United States v. Transocean Deepwater Drilling Inc.

Decision Date30 March 2013
Docket NumberCivil Action No. H–11–3638.
Citation936 F.Supp.2d 818
PartiesUNITED STATES of America, Petitioner, v. TRANSOCEAN DEEPWATER DRILLING INC., Respondent.
CourtU.S. District Court — Southern District of Texas


Samuel G. Longoria, U.S. Attorney's Office, Adam Laurence Goldman, Department of Justice, Houston, TX, for Petitioner.

Steven L. Roberts, David Andrew Baay, Julie S. Stanger, Sutherland Asbill & Brennan LLP, Houston, TX, for Respondent.


LEE H. ROSENTHAL, District Judge.

This case challenges the jurisdiction of the United States Chemical Safety and Hazard Investigation Board (“CSB”) to investigate the release of chemicals resulting from the May 2010 explosion and fire on the Deepwater Horizon drilling rig in the Gulf of Mexico at British Petroleum's Macondo well. The United States petitions to enforce subpoenas the CSB issued to Transocean Deepwater Drilling, Inc. (Transocean), the rig owner. Transocean has moved under Federal Rule of Civil Procedure 12(b)(6) to dismiss the petition on the ground that the subpoenas are unenforceable. In the alternative, Transocean moves to quash the subpoenas. (Docket Entry No. 23). The court heard oral argument on these issues, (Docket Entry No. 43), and has considered the motions, the accompanying briefing and exhibits, the arguments of counsel, and the relevant law. For the reasons explained below, the motion to dismiss or to quash is denied.

I. Background

This dispute arises from the explosion and fire on the offshore drilling rig Deepwater Horizon on April 20, 2010. See In re: Oil Spill by the Oil Rig “DEEPWATER HORIZON” in the Gulf of Mexico on April 20, 2010, 844 F.Supp.2d 746, 747–48 (E.D.La.2012). The April 20, 2010 blowout event did not immediately result in the release of oil into the water. Instead, the collapse of the riser structure created a flow path for the subsea discharge of crude oil approximately two days later. See id. at 748 & n. 4 (explaining that Transocean's position is “that any oil that traveled up the riser to the deck of the MODU during th[e] time [of the blowout event] would have combusted in the fire before it could have entered the water”).

Many governmental and other entities investigated the blowout, explosion, fire, and oil spill. The CSB issued five subpoenas at issue in this litigation, two on November 24, 2010, one on March 9, 2011, and two on April 7,2011. (Docket Entry No. 1, Petition, ¶ 11). These subpoenas seek, among other things, all records collected by the Transocean internal investigationteam. ( Id., ¶ 13). They also seek all records provided to the Joint Investigative Team, which consists of members of the United States Coast Guard and what was formerly the Mineral Management Service (now the Bureau of Ocean Energy Management Regulation and Enforcement), two federal agencies granted express authority to investigate the incident. ( Id., ¶ 15).

After Transocean was served with the CSB subpoenas, it took the position that the CSB lacked authority to investigate the Macondo incident. On October 12, 2011, Transocean told counsel for CSB and the United States that it would not comply with the subpoenas. The United States, on behalf of the CSB, filed the present petition under 28 U.S.C. § 1345 and 42 U.S.C. §§ 7412(r)(6)(A)-(S) and 7607(a), to enforce the administrative subpoenas. (Docket No. 1).

II. The Legal Standard

To enforce its administrative subpoenas in a federal district court, a governmental agency must show that: (1) the investigation will be conducted pursuant to a legitimate purpose; (2) the inquiry may be relevant to the purpose; (3) that the information sought is not already within the agency's possession; and (4) that internal administrative procedures have been followed. See U.S. v. Powell, 379 U.S. 48, 57–58, 85 S.Ct. 248, 13 L.Ed.2d 112 (1964); Burlington N. R.R. Co. v. Office of Inspector Gen., R.R. Ret. Bd., 983 F.2d 631, 638 (5th Cir.1993). When called on to enforce an administrative subpoena, a court must evaluate whether: (1) the subpoena was issued for a lawful purpose within the statutory authority of the issuing agency; (2) the documents requested are relevant to that purpose; and (3) the subpoena demand is reasonable and not unduly burdensome. See, e.g., Okla. Press Publ. Co. v. Walling, 327 U.S. 186, 209, 66 S.Ct. 494, 90 L.Ed. 614 (1946); Endicott Johnson Corp. v. Perkins, 317 U.S. 501, 509, 63 S.Ct. 339, 87 L.Ed. 424 (1943); Burlington N., 983 F.2d at 638 (citing U.S. v. Morton Salt Co., 338 U.S. 632, 652, 70 S.Ct. 357, 94 L.Ed. 401 (1950)).

Courts should not enforce administrative subpoenas issued in an investigation if the agency lacks jurisdiction to investigate. See, e.g., E.E.O.C. v. Karuk Tribe Hous. Auth., 260 F.3d 1071, 1077 (9th Cir.2001) (quashing an administrative subpoena because agency's investigation exceeded its jurisdiction); see also Marshall v. Burlington N., Inc., 595 F.2d 511, 513 (9th Cir.1979); Reich v. Great Lakes Indian Fish & Wildlife Comm'n, 4 F.3d 490, 491–92 (7th Cir.1993). An administrative-enforcement proceeding is an appropriate forum for challenging an agency's jurisdiction. See F.T.C. v. Ken Roberts Co., 276 F.3d 583, 587 (D.C.Cir.2001); see also Audubon Life Ins. Co. v. F.T.C., 543 F.Supp. 1362, 1367 (D.C.La.1982). But a district court may not inquire into an agency's jurisdiction in an enforcement action so long as the material sought by the subpoena is not “plainly incompetent or irrelevant to any lawful purpose” of an agency. Endicott Johnson, 317 U.S. at 509, 63 S.Ct. 339.

The Powell standard is intended to be “a minimal burden” and one “which may be met by a simple affidavit filed with the petition to enforce.” United States v. Tex. Heart Inst., 755 F.2d 469, 474 (5th Cir.1985); see also Burlington N., 983 F.2d at 637 (“It is settled that the requirements for judicial enforcement of an administrative subpoena are minimal.”). Because the United States established its prima facie case under Powell, the burden of going forward shifted to Transocean. See United States v. Wilson, 864 F.2d 1219, 1222 (5th Cir.1989); United States v. Davis, 636 F.2d 1028, 1034 (5th Cir.1981).

III. AnalysisA. The Statutory Authority for the CSB's Investigation

The CSB is a federal agency created by the Clean Air Act (“CAA”) Amendments of 1990, Pub.L. No. 101–549, 104 Stat. 2399.See40 C.F.R. § 1600.1. The authorizing statute is codified at 42 U.S.C. § 7412(r)(6). The statute gives the CSB authority to “investigate ... the facts, conditions, and circumstances and the cause or probable cause of any accidental release resulting in a fatality, serious injury or substantial property damages.” 42 U.S.C. § 7412(r)(6)(C)(i). “The term ‘accidental release’ means an unanticipated emission of a regulated substance or other extremely hazardous substance into the ambient air from a stationary source.” Id., § 7412(r)(2)(A). “The term ‘stationary source’ means any buildings, structures, equipment, installations or substance emitting stationary activities (i) which belong to the same industrial group, (ii) which are located on one or more contiguous properties, (iii) which are under the control of the same person (or persons under common control), and (iv) from which an accidental release may occur.” Id., § 7412(r)(2)(C).

The enabling statute also delineates investigative responsibilities between the CSB and other agencies:

The [CSB] shall coordinate its activities with investigations and studies conducted by other agencies of the United States having a responsibility to protect public health and safety. The [CSB] shall enter into a memorandum of understanding with the National Transportation Safety Board to assure coordination of functions and to limit duplication of activities which shall designate the National Transportation Safety Board as the lead agency for the investigation of releases which are transportation related. The [CSB] shall not be authorized to investigate marine oil spills, which the National Transportation Safety Board is authorized to investigate. The [CSB] shall enter into a memorandum of understanding with the Occupational Safety and Health Administration so as to limit duplication of activities. In no event shall the [CSB] forego an investigation where an accidental release causes a fatality or serious injury among the general public, or had the potential to cause substantial property damage or a number of deaths or injuries among the general public.

Id., § 7412(r)(6)(E).

B. Whether the CAA Expressly Prohibits the CSB from the Type of Investigation at Issue

Transocean argues that the CAA expressly prohibits the CSB from investigating the Macondo incident because it was a “marine oil spill.” Transocean argues that Congress expressly placed responsibility for investigating such incidents with the National Transportation Safety Board (“NTSB”). (Docket Entry No. 23, at 5). Transocean cites the statement that the CSB “shall not be authorized to investigate marine oil spills, which the National Transportation Safety Board is authorized to investigate.” 42 U.S.C. § 7412(r)(6)(E).

The United States argues that the CSB is not investigating a marine oil spill but rather the release of gases from the blowout and explosion. This court agrees. The proffered chronology—blowout, explosion, and fire followed by the collapse of the Deepwater Horizon's subsea riser, then the release of oil into the sea—does not convert the spill into one that is solely marine in nature, as opposed to one also involving airborne gases and their release. This court cannot conclude that the CSB's investigation is expressly prohibited by the CAA.

Transocean argues that the CSB is “masking its investigation as being ‘limited to’ substances released into the ambient air because all of the CSB's investigations are limited to accidental releases into ‘ambient air.’ By expressly prohibiting the CSB from investigating ‘marine oil spills,’ Congress could only have intended that the CSB be prohibited...

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