY OF THE DEPARTMENT OF

ENVIRONMENTAL QUALITY, M. A. MADDEN

ON JANUARY 16, 1987

APPEALED TO THE FIRST CIRCUIT COURT

OF APPEAL PURSUANT TO LA. REVISED

STATUTE 30:1072 AND RULE 2 OF THE

LA. COURT OF APPEAL, FIRST CIRCUIT

CIVIL CASE

REPLY BRIEF ON BEHALF OF

APPELLANT, JOHN W. MCGOWAN

IN RESPONSE TO APPELLEE'S BRIEF

GARY L. BOLAND

HUNTER & BOLAND

7911 Wrenwood Blvd., Suite A

P. O. Box 80551

Baton Rouge, LA 70898-0551

(504) 924-6881

ATTORNEY FOR DEFENDANT/

APPELLANT, JOHN W. MCGOWAN

(ORAL ARGUMENT REQUESTED)

App. 67

TABLE OF CONTENTS

he SAMs so cc ccsessecess

po Cameo ebasebeneseeeesees i

II. STATEMENT OF THE CASE.......

Cosneabeeeeeneeenss 1

TIL. ISSUES... ccaces

TEECLERTT CELE TEE 4

IV. Sc sy ee ee ae ea ee

pee eseceesscenesess 5

A. THE SPECIFICATIONS OR ASSIGNMENTS

OF ERROR SET FORTH IN JOHN W. MCGOWAN'S

ORIGINAL BRIEF FILED JULY 21, 1987 ARE

VALID AND SHOULD NOT BE DISMISSED

(Ske ka ee eae 5

B. THE OIL AND SALT WATER SPILLS

IN THE AMOUNTS AND CONCENTRATIONS CITED

WERE NOT POLLUTANTS AND NEVER ENTERED THE

WATERS OF THE STATE; SINCE NO VIOLATION OF

THE LAW OCCURRED,THERE WAS NO DUTY TO

ots ae. | ee ee 7

i Waters of the State, as Defined

by the Louisiana Legislature does not

Include a Dry Ditch or a Depression in a

gi re ee eee eee ee Pe eee ee

2. “Water Course” is Defined as a

Stream of Water Uninterrupted Having a

Flow of Direction, a Regular Channel, a

Bed with Banks, and Sides with a

Permanent Source of Flow Not a Dry

Ditch or Low Depression in a Field

ee Fe ee Pe ee ket 13

i Other States With Similar

Statutory Language as Louisiana R.S.

30:1093(5) have defined Waters of the

State as requiring substantial amounts

of water, not dry ditches or low

depressions in a field

ree re ae 16

4. If the Spills Occurred into Waters

of the State There Must Be Water

App. 68

Pollution Before Notification is

Required

ye et Mas en energie Pag ease 17

ei The Quantity of Oil or Brine

Spilled on the Ground is not Water

Pollution Pursuant to La. R.S.

30: 169314) 2.2005 17

6. The DEQ Has No Control Over

Land- Spills if the Substances do not

Cause Water Pollution.

eas Ok ek ee ee 19

7. Appellee's Definition of Waters

of the State is Overly Broad, Ambiguous

Se VON as ea ee eee eee een

8. The Expansive Definition Created

by the DEQ is a Violation of Due Process

PROGR E TT TR ORG save wae tae eeh eee eee sss

9. No Oil was Spilled Into Waters of

the State, According to the Evidence

De te ae ata ane oe teres 26

10. If the Oil Spill Had Reached

the Waters of the State, the Amounts

Reported would not have Caused Water

Pollution

NAP a OS Marre ree oe Ee ee 27

ie The Saltwater Leak was Not

Water Pollution and did not Reach Waters

of the State

aise he ee ae ee ee 29

C. THE CIVIL PENALTIES ORDERED BY THE

DEQ'S SECRETARY SHOULD BE REVERSED

BECAUSE JOHN W. MCGOWAN'S DUE PROCESS

RIGHTS HAVE BEEN VIOLATED

a ear tete kia Sa ates Bk ee ee 30

i The DEQ has Confused

Recalcitrance in a Capricious and

Arbitrary Manner with John McGowan's

Due Process Rights to a Fair and Impartial

Trial

Ee ee eee ey ee Pe eee ee 30

App. 69

Zs The Salt Water Notification

Requirements are Overly Broad and Vague,

Since the DEQ Inspectors Who Inspected the

Lease Did Not Even Know Whether Any Laws

Had Been Broken After He Had Inspected the

Lease

veer eee ee ee ee 31

3. The Louisiana Supreme Court Has Set

out Guidelines for an Agency to Interpret

Legislative Intent From’ Environmental

Statutes

eee Pe ere SP ee oa ste ai

4. The Pollution Standards as

Enforced by the - DEQ Will Result in

Abolishing Louisiana's Oil and Gas

Industry Forever

ee ee ee re ee rer 32

5. The Notification Requirements as

Enforced by the DEQ of Discharges into

Waters of the State are Ambiguous and

Unconstitutionally Vague

Ce Ae a are ares 33

S. The Regulations Are Ambiguous and

Too Vague to Give Notice of Possible

Infractions According to the Louisiana

Supreme Court

ORF err hg SO ae ata a igang Kt 36

7. The Louisiana Supreme Court Has

Determined that the Environmental Statutes

Must Balance Environmental Costs and

Benefits along with Economic, Social

Factors for its Citizens

ke ee keen Re a eae wo eee ee 38

Zs Where an Agency Adheres Only to

Its Own Policy and Regulations, It is in

Error and Judicial Intervention is

Necessary

Ere eee Se Ce Le PT Ee PO ECR ee ee 40

9. The DEQ's Procedure Does Not

Insulate Agency Decisions From Review and

Reversal

ieee eee ee PUP eee eer Te Te 41

App. 70

10. The Agency is Arbitrary and

Overly Punitive and Requires the Guidance

of a Proper Judiciary to Ensure a Fair

Adjudication in this Case

ys oe etake aes ea ee ee ee 42

ll. John W. McGowan Was Denied a Fair

and Impartial Hearing

Terri rere yee kee Se 43

V. CONCLUSION

Tererer re ee eee ee eT ef. 49

Vi. CASES CITED OTHER THAN LOUISIANA -

ATTACHED...

Vil. MATERIAL EVIDENCE GERMANE- TO

DETERMINATION OF

POLLUTION FROM OIL AND SALT WATER

SPILLS... 1.

App. 71

III. ISSUES

THE SPECIFICATIONS OR ASSIGNMENTS OF

ERROR SET FORTH IN JOHN W. MCGOWAN'S

ORIGINAL BRIEF FILED JULY 21, 1987 ARE

VALID AND SHOULD NOT BE DISMISSED.

THE OIL AND SALT WATER SPILLS IN THE

AMOUNTS AND CONCENTRATIONS CITED WERE

NOT POLLUTANTS AND NEVER ENTERED THE

WATERS OF THE STATE; SINCE NO VIOLATION

OF THE LAW OCCURRED,THERE WAS NO DUTY

TO NOTIFY THE DEQ.

THE CIVIL PENALTIES ORDERED BY THE

DEQ'S SECRETARY SHOULD BE REVERSED BECAUSE

JOHN W. MCGOWAN'S DUE PROCESS RIGHTS HAVE

BEEN VIOLATED.

App. 72

V. CONCLUSION

John W. McGowan did spill less than ten

(10) barrels of oil because of a mechanical

equipment failure at the Taylor Lease on

February 24, 1986. When Manuel inspected

the lease on February 28, 1986, less than

two (2) barrels of oil remained. The

remaining oil was in a low depression in a

pasture one-fourth (1/4) of a mile from the

WATERS OF THE STATE. The oil was being

absorbed in hay. On March 6, 1986, Manuel

again inspected the Taylor Lease, and he

found that the area was 99% cleaned up.

John W. McGowan did spill an

undetermined amount of salt water which was

Jeaking from an abandoned salt water pit.

Since the pit was not used in McGowan's

working operation, no one checked the pit

on a routine basis. On January 27, 1986,

David Russell (McGowan's' environmental

officer who is a biologist and a geologist)

discovered the leak, and the leaking valve

was fixed at his orders. Russell walked

out the leak, and determined that no water

pollution or environmental damage _ had

occurred. ° Russell, who has a working

knowledge of the rules, laws, and

regulations relating to oil production in

Louisiana, Texas, and Mississippi, was

aware of the specific notification

regulations regarding pollution, water

pollution, waters of the state, harm and

potential harm to the environment, and the

chemical and biological properties of salt

water and oil. Russell determined that no

rules or laws had been broken.

The report written by Manuel in March

of 1986 specifically determined that there

was no damage to the environment and that

the substances cited did mot effect the

State's waters. McGowan's representatives

were invited to a conference with the DEQ

App. 73

to explain the circumstances of the spills

and to explain to the Department how the

spills had been taken care of. fThe tape

recording of the conference was taped by

the DEQ and introduced into evidence as

McGowan Exhibit number 2. Like the

Watergate tapes, there are gaps or missing

parts on the tape. After the conference

was notified that he was being fined

$5,000.

At the pre-hearing conference, DEQ

offered to reduce the fine to $3,000 since

no environmental harm had occurred, if

McGowan would plead guilty to all of the

DEQ's charges. McGowan requested a hearing

even though the hearing cost him over

$27,000 and the hostility of the Hearing

Officer and the DEQ. McGowan requested an

objective forum so that he could obtain a

fair and impartial judicial determination

to ascertain if the law had been broken.

The Hearing Officer from his demeanor and

rulings determined early on the first day

of the hearing that McGowan had broken the

law. He fined John McGowan $56,000 for

breaking the law and, as it was pointed out

in the appellant's assignment of errors,

the Hearing Officer made numerous material

errors of fact and law in his decision.

McGowan ‘ppealed and the DEQ accused

McGowan of being recalcitrant and

indifferent and requests this Court to

increase the fine to $62,000. At this time

the Court must surely be asking itself, why

didn't McGowan pay the $3,000 fine and

promise the DEQ that he would never spill

a glass of salt water into the waters of

the state. He could have also promised

that he would never ever spill any oil into

the waters of the state in the future. It

does not take a financial genius to

determine that McGowan has already spent

more than $56,000 denying that he caused

App. 74

more water pollution or spilled anything

that caused harm to the environment or ever

reached the waters of the state. He does

not agree with the DEQ's position that

water pollution occurred when the

substances cited were contained in a low

depression in his field and in a dry ditch.

He does agree that DEQ does have authority

over regulating the waters of the state by

preventing water pollution. He does not

agree that oil causes water pollution if it

never reaches the water. He does agree

with the definitions and interpretations of

waters of the state, water pollution, and

water courses as it is set out in the brief

with numerous legal citations of authority

to verify the application of those

definitions. He does not agree that the

DEQ regulations concerning the’ terms

"significant harm to the environment" and

"water pollution" are consistent or valid

with the Constitutional and legislative

intent in balancing the economic and social

factors in the oil industry.

The evidence submitted and set forth in

this brief clearly shows that no oil and

gas producer in this state or anywhere else

in the world can do one hour's work without

spilling salt water and oil.

McGowan agreed that when water pollution

occurs and if he causes the waters of the

state to be degraded physically,

chemically, biologically, or radiologically

that notification to the DEQ is necessary.

McGowan agrees that the substances must

enter the waters of the state first.

McGowan agrees that when he spills oil and

salt water on a lease, he must contain it

and clean it up. According to the

evidence, he cleaned up the spills and no

harm resulted to the environment!

McGowan asks this Court to define the

terms according to the law and to strike

App. 75

down the arbitrary and capricious rules and

regulations which the DEQ have

inappropriately applied to the production

of oil and gas on an oil field lease not

involving State waters.

In these financially troubled times,

this Court may never be asked to rule on

anything so vital to Louisiana's oil and

gas industry again! It is cheaper to pay

a $3,000 fine than to ask for rules of

reason or justice when one is dealing with

a state agency that makes its own budget

and expands its jurisdiction by fining out

of existence the industry which has shaped

Louisiana's economy.

Respectfully submitted,

/s/

GARY L. BOLAND

HUNTER & BOLAND

7911 Wrenwood Blvd., Suite A

P.O. Box 80551

Baton Rouge, LA 70898-0551

(504) 924-6881

ATTORNEY FOR JOHN W.

McGOWAN--APPELLANT

App. 76

APPENDIX I

October 1, 1987

Mr. Stanley P. Lemoine

Clerk of Court

First Circuit Court of Appeal

P.O. Box 4408

222 St. Louis Street

Baton Rouge, LA 70802

RE: In the Matter of John W. McGowan

On Judicial Review From a Ruling

by the Department of Environmental

Quality

Appeal No. CA-87-0677

Dear Mr. Lemoine:

Enclosed are the original and seven

copies of the following: Reply Brief

filed timely, Non-Louisiana Cases Cited in

brief, written supplemental evidence,

Motion to Supplement scientific evidence

pursuant to La.R.S. 49:964(E) when the

case is heard during oral arguments.

As per our telephone conversation with

your office, the Order is attached to and

a part of the Motion. Please let me know

when arguments will be scheduled for the

above captioned case. Oral arguments were

requested when the Brief was timely filed

on July 21, 1987 and on page 32 of the

Brief we reserved our rights to present

evidence on the grounds that the Hearing

Officer refused to allow us to present

evidence refuting or challenging the

scientific validity of the DEQ

regulations.

Sincerely,

/s/

Enclosure Gary L. Boland

App. 77

IN THE MATTER OF: : NUMBER: CA-87-0677

JOHN W. MCGOWAN a“ COURT OF APPEAL

ON APPEAL FROM THE * FIRST CIRCUIT

DEPARTMENT OF *

ENVIRONMENTAL QUALITY, *

STATE OF LOUISIANA * STATE OF LOUISIANA

MOTION TO SUBMIT SUPPLEMENTAL EVIDENCE

NOW COMES, John W. McGowan, through

undersigned counsel, and moves this

Honorable Court to allow said John W.

McGowan to submit supplemental evidence at

the oral argument to be held in the above

captioned cause pursuant to Louisiana

Revised Statute 49:964(E).

Respectfully submitted,

/s/

GARY L. BOLAND

HUNTER & BOLAND

7911 Wrenwood Blvd., Suite A

P.O. Box 80551

Baton Rouge, LA 70898-0551

(504) 924-6881

ORDER

Considering the foregoing Motion of

John W. McGowan requesting that he be

allowed to submit supplemental scientific

C—O

App. 78

evidence at the oral argument to be held

in the above captioned cause pursuant to

Louisiana Revised Statute 49:964(E).

IT IS ORDERED, ADJUDGED AND DECREED

that such submission of supplemental

scientific evidence be granted.

Baton Rouge, Louisiana, this the

day of August, 1987.

JUDGE

CERTIFICATE OF SERVICE

I hereby certify that a copy of the

foregoing was served upon Ann C. Coco,

Department of Environmental Quality, P.O.

Box 44066, Baton Rouge, LA 70808, by

placing same in the United States Mail,

properly addressed and with postage fully

prepaid, at Baton Rouge, Louisiana this

the lst day of October, 1987.

/s/ Gary L. Boland

| | : a

App. 79

APPENDIX J

FIRST CIRCUIT COURT OF APPEAL

STATE OF LOUISIANA

IN THE MATTER OF: APPEAL

NO: CA 87-0677

JOHN W. MCGOWAN ON JUDICIAL REVIEW FROM A

RULING BY THE DEPARTMENT OF ENVIRONMENTAL

QUALITY

MEMORANDUM _IN OPPOSITION OF APPELLEE'S

MOTION TO STRIKE

MAY IT PLEASE THE COURT:

The appellee, tise Louisiana Department

of Environmental Quality. contends that

the reply brief submitted by John WwW.

McGowan does not comply with the

requirements of the Uniform Rules for the

Courts of Appeal. Specifically, appellee

contends that appellant breached Rule 2-

12.6. Rule 2-12.6 is as follows:

"Reply Brief. The appellant may

file a reply brief if he has timely

filed an original brief but it

shall be strictly confined _ to

rebuttal of points urged in the

appellee's. brief. No further

App. 80

briefs may be filed except by leave

of Court.”

Appellant John McGowan's brief rebuts each

point urged in appellee's brief.

Since the problem Mr. McGowan has

encountered with the Department of

Environmental Quality has always been lack

of any definite proscriptions and vague

and over-broad application of nebulous

standards capriciously applied to Mr.

McGowan's oilfield operations, the vehicle

chosen for this appellate proceeding was

specifically chosen to be rebuttal of each

point urged in appellee's brief. No other

conceivable method of determining what

appellee defines the law to be seemed

suitable.

By allowing appellee to finally commit

to their "understanding" of the law, only

then could intelligent discussion and

exploration of the propriety and

_applicability of this law be presented for

App. 8l

determination by this Honorable Court.

Appellee is clearly wrong in her

assertions that appellant's brief “engages

in numerous excursions into areas and

issues not urged by appeilee in its

Original brief."

Naturally, constitutional issues of due

process and void for vagueness regulations

claims are not a portion of appellee's

Original brief. However, denial of these

constitutional issues and vagueness issues

does appear in appellee's brief.

Appellee's brief seeks to apply

regulations that are void for vagueness

and seeks to apply them in a manner that

would deprive John McGowan of

constitutionally guaranteed due process of

law. This attempt is rebutted on these

grounds in appellant's brief.

Appellant John McGowan has submitted as

part of his reply brief documents he

App. 82

Wishes the Court to consider. These

documents were not permitted at the

hearing and should be reviewed at this

time to determine whether they are

relevant. Specifically, relevance of

these documents becomes obvious when the

operative language of the statutes and

regulations proscribing McGowan's future

behavior contains terms such as: "

introduction . . . of any substance in

concentrations which tend to degrade the

chemical, physical, biological, or

radiological integrity of such waters

"(R.S. 30:1093 Definition of water

pollution); where fish life or

beneficial animal or vegetable life in

Said waters may be destroyed or injured"

(Rule 7 of Stream Control Commission

amended January 27, 1953); " . . . by

discharge into water bodies normally or

seasonally sufficiently saline as_ to

App. 83

preclude any actual or potential pollution

hazard due to such discharge" (Rule 8 of

the Stream Control Commission amended

January 27, 1953); “In the event that a

significant unauthorized discharge” (9.1.1

from Notification Requirements for

Significant Unauthorized Discharges); “Any

unauthorized discharge which . . . may

reasonably be expected to result in

violation or significant impairment of

designated water uses" (9.3.6 of

Notification Requirements for Significant

Unauthorized Discharges). Such terms used

in regulations indicate the materiality

and significance of the evidence offered

repeatedly throughout the hearing and

refused entry into the record on each and

every occasion. Appellant seeks judicial

determination of the relevance and

materiality of this evidence. Upon

determination that this evidence is

App. 84

relevant and material, John McGowan,

appellant in this proceeding, submits this

evidence as part of the record erroneously

kept out by the Department of

Environmental Quality and attorney Ann

Coco. Ample documentation of repeated

refusals to allow this evidence appears

throughout appellant's brief, therefore,

Summer _v. Sutton as quoted in appellee's

memorandum in support of motion to strike

is non-applicable. Quoting the First

Circuit and appellee's brief, the First

Circuit put it thus "“assertions’ and

arguments in brief on appeal of facts not

established by the evidence in the record

cannot be considered by the kovincinn

Court.” Repeated refusal to allow this

evidence is well established by the

evidence in the record and can _ be

considered by this reviewing Court.

App. 85

The proper Code of Civil Procedure

Article for judicial review of

adjudication is R.S. 49:964(d) which

states: (in pertinent part) " .. . by

stipulation of all parties to the review

proceedings the record may be shortened.

A party unreasonably refusing to stipulate

to limit the record may be taxed by the

court for the additional costs the court

may require or permit subsequent

corrections or additions to the record.”

Pursuant to Subparagraph E or R.S. 49:964,

application is herein made to this Court

for leave to present additional evidence,

in that it is respectfully urged this

Court be satisfied that the additional

evidence is material and failure of this

evidence to be entered into the record lay

in the hearing o‘ficer's adamant refusal

to accept that same evidence into the

record.

App. 86

It is also notable that appellee's

reliance on Summer v. Sutton in her

memorandum is not only misplaced, but

Subsection F of 49:964 seems to explicitly

overrule Summer _v. Sutton by statutory

authority.

Finally, appellee contends that

appellant's documents were not filed with

the administrative law clerk responsible

for preparing the record and are not

certified and dated by the clerk. This is

incorrect. All records and supplemental

records were prepared for filing,

certified, and dated as by law required.

For the foregoing reasons, it is

respectfully urged that all documents

submitted by the appellant be included as

part of the record in John W. McGowan

appellant. John W. McGowan exercises his

right of judicial review of the

administrative proceeding so necessary to

insure

justice.

App. 87

due process and_ substantial

Respectfully submitted,

/s/

GARY L. BOLAND

HUNTER & BOLAND

7911 Wrenwood Blvd., Suite A

P.O. Box 80551

Baton Rouge, LA 70898-0551]

(504) 924-6881

App. 88

APPENDIX K

In the matter of John W. McGowan

No. 87 CA 0677,

Court of Appeal of Louisiana,

Piret Circuit.

Oct. 12, 1986.

Rehearing Denied Nov. 30, 1988.

Civil penalty in sum of $5,000 was

assessed against owner and operator of

production leases. Upon operator's

request, administrative hearing was held

and Department of Environmental Quality

assessed penalties in amount of $56,000

and review was’ sought. The Court of

Appeal, Crain, J., held that: (1)

secretary's finding that salt water and

oi] were discharged in sufficient

quantities to pollute environment was

supported by records; (2) drainage ditches

into which oil and salt water were

discharged constituted "waters of the

state" within meaning Environmental

App. 89

Quality Act; and (3) Secretary's

imposition of $56,000 penalty was abuse of

discretion.

Amended and affirmed.

Shortess, J., concurred in part and

dissented in part for reason assigned and

would grant rehearing.

Gary L. Boland, Hunter and Boland,

Baton Rouge, for appellant John WwW.

McGowan.

Ann C. Coco, Sr. Atty., Dept. of

Environmental Quality, John B. Sheppard,

Jr., Asst. Atty. General, Baton Rouge, for

appellee State of La.

Before SHORTESS, LANIER and CRAIN,JJ.

CRAIN, Judge.

The Louisiana Department of

Environmental Quality, Office of Water

Resources (DEQ) issued compliance order to

John W. McGowan, as owner and operator of

the DeVilbis, Kratzer and Taylor

elie

App. 90

production leases located in the Roanoke

Field of Jefferson Davis Parish. The

compliance order was issued for alleged

violations of the Environmental Quality

Act on the sites, the discharge of oil

field wastes and failure to notify the DEQ

of the discharges. A civil penalty sum of

$5000 was assessed against McGowan for the

violations. Upon McGowan's request an

administrative hearing was held. The

findings of fact, conclusions of law and

recommended penalty of the Hearing Officer

were adopted by the Secretary. The

charges for violations at Kratzer lease

were dismissed. McGowan was found to have

discharged oil field waste at the Taylor

and DeVilbis sites in violation of the

Environmental Quality Act and to have

failed to notify the appropriate

authorities of the unauthorized

discharges. Penalties were assessed

_—

App. 91

against McGowan in the sums of $5000 for

the salt water discharge at the DeVilbis

site; $25,000 for failure to notify DEQ of

discharge; $1000 for the oil spill at the

Taylor site; and $25,000 for failure to

notify DEQ of the oil spill. From this

assessment of penalty McGowan appeals

alleging twenty-one assignments of error.

[1] In the first assignment of error

appellant alleges that the Secretary erred

in assessing a $1000 penalty for the

Kratzer oil spill and $25,000 for the

failure to notify. authorities of the

spill. It is uncontested that less than

one-half barrel of oil was spilled at the

Kratzer site and that a spill of this

quantity does not give rise to

notification requirements. DEQ concedes

in brief and the record reflects that in

the proposed findings of fact the hearing

officer found that the charges _ for

App. 92

violations at the Kratzer site had been

dismissed. However in the _ proposed

penalty recommendations the hearing

officer mistakenly referred to the 10

barrel oil spill at the Taylor site as the

Kratzer site. The order issued by the

Secretary does not refer to violations at

the Kratzer site nor was a penalty

assessed for the alleged Kratzer

violations. The Secretary merely assessed

a $56,000 penalty against McGowan for the

DeVilbis salt water discharge and the

Taylor 10 +barrel 0i] spill. The

assignment of error has no merit.

In brief McGowan concedes the

occurrence of the salt water discharge at

the DeVilbis site and the oil spill at, the

Taylor site. However, in the third,

fourth, fifth, sixth, seventh, eighth,

twelfth, thirteenth, fourteenth,

eighteenth, nineteenth, twentieth and

App. 93

twenty-first assignments of error McGowan

contends that the oil spill and salt water

discharges do not constitute pollutants as

defined under the Environmental Quality

Act; did not enter waters of the state as

defined under the Environmental Quality

Act; and did not give rise to a duty to

notify DEQ. He further alleges that the

Secretary erred in determining that the

discharges violated Louisiana Water

Pollution Control Regulation §§ 2.I1.B and

3.1.D; order of the Stream _ Control

Commission, July 1, 1968; Rules 2 and 7 of

the Stream Control Commission as amended

January 27, 1953; La.R.S. 30:1073, 1095,

1096 and Notification Regulations and

Procedures for Unauthorized Discharges §§

9.315, Brvase;

The Secretary found that salt water was

discharged from a salt water pit located

on the DeVilbis site on or about January

App. 94

31, 1986. The salt water exited the pit

through a bleeder pipe and open valve

which exited the east levee of the pit and

extended 50 yards to the edge of a storm

water drainage ditch on the DeVilbis site.

The drainage ditch enters Gum Gully Canal

which flows into Bayou Chene and comprises

part of the Intracoastal-Mermentau-

Lacassine Basin.

On February 28, 1986, DEQ water

pollution specialist Kirk Manuel

investigated an oil spill of an estimated

10 barrels of oil on the Taylor site. The

oil spilled over the containment wall and

traveled 200 yards through a drainage

ditch. The flow was diverted from the

ditch and traveled easterly into a cow

pasture for 350 feet. The oil flow was

diverted from the ditch by McGowan in

order to prevent the oil from flowing

App. 95

through the remaining 600 feet of the

ditch and into Gum Gully Canal.

Part IV of the Louisiana Environmental

Quality Act, the Louisiana Water Control

Law (La.R.S. 30:1091-1098), provides: The

legislature finds and declares that the

waters of the state of Louisiana are among

the state's most important natural

resources and their continued protection

and safeguard is of vital concern to the

citizens of this state. To insure the

proper protection and maintenance of the

state's waters, it is necessary to adopt

a system to control and regulate the

discharge of waste materials, pollutants,

and other substances into the waters of

the state.

La.R.S. 30:1092.

Under La.R.S. 30:1096 of the Louisiana

Water Control Law:

App. 96

A. (1) No person shall discharge or

allow to be discharged into any waters of

the state:

(a) any waste or any. other

substance of any. kind that will tend to

cause water pollution in violation of any

rule, order, or regulation; or

(b) Any substance, the discharge

of which violates any term, condition, or

limit imposed by a permit.

(2) The provisions of this Part

shall not apply to any unintentional non-

point-source discharge resulting from or

in connection with the production of raw

agricultural, horticultural, Or

aquacultural] products.

(3) No person shall violate any rule

or regulation adopted under this Part of

the terms of any permit or order issued

under authority of this Chapter.

App. 97

Any activity resulting in the discharge of

any substance into the waters of the state

without a required license or permit is

prohibited. La.R.S. 30:1095; Louisiana

Water Pollution Control Regulation §

2.I1.B. The "discharge of any pollutant in

quantities exceeding permitted

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