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

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for Writ of Certiorari
- **Published:** January 1, 1996
- **Citation:** 519 U.S. 811

## Text

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

i

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

ii

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.

iv

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

11

12

ch

Vv

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

vi

APPENDICES:

A.

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.
App.
App.
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,

12,

24

14

17

10

14

ix

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

a

18

17

x

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

2

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

rn

3

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) ].

4

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
_ -

5

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

6

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

7

"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

10

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.

11

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

12

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.

13

‘ 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

14

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.

4
F

15

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

16

“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

17

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

18

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

19

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

20

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

21

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

it
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

22

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

23

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

24

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

3

25

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,

26

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.

%

27

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

28

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 --

29

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

30

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.

:
3
4
4
F
d

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

.
‘
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4

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
———————
ey

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 definit

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386002_1319%3A1. Public record. Not legal advice.