906R88101
OVERVIEW OF EPA FEDERAL PENALTY PRACTICES
FY 1988
May 1989
Compliance Policy and Planning Branch
Office of Enforcement and Compliance Monitoring
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USB
1 UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
/ WASHINGTON. D.C. 20460
MAY i 9 1989
OFFICE OF
ENFORCEMENT AND
COMPLIANCE MONITORING
MEMORANDUM
SUBJECT: Penalty Report for FY 1988
FROM: Edward E. Reich
Acting Assistant Administrator
TO: The Administrator
Acting Deputy Administrator
Assistant Administrators
Regional Administrators
Attached is the final Federal penalty report for FY 1988,
entitled "Overview of EPA Federal Penalty Practices FY 1988."
The report consists of two parts — an overview report prepared
by OECM and program-specific appendices prepared by the program
offices and the Associate Enforcement Counsels. OECM owes much
to all those in the program offices and Regions who contributed
data and analyses, reviewed the draft report, and maintained
accurate penalty records throughout the year.
The report shows that FY 1988 was the biggest penalty year
in EPA's history. A new record was set, with $36.8 million in
civil penalties. This represents a 51 percent increase over the
FY 1987 total. The last five years have brought 74 percent of
all EPA penalties to date.
We hope you find this report useful and informative. If you
have suggestions on how EPA could make more use of this report,
please let me know.
Attachment
cc: Associate Administrator for Regional Operations
Acting General Counsel
Headquarters Compliance Office Directors
Deputy Regional Administrators
Regional Counsels
Regional Division Directors
Steering Committee on the State/Federal
Enforcement Relationship
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OVERVIEW OF EPA FEDERAL PENALTY PRACTICES
FY 1988
I. EXECUTIVE SUMMARY 1
II. PURPOSE, SCOPE AND LIMITATIONS OF THIS REPORT 3
III. GENERAL OVERVIEW
1. General Profile
Highlights 5
Median and Average Penalties 10
Percentage of Cases Concluded With a Penalty 14
Range of Penalty Amounts 15
Highest Penalties 18
Types of Cases 18
New Penalty Programs and Authorities 19
2. Program Summary
Highlights 19
Criminal Enforcement . 20
Relative Contributions 20
Major Changes in FY 1988 21
3. Regional Summary • 22
Appendices;
A. Criminal Enforcement
B. Clean Water Act
C. Safe Drinking Water Act
D. Wetlands Protection
E. Stationary Source Air
F. Mobile Source Air
G. RCRA
H. FIFRA/TSCA
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ACKNOWLEDGMENTS
This report was coordinated by the Compliance Policy and Planning
Branch of the Office of Enforcement and Compliance Monitoring.
The project manager and principal author was George Alderson.
The following were the principal authors of the program-specific
reports:
Criminal Enforcement
Clean Water Act
Judicial
Administrative
Safe Drinking Water Act
Judicial
Administrative
Wetlands Protection
Stationary Source Air
Mobile Source Air
RCRA
Judicial
Administrative
TSCA, FIFRA
John Dugdale, OECM
Tonia D. Bandrowicz, OECM
Kathy Summerlee, OECM
Ken Keith, OWEP
Tonia D. Bandrowicz, OECM
Peter Bahor, ODW
Joseph DaVia, OWP
Elise Hoerath, OECM
Phyllis Anderson, QMS
Rene Webb, OECM
Bob Small, OWPE
Tony Ellis, OCM
The collection, quality control, analysis and display of these
data took many long hours by these individuals and their
colleagues and support staff.
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I. EXECUTIVE SUMMARY
General Findings
o EPA has obtained over $151 million in civil penalties through
FY 1988.
o A new record was set in FY 1988, with $36.8 million in civil
penalties — a 51 percent increase over FY 1987.1
o Criminal fines of over $8.6 million were assessed in FY 1988,
and 30 years of incarceration were imposed (before deducting
suspended sentences). After suspension, fines of over $1.4
million and incarceration of almost eight years were ordered
by the courts.
o Seventy-four percent of all EPA's civil penalties to date were
imposed in the last five years, from FY 1984 through FY 1988.
Some 24 percent of all penalties were imposed in FY 1988
alone.
o The 51 percent growth in penalty dollars in FY 1988 can be
attributed to three changes from the previous year. First,
relatively new enforcement initiatives resulted in substantial
penalties in FY 1988, specifically RCRA interim status
judicial cases and implementation of administrative penalty
authorities under the Clean Water Act and Safe Drinking Water
Act (Underground Injection Control). Second, four well
established programs showed major increases in penalties (the
Clean Water Act, Stationary Source Air, RCRA and TSCA
programs). Third, a larger percentage of the cases were in
programs which obtain traditionally high-dollar penalties
(most notably the Clean Water Act program).
o Penalties were obtained in 92 percent of the cases concluded
in FY 1988.
1 This does not include the $15-million penalty in the
lodged, but not yet filed, consent decree in the Texas Eastern
Pipeline case, which was still pending early in FY 1989.
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Program Highlights
o The penalty dollars were dominated by Clean Water Act (34%)
and Stationary Source Air (25%) cases. These were followed by
RCRA (17%), TSCA (14%) and Mobile Source Air (7%) cases.
o The numbers of cases were dominated by four penalty programs
that heavily use administrative enforcement cases —
TSCA (42%), Mobile Source Air (17%), FIFRA (13%) and
RCRA (11%).
o Four programs set new records for total dollars and number of
cases — Clean Water Act, Safe Drinking Water Act, Stationary
Source Air and RCRA.
o Two programs obtained their first penalties through
administrative cases in FY 1988 — Clean Water Act and
Wetlands Protection.
Regional Highlights
o Regions I, II and III displayed relatively high penalty
dollars compared to their number of cases.
o Regions II, V and VI were the highest in total penalty dollars
and numbers of cases. These same Regions also exhibited the
top dollars or cases in two or more programs.
o Region II had the largest total of penalty dollars with
$6.7 million, or 20 percent of the national total for FY 1988.
Regions III, V and VI also obtained more than 10 percent of
the national total.
o Region V had the largest number of cases with penalties —
228 cases, or 19 percent of the national total. Regions II,
VI, VII and VIII also had more than 10 percent of the national
total.
o Regions I and II showed notable increases in their share of
the national penalty dollars compared to FY 1987.
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II. PURPOSE. SCOPE AND LIMITATIONS OF THIS REPORT
This overview report summarizes the penalty practices of EPA
Regions and Headquarters offices in FY 1988 in civil judicial,
civil administrative, and criminal enforcement actions. The
program-specific penalty reports used as the basis for this
overview are attached to this report as appendices. A report on
criminal penalties forms a separate appendix. Except where
specifically noted, the term "penalties" is used in this overview
to refer only to civil (administrative and judicial) penalties,
not criminal penalties.
Programs Covered
Nine EPA penalty programs are addressed in this report. The
following list gives their names, the types of enforcement cases
each uses, and any acronyms by which they are cited in this
report:
Program
Criminal Enforcement
Clean Water Act - NPDES (CWA)
Safe Drinking Water Act (SDWA)
Wetlands Protection
Stationary Source Air
Mobile Source Air
Resource Conservation and
Recovery Act (RCRA)
Toxic Substances Control
Act (TSCA)
Federal Insecticide, Fungicide
and Rodenticide Act (FIFRA)
Types of cases
Judicial
Judicial
Administrative
Judicial
Administrative
Judicial
Administrative
Judicial
Administrative
Judicial
Administrative
Judicial
Administrative
Administrative
Administrative
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Cases Covered
The penalties discussed in this report are cash amounts assessed
in EPA enforcement cases that were concluded in FY 1988. They
reflect final judgments by a court, consent decrees and consent
orders reflecting settlements, and final administrative orders.
This report does not include "proposed penalties" or other
amounts under discussion prior to the conclusion of a case, and
it does not include penalties paid to entities other than the
Federal Government. Contempt enforcement actions (cases seeking
to invoke sanctions for a failure to comply with a prior court
order, decree, or administrative order) are not included, because
those cases are not concerned purely with violations of the
environmental regulations. "Stipulated penalties" also are not
included in this report; they are penalties stipulated in an
administrative or court order that are due only if the violator
fails to carry out certain other requirements of the order.
This report also does not reflect "credits," "benefit projects,"
or other non-monetary actions which parties in enforcement cases
often agree to carry out as part of a settlement. Such actions
may yield large environmental benefits of substantial dollar
value, as is the case with a two-million-dollar mitigation
project in FY 1988 in the Boston Harbor case, under a Clean Water
Act judicial case.
One element of this report is an analysis of the extent to which
EPA used penalties in its enforcement cases. Some cases did not
obtain penalties. The cases without penalties included in this
report are enforcement actions in which a penalty is authorized
by the statutes and regulations on which the case is based. If
Congress did not authorize EPA to assess a penalty for a given
type of violation, an enforcement action for such a violation
would not be counted as a case in this report.
Penalties are counted in this report as assessed in a final
administrative action or in a court order; appeals and
collection of penalties are not considered here. The word
"obtained" is used in this report as a general term referring to
penalties that were assessed by a court or by EPA administrative
orders. Its meaning is the same as "assessed" or "imposed."
Purposes and Limitations
This overview report is not an evaluation of practices by EPA
programs or Regions, and it should be viewed in the context of
the total enforcement effort. The report may illuminate both
individual characteristics of programs and Regions and provide a
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helpful comparison among programs and among Regions. Identifying
differences may stimulate further thinking about penalties in
general, advancing the goal of more effective use of penalties as
part of an overall enforcement program.
The reader should bear in mind that the data presented here are
historical in nature, and do not necessarily represent present
penalty practices. Nothing in this report may be used as a
defense or guide to future settlements of Federal cases involving
penalties.
The specific penalty data used in this report were obtained from
several Federal data systems. The quality and completeness of
the data are not known and may vary among the programs discussed
here.
III. GENERAL OVERVIEW
1. General Profile
Highlights
EPA has obtained over $151 million in cash penalties from FY 1974
through FY 1988 in 8,085 civil judicial and administrative cases.
In addition, in the two years EPA's criminal enforcement program
has been tracking penalty data (FY 1987-1988), $12 million in
criminal fines and over 112 years of incarceration have been
imposed, before deduction of suspended sentences. Incarceration
sentences after suspension totaled 33 years.
Seventy-four percent of all civil penalty dollars in EPA's
history were obtained in the last five years (FY 1984-1988).
Fifty-four percent of the civil penalty dollars ($82 million of
$151 million) and fifty percent of the cases with penalties
(4,024 of 8,085) were obtained in the last three fiscal years.
The historical picture is shown in Figure 1, displaying total
penalties by fiscal year.
The contributions of the different EPA programs to the FY 1988
totals of penalty dollars and number of cases with penalties are
shown in Figures 2 and 3.
Four programs set new records in FY 1988 for both total dollars
and total number of cases with penalties: Clean Water Act with
$12,427,658 and 125 cases, Stationary Source Air with $9,062,497
and 75 cases, RCRA with $6,236,892 and 158 cases, and SDWA with
$472,630 and 46 cases.
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The largest penalty obtained in FY 1988 was $2 million, in a
judicial action in the Clean Water Act program. Individual
penalties over $1 million were also obtained in judicial cases by
the Stationary Source Air and RCRA programs, and in
administrative cases by the Mobile Source Air and TSCA programs.
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40
Figure 1
TOTAL PENALTIES BY FISCAL YEAR
CIVIL JUDICIAL AND ADMINISTRATIVE
§1
si
Ul
D.
35
30
25
20
15
10
1981 1982 1983 1984 1985
RSCAL YEAR
1986
1987
1988
TOTAL PENALTY DOLLARS BY FISCAL YEAR
1988 (24.3%)
THRU 1980 (13.9%)
1987 (16.1%)
1981 (4.2%)
1982 (2.9%)
1983 (5.2%)
1984 (4.6%)
1985 (15.1%)
1986 (13.7%)
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8
Figure 2
PERCENT PENALTY DOLLARS BY PROGRAM
FY 1988
OTHERS (3.4%)
TSCA (13.9%)
RCRA (17.0%)
MOBILE (7.2%)
CWA (33.8%)
STAT AIR (24.7%)
Figure 3
PERCENT PENALTY CASES BY PROGRAM
FY 1988
OTHERS (3.9%) CWA (8.7%)
F1FRA (12.9%)
TSCA (41.6%)
STAT AIR (5.2%)
MOBILE (16.6%)
RCRA (11.0%)
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Table 1
Total Amount of Civil Judicial and Administrative Penalties
Clean Water Act
Judicial
Administrative
Safe Drinking Water Act .
Judicial
Administrative
Judicial
Administrative
Stationary Source Air . .
Judicial
Administrative
Mobile Source Air ....
Judicial
Administrative
RCRA
Judicial
Administrative
TSCA - Administrative . .
FIFRA - Administrative
CERCLA — Judicial ....
TOTAL
in FY 1988
Total dollars
(cercent)
. . $ 12,427,658
11,885,858
541,800
. . . 472,630
49,740
422,890
. '. . 147,000
25,000
122,000
. . . 9,062,497
8,914,384
148,113
. . . 2,657,293
10,000
2,647,293
. . . 6 236 892
3,776,239
2,460,653
. . . 5,126,057
. . . 317,494
. . . 315 000
$ 36,762,521
3
(34%)
(1%)
(<1%)
\ ^••'•^ i
(25%)
\ t*-J 0 1
(7%)
V ' " /
(17%)
\ •*• ' • )
(14%)
d%)
(1%)
V J-* /
(100%)
No. A]
(cere
127
87
40
101
6
95
10
5
5
78
74
4
238
1
237
177
22
155
604
215
1
1,551
LI Cases*
sent)
(8%)
(7%)
(1%)
\ •*• ° /
(5%)
\ ~* ° /
(15%)
\ J-->^ )
(39%)
(14%)
(100%)
*"Number of all cases" here includes all cases with or without
penalties. Percentages shown here will differ from analyses
presented elsewhere in this report, based on only those cases
with cash penalties.
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Table 2
Total Amount of Criminal Fines and Incarceration
in FY 1988
Number of defendants convicted 50
Total fines assessed
Before suspension $ 8,645,050
Ordered (after suspension) 1,450,050
Total months incarceration
Sentenced (before suspension) 369 (30 years)
Ordered (after suspension,
before parole) 95 (8 years)
Median and Average Penalties
This section of the report attempts to look beyond the aggregate
figures to see what the typical penalties were for each program.
Average and median penalty figures represent different aspects of
the program.
The average penalty is the total dollars divided by the number of
penalty cases in a given program. While an average is useful in
seeing overall program accomplishments, it may give a misleading
picture if the penalties within that program went to extremes.
One high-penalty case and a large number of low-penalty cases
could produce a mid-level average, even though no cases had a
mid-level penalty.
The median is useful to gain a different perspective on a program
without the heavy influence of a few extremely large or small
penalties. The median penalty represents the middle number in
the series of all penalties for a given program arranged in order
of size. That is, there were as many penalties below the median
as above it.
Medians - Figure 4 shows trends in medians over several years for
the largest EPA penalty programs during that period. Programs
with fewer than four years of penalty history are not shown. In
the Mobile Source Air and TSCA programs, the data reflect several
different penalty authorities, including some that lead to
higher-dollar penalties. However, most of the cases in both
these programs are in lower-dollar categories, which results in
low median penalties.
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Figure 4
PROGRAM MEDIANS BY FISCAL YEAR
JUDICIAL PENALTIES
1975 76 77 78 79 80 81 82
FISCAL YEAR
O Cl«on Watw Act
83 54 85 86 87 1988
Air - Stationary
PROGRAM MEDIANS BY FISCAL YEAR
ADMINISTRATIVE PENALTIES
FISCAL YEAR
-t- Ar - Mobile
PROGRAM MEDIANS BY FISCAL YEAR
ADMINISTRATIVE PENALTIES
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Medians increased in four programs in FY 1988 over the previous
year's levels. RCRA and SDWA showed notable increases in their
judicial cases; RCRA continued the rising trend in its
administrative cases; Stationary Source Air reached a new high in
its administrative cases; and TSCA made a modest increase over
FY 1987.
Medians decreased in four programs. In Mobile Source Air
administrative cases the decrease appears to be part of a
continuing trend related to a change in program emphasis. In the
other three — CWA judicial, Stationary Source judicial, and
FIFRA — the decreases appear to be within the range of expected
annual fluctuation.
Change in medians has not been analyzed for a few categories of
cases. There were too few SDWA administrative cases and Mobile
Source Air judicial cases in one or both years to make these
categories suitable for analysis of change in medians. FY 1988
was the first year of concluded administrative penalty cases in
the CWA and Wetlands programs. Wetlands judicial cases are
presented separately for the first time this year.
o Clean Water Act; The median judicial penalty dropped from its
FY 87 level of $50,000 to $37,500 in FY 88. This returns the
figure to the same range between $35,000 and $40,000 where it
has been in three of the last five years. -In this first year
of CWA administrative penalties, the median was $8,500.
o Safe Drinking Water Act; The median judicial penalty rose from
$3,000 in FY 87 to $4,900 in FY 88, attaining its highest level
yet. The median administrative penalty (all but one being
Underground Injection Control cases) declined from $7,500 to
$2,750, but no conclusions are warranted because in the
previous year (FY 87) there were only three cases.
o Wetlands Protection; This program concluded its first
administrative cases in FY 88, establishing a median penalty of
$19,000. The median judicial penalty was $6,250. (This is the
first year Wetlands data have been presented separately in this
report. Wetlands judicial penalties were presented as part of
Clean Water Act data in previous reports.)
o Stationary Source Air; The median judicial penalty declined
from its record high of $65,750 in FY 87 to $30,000 in FY 88,
returning to the rough range occupied in FY 85 and 86. The
median administrative penalty reached a record high of $39,397
based on four cases in FY 88, rising from $8,500 in combined
years FY 86-87 based on 11 cases.
o Mobile Source Air; The median administrative penalty decreased
from $1,000 in FY 87 to $500 in FY 88, reflecting a changed
program emphasis and the use of field citations instead of
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13
formal administrative cases in the fuel-switching enforcement
effort. (Analysis of change in median judicial penalties is
not productive, because there was only one case in FY 88 and
two in FY 87.)
o RCRA; The median judicial penalty rose from $40,000 in FY 87
to a new high of $96,479 in this third year of RCRA judicial
cases. The median administrative penalty continued its rising
trend for the fifth straight year, increasing from $7,550 in
FY 87 to a record high of $9,440 in FY 88.
o TSCA; The median penalty rose from $1,300 in FY 87 to $1,500
in FY 88, still below the $1,800 level of FY 86. Prior to
FY 86, medians were not calculated on a TSCA program-wide
basis.
o FIFRA; The median penalty decreased from $1,547 in FY 87 to
$1,200 in FY 88, the second year of decrease from the program's
record high of $1,852 in FY 86.
Averages - Average penalties increased in six programs in FY 1988
and declined in one. However, it should be noted that averages
may be influenced by a few large cases. A year with one or two
extremely large cases may have a much higher average penalty than
a year without any, even though the latter may have had larger
penalties in most enforcement cases.
Averages rose to record highs in CWA judicial cases, SDWA
judicial and administrative cases, RCRA judicial cases, and TSCA
cases. Also showing higher averages this year were Stationary
Source Air judicial and administrative cases, RCRA administrative
cases, and FIFRA cases.
Only Mobile Source Air administrative cases had a lower average
penalty. Judicial cases in the Mobile Source Air program were
not analyzed with respect to change in average penalties, since
there was only one case in FY 1988 and two in FY 1987. The three
categories included this year for the first time were also not
analyzed, since there were no previous year's data for
comparison: CWA administrative cases and Wetlands judicial and
administrative cases.
o Clean Water Act; The average judicial penalty rose to a record
high of $139,834. In this first year of concluded
administrative cases, the average penalty was $13,545.
o Safe Drinking Water Act: The average judicial penalty rose to
a new high of $8,290, and the average administrative penalty
(reflecting almost entirely UIC cases) rose to $10,572.
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o Wetlands Protection; The average judicial penalty was $6,250.
In this first year of concluded administrative cases, the
average penalty was $24,400.
o Stationary Source Air; The average judicial penalty rose from
$102,634 in FY 87 to $125,555 in FY 88, partly reflecting three
cases with penalties over $1 million each. The average
administrative penalty rose to $37,028 (reflecting four cases)
from its FY 86-87 level of $13,526.
o Mobile Source Air; The average administrative penalty declined
from $13,128 in FY 87 to $11,217 in FY 88. (Analysis of the
average judicial penalty is not productive, because there was
only one case in FY 88 and two in FY 87.)
o RCRA; The average judicial penalty rose to a new high of
$209,791 in the third year of concluded RCRA judicial cases.
The average administrative penalty rose from $13,635 in FY 87
to $17,576 in FY 88. This would be a record high if the single
penalty of $2,103,000 were excluded from the FY 86 data.
o TSCA; The average penalty rose to a new three-year high of
$8,615. (Averages were not calculated on a TSCA program-wide
basis before FY 86.)
o FIFRA: The average penalty rose from $1,547 in FY 87 to $1,716
in FY 88.
Percentage of Cases Concluded with a Penalty
A high percentage of cases were concluded with a penalty in all
programs except one. Excluding this one program from the
calculation, 95 percent of all FY 1988 cases were concluded with
a penalty, the same percentage as in FY 1986-1987.
The atypical program was the Underground Injection Control
program (authorized by the Safe Drinking Water Act), which
obtained penalties in 42 percent of its cases. The UIC program
was in its second full year of administrative penalty cases. The
low percentage figure is in part a result of the structure of the
SDWA, which does not separate EPA's authority for non-penalty UIC
administrative orders from the authority for penalty orders, as
was done in the Clean Water Act, the Public Water System
provisions of SDWA, and the Clean Air Act. In this report, every
UIC administrative order is counted as a potential penalty case,
while in other programs the only orders counted are the ones
issued under the statute's penalty provisions. The agencywide
figure including the UIC cases is 92 percent.
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15
The percentage of cases with a penalty ranged from 42 percent in
SDWA administrative cases (all but one were UIC cases) to 100
percent in CWA administrative, SDWA judicial, Wetlands
administrative, Stationary Source Air administrative, and Mobile
Source Air judicial and administrative cases.
Range of Penalty Amounts
The distribution of penalties in most programs maintained
position approximately in the profile established in FY 1986 and
1987. This represents a consolidation of the gains achieved over
the FY 1984 levels, which had shown a distribution much more
heavily weighted toward the low end of the dollar scale.
Figure 5 shows the penalty distribution of all FY 1988 cases.
Figure 5
PENALTY DISTRIBUTION .- ALL PROGRAMS
FY 1988
0.9 -
0.8 -
0.7 -
0.5 -
0.5 -
0.4 -
0.3 -
0.2 -
0.1 -
912
120
183
140
74
52
59
>QOOOOQ<
8
I "I"' I T "I
ZERO $ <=$5000 <$10000 <$25000 <$50000 <$100000 <$1 MILL >=$1 MILL
RANGES
JUDICIAL
ADMINISTRATIVE
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16
There have been changes in the penalty distributions of some
programs. In FY 1988 the CWA penalty distribution shows growth
both in the lower ranges and in the highest range. There was
some growth in CWA judicial penalties in the categories under
$10,000, and CWA administrative penalties contribute to the
growth in the same categories. The program also increased its
number of judicial penalties over $1 million. Stationary Source
Air judicial penalties showed a decrease in cases over $25,000,
evidently as a result of the program's increasing concentration
on asbestos cases, which command lower penalties, but this
program too increased its number of penalties over $1 million
from FY 1987 to 1988. RCRA penalties show the effect of growing
judicial penalties in the higher categories. Distribution graphs
for three programs appear in Figure 6, comparing FY 1988 to the
combined data for the three years FY 1985-1987.
The overall distribution (shown in Figure 5) is dominated by the
large number of cases brought by the TSCA, FIFRA and Mobile
Source Air programs, in which the penalties are generally lower
than in other programs.
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17
Figure 6
45
PENALTY DISTRIBUTION - CWA
Ft 1985-1987
40
33 -
30 -
' 25 -
20 -
15 -
10 -
5
40
ZERO t ofSOOO =$' MILL
RANGES
PENALTY DISTRIBUTION - STATIONARY AIR
FY 1985-1987 JUDICIAL
20 -
ZERO $ <=$50OO <$10000 <$25000 <$SOOOO <$100000 <$1 MILL >=$1 MILL
RANGES
PENALTY DISTRIBUTION - RCRA
FV 1985-1987
ZERO t <=»5000 <$10000 <»250OO <$50000 <$10OOOO <$1 MILL >=$1 MILL
RANGES
JUDICIAL ES3 ADMINISTRATIVE
PENALTY DISTRIBUTION - CWA
FV 1988
15 -
26
ZERO t <=»5000 <»10000 <$25000 <»50000 <$100000 <$1 MILL >»$1 MILL
RANGES
JUDICIAL BS3 ADMINISTRATIVE
PENALTY DISTRIBUTION - STATIONARY AIR
FY 1988
24 -
22 -
20 -
18 -
16 -
14 -
12 -
10 -
8 -
6 -
ZERO $ <=$5000 <$10000 <$25000 <$5OOOO <$100OOO <$1 MILL >=$1 MILL
RANGES
K\'. 3 JUDICIAL Sv^ ADMINISTRATIVE
PENALTY DISTRIBUTION - RCRA
FY 1988
ZERO $ <=$5000 <$10000 <$25000 <$50000 <$100000 <$1 MILL >=$1 MILL
RANGES
3 JUDICIAL £222 ADMINISTRATIVE
NOTE: Please note different scales.
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Highest Penalties
Three programs established new records for highest individual
administrative or judicial penalties — that is, the highest
penalty assessed in a single case. These records were in Safe
Drinking Water Act (Underground Injection Control) administrative
cases ($125,000), Stationary Source Air administrative cases
($61,500), and RCRA judicial cases ($1.1 million). The highest
penalties in each program are shown in Table 3.
Table 3
Highest Penalty in FY 1988 by Program
Judicial Administrative
Clean Water Act $ 2,000,000 $ 60,000
Safe Drinking Water Act 25,000 125,000
(UIC)
Wetlands Protection 6,250 60,000
Stationary Source Air 1,750,000 61,500
Mobile Source Air 10,000 1,175,000
RCRA 1,100,000 150,000
TSCA ' 1,281,950
FIFRA 27,720
CERCLA 315,000
Types of Cases
Roughly $25 million, or 68 percent, of all EPA Federal penalty
dollars in FY 1988 came from judicial cases. The remaining
32 percent were from administrative cases.
In number of cases, the administrative outweighed the judicial.
Some 87 percent of all penalty cases were administrative
enforcement actions, compared to 13 percent that were judicial
actions.
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In general, the penalty is likely to be higher in a judicial case
than in an administrative case, but the ranges overlap. For
instance, two of EPA's top ten penalties in FY 1988 were assessed
in administrative cases brought by the TSCA and Mobile Source
programs. Both were over $1 million.
New and Increased Penalty Authorities
Two programs obtained their first administrative penalties in
FY 1988, using their new authority under the Water Quality Act of
1987: Clean Water Act and Wetlands. The CWA and Wetlands
programs also had increased judicial penalty authority under the
Water Quality Act of 1987, which raised the maximum judicial
penalty from $10,000 per day of violation to $25,000 per day.
2. Program Summary
Highlights
Penalties play quite different roles in the different EPA
programs. This results from differences in the penalty
authorities the United States Congress has granted EPA, different
lengths of time the programs have been operating, different types
of violations to which the penalties apply, and different types
of pollution sources. All of these influence the use and levels
of penalties. The following observations are not evaluations of
the programs' use of penalties, but rather an attempt to
illuminate differences among the environmental media.
Although each program is different, the programs can be seen as
falling in four groups on the basis of the size of typical
penalties and the number of cases concluded with a penalty in
FY 1988:
Group One; High Judicial Penalties - Three programs are
represented in this group. The Clean Water Act and Stationary
Source Air programs had large typical judicial penalties
(medians for FY 88 were $37,500 and $30,000, respectively) and
low volume of cases (85 and 71, respectively). This year the
RCRA program joined this group for the first time, with a
median judicial penalty of $96,479 and 18 cases.
Group Two; Low Judicial Penalties - Three programs had
relatively low judicial penalties and few cases: SDWA (median
$4,900 with 6 cases, in both UIC and Public Water Systems
programs), Wetlands (median $6,250 with 4 cases), and Mobile
Source Air (one judicial case with a penalty of $10,000).
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20
Group Three; High Administrative Penalties. Low Volume - Five
programs had relatively high median administrative penalties
and low numbers of administrative cases in FY 88. These
programs include Stationary Source Air (median $39,397 with
4 cases) and RCRA (median $9,440 with 140 cases). In addition,
three programs with relatively new administrative penalty
authority joined this group: Clean Water Act (median $8,500
with 40 cases) and Wetlands (median $19,000 with 5 cases), both
of which had their first administrative penalties in FY 88, and
SDWA (median $2,750 with 40 cases), which was in its second
full year of administrative penalties.
Group Four; Low Administrative Penalties, High Volume - Mobile
Source Air, TSCA and FIFRA had relatively low administrative
penalties and large numbers of cases. Median administrative
penalties for these programs were $500, $1,500 and $1,200,
respectively; case numbers were 236, 595 and 185, respectively.
Some very high administrative penalties were also obtained by
Mobile Source Air and TSCA, placing them as the third and
fourth highest programs in the ranking of highest individual
penalties. Mobile Source and TSCA cases reflect several
different penalty authorities, including some that lead to
higher-dollar penalties. Mobile Source Air's top penalty was
$1,175,000 against a refiner under the lead phasedown program,
while TSCA's was $1,281,950 in a Premanufacture Notification
case. However, the majority of cases in both programs are in
lower-dollar categories, and these dominate the penalty data
and result in low average and median penalties.
Criminal Enforcement
The Criminal Enforcement program operates on a cross-media basis,
serving all the major programs that have been authorized by
Congress to use criminal sanctions against violators. Most
criminal cases include charges under more than one environmental
law, but for statistical purposes each case is listed under one
predominant statute. On this basis, the programs with the
largest numbers of defendants convicted in FY 1988 were RCRA (25)
and Clean Water Act (12), followed by FIFRA (4), Clean Air Act
(3) , TSCA and CERCLA (one each). (The foregoing numbers are sums
of entities and individuals convicted.)
Relative Contributions
Two penalty programs that dominated the penalty dollars in past
years did so again in FY 1988. Clean Water Act and Stationary
Source Air penalties made up more than half the FY 1988 penalty
dollars (34 percent from CWA and 25 percent from Stationary
Source Air). These were followed by RCRA (17 percent), TSCA
(14 percent) and Mobile Source Air (7 percent). (See Figure 2.)
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21
The majority of cases with penalties in FY 1988 were concluded by
four programs that made heavy use of administrative cases. TSCA
alone had 42 percent of the cases, followed by Mobile Source Air
(17 percent), FIFRA (13 percent) and RCRA (11 percent). The
programs that made heavy use of judicial cases were led in case
numbers by Clean Water Act with 9 percent of the total, and
Stationary Source Air with 5 percent. (See Figure 3.)
Manor Changes in FY 1988
The most striking change in FY 1988 compared to the past two
fiscal years is the growth in total penalty dollars. The EPA
total of $36.8 million is $12.4 million, or 51 percent, over the
FY 1987 figure. (It is also 78 percent over the FY 1986 figure.)
Moreover, the phenomenon was achieved with only a 4-percent
increase in the number of cases with penalties. Where did this
dollar increase come from?
Examination of the data reveals three major factors that have
played a part. First, substantial penalty totals were obtained
by three relatively new enforcement initiatives. Second, four
well established programs showed major increases. Third, there
was a significant shift in EPA's overall caseload, resulting in a
larger percentage of the cases being in programs that obtain
traditionally high dollars per case. We will examine these three
factors separately.
New Initiatives; Relatively new enforcement initiatives
made a large impact in FY 1988 in three programs. RCRA judicial
cases, in their third year of penalties, went from $277,034 in
FY 1987 to $3.8 million in FY 1988, reflecting loss of interim
status cases. Clean Water Act administrative cases, based on new
penalty authority, achieved more than $500,000 in their first
year. Safe Drinking Water Act administrative cases went from
$19,550 to over $400,000 in their second full year, largely in
the UIC program. RCRA judicial cases and SDWA administrative
cases showed increases in number of cases and average and median
penalties in FY 1988. In these RCRA and SDWA efforts, the
increases in total dollars came both from the growing number of
cases and from growing dollars per case.
Established Programs; The second element in the $12.4-
million increase is the higher total dollars obtained by four
well established programs. These gains were led by the Clean
Water Act program, which obtained more than $5 million more in
its judicial cases than in FY 1987. Stationary Source Air
judicial cases had an increase of over $3 million over FY 1987,
RCRA administrative cases increased by almost $593,000 and the
TSCA program gained over $400,000.
What led to these increases in dollars? In CWA and Stationary
Source Air judicial cases, the increases were accompanied by
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22
growth in the programs' number of cases and their average
penalties but a decline in median penalties. Examination of
program data shows that CWA's lower median reflects more growth
in the number of moderate-dollar cases than in other dollar
ranges. However, the program also had four cases of $1 million
or more (compared to one in FY 1987), creating a large boost in
dollars from a few cases. In Stationary Source Air the lower
median reflects a shift to lower-dollar asbestos cases, but the
program also had three penalties over $1 million each (compared
to none in FY 1987). The predominant factors driving the
increases in CWA and Stationary Source Air, therefore, were both
the increased volume of cases and the growth in dollars per case.
In RCRA administrative cases, the growth came in dollars per
case. There was no significant growth in number of cases, but
more of the cases brought penalties between $25,000 and
$150,000, which is reflected in higher average and median
figures. In TSCA, there was a minor decline in cases and
increases in average and median penalties, indicating that growth
in dollars per case was the predominant influence.
Caseload Shift; The third element of the increase in
dollars from FY 1987 to 1988 was a shift in EPA's caseload among
the major programs. There was a notable decline in one program,
coupled with increases in others. (Here we compare FY 1988 data
with combined FY 1986-87 data.) There was a decline of 12
percent in the Mobile Source Air program's share of the total
count of cases with penalties, as a result of changing program
priorities upon completion of a successful enforcement
initiative. Mobile Source Air is a program with low median and
average penalties, but a large number of cases. Compensating
gains in caseload share occurred in the Clean Water Act (4
percent), TSCA (4 percent), Safe Drinking Water Act (2 percent)
and Stationary Source Air (1 percent) programs. Both CWA and
Stationary Source Air are programs with typically high dollars
per case.
3. Regional Summary
Regional penalty practices generally differ according to a number
of variables which are inherent in the regional organization of
any Federal agency. One example is the differing relative
importance of the agency's programs. For instance, a Region in
which water pollution is the number one problem will have a large
Clean Water Act program, and the Region's penalty data will
reflect the penalties characteristic of that program. Another
Region where hazardous wastes are the largest problem may have
relatively little CWA action and instead may have a dominant RCRA
program, and its penalties will reflect that difference.
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23
Despite these variables, some overall patterns can be observed
among the Regions. Regional analyses for individual programs can
be found in the program-specific reports which appear as
appendices to this report. These analyses are summarized below.
Some differences among the Regions' penalty practices are to be
expected because of varying circumstances, such as different
types of sources, differences in the extent of delegation to the
States, or the impact of a few large cases (especially where the
Region had few cases overall), and perhaps because of some
underlying differences in Regional philosophy on how best to
create deterrence. Moreover, because of the unknown quality and
completeness of the penalty data, comparisons among Regions may
have limited reliability. Nevertheless, some real differences
may emerge from looking at the overall pattern among Regions and
exploring the observed differences further through consultation
with the Regions.
Figure 7 shows the percentage of the national total in dollars
and numbers of cases with penalties attributed to each Region.
(The graph excludes data for the Mobile Source Air program, which
is not regionalized.)
o Regions I, II, and III in particular displayed large penalty
totals compared to their proportion of cases. (This can be
seen in Figure 7 by comparing the heights of the two bars for a
given Region.)
o Regions II, V and VI were the highest in total penalty dollars
and numbers of cases. These same Regions also exhibited the
top dollars or cases in two or more programs.
o In penalty dollars (the bar on the left in Figure 7),
Regions II, III, V and VI imposed a significant proportion
(more than 10 percent) of the total for FY 1988. Region II had
the largest total with nearly $6.7 million in penalties or 20
percent of the national total for the year.
o In numbers of cases with penalties (the bar on the right in
Figure 7), the Regions with more than 10 percent were Regions
II, V, VI, VII and VIII. Region V stands out with 228 cases,
or 19 percent of the national total.
o Regions I and II showed notable increases in their share of the
national penalty dollars compared to FY 87.
Penalties in a given program are often concentrated in a few
Regions, as is shown in Figure 8. This is influenced by the very
significant program differences among the Regions. The program-
specific analyses discussed in the appendices are essential to
the reader who wishes to gain an understanding of the differences
among Regions.
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<
g
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26%
Figure 7
REGIONAL DISTRIBUTION ALL PROGRAMS
FY 1958
HQ
u
D.
5 -
4 -
1 -
Figure 8
REGIONAL PENALTIES BY PROGRAM
FY 1988
2 3
[771 STAT AIR
5 5
REGIONS
I\\J CWA
10
5DWA
IXX1 T5CA
OTHERS
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25
The following program-specific sections summarize the
accomplishments of the EPA Regions in each of the penalty
programs. Where medians are discussed here, the reference is to
the median penalty, not including zero-penalty cases. Where
there are significant differences in the percentage use of
penalties among Regions, this will be addressed.
Criminal Enforcement
In the criminal enforcement program, nine Regions had one or more
defendants convicted during FY 1988. Regions III, IV, VIII and X
led the numbers (11, 8, 6 and 8 defendants, respectively). See
Figure 9 for the regional distribution of defendants convicted.
Q
Z
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Id
Q
m
5
D
Z
12
11
10
9
3
7
6
5
4
3
2
1
0
Figure 9
DEFENDANTS CONVICTED, BY REGION
ENTITIES AND INDIVIDUALS - FY 1988
5 6
REGIONS
10
NEIC
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26
Clean Water Act
This was a year of growth in penalties and number of cases, and
Regions II and III showed the largest relative growth in penalty
dollars in FY 1988, compared to FY 1986-87. The largest relative
growth in number of cases was in Region VI, in part a result of
that Region's strong start in using administrative cases, a new
enforcement tool authorized by Congress in the Water Quality Act
of 1987.
Judicial; In FY 1988 the largest relative changes among the
Regions were increases in Region II in both dollars and cases.
Region IV also showed a notable increase in its share of cases.
Regions III, VII, VIII and X achieved increases in median
penalties.
A large proportion of the judicial penalty dollars in FY 1988
came in Regions II, IV, VI and IX (34%, 10%, 13% and 14%,
respectively). The largest number of cases were concluded by
Regions II, IV, V, VI and X (25%, 18%, 12%, 19% and 11%,
respectively). Regions II and IX exhibited high total dollars in
relation to their number of cases.
In FY 1988 the highest judicial medians were in Regions III and
VIII'($481,334 and $285,000, respectively), followed by Regions
VII, I and IX ($150,000, $75,000 and $75,000, respectively). The
Regions with individual penalties over $1 million were Regions II
and IX. See Figures 10 and 11 for the regional distribution of
CWA judicial penalties (dollars and cases) and median penalties
for FY 1988.
Administrative; FY 1988 was the first year in which CWA
administrative penalty cases were concluded under the new
authority granted by Congress in the Water Quality Act of 1987.
Most of the penalty dollars came in Regions I, VI and X (30%, 39%
and 11%, respectively), and most of the cases were in the same
Regions (15%, 53% and 13%, respectively). Region I exhibited
high total dollars in relation to its number of cases.
The highest median administrative penalties were in Regions I, V
and VII ($18,750, $20,900 and $25,000, respectively), followed by
Regions VI and IX ($8,000 and $10,000, respectively). The
Regions with individual penalties over $40,000 were Regions I, VI
and X. See Figures 12 and 13 for the regional distribution of
CWA administrative penalties (dollars and cases) and median
penalties for FY 1988.
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o
5
0
I
H
Ut
u
IK
U
Q.
35%
30% -
25% -
20% -
15% -
10% -
Figure 10
REGIONAL DISTRIBUTION CWA PENALTIES
FY 1988 JUDICIAL PENALTIES
10
DOLLARS
(ft
§3
Figure 11
REGIONAL MEDIANS - CLEAN WATER ACT
500
FY 1988 JUDICIAL CASES
400 -
300 -
200 -
100 -
21
15
Number of cases shown above bar
10 16
5
REGIONS
l
10
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28
o
i-
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o
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u
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a:
Q t
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2
Figure 12
REGIONAL DISTRIBUTION CWA PENALTIES
50%
PC 1988 ADMINISTRATIVE CASES
50% -
40% -
30%
20% -
1
3
DOLLARS
5 6
REGIONS
7 8
5% CASES
10
Figure 13
REGIONAL MEDIANS - CLEAN WATER ACT
30
28
26
24
22
20
18
16
14
12
10
8
6
4
2
0
FY 1988 ADMINISTRATIVE CASES
Number of cases shown above bar
1
21
5 6
REGIONS
8 9 10
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29
Safe Drinking Water Act
In the Safe Drinking Water Act program, the Underground Injection
Control program showed major growth in its administrative cases
in FY 1988, both in penalty dollars and number of cases. The
Public Water System program maintained its presence in the
judicial cases. Region IV had the highest SDWA penalty dollars
overall. Regions IV, V and VIII had both administrative and
judicial cases, and Regions III, VI and IX were also active in
administrative cases.
Judicial; There is limited value in discussing regional
patterns for SDWA judicial penalties because there have been few
cases: six in FY 1988, six in FY 1987, and two in FY 1986. The
FY 88 cases reflect both UIC and PWS programs. Regions with
cases concluded during these three years were Regions III, IV, V,
VI, VIII and X. Those with cases in more than one year were
Regions V and VIII. Region IV obtained the highest individual
penalty to date, a $25,000 penalty in FY 1988.
Administrative; FY 1988 was the second full year of
operations for SDWA administrative penalties, and all but one
case were in the UIC program. A large proportion of the penalty
dollars were in Region IV (65%). The largest numbers of cases
were in Regions IV, V and VI (each with 25%), followed by Regions
III and VIII (13% and 10%, respectively). The highest medians
were in Regions III, IV and IX ($10,000, $10,000 and $37,500,
respectively). Regions with individual penalties over $30,000
were Region IV, which obtained the statutory maximum of $125,000,
and Region IX ($37,500). Region IV exhibited high total dollars
in relation to its number of cases.
There were notable differences among Regions in their use of UIC
administrative penalties. Regions VIII and IX obtained penalties
in 100% of their cases, and Region V attained the 77% level. The
other Regions with FY 1988 cases obtained penalties in less than
half of the cases. The low figures are attributed to two
factors: (1) the UIC program focuses on small operators with
little or no ability to pay penalties, and (2) many of the UIC
orders are directed at types of violations for which the UIC
Compliance Strategy does not require assessment of penalties
(examples include violations such as failure to submit an annual
report or failure to submit a plugging and abandonment plan).
See Figures 14 and 15 for the regional distribution of SDWA
administrative penalties (dollars and cases) and regional medians
for FY 1988.
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QL
Figure 14
REGIONAL DISTRIBUTION SDWA PENALTIES
70%
60% -
50% -
40% -
30% -
FY 1988 ADMINISTRATIVE PENALTIES
20% -
10% -
DOLLARS
CASES
Figure 15
REGIONAL MEDIANS - SDWA
FY 1988 ADMINISTRATIVE CASES
40
ll
35 -
30 -
25 -
20 -
15 -
10 -
5 -
Number of cases shown above bar
10
10
10
l.XAAiVX^. ..I
5
REGIONS
10
10
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31
Wetlands Protection
A total of ten judicial and administrative cases were concluded
by the Wetlands Protection program in FY 1988. Region III had
four judicial cases, with total penalties of $25,000, and Region
IV had one judicial case without penalty but with restoration of
the site. FY 1988 was the first year of administrative penalties
for the Wetlands program. Three administrative cases were
concluded by Region V (total $94,000) and two by Region VI (total
$28,000). The highest individual administrative penalties were
$60,000 in Region V and $24,000 in Region VI.
Stationary Source Air
The Stationary Source Air program showed major growth in judicial
cases in FY 1988, both in penalty dollars and number of cases.
Administrative cases remained at a low level.
Judicial; In FY 1988 Region V made a notable increase in
its share of judicial penalty dollars in the Stationary Source
Air program. Regions II, III and IX..made notable increases in
median penalties.
The highest total judicial penalty dollars were in Regions III, V
and VI (23%, 32% and 24%, respectively). The largest number of
cases were concluded in Regions II, V, VI and VII (15%, 29%, 10%
and 15%, respectively). Regions III and VI showed high total
dollars in relation to number of cases.
The highest judicial medians in FY 1988 were in Regions III, IX,
VI, and IV ($105,250, $68,421, $65,000 and $52,500,
respectively), followed by Regions II, I, VIII and V ($42,000,
.$31,590, $30,000 and $27,500, respectively). The regions with
individual penalties over $1 million were Regions III, V and VI.
See Figures 16 and 17 for the regional distribution of Stationary
Source Air judicial penalties (dollars and cases) and median
penalties for FY 1988.
Administrative; There is limited value in discussing
regional patterns for Stationary Air administrative cases,
because there were only four cases in FY 1988, and two cases in
FY 1986-87 combined. In FY 1988, Regions II and V each concluded
two cases. Region V obtained the higher total dollars and had
the higher median ($50,273). The highest penalty was $61,500 in
Region V.
Mobile Source Air
The Mobile Source Air program is operated by EPA Headquarters,
without regional delegation.
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40%
35% -
Figure 16
REGIONAL DISTRIBUTION OF PENALTIES
FY 1988 - STATIONARY SOURCE JUDICIAL
10
CASES
£.
§2
Figure 17
REGIONAL MEDIANS - STATIONARY SOURCE
130
120
110
100
90
80
70
60
50
40
30
20
10
0
FY 1988 JUDICIAL CASES
10
Number of cases shown above bar
2
^
20
10
5 6
REGIONS
10
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33
The RCRA program showed a major increase in its judicial cases in
FY 1988, both in penalty dollars and number of cases, while RCRA
administrative cases showed a notable increase above their
FY 1987 dollar level. Overall Region VI had the highest penalty
dollars, and Region V had the highest number of cases. Regions
that showed the greatest growth in their share of dollars
compared to FY 1986-87 were Regions VI, I and II.
Judicial; In FY 1988, RCRA judicial cases showed a large
increase in dollars and number of cases. A large proportion of
the penalty dollars were in Regions I, II, V and VI (17%, 23%,
18% and 29%, respectively). The 18 cases with penalties were in
seven Regions, with the largest numbers in Regions I and III (17%
and 39%, respectively). The highest medians were in Regions V,
II and I ($1.1 million, $437,500 and $230,000, respectively),
followed by Regions IX and IV ($160,000 and $110,000,
respectively). Regions with individual penalties over $500,000
were Regions II and V. See Figure 18 for the regional
distribution of RCRA judicial penalties (dollars and cases) for
FY 1988.
Figure 18
REGIONAL DISTRIBUTION RCRA PENALTIES
*
0
I-
2
UJ
O
It
UJ
Q.
40%
35% -
30% -
25% -
20% -
JUDICIAL CASES - FY 1988
15% -
10% -
10
CASES
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34
Administrative; Region I showed a notable increase in its
share of RCRA administrative penalty dollars compared to FY 1986-
87. Regions III, IV and VIII achieved notable increases in
median penalties over FY 1986-87.
The largest shares of administrative penalty dollars came in
Regions I, V, VI and VII (16%, 26%, 12% and 15%, respectively).
The largest number of penalty cases were in Regions II, V, VI and
VII (14%, 29%, 11% and 11%, respectively). Region I exhibited
high total dollars in relation to number of cases.
In FY 1988 the highest median administrative penalty was in
Region I ($20,992), followed by Regions III, IX, V and IV
($14,750, $13,000, $12,500 and $11,000, respectively). The
Regions with individual penalties over $100,000 were Regions IV,
VI and VII. See Figures 19 and 20 for the regional distribution
of RCRA administrative penalties (dollars and cases) and median
penalties for FY 1988.
The greatest relative changes in the TSCA program in FY 1988 were
an increase in penalty dollars by Headquarters and an increase in
cases in Region VIII. Increases in median penalties were
achieved by Regions I, II, III, IV, V, IX and Headquarters.
The largest shares of penalty dollars came from Headquarters and
Regions I, II and V (41%, 9%, 14% and 9%, respectively). The
largest numbers of cases were in Regions II, V, VI and VIII (18%,
20%, 9% and 19%, respectively).
The highest median penalties were at Headquarters and in Regions
I and III ($67,025, $9,000 and $5,600, respectively), followed by
Regions IX, II and IV ($4,250, $3,225 and $2,948, respectively).
The two highest individual penalties were obtained by
Headquarters ($1,281,590 and $500,000). See Figures 21 and 22
for the regional distribution of TSCA administrative penalties
(dollars and cases) and median penalties for FY 1988.
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Figure 19
REGIONAL DISTRIBUTION RCRA PENALTIES
K
1
o
LL
0
I-
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It
kl
D.
PC 1988 ADMINISTRATIVE
§5
24
22 -
20 -
18 -
16
14
12 -
10 -
8 -
6 -
4 -
2 -
0
12
Figure 20
REGIONAL MEDIANS - RCRA
FY 1985 ADMINISTRATIVE CASES
20
Number of cases shown above bar
41
16
16
5 5
REGIONS
-r
10
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36
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Figure 21
REGIONAL DISTRIBUTION TSCA PENALTIES
45%
0%
FY 1988
10 HQ
CASES
i/l
i
Q H
UJ
Figure 22
REGIONAL MEDIANS - TSCA PENALTIES
10
8 -
4 -
3 -
2 -
1 -
24
108
FY 1988
32
Number of cases shown above bar
29
119
42
51
38
112
32
v
5 6
REGIONS
10
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37
FIFRA
In FY 1988 the largest changes in contributions to total penalty
dollars were relative increases by Region VI and Headquarters and
relative decreases by Regions VIII and X. Increases in median
penalties were achieved by Regions I, II, V, IX, X and
Headquarters.
A large proportion of the penalty dollars came from Headquarters
and Regions III, VI, VII and IX (21%, 10%, 15%, 12% and 16%,
respectively). The largest numbers of cases were in Regions VI,
VII and IX (29%, 24% and 12%, respectively).
The highest medians were in Region I and Headquarters ($9,800 and
$8,150, respectively), followed by Regions X, IX, III and II
($3,000, $1,960, $1,870 and $1,600). The two highest individual
penalties were obtained by Headquarters ($27,720 and $12,600).
See Figures 23 and 24 for the regional distribution of FIFRA
penalties (dollars and cases) and median penalties for FY 1988.
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o
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UJ
Q.
Figure 23
REGIONAL DISTRIBUTION FIFRA PENALTIES
30%
28%
26%
24%
22%
20%
18%
16%
14%
12%
10%
8%
6%
4%
2%
0%
FY 1988
m
ES
10 HQ
DOLLARS
CASES
1/1
o:
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bJ
Figure 24
REGIONAL MEDIANS - FIFRA PENALTIES
10
9
8
7
6
4
3
1
0
13
15
FY 1988
Number of cases shown above bar
\v
10
44
12
22
455
REGIONS
10
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APPENDICES
TO
OVERVIEW OF EPA FEDERAL PENALTY PRACTICES
FY 1988
A. Criminal Enforcement
B. Clean Water Act
C. Safe Drinking Water Act
D. Wetlands Protection
E. Stationary Source Air
F. Mobile Source Air
G. RCRA
H. FIFRA and TSCA
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ro
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
Appendix A
ECTION AG
WASHINGTON, D.C. 20460
February 24, 1989
OFFICE OF
ENFORCEMENT AND
COMPLIANCt MONITORING
MEMORANDUM
SUBJECT: 1988 Penalties Study
FROM: Paul R. Thomson, 3r.
Deputy Assistant Administrator-Criminal Enforcement
TO: Gerald A. Bryan, Director
Office of Compliance Analysis and Program Operations
Criminal Enforcement Program: Use and Levels of Penalties
Most EPA statutes from their inception provided criminal
sanctions (often initially at the misdemeanor level) for
violations of environmental laws committed with the requisite
criminal intent (usually defined as "knowing" violations). In
recent years, EPA and DOJ have successfully persuaded Congress to
augment criminal penalties in new and reauthorized legislation.
Typically, violations of environmental laws are felonies
punishable by a maximum fine of up to $50,000 per day of
violation or by a term of imprisonment of up to five years per
day of violation or by both. To determine maximum penalties in
particular cases, reference must be made to the applicable
statute, and to the fine enhancement provisions in the Criminal
Code, 18 U.S.C. §§ 3623 and 3671.
Additional criminal penalties are provided in the general
criminal laws (found in Title 18 of the U.S. Code) applicable to
such federal offenses as mail and wire fraud, false statements,
and conspiracy, which are often charged by prosecutors in
conjunction with charges based on violations of EPA statutes.
In addition to (a) monetary penalties (fines), in criminal
enforcement penalties are also measured by (b) time of
incarceration ("jail time") and by (c) compliance-related relief.
Indeed, because of the enormous deterrent effect of imprisonment,
jail time is the most onerous and probably the best measure of
the effectiveness of criminal penalties. Compliance-related
relief includes such things as monetary restitution or actual
performance of corrective action, attendance at or giving of
training programs, community service, guaranteeing environmental
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A-2
compliance during a term of probation and other punishment
tailor-made to suit the crime. Compliance-related relief is
usually imposed by a creative judge as a condition of probation
or of suspension of all or a portion of a sentence. In contrast
to jail time, which is completely unavailable in civil
enforcement, compliance-related relief may be obtained in both
civil and criminal cases.
Finally, it is noteworthy that a criminal conviction often
carries additional, collateral consequences which can be very
considerable, including (a) personal stigmatization and the loss
of fundamental civil rights of felons who are individuals, (b)
the automatic "listing," or disqualification from government
contracts, grants and loans, of business facilities convicted
under the Clean Water Act or Clean Air Act, and (c) the creation
of a transcript or record which may assist third-party civil
plaintiffs or government agencies in subsequent suits against a
convicted defendant. These additional consequences deserve
mention to fully understand the totality of the punitive and
deterrent impact of criminal enforcement, but they will not be
discussed further herein.
Background on the History, Nature, and Current Status of the
Criminal Enforcement Program
Because the use of criminal enforcement and its penalties is
relatively new, unique, and perhaps unfamiliar to many people
involved in environmental protection, some additional background
may be useful. Before FY 1983, the federal government brought
only a few, isolated criminal cases, and there was no systematic
federal program for investigating and prosecuting environmental
crimes. In October 1982, EPA hired its first criminal
investigators, and small units of attorneys were organized at DOJ
and EPA to work exclusively in criminal enforcement. EPA's
special agents (all experienced criminal investigators and fully
authorized federal law enforcement officers) now are located
physically in all ten EPA Regions; organizationally they comprise
the Office of Criminal Investigations, a unit headquartered in
the National Enforcement Investigations Center (NEIC), itself
located in Denver, Colorado and a part of OECM. In 1988, the
work of EPA's 45 special agents was complemented by about 26 man
years provided by the FBI, and supported by a substantial
commitment of technical (field and laboratory) support provided
primarily by NEIC and to some extent by the EPA Regions.
Prosecutorial support is provided by all Offices of the United
States Attorneys and the Environmental Crimes Section of the
Department of Justice, with assistance from EPA's Office of
Criminal Enforcement Counsel and Offices of Regional Counsel.
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A-3
Criminal Penalty Policy
While EPA has no criminal penalty policy, for the first time
on the federal level the federal government now has a criminal
penalty policy, one which explicitly covers offenses involving
the environment. On November 1, 1987, the Guidelines of the
United States Sentencing Commission became effective (pursuant to
18 U.S.C. § 3551). These were developed at the request of
Congress to reduce the disparities among criminal sentences
ordered, and between sentences ordered and sentences actually
served.
The application of the Guidelines resulted in numerous
appeals questioning their constitutionality. On January 18, the
United states Supreme Court voted to uphold the Sentencing Reform
Act of 1984, the enabling legislation for the Guidelines.
Therefore, in essence, the Guidelines will operate as the
Agency's criminal penalty policy. Part Q of these Guidelines,
which covers "offenses involving the environment," makes it more
likely that convicted environmental offenders will receive
sentences with at least minimal terms of imprisonment. Fines
are more likely to be imposed, and may be calculated in terms of
(a) twice the estimated pecuniary loss caused by the offense, or
(b) three times the estimated pecuniary gain wrongfully obtained
by an environmental criminal, in addition to (c) set statutory
amounts. Since criminal cases are often multi-media (or
typically involve multiple charges under a number of EPA
statutes), defendants' exposure to available maximum penalties
can be very large indeed.
The period of imprisonment and amount of fine are contingent
on the "specific offense characteristics" applicable to the
violation. For example, the Guidelines require a greater penalty
for a violation involving hazardous or toxic substances or
pesticides as opposed to conventional environmental pollutants.
In addition, a greater penalty is required if the environmental
offense resulted in an ongoing, continuous or repetitive
discharge rather than a one-time discharge, other such
aggravating (and mitigating) factors are contained in the
Guidelines.
We have no experience yet with the application of these
Guidelines, but within a year or two we expect to report positive
results.
Possible Influences on the Use and Levels of Criminal Penalties
In addition to the factors described above which influence
criminal penalties, there are a number of institutional factors
that affect the use and levels of criminal penalties in
environmental cases. These include the following:
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A-4
o The criminal enforcement program is a small one. It
operates as a supplement to the administrative and
civil judicial enforcement vehicles which are EPA's
principal enforcement tools.
o The extent to which particular Regions and media
programs actively participate in criminal enforcement
still varies.
o Even in those cases selected with the participation of
regional or media program officials, because
investigations are centrally managed by NEIC's Special
Agents, within EPA it is OECM which is ultimately
responsible for case selection and investigation.
o The bottom-line outcomes (sentencings) from federal
criminal prosecutions are determined almost entirely by
DOJ and the U.S. District Courts.
o EPA does not delegate criminal enforcement authority to
States, which are free to run their own, concurrent
criminal enforcement programs, as EPA encourages them
:to- do. Among the States, there is a wide range from
fully developed programs to no criminal enforcement.
Use of Penalties
When EPA criminal charges are filed, there is a greater than
90% likelihood that at least one defendant will be convicted,
(whether by a plea or guilty verdict after a trial), and almost
all EPA criminal cases resulting in a conviction have concluded
with a criminal penalty of some type.
The historical statistics are as follows:
(Pre-1982 data is omitted.) 1982 1983 1984 1985 1986 1987 1988
Investigations (referrals) 20 26 31 40 41 41 60
to DOJ (does not include
investigations jointly with
FBI and/or other agencies)
Investigations (referrals) 7 13 16 40 25 42 41
to DOJ resulting in filing
of charges
Number of defendants charged 14 34 36 40 98 66 98
(individuals and corporations)
Successful cases prosecuted 7 12 14 15 26 27 24
(resulting in a finding of
guilty)
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A-5
Number of defendants 11 28 26 40 66 58 50
convicted
Number of special agents 0 23 26 34 34 40 46
Beginning in early 1987, we began keeping more detailed data
with which to produce additional statistics of interest, including
the following totals:
1987 1988
Referrals of investigations
o resulting in a conviction 27 24
o in which all charges were dismissed
or all defendants acquitted 2 2
Defendants sentenced (see two attached charts)
o entities- 16 16
o individuals 48 31
Total 64 47
Total amount of fines assessed
(before suspension) $3,622,876 $8,645,050
Total months
o sentenced (before suspension) 1,015.25 369
(84 yrs.) (30 yrs.)
o of incarceration ordered 302.5 95
(after suspension, before parole) (25 yrs.) (8 yrs.)
Judicial Penalty Profile
Accurate data on criminal penalties is not available before
the year 1987. Beginning in 1987, when EPA adopted new success
measures under the Strategic Planning and Management System
(SPMS), accurate data has become available. We are now tracking,
by Region and by major statute (or media program), both fines and
jail time. There has been a wide variety in the nature and size
of criminal penalties actually imposed.
While a monetary fine is the typical penalty which is almost
always imposed on a convicted defendant, dollar amounts have
varied widely. Unfortunately, jail time has only been imposed in
about one-sixth of all cases resulting in the conviction of an
individual, and in most of these cases all or a portion of the
time has been suspended. For every three or four months of
imprisonment to which a defendant is sentenced (before
suspension), typically only about one month of incarceration has
been ordered (after suspension), and less than this has been
served as time is reduced for good behavior in prison.
Nevertheless, the threat of incarceration is present in every
criminal case where an individual is charged. In the future, as
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A-6
expect to see more severity, uniformity, and predictability in
sentencing.
To date, the government has not made a concerted effort to
seek compliance-related relief, and it is ordered in only about
10% of all cases sentenced. Compliance-related relief cannot be
easily quantified and is not tracked statistically.
Highest Penalties
Of the few EPA cases brought before 1983, many were
substantial cases for serious violations. Indeed, the largest
criminal fine ever obtained by EPA was in the criminal case of
U.S. v. Allied Chemical Corp., et al.f arising out the actions of
Life Science Products Company. The companies pled guilty to 940
counts in violation of the CWA for unlawful discharges of the
kepone which to this day still contaminates the James River below
the city of Hopewell, Virginia. In 1976, Allied Chemical was
fined $13,240,00 and Life Science Products was fined $3',835,000.
After the fine was levied, in response to a motion for reduction
of sentence the judge ordered Allied to contribute $8 million to
endow an environmental research foundation in Virginia, so that
Allied Chemical actually paid a criminal fine of $5,240,000.
In the cases tried since EPA first had criminal
investigators in 1982, some substantial penalties have been
imposed. Some highlights are the following:
Year/ Summary
Region Case Description
Penalty Imposed/
Paid/Time Served
1988
I Vice-president of real
estate development firm
(CWA)
IV Owner/president of chemical
brokerage (RCRA)
VII Manufacturing of epoxies
and grouting compounds
(RCRA, CWA)
President and treasurer
of pesticide manufacturer
(FIFRA)
6 months (suspended)
$10,000 in fines
5 years (4 years
suspended)
$7,630,000 ($440,000
to be paid in fines;
$950,000 trust fund
to compensate injured
workers; $1,980,000 for
site clean up; balance
suspended)
1 year (10 months
suspended),
$70,000 in fines
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A-7
1987
V Vice-president of a company
operating injection wells
(SDWA)
VII Principal of a distributor
of grain products contam-
inated with a pesticide
(a joint investigation,
with conviction under CWA,
FDCA, and Title 18)
VII Two companies owning and
cleaning river barges
(CWA)
9 months imprisonment
(none suspended)
3 years imprisonment
(none suspended)
$375,000 total fines
(none suspended)
1986
I An industrial discharger
POTW (CWA)
President of shipyard
and his company (CWA,
CAA, CERCLA, TSCA)
II Two brothers and their
companies exporting
hazardous waste (an FBI-
lead investigation, with
convictions under Title 18)
IV An ocean resort, its vice-
president and director of
utilities (CWA)
IV President of a waste
treatment company (RCRA)
$1,025,000 ($225,000 to a
suspended upon construc-
tion of wastewater
treatment works)
$335,000 total fines
($200,000 and his company
(CWA, CAA, suspended
upon its payment as
restitution to response
fund) president required
to certify company's
compliance for term
of five years probation
13 years imprisonment for
each individual (none
suspended); fines
totalling $550,000, and
$66,000 restitution
$600,000 fine for
corporation (none of
suspended, the individual
received smaller fines
and terms of probation)
3 years (none suspended)
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Food-manufacturing national
company and its plant
manager (CWA)
$450,000 fine upon
company ($150,000
suspended upon its
payment to fisheries
improvement fund),
company required to
stay in compliance at all
plants nationwide for
term of three years
probation, 1-year and
1-day sentence upon
plant manager
1985
IX Principal operations
officer of an imported
auto emissions testing
facility (Title 18)
X Wood-preserving company
(RCRA, CWA)
Typical Penalties
5 years (4 1/2 years
suspended)
$1,000,000 ($850,000
suspended upon its
payment into restoration
fund for he site)
Given the newness, small size of the program, and other
limitations of the available data on criminal penalties, one must
be very careful when attempting to draw any conclusions in any
one year regarding typical penalties, i.e., the average amount of
the typical penalty. Because deterrence is mainly a function of
(a) the likelihood of detection, (b) the certainty, and (c) the
severity of punishment, as important as average size may be
(1) the number of criminal penalties, (2) the fact that a
criminal penalty is likely in any case where criminal charges are
filed, and (3) the very criminal (i.e.. severe) nature and like
collateral effects of the "typical" criminal penalty.
During any one year in any given Region or program, the
nature and amounts of criminal penalties obtained can vary
enormously, so that averages are easily skewed. Consequently, it
does not make sense to calculate averages and otherwise analyze
data on criminal penalties to the extent that this study analyzes
data on civil penalties, and we have not done so.
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A-9
Effect of Policies and Initiatives
For those few perpetrators who are determined to break the
law, a mere fine against the corporation is accepted as "business
as usual." Corporations cannot be jailed and cannot be deterred
by the possibility of imprisonment, the most onerous of criminal
sanctions. Thus it is EPA policy to criminally charge culpable
corporate officers, employees, and other individuals whenever
possible, in addition to their corporate employers.
In the typical EPA criminal case, one corporation and two or
three individual persons are defendants, and individual
defendants are more likely to be corporate presidents or other
responsible officials than low-level employees such as truck
drivers or laborers. The policy of charging individual persons
exposes them all to the possibility of jail time. Although only
about one person in six is actually sentenced to serve jail time,
they all run an enormous risk which we believe maximizes the
effectiveness of criminal penalties.
Comparisons of Regional, and of National Media Program, Use and
Levels of Criminal Enforcement Penalties
EPA regional media programs cannot be held directly
accountable for the level (number and typical amount) of
penalties achieved in criminal cases in their areas. This is so
for the institutional reasons, discussed above, and because of
the small size of the criminal enforcement program. It is to be
expected that in any one year a number of regional media programs
will not have a criminal case. However, for each Region as a
whole, over time the level of criminal penalties achieved will be
at least a very rough measure of whether the Region has
successfully applied the criminal enforcement tool.
For each national media enforcement program as a whole, over
time the level (number and typical amount) of criminal penalties
achieved will be an even rougher measure of whether the national
program has successfully applied the criminal enforcement tool in
its regulatory area. This is true again for the institutional
reasons discussed above, and also because of the small size of
the criminal enforcement program. In addition, most criminal
cases are inherently cross-media, and the available media-by-
media data is inevitably somewhat misleading. This is so because
most criminal cases include charges placed under several
statutes, yet for statistical purposes each case is listed only
under its predominant statute. (Thus, for example, a case may be
sentenced primarily under RCRA; additional sentences in the same
case under CERCLA and other general criminal laws are not
reported separately in the SPMS statistical data.) Furthermore,
where a defendant is convicted of multiple statutory violations,
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A-10
unless the sentencing judge is unusually precise it is usually
impossible to apportion the totality of the sentence to the
individual violations and thus among the particular statutes
involved. Despite these "real-world" obstacles to statistical
truth, however, OECM is now collecting the underlying data for
each and every statutory charge placed against any defendant, and
in the future greater media-by-media program specificity should
be possible.
Given the foregoing, and because there is as yet no direct
measure of regional or program involvement in criminal
enforcement, it is to be reiterated that one must be very careful
when attempting to draw any conclusions in any one year regarding
the use and levels of criminal penalties by a Region as a whole
or by a national media program. Yet perhaps from the available
data we may begin to make some initial observations, and even
postulate some tentative conclusions, as to the relative and
absolute use of criminal enforcement in particular areas.
It must be true that the number of defendants sentenced in a
given area is at least to some varying extent a reflection of the
involvement of each Region and national media program in the
small, new criminal enforcement effort. Certainly those Regions
and programs which increase their supportrfor and participation
in criminal enforcement (and pursue more complex cases involving
greater environmental threat or harm) may expect that, over time,
the number and the average amount of criminal penalties in their
areas will increase proportionately. And while increased
environmental compliance through deterrence and increased respect
for the integrity of EPA programs cannot be measured, these will
be the ripening fruits of criminal enforcement.
Regional Interviews and Case File Review of Implementation of
Policy
The Office of Criminal Enforcement Counsel monitors and
encourages Regional and media program participation in criminal
enforcement. Beginning in Fiscal Year 1988 OCEC initiated a
process of periodic review of Regional participation in the
criminal enforcement program, which consists of meetings at
selected Regional offices with management personnel from all
media programs, the Regional and Deputy Regional Administrators,
Regional Counsel's Office, the Office of Criminal Investigations,
and with representatives from the Department of Justice. While
specific case files and penalties achieved do not figure in the
agenda for these meetings, targeting in specific media for
criminal enforcement action and the achievement of deterrence
through a given statute's range in criminal penalties are
considered.
Attachment
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A-14
DEFENDANTS CONVICTED, BY PROGRAM
INDIVIDUALS CONVICTED FY 1988
OTHER (3.2%)
FIFRA (5.5%)
T5CA (3.2%)
WATER (19.4%)
AIR (9.7%)
RCRA (58.1%)
DEFENDANTS CONVICTED, BY PROGRAM
CORPORATIONS CONVICTED FY 1988
CERCLA (6.3%)
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WATER (37.5%)
RCRA (43.8%)
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Appendix B
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
MAR 17 1989
MEMORANDUM
SUBJECT: CWA Civil Judicial And Administrative Penalty Practices
Report for FY88
FROM: Robert G. Heiss
Associate Enforcement Counsel
for Water
James R. Eldgr/TJirector
Office of Water Enforcement
and Penults
TO: Gerald A. Bryan, Director
Office of Compliance Analysis
and Program Operations
Attached is the Clean Water Act Civil Judicial and
Administrative Penalty Practices Report covering cases concluded
in FY88. Pursuant to your request, it has been revised from the
submission earlier this year to reflect the face amount of
judicial penalties without reduction to present value for those
penalties to be paid over extended periods. If you have any
questions regarding this report please contact Kathy Summerlee or
David Drelich of the Office of Enforcement and Compliance
Monitoring at 382-2879 or 382-2949, respectively, or Carol Hudson
Jones of the Office of Water Enforcement and Permits at 475-8487.
We look forward to receiving the final agency-wide report
when it is completed.
Attachment
cc: Cheryl Wasserman
J. William Jordan
Kathy Summerlee
Tonia D. Bandrowicz
David Drelich
Carol Hudson Jones
Ken Keith
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B-2
CWA CIVIL JUDICIAL AND ADMINISTRATIVE
PENALTY PRACTICES REPORT FOR FY88
1. Use and Levels of Penalties
This report summarizes the use and levels of civil judicial
and administrative penalties in FY88 in cases concluded under the
Clean Water Act's National Pollutant Discharge Elimination System
("NPDES") program. Separate reports have been prepared
summarizing FY88 penalties for Clean Water Act criminal actions
and Section 404 (wetlands) civil judicial actions.
Section 309(d) provides that any person who violates certain
enumerated sections of the Clean Water Act, any NPDES or Section
404 permit condition or limitation implementing any one of those
enumerated sections, any requirement in a pretreatment program,
or any EPA-issued administrative order, shall be subject to a
penalty of $25,000 per day for each such violation. Prior to
enactment of the Water Quality Act ("WQA") in February, 1987,
such violations were subject to a penalty of $10,000 per day per
violation.
Section 309(d), as amended by the WQA of 1987, also lists
criteria which the court must consider in determining the amount
of the civil penalty. Specifically, the court must consider "the
seriousness of the violation or violations, the economic benefit
(if any) resulting from the violation, any history of such
violations, any good-faith efforts to comply with the applicable
requirements, the economic impact of the penalty on the violator,
and such other matters as justice may require."
The authority to seek administrative NPDES penalties is
found in Section 309(g) of the Act. Prior to enactment of the
WQA in 1987, the agency did not have authority to seek
administrative penalties. The WQA authorizes EPA to institute
Class I or Class II administrative penalty actions. In Class I
actions, EPA may seek penalties of up to $25,000, at a rate not
to exceed $10,000 per violation. In Class II actions, the
maximum is $125,000, also assessed at a rate not to exceed
$10,000 per day. Class II penalty proceedings must conform to
the Administrative Procedures Act. EPA issued guidance on
There were no judicial cases concluded under Section 311
of the Clean Water Act in FY88. The amount of administrative
penalties obtained under Section 311 in FY88 was negligible and
therefore was not added to the administrative penalty data base.
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B-3
administrative penalty orders in August, 1987 and Regional
Offices began imposing penalties shortly thereafter. Although
several administrative cases were commenced in FY87, no cases
were concluded until FY88.
For purposes of settlement, penalties are calculated
according to EPA's February, 1986 Clean Water Act penalty policy.
An addendum to the policy for the calculation of administrative
penalties was issued in August, 1987. Essentially, the policy
requires the recoupment of economic benefit and a gravity
component. Adjustments are authorized for ability to pay and
litigation considerations. The economic benefit is typically
calculated using EPA's BEN computer software program.
2. Statutory Changes to Penalty Authorities
There have been no changes to the penalty authorities under
the Clean Water Act since the WQA of 1987.
3. Possible Influences on Use and Level of Penalties
There are several factors which may have affected the amount
of penalties the United States has received in settling or
litigating Clean Water Act cases in FY88:
a. The increase in the civil penalty liability from
$10,000 to $25,000 provided by the WQA of 1987;
b. Addition of administrative penalty authority in the WQA
of 1987;
c. The Clean Water Act settlement penalty policy which,
absent ability to pay or litigation considerations, requires
recoupment of economic benefit and a gravity component;
d. Use of the BEN computer model to calculate economic
benefit; and
e. The agency's emphasis on enforcement of the National
Municipal Policy and the pretreatment regulations.
4. Use of Penalties
Ninety-Eight percent of the judicial cases concluded in FY88
were settled with a penalty. See Table 1. This continues the
post-1985 trend noted in last year's report of concluding
virtually all Clean Water Act civil judicial cases with a
penalty. See Figure 1 (Use of Penalties in CWA Judicial Cases
FY75-88).
All administrative penalty actions in FY88 were concluded
with a penalty. See Table 4.
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B-4
5. Judicial Penalty Profile
The penalties which establish the data base for the judicial
penalty profile include only upfront, cash penalties payable to
the United States.
Only entered consent decrees or judicial decisions are
counted as concluded cases in the data base. Multiple complaints
consolidated in one consent decree or decision are counted as one
concluded case.
a. Number of Cases
The total number of judicial cases concluded in FY88
(including those concluded without a penalty) was 87, the highest
annual total ever. See Table 1. This was an increase from the
figures reported for FY87 and FY86 (i.e., 66 and 56 cases,
respectively). See Figure 1.
Figure 1 shows that the number of cases brought each year
has steadily increased in recent years from the low point which
occurred in the early eighties (FY82-84) to the higher numbers
seen in the late seventies.
b. Total Penalties
Total penalties for all concluded judicial cases in FY88 was
$11,885,858. See Table 1. This amount is nearly double the FY87
figure of $6,872,940 and by far the highest amount ever collected
in one year for the period FY75 through FY88. See Figure 2
(Clean Water Act Penalties By Year - Judicial Cases).
c. Typical Penalties
The median penalty for all concluded judicial cases in FY88
(including those concluded without a penalty) was $37,500. See
Table 1. This is a decrease from the FY87 median of $41,000 and
is consistent with the FY86 median. See Figure 3 (Median
Penalties - Clean Water Act - All Concluded Judicial Cases).
A review of Figures 4 (Distribution CWA Judicial Penalties
FY88) and 5 and 6 (Distribution CWA Judicial Penalties FY87 and
FY86, respectively) indicates that this change in the median is
not due to a decrease in the number of cases in the higher
penalty ranges (i.e., $10,000 to $999,999 range) but to a
disproportionate increase in the number of cases in the lower
penalty ranges (i.e., 0 to $9,999 range).
O
Although this report concerns cash penalties, we note
that the Court required the defendant in the Boston Harbor case
to undertake and complete a $2,000,000 environmental project as
well as pay a civil penalty.
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B-5
A comparison of Figure 7 (Distribution CWA Judicial
Penalties - Average Yearly FY75 - 85) with Figure 4 indicates
that there has been a shift in recent years toward cases with
higher penalties.
d. Highest Penalties
The highest penalty in FY88 was concluded by Region 2
against the Puerto Rico Aqueduct Sewer Authority for $2,000,000.
The next highest penalty was concluded by Region 9 against
Chevron for $1,500,000. There was also a large case concluded by
Region 3 for $840,000 against Atlas Powder. See Table 3.
e. Comparison of Regional Uses and Levels of Judicial
Penalties
Four Regions concluded cases with penalties of over 1
million dollars in FY88. Region 2 obtained the largest amount of
penalties, $3,987,451. Regions 9, 6, and 4 obtained penalties of
$1,606,000, 1,556,500 and $1,230,05.0, respectively. See Table 3.
In terms of the number of cases concluded, Region 2 also
concluded the most cases (21) followed by Regions 6 and 4 (16 and
15, respectively). See Table 3.
Figure 8 (Regional Distribution CWA Penalties FY88 -
Judicial Penalties) shows the percentage of total Clean Water Act
penalties concluded by each Region and the percentage of the
total number of cases concluded by each Region.
6. Administrative Penalty Profile
The penalties which constitute the data base for the
administrative penalty profile reflect upfront, cash penalties
which are to be paid to the United States generally within 30 to
60 days. In a few instances payment terms extended beyond 60
days without interest payment. Since discounting these few
extended payments to present value would not change the data
significantly, they have not been discounted.
a. Total Penalties and Number and Type of Cases
In FY88 the total penalties for all concluded administrative
penalty orders was $541,800. See Table 4. The total number of
administrative penalty orders was 40. Of these, 32 were Class I
penalty orders and 8 were Class II penalty orders. The penalty
A breakdown of the penalty ranges for each year from FY75
through FY85 was not available. Therefore the number of cases in
each penalty range for the period FY75 through FY88 was divided
by the number of years in the period (i.e., 10) to produce a
yearly average which could be compared with the yearly data for
FY88.
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B-6
orders were issued for a variety of violations: effluent
violations (18); failure to submit discharge monitoring reports
or submission of late reports (9); pretreatment violations (5);
failure to start or complete scheduled construction (these are
categorized as National Municipal Policy violations) (3); and
unpermitted facilities (5).
b. Efficiencies of Use
The administrative penalty orders in FY88 were concluded, on
an average, within 136 days of being issued. There was
considerable variation in the time taken to conclude an
administrative penalty order with 49 days the shortest duration
and 251 the longest. All of the penalty orders concluded in FY88
were achieved by consent order; none of the concluded cases were
decided as a result of a formal hearing.
c. Typical Penalties
The median penalty for administrative penalty orders
concluded in FY88 was $8,500. See Table 4. The median for Class
I actions was $7,400 and for Class II actions was $39,500. See
Table 4.
The majority of cases concluded in FY88 were in the 0 to
$10,000 range (26 cases). See Table 5 and Figure 9.
d. Penalties Issued to Municipalities
Fifteen of the 40 respondents were municipalities. The
median penalty assessed against municipalities ($8,000) was
slightly lower than the median for all administrative penalty
orders concluded in FY88 ($8,500). Major municipalities were
assessed a median penalty of $12,500.
e. Pretreatroent Penalties
Five penalties were issued for pretreatment violations,
three to industrial users (lUs) and 2 to municipalities for
failure to implement all or part of a pretreatment program. The
median penalty assessed against lUs was $45,000; the median
penalty assessed against a municipality was $18,750.
f. Highest Penalties
The largest penalty order concluded in FY88 was issued by
Region 1 against Dartmouth Woolen Mills, Inc. for $60,000. See
Table 6. The next highest, also issued by Region 1, was for
$50,000 against an industrial user, Carr Leather Co. Both
Regions 6 and 10 issued penalties for $45,000. The Region 10
penalty for $45,000 was issued to both the City of Kodiak, Alaska
as owner and the Kodiak Fish Reduction Corp. as operator. The
highest penalty issued solely to a municipality was for $25,000
against the City of Mount Pleasant, Texas.
-------
B-7
g. Comparison of Regional Use and Levels of Penalties
Region 6 issued over half the administrative penalty orders
concluded in FY88. See Figure 10. In Region 6 authority for the
NPDES program is vested in EPA in all but one state. Region 1
and 10 had the second and third largest number of final
administrative penalty orders (6 and 5, respectively).
Region 6 obtained the highest amount of penalties
($212,500). Region 1 had the second highest amount of penalties
($162,500). See Figure 11.
-------
B-8
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-------
B-12
FIGURE 1
UJ
$
o
u.
0
IT
UJ
m
USE OF PENALTIES IN CWA JUDICIAL CASES
90
80 -
70 -
60 -
50 -
40 -
30 -
20 -
10
FY 1975-1988
1975 76 77 78 79 80 81 82 83 84 85 86 87 1988
FISCAL YEAR
WITH PENALTY
WfTHOUT PENALTY
<
ui
n
13
12
11
10
9
8
7
6
5
4
3
2
1
0
FIGURE 2
CLEAN WATER ACT PENALTIES, BY YEAR
JUDICIAL CASES
1975 76 77 78 79
80 81 8
FISCAL YEARS
83
84 85
r
86
87 1988
-------
B-13
FIGURE 3
It
gt
60
50 -
40 -
30 -
20 -
10 -
MEDIAN PENALTIES - CLEAN WATER ACT
ALL CONCLUDED JUDICIAL CASES
i i i i i r i i i i T i i i
1975 76 77 78 79 80 81 82 83 84 85 86 87 1988
FISCAL YEAR
L.
o
LU
ID
D
Z
30
28
26
24
22
20
18
16
14
12
10
8
6
4
2
0
FIGURE 4
DISTRIBUTION CWA JUDICIAL PENALTIES
FY 1988
ZERO $ <=$5000 <$10000 <$25000 <$50000 <$100000 <$1 MILL >=$1 MILL
RANGES
-------
V)
Ul
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18
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6
4
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0
B-14
FIGURE 5
DISTRIBUTION CWA JUDICIAL PENALTIES
FY 1987
ZERO $ <=$5000 <$10000 <$25000 <$50000 <$100000 <$1 MILL >=$1 MILL
RANGES
l/l
id
LL.
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D
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25
24
22
20
18
16
14
12
10
8
6
4
2
0
FIGURE 6
DISTRIBUTION CWA JUDICIAL PENALTIES
FY 1986
ZERO $ <=$5000 <$10000 <$25000 <$50000 <$100000 <$1 MILL >=$1 MILL
RANGES
-------
B-15
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12
10
8
6
4
2
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FIGURE 7
DISTRIBUTION CWA JUDICIAL PENALTIES
AVERAGE YEARLY FY 75-85
1
35%
ZERO $ <=$5000 <$10000 <$25000 <$50000 <$100000 <$1 MILL >=$1 MILL
RANGES
FIGURE 8
REGIONAL DISTRIBUTION.CWA PENALTIES
FY 1988 JUDICIAL PENALTIES
30% -
25% -
20% -
15% -
10% -
10
DOLLARS
CASES
-------
B-16
i/i
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14 -
13 -
12 -
11 -
10 -
9 -
8 -
7 -
6 -
5 -
4 -
3 -
2 -
1 -
0 -•
FIGURE 9
DISTRIBUTION OF CWA PENALTIES
ADMINISTRATIVE CASES - FY 1988
ZERO $ <=$5000 <$10000 <$25000 <$50000 <$100000 <=$125000
RANGES
-------
B-17
u.
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24
22 -
20 -
18 -
16 -
14 -
12 -
10 -
8 -
6
4 -
2 -
0
FIGURE 10
REGIONAL DISTRIBUTION CWA PENALTIES
NUMBER OF FY 1988 ADMINISTRATIVE CASES
I 23456789
REGIONS
FIGURE 11
REGIONAL DISTRIBUTION CWA PENALTIES
DOLLARS - FY 1988 ADMINISTRATIVE CASES
10
5 6
REGIONS
10
-------
B-18
NOTES
-------
Appendix C
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
MAR24 389
MEMORANDUM
SUBJECT: SDWA Civil Penalty Practices Report for FY88
FROM: Robert G. Heiss
Associate Enforcement Counsel
for Water
Robert J. Blanco, Director
State Programs Division
TO: Gerald A. Bryan, Director
Office of Compliance Analysis and
Program Operations
Attached is the Safe Drinking Water Act Civil Penalty
Practices Report covering penalties concluded in FY88. Pursuant
to your request, it has been revised from the January 27, 1989
submission to reflect the face amount of judicial penalties
without reduction to present value for those penalties to be paid
over extended periods. If you have any questions regarding this
report, please contact Kathy Sununerlee or David Drelich of the
Office of Enforcement and Compliance Monitoring at 382-2879 or
382-2949, respectively, or Don Olson of Underground Injection
Control Branch at 382-5558.
We look forward to receiving the final agency-wide report
when it is completed.
Attachment
cc: Cheryl Wasserman
Francoise Brasier
Kathy Summerlee
Tonia D. Bandrowicz
David Drelich
Don Olson
-------
C-2
SAFE DRINKING WATER ACT CIVIL PENALTY PRACTICES REPORT FOR FY88
1. Use and Levels of Penalties
This report summarizes the use and levels of civil judicial
and administrative penalties in FY88 in cases concluded under the
Safe Drinking Water Act ("SDWA").
The authority to seek penalties for violations of the Public
Water Supply ("PWS") and Underground Injection Control ("UIC")
programs is found in Section 1414 and 1423 of the SDWA,
respectively. When Congress amended the SDWA in June, 1986, it
increased civil judicial penalties for PWS and UIC violations
from $5,000 to $25,000 a day and eliminated the need to show
"willfulness" as a precondition to the imposition of penalties in
the PWS program.
Congress also established administrative remedies in both
the PWS and UIC programs, including the authority to issue
administrative compliance orders to violators of SDWA
requirements. If any person fails to comply with a PWS
administrative compliance order, the Administrator is authorized
to seek either judicial penalties of $25,000 a day or, if the
total penalty is $5,000 or less, administrative penalties.
For violations of UIC administrative compliance orders or
the requirements of the SDWA, the Administrator may seek either
judicial penalties of $25,000 a day or administrative penalties
of up to a maximum of $125,000 (assessed at the rate of $5,000 or
$10,000 per day of violation depending on the type of injection
activity at issue). Administrative penalties under both the PWS
and UIC programs can only be assessed after providing the
respondent with the opportunity for a hearing.
The November 17, 1983 "Safe Drinking Water Act Public Water
System Settlements—Interim Guidance," governs PWS judicial
penalty settlements. Penalty settlement policy for the UIC
judicial program and the SDWA's administrative penalty program is
governed by the agency's more general February 16 > 1984, "Policy
on Civil Penalties."
2. Statutory Changes to Penalty Authorities
There have been no changes to the penalty authorities under
the SDWA since the statutory amendments in 1986.
3. Possible Influences on the Use and Levels of Civil Penalties
The penalty guidance documents referred to above, as well as
the April 14, 1987 UIC Compliance Strategy Guidance, have had an
effect on the use and levels of civil penalties the U.S. has
received in settling or litigating SDWA cases in FY88.
-------
C-3
The reason that the majority of the concluded cases contain
no penalties or penalties of under $5,000 may be due to the fact
that many of the violators are small operators often having
ability to pay problems.
4. Use of Penalties
All six of the SDWA judicial cases concluded in FY88 were
concluded with a penalty. See Table 1.
Forty-two percent of the administrative cases concluded in
FY88 were concluded with penalties (40 out of a total of 95
cases). See Table 3.
5. Judicial Penalty Profile
The penalties which establish the data base for the judicial
penalty profile include only upfront, cash penalties, payable to
the United States. Only entered consent decrees or judicial
decisions are counted as concluded cases in the data base.
The total number of judicial cases concluded in FY88 was 6.
See Table 1. This is consistent with FY87 in which the same
number of cases were concluded. In FY86, two judicial cases were
concluded.
Total judicial penalties for FY88 are $49,740. See. Table
1. This amount is an increase from FY87's total of $19,140 and
FY86's total of $2,000.
The median judicial penalty for FY88 ($4,900) was also an
increase over last year's figure ($3,000). See Table 1.
The highest penalty collected in FY88 was $25,000. See
Table 1.
Only Regions 4, 5 and 8 concluded SDWA judicial cases, with
Region 5 concluding the most cases (4) and Region 4 collecting
the highest penalty ($25,000). A summary of the SDWA judicial
cases by Region follows:
Region 4 Roskee $25,000
Region 5 Devon $ 5,000
Tussey $ 5,000
Carlisle $ 4,800
Carefree $ 7,500
Region 8 Merritt $ 2,440
-------
C-4
5. Administrative Penalty Profile
EPA concluded a total of 95 administrative cases in FY88
(including those cases concluded without a penalty). See Table
3. This is an increase over the 18 cases concluded in FY87. In
FY88 more cases were concluded with a penalty (42%) than in FY87
(17%).
All but one of the SDWA administrative cases in FY88 were
concluded under the UIC program. The only PWS program case that
was concluded in FY88 was in Region 3 for $1,000.
The total administrative penalties obtained in FY88 is
$422,890. See Table 3. This is a dramatic increase over the
FY87 administrative total of $19,550 and considerably more than
the FY88 judicial total.
The median penalty for FY88 is $2,750. See Table 3. The
greatest number of cases in FY88 were in the $5,000 or less
penalty range. See Figure 1.
The highest penalty in FY88 is $125,000 (the statutory
maximum) collected by Region 4 against Ashland Oil. See Table 3.
In FY87, the highest penalty was only $10,000.
Regions 3, 4, 5, 6, 8 and 9 concluded SDWA cases in FY88.
See Table 3. Regions 3, 4, and 6 all concluded over 20 cases
each. Region 4 had the highest number of cases (25) and the most
penalties ($274,000).
-------
C-5
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DISTRIBUTION OF PENALTIES - SDWA
ADMINISTRATIVE CASES - FY 1988
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RANGES
-------
Appendix D
A _\ UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
' WASHINGTON. D.C. 20460
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OFFICE OF
WATER
MEMORANDUM
SUBJECT: Submission of CWA Section 404 Civil Penalty Report
for FY 1988
FROM: Suzanne E. Schwartz, Director
Regulatory Activities Division
Office of Wetlands Protection
TO: Gerald A. Bryan, Director
'Office of Compliance Analysis and Program Operations
Office of Enforcement and Compliance Monitoring
The Office of Wetlands Protection (OWP) is pleased to
submit to your office for review a copy of the Clean Water Act
Section 404 Civil Penalty Report covering penalties concluded in
FY 1988. Since it was during FY 1988 that EPA first initiated
and concluded administrative penalty actions for 404 violations,
we suggest including a statement to this effect in the Executive
Summary of the Report.
OWP only learned of the requirement to submit this report on
December 5. Therefore, per a conversation with George Alderson,
we are submitting a first draft of the Clean Water Act Section
404 submission at this time.
Should you have any questions concerning this submission,
please contact Joseph DaVia of the Enforcement and Regulatory
Policy Staff at 245-3902.
Attachment
cc: John W. Lyon
OECM-Water (LE-134W)
George Alderson
Compliance Policy and Planning Branch (LE-133)
Becky Barclay
Compliance Policy and Planning Branch (LE-133)
-------
D-2
CWA SECTION 404 CIVIL PENALTY REPORT FOR FY 1988
Program Description
Section 404 of the Clean Water Act establishes a program to
regulate the discharge of dredged or fill material into "waters
of the United States," which includes most wetlands. EPA and the
Army Corps of Engineers jointly implement Section 404, with the
Corps responsible for deciding whether to issue or deny permits.
EPA, in conjunction with the Corps, develops Guidelines under
Section 404(b)(l) which contain the environmental standards that
the Corps must apply when evaluating permit applications. Under
Section 404(c), EPA has authority to prohibit or restrict
discharges if it determines that the discharge would have
unacceptable adverse effects on the resource. EPA's other
Section 404 responsibilities include determining and defining the
geographic scope of Section 404.
Section 404 enforcement differs from other Clean Water Act
enforcement programs in several ways. For one, EPA and the Corps
share 404 enforcement authority. Section 309 of the Clean Water
Act gives EPA the authority to act against persons who discharge
without a permit and also to enforce against violations of 404
permit conditions. Section 309 provides EPA with a variety of
enforcement mechanisms. Our first line of defense is the
administrative compliance order issued pursuant to Section
309(a), which generally requires a violator to stop all illegal
discharges and, where appropriate, to remove the fill and/or
restore the site. Section 309(g) authorizes EPA to assess
administrative civil penalties for, among other things,
violations of Section 404. A third enforcement mechanism allows
EPA to seek monetary penalties, injunctive relief, and even
prison sentences through judicial action pursuant to Sections
309(b) and (c). Under these Sections, EPA may refer cases to the
Department of Justice for criminal and/or civil litigation.
Since the Corps has a larger field presence and is the federal
permitting authority, EPA has focused its resources on
identifying and enforcing against unpermitted discharges of
dredged or fill material. The Corps has the lead on acting
against violations of Corps-issued permits, and has also been
responsible for a significant amount of the enforcement efforts
against unauthorized discharges. The administrative and judicial
404 enforcement actions discussed below only reflect those
initiated solely by EPA or jointly by EPA and the Corps.
Another distinction is the nature of the 404 discharge,
which most often converts waters of the U.S., including wetlands,
into fastland. Thus, enforcement actions which only require a
violator to stop the illegal discharge activity or which impose
monetary penalties may not adequately redress the environmental
harm caused by such activity. As a result, EPA Section 404
-------
D-3
enforcement efforts generally also seek timely removal of the
illegal fill and, where necessary, restoration of the site.
Turning to the dischargers, many are not large corporations,
as is the case in other Clean Water Act programs. Instead, they
are often "mom and pop" businesses, and usually private
individual landowners. This becomes particularly significant
when considering "ability to pay" in calculating a penalty
amount. This is also reflected in the fact that 404 discharges
may occur at any time at any place where waters of the U.S.
occur. Another difference between Section 404 and other Clean
Water Act enforcement programs is that, since only one state
(Michigan) has assumed the 404 program, virtually all 404
enforcement remains the responsibility of EPA and the Corps.
Statutory Changes
The Water Quality Act of 1987 (WQA) made several changes to
EPA's 404 enforcement authorities. It amended Section 309(d) to
increase judicial civil penalties from $10,000 per day per
violation to $25,000 per day per violation. As amended, Section
309(d) also enumerates the factors the courts must consider in
assessing judicial penalties, which are: seriousness of the
violation(s), economic benefit resulting from the violation(s),
the violator's compliance history and any good-faith efforts to
comply, the economic impact of the penalty on the violator, and
"such matters as justice may require." The 1987 amendments also
amended Section 309(c) to increase maximum allowable penalties
and imprisonment for knowing criminal violations of Section 404.
Further, the WQA established a new Section 309(g) which
gives the Agency and the Secretary of the Army the authority to
assess administrative civil penalties for violations of Section
404. The administrative penalties are divided into two separate
classes. Class I penalties are assessed at a rate of up to
$25,000 through non-Administrative Procedures Act (APA) methods.
Class II penalties are assessed at a rate of up to the statutory
maximum of $125,000, where the APA procedures are followed.
Pursuant to Section 309(g), the Administrator and the Secretary
of the Army, when assessing an administrative penalty, "shall
take into account the nature, circumstances, extent and gravity
of the violation, or violations, and, with respect to the
violator, ability to pay, any prior history of such violations,
the degree of culpability, economic benefit or savings (if any)
resulting from the violation and such other matters as justice
may require." FY 1988 marks the first year that EPA has
exercised its new authority to assess administrative penalties
for Section 404 violations.
Possible Influences on the Use and Levels of Civil Penalties
There are several factors which may have affected the amount
-------
D-4
of money EPA has received in settling and litigating Section 404
enforcement cases. In 1987, EPA issued draft guidance on
settling CWA administrative penalty actions for Section 404
violations, with final guidance scheduled for completion in
FY 1989. This guidance supplements the August 1987 OECM/OW
administrative penalty guidance by specifically addressing the
unique informational requirements and needs for assessing
penalties under Section 404. In particular, given the lack of
quantitative standards dealing with 404 discharges, the guidance
is more qualitative than quantitative in nature. It discusses
the statutory factors to be considered when assessing
administrative penalties as they relate to Section 404
violations, and provides recommended settlement ranges based on
the environmental significance of the violation and the
compliance significance of the violator.
Experience to date has indicated that penalty levels may
need to be adjusted for economic benefit and ability to pay
considerations. However, determining the economic benefit
derived by the violator by discharging without a permit may be
difficult. For one thing, economic benefit is not always
relevant, e.g., where the fill is removed and the site is
restored to its original condition. Even where economic benefit
is relevant, it may be quite difficult to calculate. Unlike the
CWA Section 402 program, economic benefit in the context of a
Section 404 violation will not be based on "costs saved from
failure to install and maintain proper pollution control
equipment." Since many Section 404 violators are individual land
owners or small businesses, in appropriate cases, penalty levels
may need to be adjusted for ability to pay considerations.
Penalty levels in EPA Section 404 civil judicial referrals
are assessed based on the statutory language found in Section
309(d) of the Clean Water Act, as discussed above. Experience to
date indicates that many courts are willing to assess relatively
large penalties for violations of Section 404. In addition,
given the need in many 404 cases for removal and/or restoration,
some courts have tied the level of a monetary penalty to the
violator's agreement to complete such removal and/or restoration.
This was the case in U.S. v. Cumberland Farms of Connecticut.
Inc.. 647 F. Supp. 1166 (D. Mass. 1986), aff., 826 F. 2nd 1151
(1st Cir. 1987), where the district court assessed a $540,000
penalty, $390,000 of which would be remitted after the defendant
restored the wetlands satisfactorily.
Use of Penalties
Only recently, since 1985, has EPA had an active nationwide
presence in Section 404 enforcement. Figure 1 graphs EPA's
Section 404 enforcement activities since 1986. Since then, the
Regions have been referring an increasing number of cases to DOJ.
Also, in FY 1988 the Regions began to implement the new
-------
D-5
administrative penalty authority, with actions initiated in four
Regions. Nevertheless, the number of EPA 404 enforcement actions
remains relatively small, especially when compared to other
Agency enforcement programs. All the 404 cases concluded in FY
1988 were against persons who discharged without a permit. All
five of the administrative penalty cases concluded in FY 1988
assessed monetary penalties.
Judicial Penalty Profile
Five judicial actions were concluded in FY 1988:
Edward Tull Region 3 $25,000
[4 separate actions]
Joseph Carter Region 4 $ 0
The $25,000 penalty assessed against Edward Tull was part of
a settlement agreement which resolved four separate Section 404
enforcement actions against this defendant. In addition, the
settlement agreement also directs the defendant to undertake some
restoration. In the Joseph Carter case, the judge refused to
grant monetary penalties because the defendant died. However,
the judge ruled for total restoration of the site, which was
completed.
Administrative Penalty Profile
In FY 1988, EPA initiated 18 administrative penalty actions
for unauthorized Section 404 discharges. Of these, five actions
were finalized during FY 1988. Four cases were settled by
consent agreements:
Kirk Corporation Region 5 $60,000
Woodland Development Corporation Region 5 $15,000
Portrait Homes of Chicago, Inc. Region 5 $19,000
George Wilcox, Wilcox Construction Co. Region 6 $ 4,000
In the fifth case, the respondent defaulted, resulting in
issuance of a unilateral final order assessing a penalty of
$24,000. The respondent subsequently appealed the order to
federal district court. Of the 18 administrative penalty actions
initiated in FY 1988, the average Class I proposed penalty was
$13,000, and the average Class II proposed penalty was $102,000.
As described earlier, in most Section 404 enforcement
actions, the immediate goal is removal of the illegal fill and,
-------
D-6
where necessary, restoration of the site. Thus, the initial
Agency response to an unauthorized discharge is frequently a
Section 309(a) administrative compliance order (AO). The 404
program issued 93 AO's in FY 1988 (Figure 2). The number of
administrative compliance orders has increased rather steadily
since EPA began to strengthen its wetlands enforcement program in
1985.
Comparisons of Regional Use and Levels of Penalties
Given the small number of administrative and judicial cases
concluded, no detailed regional analyses are possible.
-------
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Appendix E
;>
* mm | UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
/ WASHINGTON, D.C. 20460
APR I 4
OFFICE OF
ENFORCEMENT AND
COMPLIANCE MONITORING
MEMORANDUM
SUBJECT: Submission of CAA Civil Penalty Practices Report
for FY 88 ~-N
v. ^ "V
FROM: Terrel1 E. Hunt --""^
Associate Enforcement Counsel
Air Enforcement Division
,,- . ^-"--i -
TO: Gerald A. Bryan, Director
Office of Compliance Analysis
and Program Operations
Attached is the CAA Civil Penalty Practices Report covering
penalties concluded in FY 88 in accordance with your memorandum
of November 4, 1988. As requested, the report data and text
follow the format outlined in the memorandum. This report
updates the report we submitted on December 13, 1988 to reflect
additional data recently submitted by one of the Regions. If
there are any questions, please have your staff contact Elise
Hoerath of OECM at 382-2842.
Attachment
cc: Gerald Kraus
George Alderson
-------
E-2
Stationary Source Program; Use and Levels of Penalties
The 1977 amendments to the Clean Air Act authorized two
sources of civil penalty authority: civil judicial under Section
113 and civil administrative under Section 120. The Section 113
judicial penalty authority is limited to $25,000 per day of
violation. In assessing a penalty, a court may consider the size
of the business, the seriousness of the violation, and the impact
of the penalty on the business. Section 120 is specifically
designed to recover the economic benefit of noncompliance which a
source may have gained through its failure to comply.
Penalties under Section 113 are now calculated according to
the Clean Air Act Stationary Source Civil Penalty Policy, issued
September 12, 1984 and revised on March 25, 1987. Before that,
the Agency-wide policies of 1978 and 1980 governed air penalties.
The current policy covers specific situations such as PSD,
asbestos demolition and renovation, and vinyl chloride in
appendices to the policy.
Section 120 penalties focus exclusively on the economic
benefits of noncompliance and are calculated according to the
formula set forth in the Technical Support Document and the
Instruction Manual. EPA .may settle for an amount less than the
penalty calculated under the Technical Support Document in some
circumstances in accordance with a guidance issued March 19, 1985
entitled "Permissible Grounds for Settlement of Noncompliance
Penalties Under Section 120 of the Clean Air Act."
Use of Penalties
Seventy-four judicial cases were concluded in FY 88. This
year, the percentage of cases where a penalty was imposed has
remained high. The percentage of cases which were concluded with
a penalty has increased from 38% in FY 79, to 80% in FY 85, 96%
in FY 86, 95% in FY 87 and 96% in FY 88.
Nearly all judicial cases were settled; only three cases in
FY 88 were decided in court.
All administrative cases under §120 concluded in FY 88 were
concluded with a penalty.
Judicial Penalty Profile
Highest Penalties
Three cases in FY 88 imposed penalties over one million
dollars. These are:
$1,750,000 Region V
$1,350,000 Region III
$1,250,000 Region VI
-------
E-3
These three large penalties account for 49% of all cash
penalties imposed in the Air program and only 4% of the number of
cases concluded in FY 88.
Typical Penalties
This year total judicial stationary source penalties
increased significantly, up to $8,914,384 in FY 88 from
$5,285,700 in FY 86 and $5,542,250 in FY 87. The total number of
cases concluded also increased significantly from 50 in FY 86 and
54 in FY 87 to 74 in FY 88. In addition, the average penalty
increased from $105,714 in FY 86 and $102,634 in FY 87 to
$125,555 in FY 88. The continuing trends in higher numbers of
cases concluding with a penalty and higher average penalties have
resulted in overall yearly totals increasing steadily.
However, the median penalties are usually a better
indication of a typical penalty than the average. This is
because averages can be skewed by a few large penalties, such as
the three cases over $1,000,000 referred to above which accounted
for 49% of all FY 88 penalties. The median penalty was down this
year from $37,500 in FY 86 and $65,750 in FY 87 to $30,000 in FY
88. The median is down in large part due to the large number of
asbestos cases concluded in FY 88. The largest concentration of
FY 88 cases was in the $10,000 to $24,999 range, 22 out of 74
cases or 30%. Of these cases, 10 cases or 48% were asbestos
cases. Many of these cases are against sources of limited
ability to pay, a factor considered in the Stationary Source
Civil Penalty Policy. The trend though is towards larger
penalties in asbestos cases, such as the $260,000 penalty in the
Big Apple Wrecking case from Region I.
The distribution of penalties also reflects the influence of
asbestos cases on the median penalty. In FY 86 and 87, 77% of
penalties were $25,000 or greater. In FY 88, only 58% of
penalties were $25,000 or greater. Of the 31 cases, or 42%, that
were below $25,000, one half were asbestos cases.
Administrative Penalty Profile
Section 120 of the Clean Air Act provides for administrative
imposition of penalties against sources in violation of the Act.
In general, the size of a §120 penalty depends solely on the
economic benefit accruing to a source because of noncompliance
with applicable law. While recoupment of the economic benefit of
noncompliance is the central goal of a §120 action, Regions have
also found that the prospect of such a penalty can cause very
accelerated steps towards compliance by the violating source.
-------
E-4
All four §120 cases concluded in FY 88 were concluded with
penalties. For §120 cases concluded through FY 87, only 63%
concluded with a penalty. Penalties in §120 cases are typically
smaller than §113 penalties. The highest §120 penalty ever is
$61,500, imposed this fiscal year by Region V. The previous high
was $45,528. The median and average penalties both increased
this year. The average for FY 88 was $37,028 compared to $13,526
for all §120 cases concluded through FY 87 and $14,206 for cases
with notices of noncompliance issued in FY 85-87. The median
penalty was up from $8,500 for all cases concluded through FY 87
and $12,639 for cases with notices issued in FY 85-87 to $39,397
in FY 88. These figures indicate a trend towards higher
penalties being imposed in §120 cases.
The major cause of the disparity between judicial and
administrative penalties in their use and size is probably that
the Regions tend to use the §120 remedy in relatively straight-
forward cases in which the economic benefit of noncompliance is
relatively small. This is likely due to the fact that §120
contains no authority to obtain injunctive relief. This is often
important in larger, more complicated cases which may involve
bigger economic benefits and require a defendant to perform, or
refrain from, certain actions. In these cases, a §113 action
with its provision for injunctive relief must be pursued.
Comparisons of Regional Use and Levels of Penalties
There may be significant differences in types of violations,
violators, and external factors such as trends in court rulings
among Regions that would explain apparent differences in the use
and levels of civil penalties. The Regions appear to differ
substantially with respect to air penalties, but a general
pattern is not evident. Regional totals (judicial and
administrative penalties) ranged widely however from Region V
with $2,781,375 to Region X with $12,000.
The three Regions that collected the three penalties over
$1,000,000 had the highest total penalties imposed. They were
Region III with a total of $2,402,500, Region VI with $2,028,505
and Region V with the highest total of $2,781,375. Region V also
had the highest total number of cases concluded in FY 88 by far
with 25, judicial and administrative, followed by Region II with
12 and Region VII with 10. Region V was also the only Region to
have a case conclude without any penalty. All three cases from
FY 88 that had no penalty were from Region V.
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E-8
STATIONARY SOURCE AIR PENALTIES BY YEAR
0
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RANGES
JUDICIAL
ADMINISTRATIVE
-------
E-9
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25% -
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REGIONAL DISTRIBUTION OF PENALTIES
FY 1988 - STATIONARY SOURCE JUDICIAL
15% -
10% -
-------
E-10
NOTES
-------
Appendix F
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
PRfll
OFFICE OF
AIR AND RADIATION
MEMORANDUM
SUBJECT: Submission of Office of Mobile Sources
1988 Penalty Data
FROM: Richard D. Wilson, Di
Office of Mobile Sour
/
TO: Gerald A. Bryan, Director
Office of Compliance Analysis
and Program Operations
Attached is the submission of the Office of Mobile
Sources for the 1988 penalty report being compiled by
your office.
This year we have incorporated the enforcement
activities of the Manufacturers Operations Division with
those of the Field Operations and Support Division.
The analysis follows the format of previous years.
If you have any questions about this material,
please contact Phyllis Anderson of my staff at 382-2664.
Attachment
-------
F-2
PENALTY STATISTICS
OFFICE OF MOBILE SOURCES
OFFICE OF AIR AND RADIATION
I. INTRODUCTION
Two divisions within the Office of Mobile Sources
conduct enforcement activities related to motor vehicles
and fuels. These are the Manufacturers Operations Division
(MOD) and the Field Operations and Support Division (FOSD).
The enforcement authorities of each of these offices
rest with the program offices at headquarters, rather than
with the regions.
MOD enforcement centers on the introduction into commerce
of vehicles not covered by a certificate of conformity certi-
fying that the vehicle (new or imported) meets applicable
emissions .requirements. FOSD enforcement ensures that emission
control devices originally installed on a vehicle are not
tampered with, and also regulates the composition and use of
motor vehicle fuels. FOSD's most notable achievement has
been the dramatic reduction in the use of lead in gasoTine
production.
II. STATUTORY CHANGES TO PENALTY AUTHORITIES
There have been no changes to the statutory penalty
authority of either office as contained in the Clean Air
Act, 42 U.S.C.S 7401 et seq. Fuels violations are subject
to a $10,000 per violation per day statutory authority. The
penalty for tampering with emission control devices is $10,000
for new car dealers or manufacturers, and $2,500 for fleet
operators and vehicle repair facilities.
The penalty provisions applicable to violations related
to introduction into commerce of vehicles not covered by a
certificate of conformity is $10,000 per vehicle. Reporting
violations are also subject to a $10,000 penalty.
III. INFLUENCES ON THE USE AND LEVELS OF CIVIL PENALTIES
A. Increased Lead Phasedown Enforcement
In recent years FOSD has concentrated its enforcement
resources on audits of gasoline producers to determine
compliance with lead phasedown regulations. This has resulted
in fewer Notices of Violation (NOVs) with higher proposed
penalties. Thirty-four phasedown NOVs were issued in FY 1988,
with proposed penalties totalling over $18.9 million.
-------
F-3
Consequently, the number of phasedown settlements has
also increased. During FY 1988 there were 18 lead phasedown
settlements, a third of which involved penalties greater
than $50,000. The total amount of settlement dollars for
phasedown cases was $1,684,338. The highest penalty was
$1.175 million.
B. New Tampering Initiative and Policy
In FY 1988, FOSD began a new tampering enforcement
initiative, carving out an exception to the antitampering
policy for the use of aftermarket catalytic converters under
controlled circumstances. FOSD's monitoring program found
hundreds of violations of the policy. Most commonly, vehicles
originally equipped with "three-way" catalysts (capable of
reducing emissions o-f nitrogen oxides in addition to carbon
monoxide and hydrocarbons) were being replaced with "two-way"
catalysts that have 'no effect on NOx emissions.
These cases are different from the standard tampering
case in which catalysts are permanently removed. Since
new cata'lysts are being installed, albeit less efficient
ones, the penalty policy was amended for such cases. Instead
of a $2,500 per violation proposed penalty, a repair shop
would be subjected to a $1,000 proposed penalty. _!/
The number of general tampering cases is also increasing.
More efforts were put into tampering enforcement because of
the large number of tampering complaints received. This has
led in turn to increased state and local inspection activities
In FY 1988, 112 NOVs were issued for tampering, with proposed
penalties of $2.2 million. For the same period, there were
64 cases settled with a total of $229,125 in penalties.
I/ FOSD is in the process of reviewing its tampering penalty
policy to ensure that its proposed penalties are consistent
and equitable for the various types of tampering that occur.
If any impact to settled penalties results, it will not
be seen until FY 1989.
-------
F-4
C. Expedited Enforcement Procedures
FOSD has also continued its use of expedited settlements
for fuel nozzle violations. (A nozzle violation occurs
when a party, generally a retailer, equips a leaded gasoline
pump with a smaller nozzle that allows insertion into unleaded
vehicles.) In previous years, a single document was sent to
the party allowing it to settle the matter by signing the
one-page document and returning it to the agency with a $200
payment.
Beginning in FY 1988, FOSD further amended the procedure
to a field citation program. This allows the violator to
mail the $200 payment in accordance with the terms of the
citation left at the time of the inspection. In FY 88, there
were 89 nozzle settlements concluded through one of these
methods.
IV. JUDICIAL PENALT.Y PROFILE
There were no judicial penalties in the MOD program.
For FOSD, there was one judicial penalty awarded for $10,000
against a gasoline retailer for installing a smaller, "unleaded"-
sized nozzle on a pump dispensing leaded gasoline.
V. ADMINISTRATIVE PENALTY PROFILE
The attached chart shows the administrative penalty profile
for both MOD and FOSD. MOD had 2 cases resolved with a penalty
in FY 1988. FOSD resolved 235 cases, all with penalties except
for one against a federal facility for which civil penalties are
not authorized.
The two MOD settlements totalled $208,000. One of the
cases involved a production misbuild in which the manufacturer
also agreed to recall some 100,000 vehicles at an estimated
cost of $5.3 million. The 235 FOSD penalties totalled $2,493,292.
The highest penalty was $1,175,000 against a refiner under
the lead phasedown program. The smallest was $50 for a
nozzle violation after consideration of a financial hardship
claim.
FOSD continues to make use of alternate payments to
support public information programs. In addition to the
penalties referenced above, another $1,903,927 was expended in
such endeavors. This would include having public service
announcements related to tampering or fuel-switching (using
leaded gas in unleaded vehicles) shown on television,
sponsoring mechanic training courses on emission control
devices, publication of newspaper ads, and a variety of
other projects.
-------
F-5
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-------
F-6
NOTES
-------
Appendix G
i UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
r J WASHINGTON, D.C. 20460
./
OFFICE OF
SOLID WASTE AND EMERGENCY RESPONSE
MEMORANDUM
SUBJECT: RCRA Civil Administrative and Judicial Penalty
Practices Report for FY88
FROM: Bruce M. Diamond, Director
Office of Waste Programs Enforcement
TO: Gerald A. Bryan, Director
Office of Compliance Analysis and Program Operations
Attached is the RCRA Civil Administrative and Judicial
Penalty data and accompanying analyses for cases concluded in
FY88. As you requested we have utilized-the data and textual
reporting formats as per earlier reports.
The Civil Administrative penalty data and associated text
are based on signed and dated enforcement actions sent to OWPE
(HQ) from our Regional offices. As you may know our Regional
enforcement offices are constantly afforded the opportunity to
quality assure the completeness of this data by means of
cumulative monthly (and end of fiscal year) enforcement reports.
I want to acknowledge the efforts and attention that our Regional
offices have exercised in ensuring that copies of all issued
enforcement actions have been sent to OWPE (HQ) in a timely
fashion for use in projects such as this.
Also, in addition to the Administrative penalty information
provided by OWPE, you will also find attached data and text on
FY88 Civil Judicial penalties; this latter information has been
furnished by the Office of Enforcement and Compliance Monitoring
and is included verbatim, in its entirety, as part of the
accompanying attachment. Any comments on the Overview Report
will be sent directly, per request, to George Alderson of your
staff by COB, April 3, 1989.
If you have any questions on the administrative penalty
data, please feel free to call Bob Small of my staff at (FTS)
475-9375.
Attachments
cc: Glenn Unterberger, (OECM)
-------
G-2
I. Use of Administrative Penalties
One hundred fifty five (155) administrative actions are
currently recorded as having been concluded under the Federal
RCRA program during FY881. Of these, 90% (N=140) are recorded as
having been concluded with a penalty. This is slightly higher
than the 88% seen in the last Federal Penalty Report covering
combined fiscal years 1986 and 1987. Both median and average
final penalty dollars appear to have increased in FY88 over that
of the prior two fiscal years, but there is no outstanding
administrative penalty recorded for FY88.
Introduction
A brief statement on.the quality control measures employed
for this section may be helpful, prior to presenting the analyses
derived from the original data.
Each month (and at the end of each fiscal year) all Regions
are sent exhaustive, cumulative summary reports (RAATS Reports)
that list all administrative enforcement actions received by
Headquarters, from the Regions, in signed and dated hardcopy.
Regional RCRA enforcement personnel are requested (each month,
and at the end of each fiscal year) to ensure that HQ has copies
of all administrative actions issued by them. For this section
it should be understood that all administrative penalty analyses
contained herein are based on (and dependent on) hardcopy input
of the signed and dated administrative enforcement actions
referenced above.
Furthermore, the specific subject area of this section is
that subset of FY88 administrative actions - primarily consent
agreements/final orders (CAFO's) - that usually consummate
3008(a) complaints and result in final penalties. Where ALJ
decisions have resulted in a decision relative to penalties these
also are included in Regional statistics. Civil judicial
penalties (i.e., penalties specified in consent decrees,
litigated cases) are considered in the following section; which
has been provided by the Office of Enforcement and Compliance
Monitoring.
The 155 Federal administrative actions reference consent
agreement/final orders (CAFO's) issued pursuant to 3008(a) of
RCRA or relevant ALJ decisions. A complete listing of these and
other types of administrative enforcement actions can be found in
the RCRA Administrative Action Tracking System (RAATS) FY88
summary report.
-------
G-3
Data & Analyses
The highest RCRA administrative penalty recorded for FY88
was $150,000 imposed by Region IV; there were however, several
other final penalty assessments from other Regions below this
amount, but which were themselves, in excess of $100,000.
There is a current total of $2,460,653 recorded as having
been assessed as final RCRA administrative penalties during FY88;
for the prior fiscal year (1987) $1,868,004 was recorded - an
increase of $592,649. These FY88 total dollars, although greater
than that in FY-87, are considerably below the $4,185,871
recorded for FY-86. In context, however, it should be noted that
one (1) case in the FY86 total was itself in excess of
$2,000,000.
The average final administrative penalty recorded for FY88
was $17,576 (zero, waived, dismissed penalties, etc., excluded)
and $15,875 with such actions averaged into the totals. The
final penalty averages (with zero, waived, dismissed penalties,
etc., excluded) for FY-86 and FY-87 were $14,565 and $13,635 .
respectively (it should be noted that the FY-86 average
of $14,565 excluded the unusually large penalty - in excess of
$2,000,000 referenced earlier - otherwise that average would be
unrealistic (i.e., highly skewed).
The median penalty for FY88 (zero, waived penalties, etc.,
excluded) was approximately $9,440 (table 1); similar medians
recorded for FY-86 and FY-87 were approximately $7,350 and $7,550
respectively.
Table 2 and figure 1 display the frequency distribution of
RCRA FY88 final administrative penalties. This is the same
distribution pattern as seen in FY-86 and FY-87 data i.e., the
majority of non-zero final administrative penalties are found in
those dollar ranges up to $50,000 after which there is a sharp
decline in the number of cases finalized in higher penalty
ranges.
Although admittedly speculative in nature it seems not
unreasonable to suggest that larger penalties are usually - for
various reasons - associated with a judicial rather than
administrative process; there are, however, usually far greater
numbers of administrative rather than judicial cases.
-------
G-4
Comparisons of Regional Use and Levels of Administrative
Penalties
Total regional (administrative) penalty dollars for FY88 -
and allied statistics - are displayed in Table 3. Region V is
recorded as having the highest administrative penalty total; it
is followed in decreasing order of total dollars by Region I,
VII, VI, and IV; the remaining regional totals are listed in
Table 3. Viewed as rounded percents of total FY88 administrative
penalty dollars some (figure 3) of the more prominent regional
percentages are: V (26%); I (16%); VII (15%); VI (12%); IV (8%).
Regions V and I, considered together, accounted for 42% of the
total recorded administrative penalty dollars. Region IV,
however, had the highest single administrative penalty recorded
for FY88 ($150,000).
In addition to final penalty dollars, the number of final
administrative actions associated with these dollars, should also
be noted (figure 3). In this context it appears that in some
Regions there may be fewer numbers of final actions - but these
actions are associated with a larger average final assessment.
In other Regions there may be a much greater number of cases "
handled, but these actions may be settled for somewhat lower
penalty amounts. Also, of general interest was the percentage of
total administrative cases across all the Regions that involved
the imposition of a penalty; approximately 90% of all the final
actions examined involved a penalty - although as already noted -
the magnitude of regional penalty amounts do vary (greatly) as
do the number of case processed.
In an allied area, there was also considerable variation
seen in regional median penalties (Table 1; figure 2). Caution
is advised, however, when interpreting some of this regional
data, especially where the sample size (number of cases) under
consideration is small.
-------
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II. Judicial Penalty Profile
RCRA civil penalties ranged from no penalty to $1,100,00.
The penalties imposed under civil judicial penalty authority in
FY88 under the RCRA program are:
Fiscal Year Region
88
88
88
88
88
88
88
88
88
8*8
88
88
88
88
88
88
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88
1
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Susan Bates
Plainville Electroplty
Dupont
Proteco
Jim Walter Resources
Ashland Chemical
Buckeye Products
Du-Wel Hartford
Hull Pottery
Keystone
Northland Products
Avesta
BFI-CECOS
American Ecological
Wycoming Refining
IT Corporation
Quemetco Industries
Penalty
$230,000
$197,000
$230,000
$ 25,000
$850,000
$110,000
$ 78,000
$ 82,000
$ 30,066
$ 18,000
$280,000
$ 9,500
$175,000
$1,100.000
$ 15,715
$ 25,000
$260,000
$ 60,000
There was also one CERCLA penalty.
The Inmar case in Region II brought a penalty of $315,000.
Comparison of Regions
Total regional judicial penalty dollars for FY88 are
displayed in Tables 1, 2, 3. Region VI is recorded as
having the highest judicial penalty total; it is followed
in decreasing order of total dollars by Region II, V, I,
IX, IV, and VIII. Region VI had the highest single judi-
cial penalty recorded for FY88 ($1,100.000).
Use of Penalties
Twenty-two (22) judicial actions are currently recorded
as having been concluded under the Federal RCRA program
during FY88. Of the 22 judicial actions, 18 are recorded as
being concluded the seven (7) seen in the last Federal
Penalty Practice Report penalties combined fiscal years 1986
and 1987. Generally, penalties have been high this year
with an outstanding penalty recorded at $1,100,000.
-------
G-12
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Appendix H
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, DC 20460
OFFICE OF
PESTICIDES AND
TOXIC SUBSTANCES
JAN -3
MEMORANDUM
SUBJECT:
FROM:
TO:
FIFRA/TSCA FY 88 Penalty Report
A. E. Conroy II, Director
Office of Compliance Monitorin
Frederick F. Stiehl
Associate Enforcement Counsel
Pesticides and Toxic Substances
Enforcement Division
Gerald A. Bryan, Director
Office of Compliance Analysis
and Program Operations
Per discussions between Tony Ellis of OCM's staf^ and
George Alderson of your staff, we are filing our portion
of the FY 88 Penalty Report subsequent to the December 1,
1988, date agreed upon by our respective staff members.
If you have any questions about the contents of this
report, feel free to contact Mr. Jerry Stubbs (382-7835)
or Mr. Mike Walker (475-8690) of our respective staff.
Attachments
-------
H-2
TSCA/FIFRA: Use and Levels of Penalties
o Program Description
o Toxic Substances Control Act (TSCA)
The TSCA of 1976 authorized civil administrative penal-
ties. Judicial civil actions are limited to injunctive
relief, seizures and collection actions and so are not
included in this report. The administrative authority
allows penalties up to a maximum of $25,000 per day per
violation.
TSCA lists several statutory factors which must be con-
sidered by EPA in developing the penalty, including nature,
circumstances, extent and gravity of the violation. TSCA
also lists the ability of a violator to pay, the impact of
a penalty on the violator's ability to continue in business,
his culpability, past compliance history as well as such
other factors as justice may require. TSCA permits the
compromise, modification or remittance of a penalty with
or without conditions.
In addition to the basic penalty, the Office of Pesticides
and Toxic Substances (OPTS) also has developed specific
penalty policies for each regulation, these include: policies
regarding violations of PCB's, dioxin, and asbestos-in-
schools (all pursuant to Section 6 of the Act), as well as
Section 4 (Test Rules), Section 5 (Premanufacture Notifica-
tion), and Sections 8, 12, and 13 (Reporting and Recordkeep-
ing Information).
In FY 1988, the asbestos program underwent a transition
from the Asbestos-In-Schools Rule (AIS) to the Asbestos
Hazard Emergency Response Act (AHERA). Pursuant to
section 207 of AHERA, EPA can assess civil penalties up
to $5,000 per day per violation against Local Education
Authorities (LEA's). Under TSCA title I, as amended by
section 3(b) of AHERA, EPA may utilize all enforcement
remedies provided under title I against "other persons"
who violate the provisions of AHERA and its regulations
(e.g., persons who design or conduct response actions
that are not accredited to perform air monitoring or do
not follow test protocols), including civil penalties of
up to $25,000 per day. Most of the AHERA regulations did
not become effective until October 12, 1988.
-------
H-3
o Federal Insecticide, Fungicide and Rodenticide Act (FIFRA)
The 1972 FIFRA amendments authorised civil administrative
penalties for violations, and judicial civil actions for
injunctive relief, seizures, and for noncompliance with
a final order.
The civil administrative penalty authority allows penal-
ties up to a maximum of $5,000 per offense for registrants,
commercial applicators, wholesalers, dealers, retailers,
or other distributors. Penalties up to a maximum of $1,000
can be assessed against private applicators following a
prior citation for a violation or written warning from
the Administrator. Private, "for hire" applicators may
be fined $500 for the first offense and $1,000 for subse-
quent offenses.
FIFRA lists several "factors" for consideration in the
development of the penalty, including size of the viola-
tor's business, the penalty's impact on his ability to
continue in business and the gravity of the violation.
OPTS's basic guidelines and procedures for assessing
civil penalties under FIFRA were first published in 1974
and have been periodically amended. Its main feature is
an assessment schedule matrix whose individual cells
contain a penalty based upon the gravity of the violation
and the size of the business.
o Statutory Changes to Penalty Authorities: None
o Possible Influences on the Use and Levels of Penalties
o FIFRA: No new influences.
o TSCA: On August 5, 1988, Office of Compliance Monitoring
issued a final enforcement response policy for Section 5
of TSCA. This policy will influence the size of penalties
for certain categories of violators. For instance, in
the past, manufacturers who produced and used (processed)
illegal chemical substances were assessed two separate
per day violations for each of these acts. Under the
new penalty policy "production and use" are consolidated
into one violation for a chemical producer. Additionally,
the new §5 penalty policy is more "risk" oriented. It
penalizes violators of chemical substances that are of
less toxic concern to the Agency at lower monetary rates.
-------
H-4
On January 1, 1988, OPTS issued an "Interim Final
Enforcement Response Policy for Violations of the
Immediately Enforceable Provisions of AHERA". This
policy (and subsequent final policy) will influence
the size of penalties in the asbestos program since
(1) it includes a new category of violators, "other
persons" who can be fined up to $25,000 per day per
violation; (2) it includes a broader range of viola-
tions for LEA's than did the AIS penalty policy; and
(3) it includes a maximum $5,000 penalty per violation
per school for an LEA whereas the AIS penalty policy
fined schools a maximum $13,000 penalty per violation
per school for the LEA. This interim policy was
modified on September 2, 1988 to encourage the regions
to hold the issuance of civil penalties to LEA's
until the final Enforcement Response Policy for
AHERA is issued. However it advises the regions- to
continue issuing complaints to "other persons".
o Average Penalties Collected: In 1988 the average
penalty collected increased slightly ($719) from the
previous year, i.e., the difference between $8615 in
1988 and $7896 in 1987. The majority of the cases
settled were equal to or under $5,000 (445 out of
604) and continues to be as a result of the small
penalty cases for the asbestos-in-schools program.
Forty five per cent of the cases closed in FY 1988
(270 out of 604) were asbestos-in-schools cases.
These asbestos cases however, represented only 5% of
the total penalties collected under TSCA ($236,988
out of $5,126,057).
o Use of Penalties
o FIFRA: In FY 1988, there were 215 Federal administra-
tive cases which were closed. Of these cases, 185 or
86% were settled with a monetary payment made by the
respondent.
o TSCA: Under this statute there were 604 administrative
cases which were closed in FY 1988. Ninety nine per
cent of these cases or 595 were settled with a monetary
penalty.
o Judicial Penalty Profile
o EPA did not file any cases in District Court under TSCA
or FIFRA during 1988 seeking the imposition of civil
penalties.
-------
H-5
o There are no provisions in either TSCA or FIFRA for
the imposition of civil penalties by District Court
Judges. All penalties must be administratively
assessed.
o Administrative Penalty Profile
o Highest Penalties FIFRA: The highest Federal admini-
strative penalties imposed in FY 1988 were at Headquart-
ers for $27,720 and $12,600 respectively. Both of
these cases involved respondents who failed to maintain
underlying data in support of some of their pesticide
registrations.
o Highest Penalties TSCA: The highest Federal penalties
in FY 1988 were $1,281,950 and $500,000 both collected
by Headauarters. The former penalty collection.was
the largest collected by the Agency for a §5 related
violation. The latter penalty was for violations of
the PCB rule.
o Typical Penalties FIFRA: The average penalty for
FY 1988 was $1,716. The median penalty was. $1,200.
Because the majority of the Federal pesticide actions
are taken under §7 of FIFRA (a violation which incurs a
maximum penalty of $3,200) most of the cases concluded,
172 out of 215, were settled for equal to or less than
$5,000.
o Typical Penalties TSCA: The average penalty for FY 1988
was $8,615. During this time the median penalty was
$1,500. As explained earlier, these figures reflect the
small penalty collections from the asbestos-in-schools
program.
o Comparisons of Regional Use and Levels of Penalties
o FIFRA: Differences in use and levels of penalties can be
primarily attributed to differences in types of violations
- and violators. Region VII and VIII have a greater mix of
cases because they still maintain primacy in Nebraska and
Colorado while Headquarters takes cases of first impression
or national significance. Other regions' caseload mix varies
depending upon the amount of referrals under §26 and §27
from states operating under Federal grants. Differences
in the use of penalties also arise under the §7 program
because some regions focus their enforcement in this area
more than others do and/or they have a higher violation
rate.
o TSCA: Significant differences in use and levels of penal-
ties arise because of the various types of violations and
-------
H-6
violators among regions and headquarters. TSCA §§5
and 8 cases, many of which account for proportionally
larger penalties than other TSCA violations, were
done in FY 1988 by Regions II, III, V and headquarters.
Also, the level of penalties is influenced by a region's
use of "settlement with conditions", a practice which
can result in the reduction or remittance of a penalty
in conjunction with environmental enhancements such as
self-audits, special training and outreach programs.
-------
H-7
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