## Facts

- Cedar Point Oil Co. owned and operated an oil and gas well and related facilities in the Cedar Point field in Galveston Bay, Texas, acquired from Chevron in 1989.
- Oil and gas production generated “produced water,” a high-volume waste stream that can contain pollutants from formation water and drilling chemicals.
- Sierra Club alleged Cedar Point discharged produced water into Galveston Bay without a Clean Water Act National Pollutant Discharge Elimination System (NPDES) permit.
- The alleged unpermitted discharges occurred over many days and were characterized as ongoing or intermittent at the time suit was filed.
- The potential maximum statutory penalty, calculated on a per-day basis, exceeded $20 million.

## Issues

1. Whether unpermitted produced-water discharges constituted ongoing or intermittent Clean Water Act violations sufficient for citizen-suit jurisdiction and summary judgment on liability.
2. Whether the district court abused its discretion in assessing a $186,070 civil penalty under Clean Water Act § 309(d) factors.
3. Whether the district court abused its discretion by modifying an injunction to allow limited continued discharge without a permit under specified conditions.
4. Whether Cedar Point’s abuse-of-process counterclaim against Sierra Club was properly dismissed.

## Decision

- The Fifth Circuit affirmed summary judgment holding Cedar Point liable for discharging pollutants into navigable waters without an NPDES permit.
- The court affirmed the $186,070 civil penalty, holding the district court’s penalty analysis was within its discretion and supported by statutory factors.
- The court affirmed the injunction as modified, concluding the district court acted within its equitable discretion in shaping and adjusting relief.
- The court affirmed dismissal of Cedar Point’s abuse-of-process counterclaim.

## Legal Principles

- A Clean Water Act citizen suit may proceed where the plaintiff shows ongoing or intermittent violations at the time of filing, not solely wholly past violations.
- Discharging pollutants into navigable waters without an NPDES permit violates the Clean Water Act and supports injunctive relief and civil penalties.
- Civil penalty determinations under Clean Water Act § 309(d) are reviewed for abuse of discretion; a district court must consider statutory factors such as seriousness, economic benefit of noncompliance, compliance efforts, violation history, and justice-related considerations.
- A penalty may be set substantially below the statutory maximum where the district court reasonably connects the statutory factors to the chosen amount, including by tying the figure to economic benefit.
- Courts have broad equitable authority to craft and modify injunctive relief in Clean Water Act cases, subject to deferential appellate review.
- A counterclaim alleging abuse of process may be dismissed where the citizen suit is authorized by statute and supported by evidence of statutory violations.

## Conclusion

The Fifth Circuit upheld Clean Water Act citizen-suit enforcement against unpermitted produced-water discharges, deferring to the district court’s reasoned exercise of discretion in setting a penalty based largely on economic benefit and in modifying injunctive relief, while rejecting a retaliatory abuse-of-process counterclaim.


Sierra Club, Lone Star Chapter v. Cedar Point Oil Co., 73 F.3d 546 (5th Cir. 1996), cert. denied, 519 U.S. 811 (1996)