Texans United for a Safe Economy Education Fund v. Crown Central Petroleum Corp.

UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
____________________

No. 98-21043

____________________

TEXANS UNITED FOR A SAFE ECONOMY EDUCATION FUND; NATURAL
RESOURCES DEFENSE COUNCIL INC; THE SIERRA CLUB; RANFORD DENOON;
RON VAN OSDOL

Plaintiffs - Appellants-Cross Appellees,

V.

CROWN CENTRAL PETROLEUM CORPORATION

Defendant - Appellee-Cross Appellant.

____________________________________________

Appeals from the United States District Court
for the Southern District of Texas
___________________________________________
April 6, 2000

Before POLITZ, GARWOOD, and DAVIS Circuit Judges.

W. EUGENE DAVIS, Circuit Judge:

Two individuals and three environmental organizations

(collectively “Texans United”) brought this citizens suit under the

Clean Air Act, 42 U.S.C. §§ 7401, et seq., seeking declaratory and

injunctive relief, civil penalties and costs against Crown Central

Petroleum Corporation (“Crown”) for violations of emission

standards for hydrogen sulfide and sulfur dioxide that occurred at

its Pasadena, Texas refinery. The district court granted Crown’s

motion for summary judgment on grounds that an administrative

proceeding instituted by a Texas agency precluded their suit. For

the reasons that follow, we reverse and remand.

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 I. FACTUAL AND PROCEDURAL BACKGROUND

Texans United allege that Crown violated the Clean Air Act

(“CAA”) by exceeding the federally-prescribed limits for releases

of sulfur dioxide into the atmosphere and for burning fuel gas

containing hydrogen sulfide.1 Specifically, Texans United’s

complaint alleges that Crown violated the federal emissions

standards for sulfur dioxide and hydrogen sulfide, 40 C.F.R. §§

60.104(a)(1) and (a)(2), as well as a number of operating and

record keeping requirements. Texans United also complain that

Crown has failed to comply with an administrative order and certain

permits issued by the Texas Natural Resource Conservation

Commission ("TNRCC").2

Crown operates a petroleum refinery in Pasadena, Texas. Those

parts of Crown's refinery that emit sulfur dioxide must comply with

Subpart J of the New Source Performance Standard (“NSPS”), which

regulates sulfur dioxide and other emissions from refineries. 40

C.F.R. Subpart J. Among other things, Subpart J limits the

concentration of sulfur dioxide that a refinery may emit and the

concentration of hydrogen sulfide that can be present in gas burned

at a refinery. 40 C.F.R. §§ 60.104(a)(1) and 60.104(a)(2)(i).

For many years, Crown's refinery regularly exceeded the

emissions limits. In 1995, Crown, without admitting any

violations, signed an Agreed Order (“1995 Agreed Order”) that

1
Burning hydrogen sulfide yields sulfur dioxide.
2
TNRCC is the State agency primarily responsible for
enforcing the CAA in Texas.

2
settled and concluded a TNRCC administrative enforcement action.

That order required Crown to pay a penalty of $110,000 for

violations from March 31, 1991 through August 8, 1993, and to

implement measures to comply with the law.3

According to Texans United, Crown's own certified monitoring

reports indicate that Crown has exceeded the federal limits on

sulfur dioxide and hydrogen sulfide for 15,0004 hours from May 1992

through March 31, 1998. The refinery has experienced major process

upsets5 nearly every month, which resulted in the release of

hundreds of tons of excess sulfur dioxide into the air at its

Pasadena plant. Texans United reside and travel near Crown's

refinery, breathe the air that contains Crown's emissions, and

complain about the odors and other effects of these emissions.6

In May 1997, Texans United notified Crown and TNRCC of their

intent to sue Crown for continuing violations. On July 10, 1997,

TNRCC wrote a letter to Crown stating its intent to commence an

enforcement action if Crown did not comply. Texans United filed

3
Crown installed monitoring and process control equipment at
a cost exceeding $17,000,000.
4
15,000 hours = 625 days.
5
According to Texans United, Crown’s Pasadena plant’s process
upsets and shutdowns are caused by systemic corrosion in the Sulfur
Recovery Unit. Texans United argue that Crown should emulate other
refineries and install a backup Sulfur Recovery Unit.
6
Sulfur dioxide and hydrogen sulfide are both extremely
hazardous gases with pungent odors often described as similar to
rotten eggs and burnt matches. American Lung Assn. v. EPA., 134
F.3d 388, 389 (D.C. Cir. 1998). The EPA has listed both sulfur
dioxide and hydrogen sulfide as extremely hazardous substances. 40
C.F.R. Part 355, App. A.

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their complaint in the district court on July 21, 1997, alleging

violations from May 16, 1992 through December 14, 1996. In

September 1997, Texans United notified Crown of their intent to

allege additional violations for the period after December 14,

1996.

TNRCC commenced an administrative action on November 25, 1997,

because of Crown’s violations of the 1995 Agreed Order and other

regulatory requirements. In December 1997, the citizens filed an

amended complaint in the district court alleging additional

violations from December 14, 1996 through September 30, 1997. On

August 25, 1988, TNRCC and Crown reached a negotiated

administrative consent order (“1998 Agreed Order”) that required

Crown, inter alia, to pay penalties of $1,055,425 and retain two

independent expert consultants to review the operations of the

entire plant, evaluate the causes of historic violations, and to

recommend to the TNRCC additional remedial actions that Crown

should take.

Crown filed two different motions for summary judgment based

upon: (1) statutory preclusion; and (2) the standing requirements

of Article III of the U.S. Constitution. Texans United filed a

cross motion for summary judgment. The district court granted

Crown's statutory preclusion motion on the ground that TNRCC's

administrative enforcement actions against Crown precluded Texans

United's suit. The court denied as moot Crown’s motion for summary

judgment predicated on Texans United's lack of standing. The court

also denied Texans United’s cross motion for summary judgment.

4
 Texans United appealed and Crown filed a "conditional" notice

of appeal challenging the court’s denial as moot of its motion for

summary judgment on standing.

II. STANDING

The district court dismissed Texans United’s suit on the

grounds of statutory preclusion without resolving the issue of

Texans United’s standing. As a threshold matter of jurisdiction,

however, we must determine whether Texans United have standing.

Steel Co. v. Citizens for a Better Environment, 523 U.S. 83, 101-

02, 118 S.Ct. 1003, 1016, 140 L. Ed.2d 210 (1998) (holding that a

court must not “resolve contested questions of law when its

jurisdiction is in doubt.”).

An association has standing to bring a suit on behalf of its

members when: 1) its members would otherwise have standing to sue

in their own right; 2) the interests it seeks to protect are

germane to the organization's purpose; and 3) neither the claim

asserted nor the relief requested requires the participation of

individual members. Hunt v. Washington State Apple Advertising

Comm’n, 432 U.S. 333, 343, 97 S.Ct. 2434, 2441, 53 L.Ed.2d 383

(1977); Friends of the Earth, Inc. v. Chevron Chemical Co., 129

F.3d 826, 827-28 (5th Cir. 1997). The individual plaintiffs can

satisfy their constitutional requirement of standing by

demonstrating that: 1) they have suffered an actual or threatened

injury; 2) the injury is "fairly traceable" to the defendant's

action; and 3) the injury will likely be redressed if the plaintiff

prevails in the lawsuit. Lujan v. Defenders of Wildlife, 504 U.S.

5
555, 560 (1992); Friends of the Earth, Inc., v. Crown Central

Petroleum, 95 F.3d 358, 360 (5th Cir. 1996). We address each of

these requirements below.

A. “Injury in Fact”

Texans United submitted a number of affidavits, from the

individual plaintiffs and its organizational members who reside in

the Pasadena area (collectively “Affiants”). These Affiants state

that they have suffered repeated exposure to sulfurous odors while

in the home, in the yard, or driving through town. They generally

describe these sulfurous odors as overpowering and capable of

inducing physical discomfort. Based on these affidavits, Texans

United argue that their enjoyment of their surroundings has been

severely diminished and that, therefore, they have demonstrated a

cognizable injury.

The Ninth Circuit has held that breathing and smelling

polluted air is sufficient to demonstrate injury-in-fact and thus

confer standing under the CAA. See NRDC v. EPA, 507 F.2d 905, 910

(9th Cir. 1974) (holding that there is no doubt that a plaintiff

will suffer injury if compelled to breathe air less pure than that

mandated by the Clean Air Act). Crown, although it does not

concede that Texans United have suffered injury-in-fact, has cited

no contrary authority nor has it offered persuasive analysis that

challenges Texans United's assertions of injury-in-fact. We

therefore conclude that Texans United have satisfied the “injury in

fact” requirement for standing.

B. Traceability

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 Texans United argue that eyewitness and expert evidence

demonstrates that their injuries are traceable to Crown’s sulfur

dioxide pollution in the community. Texans United’s eyewitness

accounts of traceability include testimony by the Affiants that

they are able to trace the sulfur pollution they smell to Crown

based on their direct observations of smoke and on their

familiarity with Crown and other industries in the area. In

addition, Texans United assert that these observations are

confirmed by Crown's own personnel who conducted surveys of sulfur

odors during periods of admitted noncompliance when they detected

sulfur odors in the plaintiffs' community on at least four

occasions. Finally, Texans United presented expert evidence

relating to two process upsets at Crown.7 According to the results

of the expert’s model, both upsets released several tons of sulfur

dioxide into the ambient air and produced pollution concentrations

that would have been detectable by some of the plaintiffs at their

residences.

Crown argues that the "fairly traceable" standard cannot be

satisfied in this case unless Texans United's injuries are linked

to the exact dates where violations of regulatory standards are

known to have occurred.

We disagree with Crown’s proposed test for traceability

because it conflates the issue of standing with the issue of actual

liability. No relevant case law supports Crown’s argument that

7
Texans United’s expert studied two process upsets at Crown,
of the type that Texans United claim occur nearly every month at
the refinery.

7
Texans United must connect the exact time of their injuries with

the exact time of an alleged violation by Crown. Texans United

presented circumstantial evidence, that includes: (1) Affiants’

testimony that they observed smoke from Crown’s plant in their

neighborhood at the same time that they smelled sulfurous odors,

(2) expert evidence that demonstrates that on certain days when

Crown experienced process upsets, excess sulfur dioxide emissions

were detectable in the neighborhood where some of the plaintiffs

reside; and (3) evidence that demonstrated the frequency with which

Crown exceeded the federal limits on sulfur dioxide emissions at

its Pasadena plant. We agree with Texans United that this evidence

sufficiently demonstrates that the injuries Texans United complain

of are “fairly traceable” to Crown’s emissions.

Moreover, we disagree with Crown's assertion that Texans

United must, at this stage, establish that Crown violated the CAA

on the occasions that Affiants suffered harm from the Crown

emissions. Although, Texans United must ultimately establish

causation if they are to prevail on the merits, they need not do so

to establish standing. Therefore, we conclude that Texans United

have demonstrated that their injuries are "fairly traceable" to

Crown's pollution based on plaintiffs’ evidence outlined above.

C. Redressability

Finally, Texans United must demonstrate that the injunction

and penalties they have requested are capable of redressing their

injuries. Crown argues that Texans United's injuries will not be

redressed by an injunction requiring Crown to cease its violations

8
because: (1) an injunction against Crown will not reduce pollution

from other sources not before this Court; and (2) the TNRCC has

already obtained all necessary relief against Crown through its

1998 Agreed Order. Crown argues further that absent a credible

claim for injunctive relief, Texans United’s claims for civil

penalties cannot alone remedy the alleged injuries.

Crown's first argument is not supported by the law in this

Circuit. In Sierra Club v. Cedar Point Oil, 73 F.3d 546, 550 (5th

Cir. 1996), an environmental group filed a citizen suit under the

Clean Water Act (“CWA”) against Cedar Point Oil (“Cedar point”)

seeking to prevent discharges of produced water into Galveston Bay.

Cedar Point challenged whether plaintiff’s injuries were traceable

to Cedar Point’s discharge because of the number of entities

discharging chemicals into the bay. Id. at 558. This Court held

that “it is sufficient for [plaintiff] to show that Cedar Point’s

discharge of produced water contributes to the pollution that

impairs [plaintiff’s] use of the bay.” Id. Moreover, this Court

affirmed the district court’s entry of a modified injunction

against Cedar Point. Id. at 579. Thus, under Cedar Point Oil, an

injunction may be appropriate even if it will not prevent all

discharges of the pollutants affecting the plaintiff.

Texans United vigorously dispute Crown’s second argument that

TNRCC has taken all the necessary action to bring Crown’s refinery

into compliance. Both the EPA and Harris County firmly opposed

TNRCC's settlement with Crown in the 1998 Agreed Order. Moreover,

Texans United produced a detailed expert report demonstrating that

9
TNRCC's remedies were inadequate, as well as affidavits from a

former Crown operator and Harris County engineer demonstrating that

Crown should install and operate a backup sulfur recovery unit to

achieve and maintain compliance. Finally, throughout these

proceedings, Crown has never demonstrated that it has achieved

compliance with the federal emission limits for sulfur dioxide.

Assuming arguendo that Texans United can prove at trial that they

have suffered injuries, an injunction requiring Crown to cease its

violations will--at least in part--redress these injuries.

Texans United also argue that civil penalties will redress

their injuries by deterring Crown from violating federal air

pollution standards. In a recent CWA case, the Supreme Court held

that citizen suitors have standing to seek civil “penalties for

violations that are ongoing at the time of the complaint and that

could continue into the future undeterred.” Friends of the Earth

v. Laidlaw Envtl Serv’s, Inc., --- U.S. ---, 120 S.Ct. 693, 707-08,

--- L.Ed.2d --- (2000). Texans United’s lawsuit is based on the

premise that the 1998 Agreed Order does not go far enough to ensure

that Crown will not violate federal emissions standards in the

future. The summary judgment evidence supports this premise.

For the above reasons we conclude that Texans United have

produced sufficient evidence to demonstrate standing to seek

injunctive relief and civil penalties under the CAA. See id.

III. STATUTORY PRECLUSION

This Court reviews de novo a district court’s grant of summary

judgment on the issue of statutory preclusion. See Urbano v.

10
Continental Airlines, Inc., 138 F.3d 204, 205 (5th Cir. 1998).

The district court concluded that 42 U.S.C. § 7604 precluded

this action. That statute provides in part that:

No action may be commenced–
(1) under subsection (a)(1) of this Section–
...
(B) if the Administrator or State has
commenced and is diligently prosecuting a
civil action in a court of the United States
or a State to require compliance with the
standard, limitation, or order, but in any
such action in a court of the United States
any person may intervene as a matter of right.

42 U.S.C. § 7604(b)(1)(B) (emphasis added).

In holding that TNRCC’s administrative action precluded the

instant suit, the district court rejected Texans United's argument

that the plain meaning of the terms "civil action" and "court" do

not include administrative or non-judicial proceedings. Instead,

the district court adopted the Third Circuit's interpretation of §

7604(b) and held that the term "court" is not limited to judicial

tribunals; and that an administrative agency can be considered a

"court" under § 7604(b) if it has the power to accord relief that

is the "substantial equivalent" to that available in federal courts

under the CAA. See Baughman v. Bradford Coal Co., 592 F.2d 215,

217-19 (3d Cir.), cert. denied, 441 U.S. 961 (1979).

The district court found substantial equivalence in the remedy

the TNRCC could accord litigators to remedies a court could award

under the CAA. For example, TNRCC could assess a penalty, could

issue compliance orders, and could allow citizen participation

through a written comment period and a public hearing at which the

citizens could speak.

11
 Texans United argue that the district court should have

followed the Second and Ninth Circuits which hold that the plain

language of § 505(b) of the CWA gives preclusive effect only to a

“civil action,” brought in a “court.” The relevant language in §

505(b) of the CWA is identical to the language in § 7604(b) of the

CAA.8

In Friends of the Earth v. Consolidated Rail Corp., 768 F.2d

57, 59 (2d Cir. 1985) (“Conrail”), plaintiffs brought a suit under

the CWA alleging that Consolidated Rail Co. violated its discharge

permits. The Second Circuit considered whether enforcement actions

by the New York State Department of Environmental Conservation

against Consolidated Rail Co. precluded citizen suits under §

505(b) of the CWA. Id. at 58. The court disagreed with Baughman

and held that, based on the plain language of CWA § 505(b), it

would be inappropriate to expand “action in a court of the United

States, or a State” to include administrative enforcement actions.

Id. at 62.

The Ninth Circuit in adopting the holding in Conrail, noted

that section 505(b) “does specifically refer to ‘courts,’ and ...

8
Section 505 of the CWA is a citizen suit provision
specifically modeled on CAA section 304. Under CWA section 505(b),
“[n]o action may be commenced ... if the Administrator or State has
commenced and is diligently prosecuting a civil or criminal action
in a court of the United States, or a State ....” 33 U.S.C. §
1365(b)(1)(B). An amendment added a separate provision explicitly
granting preclusive effect to certain administrative penalty
actions. See Pub. L. 100-4 § 314(a), 101 Stat. 7 (Feb. 4, 1987)
(codified at 3 U.S.C. § 1319(g)(6)(A)). Since the Second and Ninth
Circuit decisions discussed above predate the 1987 amendment, the
analysis therein is directly applicable to the interpretation of
CAA § 304.

12
makes no direct or veiled reference to any type of administrative

proceeding.” Sierra Club v. Chevron U.S.A., Inc., 834 F.2d 1517,

1525 (9th Cir. 1987). We agree with the Second and Ninth

Circuits that the plain meaning of “court of the United States or

a State” excludes administrative actions. We therefore reverse the

district court’s judgment dismissing this suit on the ground that

Texans United are precluded, under § 7604, from pursuing this cause

of action against Crown.

IV. CONCLUSION

For the above reasons, we conclude that Texans United have

standing to pursue the suit under the CAA. We REVERSE the district

court’s grant of summary judgment in favor of Crown on the grounds

of statutory preclusion and REMAND to the district court for

further proceedings.

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