Opinion ID: 162640
Heading Depth: 4
Heading Rank: 1

Heading: Class II Disposal Wells.

Text: 34 Attaluri's first challenge concerns the allegation that he conspired to inject a nonpermitted liquid waste into a Class II disposal well. He argues that the injection was lawful under the governing regulations issued by the Oklahoma Corporation Commission. We reject the argument because the Oklahoma regulations are no more permissive than the federal law on which the jury was instructed. 35 Before addressing Attaluri's contentions, we review the pertinent provisions of the SDWA. The SDWA established a federally mandated, state-administered regulatory scheme for the protection of natural sources of drinking water. See HRI, Inc. v. E.P.A., 198 F.3d 1224, 1232 (10th Cir. 2000). The Act delegates primary enforcement responsibility to the states. Each state was required to submit for approval by the EPA an underground injection control program designed to assure that underground injection will not endanger drinking water sources. 42 U.S.C. § 300h-1(a)-(b). If the EPA did not approve a program, it was to fashion regulations applicable to the state. 42 U.S.C. § 300h-1(c). 36 All state programs must meet the EPA minimum requirements published in the Code of Federal Regulations. 42 U.S.C. § 300h(a), (b). The EPA regulations divide underground injection wells into five classes, each defined by what may be injected into wells of that class. 40 C.F.R. § 144.6. The regulations establish minimum construction and maintenance standards for each class. 40 C.F.R. pt. 146. This case involves Class II wells, which are [w]ells which inject fluids: 37 (1) Which are brought to the surface in connection with natural gas storage operations, or conventional oil or natural gas production and may be commingled with waste waters from gas plants which are an integral part of production operations, unless those waters are classified as a hazardous waste at the time of injection. 38 (2) For enhanced recovery of oil or natural gas; and 39 (3) For storage of hydrocarbons which are liquid at standard temperature and pressure. 40 40 C.F.R. § 144.6(b). 41 Oklahoma's application for primary enforcement power over Class II wells was approved on December 2, 1981. See 40 C.F.R. § 147.1851. Oklahoma's program delegates regulatory authority over Class II wells to the Oklahoma Corporation Commission (OCC). Id. The OCC regulations divide wells into four categories: (1) enhanced recovery injection wells, (2) disposal wells, (3) storage wells, and (4) simultaneous injection wells. Okla. Admin. Code [OAC] 165:10-5-1. Each category is a type of Class II well. Only the second category, disposal wells, is at issue in this case. A disposal well is a well which injects, for purposes other than enhanced recovery, those fluids brought to the surface in connection with oil or natural gas production. OAC 165:10-5-1(2). 42 The SDWA provides criminal penalties for willful violation of an applicable underground injection control program. 42 U.S.C. § 300h-2(b). The Act defines applicable underground injection control program as the program (or most recent amendment thereof) (1) which has been adopted by the State and which has been approved [by the EPA] under subsection (b) of this section.... 42 U.S.C. § 300h-1(d). 43 Attaluri correctly contends that the Oklahoma regulatory scheme is the applicable underground injection control program in this case. He further contends, however, that the Oklahoma program allows the allegedly unlawful injections by Defendants. In particular, he contends that the injection wells Overholt used were commercial disposal wells, which, in his view, could properly accept the injected chemicals. 44 Attaluri's brief-in-chief asserts (incorrectly, as we shall point out) that the following definition appears in the Oklahoma regulations at OAC 165:10-1-2: 45 Commercial disposal well is one that: (a) is operated primarily for profit from the disposal of saltwater and/or other deleterious substances for a fee; and (b) disposes of saltwater and other deleterious substances transported by truck to the facilities used in conjunction with said disposal well or is a disposal well for which none of its owners is an owner in any of the oil and gas wells which produce the saltwater and/or other deleterious substances which will be disposed into said disposal well. 46 Because the chemicals that a commercial disposal well may accept include deleterious substances, Attaluri infers that such a well can accept all deleterious substances. [D]eleterious substances are defined as [a]ny chemical, salt water, oil field brine, waste oil, waste emulsified oil, basic sediment, mud, or injurious substance produced or used in the drilling, development, production, transportation, refining, and processing of oil, gas and/or brine mining. OAC 165:10-1-2. Attaluri notes that Allied was in the business of recycling used oil, and that the Oklahoma regulations define recycling as the reuse, processing, reclaiming, treating, neutralizing, or refining of materials and by-products into a product of beneficial use which, if discarded, would be deleterious substances. OAC 165:10-1-2 (emphasis added). He concludes that because Allied was an oil recycler, the byproducts of the business were deleterious substances, which, by definition, could be injected into a commercial disposal well. 47 Based on this argument, Attaluri challenges the following jury instruction given at trial: 48 With reference to the conspiracy charged in Count 1, you are instructed that the government claims in Count 1 at page 7 that the defendants ... conspired to violate or cause to be violated Title 42, United States Code, section 300h-2(b)(2), which provides that: 49 Any person who violates any requirement of an applicable underground injection control program ... if such violation is willful, such person ... 50 shall be guilty of an offense against the laws of the United States. 51 The applicable underground injection control program the government claims were violated are: 52 Title 40, Code of Federal Regulations, Part 144.11, which provides: Any underground injection, except into a well authorized by rule or except as authorized by permit ... is prohibited. 53 And, Title 40, Code of Federal Regulations, Part 144.6(b)(1), which provides that Class II injection wells are classified as follows: 54 Wells which inject fluids ... Which are brought to the surface in connection with natural gas storage operations, or conventional oil or natural gas production and may be commingled with waste waters from gas plants which are an integral part of production operations, unless those waters are classified as a hazardous waste at the time of injection. 55 He argues that the instruction improperly refers to federal regulations rather than to Oklahoma law, which he contends was less restrictive, and that the district court should have given the following tendered instruction: 56 The government has alleged that the defendants conspired to commit the crime of Wilful Injection of Liquid Waste Into a Class II Disposal Well without authority. The government must prove as to each defendant that he intended to break this law by agreeing to commit the following four (4) essential elements beyond a reasonable doubt: 57
58
59
60 (4) Without authority from the Oklahoma Corporation Commission The defendant must have wilfully agreed to commit each of the elements of the offense. [emphasis added] 61 Before addressing Attaluri's arguments, we note the standard of review. The argument on appeal was not raised below. Attaluri points to nothing in the record, nor have we found anything, indicating an objection by any defendant to the instruction given by the court. As for the proposed instruction, it does not suggest that the Oklahoma regulations are more permissive than the federal regulations. Nor have we been directed to, or found, any indication in the record that anyone so argued in district court. Therefore, we review for plain error. See United States v. Fabiano, 169 F.3d 1299, 1302-03 (10th Cir.1999) (failure to object to a given instruction, even when the defendant offers his own instruction, does not put the district court clearly on notice as to the asserted inadequacy, and thus plain-error review is appropriate). Following Johnson v. United States, 520 U.S. 461, 466-67, 117 S.Ct. 1544, 137 L.Ed.2d 718 (1997), we have held: 62 Under [the plain-error] standard, [the appellant] must show: (1) an error, (2) that is plain, which means clear or obvious under current law, and (3) that affects substantial rights. If these three requirements are met, then we may exercise discretion to correct the error if it seriously affects the fairness, integrity, or public reputation of judicial proceedings. 63 Id. at 1303 (internal quotation marks, citation, and brackets in original omitted). 64 The district court's instruction defined the applicable underground injection control program as the prohibitions mandated in the EPA regulations, and it specifically incorporated the definition of a Class II well as expressing what could legally be injected into the wells at issue in this case. The given instruction informed the jury that Defendants violated the law if they injected into these wells anything but fluids ... [w]hich are brought to the surface in connection with natural gas storage operations, or conventional oil or natural gas production and may be commingled with wastewaters from gas plants which are an integral part of production operations, unless those waters are classified as a hazardous waste at the time of injection. Although it may have been preferable for the instruction to refer to the Oklahoma regulations, the instruction did not mislead the jury because, as we now explain, the substantive standard set forth in the instruction conforms to the Oklahoma regulations. 65 As previously stated, the Oklahoma regulation defines a disposal well as a well which injects, for purposes other than enhanced recovery, those fluids brought to the surface in connection with oil or natural gas production. OAC 165:10-5-1(2). Comparing this definition to the definition of a Class II well in the jury instruction, it is clear that nothing can be injected into a disposal well that cannot be injected into a Class II well. In fact, Class II is a broader category of wells than disposal wells. 66 We are not persuaded by Attaluri's claim that a different result must follow because the wells here are  commercial disposal wells. Attaluri fails to recognize that commercial disposal wells are a subclass of disposal wells. The actual definition of commercial disposal wells in the Oklahoma regulations (not the misquote in Attaluri's brief-in-chief) is: 67 Commercial disposal well means a disposal well which: (A) Is operated primarily for profit from the disposal of salt water and/or other deleterious substances for a fee; and (B) Disposes of salt water and/or other deleterious substances transported by truck to the facilities used in conjunction with said disposal well or is a disposal well for which none of its owners is an owner in any of the oil and gas wells which produce the salt water and/or other deleterious substances which will be disposed into said disposal well. 68 OAC 165:10-1-2 (emphasis added). (Attaluri's misquote replaced a disposal well by one, an alteration that could lead to the misconstruction that a commercial disposal well is not necessarily a disposal well.) 69 The reference to deleterious substances in the definition of commercial disposal well does not imply that such a well can accept all deleterious substances. Because the well is a disposal well, it can accept only those deleterious substances that can be accepted by disposal wells. A disposal well can accept fluids brought to the surface in connection with oil or natural gas production.... OAC 165:10-5-1(2). These fluids may well contain deleterious substances, as recognized by subpart (B) of the definition of commercial disposal well, which speaks of a disposal well for which none of its owners is an owner in any of the oil and gas wells which produce the salt water and/or other deleterious substances which will be disposed into said disposal well. OAC 165:10-1-2 (emphasis added). But only deleterious substances from oil or gas production are permitted to be injected. 70 Our construction of the Oklahoma regulations is based on the natural reading of the language. Moreover, we would be loath to adopt an interpretation of the Oklahoma regulations that, as with Attaluri's interpretation, would make them more permissive than the minimum requirements set by the EPA, which all state programs are obliged to satisfy. Thus, we find no plain error in the jury instruction setting forth what substances could be injected into the wells at issue. 71 Finally, we note that Attaluri devotes several pages of his brief-in-chief to a discussion of United States v. Lewis, No. CR-99-50-B, a case from the United States District Court for the Eastern District of Oklahoma. The defendant in Lewis was also prosecuted on a charge of improperly disposing of fluids down a commercial disposal well. The district court in that case dismissed the charge, apparently adopting the view Attaluri urges here regarding what substances are permitted to be injected into such wells in Oklahoma. Because this court is not bound by that decision, see Abeyta ex rel. Martinez v. Chama Valley Indep. Sch. Dist., No. 19, 77 F.3d 1253, 1257 (10th Cir.1996), we have not reviewed the transcript of that trial (attached as part of the appendix to Attaluri's brief-in-chief) to determine whether the facts distinguish that case from this one. See also Boone v. Carlsbad Bancorporation, Inc., 972 F.2d 1545, 1549 n. 1 (10th Cir.1992) (court of appeals will not review documents not before the district court). To the extent that the reasoning of that court is persuasive, Attaluri was, of course, free to present that reasoning on this appeal. Otherwise, that decision has no bearing here. 72