Assistant Attorney General John C. Cruden Speaks at the American Bar Association Section of Environment, Energy and Resources Spring Conference on “Highlights from the Environment Division”
Austin, TX United States ~ Thursday, March 31, 2016
Remarks as prepared for delivery
It is great to be back in the capital of the Lone Star State. And I am very excited to have the opportunity to help start this conference and discuss the important work of Department of Justice’s Environment and Natural Resources Division aka ENRD. The title of my talk today is “2015 Highlights from the Environment Division.”
First, I would like to situate you–what is ENRD? In existence for over one hundred years, the division is built upon a history of service, integrity and adherence to the rule of law. Our responsibilities are broad. They include enforcing the nation’s civil and criminal pollution-control laws; defending environmental challenges to federal agency programs; representing the United States in matters concerning the stewardship of the nation’s natural resources and public lands; acquiring real property; bringing and defending cases under the wildlife protection statutes; and litigating cases concerning the resources and rights of Indian tribes.
In 2015, ENRD litigated 864 cases and handled a total of 6,729 cases, matters and appeals; recovered over $2.7 billion in civil and criminal fines, penalties, and costs; obtained an estimated value of federal injunctive relief—including clean-up and pollution prevention actions funded by private parties—exceeding $6.4 billion; saved the taxpayers’ dollars, avoiding claims of over $3 billion. Overall, the division achieved a favorable outcome in 96 percent of its cases. The result of this work I am proud to say is cleaner air, land and water in the United States.
I will cover six topics today: First, the historic Deepwater Horizon Settlement. Second, defending the Clean Power Plan. Third, our complaint against Volkswagen in the defeat devices matter. Fourth, ENRD’s initiative to increase cooperation with states. Fifth, our mandate to pursue worker safety cases. Sixth, our focus on illegal wildlife and timber trafficking.
I. Negotiating the Deepwater Horizon Settlement
A key accomplishment of the past year was the negotiation of a settlement in the Deepwater Horizon litigation that resolves civil claims of the United States and five gulf states against BP, arising from the 2010 blowout of the Macondo well and the massive oil spill in the Gulf of Mexico. After considering more than 28,000 comments, the U.S. filed its motion for entry of the consent decree last Tuesday, March 22.
Under the consent decree, BP will pay the U.S. and the gulf states (including Texas) more than $20 billion, including: First, a $5.5 billion (federal) civil penalty; second, more than $8.1 billion in natural resource damages (including over $238 million for restoration in Texas); third, $600 million in further reimbursement of clean-up costs and some royalty payments; and finally, up to $6 billion in economic damage payments for the Gulf States or their local units of government.
This resolution is historic in size and scope. It is the largest settlement with a single entity in department history. It includes the largest civil penalty ever awarded under the Clean Water Act, the largest ever natural resources damages settlement and massive economic damages payments to our state partners. It is a strong and fitting response to the worst environmental disaster in American history. Natural resource restoration projects in Texas include restoring three rookery islands in Galveston Bay and one in East Matagorda Bay to increase nesting pairs of waterbirds such as pelicans, gulls and herons.
II. Defending the Clean Power Plan
Second, the Clean Power Plan. Pursuant to the President’s Climate Action Plan, the Environmental Protection Agency (EPA) has developed regulations under the Clean Air Act to set carbon dioxide emission standards for new and existing coal and natural gas-fired power plants. When fully implemented in 2030, the rules will reduce carbon dioxide emissions from coal and natural gas-fired power plants by over 30 percent from 2005 levels. The Clean Power Plan consists of two separate but related rules: one, for existing power plants and another for new and modified power plants.
Opponents brought multiple rounds of litigation before the rules were finalized. They challenged EPA’s proposed rule to limit carbon dioxide emissions from fossil fuel-fired power plants and sought an extraordinary writ prohibiting conclusion of the rulemaking. In orders issued last year, the D.C. Circuit dismissed the petitions, holding that the court lacked jurisdiction because EPA had not taken final agency action.
Opponents tried again after the rules were signed by EPA’s Administrator, but before they were published. West Virginia and 14 other states, and a group of coal industry interests, filed “Emergency Petitions for Extraordinary Writ” asking the court to stay all of the deadlines in the Clean Power Plan. On Sept. 9, 2015, the D.C. Circuit denied the petitions. In a short order, the court held that “petitioners have not satisfied the stringent standards that apply to petitions for extraordinary writs that seek to stay agency action.”
Since the rules were published in October, 39 petitions for review of the existing source rule were filed on behalf of over 100 state and industry parties and 16 petitions for review of the new and modified source rule were filed. On February 9, after D.C. Circuit denied a requested stay, the Supreme Court stayed the Clean Power Plan while the litigation is pending. However, ENRD is confident that the rule will be upheld when the courts consider it on the merits. ENRD will continue its vigorous defense of the Clean Power Plan in 2016 as the litigation continues in the D.C. Circuit.
III. Litigating the Volkswagen “Defeat Devices” Matter
In another Clean Air Act case, ENRD filed a civil complaint in federal court on January 4, against Volkswagen. The complaint alleges that nearly 600,000 diesel engine vehicles had illegal “defeat devices” installed. These devices impair their emission control systems and cause emissions to exceed EPA’s standards. This results in harmful air pollution.
The Clean Air Act requires manufacturers to certify to EPA that their products will meet applicable federal emission standards. Vehicles equipped with illegal defeat devices cannot be certified. The complaint states that Volkswagen equipped certain vehicles with software that detects when the car is being tested and turns on full emissions controls only during that testing process. During normal driving situations, the effectiveness of the emissions control devices is greatly reduced. This results in cars that meet emissions standards in the laboratory and at the test site. But during normal on-road driving they emit oxides of nitrogen at levels up to 40 times the EPA compliance level. NOx pollution can result in serious consequences for human health. It contributes to harmful ground-level ozone and fine particulate matter. Recent studies indicate that the direct health effects of NOx are worse than previously understood, including respiratory problems, damage to lung tissue and premature death.
IV. Partnering with States
I would also like to highlight our initiative to increase our partnership with states. During 2015, ENRD partnered with many states to enforce our nation’s pollution laws and prosecute traffickers in protected wildlife and illegally harvested timber, as well as to defend challenges to critical infrastructure projects. For example, 14 states received a combined total of nearly $8.4 million in civil penalties from joint environmental enforcement cases with the federal government. I also named a senior ENRD lawyer as Counselor for State and Local Matters, a position designed to facilitate joint efforts by the division and its environmental partners in state and local governments. The partnerships we have forged with state and local governments in a variety of contexts are critical to achieving ENRD’s mission on behalf of the American people.
Specifically, in U.S. and State of Arkansas v. ExxonMobile Pipeline Co. et al. (E.D. Ark.), the division and the state of Arkansas settled claims against ExxonMobil Pipeline Company and Mobil Pipe Line Company over an oil spill from a pipeline in Mayflower, Arkansas. The pipeline ruptured, spilling oil directly into a residential neighborhood, then into nearby waterways, including a creek, wetlands and Lake Conway, a tributary of the Arkansas River. Residents of 22 homes were forced to evacuate due to the hazardous conditions in the neighborhood. Most people never moved back. The United States brought claims for civil penalties and injunctive relief under the Clean Water Act; the state of Arkansas joined our claims and brought additional claims under state law. Under the agreement, ExxonMobil paid the United States a civil penalty of $3.19 million and will take measures to help prevent and minimize future spills. The company also paid the state a $1 million penalty and $280,000 in litigation costs and must perform one or more state supplemental environmental projects valued at $600,000.
V. Assuming Responsibility for Worker Safety Matters
On average in the United States, approximately 13 workers die on the job and 150 succumb to occupational diseases like asbestosis and chemical poisoning per day. To prevent and deter crimes that put the lives and the health of workers at risk, several months ago the Deputy Attorney General gave responsibility for criminal worker safety prosecutions to ENRD. Under the new plan, ENRD and the U.S. Attorneys’ Offices will work with several Department of Labor offices, including the Occupational Safety and Health Administration (OSHA) to investigate and prosecute worker endangerment violations.
This makes good common sense. Just as every major corporation has a vice president or significant corporate official charged with responsibilities for environment, health and safety, the Department of Justice is now organized for the first time in a similar fashion. We have long thought that those who mistreat their employees may also have environmental problems worth examining. In addition to considering environmental statues when addressing illegal worker treatment, we can also utilize other normal prosecutorial tools.
For example, United States v. Black Elk Energy Offshore Operation LLC is a case scheduled to go to a jury trial in January 2017. A 12-count superseding indictment was returned by a federal grand jury in November 2015 charging several defendants with involuntary manslaughter and violations of the Outer Continental Shelf Lands and Clean Water Acts. These charges stem from a November 2012 series of explosions on an oil production platform that resulted in the deaths of three workers, serious burns to several other workers and the discharge to the Gulf of Mexico of approximately 500 barrels of burning oil. Three workers were welding a pipe connected to a tank containing oil. The tank exploded, causing two other tanks to explode, with one tank flying over the platform and another destroying the platform crane.
Protecting public health and the environment is a cornerstone of ENRD’s law enforcement responsibilities. That explicitly includes protecting the American worker through vigorous criminal and civil enforcement of the worker safety, environmental and criminal laws.
VI. Prosecuting Illegal Wildlife and Timber Trafficking
Next, we have been fully engaged in prosecuting illegal wildlife and timber trafficking. In Texas, the Nine-Banded Armadillo and Texas Longhorn are iconic creatures. They are the official state small and large mammals. While armadillos and longhorns are not imperiled, other iconic species around the globe like rhinos and elephants are facing extinction, partly as the result of illegal international wildlife trafficking. One area of increased attention for us has been wide-ranging efforts to curtail international wildlife trafficking. With estimated annual revenues of $10 billion or more, wildlife trafficking is one of the most profitable types of transnational organized crime, behind only drugs, counterfeiting and human trafficking. Organized criminal syndicates and militant groups have become increasingly involved.
In March of 2015, I had the privilege of leading the U.S. delegation to the international Conference on the Illegal Wildlife Trade in Botswana. Representatives from more than 30 nations gathered to follow up on commitments to reduce illegal wildlife trade. Also, together with U.S. Attorneys’ Offices and federal agencies such as the Fish and Wildlife Service and National Oceanic and Atmospheric Administration, ENRD’s Environmental Crimes Section prosecutes international wildlife trafficking crimes. The Crimes Section primarily operates under the Endangered Species and Lacey Acts. It also prosecutes related crimes such as smuggling, money laundering and conspiracy.
In one case, a Canadian antiques dealer and co-conspirators smuggled into Canada more than $500,000 worth of rhino horns and sculptures made from elephant ivory from various U.S. auction houses. They did so by driving them across the border or having packages mailed directly to Canada with false paperwork and without the required declaration or permits. In March 2015, defendant Tony Guan was sentenced to 30 months’ imprisonment.
Additionally, illegal timber trafficking is a major issue for the division. Under the Lacey Act, it is illegal to import timber that has been logged illegally under the laws of its country of origin. On February 1, hardwood flooring retailer Lumber Liquidators was sentenced and will pay more than $13 million in criminal fines, community service and forfeited assets related to its illegal importation of hardwood flooring. Much of the flooring was manufactured in China from timber that had been illegally logged in far eastern Russia, in the habitat of the last remaining Siberian tigers and Amur leopards in the world. We hope that Lumber Liquidators will help deter companies from purchasing illegally-logged timber in the future.
I wish you all a wonderful conference here in Austin. I know you will learn a great deal during this fantastic event.