Texas Companies Plead Guilty to Criminal Violations of the Clean Air Act and Agree to Pay $3.5 Million

Four Texas companies with related ownership and management agreed to pay $3.5 million and plead guilty to Clean Air Act criminal violations.  The violations relate to an explosion in Port Arthur, Texas, which killed one and injured two others.  The violations also relate to operations in Crosby, Texas, which is near Houston.

Criminal Consequences for Violating Industry Standards

According to the plea agreement, the Port Arthur facility had falsified “hot work” permits and allowed contractors to weld on piping that had not been properly drained and decontaminated.  The welding caused an explosion that injured the welders and killed another nearby worker.

The United States Department of Justice (“DOJ”) brought criminal charges against the companies that own/operate the Port Arthur facility.  DOJ indicated that a failure to meet industry standards, by falsifying the hot work permit and allowing welding of a pipe not decontaminated, is a criminal violation of federal law.  The Clean Air Act contains a “general duty clause” that requires facility operators to take steps necessary to prevent releases.  DOJ asserts that this explosion, due to the failure to follow industry standards, constituted a criminal violation of the Clean Air Act.

Criminal Consequences for Falsely Certifying Compliance

The DOJ also coordinated an investigation of other facilities subject to common ownership/control as the Port Arthur facility.  This investigation determined that a facility in Crosby had failed to monitor for leaks of chemicals that can cause ground level ozone, and then falsified records and reports that certified that the facility was in compliance.  These actions also led to criminal charges and part of the $3.5 million payment.

Catastrophic Events Lead to Extensive Criminal Investigations

In the current regulatory climate, significant catastrophes involving hazardous materials will inevitably provoke criminal investigations.  Moreover, the investigations will likely extend beyond the facility where the catastrophe occurred, to other facilities under common ownership or control.

As an example, in my recent Alert regarding the PG&E convictions, the DOJ sought convictions for record keeping relating to pipelines that had no relation to the San Bruno explosion.  In this Texas case, part of the charges related to a facility in Crosby, which is approximately 75 miles from the Port Arthur facility where the death and injuries occurred.

For a copy of the DOJ’s press release describing the plea agreement click here.

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