Reed Smith Client Alerts

Following last year’s indictments of Arkema Inc. (Arkema) CEO Richard Rowe and plant manager Leslie Comardelle, a Texas grand jury recently indicted Mike Keough, Arkema’s Vice President of Logistics, in connection with allegations that Arkema failed to provide adequate emergency response information to response officials. Along with this indictment, recent charges against Intercontinental Terminals Company and the hiring of several additional prosecutors reflects Harris County District Attorney’s increased focus on prosecuting environmental and safety crimes. This trend of increased accountability for companies after high-impact incidents was also highlighted in California, where a federal judge overseeing Pacific Gas and Electric’s (PG&E) probation ordered PG&E board members to visit Paradise, CA, which was destroyed in the 2018 Camp Fire.

Auteurs: Benjamin H. Patton Todd O. Maiden Mary M. Balaster Jessica I. Wilson

The Harris County District Attorney’s Office is pursuing additional charges against Arkema in connection with an organic peroxide release and fire at its facility in Crosby, Texas during Hurricane Harvey. The hurricane, which resulted in historic rainfall and flooding in South Texas between August 25 and September 2, 2017, caused a loss of power at Arkema's Crosby plant that disabled refrigeration units, eventually causing the decomposition and release of stored organic peroxides.

In April, Harris County DA Kim Ogg announced that Mike Keough, Arkema’s Vice President of Logistics, had been indicted by a Harris County grand jury for felony assault. According to the available records, the charges appear to stem from Arkema’s failure to provide adequate emergency response information to response officials who suffered bodily injury as a result of entering an area with toxic fumes. The charges were filed under the same case alleging that Arkema failed to adequately assess risk and compared Arkema’s risk model to a neighboring facility. This is the second round of indictments for Arkema executives – a grand jury indicted CEO Richard Rowe and plant manager Leslie Comardelle in connection with the incident – and highlights the various pathways of criminal liability that can arise from an allegedly inadequate assessment of hazards.

The charges are also indicative of the Harris County DA’s increased focus on prosecuting environmental crimes. In April – after the charges against Keough were announced – the Harris County Commissioners Court approved $850,000 to hire four additional environmental prosecutors and two full-time investigators. During the same month, the Harris County DA’s Office filed five misdemeanor charges against Intercontinental Terminals Company (ITC), the owner of a petrochemical facility in Deer Park, Texas that experienced a large fire in its aboveground storage tanks in March. According to the DA, the incident caused discharges of xylene and benzene into the Tucker Bayou, which flows into Galveston Bay. The Texas Water Code allows penalties of up to $100,000 for a person other than an individual for unauthorized discharges of water pollutants. The penalty limit increases to $250,000 for “intentional or knowing” unauthorized discharges.