New Criminal Charges Under Migratory September 7, 2011 Bird Treaty - - PDF document

New Criminal Charges Under Migratory Bird Treaty Act Create More Complexity for Energy Companies

Introduction

The United States Department of Justice recently filed federal criminal charges against seven oil and gas producers operating in North Dakota’s Williston Basin. The charges allege violations of the federal Migratory Bird Treaty Act (“MBTA” or the “Act”), asserting simply that the companies committed “take” of migratory birds without permission. Media accounts explained that birds were said to have died after landing in oily water in waste pits maintained by the companies. An interesting feature of these enforcement actions is that the charges allege relatively few individual bird deaths (twenty eight total for the seven companies charged), in contrast to large-scale spill events where hundreds of birds might be impacted. These developments could signal a renewed MBTA enforcement focus on the oil and gas industry generally, but in any event they serve to remind facility

• perators nationwide of the need to avoid even unintended take of migratory birds.

Criminal Liability and Penalties under the Migratory Bird Treaty Act

Historically, most MBTA cases have been brought against those who hunted protected birds without proper permits. In the charges against the Williston Basin producers, however, the government did not allege that the companies meant to kill birds, or even that the deaths resulted from negligent

• behavior. Such allegations are not necessary because the MBTA prohibits “take” of migratory birds

without regard to a defendant’s intentions or even its failure to exercise care. Indeed, although courts have addressed the intent question differently, several have found liability where the defendant’s actions were clearly not intended to cause bird deaths, for example, where the defendant’s industrial wastewater pond containing pesticides killed birds that landed there;1 where birds died after feeding

• n crops sprayed with pesticides;2 where the defendant owned and operated power lines that

electrocuted birds which landed on the wires;3 and where birds were found to have been entrapped in defendants’ oil drilling tower equipment.4 Another aspect of the Act’s broad scope involves the variety of birds it protects. “Migratory” under the Act covers far more than waterfowl and other birds commonly thought of as migratory. Under the U.S. Fish and Wildlife Service’s (“Service”) regulations, there are over 800 types of migratory birds that are protected. 785 Fed. Reg. 9282-9322 (March 1, 2010) codified at 50 CFR § 10.13. It includes native species such as hummingbirds, warblers, raptors, owls, crows, gulls, and a great many

• songbirds. Naming a species not on the list is more difficult than naming one on it; non-native birds

1 Uniteds States v. FMC Corp., 572 F.2d 902 (2d Cir. 1978). 2 United States v. Corbin Farm Services, 444 F. Supp. 510 (E.D. Cal. 1978), aff’d on other grounds, 578 F2d 259 (9 th Cir.

1978).

3 United States v. Moon Lake Electric Ass’n, Inc., 45 F. Supp. 2d 1070 (D. Colo. 1999). 4 United States v. Apollo Energies, Inc., 611 F.3d 679 (10 th Cir. 2010).

September 7, 2011

Practice Group: Energy and Utilities Environmental, Land and Natural Resources

Federal Migratory Bird Act Charges Filed Against Producers in the North Dakota Oil Fields

2 and ground-dwelling game birds are among the few not covered. Consequently, anyone whose act or facility poses a threat to birds generally might be exposed to liability under the Act. By contrast, the government’s range of enforcement tools under the Act is narrow. Unlike many environmental statutes that authorize escalating civil penalties that can, in the most serious cases, give rise to criminal sanctions, the Act’s only enforcement mechanisms are criminal charges. Unless the alleged violation can be proven to have been done “knowingly,” it is a misdemeanor.5 Even a misdemeanor under the Act is, however, punishable through fines of up to $15,000 per violation and up to six months’ imprisonment. The charges against the seven Williston Basin oil operators are misdemeanors, and they allege each bird death as a separate violation. Adding concern for operators, the government may try to escalate punishment by invoking the Alternatives Fine Act.6 Under the APA,, a court is sometimes authorized to impose a fine that is equal to twice the loss caused by the crime. In the well known Exxon Valdez prosecution, the government

• btained fines of $125 million, based on single violations of the MBTA and Clean Water Act. The

statutory fines would have been miniscule in comparison. Instead, the government argued, and the company agreed, that the economic loss measured in part by the cost of replacing or restoring wildlife (including migratory birds), combined with the loss doubling provision of the Alternative Fines Act, justified this much higher fine.7 If modern-day policymakers were to re-imagine the Migratory Bird Treaty Act, they might empower the Service to grant liability exceptions for specific development activities that have been adapted to minimize bird mortality but which could not avoid it altogether. Such safe harbors would perhaps resemble the “incidental take” provision of the Endangered Species Act. The MBTA has no such feature, however. Although it does authorize the Service to exempt take by regulation8 – it is through such regulations, for example, that the Service permits hunting of migratory birds – it does not directly empower the Service to grant exemptions on a case-by-case basis. In the absence of operator-specific incidental take clearances, new safe harbors through regulations remain theoretically available, but given the time and uncertainty involved in the rulemaking process the regulated community will face practical challenges in obtaining clarity through that forum.

Achieving “Compliance” Through Best Practices

Although the MBTA establishes broad liability exposure for causing bird deaths and the legal consequences are potentially serious, there do appear to be patterns of conduct that attract

• enforcement. Charges seem most often filed against operators who either carelessly create the bird

hazard or who fail to take available, reasonable steps to mitigate it. For example, oil drilling wastewater pits of the kind involved in the North Dakota MBTA charges are the subject of Service guidance postings.9 Those postings recommend various risk avoidance or bird protection techniques, from covering the ponds with netting, to preventing the formation of oil sheens on the ponds, to replacing the ponds entirely with enclosed structural tanks. Of course the costs and practical challenges in implementing these measures can be considerable; maintaining the proper placement of

5 16 USC § 707(a). 6 18 U.S.C. § 3571(c)(3). 7 See Government’s Memorandum in Aid of Sentencing, United States v. Exxon, No. A90-015-CR (1991) [on file with

authors]. In addition, some question exists as to whether the United States could use the asset forfeiture provisions of the MBTA to seize any ‘equipment…”used… when engaged in the …killing…of any migratory bird…” even if not done with the intention of offering the bird for sale. See 16 U.S.C. §707(d)

8 16 U.S.C. § 704(a). 9 http://www.fws.gov/mountain-prairie/contaminants/contaminants1c.html.

Federal Migratory Bird Act Charges Filed Against Producers in the North Dakota Oil Fields

3 the nets would be understandably difficult in the Great Plains winds. Still, cautious operators will realize that if their facilities carry the potential to kill migratory birds, implementing best practices may be the best way to avoid becoming the target of criminal prosecution. A similar regulatory pattern has developed in the wind energy industry. Experience shows that birds

• f various kinds are killed when they collide with wind turbines. It appears to be the case that the

Service has not yet prosecuted windfarm operators for bird mortality under the Act.10 The Service has, however, proposed detailed guidelines addressing recommended practices in wind energy siting and operation,11 as well as mitigation measures to compensate for identified mortality. These guidelines, while deemed “voluntary,” have teeth in practice because industry operators appreciate the possibility of MBTA enforcement if their operations kill birds under circumstances where recommended practices were not followed.

Conclusion

For any company whose operations pose a threat to kill birds, even where the deaths are unintended and incidental, liability under the Migratory Bird Treaty Act should be a concern. Complete safe harbors from liability are probably unattainable for companies who cannot avoid some level of incidental bird deaths, but attentive implementation of best practices may provide the best protection available. Authors:

Barry Hartman Barry.hartman@klgates.com +1.202.778.9338 Brian Knox Brian.knox@klgates.com +1.206.370.6791

10 Wind Farms under Fire for Bird Kills, Washington Post (Aug. 28, 2011). 11 http://www.fws.gov/habitatconservation/wind/html. The Service proposed the guidelines on Feb. 8, 2011, and is in the

process of revising them in light of public comment.