Petition for Writ of Certiorari — Cedar Point Oil Co. v. Sierra Club

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Supreme Court, U.S.

) FILe&s D

951831 MAY 10 1996

No.

O6P@8 OF THE CLERK

In The

SUPREME COURT OF THE UNITED STATES

Ow ober Term, °995

CEDAR POINT OIL COMPANY,

Petitioner,

vs.

SIERRA CLUB, LONE STAR CHAPTER

Respondent.

On Petition For Writ of Certiorari To The

Court of Appeals For the Fifth Circuit

PETITION FOR WRIT OF CERTIORARI

DAVID K. MCGOWAN

COUNSEL OF RECORD

P. O. BOX 22803

JACKSON, MS 39225-2803

TELEPHONE: (601) 948-3411

MSB NO. 2619

JAMES A. BECKER, JR.

WATKINS & EAGER

P. O. BOX 650

JACKSON, MS 39205

TELEPHONE: (601) 948-6470

MSB NO. 2303

ATTORNEYS FOR PETITIONER

QUESTIONS PRESENTE‘) FOR REVIEW

a. Whether a Plaintiff has

CONSTITUTIONAL STANDING to file a Citizen’s

Suit under the Clean Wetter Act (33 U.8.C,

§1365 (a) (1)) where such Plaintiff is

"cc cerned", and "fears" *hat a discharge may

impair his enjoyment of a waterway, but has

suffered no “injury in fact".

2. Whether, upon the failure of EPA to

perform its Congressionally mandated duties to

issue discharge permits, and to develop

applivable effluent limitations, a Plaintiff

has statutory standing to file a Citizen’s Suit

where there has been no "violation of an

effluent standard, permit or order".

3. Whéther, in the above instance, a

discharger is guilty of violating the Clean

Water Act in the first instance by reason of

discharge which violates no effluent standard,

permit or order.

4. Whether, in the above instance, the

federal courts are authorized to make the

factual determination whether a discharger is

"discharging a pollutant".

$s. Whether, if the federal courts are

authorized in EPA’s stead to make the factual

determination whether a discharger is

"discharging a pollutant", they may do so

summarily, without affording the discharger the

Opportunity to offer factual proof on such

issue.

6. Whether it is an abuse of discretion

for a court to strike all of a defendant

discharger’s expert testimony on the issue of

pollution and harm in a Clean Water Act case,

where the Plaintiff filed no Motion to Compe] ;

and where the discharger made a good faith

effort to comply with a local accelerated

discovery rule sxequiring simultaneous

disclosure of expert testimony, informed

counsel opposite and the Court in advance of

his inability to do so, applied to the Court in

advance for relief from such rule through

traditional discovery, and provided all

available information available in rebuttal.

Ve Whether it is proper for a Court to

assess a penalty based entirely and verbatim

upon one party’s pre-trial memorandum, and upon

evidence which was discussed in such memorandum

but never presented to the Court.

8. Whether attorney fees jncurred on

appeal are allowable under 33 U.S.C. 1365(d).

iii

LIST OF PARTIES TO THE PROCEEDING

IN THE COURT WHOSE JUDGMENT IS

SOUGHT TO BE REVERSED

All Parties appear in the caption of the

case.

Cedar Point Oil Company has no parent

companies or nonwholly owned subsidiaries.

TABLE OF CONTENTS

QUESTIONS PRESENTED FOR REVIEW

LIST OF PARTIES TO THE PROCEEDING IN

THE COURT WHOSE JUDGMENT IS SOUGHT TO

BE REVERSED

TABLE OF CONTENTS

TABLE OF AUTHORITIES

STATEMENT OF JURISDICTIONAL GROUNDS

CONSTITUTIONAL PROVISIONS, STATUTES

AND STATUTORY REGULATIONS INVOLVED

STATEMENT OF THE CASE

1. Course of proceedings and

disposition in Court below

2. Statement of Facts

ARGUMENT

I. CONSTITUTIONAL STANDING

II. A STATUTORY SCHEME GONE MAD

A. IS IT A SUBSTANTIVE

VIOLATION OF CLEAN WATER

ACT IN THE FIRST INSTANCE

TO DISCHARGE A SUBSTANCE

WHERE NO EFFLUENT LIMITA-

TION HAS BEEN IMPOSED ON

THE DISCHARGE OF SUCH

SUBSTANCES BY EPA IN

THAT SITUATION?

viii

B. DOES SIERRA CLUB HAVE

SPECIFIC STATUTORY STANDING

TO SUE UNDER THE CITIZEN

SUIT PROVISIONS OF THE

CLEAN WATER ACT WHERE

THERE HAS BEEN NO ALLEGED

VIOLATION OF AN EPA

EFFLUENT LIMITATION OR

PERMIT? 14

C. DID CONGRESS INTEND THAT

THE FEDERAL COURTS WOULD

DETERMINE WHAT IS OR IS

NOT A POLLUTANT IN A GIVEN

SITUATION? 20

D. CAN THE FEDERAL COURTS

SUMMARILY DETERMINE WHAT

IS OR IS NOT A POLLUTANT,

WITHOUT AFFORDING THE

DISCHARGER THE OPPORTUNITY

TO PUT ON ANY PROOF ON THE

ISSUE, AND STILL AFFORD

THE DISCHARGER DUE

PROCESS? 21

III. STRIKING OF CEDAR POINT’S

EXPERTS 23

IV. THE PENALTY COMPUTATION 27

V. ATTORNEY FEES 28

CONCLUSION 28

APPENDICES:

OPINION OF THE UNITED STATES

COURT OF APPEALS, FIFTH CIRCUIT,

DATED JAN. 11, 1996 App. 1

ORDER OF THE UNITED STATES

COURT OF APPEALS, FIFTH CIRCUIT,

ON PETITION FOR REHEARING,

DATED FEB. 12, 1996 App. 87

ORDER OF THE UNITED STATES

COURT OF APPEALS, FIFTH CIRCUIT,

ON SIERRA CLUB’S APPLICATION FOR

ATTORNEYS’ FEES AND COSTS, AND

CEDAR POINT’S MOTION TO STRIKE,

FILED FEB. 14, 1996 App. 89

ORDER OF UNITED STATES DISTRICT

COURT, SOUTHERN DISTRICT OF TEXAS,

HOUSTON DIVISION, DATED JUNE 20,

1994, AMENDING/SUPPLEMENTING THE

COURT MEMORANDUM App. 91

MEMORANDUM OPINION, FINDINGS OF

FACT AND CONCLUSIONS OF LAW OF

THE UNITED STATES DISTRICT COURT,

SOUTHERN DISTRICT OF TEXAS,

HOUSTON DIVISION, DATED MAY 27,

1994 App. 93

PARTIAL SUMMARY JUDGMENT ORDER

OF THE UNITED STATES DISTRICT

COURT, SOUTHERN DISTRICT OF

TEXAS, HOUSTON, DIVISION, DATED

MARCH 1, 1994 App. 108

STATUTES App. 115

vii

H. REGULATIONS

I. AFFIDAVIT OF TOMMY C.DOUGLAS

J. AFFIDAVIT OF MARK MUHICH

K. AFFIDAVIT OF JOHN SOMERS

App.

121

161

164

167

CASES:

855 F.2d 233 (5th Cir. 1988)

Page

Jones Falls Sewage System v. Train,

375 F.Supp. 1148 (DCMD 1974)

National Wildlife Federation v.

Gorsuch, 693 F.2d 156, 178

(DC Cir. 1982)

Public Interest Research Group

of New Jersey v. Powel] Duffryn

Terminals, Inc., 913 F.2d 64 70

(3d Cir. 1990), cert. denied,

498 U.S. 1109, 111 S.Ct. 1018,

112 L.Ed.

Sierra Club v. SCM Corp.,

747 F.2d 99 (2d Cir. 1984)

U.S. v. GAF Corp., 389 F.Supp.

1379, 1386 (NDTX 1975)

12,

STATUTES :

33 U.S.C. §1311(a)

33 U.S.C. §1314

33 U.S.C. §1342(a) (1)

33 U.S.C. §1342(b)

33 U.S.C. §1362(6)

33 U.S.C. §1362(19)

33 U.S.C. §1365(a) (1) a,

33 U.S.C. §1365(a) (2)

33 U.S.C. §1365(d)

33 U.S.C. §1365(f)

40 C.F.R. §122.44(c) (2)

40 C.F.R. §435.42

117 Cong.Rec. 38,838 (1971),

1972 Leg. Hist. 1347

57 Fed.Reg. 60,926 (12/22/92)

60 Fed.Reg. 2387 (1/9/95)

1972 Leg.Hist. 332, 1972 U.S. Code

Cong., Admin. News at 3826

STATEMENT OF JURISDICTIONAL GROUNDS

AND REFERENCE TO OFFICIAL REPORTS

OF OPINIONS

i. The U. S. District Court for the

Southern District of Texas rendered a final

decision in this case on May 27, 1994. District

Courts have jurisdiction over Citizen’s Suits

under 33 U.S.C. §1365(a). The U. S. Courts of

Appeal have appellate jurisdiction over appeals

from final orders of District Courts pursuant

to 28 U.S.C. §1291. Appellant filed a Notice

of Appeal on June 20, 1994, and an Amended

Notice of Appeal on July 5, 1994.

2- The U. S. Fifth Circuit Court of

Appeals rendered its opinion (73 F.3d 546

(1996)) on January 11, 1996, affirming the

judgment of the U. S. District Court for the

Southern District of Texas, which final order

disposes of all claims with respect to all

parties.

30 The U. S. Fifth Circuit Court of

Appeals entered an order denying Cedar Point

Oil Company’s Petition for Re-hearing on

February 12, 1996, and entered an order

granting in part Sierra Club’s Motion for

attorney fees and costs on February 14, 1996.

4. Jurisdiction is conferred upon this

Court by 28 U.S.C. 1254(1).

CONSTITUTIONAL PROVISIONS, STATUTES,

ORDINANCES AND REGULATIONS INVOLVED

IN THIS CASE

STATUTES :

33 U.S.C.§1311(a) ; 33 U.S.C. §1314(b);

33 U.S.C.§1362(6)&(19); 33 U.S.C. §1365(a) &(d)

REGULATIONS:

40 C.F.R. §435.42

57 Fed.Reg. 60,926 (12/22/92)

60 Fed.Reg. 2387 (1/9/95)

No.

In The

SUPREME COURT OF THE UNITED STATES

October Term, 1995

CEDAR POINT OIL COMPANY,

Petitioner,

vs.

SIERRA CLUB, LONE STAR CHAPTER,

Respondent.

PETITION FOR WRIT OF CERTIORARI

STATEMENT OF THE CASE

i. Course of proceedings and

disposition in Court below. This is an appeal

from the decision of the Fifth Circuit Court of

Appeals affirming a decision of the District

Court for the Southern District of Texas

granting Summary Judgment in favor of Sierra

Club on a Citizen’s Suit under the Clean Water

Act (33 U.S.C. §1365(a)(1)), and assessing

penalties and attorney fees against Cedar Point

Oil Company.

2. Statement of Facts. Cedar Point Oil

Company ("Cedar Point") operates an oil well in

Galveston Bay. Oil is but a small part of the

total fluid produced by an oil well. That

fluid is for the most part salt water, brought

to the surface from ancient, subterranean seas

("produced water"). After the oil is

separated, the salt water must be disposed of.

When Cedar Point’s well was completed in 1991,

Cedar Point did what every other operator in

the Bay had done for the past sixty years. It

applied to the Texas Railroad Commission and

received a permit to discharge its produced

saltwater back into the sea.

Cedar Point is in a permitting vacuum --

a tiny crack between a number of bureaucratic

agencies. The Clean Water Act ("CWA") first of

all exempted from CWA regulations the vast

majority of the on-shore oil and gas industry,

when it speci®ically excluded from the

statutory list of ~egulated discharges the sub-

surface disposal of produced salt water (33

U.S.C. §1362(6)). Most water produced by on-

shore facilities is disposed of by re-injection

into underground reservoirs. The CWA allowed

EPA to delegate the permitting of surface

disposal to state agencies (33 U.S.C.

§1342(b)). In Texas, such authority was

delegated to the Texas Natural Resource

Conservation Commission ("TNRCC"); but the

TNRCC does not by State law administer to the

oil and gas industry. Its rival agency, the

Texas Railroad Commission does. So the TNRCC

developed regulations for gurface discharges by

every industry around Galveston Bay except the

oil and gas industry. Cedar Point’s discharge

is permittable under TNRCC regulations, but

TNRCC does not have jurisdiction to issue the

permit under State law. The Texas Railroad

Commission does; but the Railroad Commission

was never given authority ("primacy") by EPA to

issue CWA National Pollutant Discharge

Elimination System ("NPDES") permits.

Therefore, EPA must do so directly only in the

case of the oil and gas industry.

EPA was charged by Congress with the

responsibility of administering the permit

system under the Clean Water Act. The CWA

envisioned that EPA, after study and input,

would develop published limitations ("effluent

limitations or standards") on the discharge of

virtually everything known to man; and that

nel

permits to discharge would be granted or denied

based upon those published standards (33 U.S.C.

§1314).' The CWA directs EPA to develop these

guidelines in three increasingly stringent

stages for each of the various industrial

categories of discharges (33 U.S.C. §1314).

The oil and gas category is divided into three

sub-categories. Surface disposal into

Galveston Bay is in the "coastal" sub-category.

On April 13, 1979, EPA adopted the first stage

guidelines for the coastal sub-category (40

C.F.R. §435.42). Later stage guidelines were

never adopted by EPA for the oil and gas

industry (or for that matter for any industry),

although they were required of EPA many years

ago under Section 301 of the Act. The only

effluent limitation placed upon’. coastal

disposal of produced saltwater by the 1979

guidelines was a limitation upon the percentage

of oil and grease contained in such water. EPA

has completely defaulted in establishing the

system of requlatory limitations envisioned by

Congress.

EPA has never issued a single saltwater

disposal permit for coastal disposal -- nor has

it denied one; it simply has never chosen to be

involved in the process in any fashion. EPA

has historically abdicated responsibility to

the Texas Railroad Commission in lieu of

formally delegating the same. The Texas

Railroad Commission issues all permits to

coastal operators in Texas. Picking up the

‘yn the absence of an established effluent

limitation, a permit may be granted or denied

on an individual basis according to the "best

judgment" of the permitting authority [33

U.S.C. §1342 (a) (1) and 40 CFR §122.44(c) (2) ].

ball informally given to it, the Railroad

Commission adopted the single EPA standard or

limitation on oil and grease, and it became a

part of Cedar Point’s permit. Cedar Point

reported the oil and grease content of its

discharge to the Texas Railroad Commission as

required, and it consistently stayed well below

that effluent limitation.

When the Railroad Commission suggested to

Bay operators that an EPA NPDES direct permit

might be required in addition to the state

permit, Cedar Point applied, in good faith, to

the federal agency. Inexplicably, EPA

expressly refused to act upon the application.

We do not mean to say that EPA is slow in

acting on the application; rather, EPA has

communicated to Cedar Point that it wil] not

rule on the application one way or the other;

and to this day -- five years later -- it has

not done so. EPA proposed instead a "general"

permit for this type of disposal which would,

in conjunction with a contemporaneous order,

authorize disposal of produced saltwater into

the Bay by all operators for a number of years

(57 Fed.Reg. 60,926 (12/22/92)).

The Sierra Club, well aware of these

circumstances, directed letters to the

operators in the Bay and elsewhere along the

Gulf Coast threatening them with Citizen’s

Suits under the Clean Water Act if they

continued to discharge produced water without

an EPA permit. Sierra offered an alternative

-- an operator could continue to discharge;

that is, continue to violate the Act in the

Sierra Club’s view, in exchange for a

“contribution” to the private environmental

community, plus payment of large attorney fees

to the Sierra Club Legal Defense Fund. Cedar

Point maintains that the Sierra Club, in

—s ——— nn

_ -

effect, is issuing “citizens’ permits” to

discharge for monetary consideration. In

February, 1993, Cedar Point applied to the U.S.

District Court in Jackson, Mississippi, for an

injunction: (1) requiring EPA to act one way or

the other on Cedar Point’s permit application

-- as required by the CWA; and, (2) enjoining

the Sierra Club from proceeding with its

Citizen’s Suit until EPA had so acted. The

District Court in Mississippi ruled that Cedar

Point could not prevent the Sierra Club from

filing suit; but in three years it has still

not ruled on the preliminary question whether

EPA must perform its statutory duty and rule on

Cedar Point’s application.

In the meantime, the Sierra Club filed

this suit against Cedar Point in Texas. The

District Court granted Summary Judgment in

favor of Sierra Club on the issue of liability.

Proof was heard only regarding the amount of

pornities: Price e Cont pny a Hoyt

the ‘eauaie that Cedar ta tan failed to

comply with the cCourt’s local rules on

accelerated discovery. Following the hearing,

Judge Hoyt assessed a fine against Cedar Point

of $186,070.00, awarded attorney fees of

$82,956.86; and shut the well down. EPA

thereafter adopted the "general" permit and

compliance order under the terms of which all

operators, including Cedar Point, were allowed

to continue to discharge into the Bay for a

period of two years. (60 Fed.Reg.2387 (1/9/95)

The Fifth Circuit Court of Appeals

affirmed and assessed an additional attorney

fee of $10,000.00.

ct a eI LL OI

ARGUMENT

I. CONSTITUTIONAL STANDING.

We lawyers have grown accustomed to

arguing the abstract and ignoring the obvious.

Some Sierra Club executive read some articles

which questioned whether produced water

discharges might represent a danger to the

environment. The Sierra Club "litigation

program" against Gulf Coast oil and gas

operators was the product of that afternoon of

5... We all ot that na never | heeeeed

The law on standing requires that a Sierra

Club member be actually injured, Sierra Club v.

SCM Corp., 747 Fed. 99 (2d Cir. 1984), and that

the injury be "fairly traceable" to Cedar

Point’s discharge, Public Interest Research

Group __of New Jersey __v. ___ Powe]]__ Duffryn

Terminals, Inc., 913 F.2d 64, 70 (3d Cir.

1990), cert. denied, 498 U.S. 1109, 111 S.Ct.

1018, 112 L.Ed.2a 1099 (1991). That is not the

case here, but federal courts stretch logic to

the breaking point in order to make the facts

of cases such as this fit the rule of law, when

the shoe very obviously does not fit. If the

standing rules were enforced, few of the

multitude of cases filed by organizations like

Sierra Club would reach court. If the

judiciary continues to bend rules to

accommodate perceived public policy and its own

bias, then the rules become meaningless.

In order to prop up an entirely too honest

Complaint, Sierra Club. presented three

affidavits. Two of the affidavits -- however

artful the wording -- merely expressed a

steers sess

"concern" that produced water discharges might

harm the environment. "Concern" will not

suffice. There must be actual injury. No one

questions that an “injury to the senses" will

suffice; but it is fundamentally necessary to

standing that Mr. Douglas and Mr. Somers

observe something which offended their senses.

Neither affiant observed anything. The third

affiant (Muhich) did. He observed oil and

odor; but he failed to allege that the injury

was traceable to Cedar Point’s discharge, or to

any produced water discharge. The affidavit

failed to say where in the 220 square miles

covered by Galveston Bay the oil and odor had

been observed. Hundreds of industries

discharge into the Bay. The affidavits utterly

failed to establish Constitutional standing.

The Court of Appeals totally ignored the

injury issue. It focused on the collateral

discussion whether the affiants were "mere

bystanders" -- a phrase commonly utilized in

standing opinions. All three affiants lived

near the Bay, and/or utilized it

recreationally; so the Court concluded that

they were not "mere bystanders". They had a

legitimate interest in the case. But the

J : : nere arx = reae :

That case is not analogous to this one on the

issue of injury.

Even though they enjoyed a status greater

than that of "mere bystanders" -- even though

they had a legitimate interest -- they had to

suffer actual injury to their senses while

utilizing the Bay near Cedar Point’s discharge.

They had to see a dead bird while canoeing; or

smell oil while swimming.

The closest the Court of Appeals came to

addressing the injury requirement was the

comment (p. 18) that the injury did not have to

be suffered; it could be merely "threatened".

But once again, that conclusion totally ignores

the fact that the affiants had to first observe

something in order to achieve standing -- if

not a sustained injury, then at least a

threatened injury. If the affiants were not

bloodied with a bat, they at least had to

observe the Defendant standing before them with

a raised bat. Two of these affiants did not

see anything; and the Court simply never

addressed that fundamental shortcoming.

Since Mr. Muhich’s affidavit makes no

attempt to satisfy the second requirement of

causation -- that the injury be “fairly

traceable" to the discharge -- the Court of

Appeals relied entirely on the affidavit of Mr.

Douglas -- who observed nothing -- to satisfy

the requirements of both injury and causation.

The Court of Appeals moved directly to the

second standing requirement -- causation. The

Court cited Powel] Duffryn, supra, to the

effect that it was not necessary to show that

the injury was caused by this particular

discharge. That is true, but how can the Court

reach the issue of what caused an injury

without establishing that an injury occurred in

the first place? In Powell Duffryn, the

SP SE yh te

Plaintiff observed brown water near Powell

Duffryn’s discharge. That sufficed as an

injury to his senses. What that Court held was

that the Plaintiff need not prove that Powell

Duffryn’s discharge 4dn_particular caused the

injury to his senses. He was only required to

show that Powe)]] Duffryn’s discharge was of the

- We do

not argue with that concept. But Mr. Douglas

never observed brown color -- or anything else.

The Court of Appeals simply skipped over the

injury requirement.

In an attempt to apply the Powel] Duffryn

causation rule to this case to establish

standing, the Court of Appeals reasoned that

Sierra Club showed that Cedar Point’s water was

“typical” of produced water; and offered expert

testimony to show that “typical” produced water

could injure benthic organisms. There are

several things wrong with this analysis. First

of all, it is factually incorrect. The water

identified by Sierra Club’s expert as typical

~~ at the penalty hearing -- was not the water

Cedar Point was discharging. It was water from

the old Chevron facility.? Second, this is a

Standing issue. The standing issue was decided

dong before the penalty phase. Standing was

decided summarily on the basis of the

affidavits alone. j

affidavit had alleged that he scuba dived; that

he loved to observe benthic organisms near

Cedar Point’s well; and that something was

killing them -- THEN, although he might not be

able to establish that Cedar Point water in

particular was killing the benthic organisms,

it would have sufficed under Powel]-Duffryn to

prove that Cedar Point’s water was “typical”

produced water -- and that typical produced

water was known to have killed benthic

organisms. But Mr. Douglas never observed a

dead benthic organisn.'

This goes to the heart of the standing

question. Sierra Club read some articles which

speculate that produced water discharges in

locations other than Galveston Bay may injure

benthic organisms. Were it not for standing

requirements, Sierra Club could do what the

Court of Appeals suggests. It could simply ask

the Court, as an academic matter, to determine

whether typical produced water damages the

environment. Standing rules preclude

presentation of academic questions to the

Court. The Plaintiff must be actually injured

in order to present the question. In this

case, there was no such injury.

Seven had Mr. Douglas observed a dead

organism near Cedar Point’s discharge, the

typicality of Cedar Point water -- amd the

effect of typical produced water -- would had

to have been established through another

affidavit in order to achieve standing under

Powell Duffryn. And even then, the Court could

not have properly entered summary judgment on

liability. The composition and effect of Cedar

Point water are fact issues.

II. A STATUTORY SCHEME GONE MAD.

Congress did not statutorily confer

standing upon a "citizen" to sue under 33

U.S.C. §1365(a)(1) to stop a discharge merely

because it is unpermitted. EPA can sue to stop

"citizen" can sue a discharger ONLY where there

is a violation of an existing EPA effluent

limitation, or permit. The statute is

absolutely clear and unambiguous.

$1365. Citizen suits

(a) Authorization; jurisdiction.

Except as provided in subsection (b)

of this section, any citizen may

commence a civil action on his own

behalf --

(1) against any person who is

alleged to be in violation of (A) an

effluent standard or limitation

under this Act or (B) an order

issued by the Administrator or a

State with respect to such a

standard or limitation.

Although the plan was overly ambitious -- and

totally unrealistic in its scope -- the logic

was not flawed. Congress wanted EPA to make

A] " eaae and

if so, to impose limits on the discharge of

that substance in that situation. If a

discharger violated the limitation developed by

EPA, or otherwise violated the permit issued by

EPA, a citizen could sue to stop the discharge.

But Congress did not want every citizen to be

able to sue to stop a discharge which the

under the

circumstances. That was EPA’s job.* It was

that simple; but it didn’t work.

The problem is, of course, that EPA never

developed the effluent limitations. So special

interest groups like the Sierra Club file

thousands of suits seeking to prohibit

discharges of substances which Sierra Club

considers pollutants. It was never supposed to

work that way. EPA’s total failure to carry out

the Congressional mandate gives rise to several

important questions which we present by this

appeal.

A. IS IT A SUBSTANTIVE VIOLATION OF

CLEAN WATER ACT IN THE FIRST INSTANCE TO

DISCHARGE A SUBSTANCE WHERE NO EFFIWENT

LIMITATION HAS BEEN IMPOSED ON THE DISCHARGE OF

SUCH SUBSTANCES BY EPA IN THAT SITUATION?

The District Court in the Northern

District of Texas held that an unpermitted

discharge did not violate the CWA if there was

no effluent limitation on the discharge of that

substance (U.S. v. GAF Corp., 389 F.Supp. 1379,

1386 (NDTX 1975)). The Court of Appeals

dismissed that ruling in GAF as dicta which had

been criticized by other opinions. The Fifth

Circuit did not address the case which gave

rise to GAF (Jones Falls Sewage System v.

Train, 375 F.Supp. 1148 (DCMD 1974)). We

believe that GAF and Jones Falls are good law.

In all of the enthusiasm over protecting the

environment, the judiciary has failed to

protect the individual.

“A "citizen" did have the right to sue EPA

under 33 U.S.C. §1365(a) (2) to_require EPA to

adopt limitations and require EPA to stop

unpermitted discharges alleged to be harmful.

‘ It is undisputed that EPA adopted an

effluent limitation on but one component of

Cedar Point’s water; and that Cedar Point has

always complied with the same. Had EPA imposed

limits on the discharge of other substances in

Cedar Point’s water, Cedar Point would have

complied with those limitations as well. But

EPA defaulted and gave Cedar Point no

directives at all. Cedar Point developed an

excellent purification system which, Cedar

Point believes, renders its produced water

harmless. These are not criminals. They are

respected, successful businessmen. So the

question here is, if Cedar Point’s discharge

violates no effluent limitations, is Cedar

Point nonetheless breaking the law because the

discharge is unpermitted? Underlying this

question is a more fundamental, if theoretical

Constitutional question.

Sierra Club believes that no one can

discharge ANYTHING, AT ANY TIME without a

permit --

- Cedar Point believes that

it has the Constitutional right to run its

business as it sees fit unless the government

determines that an action is harmful to the

public, and prohibits the action. If it is

illegal to discharge anything without a permit,

then each of us violates the law eaci time we

pour drinking water down the sink. Oh no, the

Court must be saying, it is only illegal to

discharge a "pollutant". But who seys what is

a pollutant, and what is not? hat is the

question which underlies this lawsuit.

Congress directed EPA to give structure to the

system -- and guidance to the individual -- by

adopting public limitations of various

discharges. In the void left by EPA, madness

prevails.

B. DOES SIERRA CLUB HAVE SPECIFIC

STATUTORY STANDING TO SUE UNDER THE CITIZEN

SUIT PROVISIONS OF THE CLEAN WATER ACT WHERE

THERE HAS BEEN NO ALLEGED VIOLATION OF AN EPA

EFFLUENT LIMITATION OR PERMIT?

In both GAF AND Jones Falls, EPA -- rather

than a "citizen" -- was the Plaintiff, so

statutory standing under the Citizen Suit

provisions was not an issue in those cases. If

an unpermitted discharge is a violation of the

act even though there is no effluent limitation

or permit violation, we now question, can a

"citizen" (vs. EPA) file suit under 33 U.S.C.

§1365(a)(1) merely because a discharge is

unpermitted? Clearly it cannot. Once again,

the language of 33 U.S.C. §1365(a)(1) is

absolutely clear and unambiguous -- a "citizen"

can sue only where there is a violation of an

effluent limitation or a permit violation.

Sierra Club urged the Courts below to ignore

the perfectly plain statutory language, and

arrive at a result exactly opposite of stated

Congressional intent through convolution.

(1) It is true, Sierra Club admitted,

that 33 U.S.C. §1365(a)(1) allows a Citizen’s

Suit only where there has been a violation of

an effluent limitation or permit.

(2) However, 33 U.S.C. §1365(f) defines

effluent standard or limitation as "any

unlawful act".

(3) It is an “unlawful act" to discharge

a pollutant without a permit. Therefore,

Sierra Club can sue to stop an unpermitted

discharge, whether the discharge violates an

effluent limitation or not.

The GAF Court rejected the identical

It is not an “unlawful act" to "discharge"

without a permit -- it is not unlawful to

"discharge" your drinking water down the sink

~~ it is rather an unlawful act to discharge a

"pollutant" without a permit (33 U.S.C.

§1311(a)). The last part of Sierra Club’s

equation either assumes that Cedar Point is

discharging a pollutant, or worse, assumes that

Since we are inundated with news every day

about the terrible effects of lead, asbestos,

etc., everyone assumes that certain substances

are pollutants -- in every situation -- in any

amount -- without qualification. That simply

is not true.

Cedar Point is therefore “discharging a

pollutant" without a permit. If that were the

case, then the water of Houston is guilty as

well, because the drinking water in that city

contains more lead than the trace amount found

in Cedar Point’s water. The very term

“effluent limitation” concedes the fact that we

can only limit the discharge of substances to

non-hazardous levels; we humans do not yet have

the technology to eliminate lead from the face

of the earth, and we would be unwise to do so

if we could.

The situation is almost as important as

the amount -- the nature of the receiving water

in relation to the discharge. Excessive

amounts of salt water will pollute the

Mississippi River; but the same amount of salt

water will not pollute the Atlantic Ocean.

Conversely, the discharge of large amounts of

fresh drinking water into a confined area

containing salt water could kill the salt water

animals living in that area. MThis analysis

requires reference to another. statutory

definition -- that of "pollution":

The term "pollution" means the man-

made or man-induced alteration of

the chemical, physical, biological,

and radiological integrity of water.

33 U.S.C. 1362(19)

The bottom line is this. If the jmpact of the

discharge in a given situation is an adverse

effect on the environment, then the discharge

is a pollutant. But that analysis necessarily

requires us to consider the amount of the

substance relative to that which occurs

naturally, the nature of the receiving water,

etc. That was supposed to have been the

function of EPA -- not Sierra Club, and not the

Courts.

Before it limits discharge of a substance

(through effluent or permit limitations) EPA

makes a more fundamental determination.

Congress gave only a vague, general definition

to the term “pollutant” (33 U.S.C. §1362(6),

and specifically left it to EPA to decide what

is, or is not a pollutant in a given situation.

The Court noted in National Wildlife

Federation v. Gorsuch, 693 Fed.2d 156, 178 (DC

Cir. 1982) that, "Congress did not intend the

term ‘pollutant’ to be all-inclusive".

Congress rather intended that EPA would have

the discretion to decide, “which ‘pollutants’

and sources of pollutants were to be regulated

under the NPDES Program" (page 173). Congress

intended that EPA would give specific meaning

to the general statutory definition. The Court

found ample authority in the Congressional

Record to support that conclusion:

In the administration of the Act,

EPA will be required to establish

numerous guidelines, standards and

limitations....[T]he Act provides

congressional guidance to the

Administrator in as much detail as

could be contrived. Virtually every

action required of the Administrator

by the Act, however, involves some

degree of agency discretion,

judgments involving a complex

balancing of factors that include

technological considerations,

economic considerations, and

others." Id.at 149, 1972 Leg.Hist.

332, 1972 U.S. Code Cong. &

Admin.News at 3826.

Senator Muskie stated: Again, I do

not get into the business of

defining or applying these

definitions to particular kinds of

pollutants. That is an

administrative decision to be made

by the Administrator. 117 Cong.Rec.

38,838 (1971), 1972 Leg.Hist. 1347.

Senator Muskie said it all when he noted,

"Sometimes a particular kind of matter is a

pollutant in one circumstance, and not in

another." (supra) That is exactly the point.

Whether or not something pollutes depends on

the situation. EPA may impose limitations on

the amount of salt water which may be

discharged into a fresh water stream; but allow

such a discharge into the ocean. EPA may

determine that salt water is a "pollutant" in

the first instance, and not in the second.

Whether a substance is a "pollutant" in a given

situation depends on whether the substance

occasions "pollution" -- or adversely affects

the environment in that situation. This is a

matter of proof. Someone has to have the

exclusive authority to make these factual

determinations -- the final word. Otherwise

there can be no uniform standards. Congress

intended that EPA would make those

determinations.

In the latter regard, the determination is

not based entirely on environmental

considerations. Under an existing executive

order, for example, EPA cannot’ impose

limitations which would require industry

expenditures of over 100 million dollars

without weighing the economic impact against

the environmental gain. As the Court is no

doubt aware, Congress is presently considering

legislation which will reduce that number to 25

million dollars. It will cost the oil and gas

industry 500 million dollars to eliminate

produced water discharges, and 100 million a

year to operate alternate facilities. In the

worst case scenario, the environmental impact

of the discharges will be less than

$100,000.00. EPA must -- and no doubt did --

consider this economic reality in determining

its course of action -- or inaction in this

case. Does the Court believe that Sierra Club

would give weight to economic considerations if

it were entrusted with making these discharge

limitation decisions? Sierra Club recognizes

only one side of the scale -- the environmental

side. That is why Congress intended that EPA

should make this decision -- not Sierra Club.

Of course, EPA did not develop effluent

limitations as Congress intended. The Court of

Appeals agreed with us (p. 26) that Congress

intended to protect the American businessman

from irresponsible litigation made possible by

EPA’s default. That is why Congress allowed

the citizen to sue only where an effluent

limitation or permit had been violated. But

the Fifth Circuit reasoned that Congress only

intended that the protection would extend until

a specific deadline set out in the statute. It

reasoned that when the length of EPA’s default

grew to 25 years, Congress could have enacted

legislation to extend protection to the

businessman had it so desired; and that

Congress -- by its jnaction -- must _ have

intended that Sierra Club could file citizen

suits in the absence of effluent limitations,

even though statute specifically says

otherwise. The Court of Appeals once again

used pragmatic logic to avoid perfectly clear

and unambiguous language.

We are also unimpressed by the fact that

numerous other citizen suits have been

entertained by the Courts which sought to

enjoin discharges which were not the subject of

effluent limitations or permits. None of the

defendant dischargers in those cases asked the

Court to address the question whether the

plaintiff had statutory standing, as we do in

this case.

The Fifth Circuit Court of Appeals held

that Sierra Club had standing to file a

citizen’s suit. But since EPA has failed to

develop effluent limitations; and since the

Court of Appeals therefore had to premise

standing on the “unlawful act” of discharging

a pollutant without a permit; what the Fifth

Circuit ruling has done, in effect, is put off

resolution of the standing issue until it is

factually determined whether the discharger is

discharging a "pollutant". Once again, this is

a matter of proof. Yet the Court of Appeals

affirmed the District Court’s guwmmary

resolution of the issue. That was clearly

error, and it leads us to more questions.

First, since EPA has not made that factual

determination, who will?

Cc. DID CONGRESS INTEND THAT THE FEDERAL

COURTS WOULD DETERMINE WHAT IS OR IS NOT A

POLLUTANT IN A GIVEN SITUATION?

While we feel that the Court of Appeals

arrived at that conclusion in a rather

circuitous fashion, we frankly welcome the

opportunity to put on proof in a court of law

on the scientific issue whether this water is

poliuting anything. It is often difficult to

get EPA to focus on such a specific question.

The problem is, Cedar Point was not allowed to

put on any proof, so the next obvious question

is:

D. CAN THE FEDERAL COURTS SUMMARILY

DETERMINE WHAT IS OR IS NOT A POLLUTANT,

WITHOUT AFFORDING THE DISCHARGER THE

OPPORTUNITY TO PUT ON ANY PROOF ON THE ISSUE,

AND STILL AFFORD THE DISCHARGER DUE PROCESS?

The Fifth Circuit affirmed the District

Court’s summary adjudication that Cedar Point

was discharging a pollutant. The Court’s

rulings in this regard are perhaps the most

frightening in the opinion. The Court pointed

out that the statutory list of pollutants (33

U.S.C. 1362(6)) contains some very broad terms

such as “industrial waste"; and concluded that

such term is vague enough to include produced

water. Although the Court had earlier

acknowledged that Congress intended for EPA to

give more specific definition to the broad

definitional terms set out in the statute

nonetheless simply concluded that produced

water was a "pollutant" without qualification

because it could be plugged into the broad term

“industrial waste".

If the Court will presume to do that which

was originally delegated to EPA, then let it at

least do what EPA was directed by Congress to

do. Let it hear proof whether this water is a

pollutant in this situation. For all the

District Court knew, Cedar Point could have

been discharging Perrier water. The District

Court heard no proof on the issue. - Remember,

the expert testimony referred to in the Fifth

Circuit opinion (Sierra Club’s side only) was

- Long before Moor

state, the District Court ruled summarily --

without explanation -- that Cedar Point’s

produced water was a pollutant. In affirming

that ruling, the Court of Appeals -- in

addition to relying upon the vagueness of the

statutory term "industrial waste" -- made note

of the fact that produced water injected

underground was specifically excluded from the

Congressional list of pollutants. It

perversely reasoned that all other produced

water must therefore be a pollutant. The Court

of Appeals also noted that EPA had developed

effluent limitations on disposal of produced

water for “on shore” and "off shore"

categories. If EPA considered produced water

pollutants in those instances, the Court

reasoned, it must consider the produced water

to be a pollutant in the “coastal” context

applicable to this case. The Court finally

commented (as did the District Court) that two

of the elements of Cedar Point’s discharge were

considered as toxic in regulations applicable

to different discharges by different

industries.

All of the Court’s reasoning blatantly

ignores the fact that in Congress’ view, a

substance may be a pollutant in one instance,

and not in another. EPA was supposed to decide

under what circumstances a substance was a

pollutant. The fact that EPA considered

produced water a pollutant when it is dumped on

the ground does not mean that it is a pollutant

eg Fyre Sag onan pt ig Cedar

Braids bilge wad fa

III. STRIKING OF CEDAR POINT’S EXPERTS.

As a technical matter, expert testimony on

the issue of the harm, if any, occasioned by

Cedar Point’s discharge was relevant only to

the extent that harm is a factor in determining

the amount of penalty. The substantive issue

whether Cedar Point was discharging a pollutant

had already been decided summarily, without

Cedar Point having been afforded the

opportunity to offer a word of testimony on the

subject. Since the District Court based the

actual calculation of the amount of its penalty

upon the economic benefit factor, rather than

the extent of harm, the Court of Appeals

reasoned that the striking of experts was not

very significant. That logic is too simplistic.

The District Court was predisposed to the

notion that Cedar Point was harming the

environment without ever hearing a word of

proof on that subject. Although it did not

enter into the actual mathematics of the

penalty calculation, the District Court

specifically found -- in the discussion of

penalty -- that Cedar Point had occasioned

harm. Cedar Point’s only opportunity to

demonstrate to the Court that its discharge was

not harming anything came at the penalty stage.

While it is not likely that the District court

would have reversed its summary ruling on the

discharge of a pollutant issue, it is absurd to

suggest that the Court would not have been

significantly influenced, in arriving at the

penalty amount, by a demonstration that Cedar

Point was harming nothing.

The Court of Appeals dismissed as

inapplicable the requirement of Broadcast

Music, Inc. v. Xanthas, Inc., 855 F.2d 233 (5th

Cir. 1988) that the Court may not strike

witnesses unless the aggrieved party first

obtains an order compelling discovery. The

Court of Appeals reasoned that in the context

of Xanthas, the Court was obliged to first make

it absolutely clear what was required of the

offending party, whereas in the case at bar,

the requirements of the accelerated discovery

order were perfectly clear in the first

instance. Without regard to whether we agree,

the Court of Appeals ignores the substance and

purpose of Xanthas. The purpose of the Motion

and Order to Compel is to make absolutely sure

that the attorney for the non-complying party

does not have a justifiable good faith excuse

for his non-compliance. If a lawyer is acting

honestly and in good faith in discovery

matters, it is simply inexcusable for a court

to treat that party as Cedar Point was treated

in this case.

The Court of Appeals conceded (p. 53) that

the Advisory Committee recommended that local

versions of the accelerated discovery rule (26)

require that the Plaintiff make the jnitial

expert disclosures, and that the Defendant be

allowed to review the same and then respond.

{[I]n most cases the party with the

burden of proof on an issue should

disclose its expert testimony on

that issue before other parties are

required to make their disclosures

with respect to that issue.

This is the traditional way. It is the only

way which makes sense. The rule in Judge Hoyt’s

Court required that the parties make

simultaneous disclosure of the detailed content

of their experts offerings. Notice pleading in

Federal Court allows the plaintiff to sue with

just minimal notice to a defendant of what he

is alleged to have done wrong. Sierra Club’s

Complaint alleged that Cedar Point’s

discharging was causing harm -- period. At the

time the subject disclosures were required of

Cedar Point, the only thing Cedar Point had

ever obtained from Sierra Club through initial

disclosure was a reference list of published

articles, some of which alleged that produced

brine caused harm to the environment. The

articles themselves were unclear as to what

element of the discharge was alleged to cause

harn. Some did point the finger at one

substance; others at a totally different

substance. Those offending substances were

either not present at all in Cedar Point water,

or were not present in amounts discussed in the

articles. Some articles discussed harm to

drinking water; some dealt with harm to benthic

organisms; others, with harm to animals which

do not even live in the Bay. None of the

articles, for that matter, involved Galveston

Bay. None of the materials discussed Cedar

Point’s water. Cedar Point had not the least

idea how Sierra Club believed that anything in

Cedar Point water was harming anything. Under

the circumstances, how could Cedar Point have

possibly disclosed what its experts were going

to say? Cedar Point did not know itself!

It would be one thing to make an

inadequate initial disclosure, and then dream

up this justification after the Court struck

Cedar Point’s experts. But Cedar Point,

knowing that what the Accelerated Discovery

Order required was JMPOSSIBLE, told Sierra

Club’s attorney -- and the Court -- jin advance,

$5032 ena ROT weno a,

in writing, that it could not possibly comply.

Cedar Point even went so far as to file some

interrogatories well in advance of the due date

of its initial expert disclosures asking Sierra

Club to specify exactly how Cedar Point water

was alleged to be harmful to the Bay. Judge

Hoyt ruled that Sierra Club did not have to

answer the interrogatories. Then he imposed

the ultimate evidentiary sanction! All Cedar

Point could do was disclose initially as best

it could, then respond in rebuttal to Sierra

Club’s expert disclosures. Cedar Point

confirmed its intention to proceed in that

manner jin advance to both Sierra Club’s

attorneys and the Court.

The Court of Appeals found that the

rebuttal disclosures should have been made

initially. To some extent that is true --

because Sierra Club’s initial disclosures were

no more than a regurgitation of the studies,

and Cedar Point’s experts for the most part

argied in rebuttal that such studies were

irrelevant to this case.* But Cedar Point could

not have known in advance that Sierra Club’s

offering would be so lacking in substance. To

the very limited extent that Sierra Club

presented relevant, specific information in its

initial offering, it did so for the first time.

Cedar Point responded in rebuttal -- the first

time it could do so -- only 21 days after its

initial disclosure -- a full 69 days prior to

> To this day Sierra Club has offered no

indication of how Cedar Point water is alleged

to be harmful to the Bay. Sierra Club never

had to put up, because the liability issue was

adjudicated summarily.

et ee eee ne oN

AA RNR Aled a the BAe SRG BOA Se NRO ESS, Lee.

trial! Sierra Club was not prejudiced in any

way in its trial preparations.

Judge Hoyt’s ruling on experts is the

equivalent of a judicial mugging. In twenty-

three years, this attorney has never seen

anything even remotely as abusive. We are

still simply flabbergasted.

IV. THE PENALTY COMPUTATION.

Case law sets out certain criteria for the

Court to consider in arriving at the amount of

penalty. The District Court weighed each

factor, but it founded the actual mathematical

calculation upon the economic benefit realized

by Cedar Point as a result of the unauthorized

discharge. The District Court opinion was a

verbatim copy of Sierra Club’s Pre-trial

Memorandum. That memorandum was submitted

prior to the District Court striking Cedar

Point’s experts, so the calculation of the

penalty in the memorandum was based upon what

Sierra Club maintained that one of Cedar

Point’s experts would say at the hearing.

Sierra Club’s version of what the witness would

have said was totally inaccurate; but more

significantly, THE WITNESS DID NOT TESTIFY! So

the District Court based the penalty entirely

upon the evidence which was never presented!

Sierra Club subsequently filed a Motion

attempting to clean up the mess which suggested

that what the District Court really meant to

say was such and such. fThe District Court

adopted Sierra Club’s rationale -- that other

obscure references in some studies offered by

Sierra Club, and a regulation of which the

Court took judicial notice could have generated

a figure jin the neighborhood of the very

specific figure the District Court based on the

non-existent witness’s testimony.

The Court of Appeals ratification of such

nonsense says more than we could ever say about

the bias of the Courts against anyone who would

dare take the unpopular side in environmental

litigation. There was nothing this District

Court could do to Cedar Point Oil Company which

could possibly offend the Court of Appeals’

notion of fair play.

Vv. ATTORNEY FEES.

The Court of Appeals awarded Sierra Club

additional attorney fees incurred during the

appeal as "costs" under 33 U.S.C. §1365/(d).

That statute authorized the District Court only

to award attorney fees and costs to the party

prevailing in that Court. There is no

statutory authority or case precedent for an

award of appellate attorney fees.

Moreover, even though the Court of Appeals

rationalized the radical] sanction of striking

all of Cedar Point’s witnesses on the grounds

that Cedar Point did not fully comply with the

rules, it totally ignored the fact that Sierra

Club’s application for an award of costs was

filed out of time. Sierra Club was not

required to comply with the rules; but Cedar

Point was -- to an impossible degree.

CONCLUSION

Every operator in Galveston Bay --

including Cedar Point -- is discharging

produced water into the Bay as we write this,

with EPA’s blessings. Nothing has changed.

The other operators paid a small amount to the

Sierra Club Legal Defense Fund. Cedar Point

did not, and Cedar Point is bankrupt. In

retrospect, it is still difficult for this

attorney to believe -- much less understand --

the things that happened along the road that

led us here.

No Sierra Club member has ever been

injured by anything Cedar Point ever did, and

everybody -- every party, every lawyer, every

Judge connected with this case -- knows it.

The Courts below stretched the rules on

Constitutional standing to the breaking point

so as to allow Sierra Club to present a purely

academic question to the Court. The Courts

below allowed Sierra Club to proceed under 33

U.S.C. §1365(a)(1) even though that statute

specifically and unambiguously provides that a

"citizen" may sue only to enjoin a "violation

of an effluent limitation or permit". Both

Courts utilized strained and convoluted logic

to arrive at the conclusion that the subject

statute actually "means" exactly the opposite

of what it says. That logic is founded

entirely on the conclusion that Cedar Point is

“discharging a pollutant" without a permit.

Yet -- in the void left by EPA’s failure to

define pollutant in the context of this case --

the Courts below determined that Cedar Point

was discharging a pollutant summarily --

without ever hearing one word of proof from

Cedar Point, or Sierra Club, on the composition

of Cedar Point’s water, or its effect on the

environment! To this day, the Courts do not

even know what Cedar Point water is, both

Opinions discussing the composition of Cedar

Point water by reference to test results on

someone else’s water! The Court of Appeals

rationalized the ultimate sanction of striking

every one of Cedar Point’s witnesses for

failure to comply with a rule which cannot be

complied with; yet it allowed Sierra Club to

blatantly violate the rule on application for

costs without so much as commenting on Sierra

Club’s error. The District Court arrived at a

penalty by simply adopting verbatim a one sided

version of the proof, and ended up thereby

founding the penalty on evidence which it never

heard; and the Court of Appeals saw nothing

wrong with that! This is, as we said earlier,

like a judicial mugging. We are still reeling;

dizzy, confused by the seemingly endless

sequence of unfriendly, outrageous rulings.

Either we are truly paranoid, or our perception

is correct that the rulings in this case are

punishing -- retributional. Why? How did this

happen? /

We can only surmise. Environmentalism is

the cause celebre of this generation. There is

a pervasive, angry, bias against anyone who

even appears to question the integrity or the

motives of an organization which espouses that

cause. Cedar Point has never wanted anything

but the opportunity to prove that it is not

polluting -- that it js not harming anything.

The Courts bend over backwards to afford those

charged with a crime the opportunity to prove

their innocence. If this case is any

indication, the day is not too distant when

those charged with an environmental "crime"

will be summarily shot.

The effluent limitation and permit system

envisioned by the Clean Water Act does not

exist. This Court has never addressed the many

important questions which arise out of that

chaotic void. This case presents the Court

with that opportunity, and we pray that the

Court will restore sense to it all, and right

this judicial aberration.

P. O. BOX 22803

JACKSON, MS 39225-2803

TELEPHONE (601)948-3411

MSB #2619

JAMES A BECKER, JR.

WATKINS & EAGER, PLIC

P. 0. BOX 650

JACKSON, MS 39205

TELEPHONE (601) 948-6470

MSB #2303

‘

Peet ek ne

App. 1

APPENDIX A

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 94-20461

SIERRA CLUB, LONE STAR CHAPTER,

Plaintiff-Counter

Defendant-Appellee,

Vv.

CEDAR POINT OIL COMPANY,

Defendant-Counter

Claimant~-Appellant.

No. 95-20227

SIERRA CLUB, LONE STAR CHAPTER,

Plaintiff-Counter

Defendant-Appellant,

Vv.

CEDAR POINT OIL COMPANY, INC.,

Defendant-Counter

Claimant-Appellee.

Appeals from the United States District

Court for the Southern District of Texas

Before REYNALDO G. GARZA, KING and

HIGGINBOTHAM, Circuit Judges.

KING, Circuit Judge:

These consolidated appeals arise from an

action brought by Sierra Club, Lone Star

Chapter ("Sierra Club"), against Cedar Point

Oil Company ("Cedar Point") under the citizen

suit provision of the Clean Water Act ("CWA"),

App. 2

33 U.S.C. §1365. Sierra Club alleged that Cedar

Point was violating the CWA by discharging

produced water into Galveston Bay without a

permit and sought civil penalties and an order

enjoining the unpermitted discharge. Cedar

Point counterclaimed for abuse of process.

Before trial, the district court granted

summary judgment in favor of Sierra Club on the

issue of Cedar Point’s liability under the CWA

and dismissed Cedar Point’s counterclain.

After a bench trial, the district court

assessed a civil penalty of $186,070. Cedar

Point appeals. The district court also

enjoined the discharge of produced water from

Cedar Point’s oil and gas production operations

without a permit; however, the court later

modified this injunction to allow Cedar Point

to continue the unpermitted discharge. Sierra

Club appeals this modification. We affirm in

all respects the judgment of the district

court.

I. BACKGROUND

A. Facts

1. "Produced Water"

This lawsuit concerns the legality of the

disposal of a by-product of the oil and gas

production process: "produced water." Produced

water originates as source water trapped in

underground geological formations with oil and

gas. When a well is drilled into a formation,

the extraction of oil and gas also brings the

water to the surface. During extraction,

chemicals used in the drilling process become

mixed with the water. The result is produced

ee oe a ee =

App. 3

water.

Part of the production process involves

the separation of the produced water from the

extracted oil and gas. After separation, the

operator must dispose of the produced water.

The available methods of disposal include

reinjection into an underground reservoir, land

disposal, evaporation, and discharge into

surface waters. Produced water is the highest

volume waste source in offshore oil and gas

production operations.?

2. Cedar Point’s Operations

Cedar Point is a Mississippi corporation

that owns and operates an oil and gas well and

associated facilities in the Cedar Point field

‘The Environmental Protection Agency has

defined produced water as "water and

particulate matter associated with oil and gas

producing formations. Produced water includes

small volumes of source water and treatment

chemicals that return to the surface with the

produced formation fluids and pass through the

produced water treating systems currently used

by many oil and gas operators." 57 Fed. Reg.

60,926, 60,951 (1992). For discussions of the

origin and composition of produced water, see

BP _ Exploration & Oil, Inc. v. U.S.E.P.A., 66

F.3d 784, 792 (6th Cir. 1995); Natural

‘ -, 863

F.2d 1420, 1425 (9th Cir. 1988); American

Petroleum Inst. v. E.P.A., 661 F.2d 340, 343

(Sth Cir. 1981).

“BP_Exploration & Oil, 66 F.3d at 792;

Natural Resources __ Defense _Counci] _v.

U.S.E.P.A., 863 F.2d at 1425.

App. 4

("the field"), which is located in Galveston

Bay in Chambers County, Texas.*> John McGowan

("McGowan") , Cedar Point’s principal

shareholder, purchased the field from Chevron

Corporation ("Chevron") on July 1, 1989. At

that time, the field contained twenty-two

abandoned wells and three producing wells.

McGowan shut down the producing wells

approximately one month after he purchased the

field. On January 1, 1991, McGowan transferred

the field to Cedar Point.‘ Later that year,

Cedar Point drilled its first well since

acquiring the field: state well 1876.5 Cedar

Point began producing oil and gas from this

well on September 10, 1991.

“The field and associated facilities are

Cedar Point’s only assets. Cedar Point itself

has no regular employees, but contracts for

necessary services with McGowan Working

Partners, a Mississippi partnership that

conducts oil and gas operations in Louisiana,

Mississippi, and Texas. While most of the

contractors who do work for Cedar Point hold

interests in McGowan Working Partners, the

partnership is not a party to this action.

‘This transfer is characterized as a

"purchase" in some of the documents in the

record on appeal; however, David Russell, Cedar

Point’s vice-president, testified that Cedar

Point acquired the field from McGowan at no

cost.

°At the time this action commenced, Cedar

Point had apparently not drilled any other

wells in the field.

eee

App. 5

Cedar Point began to discharge produced

water into Galveston Bay at approximately the

same time that it began production from state

well 1876. This discharge continued through

the trial of this action in May 1994, except

that the discharge was temporarily suspended

between April and August of 1992. Throughout

this period, the average daily discharge ranged

between 500 to 1200 barrels per day.® Cedar

Point’s produced water contained inter alia,

barium, benzene, zinc, chlorides, sulfate,

bicarbonate, ammonia, naphthalene, phenolic,

radium, oil and grease. Cedar Point disposed

of its produced water in the following manner:

(1) the oil, gas and water mixture produced

from state well 1876 was piped to a platform in

Galveston Bay for the first phase of

separation; (2) after the initial separation,

the remaining mixture was then piped to shore

where more oil was separated in a series of

tanks; (3) the produced water was then

transferred to settling pits so that some

constituents could settle out of the water; and

(4) the remaining produced water was drained

out of the pits and discharged through a pipe

over the bulkhead into Galveston Bay.’

3. The Pernits

Between August 1971 and July 1989, Chevron

discharged produced water from the onshore

‘A barrel contains 42 gallons.

‘Originally, the produced water had been

discharged into a marsh near the shore

facility. In modifying the separation system,

Cedar Point changed the discharge point to

Galveston Bay.

SD ST

———————

App. 6

separating facility pursuant to a permit issued

by the Texas Railroad Commission ("the Railroad

Commission"). This permit set limitations only

on the oil and grease content of the produced

water that was being discharged. After McGowan

purchased the field, the Railroad Commission

transferred Chevron’s Commission permit to

McGowan. The letter from the Railroad

Commission authorizing this transfer stated

that a permit from the Environmental Protection

Agency ("EPA") may be required for the

discharge of produced water under the National

Pollutant Discharge Elimination System

("NPDES") . David Russell ("Russell"), who

reviewed the transferred permit for McGowan,

testified that he did not read this sentence in

the letter; however, he did review Chevron’s

files, which did not reveal any NPDES permit or

NPDES permit application in the twenty-year

period of Chevron’s ownership of the field.

Based on this review, Russell did not apply for

a NPDES permit for McGowan at that time.

After McGowan transferred the field to

Cedar Point in 1991, Russell commenced

negotiations with the Railroad Commission to

transfer McGowan’s Commission permit to Cedar

Point. This negotiation took several months,

apparently because Cedar Point and the Railroad

Commission disputed the terms of the Commission

permit that Cedar Point would ultimately

receive. Cedar Point finally obtained a

Commission permit in September 1992, again

establishing limitations only on the oil and

grease content of the produced water that was

App. 7

being discharged.*® According to Russell, while

he was negotiating the terms of this permit,

Railroad Commission employees informed him that

oil and gas operators in Galveston Bay were

being sued for discharging produced water into

the bay without a NPDES permit. Also, the

final Commission permit that Cedar Point

received in September 1992 advised that a NPDES

permit may be required for the discharge of

produced water and that EPA was considering

prohibiting such discharges. Accordingly, on

October 15, 1992, Cedar Point applied to EPA

for a NPDES permit for its produced water

discharges.

By letter dated November 5, 1992, EPA

informed Cedar Point that its application for

@ NPDES permit had been reviewed and determined

to be administratively complete. Since this

acknowledgment, however, EPA has failed to act

on the application. On December 30, 1992,

Russell submitted a request to EPA under the

Freedom of Information Act ("FOIA"),® asking

"Because Cedar Point began discharging

produced water into Galveston Bay in September

1991, it had been discharging without a

Commission permit of its own for twelve months.

Russell testified that he assumed that Cedar

Point could discharge pursuant to McGowan’s

Commission permit pending the approval of Cedar

Point’s transfer application. Although Sierra

Club apparently questioned the legal basis of

this assumption at trial, the legality of Cedar

Point’s discharges under Texas law is not an

issue in this lawsuit.

%5 U.S.C. §552.

illic

App. 8

whether EPA had ever issued a permit for the

discharge of produced water in Texas. On

February 4, 1993, EPA responded that it had

issued two such permits. The first permit was

a general permit” that applied to oil and gas

operators in the “Offshore Subcategory" in

Louisiana and Texas and established limitations

on the oil and grease content of discharged

produced water.'' The second permit was also

a general permit that applied to oil and gas

operators in the "Onshore Subcategory" in

Louisiana, New Mexico, Oklahoma, and Texas;

this permit established an absolute prohibition

on the discharge of produced water by these

entities."* Neither of these permits applied to

Cedar Point because Cedar Point is in the

There are two types of NPDES permits:

individual and general. Typically, EPA will

promulgate a nationally uniform "effluent

limitation" on the discharge of a particular

pollutant and implement that limitation in the

form of jndividual NPDES permits issued to

entities discharging that pollutant. See 33

U.S.C. §§1311, 1342. Where EPA has not yet |

promulgated such an effluent limitation, :

however, it may regulate the discharge of

pollutants by issuing a general NPDES permit

that applies to a class of similar entities

located in a particular geographical region.

See Natural Resources Defense Council] _v.

Costle, 568 F.2d 1369, 1380-82 (D.C. Cir.

1977); 40 C.F.R. §122.28.

"46 Fed. Reg. 20,284 (1981).

56 Fed. Reg. 7698 (1991)

App. 9

“Coastal Subcategory."" In fact, at that time

the only regulation that EPA had promulgated

that applied to the discharge of produced water

by Coastal Subcategory operators was an

effluent limitation on the oil and grease

content of discharged produced water; however,

EPA had never implemented this limitation

through a general permit or individual permits.

AS a result, none of Cedar Point’s produced

water discharges was authorized by a NPDES

permit.

B. Procedural History

1. Cedar Point’s Collateral Action.

By letter dated December 16, 1992, Sierra

Club informed Cedar Point that the discharge of

produced water without a NPDES permit violated

the CWA and that Sierra Club planned to seek

monetary penalties and an order enjoining Cedar

Point’s unpermitted discharges." In response

“EPA has divided the category of "Oil and

Gas Extraction Point Sources" into several

subcategories for the purpose of regulating

discharges: "Offshore," "Onshore," "Coastal,"

"Stripper," and “Agricultural and Wildlife

Water Use." 40 C.F.R. §435. The "Coastal

Subcategory" includes facilities engaged in oil

and gas production, field exploration,

drilling, and well completion and treatment in

"any body of water landward of the territorial]

seas as defined in 40 C.F.R. §§435.31/(e),

435.40.

“40 C.F.R. §435.42.

"The CWA requires that a person bringing

an action under the citizen suit provision send

App. 10

to this letter, Cedar Point filed an action

against Sierra Club and EPA in the United

States District Court for the Southern District

of Mississippi. In its complaint, Cedar Point

alleged, inter alia that Sierra Club had

"threatened" Cedar Point with a citizen suit

and, impliedly, that EPA and Sierra Club were

conspiring to deprive Cedar Point of

unspecified constitutional rights.

Specifically, Cedar Point requested the

district court to issue an order that: (1)

required EPA to respond to Cedar Point’s

application for a NPDES permit; and, (3)

enjoined Sierra Club from filin7 a citizen suit

against Cedar point. On July 12, 1993, the

district court dismissed Cedar Point’s claims

against Sierra Club.”

2. Sierra Club’s Citizen suit

Sierra Club filed the present action

against Cedar Point on April 20, 1993, in the

United States District Court for the Southern

District of Texas. In its complaint, Sierra

Club prayed for: (1) a judgment declaring that

Cedar Point’s unpermitted discharges of

an “intent to sue" letter to the EPA, the

alleged violator, and the state in which the

alleged violation occurs at least 60 days prior

to the commencement of the action. 33 U.S.C.

§1365(b) (1).

‘The court apparently has not disposed of

Cedar Point’s claims against EPA. The last

docket entry in the case indicates that the

court held a hearing on EPA’s motion to dismiss

on September 19, 1994, "with written opinion to

follow in about a week."

Pe eg we ey ee

App. 11

produced water into Galveston Bay violated the

CWA; (2) a permanent injunction prohibiting

future ounpermitted discharges; and (3)

penalties for past unpermitted discharges. The

district court immediately entered an Order for

Accelerated Discovery, requiring the parties to

make certain disclosures without waiting for

discovery requests. This order directed, inter

alia, that the parties disclose at least ninety

days prior to trial the expert testimony that

they would offer at trial.

Cedar Point filed its answer and a

counterclaim against Sierra Club on August 18,

1993. The counterclaim alleged that Sierra

Club’s lawsuits against Cedar Point and other

oil and gas operators in the bay constituted an

abuse of process. Cedar Point sought

compensatory damages for the emotional distress

suffered by its officers and directors and

$10,000,000 in punitive damages. Sierra Club

moved to dismiss this counterclaim. The

district court ultimately entered an order

granting Sierra Club’s motion on the grounds

that, because Sierra Club’s citizen suit was

not frivolous, it could not be the basis for a

claim for abuse of process.

Sierra Club then filed a motion for

partial summary judgment on the issue of Cedar

Point’s liability under the CWA. In response,

Cedar Point filed a cross-motion for partial

summary judgment on the issues of its

liability, Sierra Club’s ability to state a

Claim under the CWA, and Sierra Club’s standing

to sue. The district court entered an order

granting Sierra Club’s motion for partial

summary judgment and denying Cedar Point’s

Similar motion on the liability issue.

App. 12

Specifically, the court found as a matter of

law that Cedar Point had discharged pollutants

without a NPDES permit in violation of the CWA.

The court also denied Cedar Point’s motion on

the issue of Sierra Club’s standing to sue.~ In

this regard, the court found that the

affidavits submitted by Sierra Club established

that some of its members had suffered injuries

in fact that were fairly traceable to Cedar

Point’s discharge of produced water, and

therefore were sufficient to defeat a motion

for summary judgment.

Sierra Club also filed a motion to strike

Cedar Point’s designation of experts that it

would offer at trial. In this motion, Sierra

Club alleged that Cedar Point had failed to

comply with that part of the district court’s

discovery order requiring "written report([s]

prepared and signed by the witness[{es] which

include[] a complete statement of all opinions

to be expressed and the basis and the reasons

therefor." Specifically, Sierra Club

complained that the reports submitted by Cedar

Point were so substantively inadequate that

Sierra Club would be substantially prejudiced

if the court allowed these witnesses to

testify. The court granted Sierra Club’s

motion to strike Cedar Point’s experts, finding

that Cedar Point had failed to comply with its

discovery order.

The issues of the penalties to be assessed

against Cedar Point for its past violations and

Sierra Club’s request for injunctive relief

were tried to the bench. The Court issued its

opinion and judgment on May 27, 1994. First,

the court imposed a civil penalty of $186,070

based on the economic benefit that accrued to

App. 13

Cedar Point because of its failure to comply

with the CWA -- i.e., the money it saved by not

constructing a disposal system that would have

resulted in zero discharge. Second, the court

enjoined Cedar Point from discharging produced

water from its operations at the field into

Galveston Bay until it obtained a NPDES

permit.” Finally, the court awarded Sierra

Club $60,000 in attorneys’ fees as the

prevailing party in the litigation.” the court

later increased this award to $82,956.86.

Cedar Point timely filed its notice of appeal

from this judgment as well as the court’s

pretrial rulings, including the dismissal of

Cedar Point’s counterclaim and the partial

summary judgment on the issue of Cedar Point’s

liability under the cwa.

3. Amendment of the Injunction

On January 9, 1995, EPA published a final

NPDES general permit covering the discharge of

produced water by operators in the "Coastal

Subcategory" in Louisiana and Texas, including

Cedar Point.” This permit imposed, inter alia,

an absolute prohibition on the discharge of

produced water, effective February 8, 1995.

Along with the pernit, however, EPA issued an

"The court also imposed a penalty for

each day Cedar Point violated the injunction

after August 31, 1994.

’See 33 U.S.C. §1365(d).

"60 Fed. Reg. 2387 (1995). A araft

version of this permit had been published on

December 22, 1992, five months before the trial

in this action. 57 Fed. Reg. 60,926 (1992).

App. 14

administrative compliance order that qualified

somewhat this effective date.” The compliance

order recognized that many operators would have

to reinject their produced water in order to

comply with the permit’s "No Discharge"

provision. Because existing reinjection well

Operators, state permitting authorities, and

drilling contractors would probably be unable

to meet the demand for reinjection occasioned

by the terms of the permit, complete compliance

by all covered operators would necessarily be

delayed until well after the February 8

effective date. Accordingly, the order

directed the permittees to "[{cJomplete all

activities necessary to attain full and

continuance [sic] compliance with [the "No

Discharge" requirement] as soon as possible,

but in no case later than January 1, 1997;"

however, this order only applied to operators

covered by the permit who would be discharging

produced water on the effective date of the

permit, February 8, 1995.”!

Cedar Point could not discharge produced

water on February 8 because.the district

court’s injunction order prevented it from

doing so without penalty. Accordingly, on

January 30, 1995, Cedar Point filed a motion to

60 Fed. Reg. at 2393.

‘The order also required covered

Operators to prepare a Compliance Plan. The

order states that "[{a]) Compliance Plan shall

include a description of the measures to be

taken, along with a schedule to cease discharge

of produced water to waters of the United

States as expeditiously as possible."

App. 15

amend or supplement the court’s final judgment

to allow it to discharge produced water without

penalty on the effective date of the permit and

thereafter so that it could take advantage of

the two-year “grace period." The district

court granted this motion and amended its May

27, 1994, opinion to allow the requested

discharge. Sierra Club timely filed a notice

of appeal from the court’s order amending the

injunction.

II. DISCUSSION

AL Cedar Point’s Appeal

In its appeal from the judgment of the

district court, Cedar Point raises the

following points of error: (1) Sierra Club

lacks standing to bring this action; (2) Sierra

Club has failed to state a claim under the

citizen suit provision of the CWA; (3) Cedar

Point’s discharges of produced water into

Galveston Bay do not violate the CWA; (4) the

district court erred in striking Cedar Point’s

designation of experts and excluding their

testimony; (5) the district court erred in

calculating the amount of the penalty imposed

and in awarding attorneys’ fees to Sierra Club;

and (6) the district court erred in dismissing

Cedar Point’s counterclaim for abuse of

process. We address each these arguments in

turn.

1. Standing

Cedar Point’s first argument on appeal is

that Sierra Club lacks standing to bring this

citizen suit. Specifically, Cedar Point argues

that Sierra Club members have not shown the

requisite “injury in fact" nor have they

demonstrated that the alleged injury is "fairly

traceable” to Cedar Point’s discharge. Rather,

App. 16

Cedar Point claims that the affidavits

submitted by Sierra Club members showed only a

concern over produced water discharges into

Galveston Bay, but not an injury from those

discharges, much less an injury traceable to

Cedar Point’s discharges in particular. We

review a district court’s holding on the issue

of standing de novo. MD II Entertainment,

“It is unclear what the district court’s

rulings on Sierra Club’s standing were, or

indeed, whether the court held anything at all

on this issue. Cedar Point had moved for

partial summary judgment on the issues of

statutory and constitutional standing. In

denying this motion, the court did not comment

on the statutory standing issue, and stated

only that the affidavits submitted by Sierra

Club’s members were sufficient to defeat

summary judgment as to constitutional standing.

The effect of this ruling was to leave the

standing issues to be tried, and indeed, one of

Sierra Club’s affiants did testify at trial as

a fact witness on the issue of constitutional

standing. In its Memorandum Opinion, however,

the court stated that it had "specifically held

that Sierra Club had standing to pursue

enforcement of this Clean Water Act claim" in

its Partial Summary Judgment Order. Therefore,

it is questionable whether the district court

ever actually ruled on the standing issues.

Nevertheless, because our review is de novo,

this discrepancy does not affect our treatment

of the issues. In addition, standing is a

jurisdictional requirement, and may always be

addressed for the first time on appeal. In re

Taxable Mun. Bond Sec. Litig., 51 F.3d 518, 521

ase Rr eh Kae

App. 17

, 28 F.3d 492, 497 (5th

Cir. 1994);

Currency, 950 F.2d 1108, 1111 (5th Cir. 1992).

An organization such as Sierra Club has

standing to bring an action on behalf of its

members where: (1) the organization’s members

would have standing to sue individually; (2)

the organization is seeking to protect

interests that are germane to its purpose; and

(3) neither the claim asserted nor the relief

requested requires the organization’s members

to participate in the lawsuit. Hunt v.

: 7 :

U.S. 333, 343

(1977); National Treasury

F.3d 237, 241 (5th Cir. 1994); Save Our

, 971 F.2d 1155, 1160

(Sth Cir. 1992). The parties do not dispute

that Sierra Club satisfies the second and third

prongs of this test. Rather, it is the

standing of individual members of Sierra Club

that is at issue.

In order to establish individual standing,

a person must show that: (1) he has suffered an

actual or threatened injury as a result of the

actions of the defendant; (2) the injury is

"fairly traceable" to the defendant’s actions;

and (3) the injury will likely be redressed if

he prevails in his lawsuit. Save Our

Community, 971 F.2d at 1160 (quoting Valley

, 454 U.S.

464, 472 (1982)). There is no question that an

injunction would redress the injuries allegedly

suffered by Sierra Club members who visit and

(Sth Cir. 1995).

App. 18

recreate in Galveston Bay. Therefore, we focus

on the "injury in fact" and "fairly traceable"

requirements.

a. “Injury in Fact"

Sierra Club submitted affidavits from

three of its members in response to Cedar

Point’s standing challenge. These affiants

described how they use Galveston Bay for

various recreational activities, including

swimming, canoeing, and bird watching. Also,

two of the affiants commented that they live

near the Bay. With respect to produced water,

each affiant made the following statement:

I am familiar with “produced water"

that is being discharged into

Galveston Bay by oil and gas

production facilities located on the

Bay. I am concerned that the

discharge of produced water

adversely affects the water quality

and the wildlife of the Bay.

Therefore, I am concerned that the

continued discharge of produced

water will impair my ability to

enjoy the activities in which I

participate.

Only one of the affiants, Tommy Douglas

("Douglas"), indicated that he had participated

in activities in the vicinity of Cedar Point’s

discharge. None of the affiants stated that

Cedar Point’s produced water in particular had

impaired or threatened to impair his use of the

Bay.

Cedar Point makes much of the fact that

the affiants expressed "concern" that the

discharge of produced water will impair their

ability to engage in recreational activities.

App. 19

Such language, Cedar Point argues, stated only

an interest in eliminating produced water

discharges into Galveston Bay, and not an

injury in fact. We find no merit in this

contention. Whether the affiants were

"concerned" or "believed" or "knew to a moral

certainty" that produced water would adversely

affect their activities on the Bay is a

semantic distinction that makes little

difference in the standing analysis. The

requirement that a party demonstrate an injury

in fact is designed to limit access to the

courts to those "who have a direct stake in the

outcome," Valley Forge Christian College, 454

U.S. at 473 (quoting Sierra Club v. Morton, 405

U.S. 727, 740 (1972)), as opposed to those who

"would convert the judicial process into ‘no

, 412 U.S. 669,

687 (1973)) Sierra Club’s affiants are

concerned, but they are not mere "bystanders."

Two of the affiants live near Galveston Bay and

all of them use the Bay for recreational

activities. All of the affiants expressed fear

that the discharge of produced water will

impair their enjoyment of these activities

because these activities are dependent upon

good water quality. Clearly, Sierra Club’s

affiants have a "direct stake" in the outcome

of this lawsuit.

That this injury is couched in terms of

future impairment rather than past impairment

is of no moment. The Supreme Court has

expressly held that a "threatened injury" will

satisfy the "injury in fact" requirement for

standing. Id. at 472 (quoting Gladstone,

App. 20

Realtors v. Village of Bellwood, 441 U.S. 91,

99 (1979)); see also Sierra Club v. Simkins

Indus., Inc., 847 F.2d 1109, 1113 & n.4 (4th

Cir. 1988) (noting that affidavit establishing

threat of future injury met Article III

standing requirements), cert. denied, 491 U.S.

904 (1989). Also, at least one of the affiants

did claim to have suffered a past injury; Mark

Muhich ("Muhich") stated that, during a number

of his bird watching trips in Galveston Bay, he

had observed discolored water, oil, and grease,

and had detected unpleasant odors; he also

asserted that polluted water impaired his

enjoyment of bird watching. The Third Circuit

has held that this precise sort of injury

satisfies the "injury in fact" requirement for

standing. Public Interest Research Group of

Inc., 913 F.2d 64, 71 (3rd Cir. 1990) (finding

sufficient injury where plaintiff organization

submitted affidavit of member who stated that

he was offended by brown color and bad odor of

water body adjacent to park where he went bird

watching), cert. denied, 498 U.S. 1109 (1991).

Moreover, we have held that affidavits

similar to those submitted by Sierra Club were

sufficient to satisfy the "injury in fact"

requirement in a citizen’s suit brought under

the CWA. In Save Our Community, the plaintiff

organization supported its standing argument

with affidavits by some of its members who

owned property or lived in the vicinity of the

wetlands that were being drained by the

defendant. These affiants stated that they

enjoyed "the wildlife, aesthetics, open space,

ecological and other values of the wetlands, .

and [were) directly and beneficially

App. 21

interested in the continued protection,

preservation, and the enhancement of these

values." Jd, at 1160-61. In holding that

these affidavits demonstrated a

constitutionally sufficient injury in fact, we

noted that "harm to aesthetic, environmental,

or recreational interests is sufficient to

confer standing, provided that the party

seeking review is among the injured." Id. at

1161 (citing Sierra Club v. Morton, 405 U.S. at

734-35). We also recognized that "[t)hese

injuries need not be large, an identifiable

trifle will suffice." id. at 1161 (quoting

Powel] Duffryn, 913 F.2d at 71 (internal

quotations omitted)). Given this low threshold

requirement,“ we hold that the affidavits

“CWA cases from other circuits

corroborate our observation that the threshold

for the injury requirement is fairly low. See,

€.9., Uni

, 883 F.2d 54, 56 (8th Cir.

1989) (finding sufficient injury where complaint

alleged that defendant had discharged

pollutants into Mississippi River without a

permit, that many of the intervenor

organization’s members used the river for

recreational purposes, and that pollution of

the water adversely affected this recreational

interest) ; Simkins Indus., 847 F.2d at 1112 n.3

& 1113 (finding sufficient injury where the

affidavit of a single group member who

regularly hiked along river alleged that

defendant’s activities adversely affected his

activities and interests) ;

, 768 F.2d 57, 61

(2nd Cir. 1985) (finding sufficient injury

App. 22

submitted by Sierra Club are sufficient to

satisfy the “injury in fact" prong of the test

for standing.

b. “Pairly Traceable"

Cedar Point further argues that, even if

the affidavits submitted by Sierra Club do

establish an injury, they do not establish that

the injury is fairly traceable to Cedar Point’s

discharge of produced water. In this regard,

Cedar Point focuses on the affidavits of

Douglas and Muhich. Cedar Point notes that

Douglas, the only affiant who stated that he

engaged in activity in the vicinity of Cedar

Point’s discharge, failed to assert that Cedar

Point’s produced water jn particular injured

him in any way. Cedar Point also notes that

Muhich, the only affiant who claimed to observe

discolored water and foul odors, did not allege

that he made these observations in that part of

Galveston Bay near Cedar Point’s discharge.

Accordingly, Cedar Point urges that Sierra Club

has not met the "fairly traceable" requirement

of standing.

The Third Circuit has articulated a three-

part test for establishing that an injury is

"fairly traceable" to a defendant’s discharge

in a citizen suit under the CWA. Powell

Duffryn, 913 F.2d at 72. According to this

test, the plaintiff must "show{] that a

defendant has (1) discharged some pollutant in

concentrations greater than allowed by its

permit (2) into a waterway in which the

plaintiffs have an interest that is or may be

where organization submitted affidavit of

member who regularly drove on bridge over river

and was offended by pollution in the river).

App. 23

adversely affected by the pollutant and that

(3) the pollutant causes or contributes to the

kinds of injuries alleged by the plaintiffs."

Id. While an overly broad application of this

test may be problematic, see infra n.24, its

application to this case is useful.

Applying this test to Douglas, we find

that Sierra Club has established that his

injury is fairly traceable to Cedar Point’s

discharge. First, because Cedar Point does not

even have a permit for its discharges of

produced water, any discharge exceeds that

Which is allowed under the cwa. Second,

Douglas asserted in his affidavit and testified

that he has canoed and participated in

educational trips in the vicinity of Cedar

Point’s discharge, and that he intends to

continue these activities in this area in the

future. These assertions establish Douglas’s

interest in that part of Galveston Bay around

Cedar Point’s discharge. With respect to

whether produced water does or may adversely

affect Galveston Bay, Sierra Club presented

expert testimony that Cedar Point’s produced

water was typical in many respects, and that

typical produced water has harmful effects on

water quality and marine life.

Finally, produced water contributes to the

types of injuries alleged by Douglas, including

his fear that the harmful effects on water

quality and the ecosystem will impair his

ability to enjoy canoeing and observing

wildlife. Contrary to Cedar Point’s

suggestion, the Constitution does not require

Sierra Club to produce an affiant who claims

that Cedar Point’s discharge jn particular

injured him in some way. We have noted that

App. 24

"the fairly traceable element does not require

that the plaintiffs ‘show to a scientific

certainty that [the] defendant’s effluent, and

[the] defendant’s effluent alone, caused the

precise harm suffered by the plaintiffs.’

Save Our Community, 971 F.2d at 1161 (quoting

Powel] Duffryn, 913 F.2d at 72). Given the

number of entities discharging chemicals into

Galveston Bay, it would be virtually impossible

for any of Sierra Club’s members to trace his

injuries to Cedar Point’s discharge in

particular. Rather, it is sufficient for

Sierra Club to show that Cedar Point’s

discharge of produced water contributes to the

pollution that impairs Douglas’s use of the

Bay. See Natural Resources Defense Council,

Inc. v. Watkins, 954 F.2d 974, 980 (4th Cir.

1992); Powel] Duffryn, 913 F.2d at 72 n.8.

Therefore, we hold that Sierra Club has, by

Douglas’s affidavit, met the "fairly traceable"

requirement for standing.™

“Because we hold that Douglas’s affidavit

establishes an injury in fact that is fairly

traceable to Cedar Point’s discharge, we need

not decide whether Sierra Club’s other affiants

also meet the "fairly traceable" requirement.

See, e.g., Simkins Indus., 847 F.2d at 1113

(4th Cir. 1988) (finding organizational

standing where one member’s affidavit

established individual standing), cited with

approval in Save Our Community, 971 F.2d at

1161.

We note, however, that Douglas was the

only affiant who expressed an interest in that

part of Galveston Bay where Cedar Point’s

discharge is located. It is true that a strict

eS ee ee ee. eee Pe ee ee ee » ?

App. 25

2. Stating a Claim Under the CWA

Cedar Point also contends that Sierra Club

application of the Powell Duffryn test does not

demand that sort of specificity, because the

plaintiff need only show an interest in the

"waterway" into which the defendant is

discharging a pollutant; nevertheless, such

literal reading of Powel] Duffryn may produce

results incongruous with our usual

understanding of the Article III standing

requirements. For example, some "waterways"

covered by the CWA may be so large that

plaintiffs should rightfully demonstrate a more

specific geographic or other causative nexus in

order to satisfy the "fairly traceable" element

of standing. Cf. Lujan v. National Wildlife

Fed’n, 497 U.S. 871, 889 (1990) (holding that

an affidavit alleging general use of a two

million-acre land area was not specific enough

to preclude summary judgment on the issue of

statutory standing where the challenged action

affected only 4500 of the two million acres) ;

Vv.

Watkins, 954 F.2d at 979 (4th Cir. 1992)

(reversing district court’s finding of no

standing in a CWA case where affiants alleged

use of river near the discharge site because

the affidavits did not require the court "to

assume any particularized geographic usage by

the affiants to establish the injury necessary

to confer standing"). Therefore, while we find

the Powel] Duffryn test useful for analyzing

whether Douglas’s affidavit meets the "fairly

traceable" requirement, we recognize that it

may not be an appropriate standard in other CWA

cases.

App. 26

has failed to state a claim under the citizen

suit provision of the CWA because Sierra Club

has not alleged that Cedar Point is violating

an effluent limitation or permit provision

promulgated by EPA.~ We review the issue of

whether a plaintiff has stated a claim under

the same standard used by the district court:

A claim may not be dismissed unless it appears

certain that the plaintiff cannot prove any set

of facts in support of his claim that would

entitled him to relief. Norman v. Apache

Corp., 19 F.3d 1017, 1021 (5th Cir. 1994);

Carney _v. RIC, 19 F.3d 950, 954 (5th Cir.

1994).

As authority for its position, Cedar Point

cites to the following language from our

decision in Save Our Community v. U.S.E.P.A.,

971 F.2d 1155 (5th Cir. 1992) (per curiam):

Without the violation of either (1)

an effluent standard or limitation

under the CWA, or (2) an order

issued with respect to these

standards and limitations, the

“The parties sometimes mistakenly refer

to this issue as "statutory standing.” The

thrust of Cedar Point’s argument, however, is

that Sierra Club has failed to state a claim

under the citizen suit provision of the CWA.

"Statutory standing" is an administrative law

concept that arises in the context of

challenges to agency actions in which a court

must determine whether the interest sought to

be protected is within the "zone of interests"

protected by the relevant statute. See

Association of Data Processing Serv. Orgs.,

Inc. v. Camp, 397 U.S. 150, 153-54 (1970).

Se ee eee

App. 27

district court lacks jurisdiction to

act.

Id. at 1162. With respect to the constituents

of Cedar Point’s produced water, EPA has only

promulgated an effluent limitation on the oil

and grease content.” Because Cedar Point’s

discharges have always complied with this

limitation, Cedar Point argues that Sierra Club

has failed to state a claim.

Also, Cedar Point contends that Sierra

Club has failed to state a claim with respect

to the discharges of the other constituents of

Cedar Point’s produced water separately or for

the discharge of produced water as a whole

because EPA has not established an applicable

effluent limitation or permit for those

discharges. Cedar Point reasons that, because

there is no effluent limitation or permit in

place for these discharges, there can be no

violation of a limitation, as required by Save

Our — In support of this contention,

Cedar Poipt notes that the Southern District of

Texas has held that the discharge of a

pollutant without a permit is not unlawful

under the CWA unless EPA has adopted a relevant

effluent standard or permit limitation. ited

States v. GAF Corp., 389 F. Supp. 1379, 1386

(S.D. Tex. 1975). Cedar Point emphatically

asserts that this interpretation represents the

way that Congress intended the CWA to work.

We find Cedar Point’s arguments to be

without merit. First, Cedar Point urges a

result contrary to the plain language of the

CWA. As we noted in Save Our Community, the

citizen suit provision of the CWA states that:

40 C.F.R. §435.42.

App. 28

[A]ny citizen may commence a civil

action on his own behalf

against any person .. . who is

alleged to be in violation of (A) an

effluent standard or limitation

under this chapter or (B) an order

issued by the Administrator or a

State with respect to such a

standard or limitation . ;

33 U.S.C. §1365(a) (1). The term “effluent

standard or limitation," however, is expanded

in a later subsection:

For purposes of this section, the

term "effluent standard or

limitation under this chapter means

(1) effective July 1, 1973, an

unlawful act under subsection (a) of

section 1311 of this title...

33 U.S.C. §1365(f). Section 1311(a) provides:

Except as in compliance with this

section and sections 1312, 1316,

1317, 1328, 1342, and 1344 of this

title, the discharge of any

pollutant by any person shall be

unlawful.

33 U.S.C. §1311(a). Among those sections

listed for which compliance is necessary to

make the discharge of a pollutant lawful, §1342

provides for NPDES permits that regulate the

discharge of pollutants. Therefore, the

discharge of any pollutant without a NPDES

permit is an unlawful act under §1311(a). The

Supreme Court has interpreted §1311 and §1342

in this way. City of Milwaukee v. Illinois,

451 U.S. 304, 310-11 (1981) ("[I]t is illegal

to discharge pollutants into the Nation’s

App. 29

waters except pursuant to a permit."). Reading

these sections together with §1365(a) and (f),

it is clear that a citizen may bring an action

under the CWA against any person who is

allegedly discharging a pollutant without a

NPDES permit.

We -agree with Cedar Point that Congress

initially intended that a citizen suit based on

a violation of 6§1311(a) for discharging

pollutants without a permit would only lie

where EPA had issued a relevant effluent

limitation or permit; that is, where the

defendant was discharging pollutants without a

permit because he had failed to obtain a permit

that was available, rather than because EPA had

failed to issue such permits. This intent is

Clearly established by the inclusion of

particular dates in the statute, as explained

by the legislative history.

First, the citizen suit provision states

that a citizen may bring an action against a

person allegedly committing an unlawful act

under §1311(a) “effective July 1, 1973." 33

U.S.C. §1365(f)(1). The CWA was enacted on

October 18, 1972. Federal Water Pollution

Control Act Amendments of 1972, Pub. L No. 92-

500, 86 Stat. 816 (1972). The legislative

history expressly states that Congress delayed

the availability of a citizen suit based on an

allegedly unlawful act under §1311(a) in order

to give EPA and the states time to issue all of

the permits required by the CWA.” Of course,

al Authority granted to citizens to

bring enforcement actions under this

section is limited to effluent

standards or limitations established

App. 30

EPA and the states have yet to achieve this

ambitious goal. Nevertheless, Congress has not

amended the statute to account for the fact

that, since July 1, 1973, numerous entities

have violated §1311(a) by discharging

pollutants without a permit because EPA and the

states have not issued the necessary permits.

In a similar vein, §1342(k) provides that:

Until December 31, 1974, in any case

where a permit for discharge has

been applied for pursuant to this

section, but final administrative

disposition of such apriication has

not been made, such discharge shall

not be a violation of (1) section

1311, 1316, or 1342 of this title,

or (2) section 407 of this title,

unless the Administrator or other

plaintiff proves that final

administratively under the Act.

Such standards or limitations are

defined in subsection (f) of [§1365)

to include the enforcement of an

unlawful discharge under [§1311(a)],

effective after July 1, 1973. By

limiting the effective date of

S. Rep. No. 414, 92d Cong., 1st Sess. 81 (1971)

(emphasis added).

App. 31

administrative disposition of such

application has not been made

because of the failure of the

applicant to furnish information

reasonably required or requested in

order to process the application.

33 U.S.C. §1342(k). Again, the purpose of this

provision was to provide a “liability shield”

to dischargers for a limited time so that they

would not be exposed to legal action because of

administrative delays in implementing the

permit provisions of the CWA; apparently,

Congress expected all permit applications to be

processed by December 31, 1974. For example,

in the House debates on the conference report,

Representative Clark commented:

Section 402(k) states that until

December 31, 1974, a discharge shall

not be in violation of law if a

permit has been applied for, and the

applicant has furnished all

information reasonably required or

requested. Hopefully, the program

will be in the hands of the States

by December 31, 1974, and permits

will be issued. But, if not,

Congress may have to extend this

date.

1 A Legislative History of the Water Pollution

274

(Environmental Policy Div., Congressional

Research Serv. ed., 1973) (House consideration

of the conference report) (emphasis added). As

with §1365(f)(1), however, Congress has not

extended the availability of this liability

shield beyond its original expiration date,

despite the fact that applications for permits

—— ee

App. 32

are continually filed and many remain pending.

The result of Congress’s failure to extend

these exceptions for cases of administrative

delay or default is that, "[{ujnless the

Administrator issues an NPDES permit, ‘the

discharge of any pollutant by any person [is]

unlawful (under §1311(a)).’" National Wildlife

Fed’n v. Gorsuch, 693 F.2d 156, 165 (D.C. Cir.

1982); gee also National Resources Defense

Council, Inc. v. Costle, 568 F.2d 1369, 1375

(D.C. Cir. 1977) ("{T)he Administrator has

discretion either to issue a permit or to leave

the discharger subject to the total

proscription of [(§1311]}."). As stated

previously, the CWA explicitly provides that a

citizen may sue persons allegedly committing

unlawful acts under §1311(a). 33 U.S.C.

§1365(f) (1). Therefore, a citizen may bring an

action against a person allegedly discharging

a pollutant without a permit, even if the

discharger’s illegal behavior results from

EPA’s failure or refusal to issue the necessary

permit.

This result is supported by Supreme Court

precedent involving an analogous administrative

default in the context of an environmental

enforcement action. Genera] Motors Corp. v.

United States, 496 U.S. 530 (1990). General

Motors involved a state implementation plan

("SIP") that regulated emissions from

automobile painting operations under the Clean

Air Act ("CAA"). Id. at 534. The original SIP

required General Motors to comply fully with

certain emission limits by December 31, 1985.

Id. at 535. One day before this deadline

passed, the state submitted to EPA a proposed

revision of the SIP that would have extended

Ee ee ee

App. 33

the compliance deadline to summer 1987. Id.

The CAA authorizes a state to propose a revised

SIP and requires EPA t. approve the revised SIP

if it meets certain statutory requirements.

Id. at 533. EPA did not act on the proposed

SIP revision until September 4, 1988. Ia, In

the meantime, however, EPA filed an enforcement

action against General Motors on August 17,

1987, alleging that General Motors violated the

compliance deadline contained in the old SIP.

id.

On appeal, General Motors contended that

EPA could not, on the one hand, bring an

enforcement action for violation of the

original compliance deadline, while at the same

time unreasonably delay acting on a proposal to

extend that deadline. Jd. at 540. The Court

rejected this argument:

There is nothing in the statute

that limits EPA’s authority to

enforce the [existing SIP] solely to

those cases where EPA has not

unreasonably delayed action on a

proposed SIP revision. Moreover, we

find it significant that Congress

expressly enacted an enforcement bar

elsewhere in the statute. See

$113 (d) (10); 42 U.S.C. §7413(d) (10)

(1982 ed.) ("During the period of

the order . . . no Federal

enforcement action pursuant to this

section and no action under section

304 of this Act shall be pursued

against such owner... -"). The

fact that Congress explicitly

enacted an enforcement bar similar

to the one proposed by petitioner in

App. 34

one section of the statute, but

failed to do so in the section at

issue in this case reinforces our

refusal to import such a bar here.

Id. at 541 (citations omitted).

Our analysis of the citizen suit

provisions of the CWA tracks the Court’s

reasoning in General Motors. Nothing in the

CWA limits a citizen’s right to bring an action

against a person who is allegedly discharging

a pollutant without a permit solely to those

cases where EPA has promulgated an effluent

limitation or issued a permit that covers the

discharge. We note that Congress did

explicitly enact limitations on citizen suits

for the purpose of protecting putative

defendants whose violations could be attributed

to administrative delay in promulgating

regulations; however, these limitations have

expires by their own terms. 33 U.S.C. §§

1342(k), 1365(f)(1). Further, although these

limitations may have been based on unrealistic

expectations regarding EPA’s ability to carry

out fully its statutory mandate, it is

significant that Congress has not in twenty-

three years amended these sections to conform

to the realities of EPA’s regulatory burden and

the attendant administrative delay. Therefore,

while Congress’s original intent may have been

to limit citizen suits based on unpermitted

discharges to those instances where an

applicable permit was available from the state

or EPA, Congress’s subsequent inaction evinces

an intent to allow such citizen suits even

where the discharger’s failure to obtain a

permit can be explained by administrative

default.

—— eee oe eee

Sm te a a re ee

App. 35

We are also not convinced that other

courts have qualified the right to sue a person

allegedly discharging pollutants without a

permit by limiting that right to situations

where EPA has promulgated a relevant effluent

limitation or permit. The only authority that

Cedar Point can cite for this proposition is

the district court opinion in GAF Corp., which

we find to have little persuasive value.

First, the language in GAF Corp. cited by Cedar

Point is dicta. Also, GAF Corp. involved a

suit for injunctive relief by the government,

rather than a citizen suit for damages; the

court may have found it inequitable to allow

the government to sue when it had not

promulgated regulations to guide the

defendant’s behavior. Yet, even with respect

to actions brought by the govermment, this

language in GAF Corp. has been criticized. In

, 602 F.2d

1123 (3rd Cir. 1979), cert. denied, 444 U.s.

1074 (1980), the Third Circuit specifically

rejected GAF Corp.’s interpretation of the CwA:

We see nothing impermissible with

allowing the Government to enforce

the Act by invoking §1311(a), even

if no effluent limitations have been

promulgated for the particular

business charged with polluting.

Without this flexibility, numerous

industries not yet considered as

serious threats to the environment

may escape administrative, civil, or

criminal sanctions merely because

the EPA has not established effluent

limitations. Thus, dangerous

pollutants could be continually

App. 36

injected into the water solely

because the administrative process

has not yet had the opportunity to

fix specific effluent limitations.

Such a result would be inconsistent

with the policy of the Act.

We do not believe, as did the

court in GAF, that the permit

procedure urged by the government is

unduly burdensome on business.

Frezzo Bros., 602 F.2d at 1128.

Moreover, we have held that obtaining a

permit is a requirement separate and distinct

from the requirement that a discharger comply

with any applicable effluent limitations. Carr

y. Alta Verde Indus., Inc., 931 F.2d 1055, 1060

n.3 (5th Cir. 1991). Indeed, numerous courts

have allowed suits by citizens against persons

allegedly discharging pollutants without a

permit, despite the fact that the discharger

was complying with applicable effluent

limitations or that no applicable effluent

limitation was in place. See, e.g., Concerned

Area Residents for Env’t v. Southview Farm, 34

F.3d 114, 117 (2nd Cir. 1994) cert. denied, 115

S. Ct. 1793 (1995); Carr, 931 F.2d at 1061;

Menzel _v. County Utils. Corp., 712 F.2d 91, 94

(4th Cir. 1983); Washington Wilderness

Coalition vs. Hecla Min. Co., 870 F. Supp. 983,

986 (E.D.Wash. 1994); Hawaii’s Thousand

Friends, Life of the Land, Inc. vs. City and

County of Honolulu, 806 F. Supp. 225, 230 (D.

Hawaii 1992); Hudson River Fishermen’s Ass’n v.

County of Westchester, 686 F. Supp. 1044, 1050

(S.D.N.Y. 1988); O'Leary v. Mover’s Landfill,

Inc., 523 F. Supp. 642, 646 (E.D. Pa. 1981).

Finally, EPA itself, whose expertise in

App. 37

enforcing the CWA is entitled to some

deference,” has recognized that citizens have

the right to sue "Coastal Subcategory"

operators who are discharging produced water

without a permit. 57 Fed. Reg. 60,926, 60,944-

45 (1992). At the time EPA made this

statement, it had never issued such permits and

had only issued effluent limitations on the oil

and grease content of produced water.

Accordingly, we hold that Sierra Club has

stated a claim under the citizen suit provision

of the CWA.

3. Violation of the CWA

Cedar Point’s third argument on appeal is

that the district court erred in granting

Sierra Club’s motion for partial summary

judgment on the issue of whether Cedar Point’s

discharges of produced water violated the CWA.

We review the granting of summary judgment de

novo, applying the same criteria used by the

district court in the first instance. Norman

Vv. Apache Corp,, 19 F.3d 1017, 1021 (5th Cir.

1994); Conkling v. Turner, 18 F.3d 1285, 1295

(Sth Cir. 1994). First, we consult the

applicable law to ascertain the material

factual issues. King v. Chide, 974 F.2d 653,

655-56 (Sth Cir. 1992). We then review the

evidence bearing on those issues, viewing the

facts and inferences to be drawn therefrom in

the light most favorable to the nonmov ing

party. lLemelle v. Universal Mfg. Corp., 18

F.3d 1268, 1272 (Sth Cir. 1994); FpIc vy,

“We generally give deference to an

agency’s interpretation of a statute that it

administers.

Corp., 987 F.2d 1206, 1208 (5th Cir. 1993).

App. 38

Dawson, 4 F.3d 1303, 1306 (5th Cir. 1993),

cert. denied, 114 S. Ct. 2673 (1994). Summary

Judgment is proper "if the pleadings,

depositions, answers to interrogatories, and

admissions on file, together with the

affidavits, if any, show that there is no

genuine issue as to any material fact and that

the moving party is entitled to judgment as a

matter of law." Fed. R. Civ. P. 56(c).

Cedar Point maintains that the discharge

of produced water without a permit does not

violate the CWA because the statute only

prohibits the discharge of a "pollutant," and,

it argues, neither produced water nor any of

its constituents is a pollutant within the

meaning of the CWA. First, Cedar Point

contends that its produced water and the

components thereof are not pollutants "per se"

because they are not specifically enumerated in

the CWA’s definition of "pollutant." That

provision states:

The term "pollutant" means

dredged spoil, solid waste,

incinerator residue, sewage,

garbage, sewage sludge, munitions,

chemical wastes, biological

materials, radioactive materials,

heat, wrecked or discarded

equipment, rock, sand, cellar dirt

and industrial, municipal, and

agricultural waste discharged into

water. This term does not mean (A)

“sewage from vessels" within the

meaning os section 1322 of this

title; or (B) water, gas, or other

material which is injected into a

well to facilitate production of oil

App. 39

or gas, or water derived in

association with oil or gas

production and disposed of in a

well, if the well used either to

facilitate production or for

disposal purposes is approved by

authority of the State in which the

well is located, and if such State

determines that such injection or

disposal will not result in the

degradation of ground or surface

water resources.

33 U.S.C. §1362(6). Cedar Point then argues

that courts may not expand this definition to

include substances not explicitly listed,

citing as authority National Wildlife Fed’n v.

Gorsuch, 693 F.2d 156 (D.c. Cir. 1982). In

this opinion, the court noted its reservations

about adding terms to the definition of

pollutant because "Congress used restrictive

phrasing -- ‘[(tjhe term "pollutant" means

dredged spoil, [etc.]’ -- rather than the

looser phrase ‘includes,’ used elsewhere in the

Act." Id. at 171-72. The Court elaborated

that the use of the term "means" indicates an

intent to exclude any meaning not expressly

stated. id. at 172 (citing Colautti v.

Franklin, 439 U.S. 379, 392 n.10 (1979)).

Further, the court relied on the

legislative history of the CWA in determining

that “Congress did not intend the term

‘pollutant’ to be all inclusive." Id. at 173.

The court pointed out that the purpose of

listing specific items in the definition was

"so that litigable issues are avoided over the

question of whether the addition of a

particular material is subject to control

App. 40

requirements." Jd. (quoting S. Rep. No. 414,

92d Cong., ist Sess. 76 (1971) (internal

quotation omitted)). Also, the court noted

that earlier draft versions of the CWA used

more inclusive phrasing: "The term ‘pollutant’

means, but is not limited to, dredged spoil, .

- », and industrial, municipal, agricultural,

and other waste discharged into water." Id.

(quoting H.R. 11,896, 92d Cong., 2d Sess.

§502 (6) (1972) (emphasis added) (internal

quotation omitted) and citing S. 2770, 92d

Cong., 1st Sess. §502(f) (1971)). The

conference committee deleted the more inclusive

phrases “but is not limited to” and “other

waste," but offered no explanation for the

change. Id. (citing S. Rep. No. 1236 (Conf.

Rep.), 92d Cong., 2d Sess. 143-44 (1972)).

Cedar Point concedes that a discharged

substance may still be subject to regulation

under the CWA even though it is not

specifically listed in the definition of

pollutant; however, Cedar Point contends that

only EPA, and not the courts, may make the

determination that a "non-listed" substance is

a pollutant. Again, Cedar Point relies

principally on National Wildlife Fed’n v.

Gorsuch. In its review of the legislative

history of the CWA, the court found "strong

signals" that Congress “entrusted EPA with at

least some discretion over which ‘pollutants’

and sources of pollutants were to be regulated

under the NPDES program." Jd. at 173. First,

the court recognized a general intent to give

EPA “substantial AtScretion" in interpreting

the CWA: :

In the administration of the Act,

EPA will be required to establish

App. 41

numerous guidelines, standards and

limitations . . . . [Tjhe Act

provides Congressional guidance to

the Administrator in as much detail

as could be contrived. Virtually

every action required of the

Administrator by the Act, however,

involves some degree of agency

discretion, judgments involving a

complex balancing of factors that

include technological

considerations, economic

considerations, and others.

Id. at 173 (quoting S. Rep. No. 1236 (Conf.

Rep.), 92d Cong., 2d Sess. 149 (1972)). The

Court then quoted Senator Muskie’s comments,

made during a debate over the Senate version of

the CWA, as evidence of a specific intent to

give EPA discretion in defining what

constitutes a pollutant:

Again, I do not get into the

business of defining or applying

these definitions to particular

kinds of pollutants. hat is an

administrative decision to be made

by the Administrator. Sometimes a

particular kind of matter if not a

pollutant in one circumstance and

not in another.

Id. at 173-74 (quoting 117 Cong. Rec. 38,838

(1971)).

Cedar Point argues that Senator Muskie’s

comments in particular make it clear that only

EPA may define what constitutes a pollutant

under the CWA. First, Cedar Point notes that

the above language expressly commits. the

definitional question to the Administrator of

App. 42

the EPA. Also Cedar Point emphasizes Senator

Muskie’s statement that a substance may be a

pollutant in some situations and not in others.

Specifically, Cedar Point contends that whether

a substance is a pollutant depends upon, inter

alia, the quantity in which it is discharged,

the characteristics of the receiving waters,

and the proportion of the amount of the

substance in the discharge to the amount that

exists in nature. For example, a substance may

be very harmful when discharged in large

quantities into a fresh water stream, but may

have no measurable effect when a smaller

quantity is discharged into a salt water bay.

EPA takes these factors into account when

promulgating effluent limitations and issuing

NPDES permits. Therefore, Cedar Point argues,

EPA defines a substance as a pollutant by

prohibiting its discharge at certain levels

through an effluent limitation or a permit.

Stated differently, if EPA has not regulated

the discharge of a substance in an effluent

limitation or a permit applicable to that

discharge, that substance is not a pollutant in

. Accordingly,

Cedar Point maintains that it is not

discharging a pollutant in violation of the CWA

because: (1) neither produced water nor any of

its constituents is specifically listed under

the CWA’s definition of a pollutant; (2) EPA

has not promulgated an effluent limitation or

issued a permit that regulates Cedar Point’s

produced water or ~ of its constituents

except oil and grease; and (3) Cedar Point has

always complied with the effluent limitation on

oil and grease.

Finally, Cedar Point advances a policy

App. 43

argument for its position that a court may not

determine that a discharged substance is a

pollutant where the substance is not

specifically listed in the CWA and is not

regulated by a limitation or permit applicable

to the discharge in question. Cedar Point

argues that, if courts are allowed to make such

decisions, chaos will result because courts

will reach different results regarding what

substances are pollutants and at what levels

such substances may be discharged without

causing harm to the environment.

An analysis of Cedar Point’s arguments

requires us to engage in a two-step inquiry.

First, we must determine whether the CWA allows

a court to find that a particular substance is

@ pollutant where it is not specifically listed

under the CWA’s definition of a pollutant and

EPA has not promulgated an effluent limitation

or permit regulating the discharge of the

substance. If a court may make such a finding,

we must then determine whether Cedar Point’s

produced water, or any of its constituents, is

a pollutant under the CWA.

We begin our analysis with the statute

itself.” When a litigant’s rights turn on

whether his conduct falls within the

proscriptions of a statute containing terms of

art, a court will naturally seek guidance on

the meanings of those terms by reference to

definitions provided in the statute. As stated

*"when courts interpret statutes, the

initial inquiry is the language of the statute

itself." Hightower v. Texas Hosp. Ass’n, 65

F.3d 443, 448 (Sth Cir. 1995); see also Matter

of Stone, 10 F.3d 285, 289 (5th Cir. 1994).

App. 44

above, the CWA defines the term "pollutant" as

"meaning" a list of various items and "not

meaning" a couple of discrete substances. 33

U.S.C. §1362(6). We do not disagree with the

D.C. Circuit’s assessment that the use of the

word "means" manifests an intent to restrict

the definition of pollutant to the terms

listed. National Wildlife Fed’n v. Gorsuch,

693 F.2d at 172. As that court recognized,

however, the breadth of many of the items in

the list of "pollutants" tends to eviscerate

any restrictive effect. See jd, at 173 n.52.

Characterizing the list as “haphazard,” the

court noted that it contains materials as

specific as "‘cellar dirt’ (but not ‘dirt’ as

such) and as general as ‘industrial, municipal,

and agricultural wastes.’" Jd, at 174 n.56. It

is scarcely disputable that many substances

discharged into the waters of the United States

could be characterized as "industrial waste,"

or even as "chemical waste," another listed

material. Therefore, the statutory definition

of pollutant at least appears to invite the

inclusion of discharged substances that are not

specifically listed into these broad

categories. Otherwise, these terms would be

meaningless; that it, there would be o such

thino as “industrial waste" because any such

discharge could always be described in more

specific terms that are not listed in the

statute.

As the D.C. Circuit acknowledged, the

legislative history of the CWA provides little

guidance on how inclusive Congress intended the

definition of pollutant to be. fd. at 173

n.52. For example, although Congress clearly

stated that the rationale for listing

1h aay IO ve

App. 45

pollutants was to avoid "litigable issues" over

whether a particular material is subject to the

statute, the inclusion in the list of such

imprecise terms as “industrial, municipal, and

agricultural waste" generates more litigable

issues than it resolves. Jd. Also, while the

conference committee’s elimination of the

phrases "but not limited to" and "other waste"

from the definition of pollutant may he

interpreted as an attempt to limit the scope of

the definition, the committee did not explain

the change. Jd, at 173. Further, we think

that the retention of such broad terms in the

definition suggests that the committee may have

determined that the eliminated phrases were

simply redundant. For instance, a list that

includes “solid waste," “chemical wastes,"

"biological materials," "radioactive

materials," and “industrial, municipal, and

agricultural waste" hardly needs to be

amplified by the phrase "other waste."

Finally, the D.C. Circuit noted that the House

Report is "of little help in determining how

inclusive Congress meant the terms ‘pollutant’

to be" because it does not discuss particular

terms within the definition. Id. at 173 n.52.

In addition, one commentator has suggested

that the CWA’s definition of pollutant is

considerably inclusive:

This laundry list of "bads" endorses

an understanding of a pollutant as

a “resource out of place." The

conaressional purpose was to

identify expansively and anticipate

all the physical "stuff" that could

end up in the wrong place to the

detriment of water quality. ...

App. 46

Despite the absence of an

indisputable catch-all (e.g., “any

other waste whatever"), there is

little doubt that the recitation of

categories in the definition of

"pollutant" is designed to be

suggestive not exclusive. In the

1972 amendments, Congress meant to

carry on the tradition of the Refuse

Act, and that tradition was to

construe the word "refuse" as

condemning each and every variation

of damage-inducing wastes that

changing technologies could invent.

This interpretation is endorsed by

United States v. Hamel, [551 F.2d

107 (6th Cir. 1977),] which condemns

a discharge of gasoline as within a

generic understanding of

“pollutant,” rather than stretch the

less inclusive "biological

materials" to cover organically-

based petroleum compounds.

That the definition of

"pollutant" is meant to leave out

very little is confirmed by the

statutory definition of "pollution,"

which means nothing less than the

"man-made or man-induced alteration

of the chemical, physical,

biological, and radiological

integrity of water." (33 U.S.C.

§1362(19).]

2 Williams H. Rodgers, Jr., Environmental Law:

Air and Water 144 (1986).

Given these observations, it seems clear

that, while the listing of a specific substance

App. 47

in the definition of pollutant may be

significant,™ the fact that a substance is not

specifically included does not remove it from

the coverage of the statute. The next

question, then, is who makes the determination

that a substance that is not listed fits into

the definition. Cedar Point argues that only

EPA may make such a determination to the

exclusion of the courts.

As an initial matter, we note that only in

rare circumstances will a court be called upon

to decide in a citizen suit whether a

particular substance is a pollutant.

Typically, citizen suits are brought against

persons who are violating effluent limitations

or permits issued by EPA. In such cases, the

question of whether the discharged substance

is a pollutant is not in issue because EPA will

have already made that determination through

the effluent limitation or permit.*' As our

earlier discussion confirms, however, a citizen

“Indeed, if a person were to be so bold

as to discharge “cellar dirt," he could hardly

be heard to complain when the full force of the

CWA was brought upon hin.

“If the discharger disputed EPA's

determination that a particular substance was

@ pollutant, its recourse would be to seek

judicial review of he determination. In such

a case, the court would not be deciding whether

a particular substance was a pollutant, but

rather whether EPA’s determination was a

reasonable interpretation of the statute. See,

@.9., National Wildlife Fed’n v. Gorsuch, 693

F.2d at 174 n.56.

App. 48

may also bring an action against a person that

is discharging an alleged pollutant without a

permit even where EPA has filed to issue a

permit or promulgate an effluent limitation to

cover the discharge. In these cases, EPA will

necessarily have not made a determination that

the discharged substance is a pollutant.

Therefore, logic dictates that the court must

be able to decide whether the discharged

substance is a pollutant in order to determine

whether the defendant is violating the statute.

It would make little sense to allow a citizen

to bring an action that the court could not

adjudicate.” We find that this logic compels

a holding that a court may determine in a

citizen suit whether a discharged substance is

a pollutant, notwithstanding the fact that EPA

has failed to issue a permit or to promulgate

an effluent limitation that regulates the

discharge.

Cedar Point does not direct us to any

“This logical flaw could be avoided by

characterizing the question of whether a

substance is a pollutant as part of stating a

Claim; that is, by requiring the citizen to

demonstrate as an element of his claim that the

defendant is discharging a pollutant. Such a

characterization is plausible, given that the

issue of stating a claim is somewhat

intertwined with the question of whether there

has been a substantive violation of the CWA.

Even under this reading, however, a court would

still have to decide whether a substance being

discharged was a pollutant in citizen suits

where EPA had not issued a permit or effluent

limitation.

App. 49

statutory authority to the contrary. First, we

note that neither the statute nor. the

legislative history expressly grants EPA the

exclusive authority to decide that a substance

falls within the statutory definition of

pollutant or divests the courts of the same.

The D.C. Circuit has _ interpreted the

legislative history of the CWA to mean that

Congress has invested EPA with "at least some

power" to define the term "pollutant," National

Wildlife Fed’n vy. Gorsuch, 693 F.2d at 167.

While we agree with this assessment, we find no

support for the logical leap that this

delegation of power necessarily deprives the

federal courts of similar authority where EPA

has not spoken. It is true that Congress

intended EPA to apply the definition of

pollutant to particular substances and to

regulate those substances through effluent

standards and permits. Nevertheless, as

explained in our discussion regarding stating

a claim, Congress also made it unlawful for a

person to discharge a pollutant without a

permit even where EPA has not applied the

definition to the substance being discharged.

In such a case, the courts must apply the

definition.

Further, these rare cases where courts are

called upon to determine whether a substance is

a pollutant do not require a "complex

balancing" of biological, technological and

economic factors, such as EPA must undertake

when promulgating effluent standards. That is,

the court will not be asked to analyze the

level of discharge, the character of the

receiving waterway, and the cost of achieving

various permit limitations. Rather, Congress

App. 50

has already set the permit limitation in such

cases -- zero discharge. A court need only

apply the statutory definition to determine if

the substance in question is a pollutant. If

it determines that the substance is a

pollutant, and the defendant is discharging it

at all without a permit, then there has been a

violation of §1311(a). We do not think that

this task is beyond the competence of a court.

Cedar Point also fails to direct us to any

judicial authority contrary to our holding. In

this regard, we point out that Cedar Point’s

reliance on National Wildlife Fed’n v. Gorsuch

for this proposition is misplaced. The court’s

reservations regarding adding terms to the

statute did not arise in the context of it

being asked to add those terms. Rather, the

court was reviewing a decision by EPA not to

regulate through a permit the low dissolved

oxygen, cold, and supersaturation caused by

dams. Jd. at 171. The court expressly stated

that it was not deciding whether the definition

of pollutant necessarily excluded those

elements, but only whether EPA could so

interpret the definition. Jd, at 174 n.56.

Moreover, our- holding breaks no new ground

in the case law. Rather, it is consistent with

numerous CWA cases in which courts have made an

independent determination that a particular

substance is a pollutant without reference to

any applicable effluent standard or permit

limitation. See, ¢@.g., Concerned Area

Residents for Env’t v. Southview Farm, 34 F.3d

114, 117 (2nd Cir. 1994) (finding that liquid

manure is a pollutant because definitional list

includes solid waste, sewage, biological

materials, and agricultural waste), cert

’

ate as ee eee ee a. ee a

> $d eR FE PI dan on "Ay Leas

App. 51

denied, 115 S. Ct. 1793 (1995); United States

, 3 F.3d 643, 645

(2nd Cir. 1993) (finding that human blood is a

pollutant because definitional list includes

biological materials), cert. denied, 114 S. ct.

2764 (1994); United States v. Schallom, 998

F.2d 196, 199 (4th Cir.) (finding that

“shotcrete" and cement are pollutants because

definitional list includes solid waste,

chemical waste, and sand), cert. denied, 114 Ss.

Ct. 277 (1993); National Wildlife Fed’n v.

Consumers Power Co,, 862 F.2d 580, 583 (6th

Cir. 1988) (finding that dead fish and fish

remains are pollutants because definitional

list includes biological materials); United

» 772 F.2a

1501, 1505-06 (11th Cir. 1985) (finding that

redeposited vegetation and sediment are

pollutants because definitional list includes

dredges spoil), vacated and remanded on other

grounds, 481 U.S. 1034 (1987); United States v.

Hamel, 551 F.2d 107, 110 (6th Cir. 1977)

(finding that gasoline is a pollutant because

generic texms of definitional list evince

congressional intent to encompass substances

covered under the Refuse Act of 1899, and

Supreme Court had held that gasoline was

covered by the earlier statute); Higbee v.

Starr, 598 F. Supp. 323, 330 (E.D. Ark. 1984)

(finding that hog waste is a pollutant because

definitional list includes agricultural waste),

aff'd, 782 F.2d 1048 (8th Cir. 1985)." ‘the

Swe recognize that some of these cases

are not completely analogous to the case sub

judice because they involve civil or criminal

enforcement actions brought by the government ;

App. 52

fact that courts have been making these

determinations since the enactment of the CWA

tends to deflate Cedar Point’s concerns that

the exercise this authority will result in

chaos.

Having held that we have the authority in

a citizen suit under the CWA to determine

whether a discharged substance is a pollutant,

we now turn to the question of whether Cedar

Point’s produced water, or any of its

constituents, is a pollutant under the CWA.

Examining the statutory definition of pollutant

first, we think that produced water is clearly

subsumed by phrases "chemical wastes" and

“industrial waste." 33 U.S.C. §1362(6). The

exclusions under this definition also provide

some guidance. Specifically, the definition

states that the term "pollutant" does not mean

water derived in association with

oil or gas production and disposed

of in a well, if the well used...

. for disposal purposes is approved

by authority of the State in which

the well is located, and if such

State determines that such injection

or disposal will not result in the

degradation of ground or surface

water resources.

33. U.S.C. §1362(6) (B).™ Although this

however, we see no reason why a court may

determine that a substance is a pollutant in

such cases but may not make that determination

in a citizen suit.

*Inexplicably, neither party brought this

provision to our attention. This failure is

eS aS ee ee ee ee oe

App. 53

exclusion of produced water from the meaning of

pollutant in very limited circumstances does

not necessarily mean that produced water is a

pollutant under all other circumstances,™ we

all the more remarkable because this provision

is the unmistakable fingerprint of the oil and

gas industry on the CWA -- in the definition of

"pollutant" no less.

“But cf.

Train, 556 F.2d 822 (7th Cir. 1977). In this

case, U.S. Steel challenged EPA’s authority to

regulate its disposal of acid wastes in a well.

id. at 851. With respect to whether the acid

wastes were a pollutant, the court quoted the

exemption in §1362(6)(B) and stated:

Applying the canon expressio unius

est exclusio alterius to the quoted

language, we conclude that the

listed materials are "pollutants"

when injected into wells under any

other circumstances.

Id. at 852. We do not apply that canon here.

The legislative history makes clear that

Congré s was distinguishing between the

disposal =f produced water into wells by the

oil industries, rather than between the

disposal of produced water into wells and the

disposal of produced water by other means. 1

589-97

(Environmental Policy Div., Congressional

Research Serv. ed., (1973) (House debate on

amendment offered by Rep. Aspin that would have

App. 54

nevertheless consider it a strong indicator of

Congress’s concern over the effects of produced

water on the environment. Furthermore, if

Congress felt that it was necessary to draft a

detailed exemption for produced water that has

been disposed of in a_ state-approved

reinjection well, it may be that Congress

believed that such produced water would

ectherwise ke a pollutant. If, absent an

exemption, produced water reinjected into a

state-approved well is a pollutant, then it is

hardly a stretch to say that produced water

deposited directly into a bay is also a

pollutant .*

Aside from this statutory support, we also

find substantial guidance from EPA on the

question of whether Cedar Point’s produced

water is a pollutant. As we noted in our

discussion of stating a claim under the CWA,

EPA has recognized that citizens have the right

to sue "Coastal Subcategory" operators who are

discharging produced water without a permit.

57 Fed. Reg. 60,926, 60,944-45 (1992). The

ability to bring such an action necessarily

implies that produced water is a pollutant. In

addition, EPA has issued permits regulating

produced water discharges by oil and gas

operators in the "Onshore Subcategory" and the

“Offshore Category" in Texas. 56 Fed. Reg.

eliminated the exemption).

“we also think it significant that,

although Congress provided this clear avenue

for oil and gas producers to avoid regulation

by the CWA, Cedar Point chose not to avail

itself of it.

PELE IER OL EI AE

% j

;

& .

App. 55

7698 (1991); 46 Fed. Reg. 20,284 (1981). In

these permits, EPA has explicitly referred to

produced water as a "pollutant." See, e.g., 56

Fed. Reg. 7698, 7701 (1991) ("[T)he permits

prohibit the discharge of all wastewater

pollutants from Onshore Subcategory facilities,

including . . . produced water." (emphasis

added)). Finally, several of the components of

Cedar Point’s produced water, including

benzene, naphthalene, and zinc, are listed as

“toxic pollutants" in regulations promulgated

by EPA. 40 C.F.R. §401.15 (1994); cf. Daque v.

City of Burlington, 732 F. Supp. 458, 469.70

(D. Vt. 1989) (finding substances discharged by

defendants to be pollutants by reference to the

toxic pollutant list). Similarly, oil and

grease are listed as "conventional pollutants."

40 C.F.R. §401.16 (1994).

Given this support in the statute, as

reinforced by EPA’s own regulations, we

conclude that Cedar Point’s produced water is

a pollutant within the meaning of the cwa.”’

We recognize that the overwhelming

evidence from the statute and the regulations

makes our determination that produced water is

a pollutant an easy one. We note, however,

that the conditions that give rise to the need

for a court to determine whether a substance is

»* pollutant may lead to more difficult cases.

Where EPA has not promulgated a permit or

linitation for a particular discharge, it may

be because EPA lacks the resources to do so or

because the discharge is not a priority.

ccasionally, however, it may be because EPA

questions whether the discharged substance is

a pollutant at all. In such a case, it is

App. 56

Cedar Point does not dispute that it discharged

this produced water into Galveston Bay without

a NPDES permit. Accordingly, we conclude that

the district court correctly held that Cedar

Point violated §1311(a) of the CWA.

4. Striking of Cedar Point’s Experts

Cedar Point’s fourth argument on appeal is

that the district court erred in striking Cedar

Point’s designation of experts and excluding

them from testifying at trial as a sanction for

violating the court’s accelerated discovery

order. In this regard, we are asked to review

two separate determinations by the district

court: (1) whether Cedar Point actually

violated the discovery order; and (2) if there

was a violation, whether the striking of Cedar

Point’s experts was an appropriate sanction.

We review the court’s finding that Cedar Point

violated the discovery order for an abuse of

discretion. See _Scott v. Monsanto Co., 868

F.2d 786, 793 (5th Cir. 1989) (district court’s

rulings on discovery matters will only be

reversed for abuse of discretion). We apply

the same standard in reviewing a sanction for

violatin= a discovery order. Chilcutt vs.

Uni vd States, 4 F.3d 1313, 1320 (5th Cir.

likely that the substance may not clearly fit

within the statutory definition and that there

will be little regulatory guidance from EPA.

In a citizen suit brought under these

circumstances, courts should exercise restraint

te avoid stretching the term "pollutant" too

far.

App. 57

1993), cert denied, 115 S. Ct. 44 (1994).™¥

The district court’s discretion in sth matters

has been described as “broad”, i¢.; Landry v

Air Line Pilots Ass’n Int’] AFL-Cj«}, 901 F.2d

404, 436 n.114 per Cir.), cert. “enied, 498

U.S. 895 (19 0), and "considerable", Murphy v.

Magnolia Elec. Power Ass’n, 639 F.2d 232, 234

(Sth Cir. 1981). Accordingly, "{i]t is unusual

for an appellate court to find abuse of

discretion in these matters." O’Malley v.

United States Fidelity and Guar. Co., 776 F.2d

494, 499 (5th cir. 1985). Generally, we will

only reverse the trial court’s discovery

rulings in “unusual and exceptional case[(s]."

Id. (quoting Brown v. Thompson, 430 F.2d 1214,

1216 (5th Cir. 1970) (internal quotations

“put see Alldread v. City of Grenada, 988

F.2d 1425, 1436 (5th Cir. 1993). Alldread

applied a "manifest error" standard in

reviewing a trial court’s exclusion of expert

testimony s a sanction for failing to comply

with a discovery order. As authority for this

proposition, the Alldread court cited Page v.

Barko Hydraulics, 673 F.2d 134, 139 (Sth Cir.

1982). Page. however, involved an evidentiary

ruling on tse admissibility of an expert’s

testimony at trial. It is true that the

exclusion of expert testimony as an evidentiary

matter is reviewable for manifest error.

United States v. Willey, 57 F.3d 1374, 1389

(Sth Cir. 1995), cert. denied, 1995 WL 668887

(U.S. Dec. 11, 1995). When expert testimony is

excluded as a sanction, however, we review the

trial court’s ruling for abuse of discretion.

Chilcutt, 4 F.3d at 1320; Bradley v. United

States, 866 F.2d 120, 124 (5th Cir. 1989).

App. 58

omitted) ).

Immediately after Sierra Club filed its

complaint on April 20, 1993, the district court

entered an order setting an accelerated

discovery schedule for this case, rather than

proceeding under a traditional discovery plan.”

The order first required the parties to make

certain “initial disclosures" without waiting

for discovery requests. These initial

disclosures were to include copies of "all

documents, data compilations, and tangible

things . . . that are likely to bear

significantly on any claim or defense."

In addition to these disclosures, the

court’s order required the parties to make

disclosures regarding the expert testimony that

they intended to present at trial. With

respect to each expert witness, each party had

to submit to the other the following:

a written report prepared and signed

by the witness which includes a

complete statement of all opinions

to be expressed and the basis and

reasons therefor; the data or other

information relied upon in forming

such opinions; any exhibits to be

used as a summary of or support for

such opinions; the qualifications of

*The authority for such an order is found

in paragraph 6 of the Cost and Delay Reduction

Plan under the Civil Justice Reform Act of

1990, 28 U.S.C. §§471-482, as adopted by the

Southern District of Texas on October 24, 1991.

The order tracks the language of the new Rule

26(a) of the Federal Rules of Civil Procedure,

with slight modifications.

ST rn

UPS GNY GEE GOR AR ELE ONT nie i tt DIEM SR PEG EH LS NG OER: SLIT ete Sl ih Lea

Ltn ea ee eet SE

App. 59

the witness; and a listing of any

other cases in which the witness has

testified as an expert at trial or

in deposition within the preceding

four years.

The order required the parties to submit these

reports ninety days prior to the trial date.”

The order appears to call for "simultaneous"

disclosure of the reports; that is, the order

did not direct one party to submit its reports

first, but only required each party’s reports

to be submitted by the ninety-day deadline.“'

“In a telephone conference on September

29, 1993, the district court set this case for

trial-docket call on May 2, 1994; accordingly,

the expert disclosure deadline fell on February

1, 1994.

“The Advisory Committee Notes to Rule 26

recommend disclosure of these reports seriatin,

but leave such a decision to the discretion of

the trial court:

(I]n most cases the party with the

burden of proof on an issue should

disclose its expert testimony on

that issue before other parties are

required to make their disclosures

with respect to the issue. In the

absence of such a direction, the

disclosures are to be made by all

parties at least 90 days before the

trial date or the date by which the

case is to be ready for trial. ..

App. 60

After this deadline, the order allowed the

parties to make additional expert submissions

in only two situations. First, the parties

could submit reports "to contradict or rebut

evidence on the same subject matter identified

by another party" in its initial expert

disclosures. The order directed that such a

report be made within thirty days after the

disclosure of the report being rebutted.

Second, the parties had a duty =. supplement

these reports if necessary.“ Such

supplementation was required to be made at

On January 24, 1994, Cedar Point filed a

corrected designation of its expert witnesses:

Fed. R. Civ. P. 26 advisory committee’s note.

“The scope of this duty to supplement is

outlined in Rule 26(e). Specifically, a party

is required to supplement its expert

disclosures if the court so orders or if "the

party learns that in some material respect the

information disclosed is incomplete . or

incorrect and if the additional or corrective

information has not otherwise been made known

to the other parties during the discovery

process or in writing." Fed. R. Civ. P.

26(e) (1).

‘SRule 26(e) (1) requires that

supplementation of expert disclosures be made

by the time the supplementing party’s "Pretrial

Disclosures" are due. Fed. R. Civ. P.

26(e)(1). The court’s accelerated discovery

order directed that the "Pretrial Disclosures"

would be due at least thirty days before trial.

a pe a a

SpE SE ALOE Te

ser ys

App. 61

Don Harper, Carl Oppenheimer, John McGowan, and

Stanley Pier. Two days later, Cedar Point

supplemented this list with the designation of

Joe Haney. Cedar Point served the required

reports from these experts around the deadline

set by the court’s order.“ Cedar Point later

timely served Sierra Club with “rebuttal"

expert reports from Don Harper, John McGowan,

and Stanley Pier. Finally, Cedar Point timely

supplemented Don Harper’s reports before

trial.%

“Cedar Point maintains that its

submission of expert reports was timely, citing

as evidence a letter to the Clerk of the

Southern District of Texas that was copied to

counsel opposite. This letter was a cover

letter to the expert reports and was dated

February 2, 1994. The deadline for service of

these reports, however, was February 1, 1994,

ninety days before the docket-call date of May

2, 1994. The court’s order directed that the

parties serve the reports in accordance with

Rule 5 of the Federal Rules of Civil Procedure.

Assuming that Cedar Point mailed these reports

to Sierra Club, it would have had to do so by

February 1, as Rule 5 provides that service by

mail is complete upon mailing. Fed. R. Civ. P.

5(b). In any event, Sierra Club’s motion to

strike Cedar Point’s experts was not predicated

on a failure to comply with deadlines.

“cedar Point also filed an untimely

Supplement to Carl Oppenheimer’s report on

April 25, 1994; however, Cedar Point’s only

purpose in doing so was to ensure the inclusion

of this report in the record -- the district

App. 62

On February 14, 1994, Sierra Club filed a

motion to strike Cedar Point’s designation of

experts as a sanction for failure to comply

with the court’s accelerated discovery order.

Specifically, Sierra Club argued that the

initial expert reports filed by Cedar Point

were so incomplete and insubstantial that they

failed to meet the requirements of the

discovery order. On April 19, 1994, the court

entered an order granting this motion. The

court found that Cedar Point had not complied

with its order regarding expert reports and

ordered that Cedar Point’s designation of

experts was stricken, with instructions that

none of Cedar Point’s experts would be allowed

to testify at trial.

Cedar Point maintains that, between its

initial expert disclosures and its rebuttal and -

supplementary disclosures, it did provide

enough information to comply with the district

court’s discovery order. Also, Cedar Point

asserts that it cannot be sanctioned for

failure to comply with a discovery order

because Sierra Club never filed a motion to

compel. Finally, Cedar Point argues that the

sanction of striking Cedar Point’s experts was

an abuse of discretion. In this regard, Cedar

Point contends that: (1) the subject of its

experts’ testimony -- the harm caused by Cedar

Point’s produced water -- was crucial to the

court’s assessment of penalties against Cedar

court had already entered an order striking

Carl Oppenheimer as a witness a week earlier.

Accordingly, we will not consider the

untimeliness of this filing in adjudicating

Cedar Point’s appeal on this issue.

App. 63

Point; (2) even if Cedar Point’s initial expert

disclosures were inadequate, there was no

prejudice to Sierra Club because Sierra Club

received the required information through

rebuttal and supplementary disclosures with

enough time to prepare for trial; (3) any

prejudice to Sierra Club because of untimely

disclosures could have been cured through a

continuance; and (4) Cedar Point’s failure to

comply was justified because Sierra Club’s

complaint and initial disclosures were so

vague, general, and irrelevant that the issues

in the lawsuit were not sufficiently defined to

put Cedar Point on notice of what expert

testimony would be needed.

The district court’s discovery order

required that the parties’ initial expert

disclosures "include a complete statement of

all opinions to be expressed and the basis and

reasons therefor" and "the data or other

information relied upon in forming such

opinions.” The Advisory Committee Notes to

Rule 26 of the Federal Rules of Civil Procedure

state that such reports must be "detailed and

complete." Fed. R. Civ. P. 26 advisory

committee’s note. These Notes also explain

that the purpose of the reports is to avoid the

disclosure of "sketchy and vague" expert

information, as was the practice under the

former rule. See id.

The district court’s finding that Cedar

Point’s initial expert disclosures did not meet

this standard does not constitute an abuse of

discretion. A review of the disclosures bears

out this assessment. Don Harper’s statement of

Opinions and reasons was a one-and-a-half page

outline listing his “points of testimony."

App. 64

Carl Oppenheimer offered two one-paragraph

descriptions of his opinions. Stanley Pier and

John McGowan also prov:4ed only one-paragraph

statements relating to their opinions. Stanley

Pier and John McGowan also provided only one-

paragraph statements relating to their

opinions. Finally, Joe Haney’s statement

included no substantive opinions, but only

declared what subjects he intended to research

amd to discuss at trial. Although Cedar Point

later reinforced these statements with rebuttal

and supplementary disclosures, the discovery

order and Rule 26(a) clearly require that the

initial disclosures be complete and detailed.

The purpose of rebuttal and supplementary

disclosures is just that -- to rebut and to

supplement. These disclosures are not intended

to provide an extension of the deadline by

which a party must deliver the lion’s share of

its expert information. Therefore, we hold

that the district court did not abuse its

discretion in finding that Cedar Point failed

to comply with the expert disclosure provisions

of its accelerated discovery order.“

“Cedar Point even appears at times to

admit that it did not comply with the discovery

order by stating that it was "impossible" to

comply and that their experts "did all they

could do" under the circumstances. The reasons

for noncompliance, however, are relevant to the

separate issue of whether the sanction imposed

was appropriate. On the other hand, a

violation of an order is a violation of an

order, regardless of the reasons therefor.

In this regard, we note that the question

of whether a party has violated a discovery

App. 65

As authority for its argument that Sierra

Club was required to file a motion to compe]

before seeking sanctions, Cedar Point cites our

decision in

inc., 855 F.2d 233 (Sth Cir. 1988). In

Broadcast Music, the plaintiff argued that the

defendant should have been estopped from

denying certain facts when it failed to produce

documents relevant to those facts. id. at 238.

We held that the sanction of estoppel was not

available because the plaintiff had not first

sought a motion to compel production of the

relevant documents. Id. Our rationale,

however, was that the pretrial order did not

explicitly compel the production of those

documents in the first place; rather, the order

only stated that "immediate receipt of such

documents would expedite plaintiff’s

preparation of this case for trial or

preparation of a motion for summary judgment."

id. In other words, it would have been unfair

to sanction the defendant for failure to

produce documents that it was never under any

clear obligation to produce. In the present

case, however, Cedar Point was compelled to

order will typically not be in dispute, as when

a party fails to attend a deposition or refuses

to produce certain documents. Where the

standard of compliance is a matter of degree,

however, such as the degree to which an initial

expert disclosure is “complete," disagreement

is more likely to occur. The resolution of

such disputes is more appropriately left to the

discretion of the trial court, and only in an

unusual case of clear abuse should an appellate

court reverse. See QO’Malley, 776 F.2d at 499.

lla i i

App. 66

produce the initial expert disclosures from the

moment the court entered the accelerated

discovery order. It was not necessary for

Sierra Club to create a obligation to produce

by filing a motion to compel; the obligation

was already present.

Moreover, Rule 37 of the Federal Rules of

Civil Procedure, which governs the imposition

of sanctions for failure to make disclosures,

does not require that a party file a motion to

compel before moving for sanctions. Instead,

the rule states only that, "({i)f a party fails

to make a disclosure required by Rule 26(a),

any other party may move to compel disclosure

and for appropriate sanctions." Fed. R. Civ.

P. 37(a)(2) (a). Indeed, the Advisory committee

Notes to Rule 37 contemplate that it may be

more effective in some situations to impose a

sanction of excluding evidence jnstead of an

order compelling production:

[A] motion [to compel] may be needed

when the information to be disclosed

might be helpful to the party

seeking the disclosure but not to

the party required to make the

disclosure. If the party required

to make the disclosure would need

the material to support its own

contentions, the more effective

enforcement of the disclosure

requirement will be to exclude the

evidence not disclosed. ...

Fed. R. Civ. P. 37 advisory committee’s note.

Because Cedar Point intended to use its expert

testimony to support its own contentions

regarding harm to the environment, the district

court could have concluded that excluding this

App. 67

testimony was the most appropriate sanction.

Accordingly, we hold that the district court

did not abuse its discretion in sanctioning

Cedar Point for violating the discovery order

without requiring Sierra club to file a motion

to compel.

Finally, we review the sanction itself.

When a district court st -‘ikes a party’s

designation of expert witnesses and excludes

their testimony as a sanction for violation of

a discovery order, we determine whether the

court’s action is an abuse of discretion by

examining four factors:

(1) the importance of the witnesses’

testimony;

(2) the prejudice to the opposing

party of allowing the witness to

testify;

(3) the possibility of curing such

prejudice by granting a continuance;

and

(4) the explanation, if any, for the

party’s failure tc comply with the

discovery order.

See Bradley v. United States, 866 F.2d 120, 125

(Sth Cir. 1989) (citing Murphy, 639 F.2d at

235).

With respect to the importance of Cedar

Point’s witnesses, it is clear that the bulk of

their expected testimony concerned the degree

of harm caused by Cedar Point’s discharge of

produced water. Although the district court

made findings regarding harm to the environment

in assessing the civil penalty against Cedar

Point, the court based the amount of the

penalty only on the economic benefit accruing

to Cedar Point from the violation. Therefore,

App. 68

the stricken testimony ultimately proved to be

unimportant to Cedar Point’s case.

As to any prejudice to Sierra Club that

would result from allowing Cedar Point’s

witnesses to testify, we note that Sierra Club

did receive more detailed information from

three of the witnesses im the form of rebuttal

reports. While these disclosures were made

approximately two months before trial, Sierra

Club should have received most of this

information in initial expert disclosures a

month earlier. Such a delay would have likely

resulted in some prejudice to Sierra Club.

While a continuance would have given Sierra

Club more time to review the late disclosures,

such a measure "would neither punish [Cedar

Point] for its conduct nor deter similar

behavior in the future." Bradley, 866 F.2d at

126.

Finally, Cedar Point’s reasons for failure

to comply with the district court’s discovery

order are not persuasive. That harm to the

environment would be an issue in this lawsuit

was clear from the filing of the action in

April 1993. Cedar Point had over nine months

to solicit experts and prepare reports on this

issue by the February 1, 1994 deadline.

Regardless of the specificity of Sierra Club’s

complaint and initial disclosures, Cedar Point

should have been able to produce more

information regarding its defense of lack of

harm that it did in its initial expert

disclosures.

In light of Cedar Point’s failure to

adhere to discovery deadlines and the fact that

the expected testimony ultimately proved to be

relatively unimportant, we find that the

App. 69

district court did not abuse its discretion in

striking Cedar Point’s experts and excluding

their testimony.

5. The Penalty and Attorneys’ Fees

Cedar Point’s fifth argument on appeal is

that the district court erred in assessing a

penalty of $186,070 against Cedar Point for

violating the CWA and in awarding attorneys’

fees to Sierra Club. We review the district

court’s findings of fact in support of the

penalty under the clearly erroneous standard.

See Public Interest Research Group of New

913 F.2d 64, 79 (3rd Cir. 1990), cert. denied,

498 U.S. 1109 (1991). With respect to the

court’s weighing of those facts and

determination of the penalty, however, we

review for abuse of discretion. See Atlantic

S97 F.2d 1128, 1142 (1ith Cir. 1990).

Similarly, we review an award of attorneys’

fees for abuse of discretion. Bode v. United

States, 919 F.2d 1044, 1047 (5th Cir. 1990).

a. The Penalty

The CWA directs district courts to assess

civil penalties for violations of the CWA. 33

U.S.C. §1319(d). Specifically, the statute

states that violators “shall be subject to a

civil penalty not to exceed $25,000 per day for

each violation." Jd, Aside from this maximum

amount, the statute guides the court’s

discretion in setting the penalty as follows:

In determining the amount of a civil

penalty the court shall consider the

seriousness of the violation or

violations, the economic benefit (if

any) resulting from the violation,

App. 70

any history of such violations, any

good-faith efforts to comply with

the applicable requirements, the

economic impact of the penalty on

the violator, and such other matters

as justice may require.

Id. The Eleventh Circuit has taken these

statutory directives and developed a procedural

framework for calculating penalties under the

CWA. Tyson Foods, 897 F.2d at 1142. First,

the court is to calculate the maximm penalty

that could be assessed against the violator.

Id. Using that maximm as a starting point,

the court should then determine if the penalty

should be reduced from the maximum by reference

to the statutory factors. Id.

The district court followed the Tyson

Foods framework in this case. The parties had

stipulated that there were 797 days of

unpermitted discharge of produced water prior

to trial. The judgment was entered twelve days

later, during which time the discharge

presumedly continued. Accordingly, the court

multiplied the statutory figure of $25,000 per

day by 809 days of unpermitted discharge to

arrive a maximum penalty of $20,225,000.

The district court then made findings of

fact with respect to the statutor

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