Another recent Alert discussed the assessment of an $81 million civil penalty against Citgo in a Clean Water Act case. The $81 million assessment came in a second trial after the US Court of Appeals for the 5th Circuit had reversed an initial assessment of $6 million. In the reversal, the 5th Circuit stated that the trial court had not adequately considered the economic benefit of non-compliance in only assessing $6 million, and ordered a new trial. At the second trial, the judge assessed an $81 million penalty.
Citgo has appealed the $81 million assessment and the US has cross appealed. The cross appeal will no doubt focus on the assessed penalty being less than what the trial court estimated as the economic benefit of non-compliance. The trial court (in the second trial) estimated an economic benefit of $91.7 million, but only assessed an $81 million penalty. The US will argue that any penalty must exceed the economic benefit, or the result will be to reward non-compliance.