FEDERAL JUDGE LOWERS THE BOOM ON TPC FOR CRIMINAL CHARGES BROUGHT BY THE DEPARTMENT OF JUSTICE / TPC WALKS
FEDERAL JUDGE LOWERS THE BOOM ON TPC FOR CRIMINAL CHARGES BROUGHT BY THE DEPARTMENT OF JUSTICE / TPC WALKS
FEDERAL JUDGE LOWERS THE BOOM ON TPC FOR CRIMINAL CHARGES BROUGHT BY THE DEPARTMENT OF JUSTICE / TPC WALKS
On Friday, January 10, 2025, Federal Court Judge Michael Truncale called the attorneys representing the victims of the TPC refinery explosion case, TPC defense counsel and the Government prosecutors back to his courtroom so he could render his long anticipated opinion on whether to accept a plea agreement proposed by the Department of Justice, the Environmental Protection Agency, and the TPC group related to criminal and civil violations of the law associated to the horrific plant explosions at their facility in Port Neches, Texas back in November of 2019. Under the proposed terms of the plea last year, TPC would agree to pay the DOJ $18 Million in criminal fines and agree to 1 year of probation, along with other remedial measures designed to better audit their operational integrity. The EPA was to be paid an additional $12 million for the civil violations of various environmental statutes, mostly associated to the release of tons of highly toxic carcinogens into the atmosphere as a result of the uncontrolled fires and explosions.
Neither TPC legal counsel nor the Government prosecutors were happy with the Court ruling. While Judge Truncale said he would ACCEPT the plea agreement, he then shifted to an hours long explanation of how and why he was going to set the terms of RESTITUTION to the victims, which was an issue contemplated within the agreement with no set amounts. Prior to the hearing, TPC and the Government had advised the Court that they did not believe restitution was appropriate in the case, citing numerous different factors. The Court went through an exhaustive explanation of his reasoning, recounting days of testimony provided by various counsel for the victims late last year, and his analysis of the law and the parameters of restitution he could consider.
At the conclusion of all the detailed explanations of his interpretation of the various laws involved and the evidence he had heard, he ordered that approximately $292 Million Dollars be included as the proper amount of restitution for the victims to add to the plea terms. TPC had argued that they had already made enough restitution in the past and shouldn’t pay any more. Moreover, they had reserved the right to walk away from the plea agreement if the Court awarded restitution, particularly if it was a substantial amount. The Government had previously joined TPC in the contentious hearings with victims counsel last year objecting to the need for any restitution. Not surprisingly, TPC advised the Court they would not accept those restitution terms and advised the Court they would exercise their right to opt out of the plea agreement. The Judge acknowledged the rejection, but not without some further warnings to TPC counsel that if there was an indictment next, that the case would come back to him, and that they already know where he stands. He also reminded them that at that point, the damages in restitution could be much higher. TPC counsel acknowledged those risks which then concluded the hearing.
What happens now that TPC has rejected the plea agreement?
The Feds and TPC had negotiated this deal behind closed doors and only announced it publicly last summer. Noteworthy is the fact that neither discussed any terms and conditions with victims nor their counsel before it was announced. The charges never went before a grand jury on an indictment. As a consequence, the Federal Government must now present the evidence forming the basis of the charges to a grand jury and seek a formal indictment. If and when that occurs, the Government would then proceed formally and seek a conviction of all charges before a Federal Court jury.
How long will the indictment process take?
Prosecutors for the DOJ advised the Court Friday that it would likely be on a roughly six-month timetable.
Assuming a formal indictment, when would a trial commence?
While the parties indicated in Court it would be less than a year to prepare, TPC made a point at the hearings that they would anticipate appealing some issues in the matter before the case were to proceed on the merits, which could result in dismissal of the charges or at the very least delay prosecution for months or longer.
Has TPC already made any “restitution”?
While TPC said that they had already made over $200 million dollars in restitution as part of the plea agreement, the Court pointed out that was not true and that they had in fact made NO restitution. He pointed out that the payments made in the past that they claimed as restitution to victims in the plea agreement was done very early on after the explosions and were primarily payments made by their insurance company. He also pointed out those payments were made BEFORE any criminal charges were brought and were not to even be considered restitution as a consequence. He also pointed out that most of the rest of the millions they had allegedly paid in restitution was primarily for air monitoring after the incident, which was legally required anyway, and was to further comply with the law once the refinery began emitting thousands of tons of toxic pollutants into the atmosphere for weeks as a result of an uncontrolled fire resulting from the explosions and the extensive amount of combustible chemicals on the site. The amounts he added to the plea as restitution was for losses that had never been paid by TPC.
Where did the $292 Million dollar number come from that Judge Truncale ordered to be paid as part of the plea?
Judge Truncale spent a great deal of time recapping the testimony he heard from the victims’ presentation in two rounds of evidentiary hearings late last year. This included testimony from Jeff Branick, the County Judge for Jefferson County who was also in charge of the Emergency Management Team for the County, victims of the explosion, various documents and videos, and then a great deal of evidence provided by Ed Gentile, who was the trustee approved by the Federal Bankruptcy Court to evaluate all of the damages associated to the explosion. Gentile had previously testified that his team had spent almost two years reviewing all the damage evidence associated to the case and provided the Court with specific numbers on the total damages for numerous losses. This included medical bills incurred by victims, property damages incurred as well as business damages.
The Court noted that the criminal restitution provisions do not allow for restitution for personal injuries, only medical bills for the treatment. The total amounts of the eligible areas of recovery added up to the $292 Million dollar figure. As none of this had been paid by TPC to date, that was the number the Court used as the restitution amount. He also stated that there were several “fence-line” refineries and facilities around the TPC plant at the time of the explosion that had claimed more than $300 Million dollars in damages as well. The Court stated that he did not include those in the restitution calculations because he did not think they had been sufficiently proven but did not rule out revisiting the issue if the case were to go to trial.
Does the prior bankruptcy filed by TPC release them from any of these restitution liabilities?
The Court acknowledged the argument made by TPC at the hearings last year that their prior bankruptcy filing had “discharged” their liabilities for restitution. The Court went through an analysis of that argument and determined it did not discharge the restitution claims for several reasons. A major factor in that consideration was due to the timeline, as TPC filed for and was discharged from the bankruptcy BEFORE the criminal charges and was thus exempted from discharge. Likewise, even though the Government prosecutors favored the plea agreement with no restitution included, they acknowledged that the bankruptcy did not release TPC from any future restitution obligations assessed by the Court.
Did TPC make other objections to restitution?
Yes. Both the Government and TPC told the Court that restitution can only be provided if the determination of that loss is not to “complex”. The Court pointed out that in this case complexity wasn’t an issue as a result of the fact that the Federal Bankruptcy Court Trustee had already done all that analysis and that his determinations of all the losses at issue was sufficiently reliable.
Did TPC have insurance on their property or for business interruption that could be used for restitution claims?
Yes. It was discussed in the civil litigation brought by the plaintiffs prior to the bankruptcy filing that TPC had close to $1 BILLION DOLLARS in reconstruction insurance and business interruption insurance. What was revealed in the bankruptcy proceedings is that TPC utilized those funds to pay off debt associated to the loans on the two refineries they operated, as well as major capital improvements to their Houston facility rather than rebuilding the Port Neches facility. In essence, rather than using some or all the money to pay the victims, they used 100% of the money to pay off bank loans to remove mortgage obligations and to expand the capacity of the Houston facility to increase production and make more revenue.
Why are personal injury claims excluded from restitution?
Unfortunately, restitution for criminal conduct under the statutes involved only provides for reimbursement of “hard” losses. That can be medical bills, home repairs or business damage. It was in those areas that the Court then focused to award 100 percent of the restitution that had been calculated and approved by the Bankruptcy Trustee that fell into those categories.
What happens now that TPC has revoked the plea agreement?
Hopefully the Federal prosecutors immediately prepare an indictment and present the evidence to a grand jury to move forward on the charges. Assuming that happens, there will eventually be a settlement or a trial. If there is a settlement, it may or may not include restitution. At this juncture the Court has already admonished the parties that it will if he has a say in it. There is some possibility that a trial could end up before another Judge with another outcome, and there is some possibility that TPC obtains some future rulings than narrows the charges brought and whether restitution can be considered.
In the interim, all of the stakeholders have the opportunity to discuss some resolution that takes away the uncertainties of a trial.
COMMENTS FROM BRENT COON as Co-lead Plaintiff counsel in the Civil lawsuits and as a victims’ counsel in Federal criminal proceedings with the DOJ and TPC.
“What happened Thanksgiving weekend of 2019, resulting in massive explosions and consuming infernos of fire at the TPC refinery in Port Neches, Texas, was all avoidable. TPC and their contractors were aware of the problems with the butadiene blend and the issues associated to the blend solidifying and expanding in the pipes when not sufficiently flowing. They were all aware of a section of the operation that had been closed off from flow which greatly increased the likelihood of this expansion and potential pipe rupture. Despite this knowledge, they allowed it to happen.”
“The consequences were devastating. Homes suffered significant damages miles away from the plant. Parts of the plant were found in the backyards of adjacent counties. 25,000 people were ordered to evacuate from the area during the middle of a holiday weekend.”
“Many were injured, and there were even some fatalities associated to the incident. It could have even been much worse. TPC had almost $1 Billion dollars in personal insurance coverage they said they would use to compensate victims and rebuild the plant. TPC lied. They didn’t spend a penny of their own insurance on claims. Instead, they secretly settled their policies and spent the money on paying off their creditors and reinvesting in their Houston facility. Then they filed for bankruptcy protection in an effort to dodge their moral, ethical, and legal obligations. They engaged in a shameful scheme to keep all that money for their own benefit, and then abandon the destruction and damage they caused to the community and its many citizens. That conduct is unconscionable. Even today, with a very profitable TPC running in Houston that COULD pay claims, they have chosen a path to continue to avoid it, even if it means going to trial on serous criminal charges brought by the Federal Government. It is shameful. Fortunately, after five years of frustrations, many of the victims have some glimmer of hope. Judge Truncale took it upon himself to roll up his sleeves and give the victims an opportunity to be heard before approving the plea agreement. In doing so, he has admitted to being truly enlightened as to the horrific extent of this tragedy and how deeply if affected thousands of families, individuals, homeowners and businesses.”
“Judge Truncale has made clear what he believes to be the right thing for TPC do to now, and that if they don’t, he will be waiting for them on a trial. That took some courage, more than we have seen from any other government official to date. Hopefully by shining some light on what has been going on with this matter behind closed doors, everyone will better understand the issues, the stakes and what should be done for at least some justice to prevail.”
ABOUT BCA: Brent Coon & Associates was founded in 2001. Today, with multiple satellite offices around the country and hundreds of associated firms in various practice areas, it is one of the most recognized trial law firms in the nation and the epitome of the 21st century law practice. Brent Coon & Associates employs a full complement of aggressive litigators with solid experience in individual and complex multi-party, occupational/environmental, health and personal injury cases.
BCA is a public policy firm and has worked with numerous state and federal investigative agencies, including the Department of Justice, multiple state Attorneys General, the United States Chemical and Hazards Investigation Board. BCA serves as institutional or advisory counsel to numerous agencies and organizations, including the United Steelworkers, pilot unions, railroad and other transportation unions. Their work in this arena has led to widespread improvements in the safety and working conditions of industries throughout America and abroad.
The firm and founder have been repeatedly recognized by most leading journals and legal associations including Texas Lawyer Litigation Department of the Year (2013); Forbes “Lawyer of the Month” and Forbes “Top 75 Litigation Firms”; MTMP “Clarence Darrow Award”; Texas Monthly Magazine “Texas Super Lawyers” (2007-2015); “Best Lawyers in America”; Lawdragon “”500 Leading Plaintiff Lawyers in America”; “American Association of Justice”
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