San Antonio Bay Estuarine Waterkeeper v. Formosa Plastics Corp., No. 6:17-cv-0047 (S. D. Tex. — Victoria) (Final Consent Decree entered Nov. 27, 2019)


San Antonio Bay Estuarine Waterkeeper and S. Diane Wilson, Plaintiffs v. Formosa Plastics Corp., Texas, et al., No. 6:17-cv-0047 (S.D. Tex. — Victoria)
Memorandum and Order on Liability entered June 27, 2019; Final Consent Decree entered Nov. 27, 2019.

Evidence, Control, Cleanup, Remediation, Mitigation Case

In San Antonio Bay Estuarine Waterkeeper et al. v. Formosa Plastics Corp., et al., Waterkeeper sued plastics production factory Formosa for liability and equitable relief under the federal Clean Water Act (CWA) and Formosa’s CWA Permit. The CWA’s purpose is to “restore and maintain the chemical, physical, and biological integrity of the Nation’s waters.” 33 U.S.C. § 1251. The CWA and accompanying Permit prohibited the discharge of “floating solids or visible foam in other than trace amounts”, and required Formosa to report violations from its wastewater pipe and stormwater outfalls. Formosa discharged to waters that are important to commercial fishing, aquatic species such as birds and turtles, and recreation.

After a several day bench trial on the issue of liability, all of Formosa’s arguments and defenses failed,[1] and the court resoundingly ruled in the Nonprofit’s favor on Formosa’s liability. Five months later, in November 2019, the court approved a Consent Decree (CD) settling all remaining matters in the case. The settlement included $50 million for funding of environmental projects in the local area, the largest citizen CWA settlement.  As of August 2020, many aspects of the settlement have been implemented, but the parties disputed when future payments must be made if plastics are found outside Formosa’s stormwater outfalls and had not agreed to the appointment of a Monitor.  On August 17, 2020, the court ordered that the “unambiguous terms of the Consent Decree” require that the Monitor “simply documents the presence of Plastics.”  The court held that if Formosa refuted whether plastics found by the Monitor resulted from a new release, the burden was on Formosa to offer such proof. 

The CD focuses on: engineering changes at the Formosa facility; monitoring, reporting and future mitigation payments; remediation; a revised CWA permit; a mitigation trust fund and environmental mitigation projects. The Nonprofit maintains a broad role in all stages of the CD processes, including reviewing agreements, access to records, and site inspections.

  • Engineering Changes (CD at IV.A.12 – 27)
    • Appointment of Engineering Consultant to review current design and operations regarding plastic[2] discharges, to design a retrofit of the facility, and audit effectiveness of measures to halt the discharges of plastics.
  • Monitoring, Reporting and Future Mitigation Payments (CD at IV.B.28-38)
    • Appointment of a Monitor
    • Install Bypass Pipe and Electronic Water Sampling Mechanism: Formosa will install an above-ground bypass pipe and treated wastewater sampling mechanism to allow for continuous electronic monitoring of Plastics after wastewater has been treated and water quality controls have been used but before discharge to Lavaca Bay. This sampling mechanism will be designed by Waterkeeper’s expert and may be the first of its kind.
    • Install Outfalls and Containment Booms: Formosa will install and maintain Containment Booms for Cox Creek stormwater outfalls.
    • Reporting:  Monitor exclusively determines days of data gathering and neither Formosa or Nonprofit to know the days in advance.
    • Violations:  For violations of the zero discharge agreement found at the Bypass WSM or inside the Containment Booms, these will be violations of Formosa’s CWA Permit and Formosa will pay to the Mitigation Trust amounts increasing annually from $10,000. .  Formosa will also report these violations to the state regulatory agency. Pursuant to the court’s August 2020 order, if Formosa disputes that these plastics resulted from a new release, Formosa bears the burden to offer that proof and may petition for a refund.
  • Remediation of Past Discharges (CD at IV.C.39-48)
    • Appointment of a Remediation Consultant to review remediation methods for plastics, develop and propose a Remediation Plan, and to determine when remediation can be concluded. The Remediation Plan’s goal is removal of “most” plastics from the environment while protecting the ecosystem. CD at IV.C.41(a). environmental damage. Record keeping will be public.
  • Revised CWA Permit (CD at IV.D.49-50)
    • Formosa will request a revised CWA Permit from TCEQ with two changes: 1) comply with “zero discharge” of plastics from the plant   (instead of “trace amounts”) starting the effective date of the CD; and 2) comply with “zero discharge” of stormwater from all stormwater outfalls up to a 5-year 24-hour rainfall event (6.8 inches in 24 hours) once the necessary infrastructure is constructed, but no later than Jan. 1, 2024.
    • Even if the revised CWA Permit terms are not obtained from the state agency, Formosa agrees to “zero discharge” of plastics and stormwater in compliance with the modified terms.
  • Mitigation Trust Fund (CD at IV.E.51-54)
    • $50M over 5 years to a trust, to provide environmental benefits to the affected areas. Annual reports will be public.  Waterkeeper, Formosa and representatives of local environmental organization sit on the board.
  • Environmental Mitigation Projects (Approximately $50M over 5 years to 7 projects) (CD at IV.F.55-62)

(Organized by amount of money)

    • Fishing Cooperative ($20M) to support fishing, shrimping, oyster industry harmed by pollution, revitalize marine ecosystem, promote long-term sustainable fisheries, and invest in necessary infrastructure, including transportation and a lending program.
    • Mitigation Trust Fund Award, to be awarded for future local environmental research and projects ($11.25M).
    • Public lake and public park development, operation and maintenance ($10M), environmental mitigation research for local river and bay ecosystems ($5M), beach erosion and control ($2M), “Nurdle Patrol” at a marine science institute to document plastic discharges ($1M), and camp instructing youth to be good stewards of local ecosystems ($750,000).
  • Public Statement (CD at IV.E.63)
    • Any public statement relating to the mitigation projects must note that the project was undertaken in connection with the litigation.
  • Other payments (CD at V.64-65). All of the other actions described in the CD are Formosa’s financial responsibility. Formosa also agreed to pay $3M in Nonprofit’s attorneys and expert fees and for Formosa to pay foreseeable attorney and expert fees.

[1] Formosa attempted unsuccessfully to disqualify the Nonprofit’s experts. Formosa also theorized that its discharges were only in “trace amounts” by applying a convoluted formula, but Formosa’s own experts and prior filings in the underlying permit case undercut this argument. Formosa also argued it had made operational changes to limit plastic discharges and was using its best efforts; however, Formosa was still “overwhelmed” with plastic discharges. Formosa unsuccessfully challenged the Nonprofit’s standing (claims of redressibility of harm) to bring the case. Lastly, Formosa argued an agreed order it had made with the state environmental agency mooted the Nonprofit’s claim, but the court found that the agreed order only covered a portion of the issues raised by the Nonprofit.

[2] In the CD, the parties defined “plastics” as “visible” plastic pellets, flakes or powder produced at the Formosa plant and did not require the plastics to be “floating”, nor did they agree to an exception for “trace amounts” of plastics (as the CWA Permit provided). CD at II.11.k.