UNITED STATES DEPARTMENT OF JUSTICEENVIRONMENT AND NATURAL RESOURCES DIVISION

SUMMARY OF LITIGATION ACCOMPLISHMENTSFISCAL YEAR 2007

CONTENTS

FOREWORD i

PROTECTING OUR NATION’S AIR, LAND AND WATER 1

ENSURING CLEANUP OF OIL AND HAZARDOUS WASTE 6

PROMOTING RESPONSIBLE STEWARDSHIP OFAMERICA’S NATURAL RESOURCES AND WILDLIFE 8

CRIMINAL ENFORCEMENT OF OUR NATION’S POLLUTION AND WILDLIFE LAWS 13

DEFENDING VITAL FEDERAL PROGRAMS AND INTERESTS 17

PROMOTING NATIONAL SECURITYAND MILITARY PREPAREDNESS 26

PROTECTING INDIAN RESOURCESAND RESOLVING INDIAN ISSUES 27

SUPPORTING THE DIVISION’S LITIGATORS 28

FOREWORD

I am honored to present this summary of the Environment and Natural ResourcesDivision’s litigation accomplishments for Fiscal Year 2007. This has been an extraordinaryyear. The Division both brings affirmative civil and criminal enforcement actions and defendsfederal agencies when their actions or decisions are challenged on the basis of our environmentalor public lands and resources laws. As in past years, the Division achieved significant victoriesfor the American people in each of the many areas for which it has responsibility. Theseresponsibilities include protecting the Nation’s air, water, land, wildlife and natural resources,upholding our trust responsibilities to American Indians, acquiring needed lands for federalagencies, and otherwise defending important federal programs.

The Division’s vigorous enforcement of our environmental laws again resulted inrecordbreaking achievements in both the civil and criminal arenas. Enforcement is a criticalcomponent of environmental protection and helps ensure that our citizens breathe clean air, drinkclean water, and will be able to enjoy the country’s public lands, wildlife and other naturalresources for generations to come.

In civil enforcement, the Division obtained nearly $6.7 billion in injunctive relief,through contested judgments or judicially approved consent decrees – the second largest singleyear amount ever. The injunctive measures secured will ensure that harmful sediments areremoved from rivers, state of the art pollution control devices are added to factories to providecleaner air, sewage discharges are eliminated, and damaged land and water aquifers are restored. This record result does not include one of the largest enforcement cases of all time, the massivecase against American Electric Power for alleged Clean Air Act violations, which was resolvedby consent decree lodged on October 9, 2007. Working jointly with eight states and thirteenenvironmental groups, the Division led the effort to bring the company into compliance with thelaw and obtain extraordinary pollution reduction. The settlement will require American ElectricPower to undertake remedial actions to reduce its emissions of pollutants at an estimated cost of$4.6 billion, the highest value of injunctive relief ever obtained in an environmental case. Theenvironmental impact is enormous. When fully implemented, the settlement will secure morethan 800,000 tons per year of air pollution reductions. The foundation for this result was laid bythe Supreme Court’s recent – and unanimous – decision in which the Division vindicated theEnvironmental Protection Agency’s position on a key liability issue related to power plantemissions.

The Division also secured a record penalty in a settlement with the East Kentucky PowerCooperative that included the highest fine ever imposed under the Clean Air Act’s acid rainprogram. And in a wide range of other cases, the Division continued to protect the nation’s airquality by successfully pursuing Clean Air Act claims against oil refineries, automobilemanufacturers, and diverse industrial facilities.

The Division also worked successfully to ensure the integrity of municipal wastewatertreatment systems. Each year, hundreds of billions of gallons of untreated sewage are discharged

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into the nation’s waters from municipal wastewater treatment systems that are overwhelmed byweather conditions that they are not adequate to handle. This year, the Division reachedsettlements with several cities – including two of the largest sewer treatment settlements ever,encompassing Indianapolis and the Pittsburgh region – that will collectively provide for morethan $4 billion in expenditures to bring these systems into compliance with the Clean Water Act. These settlements will ultimately reduce the volume of untreated sewage discharged into ourstreams and rivers by tens of billions of gallons. The Division also protected the nation’s watersand wetlands from illegal fill through Clean Water Act enforcement actions.

The Division this year also successfully concluded the first court action ever broughtunder the Pipeline Safety Act. The settlement of this case – which arose out of a tragicexplosion of an El Paso Natural Gas Company pipeline which killed twelve people – will requirethe defendant to pay a $15.5 million civil penalty and to spend at least $86 million oncomprehensive upgrades of its pipeline system.

The Division’s critical enforcement successes in the civil arena were paralleled in thecriminal arena. As part of the Division’s ongoing initiative to prosecute those who dump wasteoil and other chemicals from ships into the oceans and coastal waterways and who keep falserecords to hide those activities, the Overseas Shipholding Group was sentenced to pay $37million in penalties – the largest ever penalty for concealing vessel pollution. The Division alsoobtained plea agreements, convictions, substantial terms of imprisonment, and criminal finesagainst violators who intentionally violated the Clean Air Act, Clean Water Act, lawssafeguarding the public from exposure to hazardous waste, and laws protecting wildlife. Forexample, the Division recently reached plea agreements with two British Petroleum subsidiariesfor environmental crimes relating to a fatal explosion at a Texas refinery and to leaks of crude oilfrom pipelines. In agreements announced in October 2007, British Petroleum agreed to pay $50million in criminal fines for Clean Air Act violations relating to a catastrophic explosion thatkilled 15 employees and injured at least 170 others, and, in a second case, agreed to $12 millionin criminal fines, $4 million in community service payments, and $4 million in restitution to thestate for Clean Water Act violations relating to pipeline leaks onto the tundra and into a frozenlake in Alaska. In another case, the Division secured convictions against Citgo Refining andChemical Company for having operated open oil tanks that lacked proper emission controls andin which birds protected by the Migratory Bird Treaty Act were trapped and killed, due to thecompany’s failure to install inexpensive protective equipment.

Record-breaking sentences and enforcement cases are impressive but they are only a partof the Division’s work. An equally important aspect of the Division’s work is its defense of vitalfederal programs, including military and national security programs. For example, the Divisionsuccessfully defended the Army against challenges to its chemical weapons demilitarizationprogram. We assisted the military in its training, preparations and deployment in the war onterrorism with a court victory that allowed the Army to resume activities critical to convertingthe 2nd Brigade, 25th Infantry Division into a Stryker Brigade as part of the Army’smodernization plan. The Division also acquired property essential to military and homelandsecurity needs.

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The Division promotes responsible stewardship of our natural resources by defendingfederal agencies charged with such tasks as determining whether a species should be listed asendangered or threatened, managing fishery resources in a way that balances various interests,overseeing water conservation projects, managing activities on federal lands that range fromgrazing to oil and gas leasing, and protecting the nation’s forests from the risks of wildfire. Thisyear, the Division had important successes in facilitating the work agencies do in all these areas.

The Division’s work also secures critical water rights for the United States. This year,the Division reached important settlements and secured favorable judgments ensuring access tothe water necessary to maintain the vitality of natural resources and uses of the public lands,national forests, national parks, wildlife refuges, wild and scenic rivers, military bases, andfederal reclamation projects throughout the West. Another primary responsibility of theDivision is the implementation of the United States’ trust responsibility to Indian tribes and theresolution of the issues pertaining to American Indians. We work to protect tribal fishing andwater rights, this year, for example, reaching a comprehensive settlement that resolves litigationongoing since the 1970s and vindicating the hunting and fishing rights of five tribes under the1836 Treaty of Washington.

The Division currently has a docket of over 6,800 active cases and matters. The cases theDivision handles arise under more than 150 different statutes, including the Clean Water Act, theClean Air Act, the Safe Drinking Water Act, the Comprehensive Environmental Response,Compensation and Liability Act, the National Forest Management Act, the Federal Land Policyand Management Act, the National Environmental Policy Act, and the Endangered Species Act. The Division litigates in every judicial district in the Nation.

As someone who has served more than a decade in the Department of Justice but isrelatively new to the Division, I have been impressed with, but unsurprised by, the dedicationand hard work of the Division’s attorneys and support staff. The service and commitment of ourpeople is in perfect keeping with the Department’s highest traditions. The Division’s exemplaryrecord in protecting the environment, American Indian rights, and the Nation’s natural resources,wildlife, and public lands is due to the hard work of these people, as well as our client agencies,the United States Attorney’s Offices, and state and local officials around the country. TheDivision’s work is a powerful demonstration that our national government can – and does –make a positive difference in the lives of Americans.

Ronald J. TenpasAssistant Attorney GeneralEnvironment and Natural Resources DivisionMarch 2008

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PROTECTING OUR NATION’S AIR,LAND AND WATER

Reducing Air Pollution from PowerPlants. During the past year, the Divisioncontinued to successfully litigate Clean AirAct (CAA) claims against operators of coal-fired electric power generating plants. Theviolations arose from companies engaging inmajor life extension projects on agingfacilities without installing required state ofthe art pollution controls, resulting in tens ofmillions of tons of excess air pollution thathas degraded forests, damaged waterways,contaminated reservoirs, and adverselyaffected the health of the elderly, the young,and asthma sufferers.

This year, the Division achieved anotable Supreme Court victory upholdingthe Environmental Protection Agency (EPA)interpretation of the CAA that underliesmany of these enforcement efforts. InEnvironmental Defense v. Duke EnergyCorp., the Supreme Court, in a 9-0 decision,agreed with the United States that the lowercourts had impermissibly reviewed thevalidity of EPA’s Prevention of SignificantDeterioration (PSD) regulations, which theylacked authority to do under the CAA. TheSupreme Court also reasoned that EPA wasnot required to give the same meaning in itsregulations to different statutory uses of theterm “modification” and that, for theprogram at issue, it was reasonable for EPAto measure emission increases based onhourly rates even though another programmeasured emission rates on an annual basis. The two programs had distinctly differentpurposes, and EPA was free to choosedifferent ways to measure pollution outputs.

In United States v. East KentuckyPower Cooperative, the Division obtained a

consent decree that resolved claims underthe CAA’s New Source Review(NSR)/PSD provisions, under which EKPCagreed to system-wide tonnage limits on itsemissions of sulfur dioxide (SO2) andnitrogen oxide (NOx), reducing annualemissions by approximately 50,000 tonsper year. The reductions will be achievedby the installation of controls estimated tocost $650 million. The decree also requiresEKPC to pay a civil penalty of $750,000,and to conduct an environmental mitigationproject at a cost of at least $5 million. In aseparate landmark settlement, EKPC alsoagreed to settle claims under the CAA’sacid rain program and pay the largest civilpenalty to date under that program – $11.4million – as well as take steps to reduceapproximately 400 tons of harmfulemissions annually and offset anotherapproximately 20,000 tons of emissionsreleased from its facility located in ClarkCounty, Ky.

In United States v. WisconsinElectric Power Company, the district courtentered an amended consent decree, nearlyfour years after its lodging. Thissystem-wide power plants settlementrequires WEPCO to install pollutioncontrol equipment at an estimated cost of$620 million and pay a $3.1 million civilpenalty.

The Division also obtained the firstconsent decree with an electric utility,Nevada Power Co., for violations at a gas-fired plant. Pursuant to the consent decree,Nevada Power will install approximately$60 million in pollution controls to securesignificant reductions of NOx from four ofits operating units.

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In addition, the Division secured anamendment of a 2002 consent decreestemming from the failures of certaincoal-fired power plants owned by PublicService Electric Gas in New Jersey to meetemissions reduction requirements in the2002 consent decree. The newly achievedair pollution reductions are equal or incertain respects superior to those that wouldhave been achieved under the 2002 consentdecree. PSEG will also pay a civil penaltyof $6 million and perform environmentalmitigation measures valued at $3.25 millionto reduce particulate matter from dieselengines in New Jersey.

The settlements achieved thus farwill, when fully implemented, removealmost two million tons of pollutants fromthe air each year.

Addressing Air Pollution from OilRefineries. The Division also madeprogress in its national initiative to combat CAA violations within the petroleumrefining industry by obtaining consentdecrees with three more refiners, TotalPetrochemical USA Inc., Valero EnergyCorporation, and Hunt Refining Co.

Total agreed to pay a $2.9 millionpenalty and upgrade pollution controls toresolve claims under the CAA. The changesto its facility, estimated to cost $37 million,will significantly reduce the facility’semissions of air pollutants, ultimatelyreducing annual emissions of NOx, SO2, andcarbon monoxide by more than 180, 800,and 120 tons, respectively.

Valero agreed to pay a $4.25 millionpenalty and install $232 million worth ofnew and upgraded pollution controls atrefineries in three states. The controls will

eventually reduce annual emissions of NOxand SO2 by more than 1,870 and 1,810 tonsper year, respectively, and will result inadditional reductions of carbon monoxide,volatile organic compounds, and particulatematter from each of the refineries. Valerowill also spend $1.6 million on mitigationprojects.

Hunt agreed to pay a $400,000 civilpenalty and spend more than $48.5 millionfor new and upgraded pollution controls atthree refineries to resolve claims under theCAA. The work is expected to reducemore than 1,250 tons of harmful emissionsannually from the company’s refineries.The States of Alabama and Mississippijoined in the settlements.

With these settlements, theDivision’s petroleum refinery enforcementinitiative will have addressed more than 92individual refineries – comprisingapproximately 85% of the Nation’s refiningcapacity – and will reduce air pollutants bymore than 325,000 tons a year.

Reducing Air Pollution from MobileSources. The Division obtained a consentdecree in United States v. Mercedes-BenzUSA and DaimlerChrysler, AG, resolvingclaims that the defendants failed topromptly notify EPA of eight separateemission-related defects in a number ofdifferent Mercedes vehicles. The CAArequires such prompt notification by automanufacturers so that the government canconsider whether a recall is necessary. Inresponse to the investigation, Mercedesbegan voluntary recalls for two of thedefects at issue and notified owners that itwould extend the warranty coverage toaddress a third defect, at an estimated costof about $59 million. Under the consent

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decree, Mercedes agreed to pay a penalty of$1.2 million and to improve its investigationand reporting system to ensure futurecompliance, at an estimated cost of about$5.4 million.

Reducing Air Pollution at Other DiverseIndustrial Facilities. The Divisionimproved the Nation’s air quality byconcluding enforcement actions against avariety of other facilities in diverseindustries including secondary aluminumproduction, sulfuric acid manufacturing,natural gas production, metal forming, andoil seed processing.

Those efforts, addressing similarlydiverse CAA violations, securedcommitments by defendants to performmore than $236 million in facilityimprovements, to undertake supplementalenvironmental projects valued at $1.375million to provide local environmentalimprovements, and to pay more than $10.1million in civil penalties. The states ofAlabama, California, Colorado, Illinois,Indiana, Iowa, Kansas, Louisiana,Mississippi and Virginia intervened asplaintiffs and signed many of these consentdecrees.

Controlling Contaminated Storm WaterRun-off. The Division also fought forcleaner water by enforcing Clean Water Act(CWA) provisions governing discharge ofstorm water. Storm water can harm theenvironment because it contains pollutantssuch as suspended solids, lead, and copper.

The Division achieved a settlementwith several St. Louis-area developersresponsible for polluting streams and lakeswith runoff from three construction sites inUnited States v. J.H. Berra Construction Co.

The defendants have agreed to adhere to astrict compliance program at futureconstruction projects, clean up pastpollution, and pay one of the largestenvironmental penalties of its kind in thestate’s history, $590,000. The UnitedStates was joined in the decree by the cityof Wildwood and the state of Missouri.

Ensuring the Integrity of MunicipalWastewater Treatment Systems.Through its aggressive nationalenforcement program, the Divisioncontinued to protect the Nation’swaterways by ensuring the integrity ofmunicipal wastewater treatment systems. The settlements the Division reached thisyear will ultimately reduce the volume ofuntreated sewage discharged into ourwaterways by tens of billions of gallons.

The Division lodged a consentdecree with the city of Indianapolis,resolving claims relating to discharges fromthe city’s sanitary sewers and overflowsfrom the portions of its sewer systemwhere storm water and sanitary sewage arecombined (combined sewer overflows orCSOs). The city will implement a long-term control plan at an estimated cost of$1.86 billion, perform a pollution reductionsupplemental environmental project valuedat $2 million, and pay a civil penalty of$1.17 million. The injunctive reliefprovided under the settlement willultimately reduce the volume ofIndianapolis’ CSO discharges by over 90percent, or 7.2 billion gallons per averageyear out of its current average of 7.9 billiongallons/year.

In a landmark settlement withfederal, state, and county authorities, thedefendant in United States v. Allegheny

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County Sanitary Authority agreed to acomprehensive plan to greatly reduce theannual discharge of billions of gallons ofuntreated sewage into local waterways. ALCOSAN has agreed to a multi-yearstrategy to upgrade the sewage systemsserving Pittsburgh and 82 surroundingmunicipalities at a cost in excess of $1billion. The settlement also requiresALCOSAN to pay a $1.2 million penalty forpast CWA violations, and to undertake $3million in environmental projects.

The Division also lodged an interimconsent decree with the City and County ofHonolulu (CCH) that will correct the mostsignificant problems in Honolulu’swastewater collection system. Because theinterim settlement addresses only the mosturgent problems in CCH’s collectionsystem, the United States and the State ofHawaii are continuing to work actively withCCH to reach a comprehensive resolution toCCH’s remaining wastewater collection andtreatment challenges.

The Division lodged its final,comprehensive consent decree in UnitedStates v. City of San Diego, resolving ourCWA action against the City relating to theunlawful discharges of sewage from theCity’s sewer system. Two previous decreeswith the City had required it to take interimmeasures at an estimated cost of $274million. The third and final consent decreewill require the city to continue to undertakecapital projects and perform operations andmaintenance through 2013, at a cost of anadditional $1 billion, to prevent future spillsof raw sewage from its system.

Assuring Environmental Compliance inthe Petrochemical Industry. The Divisionlodged a consent decree in United States v.

Equistar Chemicals LP under which thedefendant has agreed to spend more than$125 million on pollution controls andcleanup to address myriad air, water andhazardous waste violations at sevenpetrochemical plants in Texas, Illinois,Iowa and Louisiana. Equistar will also paya civil penalty of $2.5 million (to bedivided among the United States and stateco-plaintiffs, Iowa, Illinois and Louisiana)and spend $6.56 million on supplementalenvironmental projects. Under the consentdecree, Equistar will be the first in thepetrochemical industry to adopt certainenvironmental measures, many of which gobeyond what the regulations would require.

Defending a Novel EnforcementApproach to Address Pollution fromFactory Farms. In Association of IrritatedResidents v. EPA, the District of ColumbiaCircuit rejected challenges to a series ofadministrative consent agreements thatEPA entered to settle potential violations ofthe CAA and the Emergency Planning andCommunity Right to Know Act caused byair emissions from large animal feedingoperations. Previously, there was noexisting methodology to reliably measurefactory farms’ air emissions, which hashampered EPA’s ability to enforce theCAA and other environmental statutes. Under the consent agreements, which aredesigned to bring the facilities intocompliance with the permitting andreporting requirements of the statutes,participating farms will pay a penalty andagree to cooperate in the development ofpertinent emissions data and monitoringprotocols. Those data and protocols willthen provide the basis for an emissionsestimating methodology to be used toensure future compliance.

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Ensuring the Supply of Safe DrinkingWater to Residents of Trailer Parks andOther Multi-Unit Properties. InManufactured Housing Institute v. EPA, theFourth Circuit upheld EPA’s determinationto apply Safe Drinking Water Actregulations to owners of multi-unitproperties other than apartment buildingswho separately meter and bill for waterdelivered to their tenants. The court foundthat EPA reasonably determined that thewater systems of trailer parks and similarmulti-unit properties require regulation toensure a safe drinking water supply.

Protecting the Nation’s Waters andWetlands. The Division obtained a numberof favorable settlements in enforcementactions to protect the Nation’s waters andwetlands from illegal fill.

United States v. Pala Band ofMission Indians involved violations of theCWA in connection with a sand and gravelmining operation and a levee built in the bedof the San Luis Rey River in California. Pursuant to a consent decree, the Pala Bandof Mission Indians will pay a $370,000 civilpenalty and fund a $545,000 mitigationproject. A separate consent decree requiresthree additional defendants to pay a civilpenalty of $65,000. In United States v. ToyArnett, et al., the Division obtained aconsent decree settling a CWA enforcementaction concerning property in Santa RosaBeach, Florida. The five defendants therewere the present or former owners of twoproperties, one where wetlands wereconverted into pasture, and the other wherean Army Corps of Engineers permit wasviolated. The defendants at the first site willpay a civil penalty of $65,000, restore thesite, and place a conservation easement to beheld by the State of Florida over the restored

site. For the violations at the second site,the defendants must convey title to anearby 20-acre mitigation parcel to anentity designated by the United States. InUnited States & State of Maryland v.Costello, the Division obtained a consentdecree under which the defendants willrestore 8,000 square feet of the ChesapeakeBay damaged by their construction of anunpermitted erosion control structure. Theywill also pay $20,000 in civil penalties tothe United States and $30,000 to a statetidal wetlands fund established to pay forstate-sponsored restoration projects.

Enhancing Pipeline Safety. The Divisionlodged a consent decree in United States v.El Paso Natural Gas Co., the first courtaction brought to enforce the PipelineSafety Act. The action resulted from atragic explosion of an EPNG pipelinewhich killed twelve people in New Mexicoin 2000. As a result of the settlement,EPNG will spend at least $86 million toimplement widespread and comprehensivemodifications of its 10,000-mile natural gaspipeline system and pay a $15.5 millioncivil penalty to resolve claims that it didnot adequately monitor and minimizeinternal corrosion in two of its pipelinestransporting corrosive gas.

ENSURING CLEANUP OF OIL ANDHAZARDOUS WASTE

Cleaning Up Contaminated RiverSystems. The Division continued itsaggressive efforts to secure cleanup of ourNation’s most contaminated rivers underthe Comprehensive EnvironmentalResponse, Compensation and Liability Act(CERCLA). The Division achieved asettlement of unprecedented size and scope

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with the General Electric Company (GE) toprovide for cleanup of contamination frompolychlorinated biphenyls (PCBs) that twoGE plants discharged directly into the upperHudson River for years. The settlement waslodged in Fiscal Year 2006 but entered inFiscal Year 2007 after a comment periodthat drew extensive and wide-ranging publicresponses. Since entry of the consentdecree, the Division has resisted variouslegal challenges to the settlement.

In United States v. NCR Corp. andSunoco-U.S. Mills, the Division obtained aconsent decree that requires these twodefendants to perform the first phase ofremedial action for one section of the LowerFox River and Green Bay site innortheastern Wisconsin. The site iscontaminated with PCBs discharged into theFox River from several paper manufacturingand recycling facilities and will cost morethan $500 million to address overall. Theremedial action required by this consentdecree – which is with only two of eightpotentially responsible parties (PRPs) at thesite – is expected to cost about $30 millionand features dredging, dewatering, andlandfill disposal of PCB-contaminatedsediments from a hot-spot of contamination. The Division also lodged a supplement to aconsent decree in United States et al v. P.H.Glatfelter Co. and WTM I Co. to documentthe commitment of these two defendantPRPs to provide an additional $12 millionfor performance of CERCLA responseactivities in another section of the site, inaddition to the approximately $60 millionprovided by these parties pursuant to a 2004consent decree addressing remedial actionsin that section of the site.

Conserving the Superfund by SecuringCleanups and Recovering Superfund

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Monies. The Division secured thecommitment of responsible parties to cleanup additional hazardous waste sites, at costsestimated in excess of $270 million, andrecovered approximately $200 million forthe Superfund to help finance futurecleanups. Examples of some of the majorSuperfund cases resolved by the Divisionthis year include: United States v.Kennecott Utah Copper Corporation(defendant to spend approximately $15million to remedy groundwatercontamination caused by past miningoperations at the Bingham Canyon mine inUtah); United States v. MidAmericanEnergy Company (defendants to pay $4.6million in past costs and assist EPA’sresponse actions at the LeMars Coal GasSuperfund site in Iowa); United States v.Frazer Exton Development Corp.(defendant to perform $22 million remedialaction and pay 50% of EPA’s unreimbursedcosts at the Foote Mineral Superfund site inChester, PA); United States v. Exxon MobilCorporation (101 defendants to ensure asite-wide $48 million cleanup of the BeedeWaste Oil site in Plaistow, NH, pay morethan $9 million for future federal and stateoversight costs, and $17 million in pastfederal and state response costs); UnitedStates v. EPEC Polymers, Inc. (defendantto remediate two of the three remainingknown contaminated areas of the TurtleBayou site in Liberty County, TX, at anestimated cost of $13.4 million; reimbursethe United States for $6.9 million of pastcosts and interim costs estimated at $1million; and pay the United States’s futureresponse costs, estimated at $2.1 million).

Enforcing Cleanup Obligations InBankruptcy Cases. The Division’sbankruptcy practice has continued to growand this year achieved notable success in

several proceedings. In the Eagle Picherbankruptcy, the Division secured theagreement of the debtor to deposit $13.6million into a custodial trust to fundenvironmental cleanup work at sites inseveral states and obtained a judgment foran allowed claim of over $8.7 million for asite in New Mexico. In the Gurleybankruptcy, the Division recovered over $20million for two sites in Arkansas through theavoidance of fraudulent transfers.

The Division has lodged additionalproposed settlements in various bankruptcycourts, including in the Asarco, Fruit of theLoom, Gulf States Steel, W.R. Grace,Armstrong and Saltire Industrialbankruptcies. In these proceedings, theDivision expects to receive millions ofdollars of recoveries towards past and futurecleanup costs. In one of the mostchallenging proceedings, In re: Asarco LLC,the United States asserted two kinds ofclaims for over 50 Superfund sites: (1)recovery of funds used for cleanup by otheragencies, and/or (2) natural resourcedamages on behalf of federal naturalresources trustee agencies.

Defending the Constitutionality of theSuperfund Law. In addition to itsenforcement actions to secure the cleanup ofhazardous waste sites, the Division has alsosuccessfully defended lawsuits aimed atinterfering with cleanup actions by EPA andother federal agencies. For example, inUnited States v. Capital Tax Corp., aSuperfund cost recovery and penalty actioninvolving the National Lacquer and Paintsite in Chicago, the defendant broughtcounterclaims alleging an EPA pattern andpractice of unconstitutional implementationof its administrative order authority undersection 106 of CERCLA. The Division

prevailed on a motion to dismiss. Thecourt found that the company lackedstanding and, in the alternative, that there isno due process violation because theunilateral administrative order recipientgets a pre-deprivation hearing, thusupholding the constitutionality of keyenforcement provisions of an importantenvironmental statute.

Similarly, in Raytheon Aircraft Co.v. United States, the Division prevailedagainst a claim that the administrativeenforcement provisions of section 106 ofCERCLA violate due process. The courtheld that section 106 provides an adequateopportunity for judicial review before anydeprivation of property occurs and does notaffect any protected liberty interests. Thecourt also rejected the argument that thepenalties authorized by section 106 are socoercive as to deprive the administrativeorder recipient of a meaningful opportunityto challenge the order in court.

Defending the Government’s CleanupActions. In Steven Pollack v. Departmentof Defense, a citizen sued the Army andNavy, alleging they had failed to performcertain nondiscretionary duties inconnection with the remediation of alandfill at Fort Sheridan, Illinois. TheDivision prevailed on a motion to dismiss. The court held that “the relief [plaintiff]seeks in his lengthy complaint is directed athalting the current work at the site andchanging the direction of any additionalwork there. Accordingly, it is premature”under the Superfund law. This win isimportant because it allows the cleanup atthe site to go forward without beingdelayed by litigation.

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Addressing Oil Spills. The Division lodgeda consent decree in United States v.Meridian Resource & Exploration, LLCresolving claims under the CWA inconnection with five unauthorizeddischarges of crude oil into waters of theUnited States from two pipelines and one oilproduction well at Meridian’s facility during2005-2006. Meridian will expand andimprove its pipeline monitoring, inspection,and maintenance program and pay a$504,000 civil penalty.

PROMOTING RESPONSIBLESTEWARDSHIP OF AMERICA’SNATURAL RESOURCES ANDWILDLIFE

Defending Endangered Species ActListings and the Critical HabitatProgram: The Endangered Species Act(ESA) requires either the Fish and WildlifeService (FWS) or the National MarineFisheries Service (NMFS), depending on thespecies, to determine whether a speciesshould be listed as endangered or threatenedunder a set of five criteria and to designatecritical habitat for listed species. In FY 07,we had notable success defending suchdeterminations.

In Alabama-Tombigbee RiversCoalition v. Kempthorne, the EleventhCircuit rejected an industry trade group’schallenges to the FWS’s listing of theAlabama sturgeon under the ESA as anendangered species. The court found thatthere was substantial evidence in the recordthat the Alabama sturgeon was not the samefish as the shovelnose sturgeon, a muchmore plentiful species. It also held that theService’s failure to designate critical habitatfor the Alabama sturgeon at the same timethat it listed the fish as endangered did not

require the court to order the delisting ofthe species, which was nearly extinct. Thecourt also rejected the argument that thelisting was unconstitutional under thecommerce clause as there was no evidencethat the Alabama sturgeon had anyinterstate nexus. The court held that theproper focus of analysis should be on thepurposes of the ESA itself, not just on theparticular species being listed, andconcluded that the ESA had a substantialrelation to commerce.

In American Wildlands et al. v.Norton et al., the court upheld a FWSlisting determination for the westslopecutthroat trout on the basis that theService’s use of morphological data, aswell as genetic data, to identify the specieswas reasonable. In National Association ofHomebuilders v. Kempthorne, the courtagreed with the Division’s argument thatthe FWS’s decision not to list the pygmyowl was reasonable, where the populationin the United States was peripheral to alarge pygmy-owl population in northernMexico. In Home Builders of N. Cal. v.FWS, the court upheld FWS’s designationof critical habitat for 15 vernal poolspecies, where certain California lands hadbeen excluded because they already hadadequate management plans. In AlseaValley Alliance v. Lautenbacher, theDivision prevailed against a challenge tothe NMFS’s decision to list 16“Evolutionarily Significant Units” ofsalmon. The decision hinged on theService’s policy regarding consideration ofhatchery-origin fish in making listingdeterminations. In Tucson HerpetologicalSociety v. Kempthorne, the Divisionsuccessfully defended a FWS decision towithdraw the proposed listing rule for theflat-tailed horned lizard, establishing the

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legitimacy of the Service’s evaluation of losthistorical habitat in consideration of thespecies’ current persistence.

Defending National Marine FisheriesService’s Ocean Harvest Management. NMFS is charged, under the Magnuson-Stevens Fishery Conservation andManagement Act, with the difficult task ofmanaging ocean commercial fishing to notonly provide for conservation andsustainable fishing, but also to optimizeyield. In several cases, the Divisionsuccessfully defended the Service’sbalancing of these objectives. In LegacyFishing Co. et al. v. Gutierrez, plaintiffschallenged Bering Sea fishery measureswhich reduce bycatch and waste of fisheryresources. The court accepted theDivision’s arguments that the Service hadadequately considered costs to industry tothe maximum extent practicable consistentwith Magnuson Act conservation standards. In Coastal Conservation Ass’n v. Gutierrez,the Division prevailed against allegations bythe fishing industry that Magnuson Actstandards for rebuilding the red snapperfishery and for reducing bycatch wereviolated. The court there also held that theService complied with its obligations underthe National Environmental Policy Act(NEPA) to analyze alternatives to therebuilding plan. In Sherley v. NOAA, theDivision successfully defended NMFS’sdenial of a recreational fishing permitagainst multiple challenges. The court heldthat the expectation of participating in afederal fishery was not a protected libertyinterest and that denial of the permit thus didnot violate the right to procedural dueprocess, that 42 U.S.C. § 1983 wasinapplicable, that the court lackedjurisdiction over a takings claim, and, in any

event, that the administrative recordsupported the denial.

Ensuring the Limitations of FederalJurisdiction Are Enforced. TheAdministrative Procedure Act and otherspecial review provisions circumscribefederal jurisdiction, as do the requirementsof standing and other jurisdictionalprerequisites. The Division prevailed inseveral wildlife cases on these defenses. InWashington State Farm Bureau v. NMFS,the court dismissed a complaint whereplaintiffs failed to establish standing anddid not demonstrate that they were injuredby the Service’s listing of a population ofkiller whales. In Oregon NaturalResources Council v. Hallock, the Divisionprevailed on summary judgment. The courtheld that EPA’s oversight of the Oregonstate National Pollutant DischargeElimination System (NPDES) program andits provision of funds to the OregonDepartment of Environmental Quality didnot “federalize” the state program so as torequire ESA consultation on state-issuedNPDES permits regarding the effects onendangered sucker fish of the discharge ofan herbicide. In Defenders of Wildlife v.Gutierrez, plaintiffs filed ESA claimsagainst the Coast Guard for failure toconsult with NMFS regarding the impact ofits recommended traffic separation schemeson whales. The court dismissed the claimson the ground that the recommendations,which went to an international body that setthe schemes, were not final agency actionssubject to judicial review. Similarly, inSave Our Springs v. Norton, a court heldthat a letter from FWS interpreting a TexasCommission on Environmental Qualityvoluntary guidance document was not finalagency action subject to judicial review;FWS had stated that compliance with the

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letter, which discussed mitigation of theeffects of storm water runoff, would avoid“take” of the Barton Springs Salamanderunder the ESA. In Conservation Northwestv. Kempthorne, the Division prevailedagainst a claim that FWS should becompelled to implement specific provisionsof the Grizzly Bear Recovery Plan; the courtheld that FWS’s implementation of recoveryplans is committed to agency discretion andthus not reviewable under the APA. In GulfFishermen Ass’n v Gutierrez, the Divisiondefended a challenge to Vessel MonitoringSystem for Gulf Reef Fish, and the courtdismissed plaintiff’s claims on the groundthat a jurisdictional 30-day limitationsperiod of Magnuson Act barred suit on allrelated claims. In Sea Hawk Seafoods v.Carlos M. Gutierrez, the Divisionsuccessfully argued that a challenge broughtby certain seafood industry plaintiffs tolimits on the Bering Sea fishery were barredby the Magnuson Act’s 30-day statute oflimitations because the restrictions wereimplemented by rule under the Act.

Restoring the Florida Everglades. TheDivision continued to contribute to therestoration and protection of the Evergladesecosystem – including the 1.3 million-acreEverglades National Park, the largest, mostimportant subtropical wilderness in NorthAmerica. In United States v. South FloridaWater Management District, court entered aconsent decree in 1992 requiring the State ofFlorida to restore water quality in theEverglades through regulation ofagricultural runoff and construction of vastwetland treatment systems. The consentdecree’s “ambitious strategy to restore andpreserve the Everglades ecosystem” – andthe federal-state collaboration that producedit – have heralded a new era ofintergovernmental cooperation on

Everglades restoration that culminated in2000 when Congress and the Floridalegislature approved an historic, 30-year,$7.8 billion restoration effort, fulfilling atop priority of the past three federaladministrations. This year, the Divisionparticipated in the proceedings of the SouthFlorida Ecosystem Restoration Task Force,the intergovernmental body codified byCongress in 1996 to coordinate therestoration of the Everglades. The Divisionalso continued negotiating over additionalwater quality restoration measures tocomplement those specified in the consentdecree.

In addition, the Division continuesto contribute to protection of theendangered Everglades ecosystem byacquiring lands within Everglades NationalPark and the Big Cypress NationalPreserve, as well as lands critical to theArmy Corps of Engineers’ project toimprove water deliveries in the area.

Restoring the San Joaquin River andSecuring Bureau of Reclamation ProjectWater Supplies. The Bureau ofReclamation’s California Central ValleyProject is one of the Nation’s major waterconservation developments. Seventy yearsago, Congress authorized construction ofthe Friant Division of the Project. FriantDam diverts all but a fraction of the watersof California’s second-longest river, theSan Joaquin – de-watering a lengthy reachof the River for most of the year – forstorage in Miller Lake and eventualdistribution, primarily for agricultural usein the Central Valley. Earlier, in NaturalResources Defense Council v. Rodgers, theDivision negotiated a historic settlement oflongstanding litigation over Reclamationwater supply contracts affecting the San

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Joaquin. When implementing legislation isenacted, the historic goals of this settlementwill be realized through funding andimplementation of one of the largest riverrestoration projects in United States history.

Defense of Federal Property Interests inEnvironmentally Sensitive Areas. InKingman Reef Atoll Investments, LLC v.United States, plaintiff sought a ruling that ithas fee simple title to Kingman Reef, a reeflocated nine hundred miles off the coast ofHawaii on which FWS has established awildlife refuge of magnificent scope. Thecourt dismissed the case on limitationsgrounds, rejecting plaintiff’s argument thatthe government had abandoned KingmanReef and should be equitably estopped fromasserting the limitations defense.

Balancing Appropriate Management ofthe Missouri River System. The ArmyCorps of Engineers has the difficult task ofmanaging the Missouri River System, whichconsists of six dams and reservoirs, for avariety of overlapping purposes, such asnavigation, flood control, irrigation, andhydropower. In order to ensure that waterresources decisions best serve these variedneeds, the Corps issued a Master Manualthat describes its water control plan. In2006, the Corps made changes to the MasterManual to comply with FWS suggestions inits biological opinion as to how to protectthe endangered pallid sturgeon. The State ofMissouri sued the Corps, alleging that it hadviolated NEPA. The Division successfullydefended the Corps on all claims.

Upholding Grazing ManagementDecisions on Federal Land. In WesternWatersheds Project v. Abbey, environmentalorganizations challenged a Bureau of LandManagement grazing management decision

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for the 325,000-acre Soldier MeadowsAllotment in Nevada, which includeswilderness areas. The Division prevailedon summary judgment, with the courtholding that the environmental assessmenton the management decision satisfiedNEPA and that the decision did not permitnew grazing or increased grazing inviolation of the Wilderness Act or thelegislation creating the wilderness areas.

In Stevens County, Washington v.Department of the Interior, a county andranchers challenged a Habitat ManagementPlan that eliminated grazing in the LittlePend Oreille National Wildlife Refuge,claiming violations of the National WildlifeRefuge System Administration Act (RefugeAct), NEPA, and their Fifth Amendmentdue process rights. The Division prevailedon all claims. The district court held thatthe agency had exercised the required“sound professional judgment” under theRefuge Act; that the FWS complied withNEPA since plaintiffs had failed to showthat the Plan caused impacts that were notalready examined in a programmaticenvironmental impact statement; and thatthere was no due process violation becauseplaintiffs had no protected interest inrenewal of a grazing permit under theRefuge Act.

Protecting the Sierra Nevada Rangefrom the Risks of Wildland Fire. In2004, the Forest Service amended theSierra Nevada Forest Plan Amendment(“Framework”) governing 11.5 millionacres in eleven national forests in the SierraNevada region of California in an attemptto increase desperately needed fueltreatments to reduce the threats ofcatastrophic wildfire while meeting thehabitat needs of species dependent on old

growth forests. This amendment is thesubject of four related lawsuits whichthreaten to paralyze forest managementefforts on 11 million acres of federal land. Recent success in our continued defense ofthe Framework includes the denial of apreliminary injunction sought against threeprojects designed to reduce fire risks nearcommunities in the Sierra Nevada.

Litigating Federal Forest LandManagement Programs and Policies. TheDivision continued to have success indefending against a variety of challenges toland management plans and projects. InLands Council v. Martin, the Divisionprevailed against challenges to the SchoolFire Salvage Recovery Project in theUmatilla National Forest. The court foundthe environmental impact statementadequate under NEPA, and upheld theForest Service’s use of a model to estimatesoil erosion. Under the National ForestManagement Act, the court found relianceon the widely used Scott Guidelines todetermine the probability of tree survivalwas reasonable, as was use of the DecayedWood Advisor (DecAID) tool. The courtalso upheld the Forest Service’s emergencysituation determination and its use of a site-specific plan amendment to modify theForest Plan. The decision as to the ScottGuidelines, DecAID, and emergencysituation determinations was particularlyimportant for the agency’s national timbermanagement program.

The Division reached a beneficialsettlement in Idaho Wildlife Federation v.Tower, involving management of the sagegrouse under the Management Plan for theCurlew National Grassland in Idaho. TheManagement Plan will continue to stay ineffect and the Forest Service will be able to

achieve its land management objectives forthe Grassland. The Division alsosuccessfully defended the decision to allowsnowmobiles in the proposed West HooverWilderness Addition of the Humboldt-Toiyabe National Forest. In addition, theDivision obtained a decision allowing theBureau of Land Management to proceedwith two timber sales in Klamath Siskiyouv. BLM. There, the court upheld BLM’sdetermination that FWS’s 2004identification of the Pacific fisher as a“warranted but precluded” species was nota significant new circumstance thatrequired supplementation under NEPA. The court deferred to the BLM’s decisionto use northern spotted owl habitat as asurrogate for Pacific fisher habitat in itsimpact analysis and distinguished an earliercase where the court had held that theForest Service violated NEPA by failing totake a hard look at the impact of logging onthe Southern Sierra fisher.

The Division also quickly anddecisively prevailed in a challenge to anadministrative decision staying a Bureau ofLand Management order closing a livestockgrazing pasture for the 2007 grazing seasonfor resource protection purposes. InOregon Natural Desert Assn. v. UnitedStates Department of the Interior, the courtgranted our request to convert thepreliminary injunction papers into summaryjudgment papers, ruling in our favor fromthe bench and entering final judgment. Thecourt held that the administrative decisionto stay closure was supported by substantialrecord evidence.

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CRIMINAL ENFORCEMENT OF OUR ships. PGM was sentenced to pay a $1NATION’S POLLUTION AND million fine, to pay $500,000 to fundWILDLIFE LAWS environmental projects on the Chesapeake

Bay and provide environmental education,Vessel Pollution Prosecutions. The to complete a three-year term of probation,Vessel Pollution Initiative is an ongoing, and to implement an environmentalconcentrated effort to detect, deter, and compliance plan. As part of the ongoingprosecute those who illegally discharge investigation, four PGM Chief Engineerspollutants from ships into the oceans, coastal have been convicted of offenses includingwaters and inland waterways and who lie APPS violations for falsifying oil recordabout such activities. The Division books, conspiracy, and making falsecontinues to have great success prosecuting statements. Three pled guilty and one wasdeliberate violations. convicted after trial.

In United States v. Overseas In United States v. IoniaShipholding Group, the defendant pled Management S.A., et al., the defendantguilty to and was sentenced on charges that company, a Greek operator, was convictedit engaged in conspiracy, obstructed justice, by a jury on 18 counts, including falsifyingmade false statements, and violated the Act records and presenting false oil recordto Prevent Pollution from Ships (APPS) and books to the Coast Guard, for overboardthe Clean Water Act, as amended by the Oil dumping of waste oil into internationalPollution Act of 1990. The crimes – waters. The second engineer pled guiltyinvolving twelve OSG oil tankers – occurred and was sentenced to serve a one-year termbetween June 2001 and March 2006. The of probation and to pay a $1,000 fine. offenses involved intentional falsification ofoil record books to conceal the discharge of In United States v. Petraiasludge and oil contaminated waste, as well Maritime Ltd., et al., the defendant, aas bypassing required pollution prevention Swedish owner and operator of the M/Vequipment. OSG was sentenced to pay a Kent Navigator, was convicted on threetotal of $37 million in penalties, the largest- APPS violations for failure to maintain anever penalty involving deliberate vessel accurate oil record book. Coast Guardpollution, to serve a three-year term of investigators discovered evidence of illegalprobation, and to implement a stringent bilge waste discharges and concealment ofenvironmental compliance plan. Of the $37 the discharges. Two chief engineers pledmillion, $9.2 will fund environmental guilty to making false entries in the oilprojects coast-to-coast as part of the record book. Each was sentenced to servecorporation’s required community service. one month’s home confinement as part of a

two-year term of probation and ordered to In United States v. Pacific Gulf pay a $3,000 fine.

Marine, Inc., the defendant, an Americanshipping company, pled guilty to four APPS In United States v. Chian Spiritviolations involving the illegal discharge of Maritime Enterprises, Inc., et. al., thehundreds of thousands of gallons of oil- named defendant and its Greekcontaminated bilge waste from four of its owner/operator each pled guilty to one

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APPS violation, and each was sentenced topay $1.25 million for misleading CoastGuard investigators during an inspection ofthe M/V Irene E.M. The ship’s master pledguilty to presenting false information to theCoast Guard, and was sentenced to serve aone-year term of unsupervised probation. The Chief Engineer pled guilty to one APPSviolation and was sentenced to serve a one-year term of unsupervised probation.

In United States v. Kassian MaritimeNavigation Agency Ltd., et al., the corporatedefendant pled guilty to one APPS violationfor maintaining a false oil record book andwas sentenced to pay a $1 million fine, toserve 30 months probation, and to pay$300,000 to fund community serviceprojects. The chief engineer pled guilty tomaking a false statement to the Coast Guardand was sentenced to pay a $1000 fine.

In United States v. Sun-Ace ShippingCompany, et al., the corporate defendantpled guilty to one APPS violation for failingto maintain an accurate oil record book. The company was sentenced to pay a$400,000 fine and an additional $100,000 incommunity service to protect and restore thenatural resources of the Delaware Estuary. The Chief Engineer pled guilty toobstruction of justice and was sentenced toserve five months in prison followed by twomonths of supervised probation. The secondengineer pled guilty to one APPS violationand was sentenced to serve a three-year termof probation.

In United States v. Nicanor Jumalonet al., the defendant, captain of the M/VSportsqueen, pled guilty to obstruction ofjustice and was sentenced to serve eightmonths in prison for illegally dumping oil-contaminated ballast water from the ship.

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The India-based shipping company, AccordShip Management Inc., pled guilty and wassentenced to pay a $1.75 million fine andserve a three-year term of probation for conspiracy, an APPS violation, and twocounts of obstruction for dumping sludge,bilge wastes, and oil contaminated ballastwater from the ship. The Chief Engineeralso pled guilty to two obstructionviolations and was sentenced to serve fivemonths incarceration.

Prosecuting Hazardous Waste and CleanAir Act Violations. In United States v.Dennis Rodriguez, the defendant, presidentand chief operator of North AmericanWaste Assistance, pled guilty to threeResource Conservation and Recovery Act(RCRA) violations, and was sentenced tofive months incarceration, followed by fivemonths of house arrest, and a two-year termof probation. Rodriguez generated amanifest that stated 84 drums contained“Non RCRA, Non-regulated hazardouswaste” when the drums actually containedan expired petroleum-based compoundwhich was an ignitable hazardous waste. Using the false manifest, he delivered thewaste to non-RCRA landfills.

In United States v. Dylan Starnes, etal., the defendant, who had been convictedin 2005 on 15 counts, including Clean AirAct (CAA) and false statement violations,was sentenced to serve 33 months’incarceration, followed by a three-yearterm of probation. Starnes and his co-defendant did not follow asbestos workpractice regulations, and filed false airmonitoring reports related to a remediationproject in a HUD-funded housing project.

In United States v. Citgo PetroleumCorporation, et al., Citgo Petroleum and

Citgo Refining and Chemical Companywere convicted on two CAA violations. Between 1994 and 2003, the defendantsoperated tanks that contained oil withoutinstalling the proper emission controls. Citgo Refining and Chemical Company wasalso convicted on three misdemeanorviolations of the Migratory Bird Treaty Act. The tanks attracted migratory birds, severalof which (including cormorants, pelicans,and several species of ducks) were killedafter they landed in the open tanks andbecame trapped in the oil.

Prosecuting Clean Water Act Violations.In United States v. Moses, the defendant, anIdaho real estate developer, used a bulldozerand other heavy equipment to channelizeand reroute Teton Creek in an attempt toprevent periodic flooding of an adjacentsubdivision that he had developed. When hecontinued these actions despite repeatedorders to stop from state and federalofficials, he was indicted for multipleviolations of the Clean Water Act (CWA). He was convicted and sentenced to 18months in prison and fined $9,000. Onappeal, he argued that he was not required toobtain a CWA dredge and fill permitbecause he only worked in the riverbedwhen water had been diverted out of theriver for irrigation purposes. He assertedthat under the Supreme Court’s 2006decision in Rapanos v. United States, whichwas decided after his conviction, the ArmyCorps of Engineers lacked regulatoryauthority over his actions. The NinthCircuit disagreed, holding that theintermittent flow of the creek resulting fromthe upstream division of water for irrigationpurposes did not divest the creek of its statusas a “water of the United States” subject tothe Corps’ regulatory authority under theCWA.

In United States v. Sinclair TulsaRefining Company, et al., the defendant, asubsidiary of Sinclair Oil, pled guilty totwo felony CWA violations. Two companymanagers each pled guilty to one felonyCWA count for manipulating the samplingand discharges of wastewater into theArkansas River in violation of Sinclair’sNPDES permit. Sinclair was sentenced topay a $5 million fine, pay $500,000 to funda community service project on theArkansas River, and serve a two-year termof probation. The managers were eachsentenced to complete a three-year term ofprobation, including six months homeconfinement. One was ordered to pay a$160,000 fine and perform 100 hours ofcommunity service, the other an $80,000fine and 50 hours of community service.

In United States v. AcquitySpeciality Products, et al., the defendantpled guilty to one CWA violation and wassentenced to pay a $3.8 million fine andcomplete a three-year term of probation. Acquity admitted that from September1998 until November 2002, whileinspectors conducted sampling, employeesaltered the wastewater flow in order todistort the sampling results. The Directorof Environmental Compliance pled guiltyto conspiracy to violate the CWA and wassentenced to pay a $5,000 fine and serve afive-year term of probation.

Enforcing the Laws Protecting Wildlife. In United States v. James Miller, et al., thedefendant was sentenced for his role inrunning an illegal, unlicensed big-gamehunting guide operation in Alaska between1999 and 2001. Miller had previously pledguilty to one felony Lacey Act charge andone felony false statement charge and wassentenced to serve 18 months’ incarceration

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followed by a three-year term of probationand to pay $10,650 in restitution. He alsowill forfeit his Super Cub aircraft, a huntingrifle, and several hunting trophies fromillegally-killed big game.

In United States v. Antonio VidalPego, et al., Pego and Vadilur S.A., aUruguayan corporation, each pled guilty toand was sentenced on charges involving theillegal importation of Patagonian andAntarctic toothfish (also known as ChileanSea Bass). The government seized morethan 53,000 pounds of toothfish, valued at$314,397. Pego pled guilty to obstruction ofjustice and was sentenced to serve a four-year term of probation and pay a $400,000fine. Vadilur pled guilty to false labeling,importation of illegally possessed fish, andattempted sale of those fish. The companywas sentenced to a four-year term ofprobation and ordered to pay a $100,000fine, cease all corporate activities, anddissolve as a business.

In United States v. Jan Swart, d/b/aTrophy Hunting Safaris, et. al., Swart, aSouth African big-game outfitter, pled guiltyto one felony smuggling violation, and wassentenced to serve 18 months’ incarcerationfollowed by a three-year term of probation. The charge stems from his involvement in ascheme to import five hides and three skullsof leopards illegally killed in South Africaand smuggled to Zimbabwe, before beingimported through Denver. His co-defendantpled guilty to one felony Lacey Act falselabeling violation and was sentenced to paya $5,000 fine and serve 19 daysincarceration, followed by a three-year termof probation in South Africa.

In United States v. Jeffrey Diaz, thedefendant pled guilty on November 28,

2006, to two felony smuggling counts andtwo felony false statement counts forsmuggling 12 Australian Eagle Owl eggs,and lying about it on customs forms. Hewas sentenced to serve 21 months’incarceration, followed by a three-yearterm of probation, and pay a $5,000 fine. The smuggling of the fertile eggs into theUnited States from Australia without therequired quarantine period posed a tangiblethreat of disease transmission to humans,including bird flu, as well as a threat to thecommercial poultry industry in the form ofNewcastles Disease.

In United States v. MichaelSofoulis, et al., Sofoulis pled guilty to amisdemeanor violation of the MarineMammal Protection Act (MMPA) and wassentenced to six months’ incarceration,followed by a one-year term of probation,ordered to pay a $15,000 fine, plus $5,000in restitution to the State of Alaska. Hisco-defendant pled guilty to conspiracy toviolate the Lacey Act and the MMPA, andto making false statements, and wassentenced to serve eight months’incarceration, followed by a one-year termof probation. The convictions stemmedfrom a scheme to sell walrus headmountsmade from tusks and skulls andfalsification of registration documents.

In United States v. Princess CruiseLines Inc., Princess pled guilty to oneviolation of the Endangered Species Actand was sentenced to pay a $200,000 fine,pay an additional $550,000 to fund researchin Glacier Bay, Alaska, and serve a five-year term of probation. Princess failed tooperate its vessel in a slow, safe speed nearhumpback whales in waters near GlacierBay National Park. After the event,Princess imposed a permanent 10-knot

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speed restriction on all its vessels in nearbywaters.

In United States v. PanhandleTrading Inc., et al., one individual and twocorporate defendants pled guilty toconspiracy to violate the Lacey Act andconspiracy to commit money laundering, fortheir roles in an illegal catfish importationscheme. The individual was sentenced toserve 51 months’ incarceration followed bya three-year term of supervised release. Both companies will complete five-yearterms of probation, and all three defendantswill be held jointly and severally liable for$1,139,275 in restitution to the Departmentof Homeland Security.

DEFENDING VITAL FEDERALPROGRAMS AND INTERESTS

Protecting the Federal Fisc – RoyaltiesDue to the United States. In BP AmericaProduction Co. v. Burton, oil and gascompanies that hold federal oil and gasleases on which they owe productionroyalties to the federal government arguedthat the Interior Department’s MineralsManagement Service (MMS) could notenforce orders to the companies to reauditpast payments for inadequacies for morethan the six-year period in the generalstatute of limitations in 28 U.S.C. 2415(a). The Supreme Court disagreed, holding thatthe limitations period pertained only todamage actions founded on contract broughtby the United States, not to an agency’sissuance of administrative orders. Thisholding will require the oil companiesinvolved in the law suit to reaudit theiraccounts for the years 1989-1996 and couldpotentially result in tens of millions of

dollars of royalty payments owed to thefederal government.

Balancing Statutory Mandates -- TheClean Water Act and the EndangeredSpecies Act. In National Association ofHome Builders v. Defenders of Wildlife,et.al; EPA v. Defenders of Wildlife, et.al,environmental groups argued that the EPAmust comply with the procedural andsubstantive requirements of Section 7 of theEndangered Species Act (ESA) whendeciding whether to delegate to a state itsauthority under Section 402 of the CleanWater Act (CWA) to issue pollutiondischarge permits. The ESA requiresfederal agencies to consult and assess theimpact of their proposed decisions on listedspecies. The CWA requires EPA todelegate the Section 402 program if a statesatisfies nine criteria, none relating toendangered species protection. TheSupreme Court, in a 5-4 decision, held thatthe ESA did not apply. The majority heldthat the court of appeals had erred inholding that EPA had acted arbitrarily andcapriciously by taking allegedlycontradictory positions on the applicationof Section 7 of the ESA. On the merits, themajority held that the ESA obligations didnot apply because a regulation jointlypromulgated by the agencies charged withadministering the ESA provided thatSection 7 did not apply to agency actionsthat were mandatory in nature. Because thepertinent CWA provisions required EPA todelegate the permitting program if a statemet the CWA’s requirements, EPA was notrequired to comply with ESA Section 7.

Defending Against Encroachment onFederal Agencies’ Regulatory Authority. In Missouri v. Westinghouse, the state andthe corporate defendant sought entry of a

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proposed consent decree to govern thecleanup of a former nuclear fuelsmanufacturing site. However, federal lawgives the Nuclear Regulatory Commissionexclusive authority to regulate cleanup ofnuclear materials at decommissionednuclear facilities. The Division successfullyintervened on behalf of NRC and theDepartment of Energy to oppose theproposed consent decree. The courtaccepted the Division’s argument that theproposed decree would impinge upon thefederal government’s exclusive authority toregulate nuclear materials. The courtexplained that the Atomic Energy Actpreempts state regulation of nuclearfacilities that are being decommissioned andpreempts state regulation of the radiologicalportion of mixed wastes.

Ensuring Consistency of United StatesAircraft Engine Emission Standards withInternational Standards. In NationalAssociation of Clean Air Agencies v. EPA,the court affirmed EPA’s decision under theCAA to conform United States aircraftengine emission standards to internationalconsensus standards, against challengescontending that domestic standards shouldbe the most stringent possible. The courtheld that, in declining to adopt morestringent standards, EPA reasonablybalanced the costs and additional timeinvolved in developing and implementingsuch standards against the benefits ofconforming domestic aircraft engineemission standards with existinginternational standards and reasonably optedin favor of the latter.

Defending EPA’s Authority to InterpretState Law and Regulations in Clean AirAct Title V Permitting Proceedings. Intwo Eleventh Circuit cases, Sierra Club v.

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Johnson and Glynn EnvironmentalCoalition v. EPA, the court affirmed EPA’sdecisions not to object to title V operatingpermits issued to sources by the State ofGeorgia. In both cases, the court confirmedthat EPA’s interpretations of state laws andregulations that were part of a federally-approved State Implementation Plan wereentitled to deference.

Defending EPA’s Interpretation of theClean Water Act. In June 2006, theSupreme Court issued a splintered opinionin Rapanos v. United States on the extent offederal jurisdiction under the CWA toregulate wetlands and upstream tributariesof navigable waters. In numerous cases indistrict and appellate courts during FY2007, the Division has litigated themeaning of the Rapanos decision and theextent of federal regulatory jurisdiction. After Rapanos, the Sixth Circuit Court ofAppeals remanded United States v. Cundiff,a civil enforcement action for the illegalfilling of wetlands, to the district court,which ruled that the United States hadestablished jurisdiction over thedefendants’ wetlands based on both the testenunciated by the plurality and the test putforth in Justice Kennedy’s concurringopinion in Rapanos. The court ordereddefendants to perform the government’sproposed restoration plan.

United States v. Fabian is a CWAcivil enforcement action in connection withthe unauthorized filling of wetlands locatedalong the Little Calumet River in Indiana. The Division obtained a favorable decisionon summary judgment. The court foundthat the United States had demonstratedthat defendant’s property containedwetlands that were within federaljurisdiction under the CWA and that

defendant had added pollutants to thewetlands. Regarding regulatory jurisdiction,the court followed Justice Kennedy’sconcurring opinion in Rapanos and held thatthe wetlands were adjacent to a navigable-in-fact water (notwithstanding beingseparated hydrologically by a 130-foot widelevee) and, thus, did not require a specificshowing of a significant nexus between thewetlands and the navigable river.

In United States v. Bailey, theDivision worked with the U.S. Attorney’sOffice to obtain a favorable ruling in a civilenforcement action for violations of theCWA in wetlands adjacent to Lake of theWoods in Minnesota. The defendantconstructed a one-quarter mile long road inwetlands abutting the lake. In grantingsummary judgment for the government, thecourt held that the United States canestablish regulatory jurisdiction under eitherJustice Scalia’s plurality opinion, or JusticeKennedy’s concurring opinion in Rapanos.The court found the filled areas to beadjacent wetlands under Justice Kennedy’s“significant nexus” test and issued arestoration order requiring removal of fill,filling drainage ditches, seeding, andmonitoring.

In P&V Enterprises v. Army Corpsof Engineers, plaintiff sought to challenge,under the Commerce Clause, the Corps’regulation defining jurisdiction undersection 404 of the CWA over certainintrastate waters that “could affect interstateor foreign commerce.” The Divisionprevailed on its motion to dismiss. Thecourt found that plaintiff had not identifiedany basis for equitable tolling of thelimitations period for its facial challenge,which had long since expired.

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Defending the Army Corps of Engineers’Clean Water Act Permits. The Divisionsuccessfully defended permitting decisionsby the Corps under Section 404 of theCWA in a number of cases.

In Natural Resources DefenseCouncil v. Army Corps of Engineers,plaintiffs challenged a regional generalpermit issued by the Corps regulatingdischarges of dredged and fill material intowaters of the United States in a 48,000-acrearea in the Florida Panhandle. TheDivision prevailed on summary judgment. Bering Strait Citizens v. Army Corps ofEngineers was a challenge to a CWApermit issued in connection with theconstruction and operation of the RockCreek Mine/Mill Complex and the BigHurrah Mine, near Nome, Alaska. TheDivision successfully defended the permit.

In Friends of Magurrewock v. ArmyCorps of Engineers, the Division defeated amotion for preliminary injunction seekingto enjoin a Corps permit issued to theMaine Department of Transportation to fill6.8 acres of wetlands and riverbed inconnection with the construction of aninternational border crossing betweenCalais, Maine, and St. Stephen, NewBrunswick. The district court found thatthe Corps had reasonably assessedpracticable locations for the internationalborder crossing and reasonably concludedthat impacts of the bridge on a nearbywildlife refuge were speculative. TheDivision also defeated a preliminaryinjunction motion in Northwest BypassGroup v. Army Corps of Engineers, anaction seeking judicial review of a permitissued by the Corps authorizing the fillingof wetlands adjacent to the Turkey River inConcord, New Hampshire, for construction

of the Langley Parkway South. The courtrejected numerous challenges, includingallegations that the Corps acted improperlyin balancing competing traffic studies,analyzing alternatives, and consideringcumulative and secondary impacts. Thisvictory allows a long-planned, importantroad construction project to proceed.

Defense of Offshore and Onshore Oil andGas Leasing and Operations. Domesticenergy exploration and production continuesto play a critical role in the Nation’s energypolicy as our energy needs grow and accessto foreign energy becomes more uncertain. The Division has been instrumental inimplementation of the Nation’s energypolicy. For instance, in North SlopeBorough v. MMS, an Alaska nativecorporation and another native interestgroup sought to stop an offshore oil and gaslease sale in the Beaufort Sea for allegedviolations of NEPA. The Division defeateda motion for preliminary injunction to haltthe lease sale.

The search for new energy resourcesis critical to energy independence. InNorthern Plains Resource Council v. BLMand Northern Cheyenne Tribe v. Norton,environmental groups challenged the Bureauof Land Management’s decision authorizingcoal bed methane development in Montana. They alleged that the decision violatedNEPA, the Federal Land PolicyManagement Act, and the National HistoricPreservation Act. Although the districtcourt held that further environmentalanalysis was needed, it agreed with theBureau that some continued developmentshould be allowed consistent with the optionto elect phased development after thesupplemental analysis was performed. Onappeal, the Ninth Circuit rejected plaintiffs’

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argument that NEPA required a prohibitionon any development pending thesupplemental analysis and upheld thenarrowly tailored injunction, which alloweddevelopment consistent with the phaseddevelopment approach to be studied.

In Chihuahuan Grasslands Alliancev. Norton, environmental groups challengedan oil and gas lease sale in the NuttGrasslands in Luna County, New Mexico,alleging that the Bureau’s sale decisionviolated the Federal Land PolicyManagement Act for failure to properlysolicit public comment and NEPA for,among other things, relying on aprogrammatic environmental impactstatement rather than a sale-specificenvironmental analysis. The Divisionprevailed on summary judgment on allcounts, obtaining an important holding thata lease sale does not necessarily mark thepoint of irretrievable commitment ofresources because an agency’s subsequentreview of applications for permits to drillon a leasehold are also subject to furtherenvironmental analysis.

In Te-Moak Tribe of WesternShoshone v. Department of the Interior, atribe and two environmental groupschallenged the Bureau of LandManagement’s approval of a three-phaseoil and gas exploratory drilling operationon approximately 30,000 acres in Nevadaunder NEPA, the National HistoricPreservation Act, and the Federal LandPolicy Management Act. The Divisionsecured summary judgment in the Bureau’sfavor on all counts.

Defeating Efforts to Avoid RoyaltyObligations in Mineral Leases. Soundadministration of the Nation’s energy

policy also includes assuring that thegovernment is appropriately paid by thosewho benefit from development of ourmineral resources. The Division’s work hasbeen important in meeting this goal. InDevon Energy Corp. v. Norton, an oilcompany challenged an Interior Departmentdecision ordering a restructured accountingand payment of additional royalties on coalbed methane produced from federal leases inWyoming because the company hadimproperly deducted certain costs incalculating royalties. The district courtgranted the Division’s motion for summaryjudgment, allowing the recovery of properroyalties to the benefit of the Americanpublic.

Resolving Challenges to theModernization of the Nation’s Airwaysand Seaways. Keeping pace withincreasing demands and technologicaladvancements is a national priority. TheDivision aided this effort in a number ofways. We negotiated a settlement in NRDCv. Army Corps of Engineers, which willpermit the Corps to proceed with a criticallyimportant project designed to deepen thenavigational channels of the New York/NewJersey Harbor. On two occasions, the courtfound the Corps’ NEPA analysis regardingthis project to be inadequate and remandedfor additional work. The Division thusworked to reach a settlement that will allowthe Corps to complete its harbor-deepeningproject without the threat of future requestsfor injunctive relief. The settlement wasbased, in part, on pre-existing Corpsobligations and practices and was tailored topreserve the Corps’ discretion in futuredecisions.

Modernization of the “world’sbusiest airport” is the subject of a $6 billion

project designed to make Chicago’s O’HareAirport no longer the “nation’s mostdelayed airport.” In National MitigationBanking Ass’n v. Army Corps of Engineers,several wetlands mitigation banking groupsbrought an action challenging the Corps’compliance with NEPA and the CWA. Theplaintiffs specifically attacked the Corps’decision to allow the permittee, the City ofChicago, to pay a provider $26.4 million topurchase wetlands mitigation in lieu ofselecting the plaintiffs to provide therequired mitigation. The Divisionprevailed on summary judgment againstNEPA and CWA challenges, successfullydefending the controversial in-lieu-feemitigation arrangement approved by theCorps.

Maintaining and Enhancing the Nation’sEnergy Infrastructure. The Division isoften called upon to litigate challenges tothe Nation’s energy infrastructure. Forexample, in Border Power Plant WorkingGroup v. Dep’t of Energy, we successfullydefended a CAA and NEPA challenge todecisions by the Department of Energy andBureau of Land Management to issuePresidential Permits and rights-of-way overfederal land for transmission lines whichcross the international border in southernCalifornia and connect to power plants inMexico. The Division prevailed on allclaims.

Management of the wastes resultingfrom the Nation’s needed energyproduction is an important component offederal energy responsibilities. TheDivision defends waste managementdecisions from challenges that couldhamper federal efforts to appropriatelydirect waste practices. For example,Coalition on West Valley Nuclear Waste

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and Joanne E. Hameister v. Bodmanconcerned a challenge to the Department ofEnergy’s decision about waste managementat the West Valley Demonstration Projectsite. The Division prevailed on summaryjudgment, with the court finding that theDepartment acted appropriately bycompleting the interim waste managementprocess under the circumstances.

Finally, in perhaps the mostambitious nuclear waste project ever, forseven years the Division has beenprosecuting litigation in United States v.State of Nevada, challenging the NevadaState Engineer’s ruling summarily denyingthe Department of Energy’s applications forpermits to use water at Yucca Mountain tocarry out the Department’s mandate underthe Nuclear Waste Policy Act to develop theNation’s first high-level nuclear waste andspent fuel repository. This year, theDivision successfully limited the reach of astate order seeking to prohibit theDepartment’s continuing use of water tocollect data in support of the licenseapplication it intends to submit next year tothe Nuclear Regulatory Commission.

Supporting the Federal HighwayAdministration’s Traffic ControlProjects. As our Nation’s population andcities grow, enhancing the ability of ourhighways to safely and efficiently transportpassengers and cargo in an environmentallysensitive manner has become a moreimportant and delicate federal task. TheDivision plays a significant role in theFederal Highway Administration’s (FHWA)efforts to address traffic control and safetyissues. In Davis v. Mineta, plaintiffschallenged two much needed highwayprojects in a rapidly growing urban area nearSalt Lake City, Utah. In addition to project-

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specific claims under NEPA, plaintiffsbroadly challenged the manner in whichFHWA fulfills its environmental analysisobligations. Plaintiffs asserted that theAgency should be required to conductbroad programmatic analyses on the entireState Transportation ImprovementProgram, not just on individual projects. Such an obligation would have broadramifications agency-wide. With closecoordination with our co-defendant, theState of Utah, we ultimately prevailed onall issues.

In Conservation Law Foundation v.FHWA, the court issued a largely favorabledecision on summary judgment regardingNEPA and Federal-Aid Highway Act(FAHA) challenges to a FHWA decision tofund the widening of a 19.8-mile stretch ofInterstate 93 between Salem andManchester, New Hampshire. This matterwas litigated jointly with the State of NewHampshire. The court found in favor ofdefendants on NEPA claims regardingconsideration of alternatives and theanalysis of direct and cumulative impactsand on the FAHA claims. The courtordered a limited remand for preparation ofa supplemental environmental impactstatement on certain issues, but allowed theproject to proceed.

Securing Needed Water Rights for theUnited States. This year the Divisionentered into numerous settlements, orsecured favorable judgments, that willprotect the water supplies and flowsnecessary to maintain the vitality of naturalresources and uses of the public lands,national forests, national parks, wildliferefuges, wild and scenic rivers, militarybases, and federal reclamation projectsthroughout the West. For example, in the

Klamath Basin Adjudication, the majorgeneral stream adjudication in the State ofOregon, the Division secured rulingsgranting FWS’s claims in their entirety forthe Lower Klamath and Tule Lake NationalWildlife Refuges. These rulings recognizethe United States’ right to divert and usehundreds of thousands of acre-feet of waterper year to meet Refuge purposes. In Stateof Washington Department of Ecology v.Acquavella, a general stream adjudication ofwater rights in the Yakima River Basin, theDivision secured a favorable decisionconfirming the Bureau of Reclamation’sstate-based water rights, both for itsfederally owned facilities and for its waterdelivery obligations to other parties, onterms that provide the Bureau with extensivediscretion in managing the Yakima Project.

The Division’s successes do notalways take the form of water rightsdeterminations. Sometimes, collateralissues are critical too, as illustrated by In ReSnake River Basin Adjudication, the generalstream adjudication covering 87% of theState of Idaho. There, the Idaho SupremeCourt upheld a decision denying an award ofattorney’s fees against the United States. Inthis case of first impression, the court ruledthat Congress has not authorized state courtsto impose liability on the United States forother parties’ attorney’s fees. This decisionwill protect the public fisc from substantialpotential liabilities in Idaho, where theUnited States is litigating in support offederal water interests in adjudicationsinvolving thousands of potential claimants.

Upholding Government to GovernmentRelations with Tribes. The Divisionsuccessfully defended Bureau of IndianAffairs (BIA) decisions affecting itsgovernment to government relations with

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tribes. In St. Pierre v Kempthorne, theDivision prevailed in a case involving alongstanding dispute over the government’saction in approving a constitutionalamendment that altered the membershipstandards of the tribe. The court found thetribe an indispensable party to theadjudication of the validity of challenges tothe tribal constitution and, alternatively,gave res judicata effect to tribal courtadjudications that sought to resolve thesame issues. This ruling is strongprecedent to prevent dissident tribalmembers from interfering with thegovernment’s dealings with tribalgovernments and provides substantialsupport for the finality of tribal courtresolutions for intra-tribal disputes.

In Vann v. Kempthorne, wesuccessfully resisted two preliminaryinjunctions that would have limited ourability to engage in government togovernment relations with the CherokeeNation, prevented the BIA fromrecognizing a tribal election, and prohibiteddistributing money to the tribe. Plaintiffsclaimed the Cherokee Nation’s leadershiptook actions to eliminate CherokeeFreedmen (descendants of former slaves ofthe tribe) from tribal membership anddeprive them of voting rights contrary to atreaty with the United States. The court,while concerned about the treatment of theCherokee Freedmen by the CherokeeNation, chose to allow the BIA to providefunding to the tribe and deal with theNation’s leadership. This allowed the BIAto take actions it believes to be both in theinterest of the Cherokee Nation as a wholeand in the interests of the Freedmen, whilerespecting tribal sovereignty.

Protecting Taxpayers AgainstUnwarranted or Excessive Claims. Animportant part of the Division’s work isdefending against unwarranted claims thatfederal actions impinge upon privateproperty interests and, in cases whereprivate property has been taken infurtherance of public purposes, determiningthe proper compensation due to propertyowners. The Division has an exemplaryrecord in these cases in ensuring that theUnited States does not pay unwarrantedclaims or excessive amounts.

In Stockton East Water District v.United States, plaintiffs sought $500 millionbased on the alleged failure of the Bureau ofReclamation to deliver water to severalCalifornia water districts under their waterservice contracts. The United Statesprevailed after a multi-week trial. The courtheld that the water districts did not showthat the Bureau made unreasonabledecisions in operating the reservoir andallocating water under a contract thatrequired the Bureau to “use all reasonablemeans to guard against” water shortages. Similarly, Klamath Irrigation District v.United States involved claims forcompensation in the amount of $100 millionbased on the alleged failure of the Bureau ofReclamation to deliver water from theKlamath Project, based on the Bureau’scompliance with the ESA. Followingprevious decisions holding for the UnitedStates as to specific claims, the UnitedStates obtained a decision this year holdingthat the Sovereign Acts Doctrine provided acomplete defense, since the ESA was passedfor the benefit of the public and did notinvolve the government acting as acontractor.

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In Testwuide v. United States,approximately 3400 plaintiffs owningproperty in Virginia near two naval basesalleged Fifth Amendment takings claimsbased on an increase in military aircraftoverflight activity as a result of mandatedbase closures and consolidations. TheUnited States settled these claims underfavorable terms, thus avoiding the risk of afar greater monetary cost.

On occasion, the Fifth Amendmenttakings claims faced by the Division rise tostaggering levels. In Nicholson v. UnitedStates, which arose out of the floodingcaused by Hurricane Katrina, plaintiffsalleged that the faulty design andconstruction of the New Orleans leveesystem caused a taking of their properties. Plaintiffs sought class certification andasserted claims of $100 billion. The UnitedStates prevailed on summary judgment,with the court finding that the flooding wasnot the natural and probable consequenceof governmental action.

Acquiring Property for Public Purposes.The Division exercises the federalgovernment’s power of eminent domain toenable agencies to acquire land for variouspurposes, including property needed fornew or expanded courthouses, for floodcontrol projects, for federal officebuildings, and for access to federalfacilities.

In the course of this work, theDivision is mindful of its goal to achieveresults just to individual landowners and tothe taxpayers of the United States. Through settlements and trials, the Divisionachieved results that amounted to savingsof some $18.6 million dollars. It alsoachieved beneficial results by working with

agencies to avoid the expense of litigationwhere possible. For example, in a situationrequiring installation of security measuresaround the federal district courthouse inManhattan, the Division worked with GSAto devise a right of use that avoidedlitigation altogether.

Enforcing Environmental Laws ThroughInternational Capacity Building. TheDivision frequently provides training oncivil and criminal environmentalenforcement to judges, prosecutors andother government attorneys, and other legalpractitioners in foreign countries. Divisionattorneys engaged in such capacity buildingtraveled to numerous countries, includingPanama, China, Taiwan, Indonesia,Thailand, Hungary, Denmark, theNetherlands, the United Arab Emirates, theKingdom of Bahrain, Egypt, Tanzania, andMexico. The Division worked withgovernment attorneys from Mexico andCanada to develop and present a conferencein February 2007 on environmentalenforcement issues for Mexican judges andmagistrates in Mexico City. Thesymposium was sponsored by theEnforcement Working Group of theCommission on Environmental Cooperation,an international organization created underthe North American Agreement onEnvironmental Cooperation. Divisionattorneys also served as instructors inworkshops for judges and prosecutors in thePhilippines and Indonesia on prosecutingcases to combat illegal trade in wildlife andwildlife parts. These workshops wereorganized in conjunction with theAssociation of Southeast Asian NationsWildlife Enforcement Network (ASEAN-WEN). Division attorneys also participatedin several capacity building efforts tostrengthen enforcement responses to oil

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pollution from vessels; attorneys plannedand staffed a multi-agency training missionto Taiwan which provided in-depth trainingto several Taiwanese agencies concerningidentification of and investigation of vesselpollution violations. The Division alsohelped organize meetings with visitingforeign enforcement and other governmentofficials from countries such as China,Japan, Indonesia, Vietnam, and Chile.

Protecting the Interests of the UnitedStates in Litigation Involving ThirdParties. The Division at times participatesin cases in which the United States is not aparty to protect the interests of the UnitedStates and its component agencies. Suchparticipation may be in district court, in acourt of appeals, or in the Supreme Court;we also participate at times in state courtproceedings. The Division has filed briefsin a number of such proceedings in the pastyear. In Northwest Environmental DefenseCenter v. Brown, we filed a brief in federaldistrict court on the issue of whether aCWA NPDES permit is required forforestry roads. The court agreed with ourview that such permits are not required. Another example is BGA/Western MoheganTribe v. Ulster County. In that case, agroup of Native Americans sought a rulingfrom a federal district court that could havesuggested that they had some of theattributes of a federal Indian tribe. TheDivision filed an amicus brief explainingthat recognition as a federal Indian tribecould be granted only by the Department ofthe Interior and that the suit was improper. The court agreed.

PROMOTING NATIONAL SECURITYAND MILITARY PREPAREDNESS

Defending the Army’s Chemical WeaponsDemilitarization Program. The Divisionhas successfully defended the Army againstchallenges to its program to destroy agingstockpiles of chemical weapons pursuant tointernational treaty obligations. In SierraClub v. Army, plaintiffs challenged theArmy’s destruction of a chemical nerveagent under the Resource Conservation andRecovery Act. The destruction processinvolves neutralizing the deadly liquid agentat one location, then shipping the resultingproduct to a commercial hazardous wasteincinerator. Plaintiffs alleged that thechemical agent is not fully neutralized in thetreatment process and that trucking theresulting product thus presents risks. TheDivision defeated plaintiffs’ motion for apreliminary injunction. The court held thatthe Army properly considered all theavailable evidence when it concluded thatthe post-neutralization product could beclassified as a caustic hazardous waste aftertreatment and that the Army took thenecessary hard look at the environmentalimpact of its plan to ship that product. Thisdecision allows this important program, vitalto national security, to proceed withoutinterruption.

An Oregon court issued a largelyfavorable decision in G.A.S.P. v. Army,upholding state-issued permits for theincineration of chemical weapons at theArmy’s facility in Umatilla, Oregon. Thecourt remanded to the state permittingagency on two relatively minor issues, butheld that the facility may continueincinerating chemical weapons during theremand because petitioners had not shown

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that the operations were having an adverseeffect on public health or the environment.

Aiding the Military’s Training,Preparations and Deployment in theWar on Terrorism. After nearly threeyears of litigation in IlioulaokalaniCoalition v. Gates, the Division this yearachieved an important victory in its defenseof a key component of the Army’s 30-yearmodernization plan, “Stryker conversion”activity at an Army training facility inHawaii. The Division secured partial relieffrom an injunction that had prohibited allconversion and training activity while theArmy worked to complete additionaldocumentation under NEPA. With thisrelief, the Army was able to immediatelyresume every conversion project andtraining activity it had identified as criticalfor ensuring that the 2nd Brigade, 25thInfantry Division is provided with trainingand weapons systems needed tosuccessfully fight the global war onterrorism.

Protecting the Navy’s Ability to UseSonar in Training Exercises. TheDivision represents the Navy in severalcases that challenge the Navy’s use of mid-frequency active sonar throughout theworld and in specific training exercises offthe coast of California and Hawaii, as wellas its use of low-frequency sonar, a newtechnology for anti-submarine warfare thatis still in the experimental phase. Thesehigh-profile cases are critically important tothe Nation’s security and militaryreadiness.

Property Acquisitions to ImproveMilitary Readiness and NationalSecurity. As requested by federal agenciesacting under authority of Congress, the

Division exercised the federal government’spower of eminent domain to initiatelitigation enabling land acquisitions formilitary readiness and national security.

The Division filed new cases forsuch diverse military installations as theNavy’s Air Facility, El Centro; the HarveyPoint Defense Testing Facility; the NavalComputer and Telecommunications AreaMaster Station; the Army’s Gowen FieldTraining Area in Idaho; and the Air Force’sSeymour Johnson Air Force Base and TravisAir Force Base. In addition, it continued itslitigation efforts in existing cases such asthat involving property at Eielson Air ForceBase in Alaska, a case which concernscomplex lease issues arising from themilitary’s “section 801 housing” project,pursuant to which the military leased landon installations to private developers whoconstructed military housing that was leasedback to the military.

In addition, the Division has filednine new cases to provide national securityalong the country’s northern and southernborders. For example, at the northwesternand northeastern borders, it filed actions toacquire property for two new or expandedports of entry. One suit, which seeks landfor the expanded border station at Blaine,Washington, involved the condemnation ofthe State’s interest in portions of Interstate-5just south of the boundary between theUnited States and Canada; the plan is toconstruct the border station and thenreconstruct the affected portions ofInterstate-5 as a bridge over the borderstation, all on an expedited basis inanticipation of 2010 Winter Olympics inVancouver. At the southwestern border, theDivision has filed suit to acquire part of the

property needed for the Multi-Tiered FenceProject.

PROTECTING INDIAN RESOURCESAND RESOLVING INDIAN ISSUES

Protecting Tribal Hunting, Fishing, andGathering Rights. The Division litigates to defend treaty-protected tribal huntingand fishing rights. In United States v.Michigan, the United States, five tribes, theState of Michigan, and Michigan huntingand conservation groups successfullynegotiated a comprehensive settlement thataffirms the existence and extent of theinland hunting and fishing rights of the BayMills Indian Community, the Sault Ste.Marie Tribe of Chippewa Indians, the LittleTraverse Bay Bands of Odawa Indians, theGrand Traverse Band of Ottawa andChippewa Indians, and the Little RiverBand of Ottawa Indians. The agreementresolves a long-standing dispute overwhether the Tribes retained hunting andfishing rights pursuant to the 1836 Treatyof Washington. The agreement resolveslitigation ongoing since the 1970s.

In United States v. Washington, along-running case involving tribal treatyfishing rights in Western Washington, thecourt issued a decision in favor of theUnited States and numerous Indian tribes,holding that the Tribes’ treaty-securedrights of taking fish impose a duty on theState of Washington to improve culvertsthat hinder fish passage and diminish fishpopulations.

Defending Tribal and Federal Interestsin Water Adjudications. During the pastyear, the Division successfully representedthe interests of Indian tribes in complexwater rights adjudications. The Division,

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working with the Interior Department, theState of Washington, private water users,and the Lummi Indian Nation, negotiated acomprehensive settlement of a significantwater rights lawsuit involving groundwaterunderlying the Lummi Reservation inUnited States v. Washington Department ofEcology. In another major water rights case,the Division successfully argued in bothfederal and state court for entry of a consentdecree effectuating the Gila River IndianCommunity Water Rights Settlement. Thesettlement brings critical water resources tothe Gila River Indian Community’sReservation and resolves long-standingissues regarding water use.

The Division also prevailed in twotrials that focused on amending two 1991consent decrees settling decades-oldlitigation involving water rights on theAnimas and La Plata Rivers in Colorado. Infour consolidated cases brought on behalf ofthe Southern Ute and Ute Mountain Tribes,the court agreed, over objections, to amendconsent decrees in order to make themconsistent with legislation concerning theAnimas-La Plata water project.

State of Maine v. EPA involved apetition for review of EPA’s decisionauthorizing the State of Maine to administerthe CWA permitting program in theterritories of the Penobscot Nation andPassamaquoddy Tribe, but retaining federalauthority to issue permits for certaintribally-owned facilities with operations thatEPA concluded are internal tribal matters. The First Circuit affirmed EPA’s decisiongranting authority to the State to administerthe program within the Tribes’ territory, butvacated EPA’s decision to retain permittingauthority as to certain tribally-ownedfacilities. The decision, which turned on

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construction of the Maine Indian ClaimsSettlement Act, clarifies the respectiveroles of the State and the Tribes inadministering the CWA in Maine.

Upholding Agencies’ Authority toImplement Indian Policies. The Divisionhas achieved considerable success indefending the Secretary of the Interior’strust land acquisition authority againstnumerous constitutional and administrativelaw challenges. These decisions havestrengthened the authority of the Secretaryto provide for tribes’ physical, economic,and political well-being.

Defending Tribal Trust Claims. TheDivision represents the United States innumerous cases that tribes have broughtdemanding accountings and alleging breachof trust and other claims relating to fundsand non-monetary assets (such as timberrights, oil and gas rights, grazing, miningand other interests) on some 45-millionacres of land that the United States holds intrust for tribes. There are more than 100cases ongoing in several courts and thesecases are in various stages of discovery,active pretrial preparation, and formal orinformal settlement discussions.

SUPPORTING THE DIVISION’SLITIGATORS

Award Winning Quality of Life. The Division was voted the second best place towork in the federal government (out of the222 agency component offices) in the “BestPlaces to Work in the Federal Government2007” survey.

The Division also was honored toreceive the “Constance L. Belfiore Qualityof Life” Award from the Bar Association of

the District of Columbia – the firstgovernment law office to be so honored inthe 10-year history of the award. Thisaward recognized the Division for its qualityof work, collegiality, attorney developmentand mentor programs, and service to thecommunity.

The Human Resources staff alsocompleted the second year of its innovative“Honors Paralegal Program,” which makesuse of the hiring authority in the FederalCareer Intern Program. Each new HonorParalegal was provided a three-dayorientation program and paired with anattorney mentor, which has provenenormously helpful in getting the new staffintegrated into the work of the Division.

The Office of Human Resources hasimplemented an on-line orientation programthat allows new employees to completetime-consuming forms in advance of theirfirst day, saving valuable time andresources.

In 2007, the Division had anoutstanding performance fulfilling thePresident’s Management Agenda, with thehighest “green” performance scores in everyrating category for which the Division ismonitored.

New Technology Resources andUpgrades. The Division upgraded allprinters and servers, increased bandwidth,updated our backup equipment, and madeadditional improvements to our systemarchitecture and network structure. Theupgrades will pave the way for a newdesktop system in the near future. TheDivision also upgraded and replaced itsBlackBerry PDAs, enabling staff to remain

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highly efficient with the use of currentmobile technology.

The Division also rolled out a newIntranet module with resources forenvironmental enforcement litigators. Thenew EESNet contains a wealth ofinformation and resources relevant to workunder various environmental statutes. Substantive legal resources include EPAand DOJ guidance to litigators, judicial andadministrative models, policies, outlines,overviews, and case updates. Managementresources provide trial schedules, staffinglists, and consent decree and complaintlibraries sorted by year and statue. Thissite will serve as a prototype for otherpractice area intranet pages.

The Division expanded its uniquemail scanning program this year to providegreater technical capability. Mail now isscanned directly into the Division’sdocument management software, ensuringthat electronic copies are made availableimmediately to multiple recipients in theiroffices or in remote locations whileteleworking, on travel, or duringemergencies requiring employees to workfrom offsite locations.

The Division’s Office of LitigationSupport provided outstanding automationsupport services for our largest and mostcomplex cases. Our Litigation Supportprogram combines cutting edge legaltechnology, experienced contract staff, andextensive in-house expertise. OLSexpanded the Division’s Extranet, allowingtrial teams to more effectively collaborateon case materials with agency counsel,investigators, and expert witnesses byroutinely making new cases availablethrough our secure Internet portal.