UNITED STATES DEPARTMENT OF JUSTICE 

ENVIRONMENT AND NATURAL RESOURCES DIVISION 

FISCAL YEAR 2004 

SUMMARY OF LITIGATION ACCOMPLISHMENTS 

CONTENTS 

FOREWORD 

CRIMINAL ENFORCEMENT OF OUR NATION'S 

ENVIRONMENTAL LAWS 

PROTECTING THE AIR, LAND AND WATER 

ENSURING CLEANUP OF HAZARDOUS WASTE 

PROMOTING RESPONSIBLE STEWARDSHIP OF AMERICA'S 

NATURAL RESOURCES 

PROMOTING NATIONAL SECURITY AND MILITARY 

PREPAREDNESS 

DEFENDING VITAL FEDERAL PROGRAMS AND INTERESTS 

PROTECTING INDIAN RESOURCES AND RESOLVING INDIAN 

ISSUES 

SUPPORTING THE DIVISION'S LITIGATORS 
FOREWORD 

I am pleased to present the Environment and Natural Resources Division’s 

(“ENRD”) Accomplishments Report for Fiscal Year 2004. The Division 

continues to work tirelessly to enforce and defend America's 

environmental laws, ensuring the air we breathe is clean, the water we 

drink pure, and the majestic American landscape preserved for generations 

to come. This year produced even more record-breaking accomplishments 

of which all Americans can be proud. The Division again secured cleanup 

costs, civil penalties and criminal fines for the United States Treasury that 

far exceeded ENRD’s budget and provided incalculable benefits for human 

health and the environment. 

Thanks to vigorous enforcement of existing laws, polluters across the 

nation agreed to spend in excess of $4 billion in the last fiscal year – 

topping the previous record of just over $3 billion in fiscal year 2002 – to 

take corrective measures protecting the nation’s health, welfare and 

environment. The last two fiscal years were also record-breaking periods 

for assessment of civil penalties. In fiscal year 2004, courts imposed more 

than $181 million in fines for violations in environmental cases, second 

only to fiscal year 2003’s recovery of $203 million, which was itself 

almost $80 million more than any previous year in ENRD’s enforcement 

history. The Division also obtained the largest civil penalty settlement ever 

in a wetlands enforcement case brought on behalf of the Environmental 

Protection Agency. 

The Division’s accomplishments in the environmental area cannot be 

summed up simply in numerical terms: ENRD also achieved immediate, 

on-the-ground benefits for the American people. For example, in 

Massachusetts a local power plant agreed to a settlement that will improve 

air quality significantly for Boston school children and North Shore 

commuters, as well as restore a salt marsh in Chelsea and construct a new 

commuter bike path. Among the projects to which plant owner Exelon 

Mystic LLC committed is retrofitting 500 Boston school buses with 

pollution control equipment, to be supplied by the company with ultra lowpolluting diesel fuel. This project alone will benefit more than 28,000 

school children who ride the buses every day, reduce tailpipe emissions by 
more than 90 percent, and make Boston the first major American city to 

have retrofitted its entire school bus fleet. 

Nor can the Division’s accomplishments be summed up solely by 

reference to its criminal and civil enforcement actions. Much of ENRD’s 

workload continued to be non-discretionary cases, whether in the form of 

defending EPA regulations or other federal agency decisions, or bringing 

eminent domain actions pursuant to Congressional direction. These cases, 

along with our litigation regarding Indian issues, repeatedly put our 

lawyers on the cutting edge of the law. As evidence of this, eight of the 

eighty-one cases accepted by the Supreme Court for argument in the last 

term were Division cases. And, as evidence of the quality of the Division’s 

work, the position advanced by ENRD on behalf of the United States 

prevailed in all but one of those cases decided by the Court. 

I have had the privilege of serving as Assistant Attorney General for the 

Environment and Natural Resources Division for almost three years now, 

and I can readily say it has been one of the most challenging yet rewarding 

positions I have held in my legal career. Hardly a week goes by without 

one or more Division cases featuring prominently in the media or without 

meetings in which difficult decisions must be made. What makes the 

challenge a pleasure is the opportunity to work with such a wonderful 

group of people. The Division’s lawyers and support staff bring 

intelligence and dedication to their cases, making my job immeasurably 

easier. They have served the American people well and I am proud to serve 

with them. 

Thomas L. Sansonetti 

Assistant Attorney General 

Environment and Natural Resources Division 

December 2004 

CRIMINAL ENFORCEMENT OF OUR NATION'S 

ENVIRONMENTAL LAWS 
Transportation of Hazardous Materials. The Departments of Justice and 

Transportation completed the first full year of this joint effort to combat 

illegal shipment of hazardous materials by air, highway, rail and water. 

The "hazmat" initiative is addressing critical homeland security issues as 

well as the significant public health and environmental consequences of 

crimes involving transportation of hazardous materials. In United States v. 

Emery Worldwide Airlines, the defendant pled guilty to a twelve-count 

information charging felony violations of the Hazardous Materials 

Transportation Act and was sentenced to pay a $6 million fine, complete a 

three-year term probation, and initiate an environmental compliance 

program. Emery specializes in shipping heavy cargo by air and land, 

including hazardous materials. DOT regulations require the operator of an 

aircraft transporting an item classified as hazmat to give the pilot written 

notification. Audits conducted by Emery revealed the company was not 

following proper procedures, but did not take constructive steps to correct 

the problem for well over a year. 

In United States v. Solar International and Shipping, the defendant 

company, and Hung Tao Chou and Chin Wang, two of its employees, were 

indicted and charged with conspiracy to make false statements and with 

use of a false emergency response telephone number on paperwork that 

accompanied numerous containers of hazardous materials shipped in 1998 

and 1999 in violation of the Hazardous Materials Transportation Safety 

Act ("HMTSA"). All three defendants were further charged with 

substantive HMTSA violations, and Solar and Chin Wang were also 

charged with false statement violations. 

Vessel Pollution Enforcement. The Vessel Pollution Initiative is an 

ongoing, concentrated effort to prevent vessels from illegally discharging 

pollutants into the oceans, coastal waters and inland waterways. Since 

1990, over 135 environmental prosecutions have resulted from such illegal 

activity. The Vessel Pollution Initiative contributed to a number of 

important new prosecutions again this year. In United States v. OMI 

Corporation, the company pled guilty to falsifying documents in an effort 

to cover up illegal dumping of thousands of gallons of waste oil at sea in 

violation of the Act to Prevent Pollution from Ships ("APPS"). The 
company was sentenced to pay a $4.2 million dollar fine, half of which 

went to a crew member whistleblower, and will also serve three years' 

probation. Connecticut-based OMI operated the M.T. Guadalupe, a tanker 

that carried various types of petroleum products, including jet and diesel 

fuel. The captain and chief engineer of the M.T. Guadalupe previously 

pled guilty to falsifying the ship's oil record book, to asking crew members 

to lie to the U.S. Coast Guard, and to asking engineers to conceal illegal oil 

discharge bypass pipes used during a five-month period in 2001. 

Similarly, in United States v. Sabine Transportation Co., Iowa-based 

Sabine pled guilty to eight APPS violations, including the illegal dumping 

of 440 tons of diesel-contaminated grain, oil-contaminated bilge waste, and 

contaminated diesel fuel and plastic waste, as well as a failure to notify and 

two false oil record violations. The company was sentenced to pay a $2 

million fine with $1 million to be paid to three employee whistleblowers. 

Sabine operated a fleet of eight U.S.-flagged ships engaged in similar 

discharge violations on the high seas. 

Combating Worker Endangerment. In United States v. Atlantic States 

Cast Iron Pipe Company, a Division of McWane, Inc., et al., the company 

and five current or former managers and supervisors were charged in a 35-

count indictment with conspiracy to violate the Clean Water Act ("CWA") 

and the Clean Air Act ("CAA"), to making false statements and to 

obstructing the Environmental Protection Agency ("EPA") and the 

Occupational Safety and Health Administration ("OSHA") and to 

defeating the lawful purpose of OSHA and EPA. Atlantic States 

manufactured ductile cast iron pipes for the water and sewer industry at its 

Phillipsburg, New Jersey facility. The superseding indictment charges the 

defendants with routinely violating their CWA permits by discharging 

petroleum-contaminated water and paint into storm drains leading to the 

Delaware River; repeatedly violating their CAA permits by, among other 

things, burning tires and excessive amounts of hazardous waste paint; 

systematically altering accident scenes and plant conditions in preparation 

for OSHA inspections; and routinely misleading federal, state, and local 

officials investigating environmental and worker safety violations. 
ENRD's Environmental Crimes Section convicted 19 individuals and 

corporations for fraudulently obtaining training certificates required to 

conduct asbestos and lead paint remediation and for using the certificates 

to win lucrative abatement contracts at federal facilities, schools, hospitals 

and other public buildings. In United States v. Ethel Holmes, the jury 

convicted the defendant on 12 counts of conspiracy, mail fraud and false 

claims following a week-long trial. Holmes was president of Holmes 

Environmental, Inc., an asbestos and lead abatement contractor that 

obtained false training certificates to enable its employees to perform 

abatement work at the Pentagon and other facilities. The company from 

which the certificates were purchased had previously been sentenced to a 

$30,000 fine and two years' probation. That company's owner was 

sentenced to 15 months imprisonment followed by three years' supervised 

release. 

Other asbestos certificate prosecutions yielded guilty pleas to false 

statement charges. Those cases include United States v. Marcor 

Remediation, (company and general manager); United States v. Macsons, 

Inc., (company and contract representative); United States v. Potomac 

Abatement, Inc., (company and operations manager); and United States v. 

ETMS, (company, president and vice-president). Fines imposed in the four 

cases totaled $292,000; $100,000 in restitution was also ordered to be paid. 

Prosecuting Hazardous Waste and Clean Air Act Violations. In United 

States v. Rhodia Inc., the defendant company pled guilty to two Resource 

Conservation and Recovery Act ("RCRA") storage violations and was 

sentenced to pay a $16.2 million fine, $1.8 million in restitution, and to 

perform 1,000 hours of community service. Rhodia operated the Silver 

Bow Plant in Montana, which manufactured elemental phosphorus, the 

waste from which spontaneously ignites when exposed to air. From 

January 1999 until August 2000, Rhodia illegally stored carbon brick and 

precipitator dust contaminated with elemental phosphorus. The company 

also illegally stored elemental phosphorus sludge. Rhodia was ordered to 

clean up the now defunct plant and was placed on a five-year term of 

probation. 
United States v. Hormoz Pourat, another hazardous waste prosecution, 

resulted in a guilty plea to RCRA and conspiracy violations. Mr. Pourat 

was a vice-president of AAD Distribution and Dry Cleaning Services, one 

of the largest handlers of dry cleaning waste in California before it was 

shut down in January 2001. Between January 1999 and July 2000, Mr. 

Pourat admitted to storing drums of tetrachloroethylene (PERC) waste at 

AAD after the facility had exceeded its storage permit limit. Mr. Pourat 

pled guilty to a similar scheme at Right Choice, Inc., where he served as 

manager. He was sentenced to serve 37 months' incarceration, pay $1.29 

million in cleanup costs, and complete a three-year term probation. 

In United States v. John Littlehale, Mr. Littlehale, a vice-president of 

Multi-Color Corporation, falsely represented that a new press in 

Scottsburg, Indiana was not in operation, and when it was working, 

claimed proper air pollution control devices had been installed when he 

knew this was not true. Mr. Littlehale pled guilty to making a false 

statement in violation of the Clean Air Act and was sentenced to serve 18 

months' incarceration, pay a $4,000 fine, and perform 50 hours of 

community service. A co-defendant pled guilty to misprison of a felony, 

the knowing concealment of and failure to report a felony committed by 

another, and was sentenced to serve six months of home detention as part 

of a five-year term probation and ordered to perform 500 hours of 

community service. 

Prosecuting Environmental Fraud. In United States v. William Murphy, 

defendant Murphy pled guilty to 28 counts of counterfeiting and 

misbranding pesticides and was sentenced to serve 41 months 

incarceration, three years' supervised release, and pay $45,305 in 

restitution to the Alabama Department of Agriculture. Mr. Murphy, 

operating under the company name Sierra Chemical, sold these pesticides 

to municipalities in Alabama and Florida for mosquito eradication in 

connection with West Nile Virus. 

In United States v. Thomas Michael Hayes, the defendant was convicted of 

conspiracy to violate the Clean Air Act, making false statements to the 

EPA, mail fraud and obstruction of justice. He was sentenced to 57 

months' incarceration and three years supervised release, and required to 
pay a $1,000 fine. Mr. Hayes was a vice-president of Saybolt Inc., which 

performed sampling and analysis of petroleum products. Mr. Hayes 

ordered the destruction of laboratory data falsified by company executives. 

He was convicted of carrying out the conspiracy at Saybolt's New Jersey 

and Massachusetts facilities. 

Enforcing Wildlife Protection Laws. 

In United States v. Marousz Chomicz, the defendant pled guilty to a fourcount information charging him with smuggling and Lacey Act violations. 

Mr. Chomicz, president of a caviar company located in Poland, was part of 

a conspiracy in which couriers were paid to smuggle black market caviar 

from Europe to Miami without import documents required under the 

Convention on International Trade in Endangered Species of Wild Fauna 

and Flora ("CITES"). Mr. Chomicz was directly responsible for the 

smuggling of 619 kilograms of caviar worth as much as $1.8 million. He 

was sentenced to 30 months' incarceration. 

Another such prosecution was United States v. Leong Tian Kum, in which 

the defendant pled guilty to smuggling protected reptiles into the United 

States and laundering money from his smuggling activities. Mr. Kum used 

overnight delivery services to ship to the United States wildlife declared as 

handicrafts, art or stuffed animals. Federal agents intercepted over 170 

tortoises, turtles, tree monitors, water dragons and other protected animals 

valued as high as $200,000. These animals are protected by CITES and 

may only be traded when accompanied by proper permits. Mr. Kum's codefendant, Reid Turkowski, also was convicted and sentenced to 10 

months imprisonment. Turkowski was the owner of Captive Bred 

Specialities, which purchased reptiles from Mr. Kum for resale at reptile 

shows in the Midwest. A second confederate of Mr. Kum, Singaporeresident Lawrence Wee Soon Chye, was sentenced to 37 months 

imprisonment for illegally shipping animals from Singapore and Bangkok 

to customers in the United States identified through the Internet. 

In United States v. Mississippi Potash, Inc., the defendant company pled 

guilty to "taking" (i.e., killing) migratory birds in violation of the 

Migratory Bird Treaty Act ("MBTA") and was ordered to pay a $15,000 
fine. The company had illegally discharged waste products from its mining 

operations in Carlsbad, New Mexico, into Laguna Toston, a natural playa 

lake. The waste products included significant amounts of sodium salts 

which can be fatal to migratory birds. The company was also required to 

fund a remediation plan by placing $237,500 in escrow. 

The defendant in United States v. Phelps Dodge Morenci, Inc., also pled 

guilty to violating the MBTA by taking migratory birds illegally, and was 

sentenced to pay a $15,000 fine and undertake a corrective action plan to 

prevent bird deaths. In addition, the company agreed to donate $10,000 to 

one or more federally-licensed bird rehabilitators to care for sick and/or 

injured birds and to fund a study of projects to create or enhance migratory 

bird habitat within the Gila/Salt/Verde River Ecosystem. Some of the 

impounded waters discharged during the mining process at the Morenci 

Mine site contained acid and other chemical solutions harmful and at times 

fatal to migratory birds. Dead birds were found near these impoundments. 

PROTECTING THE AIR, LAND AND WATER 

Reducing Air Pollution from Coal-Fired Power Plants. The Division 

continues to litigate vigorously Clean Air Act cases against operators of 

coal-fired electric power generating plants. Violations arise when 

companies engage in major life extending projects on aging facilities 

without first installing state of the art pollution controls, as the law 

requires. These violations result in tens of millions of tons of excess air 

pollution which adversely affect the health of the elderly, the young and 

asthma sufferers and lead to forest degradation, waterway damage and 

reservoir contamination. The settlements achieved to date by the Division 

with operators of coal-fired power plants will remove 688,000 tons of 

pollutants from the air annually. 

In January 2004, the Division expanded its enforcement initiative by suing 

East Kentucky Power Cooperative, which emits over 85,000 tons of sulfur 

dioxide and nitrogen oxides each year. In June 2004, the Division sued the 

South Carolina Public Service Authority and simultaneously lodged a 

settlement under which that utility will spend over $400 million to reduce 

its pollutant emissions by more than 69,000 tons per year, pay a $2 million 
civil penalty, and perform $4.5 million in environmental mitigation 

projects. 

In September 2004, the Division sued Mirant Mid-Atlantic Corp. and 

lodged a settlement under which that company will spend over $130 

million to reduce emissions of nitrogen oxides by over 28,000 tons a year, 

pay a $500,000 civil penalty and perform $1 million in mitigation projects. 

The Division also entered into an alternative dispute resolution process in 

the largest of the power plant cases filed to date, United States v. American 

Electric Power Co., and reactivated litigation in United States v. Alabama 

Power Co., which had been administratively stayed by the court. 

Addressing Air Pollution from Oil Refineries. The Division also made 

significant progress this year in its national initiative to combat Clean Air 

Act violations within the petroleum refining industry. Among other 

accomplishments, the Division secured comprehensive settlements with 

Chevron U.S.A., Inc. and CITGO Petroleum Corp. The Chevron settlement 

covers operations at five petroleum refineries in four states. Mississippi, 

Utah, Hawaii and the Bay Area Air Quality Management District in 

California participated as plaintiff-intervenors in the settlement. Under the 

settlement, Chevron will undertake specified measures to reduce pollution, 

including implementation of innovative technologies to reduce emissions 

of nitrogen oxides and sulfur dioxide from refinery processes by 

approximately 9,600 tons per year at an estimated cost in excess of $275 

million. Chevron will also pay a civil penalty of $3.5 million and spend at 

least $4.55 million to perform supplemental environmental projects 

("SEPs"). 

A proposed consent decree settlement with CITGO Petroleum Corporation 

requires CITGO to spend an estimated $320 million to install and operate 

innovative technologies to reduce pollutants at refineries in Illinois, 

Louisiana, Texas, New Jersey and Georgia. These controls are expected to 

reduce emissions of nitrogen oxides by more than 7,000 tons and 

emissions of sulfur dioxides by more than 23,000 tons a year. The decree 

also requires CITGO to pay a $3.6 million civil penalty and spend at least 

$5 million on a SEP to further reduce nitrogen oxide emissions. With these 

additional settlements, the Division's initiative will have addressed more 
than 40% of the nation's refining capacity and will reduce air pollutants by 

more than 166,000 tons per year. 

Reducing Air Pollution at Other Diverse Industrial Facilities. The 

Division made additional significant gains in improving the nation's air 

quality by concluding enforcement actions against facilities operating in 

diverse industries including wood cabinet manufacturing (United States v. 

Capital Cabinet Corp.), molybdenum and copper mining (United States v. 

Phelps Dodge Sierrita), refrigeration manufacturing (United States v. True 

Manufacturing), silica sand processing (United States v. J.R. Simplot 

Company) and steel mills (United States v. CF&I Steel, L.P., d/b/a Rocky 

Mountain Steel Mills). Those efforts addressing Clean Air Act violations 

resulted in the United States securing commitments by defendants to 

perform $2.57 million in facility improvements, to undertake SEPs in local 

communities valued at $400,000, and to pay more than $6.6 million in civil 

penalties. 

Innovative Pollution Controls to Reduce Air Pollution at Commercial 

Egg Production Facilities. In an unprecedented Clean Air Act settlement, 

Buckeye Egg Farm, L.P., Ohio's largest commercial chicken egg producer 

(responsible for 4% of the nation's total production in 2002), agreed to 

install and test innovative pollution controls at its three giant Ohio facilities 

to dramatically cut air emissions of particulate matter and ammonia. 

Particulate matter has been linked to aggravated asthma, 

breathing difficulties, and chronic bronchitis, among other ailments. 

Ammonia is a serious lung irritant. The combined particulate matter and 

ammonia controls are also expected to reduce fly infestations, the subject 

of repeated state and private litigation. The settlement ensures that families 

residing near the massive farms will see continuing improvement in the air 

they breathe. Buckeye will also pay a civil penalty of approximately 

$880,600. 

Upholding EPA's Clean Air Act Regulatory Program. The Division had 

numerous successes in defending EPA's regulatory program under the 

Clean Air Act. Most notably, in Alaska Department of Environmental 

Conservation v. EPA, the Division obtained a favorable appellate ruling 
upholding EPA's authority to issue findings of noncompliance and a stop 

construction order with respect to a prevention of significant deterioration 

("PSD") permit issued by Alaska for a new diesel generator at a major zinc 

mine. The decision was affirmed by the Supreme Court, which sustained 

EPA's interpretation of the Clean Air Act as granting the agency authority 

to block construction of a major new pollutant-emitting facility permitted 

under a state implementation plan-approved program where EPA found the 

state's determination of "best available control technology" unreasonable. 

Upholding EPA Actions on State Implementation Plans. The Division 

also obtained multiple rulings upholding EPA decisions involving 

implementation of air quality standards in various parts of the country 

through the state implementation plan ("SIP") process. In Environmental 

Defense v. EPA, the Court of Appeals for the Second Circuit upheld EPA's 

full approval of the New York portion of the New York City area SIP and 

attainment demonstration for the one-hour ozone standard. Rejecting 

numerous claims that EPA had not properly interpreted or applied statutory 

requirements, the court upheld EPA's interpretation and application of the 

statute. 

Similarly, in BCCA Appeal Group v. EPA, the Fifth Circuit rejected 

multiple petitions for review of related EPA actions regarding the ozone 

attainment SIP for Houston. The court found EPA's reliance on the state's 

photochemical grid modeling was neither arbitrary nor capricious because 

the model provided a reasonable indication, supported by the record, that 

the measures and procedures in the SIP would lead to attainment of the 

ozone standard. 

In Sierra Club v. EPA, the Seventh Circuit Court of Appeals rejected 

petitions for review of a final rule determining that the St. Louis ozone 

nonattainment area had attained one-hour ozone National Ambient Air 

Quality Standards ("NAAQS") and approving the implementation plan for 

the area. And in Greenbaum v. EPA, the Sixth Circuit upheld EPA's 

decision to redesignate Cuyahoga and Jefferson Counties, Ohio, to 

attainment status for particulate matter. 
Ensuring the Integrity of Municipal Wastewater Treatment Systems. 

At ENRD's request, the District Court for the Southern District of Ohio 

entered two consent decrees that will require the Metropolitan Sewer 

District of Greater Cincinnati to spend more than one billion dollars to 

bring its aging sewer system into compliance with the Clean Water Act. 

For years, Cincinnati and Hamilton County illegally discharged untreated 

sewage through overflow pipes from sanitary sewers and outfalls 

("sanitary sewer overflows," or "SSOs") when it rained. Additionally, 

inadequate capacity in those portions of the sewer collection system that 

also accept storm water ("combined sewer overflows," or "CSOs") caused 

the discharge of an estimated six billion gallons of untreated sewage each 

year, much of which found its way into residents' yards and basements. 

The two decrees will bring about CSO and SSO compliance and require 

defendants to implement a comprehensive program to prevent, clean up, 

and compensate homeowners for sewage entering their basements. The 

decrees also require the defendants to pay $1.2 million in civil penalties 

and undertake SEPs valued at $5.3 million. The State of Ohio joined in the 

settlement. 

Also, in one of the largest sewage cases in our nation's history, the United 

States and a coalition of co-plaintiffs reached a $2 billion settlement with 

the City of Los Angeles resolving years of sewage spills. Los Angeles 

operates the largest sewage collection system in the country with 

approximately 6,500 miles of lines. The consent decree, a groundbreaking 

effort to address all causes of sewage spills and odors in the City, requires 

Los Angeles to repair and replace its aging infrastructure and to work 

proactively to prevent future problems. In addition to the injunctive relief, 

the proposed decree requires the city to perform $8.5 million in SEPs and 

pay civil penalties of $1.6 million. 

Courts also entered consent decrees settling Clean Water Act violations 

arising from operation of wastewater collection and treatment systems with 

five smaller municipalities during the past year: Lebanon, Missouri; 

Branford, Connecticut; South Haven, Indiana; and Williamstown and 

North Adams, Massachusetts. The consent decrees provide for the 

governments to spend approximately $22 million in injunctive relief to 
bring their sewage treatment systems into compliance with the CWA, to 

pay civil penalties totaling $722,000 and to perform SEPs worth $364,000. 

Conserving the Nation's Wetlands. Working in concert with various U.S. 

Attorney's Offices, the Division has continued to take successful 

enforcement action where unlawful discharge of dredged or fill material 

has damaged or destroyed wetlands and waterways. Most notably, in 

August 2004, ENRD lodged a proposed consent decree resolving an 

enforcement action for the unauthorized discharge of fill material in 

wetlands and other waters of the United States at a private ski and golf 

resort near Yellowstone National Park. The defendants' violations had 

adversely affected several tributary streams of the Gallatin River, a worldrenowned fishery. The settlement calls for the Yellowstone Mountain Club 

to pay a $1.8 million civil penalty, the largest ever in an EPA wetlands 

enforcement case. Defendants will also restore damaged wetlands and 

create new ones as mitigation. Overall, the Division's wetlands 

enforcement efforts yielded assessments of civil penalties exceeding $2.9 

million. 

Controlling Storm Water Run-off at Construction Sites. In a strong 

start to a new national initiative designed to assure compliance with Clean 

Water Act provisions governing discharge of storm water from large 

construction sites, the Division lodged a consent decree with the nation's 

largest retailer and one of the country's largest commercial developers, 

Wal-Mart Stores, Inc. The decree resolved claims that Wal-Mart violated 

the CWA's provisions at 24 locations in nine states. Wal-Mart builds more 

than 200 stores each year across the United States. Runoff from 

construction sites is a primary contributor to the impairment of water 

quality in our nation. The United States was joined in the settlement by the 

States of Tennessee and Utah. Under the proposed decree, Wal-Mart will 

pay a civil penalty of $3.1 million, undertake a SEP to protect sensitive 

wetlands or waterways, and implement a substantial compliance program 

that includes requirements for construction planning, training, inspections 

and record keeping. The settlement with Wal-Mart will serve as a model in 

ongoing negotiations with other large commercial and residential 

developers who engage regularly in substantial construction activities. 
Continuing Progress to Clean up Contaminated River Systems. The 

Division made significant progress in efforts to secure four river cleanups 

that are unprecedented in scope. 

Two consent decrees were entered as part of the Division's effort to require 

seven paper companies to clean up a 39-mile stretch of the Fox River 

flowing into Green Bay, Wisconsin, which became contaminated with 

PCBs as a result of paper manufacturing, and to pay associated natural 

resource damages ("NRD"). One decree requires two companies to dredge 

the uppermost section of the Fox River at an estimated cost of $66 million; 

a second decree recovers $10.8 million for specified NRD projects and 

$1.6 million for the United States from a third company located down 

river. Additionally, ENRD assisted EPA in negotiating an administrative 

order on consent ("AOC") with two paper companies that have agreed to 

perform the design work, estimated to cost $20 million, for remediating the 

balance of the river. The eventual cleanup and NRD restoration costs are 

expected to exceed one billion dollars. 

Additional progress was made in the United States' effort to secure cleanup 

of the Hudson River, which is contaminated with polychlorinated 

biphenyls ("PCBs") discharged by the General Electric Co. ("GE"). This 

year, the Division assisted EPA in negotiating a second complex AOC, 

which provides for GE to develop a multi-million dollar remedial design 

for dredging the river, an additional payment of $15 million to the 

Superfund, and $13 million to offset government costs of overseeing the 

design process. This AOC and one negotiated in 2002 collectively recover 

$20 million in past costs for the Superfund, more than $15 million in 

government oversight costs, and, because GE will perform millions of 

dollars of work under the two orders, spare the Superfund that expenditure. 

The Division also assisted EPA in negotiating AOCs with more than 30 

parties responsible for contamination of the Passaic River in New Jersey. 

Collectively, the AOCs will provide more than $10 million toward a 

remedial investigation/feasibility study ("RI/FS") along a 17-mile stretch 

of the river and the performance of a multi-million dollar RI/FS of the 

Newark Bay, thus also saving Superfund resources for other cleanups. 
Another consent decree involving river contamination was reached with 

Tecumseh Products Company, and will require that company to implement 

an upper river cleanup effort - estimated to cost $28 million - on the 

Sheboygan River in Wisconsin and reserve all claims with respect to future 

work in downstream portions of the river. The remedial work will be 

allowed to go forward while the parties evaluate and negotiate their next 

steps. The decree also provides for Tecumseh to reimburse the United 

States at least $2.1 million in past response costs. 

Restoration of River Habitat. ENRD reached a settlement in August 

2004 with eight companies which will pay nearly $60 million to restore 

natural resources in the Grand Calumet River and Indiana Harbor Canal. 

Although located in one of the most heavily industrialized areas of the 

country, the river and canal support a variety of fish and wildlife. 

Interspersed among the area's factories, housing developments and 

refineries are remnants of important natural features including globally rare 

dune and swale habitat, prairie wetlands, savannas, marshes and swamps, 

as well as the Indiana Dunes National Lakeshore. Federal and state 

agencies worked cooperatively to determine the extent of damage from a 

century of industrial releases of oil and other hazardous substances into the 

waterway. The proposed settlement provides more than $53 million to 

clean up, restore and protect the waterways and surrounding areas, protect 

permanently 233 acres of land that contain important fish and wildlife 

habitat, and pay $2.7 million to state and federal agencies to reimburse 

them for damage assessment costs. 

Defending EPA Standard-Setting. The Division obtained an important 

ruling upholding EPA's emission standards for engines used in the largest 

ocean-going vessels - including oil tankers - in Bluewater Network v. EPA. 

The U.S. Court of Appeals for the District of Columbia Circuit found that 

EPA reasonably limited the rule to codifying emission standards currently 

used by engine manufacturers pursuant to the International Convention for 

the Prevention of Pollution from Ships ("MARPOL") treaty, and 

permissibly deferred consideration of more restrictive standards until a 

second rulemaking to be completed in 2007 to enable the agency to 

develop additional information on new technology. 
ENSURING CLEANUP OF HAZARDOUS WASTE 

Conserving Superfund Resources. Through numerous judgments and 

settlements, the Division obtained commitments from responsible parties 

to clean up hazardous waste sites at costs estimated in excess of $285 

million and recovered more than $92 million for the Superfund to help 

finance cleanups under the Comprehensive Environmental Response, 

Compensation and Liability Act ("CERCLA"). Superfund sites that will 

benefit include the San Gabriel Valley site in California, Commencement 

Bay site in Washington, Palmerton Zinc site in Pennsylvania, Plymouth 

Wood Treating Plant site in North Carolina, Liberty Industrial Finishing 

site in New York and the National Southwire Aluminum site in Kentucky. 

The Division also recovered more than $700,000 to restore or replace 

damaged natural resources. 

Five enforcement actions that could not be settled proceeded to trial: 

United States v. JG-24, Inc.; United States v. E.I. DuPont de Nemours and 

Company; United States v. Pharmacia (f/k/a Monsanto); United States v. 

Rayonier Inc.; and United States v. 175 Inwood Associates. The United 

States prevailed on all or a portion of the issues tried in each case. The 

Division also prevailed on all issues in a suit tried the previous year, 

United States v. Domenic Lombardi Realty, Inc. These favorable rulings 

will provide strong precedential support for future enforcement actions. 

Pursuing Corporate Assets to Fund Cleanup Responsibilities. 

The Division filed a civil complaint against three corporate 

defendants for CERCLA cost recovery and declaratory relief with 

respect to the Waste Disposal, Inc. Superfund site in Santa Fe 

Springs, California, and asserted a fraudulent conveyance claim 

against two of them, Powerine Oil Company, a defunct and 

insolvent refinery company that sent hazardous waste to the site, 

and Energy Merchant Corporation ("EMC"), Powerine's corporate 

parent and the recipient of a $12.5 million "dividend" from Powerine 

that left Powerine insolvent. The Division seeks to void the 

purported $12.5 million dividend under the Federal Debt Collection 

Procedures Act to ensure the funds will be available for site 

cleanup. 
Enforcing Cleanup Responsibilities In Bankruptcy Cases. The 

Division's bankruptcy practice continued to grow. This year, ENRD 

represented the United States in numerous proceedings including 

the Kaiser Aluminum, Union Financial, Philip Services, Fansteel, 

Horizon, Northwestern, Farmland, Washington Group, Plainwell, 

Special Metals, GenTek, and Black Pine bankruptcies, where 

debtors had significant environmental cleanup responsibilities. The 

Division obtained agreements to provide more than $175 million of 

funding or financial assurance for cleanup, reclamation, or natural 

resource restoration work. The Division also obtained allowed 

general unsecured bankruptcy claims of more than $83 million to be 

paid in part by debtors under their plans of reorganization in the 

Washington Group, Kaiser Aluminum, Philip Services, GC Quality, 

Pittsfield-Canfield, Farmland, Bethlehem, Keysor and Burlington 

bankruptcies. 

Of particular note this year, the Division successfully defended 

against several attempts by debtors to misuse bankruptcy law to 

evade legal obligations for public health and safety protection (e.g., 

Philips Services, Horizon and Union Financial) and used innovative 

trust instruments to provide for cleanup of contaminated properties. 

In the Philips Services bankruptcy, the United States successfully 

thwarted the debtor's plan to abandon Superfund sites it owned 

without providing for cleanup. In lieu of abandonment, the debtor 

transferred the sites to custodial trusts and agreed that 

governmental parties will receive the benefit of more than $6 million 

of cleanup work. Similarly, in the Union Financial bankruptcy, the 

Division prevented the debtor from transferring property it owned 

without funding cleanup. After expedited hearings, the debtor 

agreed to provide over $14 million. In the Kaiser Aluminum 

bankruptcy, the debtor agreed to transfer one of its contaminated 

properties to a custodial trust that will undertake cleanup work and 

provide funding to perform the work. 

In these and others cases, ENRD was able to foster settlements 

that harmonized bankruptcy and environmental law. The 
 

settlements enabled large companies to avoid liquidation and 

significant job loss by facilitating either reorganization or sale of 

ongoing operations. A number of our settlements also avoided 

abandonment of contaminated properties by debtors without 

provision of funding for cleanup. 

Cleaning Up Federal Facilities. The Division successfully resolved 

litigation regarding cleanup of contaminated federal facilities on 

appropriate terms. In United States Department of Energy v. Curry, 

DOE contested unilateral administrative orders issued by the New 

Mexico Environmental Department for cleanup of the Los Alamos 

and Sandia National Laboratories. Following approximately two 

years of negotiations, the Division resolved the litigation through 

agreements that will govern cleanup of these laboratories. Similarly, 

in United States v. Fitzsimmons, ENRD negotiated a settlement 

between DOE and the State of Washington that resolved two 

related lawsuits regarding DOE's Hanford Reservation. This 

settlement established a new 10-year schedule for cleaning up 

certain radioactive wastes at Hanford while eliminating outdated and 

ineffective cleanup requirements DOE was alleged to have violated. 

PROMOTING RESPONSIBLE STEWARDSHIP OF AMERICA'S 

NATURAL RESOURCES 

Everglades Restoration. The Division continues to work toward 

protection of the endangered Everglades ecosystem by acquiring 

land for addition to Everglades National Park and Big Cypress 

National Preserve through exercise of the power of eminent domain, 

as authorized by Congress and requested by the National Park 

Service. Related acquisitions on behalf of the U.S. Army Corps of 

Engineers took place to improve water deliveries to the Everglades. 

Defending Responsible Natural Resource Management. The 

Division successfully defended multiple emergency challenges to a 

succession of salvage timber sales designed to recover burned-over 

timberlands in the Pacific Northwest. The sales were in furtherance 

of President Bush's Healthy Forests Initiative to reduce the risk of 
catastrophic wildfire and improve the overall health and productivity 

of the nation's forests. The Division's victories will permit federal 

agencies to pursue goals of creating jobs and boosting local 

economies through salvage of millions of board feet of usable 

timber. These agencies can now take steps to prevent future 

catastrophic fires and restore habitats and ecosystems destroyed by 

the fires. 

Environmental groups also challenged the revised Tongass Land 

Management Plan and seven major timber sale projects constituting 

the bulk of the timber available on the Tongass, alleging the plan 

and projects were arbitrary and capricious and relied on incorrect 

market demand projections. The Division succeeded in having that 

challenge dismissed on the merits. 

The Division also won a notable victory in persuading a district court 

not to enjoin grazing on 1.3 million acres in Nevada. The court was 

persuaded by the actions the Bureau of Land Management ("BLM") 

had taken to improve conditions and reduce the amount of grazing. 

In June the Supreme Court issued a unanimous decision in favor of 

the government in a dispute over the BLM's administration of public 

lands in Utah. Plaintiffs in Norton v. Southern Utah Wilderness 

Alliance alleged BLM was acting unlawfully by not curtailing or 

eliminating off-road vehicle use in Wilderness Study Areas, areas 

identified by the agency as eligible for consideration as wilderness 

but not yet so designated by Congress. The Supreme Court held 

these claims inactionable. 

Defending the U.S. Army Corps of Engineers' Missouri River 

Operations. The United States Army Corps of Engineers operates 

the Missouri River Main Stem System, a network of dams and 

reservoirs on the Missouri River. A series of lawsuits filed during 

2002 and 2003 by states, environmental groups and commercial 

interests allege the Corps' operation of the Missouri River system 

violates both the Flood Control Act of 1944 and the Endangered 
Species Act ("ESA"). The Division obtained summary judgment 

favorable to the federal government on all counts in all cases. 

Water Rights Victories. The Division secured numerous 

settlements protecting the water supplies and flows necessary to 

maintain vital natural resources and uses of the public lands, 

including national forests, parks, wildlife refuges, wild and scenic 

rivers, military bases and federal reclamation projects in areas such 

as the Snake River Basin in Idaho, Klamath River Basin in Oregon, 

and Yakima River Basin in Washington. 

PROMOTING NATIONAL SECURITY AND MILITARY 

PREPAREDNESS 

Promoting National Security. The Division has been active in 

safeguarding administration initiatives to support the war on terror, 

including the successful defense of the construction and operation 

of a biological safety laboratory against environmental challenges. 

The laboratory will permit the Department of Homeland Security and 

other federal agencies to safely research infectious biological 

agents that pose risks to human health. 

The Division also successfully defended the Navy in a case raising 

National Environmental Policy Act ("NEPA") and ESA challenges to 

the upgrade of the Trident missile system at Submarine Base 

Bangor in Washington. The Ninth Circuit Court of Appeals agreed 

the decision to site Trident missiles at Bangor was a presidential 

decision not reviewable under NEPA. The court also concluded the 

Navy did not violate the ESA because, given the remote possibility 

of an accidental explosion, the project was unlikely to jeopardize the 

continued existence of any listed species. 

Defending Military Readiness: In Malaga Makua v. Rumsfeld, a 

case litigated to settlement in the course of two weeks, the Division 

defended the Department of Defense's live-fire mortar and rocket 

training exercises at Makua Military Reservation on the island of 

Oahu. Plaintiffs claimed these exercises posed a risk of destructive 
fire to listed species and designated critical habitat under the ESA. 

On March 19, the court temporarily enjoined mission-essential 

training that would become impossible after mid-April. The Division 

negotiated a settlement that allowed the Marines to train during the 

window of opportunity, with certain additional safety precautions and 

other mitigation. An ENRD trial attorney was present during the 

exercise to assist military counsel in ensuring the agreement's 

terms were satisfied. 

Property Acquisitions to Improve Military Readiness and 

National Security. As directed by federal agencies acting under 

authority of Congress, ENRD exercised the federal government's 

power of eminent domain to complete several land acquisitions for 

military purposes. These actions included: 

United States v. 1,098.221 Acres in Duval County, Florida, and 

Gate Maritime Properties acquired a port facility on Blount Island 

near Jacksonville, Florida, for use by the Department of the Navy for 

weapons shipping around the globe. Estimated just compensation 

of $101,000,000 was made immediately available to the landowner. 

United States v. 8.51 Acres in Washington, D.C. and Riverside 

Associates Limited Partnership obtained land for expansion of the 

National Defense University and Ft. McNair. Estimated just 

compensation of $18,500,000 was made immediately available to 

the landowner. 

United States v. 1,402 Acres of Land Honolulu, Hawaii and the 

Estate of James Campbell acquired land needed for the U.S. 

Army's transformation of its 2nd Brigade, 25th Infantry Division (Light) 

to a Stryker Brigade Combat Team. Estimated just compensation of 

$15,900,000 was made immediately available to the landowner. 

Successful Defense of the Army's Chemical Weapons 

Demilitarization Program. The Division continued to successfully 

defend the Army's $24 billion Chemical Weapons Demilitarization 

Program. Pursuant to U.S. treaty obligations, Congress has charged 
the Army with destroying certain weapons stockpiles at current 

locations. The Division defended litigation related to the destruction 

of chemical weapons in Alabama, Arkansas, Oregon and Utah. Of 

particular note is ENRD's success in GASP v. Environmental 

Quality Commission of the State of Oregon, a challenge to a stateissued hazardous waste permit to incinerate chemical weapons at 

the Umatilla demilitarization facility. After a lengthy trial (over 70 trial 

days), the court ruled for the State and Army on almost all claims, 

thus allowing the Army to proceed with its incineration schedule. 

No Liability for Destruction of Sudanese Industrial Plant. ElShifa Pharmaceutical Industries sought $50 million in compensation 

for destruction of an industrial plant in Sudan by cruise missiles 

launched on orders of President Clinton in response to bombing of 

U.S. embassies in Tanzania and Kenya by terrorists affiliated with 

Al-Qaeda. The Court of Federal Claims dismissed the claim, 

reasoning that federal courts have no role in setting standards by 

which the president or military commanders are to measure the 

veracity of intelligence gathered to determine what assets located 

abroad constitute enemy property. 

DEFENDING VITAL FEDERAL PROGRAMS AND INTERESTS 

The Corp of Engineers' Wetlands Protection Program. The 

Division successfully defended numerous cases challenging the 

U.S. Army Corps of Engineers' wetlands protection and permitting 

program under the Clean Water Act. National Association of Home 

Builders v. U.S. Army Corps of Engineers and National Stone, Sand 

and Gravel Ass'n v. United States Army Corps of Engineers 

challenged an EPA and Corps-promulgated rule modifying the 

definition of "discharge of dredged material" under the CWA. The 

rule clarifies the distinction between regulable redeposits of dredged 

material (which may result from a variety of mechanized earthmoving activities) and "incidental fallback," which cannot be 

regulated under the CWA. The Division obtained an order 

dismissing those challenges to the rule. Similarly, National 

Association of Home Builders et al. v. Army Corps of Engineers 
presented challenges to the Corps' March 9, 2000 replacement 

nationwide permits ("NWPs"). A court dismissed all the plaintiffs' 

complaints for lack of jurisdiction on the ground that the NWPs are 

not final agency action subject to review. 

The Division also continued a history of successfully defending Fifth 

Amendment takings claims involving permit applications necessary 

to dredge and fill wetlands pursuant to Section 404 of the CWA. 

Noteworthy victories this year included Palm Beach Isles Associates 

v. United States and Bay-Houston Towing Co. v. United States. In 

Palm Beach Isles, the court held the government had demonstrated 

a bona fide navigational purpose in denying a permit to fill 49 

submerged acres of Lake Worth in Palm Beach, Florida, and thus 

there was no taking. In Bay-Houston, the court held a property 

owner's failure to wait for a final decision on his permit application 

rendered his claim unripe for review, rejecting the argument that 

further pursuit of the permit would constitute an exercise in futility. 

In Greater Yellowstone Coalition v. Flowers, an appellate court 

upheld the Corps of Engineers' issuance of a CWA Section 404 

permit. Plaintiffs had argued the Corps violated the CWA and NEPA 

when it issued the permit in connection with the construction of 

Canyon Club, a residential development and golf course along the 

Snake River near Jackson, Wyoming. 

In Protect Our Water and San Joaquin Raptor/Wildlife Rescue 

Center v. Flowers, a court upheld the Corps' issuance of a CWA 

Section 404 permit in connection with Phase One of the "Diablo 

Grande" development project, a resort and residential community in 

Stanislaus County, California. Plaintiffs had alleged the project 

would result in an unpermitted taking of the endangered San 

Joaquin kit fox and California red-legged frog. Similarly, in Hayward 

Area Planning Association v. Norton, the court rejected claims the 

Corps' permit for a residential subdivision and golf course would 

jeopardize the continued existence of the Alameda whipsnake and 

California red-legged frog, concluding the administrative record of 
the Corps and U.S. Fish and Wildlife Service supported the "no 

jeopardy" determination that allowed issuance of the permit. 

Enforcing Magnuson Act limitations on judicial review of 

fishery regulations. The Magnuson Stevens Fishery Conservation 

and Management Act provides for special judicial review procedures 

calculated to address the rapidity with which fishery regulation 

changes from year to year and fisheries open and close. Cases 

must be brought immediately and heard on expedited review, but 

plaintiffs are expressly prohibited from seeking preliminary 

injunction of fishing regulations. In two cases brought this year 

plaintiffs sought to circumvent this prohibition by asking for 

injunctive relief under the ESA and NEPA. The Division argued such 

claims could not be heard since a ruling for plaintiffs would 

effectively halt fishing. Both courts presented with the issue agreed 

with the Division's position. 

Defending the Fish and Wildlife Service's Habitat Conservation 

Program. The U.S. Fish and Wildife Service has developed an ESA 

habitat conservation permit ("HCP") program encouraging private 

landowners to contribute to species conservation while providing 

certainty against prosecution to those landowners desirous of 

developing their property. Plaintiffs in California Native Plant Society 

v. Norton challenged the permit for a Carroll Canyon development 

issued pursuant to a complicated, regional multispecies HCP in the 

San Diego area. The court held the agency had wide latitude to 

decide the best scientific and commercial data available and in 

general deferred to FWS judgment. In National Wildlife Federation 

v. Norton plaintiffs challenged an HCP and associated incidental 

take permit issued for the Metro Air Park project near Sacramento. 

The court again deferred to the Service's judgment regarding the 

level of mitigation and funding in the HCP and further held the 

Service's interpretation of the requirement to minimize and mitigate 

to the "maximum extent practicable" under ESA was entitled to 

deference. 
Maintaining the Nation's Infrastructure. The Division opposed 

efforts to halt upgrade of several of the nation's airports and 

operation of major dams. In City of Olmsted Falls v. EPA, for 

example, ENRD defeated an action against the Corps of Engineers 

and EPA challenging a permit issued under Section 404 of the 

Clean Water Act in connection with runway improvement at 

Cleveland Hopkins International Airport in Ohio. The court issued a 

final opinion and order upholding the permit. 

ENRD exercised the government's power of eminent domain to 

acquire transmission line easements in the western United States 

on behalf of DOE's Western Area and Bonneville Power 

Administrations. New transmission lines will bolster system reliability 

by creating redundancy and allowing transmission of new capacity 

to population centers. 

The Division defended successfully a NEPA challenge to the 

Longhorn pipeline project, which will use a pre-existing pipeline to 

transport gasoline and other petroleum products across the state of 

Texas. 

The Division also exercised the federal government's power of 

eminent domain to assemble properties in Richmond, Virginia for 

construction of a new federal courthouse; $3,029,600 in estimated 

just compensation was made available to the landowners. 

Protecting the Public Fisc. A significant portion of the Division's 

practice includes resolving liability of federal agencies in connection 

with cleanup of contaminated facilities under CERCLA. This year 

ENRD successfully defended numerous claims of federal Superfund 

liability, saving the government hundreds of millions of dollars. 

Of particular note is the Division's victory in Miami-Dade County, 

Florida v. United States. In 2001, Miami-Dade County brought a 

lawsuit against the United States arising from environmental 

contamination in and around Miami International Airport. The county 

sought to hold the United States responsible for approximately $500 
million in past and estimated future cleanup costs and penalties 

under a variety of theories based on federal, state and local laws. 

After extensive discovery the court conducted a trial during 

December 2003 and January 2004. In September 2004, the court 

issued a lengthy order rejecting on factual and legal grounds every 

claim made by the county. 

In DuPont v. United States, the Division defeated CERCLA 

contribution claims for costs to clean up fifteen DuPont-owned 

plants based on activities during the First and Second World Wars 

and the Korean War. Through orders issued in December 2003 and 

March 2004, the court granted judgment in favor of the United 

States on grounds that DuPont had not satisfied statutory 

prerequisites for maintaining a contribution action under CERCLA. 

These rulings disposed of a case in which DuPont sought to have 

the United States pay a significant portion of the estimated $1.5 

billion cost of cleaning up the DuPont plants. 

Where the government bore liability for cleanup costs at 

contaminated sites, the Division negotiated appropriate settlements 

providing for payment of a fair share. For example, in General 

Motors Corp. v. United States, a CERCLA contribution action 

alleging the United States was liable as an owner, operator and 

arranger for contamination based on wartime contamination in 

Michigan, Indiana and New Jersey, the Division resolved the 

government's liability at nine of the sixteen sites through a 

settlement agreement requiring the United States to pay $890,000 

of the cleanup costs (approximately 3%). 

ENRD defeated an attempt to extend CERCLA obligations to 

military facilities overseas. In ARC Ecology v. Air Force and Navy, a 

court dismissed a complaint seeking to compel the Air Force and 

Navy to perform preliminary environmental assessments at the 

former Clark and Subic bases in the Philippines. The court 

concluded that CERCLA does not have extraterritorial application in 

this context. 
The Division also defended a Clean Air Act enforcement action 

brought against the United States in City of Jacksonville v. 

Department of the Navy. The Eleventh Circuit Court of Appeals held 

the CAA federal facilities section does not waive the government's 

sovereign immunity from payment of punitive fines to state and local 

governments, following the Supreme Court's ruling in Department of 

Energy v. Ohio. 

Protecting the Public Fisc Against Invalid Fifth Amendment 

Takings Claims. Several important victories by the Division helped 

clarify Fifth Amendment takings law while ensuring that those who 

assert valid claims are justly compensated. A notable victory was 

achieved through litigation in Henderson County Drainage District v. 

United States, in which the United States proved the property owner 

had been aware for decades of erosion of its property along the 

Mississippi River. As a result, the court dismissed plaintiffs' $200 

million claim as barred by the statute of limitations. 

Considerable savings to the public fisc also have been achieved 

through successful use of settlement and alternative dispute 

resolution in these cases. The Division achieved an important 

negotiated resolution of Quinault Indian Nation v. United States, 

where the plaintiff alleged taking and trust claims as a result of Fish 

and Wildlife Service restrictions on timber harvest pursuant to the 

ESA. The Quinault Nation sought in excess of $92 million but 

ultimately settled for a congressionally-appropriated payment of $30 

million plus a separate contribution from a non-governmental party. 

Resolving Claims Involving the National Trails System. The 

Division continued to defend numerous lawsuits brought by 

thousands of individuals throughout the United States as a result of 

conversion of former railroad rights-of-way into recreational trails in 

"rails-to-trails" programs. These suits allege the conversions caused 

a taking of private property without just compensation in violation of 

the Fifth Amendment. The Division successfully resolved all or part 

of many of these suits this fiscal year, saving the United States 
 

millions of dollars by ensuring that only plaintiffs who state valid 

claims are compensated. 

Protecting Federal Title to Lands. In a long-running original action 

before the Supreme Court, the Division achieved a significant 

victory before a special master who recommended that title to 

submerged lands in Glacier Bay National Park and around the 

Alexander Archipelago be deemed to belong to the United States 

rather than the State of Alaska. 

In another Alaska matter, ENRD defended federal interests against 

the claimed right of the "Pilgrim Family" to construct a 15-mile road 

across Wrangell-St. Elias National Park. 

Advice and Training for Federal Agencies. The Division provides 

advice and training to other federal agencies when appropriate. This 

year, the Land Acquisition Section held three training conferences 

for attorneys holding delegated authority to review titles for federal 

land acquisitions. Approximately 250 federal employees from 11 

agencies participated. Instructors were also provided for land 

acquisition training sessions held by the Departments of the Interior, 

Navy and Veterans Affairs. 

Capacity Building for Environmental Enforcement. ENRD has 

participated in a number of programs to improve enforcement 

capacity around the world. These programs have been generally 

sponsored or supported by other agencies and/or conducted under 

the auspices of Administration initiatives such as the US Free Trade 

Agreements with Chile and Morocco. They have included courses 

on general civil and criminal enforcement, as well as on specific 

issues such as wildlife enforcement, vessel pollution and recovery 

of natural resource damages. In 2004, ENRD conducted such 

programs in Belgium, Canada, Chile, China, Central and Eastern 

Europe, Mexico, Morocco and Thailand. 

PROTECTING INDIAN RESOURCES AND RESOLVING INDIAN 

ISSUES 
Defending Tribal and Federal Interests in Water Adjudications. 

The Division devoted significant resources to settling water 

adjudications in which the United States asserted claims on behalf 

of Indian tribes and their members. These water adjudications are 

complex cases involving the water rights of thousands of parties. 

This year the Division worked with the Department of the Interior, 

the State of Idaho and the Nez Perce Tribe to craft an historic 

settlement of the Snake River Basin Adjudication. The settlement 

followed eight years of contentious litigation and difficult 

negotiations. The Division also worked with Interior, the State of 

Arizona, the Gila River Indian Community and private water users to 

settle Gila Community water claims in In Re Gila River System and 

Source. Finally, our efforts in the Klamath Basin Adjudication and 

the Bitterroot Basin Adjudication convinced the parties to settle or 

withdraw sixteen claims. 

Not all water adjudications are susceptible to settlement, however. 

The Division won a notable litigation victory in Matter of Applications 

to Change Use of Waters Within the Pyramid Lake Valley, where we 

successfully defended the Pyramid Lake Paiute Tribe's right to use 

its water to protect fish habitat in Pyramid Lake rather than for 

irrigation. 

Defending Tribal Lands. The Division defends over 150 million 

acres of land held by the United States in trust for tribes. This fiscal 

year the Division prevailed in United States v. City of Tacoma, a 

trespass action brought against the City for unlawfully condemning 

Indian lands. The trial court granted our motion for summary 

judgment and the Ninth Circuit Court of Appeals affirmed. In 

Proschold v. United States, the Division successfully defended the 

use and existence of an easement for the benefit of a tribe in both 

the district and appellate courts. 

Defending the United States' Authority to Implement Indian 

Policies. ENRD realized a number of successes this year in 

defending federal agencies and programs intended to further federal 

Indian policies. The Division obtained dismissal in Arakaki v. 
Cayetano of a challenge to the constitutionality of programs serving 

Native Hawaiians, including a 1920s program to set aside lands for 

Native Hawaiian people. In Morris v. Tanner, the Division prevailed 

in a constitutional challenge to the Indian Civil Rights Act, 

establishing that Indian tribes have criminal jurisdiction over crimes 

committed in Indian country by members of other tribes. 

Promoting Negotiated Resolutions of Indian Disputes. ENRD 

continues to promote the use of settlements for resolving complex 

litigation with Indian Tribes. In Quapaw v. Norton, the Division 

reached a novel agreement that funded a tribal enterprise's project 

for collecting and analyzing historic documents related to the tribe's 

trust funds and trust assets, thereby avoiding costly litigation and 

saving the Department of the Interior from incurring the expense of 

preparing an accounting that, in the tribe's view, would not have met 

the tribe's needs. In Warm Springs v. Norton, the Division entered 

into a comprehensive settlement of three major asset 

mismanagement cases, saving the government from protracted 

litigation and setting the stage for further negotiated settlements. 

Defending Indian Gaming Laws. The Division had considerable 

success in defending the constitutionality of provisions of the Indian 

Gaming Regulatory Act ("IGRA"). In Lac Courte Oreilles Band of 

Lake Superior Chippewa v. Norton, ENRD prevailed in a tribe's 

challenge to the constitutionality of an IGRA provision permitting the 

Secretary of the Interior to take newly acquired lands into trust for 

Indian gaming purposes only if the Secretary determines gaming 

would be in the best interest of the tribe and not detrimental to the 

surrounding community, and the governor of the relevant state 

concurs. In Artichoke Joe's California Grand Casino v. Norton, the 

Division prevailed in a challenge by non-Indian gambling interests, 

under the Equal Protection Clause, to state compacts that authorize 

Indian tribes to engage in casino gaming despite prohibition of 

others from engaging in such gambling. 

SUPPORTING THE DIVISION'S LITIGATORS 
 

Support for Large Trials. For ENRD's largest cases, the Executive 

Office has provided on-site trial support to the traveling trial teams. 

The Office has provided a full complement of support for the Ohio 

Edison and Illinois Power (Power Plants) trials, as well as the 

Shoshone-Arapaho and Gros Ventre (Tribal Trust) trials. Support 

has included technology resources, exhibit/document processing 

and management services, witness preparation, contractor support 

and logistical services. Our Executive Office also helped with 

establishing "war rooms" and "mini-networks" connected to the 

ENRD JCON 2A computer system for key Division trials across the 

country. 

Continuity of Operations. ENRD is dedicated to meeting the 

Attorney General's commitment to maintain business operations in 

the event of a national emergency. To that end, the Division further 

strengthened our precedent-setting computer network security 

protocols and initiated a continuity of operations plan. 

Simultaneously, ENRD became the first litigating division with a 

DOJ-certified remote computer access system. Connectivity to the 

Division's computer system was enabled for key ENRD trials across 

the country.