Opa or Nopa? Restoring Cooperative Federalism in Oil Pollution Enforcement

• Citation: Vol. 65 No. 3
• Publication year: 2016

OPA or NOPA? Restoring Cooperative Federalism in Oil Pollution Enforcement

Jennifer Lamb

OPA OR NOPA? RESTORING COOPERATIVE FEDERALISM IN OIL POLLUTION ENFORCEMENT

Abstract

Catastrophic oil spills are some of the most visible and devastating contemporary environmental disasters. Unfortunately, a loophole in the Clean Water Act has significant potential to limit the United States's ability to prosecute those who spill oil. Commonly known as the statutory preclusion provision, the provision prevents the federal government from prosecuting an action when a state acts first—even if the state has only acted administratively against a violator. Expansive interpretation of statutory preclusion by federal courts creates an emerging impediment to effective enforcement against oil pollution. The highly publicized 2013 decision of United States v. CITGO Petroleum Corp. was the first oil spill case to address the issue of statutory preclusion.

This Comment argues that the application of statutory preclusion to Oil Pollution Act cases is contrary to the original intent of the Congress in drafting the statutory preclusion provision of the Clean Water Act and subsequent Oil Pollution Act amendments. Further, applying statutory preclusion to oil pollution cases undermines effective enforcement. This Comment proposes that the Environmental Protection Agency (EPA) should take a leadership role by arguing that its interpretation of the statutory preclusion provision in its regulations should be entitled to deference under Chevron v. National Resource Defense Council. Providing Chevron deference to the EPA's prosecutorial determinations will resolve a three-way split among the federal circuits. A uniform rule will also facilitate effective relationships under cooperative federalism for the benefit of the environment.

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Introduction

Whether it is 1989 or 2015, images of oil covered birds and tarred beaches from catastrophic oil spills underscore the need for improved environmental protection and enforcement.¹ Historically, catastrophe was enough to unite the U.S. Congress to work together on oil pollution reform.² After the Exxon Valdez spilled eleven million gallons of crude oil into the Prince William Sound on March 24, 1989, national outcry erupted over the limited ability of the federal government to respond to, and clean up, oil spills.³ U.S. citizens demanded that the federal government have the ability to prosecute and hold responsible individuals who spilled oil into waters of the United States.⁴ Congress responded by enacting comprehensive amendments to the Federal Water Pollution Control Act—or the Clean Water Act (CWA).⁵ These amendments, known as the Oil Pollution Act amendments of 1990 (OPA 1990), treated oil pollution as an inherently national issue. They provided the Environmental Protection Agency (EPA) and Coast Guard with primary and comprehensive authority to address oil spills into waters of the United States.⁶ One of the most important components of this enforcement regime is the EPA's ability to levy large criminal and civil penalties against violators.⁷

Treating oil pollution as a national issue under the CWA creates some tension with the CWA's central mandate of cooperative federalism. Under cooperative federalism, states and the federal government share the responsibility, with states playing the primary role, to restore the physical, chemical, and biological integrity of the nation's waters.⁸

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Not surprisingly, state and federal tensions over proper management of oil pollution remain a pervasive issue in environmental law. In the early years, states were frustrated with slow federal progress in implementing OPA.⁹ In the immediate wake of OPA 1990, many coastal states proposed and adopted provisions to prosecute oil pollution violators themselves.¹⁰ Some states clashed with federal agencies over the details of enforcement in the immediate wake of spills.¹¹

Today, the balance between state and federal enforcement of oil pollution is managed by a single, crudely drafted 1987 Amendment to the CWA that precipitated the modern OPA provisions. Commonly known as the statutory preclusion provision,¹² the original intent of the provision was to prevent violators from paying twice for violations due to duplicative enforcement actions brought by states, citizens, and the federal government.¹³ The provision allows an administrative action by the state to preclude pursuit of a federal civil penalty against a violator, regardless of whether the federal action is brought by a citizen plaintiff or the EPA. Federal courts inappropriately applying the statutory preclusion provision when a state prosecutes first now allows violators to entirely avoid liability .¹⁴ For OPA prosecutions, removing civil penalty liability strikes at the heart of effective federal enforcement.

The increasing size and scale of recent catastrophes by repeat offenders demand that federal enforcement against OPA violators be more effective, not less. For example, the EPA collected $25 million—the largest OPA civil penalty in history up to that point—from BP for the North Slope Alaska Spill in 2011.¹⁵ Just two years later, the 210 million gallon spill and $1 billion civil penalty collected in the Transocean Settlement—again from BP—dwarfed the

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North Slope spill.¹⁶ In 2010, Plains All American Pipeline paid over $3 million for spills occurring in five states.¹⁷ This summer, a spill from a Plains pipeline spread oil 100 miles down the Santa Barbara coast.¹⁸ The bottom line is that serious spills keep happening, and too often by the same companies.

In the wake of environmental disasters such as the Deepwater Horizon and other recent spills, scholars have once again called for Congress to pass OPA reforms.¹⁹ However, given the congressional stalemate over most environmental issues,²⁰ this Comment looks to how OPA litigation might be used to make national OPA enforcement more effective.

Notably, a litigation approach calls for a marked departure from the typical mechanics of EPA enforcement. The EPA prefers to settle OPA cases, as evidenced by the fact that, since 1999, more than ten OPA consent decrees have been filed²¹ —and only two cases have gone to litigation under OPA 1990.²²

But recent case law indicates that the EPA may no longer have the discretion to continue its preference for settlement if it wishes to effectively enforce OPA violations. In 2013, defendants first availed themselves of the statutory preclusion provision during litigation of an oil pollution civil penalties prosecution in United States v. CITGO Petroleum Corp.²³ In CITGO, the company's failure to clean its produced water holding tanks resulted in a significant accumulation of oil.²⁴ When the tanks overflowed due to a large storm event, over two million gallons of oil flowed into a nearby river,

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resulting in a fish kill and covering numerous birds with oil.²⁵ As the first case to go to trial for civil penalties under OPA²⁶ and raise the statutory preclusion defense,²⁷ CITGO was closely followed by environmental counsel, states, and firms around the country. In the popular press, CITGO was discussed as a model for the Deepwater Horizon prosecution.²⁸ Although the statutory preclusion defense was unsuccessful in CITGO, the case simultaneously raised the profile of the statutory preclusion provision. Consequently, statutory preclusion is an emerging issue in the effectiveness of oil pollution enforcement.²⁹

In light of the implications of CITGO, this Comment analyzes the impacts of statutory preclusion on OPA enforcement. This Comment proceeds in three Parts. Part I explores the relationship between legislative intent, OPA, and statutory preclusion provisions under the principles of cooperative federalism in the CWA. Part I includes a novel analysis of to the EPA's guidance on the application of statutory preclusion to OPA cases and details the broad expansion of statutory preclusion by the federal courts in a manner that is inconsistent with legislative intent. Part II next demonstrates how, contrary to established legislative intent, the broad application of statutory preclusion to oil cases directly undermines effective oil pollution enforcement and cooperative federalism. Finally, Part III explores how the application of Chevron deference to the EPA's regulatory interpretation of the statutory preclusion provision would make judicial interpretation of the provision more consistent with legislative intent. Further, arguing for Chevron deference places the agency in a position of leadership in oil pollution prosecution and promotes cooperative federalism. Ultimately, this Comment concludes that the application of Chevron deference and a uniform national standard for statutory preclusion will create net benefits for states, citizens, the EPA, industry, and the environment.

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I. Oil Pollution and Cooperative Federalism in the Clean Water Act: How the Statutory Preclusion Provision Expanded Beyond Its Intended Scope

Even though Congress intended the statutory preclusion provision to support cooperative federalism, nearly thirty years of confused application of the provision by federal courts has resulted in the provision actually undermining the shared responsibility of the federal government and states to manage water pollution.³⁰ In this Part, section A first explains the basic principles of cooperative federalism in the CWA and the Act's statutory preclusion provision. Section B turns to the discussion of the modest roots of the statutory preclusion provision in cooperative federalism through a discussion of legislative history. Section B then traces the parallel development of EPA enforcement of the water and oil provisions of the statute to show how they have diverged over time since the passage of the statutory preclusion provision. This demonstrates the current and substantial potential for statutory preclusion to undermine...