The U.S. Supreme Court has declined to hear an appeal[1] addressing whether a mixture of petroleum and chemicals constitutes “oil” under the Oil Pollution Act (OPA). In doing so, the Court has effectively rejected the efforts of multiple companies to resuscitate their claims against a storage terminal operator for polluting the Houston Ship Channel.

Background

The case stems from the 2019 fire at Intercontinental Terminals Co.’s (ITC) Deer Park facility, where a four-day fire led to a retaining pool rupture, releasing 400,000 barrels of oil, along with more than 38,000 barrels of xylene, into the Ship Channel. As a result, numerous lawsuits ensued from companies experiencing financial losses due to the Ship Channel closure and from nearby property owners. Subsequently, prosecutors pursued criminal environmental charges against ITC following the spill.

Lawsuits Under the Oil Pollution Act

For its part, Texas Aromatics and other companies filed a lawsuit against ITC for the spill under the Oil Pollution Act. Initially, the Texas federal judge dismissed the suit, finding that the mixture that spilled into the waterway could not be defined as “oil” under the OPA. This decision was appealed and affirmed by the Fifth Circuit, noting that the spill was not purely oil given that there was more than 38,000 barrels of xylene also released.

Appeal and Supreme Court Decision

Texas Aromatics, LP and other companies sought review of the Fifth Circuit’s decision, arguing that the “single molecule” theory would prevent companies from liability for comingled chemical and oil spills and limit suits to hold those companies accountable to the Comprehensive Environmental Response Compensation and Liability Act (CERCLA). According to Texas Aromatics, ITC should/could be liable under both. Unpersuaded by this argument, the Supreme Court will not review the Fifth Circuit’s decision.

References

[1] Tex. Aromatics, L.P. v. Intercontinental Terminals Co., L.L.C.