UPDATE ON TPC LITIGATION – TPC Withdraws from Plea Agreement

“The plea agreement contemplates our withdrawal from the agreement if the court orders additional restitution, beyond the $212 million, while otherwise accepting the plea,” attorney Ryan Gertz, who represents TPC, told the court. “In light of the court’s ruling today, we respectfully withdraw our plea of guilty and participation in the agreement.”

TPC released a statement following today’s decision:

TPC Group disagrees with the Court’s actions today and its characterization of the Company’s response to the November 2019 incident, and exercised its right to withdraw from the plea agreement.

In the more than five years since the event at our Port Neches facility, which now operates as a terminal, TPC Group has invested thousands of man-hours in risk reduction initiatives and millions of dollars in mechanical integrity, infrastructure and asset improvements to improve our process safety performance. The Company’s continued focus remains on ensuring our facilities’ safe and reliable performance and operations as we continue to be a positive part of the communities in which we operate and a leader in the petrochemical industry.

TPC has not been indicted nor has it waived an indictment. Basically, everything is back to square one.

Brent Coon is one of several attorneys representing plaintiffs. He tells KFDM/Fox 4 News they believe today’s plea agreement withdrawal is a good thing, because he says by their calculations, TPC should pay a total of about $1 billion in damages to surrounding plants and families impacted by the blast. He says the plea agreement would have compensated plaintiffs for physical damage to homes and businesses, and not for injuries or the impact to their mental health. Now, with the plea agreement rejection, he says they have an opportunity for a better outcome.

The company pled guilty to what’s known as an information in the federal system, based on criminal violations of the Clean Air Act in the massive November 2019 fire and explosions that rocked the Port Neches plant, along with homes and businesses for miles around.

Plaintiffs’ attorneys represent hundreds of people whose property was impacted by the explosions and fire. They hoped Judge Truncale would reject the plea agreement because they said under its terms, their clients wouldn’t receive anything near the compensation they deserve for the damage..

Prior to today’s hearing, Gertz told KFDM the plea agreement involves restitution of more than $200 million, an $18 million fine, one year of probation, and a felony conviction for TPC.

Gertz said TPC and the government asked the court to follow the plea agreement.

If Truncale didn’t follow the plea agreement, Gertz previously told KFDM that TPC would withdraw its guilty plea and go to trial.

Gertz said TPC would also withdraw its guilty plea if Truncale ordered the company to pay additional restitution.

The Justice Department and Environmental Protection Agency announced May 21 the filing of a felony criminal charge and related civil complaint and consent decree under the Clean Air Act (CAA) against TPC Group LLC, a Texas petrochemical company. TPC Group also entered a plea of guilty to a one-count information charging the company with a violation of the Clean Air Act before U.S. Magistrate Judge Zack Hawthorn for the Eastern District of Texas.

The filings address explosions that caused injuries, evacuations and significant air pollution. The company agreed to pay more than $30 million in criminal fines and civil penalties and spend approximately $80 million to improve its risk management program and improve safety issues at TPC Group’s Port Neches and Houston facilities.

According to information provided in court, on Nov. 27, 2019, two explosions at TPC Group’s Port Neches facility prompted evacuations of thousands of residents from the City of Port Neches and surrounding areas, released more than 11 million pounds of extremely hazardous substances and caused more than $130 million in offsite property damage and other impacts to human health and the environment. Four employees and one contractor suffered injuries including concussions, burns, perforated eardrums, tinnitus and cracked teeth.

“Port Neches residents will always remember the day before Thanksgiving 2019,” said Acting Associate Attorney General Benjamin C. Mizer. “That day, powerful explosions at the TPC Group’s facility caused evacuations, injuries, air pollution, and more than $130 million in damage. This entirely preventable accident was the result of the company’s failure to take the necessary precautions to control a hazardous chemical even though it was well aware of the serious risks. Today’s criminal plea and settlement send a clear message that safety measures are not optional and that we will hold violators accountable.”

“When a disaster happens like at Port Neches, public safety is paramount,” said Assistant Attorney General Todd Kim of the Justice Department’s Environment and Natural Resources Division. “TPC Group’s knowing failure to comply with the chemical accident prevention provisions of the Clean Air Act at its Port Neches and Houston facilities placed its workers, neighbors and the environment in danger. Community members have expressed concerns about potential explosions happening at TPC Group’s Houston facility, like what happened in 2019 at Port Neches. Importantly, today’s criminal plea and civil settlement includes safety requirements that will help prevent future incidents.”

“TPC recklessly risked the lives of thousands of Port Neches residents and illegally released millions of gallons of extremely hazardous substances into the environment,” said Assistant Administrator David M. Uhlmann of EPA’s Office of Enforcement and Compliance Assurance. “Today’s criminal and civil settlements hold TPC accountable for endangering the Port Neches community and require the company to invest approximately $80 million to improve safety at TPC Group facilities. These settlements highlight the strong partnership between EPA’s criminal and civil enforcement programs and demonstrate EPA’s emphasis on a more strategic and collaborative approach to enforcement and compliance assurance.”

“Protecting our environment and the safety of the citizens of Southeast Texas will always be a priority of our office,” said U.S. Attorney Damien M. Diggs for the Eastern District of Texas. “The community of Port Neches and their neighbors will never forget the horror of being awakened in the middle of the night – hours before Thanksgiving – by the frightening sounds of the TPC plant explosion at their doorsteps. TPC violated the law when it ignored its own safety protocols, which led to a disastrous explosion with catastrophic consequences that directly endangered the lives of TPC workers and the surrounding community. Today’s guilty plea shows that businesses that choose to place profits over safeguards and legal compliance will face serious consequences.”

“The people of Port Neches had their lives disrupted because of a major disaster in their neighborhood. TPC must uphold the accident-prevention standards in the Clean Air Act to ensure families and workers are not harmed,” said EPA Regional Administrator Dr. Earthea Nance. “And when companies do not comply with these important safety regulations, EPA and our federal partners will continue to hold them accountable, in this case by requiring TPC to pay $80 million to reduce health risks at its facility and $12.1 million in civil penalties so communities like Port Neches will be protected from harm in the future.”

TPC Group’s facility produced the hazardous chemical Butadiene, which is used in the production of tires, latexes and plastics. Butadiene can form a “popcorn polymer,” which can grow at an accelerating rate and cause catastrophic events, including explosions and fires. The company was aware that this polymer was forming in some of its production lines, and the risks it posed, but failed to take necessary measures to prevent the explosion.

An initial explosion occurred at the facility’s South Unit. A secondary explosion followed, and a series of fires erupted at the facility which blew contaminants into the air. As a result of the explosions, mandatory evacuations were ordered for residents within a four-mile radius of the facility, voluntary orders to shelter in place were issued for residents in the surrounding area and local schools were closed for multiple days to allow buildings to be cleaned, repaired and inspected.

The company has agreed to pay $18 million in criminal fines. The plea agreement also includes a one-year term of probation and publishing of a public apology. The $12.1 million in civil penalty payments will be made through bankruptcy proceedings. TPC Group will also spend approximately $80 million to improve its risk management program and improve safety issues at both facilities.

TPC Group has been criminally charged and pleaded guilty to knowingly failing to implement its own written operating procedures, including monthly flushing of production lines, that would have prevented the explosion. Clean Air Act regulations require planning to prevent accidental releases of hazardous chemicals and makes implementation of those plans mandatory.

The civil complaint includes 27 claims and counts – some of which included numerous violations – against TPC Group for violations of the CAA at its Port Neches facility, including numerous violations that led to the 2019 explosions. The Port Neches facility is now used for storage purposes only. The civil complaint also includes 26 claims and counts against TPC Group for CAA violations at the company’s Houston facility, including failing to promptly take corrective actions for hundreds of pieces of process equipment and failing to address similar conditions that led to the Port Neches explosions.

Under the proposed civil consent decree, TPC Group is required to update safety information for equipment at its Port Neches and Houston facilities to ensure that they are designed, maintained, inspected and operated in a safe manner. TPC Group must overhaul its process hazard analysis program to ensure prompt completion of all corrective actions and remedial measures to mitigate hazards at the facilities. TPC Group will also update operating procedures and training for its workers and contractors. TPC Group has agreed to audit and revise their emergency shutdown procedures and implement key performance indicators.

The company will now provide incident investigations to EPA and release incident report information to the public on a publicly available website. The consent decree requires TPC Group to conduct an audit of the relief system design at the Houston facility to ensure the system can handle all appropriate scenarios.

TPC Group will also install and continually use air monitors at the fence line of each facility and in the neighboring communities. Data from the air monitors will be available on TPC Group’s website. TPC Group agreed to conduct an inherently safer technology review to identify safer technology alternatives that minimize or eliminate the potential for accidental chemical releases. TPC Group is required to host community meetings to inform the community about risks associated with its facilities, share evacuation routes and share information about how to properly shelter in place.

Under section 112(r) of the CAA, facilities like TPC Group’s in Port Neches and Houston must identify hazards, design and maintain a safe facility, minimize the consequences of accidental releases that do occur and comply with regulatory prevention measures. Failing to comply with these requirements increases the risk of accidents and threatens surrounding communities that are commonly overburdened with pollution.

EPA investigated this matter and received extensive cooperation from the Occupational Safety and Health Administration (OSHA). On the date of the explosion, a Unified Command was established that included Jefferson County Judge Jeff Branick, the Jefferson County Office of Emergency Management, the EPA, the Texas Commission on Environmental Quality and TPC Group. If you know of an unsafe industrial situation or an environmental violation, report it here: echo.epa.gov/report-environmental-violations.