United States v. Limetree Bay Refining, LLC

CourtDistrict Court, Virgin Islands
DecidedJanuary 12, 2023
Docket1:21-cv-00264
StatusUnknown

This text of United States v. Limetree Bay Refining, LLC (United States v. Limetree Bay Refining, LLC) is published on Counsel Stack Legal Research, covering District Court, Virgin Islands primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. Limetree Bay Refining, LLC, (vid 2023).

Opinion

DISTRICT COURT OF THE VIRGIN ISLANDS

DIVISION OF ST. CROIX ║ UNITED STATES OF AMERICA, ║ ║ Plaintiff, ║ 1:21-cv-00264-WAL-EAH ║ v. ║ ║ LIMETREE BAY TERMINALS, LLC, ║ WEST INDIES PETROLEUM LIMITED, ║ PORT HAMILTON REFINING & ║ TRANSPORTATION, LLLP, ║ TRANSITION REFINERY ENTITY, LLC, ║ ║ Defendants. ║ ________________________________________________ ║ TO: Myles E. Flint, Esq. For the United States Carl A. Beckstedt, III, Esq. For Limetree Bay Terminals Andrew C. Simpson, Esq. For W. Indies Petroleum and Port Hamilton Refining & Transportation

ORDER THIS MATTER

comes before the Court on a Motion to Reconsider, filed by Defendants West Indies Petroleum Limited (“WIPL”) and Port Hamilton Refining & Transportation, LLLP (“PHRT”). Dkt. No. 26. Defendant Limetree Bay Terminals and Plaintiff United States have opposed the motion, Dkt. Nos. 30 and 32, respectively. WIPL and PHRT have filed separate replies. Dkt. Nos. 33, 37. For the reasonBsA tChKatG fRoOlloUwN,D th e motion will be denied. In July 2021, the United States filed the Complaint in this action against Limetree Bay Refining, LLC (“LBR”) and Limetree Bay Terminals, LLC (“Terminals”), at the request of the United States v. Limetree Bay Terminals, LLC

1:21-cv-00264-WAL-EAH Order Page 2

Administrator of the U.S. Environmental Protection Agency (“EPA”). Dkt. No. 1. The United States brought the action due to emissions of hydrogen sulfide, sulfur dioxide, and other air pollutants, in addition to the risk of a catastrophic failure of emissions control systems at the Refinery located at Limetree IBda.y that posed an imminent and substantial danger to public health and the environment. at 1-2. While the Refinery was not operating at that time, it could not be restarted or operated safely without LBR and Terminals complying with environmental and safety audit and compliance plan requirements set forth in a May 2021 EPA administrative order underI dth.e Clean Air Act that would remain in force only if aided by an order of the district court. at 2. The United States filed the instant action seeking injunctive relief under Section 303 of the Clean Air Act to require compliance with the May 2021 Order, restrain LBR and Terminals from emitting various pollutants, and require them to take additiIodn. al necessary steps to cease the endangerment to public heath or the environment. at 3. Simultaneously with the filing of the Complaint, the United States filed a Joint Stipulation with LBR and Terminals ensuring that those Defendants would meet the requirements of the May 2021 Order and notify the United States if they intended to restart the Refinery. Dkt. No. 2. Also on the day it filed the Complaint, the United States filed an Unopposed Motion to Stay All Deadlines, given the then-Defendants’ changed circumstances—the Refinery was idle and the Defendants did not intend to restart it except to bring it to a state of indefinite shutdown. Dkt. No. 3. The Court granted the motion. Dkt. United States v. Limetree Bay Terminals, LLC

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No. 4. Subsequently, the United States moved multiple times to extend the stay, which the Court granted. Dkt. Nos. 7, 10, 12, 17. In August 2022, the United States filed another Joint Motion to Stay All Deadlines and Proceedings until December 1, 2022, except that it noted that it expected to file a motion under Federal Rule of Civil Procedure 25. Dkt. No. 20. The Court granted the extension motion. Dkt. No. 21. On November 15, 2022, the United States filed a Motion to Substitute Party pursuant to Fed. R. Civ. P. 25(c), seeking to substitute WIPL, PHRT, and the Transition Refinery Entity, LLC (“TRE”) for Defendant LBR. Dkt. No. 23. In the accompanying memorandum in support of its motion, Dkt. No. 23-1, the declaration of Attorney Myles E. Flint, II, Dkt. No. 23-2, and attached exhibits, the United States showed that WIPL and PHRT purchased all or substantially all of LBR’s assets following LBR’s filing for Chapter 11 bankruptcy relief in late 2021-earlyS 2e0e22, and that the TRE became the reorganized Limetree Bay Refining, LLC in mid-2022. Dkt. No. 23-1 at 2-9. In describing the background of the sale of LBR’s assets in Bankruptcy Court, the motion described a requirement in the sale order that WIPL and PHRT “must become a party to . . . the Joint Stipulation.” Dkt. No. 24 at 6. The United States argued, inter alia, that WIPL’s and PHRT’s acquisition of LBR’s assets and the sale order’s requirement that WIPL and PHRT become parties to the Joint Stipulation satisfied the transfer of interest requirement of Rule 25(c) and, in order to become parties to the Joint Stipulation, they had to become parties to the case. In addition, the Plan Order required the TRE to be bound by the joint stipulation United States v. Limetree Bay Terminals, LLC

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and cooperate in its substitution in this case. Since WIPL and PHRT were in possession and control of the Refinery; the TRE had an alleged interest in permits relating to the Refinery operation; and WIPL expresIsded its intent to restart the Refinery, substitution was essential to the conduct of the case. . at 11-12. It argued in the alternative that the three entities could be joined as parties if the CouIdrt was not convinced that substitution would best facilitate the conduct of the litigation. . at 13. The Notice of Motion provided, inter alia, that the United States served its motion on the resident agent for PHRT on November 15, 2022, pursuant to Fed. R. Civ. P. 25(c) and (a)(3), and would serve its known counsel by electronic mail, and personally served WIPL on November 3, 2022, in accordance with Fed. R. Civ. P. 25(c) and 4(f)(2). Dkt. No. 23 at 4-7. On November 17, 2022, the Court granted the Motion to Substitute. Dkt. No. 25. It held that WIPL’s and PHRT’s acquisition of Defendant Limetree Bay Refining’s assets, the sale order’s requirement that these entities become parties to the Joint Stipulation (which in turn led to the conclusion that they become parties to this case), and WIPL’s and PHRT’s exercising their option in the bankruptcy sale documents to reorganize Limetree Bay Refining as TRE, with the requirement that TRE also be fully bound by the Joint Stipulation and cooperate in its substitution as a deIfde.n dant in this case, satisfied the transfer of interest requirement in Fed. R. Civ. P. 25(c). at 3. In addition, substituting these entities as United States v. Limetree Bay Terminals, LLC

1:21-cv-00264-WAL-EAH Order Page 5 Luxliner P.L. Export Co. v. RDI/Luxliner,

DInecfendants would “facilitate the conduct of this case.” 1 ., 13 F.3d 69, 71 (3d Cir. 1993). WIPL and PHRT filed a Motion for Reconsideration to correct clear error or prevent manifest injustice, arguing that: (1) the Court overlooked all non-assumption of liability language in the bankruptcy sale order which “required joinder to the Joint Stipulation but with a carve-out for non-liability for any obligation other than air monitoring obligations, under the Joint Stipulation. .

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United States v. Limetree Bay Refining, LLC, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-limetree-bay-refining-llc-vid-2023.