Vol. 50-2 State Casenote
By Stacie M. Dowell and Thomas Kagerer
State of Texas v. ITC
The State of Texas, acting on behalf of the Texas Commission on Environmental Quality (TCEQ), recently brought suit against International Terminals Company, LLC (ITC) for violations of the Texas Clean Air Act, the Texas Water Code, the Texas Solid Waste Disposal Act, and TCEQ rules implementing those statutes. These claims arise from chemical fires that occurred at ITC’s plant in Deer Park, Texas in March 2019. The case is currently pending trial in the 261st District Court of Texas. The decision to sue ITC immediately after the chemical fires occurred is notable because the state has not pursued environmental claims as aggressively in the past.
ITC owns and operates an independent storage facility for various petrochemical and chemical companies. According to ITC, one of their storage tanks caught fire on March 17, 2019 after a pipe began leaking naphtha, a flammable chemical distilled from petroleum. This fire spread to several other tanks, and by March 19, 2019, ten of ITC’s tanks storing “naphtha and xylene (fuels used in gasoline and plastics), toluene (a volatile liquid used to make nail polish remover and paint thinner), pyrolysis gas, and blended oils” were ablaze.
These fires resulted in “elevated levels of VOCs [Volatile Organic Compounds]” and the “release of several air contaminants including, but not limited to, PM2.5, PM10, benzene, NOx, toluene, and xylene.” The air contaminants released by fires resulted in several school closures and two “shelter-in-place” orders, which required residents of Deer County and the surrounding areas to stay inside and avoid hazardous air quality in the area.
After the fires were contained, a “secondary containment area at the Site—that collected a mixture of foam, firefighting water, and petrochemicals, including, but not limited to, toluene, benzene, xylene, and naphthalene—collapsed and resulted in a release of wastewater from the Site.” The wastewater was released into a drainage ditch that feeds into Tucker Bayou and the Houston Ship Channel.
The State of Texas alleges that the release of these air contaminants, water pollutants, and solid wastes violates TCEQ permits and rules. The State of Texas is seeking civil penalties for: (1) “Unauthorized Air Pollution at the Site,” (2) “Unauthorized Outdoor Burning at the Site,” (3) “Nuisance,” (4) “Unauthorized Visible Emissions,” (5) “Unauthorized Discharge of Wastewater,” and (6) “Unauthorized Discharge of Industrial Solid Waste and Hazardous Waste.”
First, regarding the cause of action for unauthorized air pollution at the Site, the State of Texas alleges that “ITC caused, suffered, allowed, or permitted the emission of air contaminants from the Site in violation of Texas Health and Safety Code Section 382.085(a) and (b), and Texas Water Code section 7.101 each day from March 17, 2019, until at least March 22, 2019.” These provisions restrict the emission of air contaminants to what the TCEQ authorizes or permits. The chemical fire caused levels of air contaminant emissions that exceeded ITC’s authorized levels.
Second, regarding the cause of action for unauthorized outdoor burning at the Site, the State of Texas alleges that “ITC caused, suffered, allowed, or permitted outdoor burning at the Site in violation of Title 30 Texas Administrative Code Section 111.201 and Texas Water Code section 7.101 each day from March 17, 2019 until March 20, 2019, and on March 22, 2019.” Similar to the first claim, ITC allegedly exceeded its permissible limits for outdoor burning during the chemical fires.
Third, the State of Texas has brought a nuisance claim against ITC. Texas alleges that the emissions from the fires created a nuisance when they caused “fatigue, dizziness, and headaches from short-term exposure” in people near the plant both when the two “shelter-in-place” orders were issued on March 17 and March 21, 2019 and when various public and private schools were forced to close in the area. The State of Texas claims that this nuisance was created “in violation of Title 30 Texas Administrative Code Section 101.4 and Texas Water Code Section 7.101.”
Fourth, the State of Texas alleges that there were “Unauthorized Visible Emissions” as a result of the fires. The State of Texas claims that a “large, dark emissions plume” was visible beyond the Site without a TCEQ permit. As a result, Texas alleges that ITC “caused, suffered, allowed, or permitted unauthorized visible emissions at the Site in violation of Title 30 Texas Administrative Code Section 111.111 and Texas Water Code Section 7.101.”
Fifth, the State of Texas alleges that ITC violated an important section of the Texas Water Code.
[U]nder section 26.121 (a) of the Texas Water Code, except as authorized by TCEQ, no person may: (1) discharge municipal, recreational, agricultural, or industrial waste into or adjacent to any water in the State: (2) discharge other waste into or adjacent to any water in the state which may cause pollution of the water; or (3) “commit any other act or engage in any other activity which in itself or in conjunction with any other discharge or activity causes, continues to cause, or will cause pollution of any of the water in the state.”
The State of Texas alleges that ITC violated this provision when it discharged wastewater into a drainage ditch that feeds into Tucker Bayou and the Houston Ship Channel without a TCEQ permit. Therefore, the State of Texas alleges that “ITC has caused, suffered, allowed, or permitted the discharge of wastewater from the Site in the waters of the state in violation of Texas Water Code Sections 26.121 and 7.101.”
Sixth, and related to the discharge of wastewater, the State of Texas alleges that ITC “caused, suffered, allowed, or permitted the continual disposal of hazardous waste from the Site in a manner that caused: (1) the discharge or imminent threat of discharge of industrial solid waste into or adjacent to the waters in the state; (2) the creation and maintenance of a nuisance; or (3) the endangerment of the public health and welfare, in violation of Title 30 Texas Administrative Code section 335.4 and Texas Water Code Section 7.101.” The hazardous waste entered into the “Waters of Texas” when the on-site storage pond collapsed and discharged into Tucker Bayou.
Finally, all of these causes of action seek damages under the same provision, T. Section 7.102 provides that “the State is entitled to civil penalties against ITC within the statutory range of not less than $50 nor greater than $25,000 for each day of each violation alleged.” Additionally, the State of Texas seeks injunctive relief against ITC for continuing violations of the Texas Clean Air Act, the Texas Water Code, the Texas Solid Waste Disposal Act, and regulations promulgated by TCEQ. Furthermore, the State seeks “reasonable attorney’s fees, investigative costs, and court costs incurred in relation to this proceeding.”
ITC has entered a “general denial to every allegation” and “demands that the plaintiff prove each allegation as applicable by law.” Additionally, ITC has raised defenses “under the Eighth Amendment to the United States Constitution and Section 13. Article I of the Texas Constitution” as well as “the Fourteenth Amendment to the United States Constitution and by Section 19. Article I of the Texas Constitution,” stating that multiple claims for the same underlying event would impose excessive fines and violate due process protections. The case is ongoing and awaiting trial in the 261st District Court of Texas.
Aside from being a disaster for both the State of Texas and ITC, this lawsuit is illustrative of a potential shift in enforcement against environmental violations. Emission events like this typically result in favorable settlements or non-enforcement of environmental statutes. For example, a report from Environment Texas concluded that from 2011 to 2017, less than three percent of emission events result in penalties. Therefore, the decision to bring a suit against ITC so soon after the incident may be a signal that Texas is changing its enforcement procedures for environmental regulations.
The State’s petition was filed on March 26, 2019, just days after the fires at the ITC plant had been extinguished. This is markedly faster than several similar incidents in the past. For example, after a chemical explosion at a fertilizer plant in West, Texas in 2013, the State of Texas and the TCEQ never sued at all. Instead, individual cities, counties, and victims of the incident brought the bulk of the lawsuits. The State has been criticized for other instances of lax enforcement, including: waiting over a year to sue after a 2005 explosion at a British Petroleum oil refinery, requesting that counties refrain from suing Volkswagen after it cheated on the EPA emissions tests, and waiting roughly three years to sue BP after the notorious 2010 Deepwater Horizon incident. The promptness of the ITC suit is a sharp contrast from previous enforcement and may be a harbinger of stricter enforcement. However, some critics have described the enforcement against ITC as selective-enforcement against a lesser-known company rather than as a shift in policy.
These concerns are informed by Ken Paxton’s record on environmental issues. Paxton has brought several suits on behalf of Texas against the EPA, such as opposing the Obama-era Clean Power Plan, challenging several ozone and sulfur oxide nonattainment determinations, and suing the EPA over regulations that aimed to cut methane emissions. However, these are challenges against federal action rather than enforcement of state environmental statutes, and Mr. Paxton’s opinion on enforcement of Texas Environmental Law could still be in favor of greater enforcement.
Regardless, it is important to note the promptness of the lawsuit against ITC and monitor how this could reflect a change in environmental enforcement across the state. Notably, several other lawsuits have been brought by the State of Texas against polluters for similar incidents, indicating that the ITC case may not be an outlier, and undercutting the criticism that the ITC suit is merely selective enforcement against a lesser-known company. Looking forward, this lawsuit and the legal claims advanced could provide a blueprint for how Texas and the TCEQ will operate in future environmental suits against polluters involved in environmental disasters.
Stacie M. Dowell is associate counsel for the Trinity River Authority of Texas and works on a wide variety of legal issues spanning contract, employment, business, property, and water law.
Thomas Kagerer is a second-year student at The University of Texas School of Law and a staff member of the Texas Environmental Law Journal.
 State of Texas’s First Amended Original Petition and Application for Injunctive Relief, State of Texas v. Intercontinental Terminals Co., LLC, (No. D-1-GN-19-001593), 2019 WL 2869894 (261st Dist. Ct., Travis Cty, Tex. Mar. 26, 2019) [hereinafter ITC Plaintiff’s Petition].
 ITC Fire Updates, Deer Park Emergency Services (last visited Feb. 11, 2020), https:// www.deerparktx.gov/1778/ITC-Fire.
 ITC Plaintiff’s Petition, supra note 1.
 Kiah Collier, Why has Texas suddenly decided to immediately sue industrial polluters?, Tex. Tribune (April 5, 2019), https://www.texastribune.org/2019/04/05/texas-attorney-general-ken-paxton-quickly-sue-industrial-polluters/.
 ITC Plaintiff’s Petition, supra note 1, at ¶ 5.2.
 Id. at ¶¶ 5.2–5.13.
 Id. at ¶ 5.12.
 Id. at ¶¶ 5.2–5.13.
 Id. at ¶¶ 5.9–5.13.
 Id. at ¶¶ 6.1–6.5.
 Id. at ¶¶ 6.6–6.9.
 Id. at ¶ 5.6.
 Id. at ¶¶ 6.10–6.13.
 Id. at ¶¶ 6.14–6.17.
 Id. at ¶¶ 6.18–6.24.
 Id. at ¶¶ 6.25–6.32.
 Id. at ¶¶ 6.5; 6.9; 6.13; 6.17; 6.24; 6.32.
 Tex. Water Code Ann. § 7.102.
 ITC Plaintiff’s Petition, supra note 1, at ¶¶ 7.1–7.4.
 Id. at ¶ 8.1.
 Defendant’s Original Answer, State of Texas v. Intercontinental Terminals Co., LLC, (No. D-1-GN-19-001593), 2019 WL 2869895 (261st Dist. Ct., Travis Cty, Tex. Apr. 15, 2019).
 Grant Durow & Luke Metzger, Major Malfunction Air Pollution from Industrial Malfunctions and Maintenance in Texas in 2017, Env’t Tex. (Jan. 2019), https://environmenttexas.org/sites/ environment/files/reports/TX_MajorMal_scrn.pdf.
 Patrick Michels, Is Ken Paxtion an Environmental Champion?, Sierra Club Lone Star Chapter (Sept. 16, 2019), https://www.sierraclub.org/texas/blog/2019/09/ken-paxton-environmental-champion (describing Ken Paxton’s change in environmental enforcement).
 ITC Plaintiff’s Petition, supra note 1.
 See Jarod Cassidy, West, Texas Receives $10 Million In Fertilizer Plant Explosion Lawsuit, Thomas J. Henry, https://thomasjhenrylaw.com/blog/workplace-accidents/west-texas-receives-10-million-fertilizer-plant-explosion-lawsuit/ (last visited May 22, 2020); see also Paul J. Gately, West: Only a few explosion lawsuits remain unsettled, KWTX (Apr. 7, 2018), https://www.kwtx.com/content/misc /West–Only-a-few-explosion-lawsuits-remain-unsettled-480030113.html.
 See Morgan Smith, The Other BP Catastrophe, Tex. Tribune (Aug. 20, 2010), https:/ /www.texastribune.org/2010/08/20/beleBP-texas-city-refinery-faces-two-lawsuits/.
 See Jim Malewitz, Harris County to Paxton: We’re Still Suing Volkswagen, Tex. Tribune (Oct. 19, 2015), https://www.texastribune.org/2015/10/19/harris-county-paxton-well-continue-volkswagen-suit/.
 P.J. Huffstutter, Texas joins flood of states suing BP over 2010 Gulf spill, Thompson Reuters (May 18, 2013), https://www.reuters.com/article/us-usa-bp-texas-lawsuit/texas-joins-flood-of-states-suing-bp-over-2010-gulf-spill-idUSBRE94H0CE20130518.
 Collier, supra note 4.
 Michels, supra note 33.
 See Defendant’s Original Answer, State of Texas v. KMCO, LLC, (No. D-1-GN-19-001795), 2019 WL 2607534 (261st Dist. Ct., Travis Cty, Tex. Apr. 29, 2019); see also Petition at 1, State of Texas v. Valero Energy Corp. & The Premcor Ref. Grp., Inc., No. D-1-GN-19-004121 (419th Dist. Ct., Travis County, Tex. Jul. 19, 2019).