Mere days after the Texas Attorney General (AG) filed a lawsuit against Triple P.G. Sand Development, the mine’s owner transferred ownership of the mine. Even though the transfer was recorded in October, the attorney general says the papers were dated for the prior January — before the unauthorized discharges from the mine that triggered the AG’s lawsuit.

Hundreds of Millions of Gallons of Wastewater Discharged

Two unauthorized discharges from the mine in Porter during May and September last year let hundreds of millions of gallons of sediment-laden wastewater escape into the headwaters of Lake Houston, the source of drinking water for 2 million people.

The putative ownership transfer was recorded in October, days after the lawsuit was filed. But it was dated for the prior January—before the May and September discharges that triggered the law suit!

Suspicious Ownership Transfer

The AG didn’t allege any motives. But the suspicious ownership transfer may have been an attempt to shield assets from prosecutors. People often set up multiple companies, trusts and partnerships to shield assets in one from lawsuits in another.

As a result of the transfer, the Texas Attorney General (AG) amended the State’s original petition and application for injunctive relief against Triple P.G. on 6/17/2020. The new petition added five additional defendants. They include:

• Guniganti Family Property Holdings, L.L.C.
• Prabhakar R. Guniganti, individually
• Prabhakar R. Guniganti, as Director of Triple P.G. Sand Development, L.L.C.
• Prabhakar R. Guniganti, as sole manager of Guniganti Family Property Holdings, L.L.C.
• Guniganti Children’s 1999 Trust.

TCEQ Surprised by “Different Operator” at Facility

The Attorney General’s amended petition states, “In or around May 2020, prior to expiration of the Temporary Injunction, Texas Commission on Environmental Quality (TCEQ) investigators conducted a site visit and were informed that a different operator had taken over operations at the Facility.”

Ironically, instead of shielding assets (if that’s what he was trying to do), Guniganti exposed more of his family’s holdings. Now they’re all part of the lawsuit.

Guniganti Family Property Holdings, L.L.C. was the recorded property owner at the time of the May and September 2019 breaches. However, new ownership records now show that in October 2019, Guniganti Children’s 1999 Trust owned the property.

Prabhakar R. Guniganti is the sole director of Triple P.G. Sand Development and sole manager of the Guniganti Family Property Holdings. The AG’s amended petition alleges Guniganti orchestrated the ownership transfer as the sole manager of Defendant Guniganti Family Property Holdings.

Officially, the State filed the amended petition to name additional entities that are responsible for the 2019 discharges. They also share a continuing responsibility to prevent discharges in the future by performing corrective actions to improve the site.

Basis for Lawsuit

The TCEQ cited Triple P.G. in both months during 2019 for the unauthorized discharge of millions of gallons of sediment-laden process wastewater. In May, the entire contents of the Triple P.G. dredge pond (about 180 acres in area) were released into Caney Creek. TCEQ estimates 325 million gallons of sediment-laden water exited into Caney Creek, which leads directly to the East Fork of the San Jacinto River and onward to Lake Houston. Then, more breaches occurred in September, 2019.

Triple P.G. agreed to injunctive relief last fall. The injunction required Triple P.G. to cease dredging operations, to repair breaches, and to retain an engineer who would propose a plan to ensure the berms could hydraulically isolate the process waste water from waters of the State. The Court entered the Agreed Temporary Injunction on November 25, 2019.

Ever since, Guniganti has been trying to dry-mine sand. Miraculously, water inside the mine has disappeared while water outside the mine has gotten higher.

The AG contends that regardless of which entity owned the mine, they all lead back to the same man and they all had an obligation to ensure that process wastewater was not discharged into waters of the State.

The AG believes all entities are liable for unauthorized discharges pursuant to Texas Water Code 26.121(c), which makes it unlawful to “cause, suffer, allow, or permit the discharge of any waste” in violation of the Texas Water Code.

Dr. Guniganti At Center Allegations

“As the individual with complete management control of sand mining company Triple P.G. and with complete management control of the property on which the Facility is located, Defendant Guniganti had authority to direct activities at the site, including the authority to prohibit or modify sand mining operations on the property, to ensure Triple P.G. maintained adequate berms, and/or to maintain the berms at the Facility to ensure that process wastewater was not discharged into waters of the state,” the AG alleges.

Guniganti, a cardiologist from Nacogdoches who moonlights as a miner, could be fined up to a million dollars for the discharges.

These discharges are the latest in a long series of problems for the troubled mine. For the complete list, read the Attorney General’s entire 51-page amended petition.

The defendant(s) have until July 20, 2020, to respond to the amended petition.

In other developments in the case, Dr. Guniganti has requested to replace his Austin-based attorney with one from Lufkin.

Posted by Bob Rehak on July 1, 2020

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