UNITED STATES DEPARTMENT OF JUSTICE ENVIRONMENT AND NATURAL RESOURCES DIVISION SUMMARY OF LITIGATION ACCOMPLISHMENTS

FISCAL YEAR 2006 CONTENTS

FOREWORD I

CRIMINAL ENFORCEMENT OF OUR NATION’S ENVIRONMENTAL AND WILDLIFE LAWS 1

PROTECTING OUR NATION’S AIR, LAND, AND WATER 4

ENSURING CLEANUP OF OIL AND HAZARDOUS WASTE 9

PROMOTING RESPONSIBLE STEWARDSHIP OF AMERICA’S NATURAL RESOURCES AND WILDLIFE 11

PROMOTING NATIONAL SECURITY AND MILITARY PREPAREDNESS 14

DEFENDING VITAL FEDERAL PROGRAMS AND INTERESTS 15

PROTECTING INDIAN RESOURCES AND RESOLVING INDIAN ISSUES 22

SUPPORTING THE DIVISION’S LITIGATORS 24 FOREWORD

It is my pleasure to present the Environment and Natural Resources Division’s Accomplishments Report for Fiscal Year 2006. The Environment and Natural Resources Division brings both affirmative civil and criminal enforcement actions on behalf of our client agencies and defends federal agencies generally when their actions or decisions are challenged in court on the basis of our environmental public lands and resources laws. This year the Division achieved significant victories for the American people in each of the many areas for which it has responsibility. These responsibilities include protecting the Nation’s air, water, land, wildlife and natural resources, upholding our trust responsibilities to American Indians, and furthering important federal programs, including the government’s mission to ensure national security.

The Division is dedicated to the vigorous and fair enforcement of our Nation’s environmental laws, in both the civil and criminal arenas. Such enforcement is a critical component of environmental protection and helps ensure that our citizens breathe clean air, drink clean water, and will be able to enjoy the country’s public lands, wildlife and other natural resources for generations to come. It also helps ensure that law-abiding businesses have a level economic playing field on which to compete.

The Division's vigorous civil enforcement of our environmental laws has generated record-breaking results over the past few years, and this year was no exception. In Fiscal Year 2006 the Division secured more than $3.7 billion in corrective measures through court orders and settlements to protect the nation's environment and safeguard the public's health and welfare. The required actions obtained by ENRD include compliance measures, land and river cleanup, state of the art pollution-abatement controls, training, and education that will significantly benefit the health and welfare of the nation. For example, the Division secured over $227 million worth of cleanup of superfund sites, and recovered more than $140 million in past EPA costs to be used to finance future cleanups. In addition, ENRD attorneys achieved extraordinary environmental results in five consent decrees with large petroleum refiners, resulting in over $2 billion in new pollution controls. With these new settlements, the Division has now brought enforcement actions against more than 80 refineries comprising approximately 77% of the nation's refining capacity, thereby reducing air pollutants more than 315,000 tons per year.

Fiscal Year 2006 was one of the most successful years of the last decade for the Division’s criminal enforcement of environmental laws, based on the amount of jail time and criminal penalties imposed against corporate polluters and other environmental law breakers. This year courts imposed $70.4 million in total criminal penalties, including fines, restitution, and supplemental sentences, and 65 years of jail time, the second highest figure for jail time in the past ten years.

Although the public is generally familiar with the Division’s role as enforcer of the environmental laws, much of our attorneys’ time is actually spent defending a wide range of federal programs and interests. The Division has defended almost every federal agency, handling cases that challenge such diverse and critical matters as military training programs, government

i cleanup actions, resource management programs, and environmental regulations. The Division’s eminent domain and takings cases also facilitate important federal programs by enabling agencies to acquire needed property or other rights in a fiscally responsible manner while respecting the property interests of citizens.

The Division currently has a docket of approximately 6,800 active cases and matters. These cases involve more than 70 different environmental and natural resources statutes, including the Comprehensive Environmental Response, Compensation and Liability Act, the Clean Water Act, the Clean Air Act, the National Forest Management Act, the Federal Land Policy and Management Act, the National Environmental Policy Act, and the Endangered Species Act. The Division litigates in every judicial district in the Nation.

The Division’s exemplary record in protecting the environment, American Indian rights, and the Nation’s natural resources, wildlife, and public lands is due to the hard work of the Division’s attorneys and staff in partnership with our client agencies, the United States Attorney’s Offices, and state and local officials around the country. The Division’s many accomplishments this year reflect the professionalism and dedication with which all these people work together to carry out the Division’s mission.

Sue Ellen Wooldridge Assistant Attorney General Environment and Natural Resources Division January 2007

ii CRIMINAL ENFORCEMENT OF OUR In United States v. Wallenius Ship NATION’S ENVIRONMENTAL AND Management, Pte., Ltd., a Singapore shipping WILDLIFE LAWS company pleaded guilty to conspiracy to violate APPS and multiple felony counts. Vessel Pollution Prosecutions. The Under the plea agreement, the company has Vessel Pollution Initiative is an ongoing, agreed to pay a $5 million fine with an concentrated effort to prosecute those who additional $1.5 million payment devoted to illegally discharge pollutants from ships community service. The company also will into the oceans, coastal waters and inland serve a three-year term of probation and waterways. The Division continues to have implement an environmental compliance plan. great success prosecuting such activity, and Crew members on the M/V Atlantic Breeze, a these prosecutions serve as a significant car carrier vessel managed by Wallenius Ship deterrent to would-be polluters. Management, sent a fax to an international seafarers’ union that they were being ordered In United States v. MSC Ship to engage in deliberate acts of pollution, Management (Hong Kong) Limited, the including the discharge of oil-contaminated defendant, a Hong Kong-based container bilge waste and sludge as well as garbage and ship company, pleaded guilty to plastics. In addition, a bypass system hidden conspiracy, obstruction of justice, in various parts of the ship had dumped oily destruction of evidence, false statements wastes illegally for about three years. and violating the Act to Prevent Pollution from Ships (APPS). MSC Ship In United States v. Pacific-Gulf Management paid $10.5 million in Marine, Inc., an American-based ship operator penalties, the largest fine in which a single pleaded guilty to violating APPS, by vessel has been charged with deliberate deliberately discharging hundreds of pollution and the largest criminal fine paid thousands of gallons of oil-contaminated bilge in an environmental case in Massachusetts waste from four of its ships through a bypass history. MSC Ship Management admitted pipe. PGM admitted to circumventing the oily that crew members on the MSC Elena water separator on four of its giant “car circumvented required pollution prevention carrier” ships. This case was also significant equipment in order to discharge oil sludge in the substantial credit given defendant for its and oil-contaminated waste directly extensive cooperation, facilitating Division overboard. After the discovery of the efforts to hold other vessel pollution violators bypass pipe during a U.S. Coast Guard accountable. inspection in Boston Harbor, senior company officials in Hong Kong directed In United States v. Stickle, the crew members to lie about it to the Coast Eleventh Circuit upheld the conviction of a Guard. Senior ship engineers also ordered vessel owner for conspiracy to violate U.S. that documents be destroyed and concealed. laws and for unlawfully operating a freight The Chief Engineer of the ship was vessel as an oil transportation vessel. In 1998 sentenced to serve two months in prison the defendant’s vessel had been transporting and ordered to pay a $3,000 fine. wheat from the United States to Bangladesh. En route, diesel fuel leaked from a separate storage compartment and contaminated the

1 wheat. When the Bangladeshi importer found guilty of substantive CWA, CAA, refused the wheat shipment, the vessel Comprehensive Environmental Reclamation, owner authorized disposal of the oil- Compensation and Liability Act (CERCLA), contaminated wheat on the high seas. The false statement, and obstruction charges. court rejected the argument that because the vessel was once an oil transportation In United States v. Pacific States Cast vessel, it should still be considered as such, Iron Pipe Company, a Utah division of even though it was not licensed and did not McWane was convicted of making false meet current standards for carrying oil. statements, and sentenced to pay a $3 million fine. The company’s vice president and Prosecuting Hazardous Waste general manager was sentenced to serve 12 Violations, Clean Water Act and Clean months and one day for violating the CAA. In Air Act Crimes, and Worker United States v. McWane, Inc., McWane was Endangerment. The Division has sentenced to pay a $5 million fine and $2.7 successfully prosecuted several companies million in community service, for conspiring owned by McWane, Inc., a company that to conceal illegal wastewater discharges into the U.S. Occupational Health and Safety Avondale Creek, from its Birmingham, Administration (OSHA) has cited for Alabama facility, substantive CWA counts, violations hundreds of times since the mid- making false statements and obstruction of 1990s. To date, McWane has paid nearly justice. $20 million in criminal fines, and the national prosecution effort against McWane In United States v. Puerto Rico has been a centerpiece of the Justice Aqueduct and Sewer Authority (PRASA), the Department's worker endangerment defendant pleaded guilty to a 15-count activities. indictment charging CWA violations based In United States v. Atlantic States upon a 25-year history of inadequately Cast Iron Pipe Company, a seven month maintaining and operating the island’s trial resulted in guilty verdicts against wastewater and water treatment systems. Atlantic States (a division of McWane) and PRASA is a public corporation of the four of the five manager defendants on Commonwealth of Puerto Rico created to multiple felony counts. Evidence adduced provide water and sanitary sewer service, and at trial established a corporate philosophy operates the island’s entire sewage collection and management practice that led to an and treatment system. PRASA admitted to extraordinary history of environmental nine counts of discharging in violation of its violations, workplace injuries and fatalities, National Pollutant Discharge Elimination and obstruction of justice. Atlantic States System (NPDES) permit at the nine largest and the four current and former managers publicly-owned treatment works on the island; were found guilty of conspiracy to violate five counts of illegal discharges from the five the Clean Water Act (CWA) and Clean Air water treatment plants that supply drinking Act (CAA); to make false statements and to water to the largest portion of the local obstruct the Environmental Protection population; and one count of a direct Agency (EPA) and OSHA; and to defeat discharge from the PRASA system to the the lawful purpose of OSHA and EPA. Martin Pena Creek. These five defendants also were variously

2 In United States v. Bezhad In United States v. Gordon Tollison, Kahoolyzadeh, the defendant was the owner and chief executive of a corporation sentenced to serve 37 months incarceration that owned and operated eight wastewater and pay $1.29 million in restitution for treatment plants servicing housing cleanup costs, conspiracy, illegally developments containing approximately 900 transporting hazardous waste and illegally homes was sentenced to serve one year and a storing hazardous waste. The defendant day of incarceration for four CWA violations. illegally stored drums of perchloroethylene The defendant’s plants had been in perpetual waste and then shipped them to violation of their state NPDES permits, unpermitted facilities to evade state and discharging untreated or under-treated sewage city inspectors. into state waterways for more than 25 years.

In United States v. Ortiz, the Enforcing the Laws Protecting Wildlife. In defendant was convicted of negligent and United States v. Jonathan Corey Sawyer, the knowing violations of the CWA for defendant was sentenced to serve 15 months disposing of wastewater from the incarceration for illegally importing and manufacture of airplane de-icing fluid into exporting more than 230 reptiles worth Grand Junction, Colorado’s storm drain approximately $30,000 during an eight-month system, which flows into the Colorado period. River. The Tenth Circuit held that the CWA does not require proof of knowledge In United States v. Panhandle Trading that a discharge will enter waters of the Inc., two companies and their vice president United States, in reversing the lower court. entered pleas of guilty to conspiracy to violate It also held that a sentencing enhancement the Lacey Act and conspiracy to commit should have been imposed for multiple money laundering for their role in an illegal discharges. catfish importation scheme. The defendants intentionally mislabeled frozen farm-raised Protecting Homeowners and Enforcing catfish fillets imported into the U.S. from the Clean Water Act. In United States v. Vietnam to evade import duties. The scheme Robert Lucas, a developer was sentenced to involved over a million pounds of catfish serve nine years in prison for violating the labeled as grouper, channa, snakehead, or CWA by illegally filling in wetlands, and bass. for conspiracy and mail fraud for selling homes to hundreds of families despite In United States v. Beau Lee Lewis, the warnings from public health officials that defendant was sentenced to serve 23 months the illegal septic systems were installed in in prison for violating the conspiracy and saturated soil and were likely to fail, smuggling statutes when he imported more causing contamination of the underlying than 300 protected reptiles and amphibians property and the drinking water aquifer. into the United States. Lucas’ co-defendants were each sentenced to serve 87 months in prison, and his two United States v. Hoang Nguyen companies were ordered to pay a total of involved the smuggling of red snapper caught $5.3 million in criminal fines. in violation of the Magnuson Stevens Fisheries Act. The captain of the fishing

3 vessel was ordered to serve 30 months in wire fraud, and tax violations. Shellef was prison, while a crew member received a ordered to serve 70 months and his co- sentence of 21 months for his role in defendant 18 months incarceration. Both concealing and selling commercial were held jointly and severally liable for $1.9 quantities of red snapper that had been million in restitution for taxes due on illegally imported into the United States. domestic sales of the ozone-depleting chemical referred to as CFC-113. The In United States v. Estremar S.A., defendants told manufacturers that they were an Argentine company was sentenced to purchasing CFC-113 for export in order to pay a $75,000 fine for violating the Lacey buy the product tax-free and then sold it tax- Act, as well as forfeit all assets including free in the domestic market without notifying $158,145.53 in proceeds from the sale of the manufacturers or paying the excise tax. Patagonian toothfish, a.k.a. Chilean seabass. The company knowingly imported PROTECTING OUR NATION’S AIR, and attempted to sell over 30,000 pounds of LAND, AND WATER this toothfish which had been illegally harvested and transported. Reducing Air Pollution from Coal-Fired Power Plants. During this past year, the Combating Fraud in the Asbestos Division continued to successfully litigate Abatement Training Industry. In United CAA claims against operators of coal fired States v. ACS Environmental, Inc., the electric power generating plants. The president of one asbestos abatement violations arose from companies engaging in company was sentenced to serve 21 major life extension projects on their aging months incarceration and pay a $1.5 facilities without installing required state of million fine and the president of another the art pollution controls. The resulting tens asbestos company was sentenced to serve of millions of tons of excess air pollution has five months in prison and pay a $1 million adversely affected human health, degraded fine for conspiring to defraud OSHA, forests, damaged waterways, and EPA, and the Small Business contaminated reservoirs. In June 2006, the Administration (SBA). The companies Division obtained a partial settlement in purchased 250 false training certificates for which Alabama Power Company agreed to their employees and then directed their install and operate state-of-the-art pollution employees to do work involving asbestos, controls at two units, to purchase and retire lead, and hazardous waste removal at $4.9 million in sulfur dioxide (SO2) emission schools and federal facilities under SBA allowances allocated under the acid rain contracts set aside for minority-owned program, and to pay a $100,000 civil penalty. businesses. And in July 2006, the court entered a consent decree with Minnkota Power Cooperative Prosecuting Illegal Sales of Ozone- which will substantially reduce air pollution depleting Chemicals. In United States. v. from SO2 and nitrogen oxide (NOX) each Dov Shellef, two sellers of refrigeration year from the two coal-fired units at its chemicals were sentenced on 87 counts of facility through the installation of pollution conspiring to avoid excise taxes on ozone- control measures estimated to cost in excess depleting chemicals, money laundering, of $100 million. Minnkota and Square Butte

4 will also pay a civil penalty of $850,000 The decree requires installation of controls and spend at least $5 million on that will reduce air pollutant emissions by environmentally beneficial wind turbine more than 51,000 tons per year, at a cost of projects in North Dakota. The State of approximately $537 million. The company North Dakota was a co-plaintiff in this will also pay a $7.7 million civil penalty, and action. The Division, along with co- another $6.7 million for environmentally plaintiffs Connecticut, New Jersey, and beneficial projects near the refineries. The New York, also made progress in its case United States was joined in this settlement by against Cinergy Corp. when, in August, the the States of Illinois, Louisiana, and Montana. Seventh Circuit upheld the District Court's The ConocoPhillips settlement covers nine ruling for the United States on the key refineries in seven states representing more legal test for an emissions increase under than 10% of total domestic refining capacity. CAA regulations. This year the Supreme Under the decree, ConocoPhillips will install Court accepted certiorari in Environmental an estimated $525 million in pollution control Defense v. Duke Energy Corp., a case that technology expected to reduce annual addresses whether, under EPA regulations emissions of NOx and SO2 by more than governing the Clean Air Act's Prevention 47,100 tons per year, pay a civil penalty of of Significant Deterioration program, $4,525,000, and perform $10.1 million in changes to a plant that increase total annual supplemental environmental projects. The emissions, but do not increase hourly United States was joined in this settlement by emissions, constitute a “modification” co-plaintiffs Illinois, Louisiana, New Jersey, under the CAA. The United States filed Pennsylvania, and the Northwest Clean Air briefs in support of the total annual Agency of Washington. In the Valero emissions regulatory standard. settlement, the settling companies will implement more than $700 million in Settlements achieved to date with pollution control technologies that will result operators of coal fired power plants will in emission reductions of over 20,400 tons per ultimately remove more than a million tons year, pay a civil penalty of $5.5 million, and of pollutants from the air a year. spend $5.5 million to implement facility and community-based supplemental Addressing Air Pollution from Oil environmental projects. Under its settlement, Refineries. The Division also continued to Sunoco will install $285 million in pollution make significant progress in its series cases control technologies at its refineries in aimed at CAA violations within the Philadelphia (PA), Marcus Hook (PA), petroleum refining industry. During the Toledo (OH), and Tulsa (OK), pay a $3 past year, consent decrees were entered in million civil penalty, and perform $3.9 an additional five enforcement actions million in supplemental projects. Finally, the against Exxon Mobil Corp., settlement with Chalmette requires the ConocoPhillips Co., Valero Energy Corp., installation of approximately $34 million in Sunoco Refinery, Inc., and Chalmette air pollution controls at a refinery in Refining, LLC. The Exxon Mobil Chalmette, Louisiana, payment of $1 million settlement addresses all six domestic in civil penalties, and performance of $3 petroleum refineries owned by Exxon million in environmental projects. The States Mobil and ExxonMobil Oil Corporations.

5 of Illinois, Louisiana, and Montana joined (U.S. v. Newly Wed Foods, Inc.), polyvinyl the United States as co-plaintiffs in this chloride (PVC) manufacturing facilities (U.S. action. v. Formosa Plastics Corp., U.S. v. OxyVinyls, L.P.), hazardous waste treatment, storage and With these additional settlements, disposal facilities (U.S. v. Clean Harbors the Division has now addressed more than Environmental Services), and pulp and paper 80 refineries, comprising approximately mills (U.S. v. Weyerhaeuser Company, 77% of the nation’s refining capacity, and Willamette Industries, Inc.). Those efforts, will reduce air pollutants by more than addressing similarly diverse CAA violations, 315,000 tons per year. In related cases, the resulted in commitments by defendants to Division also completed civil enforcement perform more than $535 million in facility actions under the CAA and CWA against improvements, to undertake SEPs valued at Motiva Enterprises LLC, another $6.8 million to benefit local communities, and petroleum refiner. The civil action was a to pay more than $4 million in civil penalties. companion to a criminal case and The States of California, Illinois, Delaware, concerned a fatal 2001 explosion and fire New Jersey, and Louisiana joined the United at a Motiva oil refinery in Delaware. States as co-plaintiff in one or more of the Under the consent decree, Motiva will pay actions listed above. Just one of these a $12 million penalty that will be shared settlements, which involved ethanol with our co-plaintiff, the Delaware Natural production (Cargill), will result in a reduction Resource and Environment Commission, of an estimated 25,000 tons per year of and spend at least $3.96 million on harmful air emissions at 29 of defendant’s environmental projects. The new owner of facilities in thirteen states. The states of the refinery, The Premcor Refining Group Alabama, Georgia, Illinois, Indiana, Iowa, Inc., now a subsidiary of Valero, also Missouri, Nebraska, North Carolina, North agreed to implement enhanced safety Dakota, and Ohio, and counties in Tennessee, procedures estimated to cost about $7.5 Ohio and Iowa, were Plaintiff-Interveners and million. signatories to the consent decree.

Reducing Air Pollution at Other Diverse Controlling Contaminated Storm Water Industrial Facilities. The Division also Run-off. The Division also directed improved the nation’s air quality through significant effort toward assuring that enforcement actions against numerous companies comply with the CWA’s other facilities operating in diverse provisions governing the discharge of storm industries, including methyl methacrylate water, a significant source of environmental and acrylic sheeting facilities (U.S. v. harm because of the pollutants it may contain. Lucite International Inc.), polystyrene In January 2006, the District Court for the foam manufacturing facilities (U.S. v. Atlas District of Hawaii entered a consent decree Roofing Corp.), rubber tractor treads with the Hawaii Department of Transportation manufacturing facilities (U.S. v. (HDOT) resolving CWA violations resulting Caterpillar and Camoplast Rockland, from discharges along HDOT’s roadways, LTD), ethanol production (U.S. v. Cargill, construction projects, and at three airports. Inc., U.S. v. MGP Ingredients of Illinois, The consent decree requires HDOT to Inc.), grocery store refrigeration units undertake comprehensive corrective

6 measures, at an estimated cost of $60 $1.2 million on environmental projects. million over the next five years, to achieve Texas was a co-plaintiff in this action. compliance with the CWA. HDOT will also pay a $1 million civil penalty and Ensuring the Integrity of Municipal perform $1 million in environmental Wastewater Treatment Systems. The projects in the affected communities. In Division continued to protect the Nation’s June 2006, the same district court entered a waterways by ensuring the integrity and consent decree with an Hawaiian property proper operation of municipal wastewater developer in U.S. v. James H. Pflueger, treatment systems. In August 2006 the resolving defendants’ illegal discharges of Division lodged a second partial consent storm water, sediment discharges, and decree with the City of San Diego requiring placement of unpermitted fill in stream further injunctive measures to address courses from construction activities on the unlawful discharges from the City’s sewer Island of Kaui. The decree requires system at a cost of an additional $87 million. defendants to spend an estimated $6 This decree follows a 2005 partial consent million on corrective measures, pay a $2 decree that required the City to undertake million penalty, and perform a $200,000 injunctive relief valued in excess of $187 environmental project. The State of million. In December 2005 a consent decree Hawaii joined the United States as co- was entered in U.S. v. Washington Suburban plaintiff in the actions against HDOT and Sanitary Commission (WSSC), resolving Pflueger. CWA claims against the sewage authority that serves Montgomery and Prince George’s Also in June, the District Court for Counties in Maryland. Pursuant to the the District of Idaho in U.S. v. Idaho decree, WSSC will spend an estimated $200 Department of Transportation (ITD) million on a comprehensive set of entered two consent decrees resolving improvements to control the overflow of stormwater violations by ITD and a sanitary sewage, pay a $1.1 million penalty, contractor in connection with a road and perform $4.4 million in environmental building project. Under the decrees’ terms, projects. Maryland joined the United States defendants will pay civil penalties totaling as co-plaintiff in this case. In August 2006, a $895,000 and undertake various actions to consent decree was entered in U.S. v. better train their employees. IDT must also Metropolitan District Commission, Hartford improve its efforts to inspect for and (MDC)) under which MDC, the operator of comply with storm water regulations. And the largest sewage collection system in the in August 2006, the District Court for the State of Connecticut, will upgrade the sewer Northern District of Texas entered a collection system at a cost of more than $100 consent decree in U.S. v. City of Dallas, million and pay a civil penalty of $850,000 settling allegations that the City violated which will be split between the United States the CWA by failing to adequately staff and and the State of Connecticut. The injunctive implement its storm water management relief is intended to eliminate sanitary sewer program. The decree requires the City to overflows in the collection system and undertake comprehensive injunctive relief, improve water quality in streams in the pay a civil penalty of $800,000 and spend Hartford area.

7 And in landmark criminal and civil which provided water to 28,000 people in enforcement actions (U.S. v. Puerto Rico Monterey County, California. The Ninth Aqueduct and Sewer Authority (PRASA)), Circuit upheld the district court's order the Puerto Rico Aqueduct and Sewer appointing a receiver and requiring the sale of Authority (PRASA) agreed to pay $10 several of the defendants’ systems. million in criminal and civil fines and to perform more than $1.7 billion in Protecting the Nation’s Wetlands. In injunctive relief to resolve repeated United States v. Lone Moose Meadows, LLC, environmental violations at wastewater working with the U.S. Attorney’s Office for treatment plants and drinking water the District of Montana, the Division treatment plants throughout Puerto Rico. successfully sued the developer of a ski resort To comply with the settlement, PRASA in Big Sky, Montana, for the illegal filling of will complete a total of 145 capital wetlands. The Montana District Court improvement projects, including short-term entered the consent decree in January 2006, and mid-term projects over the course of and ordered Lone Moose Meadows to restore two years from the entry of the settlement. streams and wetlands, create new wetlands in The consent decree with PRASA was mitigation, and pay a $165,000 civil penalty. lodged with the Puerto Rico District Court In another enforcement matter, United States in June 2006. v. Don Prow d/b/a Rochester Topsoil, the Minnesota District Court in April 2006 The Division also helped ensure the entered a consent decree requiring the integrity of municipal wastewater defendant to pay a $250,000 civil penalty and treatment systems by concluding comply with onsite/offsite restoration and enforcement actions against a number of mitigation projects for the unauthorized smaller municipalities: City of New Iberia discharge of fill material into approximately (LA), City of Nashua (NH), City of 73 acres of wetlands in Rochester, Minnesota. Okmulgee (OK), City of Chicopee (MA), and City of Brockton (MA). In these In May 2006 the Supreme Court ruled actions, the United States secured in S.D. Warren v. Maine Board of commitments by defendants to spend an Environmental Protection, consistent with the estimated $310 million to improve their amicus brief filed by the Department of municipal wastewater systems. In all of Justice; the Court held that dams produce these cases, the States joined the United "discharges" and are therefore subject to State States as co-plaintiff and signed onto the authority under section 401 of the Clean consent decree. Water Act.

Ensuring Safe Drinking Water. The ENSURING CLEANUP OF OIL AND Division also achieved a significant victory HAZARDOUS WASTE under the Safe Drinking Water Act in the Ninth Circuit. The appellate court Continuing Progress to Cleanup affirmed a judgment in favor of the United Contaminated River Systems. This year States in United States v. Alisal Water the Division continued to secure significant Corp., an action involving 232 violations river cleanups. In October 2005, the Division of the Act against five water companies reached an agreement with the General

8 Electric Company (GE), requiring it to Unit 4 of the Lower Fox River and Green Bay begin the dredging of sediment site in northeastern Wisconsin. Wisconsin is contaminated with polychlorinated participating as a co-plaintiff in the Fox River biphenyls (PCBs) at the Hudson River cleanup. The site is contaminated with PCBs PCB Superfund site in upstate New York. discharged into the Fox River from several Under the settlement, GE will perform the paper manufacturing and recycling facilities. first of two phases of the dredging and pay The site was divided into five operable units EPA up to $78 million for the Agency’s for purposes of remediation and will cost past and future costs. The first phase will more than $500 million to address overall. remove about 10 percent of the total Phase 1 is expected to cost about $30 million volume of PCB-contaminated sediment and features dredging, dewatering, and slated for dredging during the entire landfill disposal of PCB-contaminated cleanup, at an expected cost of between sediments from a hot-spot of contamination $100 million and $150 million. The near the U.S. Paper manufacturing plant. second phase of the dredging is expected to This is the fifth partial consent decree take five years. The GE cleanup project is negotiated in connection with cleanup of the unprecedented in size and scope and site. addresses the PCB discharges from two GE manufacturing plants that for years Conserving the Superfund through discharged hazardous PCBs directly into Securing Cleanup of Hazardous Waste the upper Hudson River. The goal of the Sites by Responsible Parties and project is to restore one of the country’s Recovering Superfund Monies Expended most important cultural and ecological for Cleanups. The Division secured the resources, while using approaches to commitment of responsible parties to clean up minimize impacts on local communities. additional hazardous waste sites, at costs In February 2006, the District Court for the estimated in excess of $227 million, and District of Montana entered a consent recovered more than $140 million for the decree in U.S. v. Atlantic Richfield Co. Superfund to help finance future cleanups. (Milltown Reservoir Sediments) resolving Examples of some of the major Superfund CERCLA claims against Atlantic Richfield cases resolved by the Division this year and NorthWestern Corporation in include: U.S. v. Carrier Corp. (defendants to connection with the Milltown Reservoir perform the shallow zone remedy for the Operable Unit, one of the numerous Puente Valley Operable Unit of the San Superfund sites within the Clark Fork Gabriel Valley Superfund site, valued at $27 River Basin in Montana. Under the million, and pay $800,000 in past response consent decree, ARCO and NorthWestern costs); U.S. v. Allegiance Healthcare Corp.; will remove the Milltown Dam and v. Lockheed Martin Corp.; v. White & White millions of cubic yards of contaminated Properties; v. Leach International Corp.; v. sediment accumulated behind the dam, at Azusa Land Reclamation Co., Inc.; v. an estimated cost of $106 million. In April Aerojet-General Corp.; and. v. Phaostron 2006, the Division lodged a consent decree Instrument and Electronic Co. (seven consent with NCR Corp. and Sunoco-U.S. Paper, decrees with16 defendants required to pay which requires those parties to perform the $14.3 million in response costs and 88 percent first phase of remedial action for Operable of future oversight costs at the Baldwin Park

9 Operable Unit of the San Gabriel Valley for $54.5 million. In U.S. v. Vertac Chemical Superfund site); U.S. v. Asarco, Inc. Corp., the Eighth Circuit Court of Appeals (developer will purchase Asarco’s Tacoma affirmed that Hercules and other companies Smelter Superfund site and perform site were liable for costs associated with EPA’s remedy at an estimated cost of $28 million cleanup of hazardous waste contamination at and Asarco will pay $1.5 million to a chemical plant site in Jacksonville, Superfund from the proceeds of sale); U.S. Arkansas. v. NCH Corp. and U.S. v. FMC Corp. (defendants will pay over $26 million in Enforcing Cleanup Obligations In past and future costs and perform remedial Bankruptcy Cases. The Division’s work estimated at more than $13 million at bankruptcy practice has continued to grow. the Higgins Farm and Higgins Disposal This year, the Division represented the United Superfund sites in New Jersey); U.S. v. States in many proceedings, including the Dominick Manzo (judgment in favor of the Dana Corp., Delta Air Lines, Asarco, Delphi United States for $31 million in costs Automotive, Saltire, Encycle, and Safety- incurred cleaning up the Burnt Fly Bog Kleen bankruptcies, where debtors had Superfund site, also in New Jersey). significant environmental responsibilities. Additionally, the Division entered into a The Division filed proofs of claim to require settlement agreement with Teck Cominco that at least part of debtors’ estates be applied America, Inc. (TCAI), and its Canadian to the costs of environmental remediation for parent, Teck Cominco Metals, Ltd. (TCM), which the debtors are liable. In the Eagle requiring TCAI to perform a remedial Picher bankruptcy, the Division secured the investigation and feasibility study (RI/FS) agreement of the debtor to deposit $13.6 at the Upper Columbia River Superfund million into a custodial trust to be used to site. The site, consisting of 150 miles of the fund environmental cleanup work at sites in Columbia River and adjoining lands several states. The Division also lodged between the Canadian border and the proposed settlements in bankruptcy courts in Grand Coulee Dam, has been contaminated the Gulf States Steel, W.R. Grace, Armstrong by millions of tons of smelter slag and and Saltire Industrial bankruptcies. In these heavy metals discharged into the Columbia proceedings, the Division received River from TCM's Canadian zinc and lead distributions this year totaling more than $6 smelter, approximately 10 miles north of million in reimbursement of response costs. the border. These settlements avoided abandonment of contaminated properties by debtors and The Division also achieved notable enabled companies to avoid liquidation and victories on appeal in U.S. v. W.R. Grace loss of jobs by facilitating reorganization or & Co., in which the Ninth Circuit Court of sales of ongoing operations. Appeals affirmed EPA’s decision to clean up asbestos contamination in Libby, Recovering Natural Resource Damages. Montana that resulted from W.R. Grace’s The Division obtained significant results in its mining operations as a “removal” action efforts to recover for natural resource damage under CERCLA instead of a “remedial” claims securing settlements worth more than action, and the district court’s order $33 million. Some of the Division’s requiring W.R. Grace to reimburse EPA recovery efforts include U.S. v. Schlumberger

10 Technology Corp, U.S. v. Elkem Metals the Healthy Forests Initiative. These Co., U.S. v. Sunoco, Inc., U.S. v. American regulations empower the Forest Service and Energy, Inc. and U.S. v. BP Amoco Bureau of Land Management to render their Chemical Co. South Carolina and Georgia own “not likely to adversely affect” joined the United States as co-plaintiffs in determinations concerning threatened and Schlumberger; Ohio and West Virginia endangered species for specified actions were co-plaintiffs in Elkem Metals, without further process, thereby expediting Kentucky was a co-plaintiff in Sunoco, and forest recovery under the Healthy Forests Texas was a co-plaintiff in the case against Initiative. BP Amoco. Restoration activities included the removal of two dams, dredging PCB The Division successfully defended contaminated sediments behind the dams, other forest management actions, including and improving the stream corridor leading timber management on Forest Service land in to Lake Hartwell in South Carolina grizzly bear habitat in Swan View Coalition v. (Schlumberger); the restoration of mussels, Barbouletos and the issuance of oil-and-gas fish, and snails damaged by releases of leases in New Mexico v. the Bureau of Land hazardous substances to the Ohio River Management. (Elkem); the preservation of at least 100 acres of bottomland hardwood forest Tending Fire-Damaged Forests and habitat, the re-colonization of 19 acres of Capturing Economic Value From Dead former pasture with native vegetation, and and Dying Timber. The Administration the creation of six acres of riparian wetland made increased active management of the in the vicinity of two Superfund sites in Nation’s forests a priority in 2006, including Harris County, Texas (BP Amoco). dealing with the ravages of wild fires. The Division continued its successes in defending PROMOTING RESPONSIBLE against emergency motions for injunctive STEWARDSHIP OF AMERICA’S relief in lawsuits challenging Forest Service NATURAL RESOURCES AND projects to salvage dead and dying trees, WILDLIFE reduce fire risks, and secure economic value from burned-over areas in the Pacific Implementing the President’s Healthy Northwest. In FSEEE v. United States Forest Forest Initiative and Defending Federal Service, the court denied a motion for Forest Management Programs. The emergency relief, finding that the plaintiffs Division continued its string of victories were not likely to succeed on claims defending against challenges to projects to challenging the Forest Service’s interpretation restore public forest lands, improve of the applicable Eastside Forest Plan and its wildlife habitat, and recover the value of use of tree mortality guidelines. As a result of damaged timber on federal forest lands – the favorable decision, the Easy Fire projects which implement President Bush’s Recovery Timber Salvage Project on the Healthy Forest Initiative. In Defenders of Malheur National Forest was able to proceed, Wildlife v. Kempthorne, the Division and the harvest was completed, allowing for prevailed in a challenge to the counterpart restoration efforts and providing revenue to Endangered Species Act (ESA) Section 7 local communities. In Lands Council v. consultation regulations enacted as part of Martin, the district court also denied a motion

11 for a preliminary injunction, finding that Spawning and Recovery Alliance v. plaintiffs were not likely to succeed on Department of State and Salmon Spawning claims under the National Environmental and Recovery Alliance v. U.S. Customs and Policy Act (NEPA) and the National Forest Border Patrol. Management Act against the School Fire Recovery Project on the Umatilla National Restoring the San Joaquin River and Forest. As a result of the Division's Securing Bureau of Reclamation Project victory, that project has been able to Water Supplies. The Bureau of proceed with similar benefits. Similarly, Reclamation’s California Central Valley the Division successfully defended the Project is one of the Nation’s major water Forest Service’s ability to use “categorical conservation developments. Seventy years exclusions” under the National ago, Congress authorized construction of the Environmental Policy Act for timber sale Friant Division of the Project. Friant Dam projects under 250 acres in size in diverts all but a fraction of the waters of Allegheny Defense Project v. Bosworth. California’s second-longest river, the San Joaquin – de-watering a lengthy reach of the Defending Multiple Federal Agencies River for most of the year – for storage in Operating the Federal Columbia River Miller Lake and eventual distribution, Power System. The Federal Columbia primarily for agricultural use in the Central River Power System, a system of dams and Valley. After eighteen years of contentious reservoirs on the Columbia and Lower litigation over the Bureau’s renewal of long- Snake Rivers, provides over 50% of the term water supply contracts, the Division power for the four states in this region. negotiated an historic settlement in Natural These rivers are also the habitat for 13 Resources Defense Council v. Rodgers. The protected species of salmon. The Division settlement delineates a monumental facilitated coordination of the client intergovernmental project by the State of agencies and fellow sovereigns to move California and the Bureau of Reclamation to forward in complying with the 2005 restore flows in 153 miles of the San Joaquin remand order in National Wildlife River, harmonizing agricultural interests in Federation v. National Marine Fisheries securing irrigation water supplies with Service and, in American Rivers v. environmental interests in enhancing water National Oceanic and Atmospheric quality and reviving two salmon runs that Administration Fisheries, on May 23, dried up when the Dam was built in the late 2006, obtained a critical decision rejecting 1940s. plaintiffs’ claims that the Upper Snake and Columbia River operations had been Defending Fisheries Legislation. The illegally segmented, thereby protecting the Division successfully defended the Snake River Basin Adjudication agreement constitutionality of a provision of the Atlantic from collateral attack. In related litigation, Coastal Act. That Act creates a cooperative the Division obtained dismissal on federalism framework under which the States jurisdictional grounds of two cases have primary authority to regulate fisheries collaterally challenging the United States’ within 3 miles of shore, together with the compliance with and enforcement of a federal government. In Medeiros v. Vincent, Canadian salmon harvest treaty in Salmon lobster fisherman challenged this legislation

12 under the Tenth Amendment and equal The Division also contributes to protection clause. The First Circuit protection of the endangered Everglades rejected this challenge and the Supreme ecosystem by acquiring lands within Court has now denied certiorari. Everglades National Park and Big Cypress National Preserve through exercise of the Protection of the Florida Everglades. power of eminent domain, as authorized by The Division continues to contribute to the Congress and requested by the National Park restoration and protection of the Service. Related acquisitions on behalf of the Everglades ecosystem – including the 1.3 U.S. Army Corps of Engineers took place to million-acre Everglades National Park, the improve water deliveries to the Everglades. largest, most important subtropical The largest case to date is United States v. wilderness in North America. In United 480 Acres of Land in Miami-Dade County, States v. South Florida Water Management Florida, and Gilbert R. Fornatora, et al. This District, the U.S. District Court entered a is the lead case in a consolidated trial group consent decree in 1992 requiring the State of seven tracts totaling 1,000 acres in the of Florida to restore water quality in the Everglades National Park expansion project. Everglades through regulation of agricultural runoff and construction of vast Defense of Offshore Oil and Gas Lease wetland treatment systems. After more Sale. Domestic energy production has than a year of negotiations, the Division become increasingly visible as the Nation’s this year negotiated an agreement with the energy needs grow and the role of foreign State of Florida on additional remedial energy increases. In Blanco v. Burton (E.D. measures to complement those specified in La.), the Governor of Louisiana sought to halt the consent decree. The consent decree’s an Interior Department offshore lease sale in ambitious strategy to restore and preserve the western Gulf of Mexico for alleged the Everglades ecosystem – and the violations of NEPA, the Outer Continental federal-state collaboration that produced it Shelf Lands Act and the Coastal Zone – have heralded a new era of Management Act. The court denied the intergovernmental cooperation on the Governor’s motion for an emergency Everglades historic $7.8 billion restoration injunction to halt the lease sale because she effort, fulfilling a top priority of the past had failed to show irreparable harm if the sale three federal administrations. The Division proceeded. The Interior Department and this year continued its participation in the Governor ultimately settled the case favorably proceedings of the South Florida to federal interests. The Governor dropped all Ecosystem Restoration Task Force, the her claims against the lease sale in return for intergovernmental body codified by an Interior Department agreement to conduct Congress in 1996 to coordinate the additional environment analysis on the next restoration of the Everglades. The lease sale and future lease activities. Division has also participated in the Miccosukee litigation, in which it has PROMOTING NATIONAL SECURITY defended the joint federal-State approach AND MILITARY PREPAREDNESS to Everglades restoration. Defending Military Readiness Activities. The Navy’s use of various sonar systems for

13 submarine detection has been the subject of modernization in Hawaii while the Army several cases. This year, the Division works to complete additional environmental aggressively defended a challenge to the documentation required by the court for U.S. Navy's use of mid-frequency active compliance with NEPA. sonar during the multi-nation Rim of the Pacific ("RIMPAC") anti-submarine Defense of Immigration and National warfare exercise scheduled to take place Security Initiatives. In Sierra Club v. off the coast of Hawaii in conjunction with Gonzales (S.D. Cal.), the Division secured an the navies of 7 other countries. In Natural important victory upholding the authority of Resources Defense Council v. Winter, the Department of Homeland Security to plaintiffs asserted Marine Mammal undertake important initiatives at a speed Protection Act (MMPA), NEPA, and appropriate to circumstances. The case was Administrative Procedure Act (APA) originally a challenge under NEPA to challenges. During litigation of a motion construction of a 14-mile fence on the for a temporary restraining order the Mexican border to deter illegal immigration. Secretary of Defense invoked the National Pursuant to recently enacted authority, Defense Exemption under the MMPA, but Secretary Chertoff waived compliance with the court still enjoined the exercise under environmental laws as they applied to NEPA. Despite that injunction, Division construction of the fence. Plaintiffs attorneys were able to negotiate terms responded with three Constitutional limiting the injunction to a number of arguments attacking the waiver. In its mitigation measures that the Navy was favorable ruling, the court emphasized that already undertaking pursuant to its “Congress' delegation of authority to the standard operating procedures or its marine Executive Branch relates to matters over mammal incidental harassment which the Executive branch has independent authorization, and the exercise was able to and significant constitutional authority: proceed. immigration and border control enforcement and national security." The court further In Ilioulaokalani Coalition v. found that the waiver authority as applied “in Rumsfeld, the Division continued to defend the completion of a project uniquely within a challenge to a critical link in the Army’s the national security and immigration policy 30-year, Army-wide modernization plan to provinces of the Executive Branch” was not meet the national security needs of the unconstitutional. future. The plaintiffs in this action challenged the Army’s compliance with Property Acquisitions to Improve Military NEPA concerning its decision to transform Readiness and National Security. As a light infantry division into a Stryker directed by federal agencies acting under Brigade Combat Team at an Army training authority of Congress, the Division exercised facility in Hawaii. After the Ninth Circuit the federal government's power of eminent reversed the district court’s decision domain to initiate litigation enabling a granting summary judgment in favor of the number of land acquisitions. United States v. Army, the Division presented argument 1,098.221 Acres in Duval County, Florida, and evidence in opposition to the plaintiffs’ and Gate Maritime Properties., et al., was request to enjoin military training and filed to acquire a port facility on Blount

14 Island near Jacksonville, Florida, used by related NEPA claims were held not to be a the Department of the Navy for weapons defense to a taking. The Division has also shipping around the globe. Estimated just acquired land on behalf of the Department of compensation of $101,000,000 was made the Navy United for encroachment protection, immediately available to the landowner; training, and operations at Harvey Point the landowner claimed compensation of Defense Testing. $199,290,000 based on a highest and best use of conversion to high-end residential The Division has been working development, with a marina, hotel, closely with the U.S. Attorney (E.D. La.) and commercial and cruise ship terminal. his Office, along with the Army Corps of Following a two week jury trial conducted Engineers in New Orleans, to assist and train last November, the jury returned a verdict those offices in anticipation of what is of $162,000,000 resulting in a cost saving estimated will be some 400 Hurricane Katrina in excess of $30,000,000. related condemnations for the reconstruction and enhancement of flood control systems. United States v. 17.69 Acres of Land in San Diego County, California, and DEFENDING VITAL FEDERAL National Enterprises, et al., concerned land PROGRAMS AND INTERESTS condemned by the Border Patrol, via the Army Corps of Engineers, for construction Defending the Department of Energy’s of a second fence and patrol zone along the Operations at Its Hanford Nuclear San Diego-Tijuana border. In a three week Reservation. In United States v. State of trial, held last December, defendants Washington, the United States succeeded in argued that just compensation was its efforts to invalidate a Washington State $48,000,000 to $72,000,000 based on a voter initiative that would have significantly highest and best use of development of a interfered with the activities of the NASCAR stadium. The United States' Department of Energy and the Navy in appraiser testified that the value of the Washington State and across the country. property was $265,400 as holding for The new state law, originally known as "I- future industrial use. The verdict, after two 297," and now the "Cleanup Priority Act," days of jury deliberation, was that just sought to: (1) bar shipments of nuclear waste compensation for the taking is $1,232,280, to the Department of Energy's Hanford resulting in a minimum cost saving in Facility – including shipments from other excess of $46,000,000. sites in the Department of Energy’s nationwide complex as well as nuclear The Division has acquired land in components from the Navy’s Pacific Fleet – a number of cases to facilitate the U.S. pending cleanup of waste currently at Army's transformation of its 2nd Brigade, Hanford; (2) change current storage, 25th Infantry Division (Light) to a Stryker treatment and disposal practices at Hanford Brigade Combat Team. In the lead action and its associated laboratories; and (3) expand filed last year, United States v. 1,402 Acres the State's jurisdiction over radioactive of Land Honolulu, Hawaii and the Estate materials. After obtaining a temporary of James Campbell, et al., the parties injunction against implementation of the new reached a $15,900,000 settlement, and law, the Division largely prevailed on its

15 interpretation of the law during a Upholding EPA Actions Implementing the certification proceeding in the Washington Montreal Protocol. In Natural Resources State Supreme Court. The District Court Defense Council v. EPA, the Division for the Eastern District of Washington in successfully defended EPA’s approval of the June 2006 granted the government’s 2005 critical use exemption for the ozone- motion for summary judgment. The court depleting substance methyl bromide. In found that the law was preempted by the August 2006, in a revised decision the D.C. federal Atomic Energy Act, barred by Court of Appeals held that NRDC had sovereign immunity, and violated the demonstrated standing, but upheld the Commerce Clause. As a result, the court position of EPA on the merits. The court held held that the law was invalid on its face, that post-treaty decisions of parties to the and struck it down in its entirety. This case Montreal Protocol on Ozone Depleting is now on appeal. Substances were not “law” that could bind courts of the United States, as they were not Defending EPA’s Clean Water Act signed by the President or ratified by the Standards for Coal Mining. In Citizens Senate. Coal Council v. EPA, petitioners under the CWA challenged effluent limitations Resolving Federal Liability to Ensure the guidelines and new source performance Cleanup of Hazardous Waste. Through the standards for subcategories within the coal use of alternative dispute resolution and with mining category. The Division the assistance of a court-approved mediator, successfully sought en banc reversal of a the Division was able to resolve a claim prior adverse panel decision in which the under CERCLA by Kerr-McGee Corporation court held that EPA incorrectly applied the (now Tronox LLC) seeking to force the statutory factors in setting effluent United States to pay the vast majority of the limitations. The Sixth Circuit granted en cost of cleaning up groundwater banc review, and in May 2006, the en banc contamination near its manufacturing facility court issued a favorable decision upholding in Henderson, Nevada. In January 2006, the the rule. The court reaffirmed the panel’s D.C. District Court in Kerr-McGee Chemical decision that the Rahall Amendment – LLC v. United States entered a consent decree which sought to encourage remining of requiring the United States to pay the agreed abandoned mines by providing limited upon share of cleanup allocated to the United exceptions from the statute’s effluent States, which was approximately one-third of limitation requirements – did not bar EPA the amount that Kerr-McGee originally from promulgating additional regulations sought. Similarly, in Crane Co. v. United to provide for broader exceptions for States, a complex action under CERCLA remining. The court also upheld EPA’s seeking $30 million in alleged past costs and use of best management practices (BMPs) undetermined future costs related to the in lieu of numerical effluent limitations, its cleanup of TCE and perchlorate at a former treatment of remining discharges that are military ordnance and pyrotechnics commingled with other waste streams, and manufacturing plant in Goodyear, Arizona, its decision to set the effluent reduction the United States was able to negotiate a attainable at remining areas at zero. favorable consent decree providing for a payment by the United States of

16 approximately 15% of plaintiffs’ claimed Defending EPA’s Toxic Release Inventory past costs and 21% of future costs. The and Community Right-to-Know Program. Arizona District Court entered the consent In Ad Hoc Metals Coalition v. Whitman and decree in August 2006, fully resolving the National Federation of Independent Business matter. Finally, in Rhode Island v. United v. Johnson, the D.C. District Court in January States, the State sued under CERCLA to 2006, upheld an EPA rule lowering the recover natural resource damages and reporting threshold for lead under the Toxic response costs at the Allen Harbor Landfill Release Inventory program, under which and associated wetlands in North industrial facilities must file reports on all Kingstown, Rhode Island. With the releases of listed toxic chemicals. The court assistance of court-sponsored mediation, also held that the statute authorizes EPA not the United States reached a $1.2 million only to raise the reporting thresholds settlement of all claims for past response established in the Emergency Planning and costs and damages to natural resources in Community Right to Know Act, but also to connection with the Allen Harbor Landfill. lower them, finding that such authority was The Rhode Island District Court entered not an unconstitutional delegation of the consent decree in August 2006. legislative power. Finally, the court held that EPA reasonably applied a scientific Defending EPA’s Cleanup Actions. In methodology that uses persistence, Benzman v. Whitman, residents of Lower bioaccumulation and toxicity to assess the Manhattan and Brooklyn filed a class- hazard presented by lead. action suit alleging constitutional tort, mandamus, APA, and CERCLA claims Defending the Clean Water Act’s against actions taken by EPA to clean up Nationwide Permits. In National inside buildings following the collapse of Association of Home Builders v. U.S. Army the World Trade Center. In February Corps of Engineers, the D.C. District Court in 2006, the District Court for the Southern September 2006, held in the government’s District of New York held that the Stafford favor on a “a myriad of challenges” to the Act precluded judicial review of claims new Nationwide Permits issued in 2002 to that EPA failed to comply with various replace a permit that had previously provisions of the National Contingency authorized filling that affected up to 10 acres Plan because those provisions were of wetlands. The court determined that the discretionary rather than mandatory. Corps acted reasonably in issuing nationwide However, the court found that the APA permits with more restrictive conditions than claim for violation of plaintiffs’ those it had issued in the past, finding that the substantive due process rights could Corps adequately explained its reasons for proceed. The court allowed constitutional making each of the challenged decisions. tort claims filed against former Administrator Whitman to proceed. Defending EPA's Interpretation of the Whitman appealed, and EPA sought and Clean Water Act. In Dominion Energy obtained certification for interlocutory Brayton Point, LLC v. Johnson, the Division appeal on the one claim against EPA that successfully defended the EPA's regulatory the court did not dismiss. interpretation of the Clean Water Act term "opportunity for public hearing" in a

17 challenge by a power company. The First February 2006, respectively, challenges to the Circuit rejected the argument that its prior permit brought by a disappointed competing decision in Seacoast Anti-Pollution League bidder and a neighboring municipality on v. Costle, which interpreted the disputed grounds that the plaintiffs lacked standing to language, created a "non-discretionary sue. Then, in Sierra Club v. U.S. Army Corps duty" under the CWA. The First Circuit of Engineers, the New Jersey District Court held that in light of the evolution of reviewed the voluminous record compiled by Supreme Court case law on statutory the Corps, and on September 28, 2006, held interpretation, deference was owed to that the Corps had properly and adequately EPA's reasonable interpretation of the analyzed the project under NEPA. The court ambiguous term. also held that, consistent with Clean Water Act requirements, the Corps reasonably Defending the Army Corps of adopted a definition of the project proffered Engineers’ Emergency Authority. In by the state development agency and gave Louisiana Environmental Action Network sufficient consideration to alternative v. U.S. Army Corps of Engineers, the configurations that could have avoided the fill District Court for the Eastern District of before concluding that there was no Louisiana, in April 2006, refused to enjoin practicable alternative that would meet the construction of a New Orleans landfill for project purpose. the disposal of hurricane debris. The court found that plaintiffs failed to establish a Defending Federal Water Management likelihood of success on the merits or Programs. The continued drought in regions irreparable harm, and that the Corps’ of the country and the pressure on water emergency authorization contained the resources generally results in constant requisite finding of an emergency litigation, as more fish species are listed under necessary to by-pass notice and comment the Endangered Species Act due, in part, to procedures and to defer NEPA analysis. these events. This year the Division prevailed The court noted: “One need only look against several challenges to federal around to know the tragic truth of these management of water resources. In Consejo statements and findings.” de Desarrollo Economico de Mexicali v. United States, a major concrete lining project Defending the U.S. Army Corps of for the All-American Canal, which delivers Engineers’ Clean Water Act Permits. Colorado River water to the Imperial Division attorneys defeated three Irrigation District (IID) along the border with challenges to the Mills Corporation’s Mexico, and in Alabama v. United States permit in connection with the proposed Army Corps of Engineers, where the adverse Xanadu shopping, entertainment, sports, impacts on protected species of the Corps' lodging and office complex in the operation of dams and reservoirs in the Meadowlands, in East Rutherford, New Apalachicola- Chattahoochee-Flint Basin Jersey. In Hartz Mountain Industries, Inc. were worsened by drought, the Division v. U.S. Army Corps of Engineers, and successfully defended against emergency Borough of Carlstadt v. U.S. Army Corps motions for injunctive relief. The court found of Engineers, the New Jersey District that the Corps could not be held liable for Court dismissed in October 2005 and

18 drought and allowed the Corps to continue Farms v. Johanns, the court dismissed ESA status quo operations. claims against EPA regarding tolerance levels of Roundup where plaintiffs failed to exhaust Defending Fish and Wildlife Service's administrative remedies and exclusive Endangered Species Act listing jurisdiction rested with the court of appeals. program. Several cases resolved by the Finally, in Salmon Trollers Marketing Ass'n v Division this year concerned interpretation Gutierrez, the court denied a preliminary of ESA provisions that allow for the listing injunction as unavailable under the limited as threatened or endangered species of judicial review provisions of the Magnuson "distinct population segments" of species, Stevens Fisheries Conservation Management and provisions that require the Fish and Act. Wildlife Service to address a species status in "a significant portion of the range." Defending Federal Criminal Jurisdiction. Division attorneys asserted carefully The Division routinely assists other articulated legal theories explaining the Department components in securing federal agency's interpretations and achieved enclave or legislative jurisdiction. This year, notable success in Center for Biological the Division assisted another Department Diversity v. Fish and Wildlife Service, component in demonstrating the existence of which affirmed the coastal cutthroat trout federal legislative jurisdiction at a national "no-list" decision, and Center for forest site in Michigan. As a result, the Court Biological Diversity v. Norton, which upheld a death penalty imposed as a result of affirmed the Rio Grande cutthroat trout a murder committed at that site. "no-list" decision. Defending the Establishment of a Nuclear Ensuring Limited Federal Jurisdiction is Waste Depository. The Division advanced Enforced. The Administrative Procedure the important policy goal of developing a Act and other special review provisions central nuclear waste repository in Western circumscribe federal jurisdiction, and in Shoshone National Council v. United States. several cases the Division prevailed on The Western Shoshone Tribes brought this these or similar defenses. In case pursuant to the Treaty of Ruby Valley Environmental Protection Information and attempted to enjoin the federal Center v. Fish and Wildlife Service, the government from taking any further steps to court held that there was no judicial review license or develop Yucca Mountain as a of prosecutorial discretion where plaintiffs nuclear waste repository and seeking a claimed the Fish and Wildlife Service declaratory judgment preventing any use of failed to revoke an ESA Section 10 permit the land not specified in the treaty. The Court when the permittee was allegedly in granted the government’s motion to dismiss violation of the permit’s terms of the on sovereign immunity grounds. permit. In American Bird Conservancy v. Federal Communications Commission the Improved Definition of Land Use Planning court dismissed an ESA challenge to Responsibilities and other Principles. In permits for communications towers where the consolidated cases State of New Mexico v. exclusive jurisdiction was in the court of BLM and New Mexico Wilderness Alliance v. appeals. Similarly, in Geertson Seed Rundell (D. N.M.), plaintiffs challenged the

19 Bureau of Land Management’s amendment public health and safety risks from train of the Resource Management Plan for accidents and diesel emissions, and effects on Southern New Mexico to govern issuance recreation areas, wetlands, historic resources, of oil and gas leases. Plaintiffs alleged that and State-designated Areas of Critical the BLM and Fish and Wildlife Service Environmental Concern, and thus allowed this violated several environmental statutes in important project to proceed. adopting the Plan, which they claimed did not adequately protect the Otero Mesa Protecting Taxpayers Against grasslands. The court held in the Unwarranted Claims. The Division has a government’s favor on all major claims. responsibility to protect the public fisc against Most significantly, it found that BLM unwarranted claims and to provide just complied with the Federal Land Policy and compensation when the government takes Management Act by considering a private property for public purposes. This proposed alternative of New Mexico's year, the Division prevailed against a number Governor. BLM was not required to adopt of claimants bringing suits as a result of a or provide for public comment on the wide variety of federal program decisions. Governor's precise alternative. The court For example, in Cane Tennessee, Inc. v. further held that BLM’s "not likely to United States (Court of Federal Claims), the adversely affect" determination for the plaintiff alleged that the Secretary of the endangered Aplomado Falcon and the Fish Interior’s decision to designate an area and Wildlife Service’s concurrence encompassing his property as unsuitable for complied with the ESA. surface coal mining operations under the Surface Mining Control and Reclamation Act Defense of Corps Permit Facilitating resulted in an unconstitutional taking. In Mass Transit Construction. In many October 2005, following trial, the court held urban areas, mass transit projects and that the plaintiff failed to establish that the efforts to relieve the burden of auto traffic government’s regulatory action caused a loss are controversial and end up in litigation. sufficient to constitute a taking. In Advocates For Transportation Alternatives Inc, v. Army Corps of Major federal construction projects Engineers (D. Mass.), plaintiffs claimed frequently result in takings claims. In Ingram that the Army Corps of Engineers violated v. United States (Court of Federal Claims), a NEPA and the Clean Water Act when it group of property owners alleged that the issued a CWA permit to the Massachusetts construction and operation of the Red River Bay Transportation Authority to fill up to Navigation Project in Louisiana resulted in 7.60 acres of wetlands for construction of a the taking of flowage easements across their 17.7-mile commuter rail line extension to property in violation of the Fifth Amendment. serve the southeast suburbs of Boston. In September 2006, following trial, the court Plaintiffs alleged, among other things, that ruled in favor of the United States in 15 cases, the Corps failed to adequately review holding that the Project did not cause surface important environmental impacts. The flooding on any of the plaintiffs’ properties, court found that the Corps’ environmental nor did it cause groundwater levels to rise on analysis properly considered beneficial and the properties. adverse effects, mitigation measures,

20 The Division also had an state law claims for recovery of response outstanding year defending important costs at this privately owned, third party site. federal regulatory programs against takings Similarly, in Rhode Island Resource Recovery claims. In Brace v. United States (Court of Corp. v. EPA, a suit challenging remedial Federal Claims), the plaintiff alleged that a action at the Central Landfill Superfund site portion of his farm in Pennsylvania had in Johnston, Rhode Island, the court held that been taken as result of a Clean Water Act there is no waiver of sovereign immunity for enforcement action that required him to suing EPA. restore previously drained wetlands. In August 2006, following trial, the court There has also been significant dismissed all claims, finding that the litigation, in multiple federal district courts government’s actions did not take the and courts of appeals, relating to the farmer’s property in violation of the Fifth interpretation and application of the Supreme Amendment. In DuMarce v. Scarlett Court's decision in Cooper v. Aviall (holding (Court of Appeals for the Federal Circuit), that a § 113 contribution action may be the heirs of several Indian decedents, brought only if there is a pending or alleged a taking of property in violation of completed §§106 or 107 civil action or a the Fifth Amendment as a result of the settlement). A particular focus has been on government's application of the the issue of whether a liable party who has Sisseton-Wahpeton Sioux Act of 1984. not satisfied the requirements of section The Act provides that small fractional 113(f) of CERCLA for bringing a interests in land escheat to the tribe instead contribution action may instead bring an of passing to the heirs. In May 2006, the action under section 107 of CERCLA. The Federal Circuit reversed the trial court’s Division has taken the position that such suits holding and found that the government, are not permitted, and prevailed on this issue acting as trustee, timely informed the in the Third Circuit in E.I. Dupont De plaintiffs of all facts pertaining to their Nemours v. United States. The Eighth Circuit potential causes of action and, as a result, ruled adversely in Atlantic Research Corp. v. their claims were time-barred under the United States; the United States has sought statute of limitations. certiorari from that decision.

General Motors v. U.S. Army Corps Enforcing Environmental Laws Through of Engineers involved a state law claim International Capacity Building. The against the Corps for recovery of response Division has developed considerable expertise costs in connection with the cleanup of the in providing civil and criminal environmental Middleground Landfill site on enforcement and related training to Middleground Island, in the Saginaw practitioners, country officials, and judges, River. In November 2005, the District and it continues to get requests from both Court for the Eastern District of Michigan agencies and foreign countries to provide dismissed the complaint against the Corps such training. Among other activities, with prejudice, finding that neither the Division attorneys assisted senior officials Resource Conservation and Recovery Act from ASEAN nations to create a Southeast nor CERCLA waived the federal Asia wildlife law enforcement network at a government’s sovereign immunity from late 2005 Workshop entitled “Stopping the

21 Illegal Wildlife Trade in Southeast Asia” asserted water rights claims for the benefit of and have conducted several follow-up tribes. First, in Arizona v. California, the training workshops throughout the area in Supreme Court issued a consolidated final 2006. Division attorneys also lectured at decree that ended 54 years of litigation in the the Lobster Workshop sponsored by the oldest original action brought before the Gulf and Caribbean Fisheries Institute Court. The decree approved the settlements (GCFI) in Colombia in late 2005 to discuss between the United States, the Quechan Lacey Act prosecutions based on foreign Indian Tribe, and the State of Arizona, and law violations. As part of their work with between the Quechan Tribe, the Metropolitan the Enforcement Working Group of the Water District of Southern California, and the Commission on Environmental Coachella Valley Water District. The decree Cooperation (CEC), Division attorneys also consolidated five separate decrees developed and presented, with previously issued by the Court. Second, the representatives from Canada and Mexico, a United States sought the adjudication court’s judicial training program for Mexican final approval of the Gila River Indian judges in Mexico City and an innovative Community Water Rights Settlement enforcement techniques conference in Agreement in In re Gila River System and Washington, D.C.. The Division also Source. The settlement, if approved, will be helped organize numerous meetings in the largest water rights agreement in Arizona D.C. to share information and expertise history, and will provide the Gila River Indian with visiting foreign enforcement and other Community with 653,000 acre-feet of water personnel from countries such as China, annually. Third, in United States v. Belgium, and the U.K. Finally, as a Washington Department of Ecology (Lummi), member of the U.S. Coral Reef Task Force, the Division worked with the Interior the Division organized and led extremely Department, the State of Washington, private well-received interagency enforcement water users, and the Lummi Indian Nation to training workshops in three Task Force craft a historic settlement of an important member jurisdictions. Together with a water rights lawsuit involving groundwater number of other federal agencies the underlying the Lummi Reservation. Finally, Division is currently working with the the Division negotiated a consent decree Commonwealth of Puerto Rico on a similar resolving the United States’ claims on behalf workshop. of Duck Valley Reservation in In re SRBA.

PROTECTING INDIAN RESOURCES Protecting Tribal Hunting, Fishing, and AND RESOLVING INDIAN ISSUES Gathering Rights. The Division litigates to defend treaty-protected tribal hunting, fishing, Defending Tribal and Federal Interests and gathering rights. In United States v. in Water Adjudications. Water Michigan, the United States, several tribes, adjudications are complex cases, often the State of Michigan, and interested involving the rights of thousands of parties. Michigan hunting and conservation groups During the past year, the Division settled negotiated the terms of an agreement in or achieved entry of a final decree based on principle that, when formalized in a consent a settlement in four major water rights decree, will recognize the existence and adjudications in which the United States extent of the inland hunting and fishing rights

22 of five tribes in Michigan. In United States Defending Implementation of Indian v. Washington, the Division worked with Gaming Laws. The explosion in Indian 17 tribes, the State of Washington, and gaming has brought an increasing number of commercial entities to reach a settlement of challenges to its regulatory structure. The the tribes’ treaty right to take shellfish. Division was successful in defending the constitutionality of provisions of the Indian Protecting Tribal Lands. The Division Gaming Regulatory Act in Santee Sioux Tribe also defends and brings suits relating to of Nebraska v. Kempthorne, in which the court over 50 million acres of land that the rejected constitutional and statutory United States holds in trust for tribes. In challenges to a regulation that provides Fidelity Exploration & Production Co. v. procedures in lieu of a Tribal-State compact United States, the Division successfully allowing gaming. The court also upheld the defended a challenge to whether the United Interior Secretary’s determination that casino States had a colorable claim that a portion games were not permitted under Nebraska of the Tongue River bed lies within the law and could not be the subject of Northern Cheyenne Indian Reservation. procedures in lieu of a compact. In Wyandotte Nation v. Sebelius, the Division Protecting Tribal Governmental preserved the exclusive jurisdiction of the Authority. Following a decision by the United States to enforce Indian gaming laws Supreme Court that Indian tribes lacked on Indian lands in Kansas. In Sebelius v. jurisdiction to bring criminal prosecutions Norton, the court affirmed that the Secretary against members of other Tribes, Congress acted properly in taking these same Indian enacted legislation reinstating that lands into trust for the Wyandotte Nation as a authority. The Division has successfully mandatory acquisition directed by Congress opposed two constitutional challenges to and not subject to NEPA or the National that legislation, and secured rulings from Historic Preservation Act. the Ninth Circuit that the legislation does not violate due process or equal protection. SUPPORTING THE DIVISION’S The two cases are Means v. Navajo Nation LITIGATORS and Morris v. Tanner; certiorari has now been denied in both cases. New ENRD Intranet. In April, the Executive Office rolled out its new and Upholding Agencies’ Authority to improved ENRDNET, an intranet site Implement Indian Policies. In addition to featuring daily announcements as well as one- actively defending the Secretary of the stop access to more than 35 Division-wide Interior’s land trust acquisition authority services and programs with related guidance against constitutional and administrative and online forms. The intranet upgrade has law challenges, the Division successfully been well received by Division staff, and resolved a challenge to the Secretary’s usage statistics (over 1 million page-views in ability to take land into trust for use by the the first 6 months) show that it is improving Nottawaseppi Huron Band of Potawatomi communication and knowledge management Indians in CETAC v. Norton. for the staff.

23 Computer System Upgrade. ENRD saw growth in the use of technology through continued its commitment to providing the expanded use of its secure extranet top-quality technology for Division connection over which trial teams share litigators with an upgrade to the JCON documents with experts, outside agency desktop office automation system in 2006. counsel and other interested parties. ENRD’s Over the first three months of the year, the document scanning lab and other innovative desktop was upgraded with the latest approaches to automated litigation support software available in both the Microsoft have served as models of best practices that and Corel office automation suites, the have been emulated by other DOJ latest version of the Internet software, and components and outside agencies. new versions of the most-used litigation tools. This new desktop image was rolled Security and Emergency Planning. In out to all employees with minimal 2006, ENRD pursued an aggressive agenda disruption. The Division also upgraded its for security and emergency planning. The video-teleconferencing hardware with Division completed writing a comprehensive portable systems that allow video- Continuity of Operations Plan (COOP Plan) conferencing where a network system drop several months ahead of the required is available. Departmental schedule and began required employee training on the Plan (which will Automated Litigation Support. The continue into 2007). As part of the Plan, the Office of Litigation Support provided Division’s information technology staff outstanding support to some of ENRD’s developed a sophisticated mirror network most complex cases, making excellent use system that will serve as an instantly available of technology, contract staff, and in-house backup, current to within 24 hours, should the expertise. We provided on-site trial primary computer network system become support for major civil and criminal cases unavailable due to an area-wide emergency across the country, in locations as diverse event. About two-thirds of ENRD’s as San Diego, Portland, Salt Lake City, employees have the capability to access the Miami, Ohio, and Virginia. Case support Division’s computer network from a remote ranged from assisting with document site if the office buildings are not fit for management to establishing technological occupancy. This network redundancy ensures infrastructure that can link the courtroom a more flexible and efficient work capability and hotel prep rooms with DOJ offices in for ENRD employees. The Assistant DC or elsewhere. The litigation support Attorney General also approved extension of team met complex demands for physical a telework policy for attorneys which can be and electronic security of documents. expanded, if necessary, in support of the COOP and other emergency planning The Office of Litigation Support initiatives. continued its exemplary “back office” support of trial teams this year with the The Division is working with building creation of a mock electronic courtroom security committees and other Federal which trial teams can use to practice agencies to ensure that physical security in litigating in the new, entirely electronic, our buildings continues to improve to the courtroom environment. The Division also highest levels needed for the health and safety

24 of all our employees. We have begun with implementing stronger internal controls implementing the changes required for the over our financial programs. The Office also issuance of government-wide identification provided updated training to all attorneys on cards mandated under Homeland Security the use and management of their purchase Presidential Directive 12 (HSPD-12). cards for litigation expenses.

President’s Management Agenda. ENRD’s Denver Field Office staff was moved ENRD has been an active participant in the into upgraded space in the Rogers Federal DOJ initiatives to improve the management Building this spring. The space includes of the Federal Government under the ergonomic office design, and better security President’s Management Agenda. The for employees. Division contributes to the Departmental rating for three initiatives: Human Capital, Budget and Performance Integration, and e-Government. We were awarded a “green” score for each quarter of 2006 in which we received a “report card” rating. Beyond the regular quarterly contributions, ENRD also has worked with the DOJ Human Resources office on the Skills Gap survey analysis, Human Capital Survey, and the updating of the Department’s Human Capital Strategic Plan.

Support Programs. ENRD’s Human Resources staff implemented an Honors Paralegal Program, as part of the Federal Career Intern Program, that will provide a strong recruiting avenue for entry-level paralegal support. Several litigating sections and individual trial teams elected to participate in a pilot program for mail scanning, which allowed them to receive all of their mail in electronic format after it had already been opened and catalogued to the proper case. This pilot program was successful and will become the basis for a fully electronic mail and file management program to be implemented in 2007.

In compliance with new requirements from the Office of Management and Budget, the Comptroller’s Office assisted the Division

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