o- • 300
MANAGEMENT REPORT ON EPA FEDERAL PENALTY PRACTICES
FY 1989
it
August 1990
Compliance Policy and Planning Branch
Office of Enforcement
HEADQUARTERS LIBRARY
ENVIRONMENTAL PROTECTION AQEN.QY
' WASHINGTON, D.C. 20460
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I.
MANAGEMENT REPOI
EXECUTIVE SUMMARY
FY 1989
II. PURPOSE, SCOPE AND LIMITATIONS OF THIS REPORT
III'. MANAGEMENT ANALYSIS OF PROGRAMS
Trends in Program Totals
Trends in Type of Case
Cross-Program Profile
IV. MANAGEMENT ANALYSIS OF REGIONAL PENALTIES
Considerations in Regional Penalty Analysis
Relative Contributions
Comparison to FY 1988
Percentage of Cases Concluded With a Penalty
Average Penalties
Highest Penalties
Types of Cases
Regional and Headquarters Roles
IV. REGIONAL PROGRAM ANALYSIS
Criminal Enforcement
Clean Water Act - NPDES
Safe Drinking Water Act
Wetlands Protection
Marine and Estuarine Protection
6
6
6
8
8
11
13
13
13
13
15
16
17
22
25
26
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ii
Stationary Source Air
Mobile Source Air
RCRA
<
EPCRA Sections 302-312
and CERCLA Section 103
Toxics Release Inventory
TSCA
FIFRA
Appendices;
A. Crininal Enforcement
B. Clean Water Act
C. Safe Drinking Water Act
D. Wetlands Protection
E. Marine and Estuarine Protection
F. Stationary Source Air
6. Mobile Source Air
H. RCRA, EPCRA Sections 302-312
and CERCLA Section 103
I. FIFRA, TSCA and Toxics Release Inventory
J. Trends in Program Totals
28
28
30
32
32
34
36
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iii
ACKNOWLEDGMENTS
This report was coordinated by the Compliance Policy and Planning
Branch of the Office of Enforcement. George Alderson was the
project manager and principal- author. Meredith Kotler revised
the draft report to reflect comments received. The following
contributed the program-specific data:
Criminal Enforcement
Clean Water Act
Judicial
Administrative
Safe Drinking Water Act
UIC
PWSS
Wetlands Protection
Marine and Estuarine
Protection"
Stationary Source Air
Mobile Source Air
RCRA
Judicial
Administrative
EPCRA Sections 302-312 and
CERCLA Section 103
Toxics Release Inventory,
TSCA and FIFRA
John Dugdale, OE
Marcia Colvin, OE
Kathy Summerlee, OE
Ken Keith, OWEP
Peter Bahor, ODW
Betsy Devlin, ODW
Joseph DaVia, OWP
Rosanna Ciupek, OMEP
Elise Hoerath, OE
Marcia S. Ginley, QMS
Rend Webb, OE
Robert Small, OWPE
Jeffrey Heimerman, OWPE
Mike Hackett, OCM
This report was reviewed in draft form by the Regions and by
Headquarters program compliance offices. These authors and
reviewers and their colleagues devoted many long hours to the
collection, verification, analysis and display of these data.
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I. EXECUTIVE SUMMARY
Program Highlights
Three programs showed a sustained rising trend in penalty
dollars in Fiscal Years 1985-1989: Clean Water Act (NPDES),
Safe Drinking Water Act and RCRA (excepting RCRA FY 87).
Three programs showed a sustained rising trend in number of
cases in FY 1985-1989: Clean Water Act (NPDES) and Safe
Drinking Water Act and stationary Source Air.
All other programs showed various fluctuations in penalty
dollars and cases in FY 1985-1989.
Approximately 87 to 91 percent of the penalty cases each
year from FY 1986-1989 were administrative cases.
The program with highest total dollars in FY 1989 was the
Clean Water Act (NPDES).
The program with the highest number of cases in FY 1989 was
TSCA. However, the TSCA program showed an overall decline
in FY 1989, both in penalty dollars and number of cases.
Despite this overall trend, some Regions showed increases in
dollars and cases, and the overall median penalty attained a
new record high level.
Regional Highlights
The Regions were more homogeneous in their total penalty
dollars and number of cases in FY 1989 than in previous
years. Host Regions had between 5 and 15 percent of the
total dollars and cases in FY 1989.
Region 5 displayed high penalties compared to its number of
cases in FY 1989. Region 5 also exhibited the top dollars
in four programs and top number of cases in one program.
Region 5 had the largest total of penalty dollars with
nearly $10.6 million, or 37 percent of the national total
for FY 1989. Regions 3, 4 and 6 also obtained at least
10 percent of the national total.
Region 5 had the largest number of cases with penalties —
196 cases, or 18 percent of the national total. Region 6
was a close second with 193 cases (17 percent). Regions 2,
4 and 7 also had more than 10 percent of the national total.
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Regions 4 and 5 showed the greatest increases in their share
of the national penalty dollars compared to FY 1988.
Regions 2 and 6 showed a significant decline in their share
of the dollars.
Regions 2 and 8 showed a significant decline in their share
of the number of cases compared to FY 1988.
Seven Regions obtained penalties in more than 90 percent of
their cases in FY 1989. Regions 5 and 10 had the highest
percentages (at 98 percent each). Regions 4, 6 and 9
obtained penalties in less than 85 percent of their cases.
In the criminal enforcement program, every Region had five
or more defendants convicted during FY 1989. Regions l
and 10 led the numbers, both with 11 defendants.
\
The Regions obtained approximately 82 percent of the penalty
dollars in FY 1989, while Headquarters offices (Mobile
Source Air and TSCA) obtained the remaining 18 percent.
II. PURPOSE. SCOPE AND LIMITATIONS OF THIS REPORT
This report is written to assist EPA enforcement and compliance
managers in Headquarters and Regions. It contains analyses of
national and regional penalty data of potential interest to those
who manage enforcement programs involving assessment of
penalties*
A less detailed summary treatment of national penalty data
appears in the national penalty report entitled "Overview of EPA
Federal Penalty Practices FY 1989," issued by the Office of
Enforcement in April 1990.
The program-specific penalty reports used as the basis for this
Management Report and for the Overview Report are attached as
appendices. A report on criminal enforcement forms a separate
appendix.
This Management Report concerns penalties obtained by EPA in
FY 1989 in civil judicial, civil administrative, and criminal
enforcement actions. Except where specifically noted, the term
"penalties11 is used in this overview to refer only to civil
(administrative and judicial) penalties, not criminal fines.
This report does not attempt to portray a complete picture on
penalties obtained during enforcement of federal environmental
laws, because it does not reflect penalties obtained by state
governments. States conduct the majority of enforcement actions
under these laws, working through programs approved by EPA to
carry out federal requirements.
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Programs Covered
Thirteen EPA penalty programs are addressed in this report.
Table 1 gives their names, the types of enforcement cases each
used in FY 1989, and any acronyms by which they are cited.
Cases Covered
The penalties discussed in this report are cash amounts assessed
in EPA enforcement cases that were concluded in FY 1989. They
reflect final judgments by a court, consent decrees and consent
orders reflecting settlements, and final administrative orders.
Because this report addresses only final cash amounts assessed,
and does not include any proposed penalties, some cases initiated
during or before FY 89 are not addressed.
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 invoice sanctions for a failure to comply with a prior court
order, decree, or administrative order) are not included.
"Stipulated penalties" and "deferred 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. Nor
does the report reflect the use of other sanctions, such as
contractor listing, sewer moratoriums, or the suspension or
revocation of permits.
This report also does not reflect "credits," "benefit projects,"
or 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.
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.
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Table 1
Penalty Programs Covered in This Report
Proaram
Criminal Enforcement
Clean Water Act - NPDES (CWA)
Safe Drinking Water Act (SDWA)
Wetlands Protection
Marine and Estuarine Protection
Stationary Source Air
Mobile Source Air
Resource Conservation and
Recovery Act (RCRA)
Emergency Planning and
Community Right-to-Know Act
(EPCRA) Sections 302-312
Comprehensive Environmental
Response, Compensation and
Liability Act (CERCLA, or
Superfund)
Toxics Release Inventory
(TRI, or EPCRA Section 313)
Toxic substances Control
Act (TSCA)
Federal Insecticide, Fungicide
and Rodenticide Act (FIFRA)
Types of cases
Judicial
Judicial
Administrative
Judicial • .
Administrative
Judicial
Administrative
Administrative *
Judicial
Administrative
Judicial
Administrative ,
Judicial
Administrative
Administrative *
Administrative •*
Administrative *
Administrative
Administrative
* Programs appearing in this report for the first time.
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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."
There may be some overlap between the number of cases counted for
different programs, because EPA increasingly is acting against
violations of more than one statute at .a single facility in a
single enforcement action. In the past, each case has normally
been attributed to a single lead program. Now, insofar as the
final order attributes the penalties to more than one statute and
the programs track them separately, this report will attempt to
report them accordingly. In FY 1989, for instance, some cases
involved both EPCRA sections 302-312 and CERCLA section 103,
which concern related subject matter dealing with emergency
notification following releases of hazardous chemicals.
Purposes and Limitations
This Management Report is not an evaluation of practices by EPA
programs, and it should be viewed in the context of the total
enforcement effort. The report may illuminate individual
characteristics of programs and provide a helpful comparison
among programs. 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 data have been approved by the
responsible program offices, but the quality and completeness of
the data may vary.
Environmental projects such as pollution prevention, credit
projects, and environmental audits are often negotiated in
addition to upfront dollar penalties. Although they are not
included as a separate section of this report, they are of great
value to EPA and to the pulbic. There have been methodological
and reporting difficulties in the past which precluded these
items from being counted. Future reports may include a section
in which to present in some regular format EPA's accomplishments
in this area. Regions will be canvased to find the best way to
report this data.
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MANAGEMENT ANALYSIS OF PROGRAMS
Trends in Program Totals
When all EPA penalty programs are considered together, the
continuing trend is upward in penalty dollars and number of cases
concluded. However, some programs have grown more than others,
and some have shown fluctuation from year to year. Fluctuations
sometimes occur because the program brought fewer enforcement
cases following successful attainment of high compliance levels
in the regulated community. They may also reflect focused
initiatives to bring enforcement actions in a given' year as part
of a concerted program strategy.
Over the period FY 1985 to 1989, three programs show a prevailing
rising trend in penalty dollars: Clean Water Act (KPDES), safe
Drinking Water Act and RCRA (excepting FY 87). These programs
showed a parallel rising trend in number of cases, except the
RCRA program, which showed an approximately static number of
cases since FY 1984. The Stationary Source Air program also
showed a prevailing rising trend in number of cases, although its
penalty dollars showed fluctuation during this period.
The other programs with active penalty programs in FY 1985-1989
showed various fluctuations: Mobile Source Air, TSCA and FIFRA.
The graphs in Appendix J show the trends for these programs,
drawing upon the data published in penalty reports covering
previous years.
Trend in Type of Case
The relative roles of judicial and administrative cases have
changed over the years. In FY 1989, 89 percent of the cases with
penalties were administrative cases, and 11 percent were judicial
ones. In Fiscal Years 1986-1988 the percentages have been
similar, ranging from 87 to 91 percent administrative cases.
Data covering the earlier years from FY 1974-1985 show an
aggregate figure of only 43 percent administrative cases. The
larger proportion of administrative cases in the more recent
years in part reflects the administrative enforcement authorities
granted to EPA in this period.
Cross-Program Profile fy
The relative levels of penalty dollars and number of cases among
EPA programs in FY 1989 are shown in Figures 1 and 2. The
program with highest total dollars is the Clean Water Act
program, followed by RCRA, Mobile Source Air, Stationary Source
Air, and TSCA. The programs with highest number of cases are
TSCA, Mobile Source Air, FIFRA, Clean Water Act, and RCRA.
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52
Ql
i*
Figure 1
PENALTY DOLLARS BY PROGRAM
FT 1989
SOW* WETLO MARINE
W£
MOBLF BTBA r
MOBILE HCRA EPCRACERC103
FIFRA
u.
O
NUMBER OF
FY 198S
BY PROGRAM
FIFRA
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8
IV. MANAGEMENT ANALYSIS OF REGIONAL PENALTIES
Considerations in Regional Penalty Analysis
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 Clean Water Act action and instead may have a
dominant RCRA program, and its penalties will reflect that
difference.
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 Regions1 penalty practices are to be
expected because of varying circumstances, such as different
types of pollution 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.
Relative contributions
Figure 3 shows how the penalty dollars and cases varied among the
Regions and programs in FY 1989.
Penalties in a given program are often concentrated in a few
Regions. Figures 4 and 5 show how the dollars and cases varied
among the Regions and programs in FY 1989. This variation is
influenced by the very significant program differences among the
Regions. The program-specific analyses presented in the
appendices will be of interest to the reader who wishes to gain a
fuller understanding of the differences among Regions.
One readily noticeable difference between Figures 4 and 5 is that
the bar segment labeled "Other" is much higher in Figure 5 than
in Figure 4 for several Regions. This reflects large numbers of
FIFRA cases, which typically bring low-dollar penalties.
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Fieure 3
40%
REGIONAL DISTRIBUTION ALL PROGRAMS
FY 1989
I
fe
8
I
30% -
23%
20%
15%
10% -
3% -
0%
fcssa K
55Z
2 3
OOUAR5
5 6
REGIONS
7 8
Egg CASES
10
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is
11
10 -
9 -
8 -
7 -
6 -
5 -
4 -
3 -
2 -
1 -
Y/s
10
Figure 4
REGIONAL PENALTIES BY PROGRAM
FY 1989
1
£-*T
55
REGIONS
CWA
5OC -rsc*
10
u.
O
z
Figure 5
REGIONAL CASES BY PROGRAM
nr
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11
A comprehensive summary of Regional penalty data appears in
Table 2. Figure 3 shows each Region's percentage of the national1
total in dollars and numbers of cases with penalties. (The graph
excludes data for the Mobile Source Air program, which is not
regionalized.)
Region 5 in particular displayed high penalties compared to
its proportion of cases. (This can be seen in Figure 3 by
comparing the heights of the two bars for various Regions.)
The highest total penalty dollars (the bar on the left in
Figure 3) were in Regions 3, 4, 5 and 6 (10 percent or more
of the total) in FY 1989. Region 5 had the- largest total
with nearly $10.6 million in penalties or 37 percent of the
total. Region 4 had 11 percent of the total, followed by
Regions 3 and 6 both.with 10 percent.
In numbers of cases with penalties (the bar on the right in
Figure 3), the Regions with more than 10 percent were
Regions 2, 4, 5, 6 and 7. Regions 5 and 6 stand out with
196 and 193 cases, respectively (18 and 17 percent of the
total, respectively).
Comparison to FY 1988
The Regions were more homogeneous in their total penalty
dollars and numbers of cases in FY 1989 than in previous
years. Most Regions had between 5 and 15 percent of the
total dollars and cases. Only three Regions fell outside
this range with respect to dollars and two Regions with
respect to number of cases.
This contrasts to FY 1988, when 6 Regions fell outside the
5-to-15-percent range with respect to dollars, and three
with respect to cases. In FY 1986-87 combined, five Regions
fell outside this range with respect to dollars, and three
with respect to cases.
The relationship between penalty dollars and number of cases
changed significantly in three Regions. Region 5 displayed
high penalties compared to its proportion of cases in
FY 1989, after having a slightly lower share of dollars than
cases in FY 1988. Region 8 also changed from a lower share
of dollars than cases in FY 1988 to having equal shares of
both.
The greatest changes in the Regions' shares of penalty
dollars since FY 1988 were in Region 5, which rose from 16
to 37 percent; Region 4, which rose from 6 percent to
11 percent; Region 2, which declined from 20 percent to
7 percent; and Region 6, which declined from 16 percent to
10 percent.
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12
The greatest changes in the Regions1 shares of the number of
cases since FY 1988 were in Region 2, which declined from
15 percent to 10 percent, and Region 8, which declined from
12 percent to 7 percent.
Table 2
Summary of Civil Penalties bv -Region
in FY 1989
Total Cases with
Reqion
I
2
3
4
5
6
7
8
9
10
Total
Headquarters
Grand Total
Dollars
1,703,782
1,888,966
2,757,714
3,136,335
13,518,126
• 2,313,811
829,605
2,011,481
1,532,031
1,277,864
28,575,215
6,496,731
35,071,946
Penalty
54"
115
102
111
196
193
112
83
72
77 •
1115
306
1,421
Cases H/O
Penalty
1
13
8
28
4
40
7
7
. 22
• ' 2
132
0
132
Total
Cases
55
128
110
139
200
233
119
90
94
79
1247
306
1,553
Percent
a/Penalty
98*
90*
93*
. 80*
98*
83*
94*
92*
77*
97*
89*
100*
92*
Average Av.g All
Penalty
31,552
16,426
27,036
28,260
54,174
14,605
7,407
24,235
21,278
16,596
25,628
21,231
24,681
Cases
30,978
14,758
25,070
22,567
53,091
12,098
6,971.
22,350
16,298
16,175
22,915
21,231
22,583
Pet Main Pet Main
Cases
81.5*
83.5*
89.2*
79.3*
82.7*
93.8*
95.5*
90.4*
79.2*
90.9*
87.1*
94.8*
-. 88.7*
Dollars
40.9*
48.1*
32.1*
36.4*
18.7*
54.7*
74.0*
22.6*
33.3*
68.4*
33.6*
64.4*
39.3*
Highesr
Pwaity
450,000
175,000
800,000
500,000
2,778',000
750,000
137,000
1,125,000
125,000
150,000
•Table 3
•
Ad"i listed Summary of
Region
1
2
' 3
4
5
6
7
8
9
10
Total
Headquarters
Grant Total
Total
Dollars
1,703,782
IfOoOfTOD
2,757,714
3,162,335
10,618,126
2,818,811
829,605
2,011,481
1,693,818
1,196,569
28,681,267
6,496,731
35,177.938
Cases with
Penalty
54
115
102
112
196
193
112
83
76
82
1125
306
1,431
Cases */o
Penalty
1
13
8
28
4
40
7
7
20
4
132
0
132
in
Total
Cases
55
128
110
140
200
233
119
90
96
86
1257
306
1,563
Civil P
FY 1989
Percent
w/Penalty
981
901
931
8m
981
83)
941
321
79*
95*
89)
100%
92*
fnalties
Irenge
Penalty
31,552
16,426
27,036
28,235
54,174
14,605
7,407
24,235
22,287
14,592
25,494
21,231
24.583
by Recrion
tog 111
Cases
30,978
14,758
25,070
22,588
53,091
12,098
6,971
22,350
17,644
13,914
22,817
21,231
22,507
pctldain
Cases
81.5*
83.5*
89.2*
79.51
82.71
93.8*
95.51
90.4)
77.6)
91.5*
87.0*
94.8*
88.71
Pet Hun
Dollars
40.0*
48.lt
32.11
36.9)
18.7)
54.7)
74.0)
22.6)
35.3)
66.3)
33.6)
64.4)
39.3)
Highest
Penalty
450,000
175,000
800,000
500,000
2,778,000
750,000
137,000
1,125,000
125,000
150,000
This table reflects data that was sent in from the Regions
after the finalization of the National Penalty Report (April
1990). The figures used in the remainder of this Report will
reflect these subsequent changes. In the future, every effort
will be made to better ensure accurate reporting in national
information systems prior to finalization.
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13
Percentage of Cases concluded with a Penalty
Seven Regions obtained penalties in more than 90 percent of their
cases in FY 1989. The highest percentages were in Regions 1 and
5 (98 per cent each) and Region 10 (95 per cent). Table 2 shows
the percentage for each Region in a column headed "Percent With
Penalties."
Regions 4, 6 and 9 had penalties in less than 85 percent of their
cases. This is explained by the fact that these Regions had a
significant number of cases without penalties in either the
Underground Injection Control (UIC) program or the FIFRA program.
The zero-penalty cases in Regions 6 and 9 were largely FIFRA
cases. Those in Region 4 were largely UIC administrative cases
under the SDWA, whose provisions do not separate authority for
non-penalty administrative orders from the authority for penalty
orders.
Average Penalties
Two Regions had average penalties exceeding $30,000 in FY 1989.
These were Region 5 ($54,174) and Region 1 ($31,552). (The
Regional averages are shown in Table 2, in a column headed'
•"Average Penalty.") This contrasts with FY 1988, when six
Regions had average penalties exceeding $30,000: Regions 1, 2,
3, 4, 6 and 9.
Highest Penalties
The highest penalty obtained in a single case in FY 1989 was in
Region 5 ($2,778,000). Five other Regions had top penalties over
$400,000. These were: Region 8 ($1,125,000), Region 3
($800,000), Region 6 ($750,000), Region 4 ($500,000), and
Region 1 ($450,000). (The highest penalties are shown in
Table 2, in a column headed "Highest Penalty.") This contrasts
with FY 1988, when eight Regions had highest penalties over
$400,000: Regions 1, 2, 3, 4, 5, 6, 8 and 9.
Types of Cases
All Regions used both administrative and judicial enforcement
cases in FY 1989. Every Region concluded more administrative
than judicial cases (see Figure 6). But most Regions obtained
more penalty dollars from judicial cases than from administrative
ones (see Figure 7). The percentages of administrative cases and
dollars for each Region appear in Table 2.
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y
3
u.
o
3
Z
260
240
220
200
180
160
140
120
100
80
60
40
20
0
55
14
Figure 6
NUMBER OF CASES BY REGION
BY TYPE OF CASE - FY 1989 '
# cases shown above bar
233
200
140
128
110
119
90
1 2 3
im JUDICIAL
10
ADMINISTRATIVE
i\
51
u
a
11
10
9
8
7
6
3
4
3
2
1
0
Figure 7
PENALTY DOLLARS BY REGION
BY TYPE OF CASE - FY 1989
&
1 2 3
1771 JUDICIAL
RECI
ADMINISTRATIVE
10
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15
Regional and Headquarters Roles
In most EPA programs the enforcement cases are handled by the
Regions. However, the Mobile Source Air program is conducted as
a Headquarters function without regional delegation. In
addition, some enforcement cases in the TSCA program are
conducted by the TSCA program at Headquarters.
The following figures show the relative roles of Headquarters and
the Regions in handling enforcement cases. In FY 1989 the
Regions obtained approximately 82 percent of the penalty dollars
and 79 percent of the cases. The remaining 18 percent of the
dollars and 21 percent of the cases were conducted by the
Headquarters (i.e., the Mobile Source Air program and the TSCA
program at Headquarters).
v> •
k
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16
IV. REGIONAL PROGRAM ANALYSIS
Criminal Enforcement
In the criminal enforcement program, every Region had five or
more defendants convicted during FY 1989. Regions 1 and 10 led
the numbers, both with 11 defendants. (See Figure 8 for the
regional distribution of defendants convicted.) There was more
homogeneity among the Regions than in either FY 1987 or 1988,
when some Regions had two convictions or less.
Cash fines imposed were highest in Regions 1 and. 3 -($3,514,475
and $2,953,450) although monetary penalties are only a secondary
form of deterrence or punishment in criminal cases, the primary
deterrant being prison sentencing. (See Figure 9 for cash fines
imposed.) Region 10 had the most criminal cases with convictions*
(7), and was followed by Regions 1 and 3 (6 each).
P
I
Figure 8
DEFENDANTS CONVICTED, BY REGION
CORPORATIONS AM) INDMXMLS - FY 1909
10 HOC
-------
17
Figure 9
CRIMINAL FINES IMPOSED, BY REGION
J.5
' »
•• C
li
!S
2.3 -
2 -
1.5 -
0.3 -
4
T7VT
FY 1989
# cases shown above bar
YZt.
5 6
REQONS
9 10
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18
Clean Water Act
This was a year of overall stability in total penalties in the
Clean Water Act (NPDES) program. The program showed a decline in
judicial cases both in dollars and number of cases. However, the
increase in penalties from administrative cases filled this gap,
and the increase in number of administrative cases took the
program to a record high in number of cases.
Considering the sum of judicial and administrative penalty
dollars in FY 1989 (shown in Figure 10), a large proportion of
the dollars came in Regions 3, 4, 5, 6, and 8.
a
J.S -
Figure 10
REGIONAL PENALTY DOLLARS - CWA
FY 1989
R^3 JUBCIAL
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19
Judicial; In FY 1989 the largest relative changes among the
Regions were increases in dollars in Regions 3, 5 and 8, and
decreases in dollars and cases in Regions 2, 6 and 9. Regions 4,
5, 6, and 10 achieved increases in median penalties.
A large proportion of the judicial penalty dollars in FY 1989
came in Regions 5, 3,8 and 4 (35%, 17%, 14% and 14%,
respectively). The largest number of cases were concluded by
Regions 4, 5, 2 and 6 (27%, 16%, 11% and 11%, respectively).
Regions 3, 5 and 8 exhibited high total dollars in relation to
their number of cases.
In FY 1989 the highest judicial medians were in Regions 3 and 7
($180,000 and $137,000, respectively). The Regions with
individual penalties over $1 million were Regions 5 and 8. See
Figures 11 and 12 for the regional distribution of CWA judicial
penalties (dollars and cases) and median penalties for FY 1989.
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20
I
LJ
35*
30% -
25% -
2035 -
15% -
10% -
Figure 11
REGlONAt DISTRIBUTION CWA PENALTIES
FY 1989 JUDICIAL CASES
1O
Figure 12
REGIONAL MEDIANS - CLEAN WATER ACT
200
190
180
170
160
150
140
130
120
110
100
90
80
70
60
30
40
30
20
10
0
FY 1969 JUDICIAL CASES
IS
E$p E
// cases shown above bar
•
1 234567
REOONS
9 10
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21
Administrative; FY 1989 was the second year in which CWA
administrative penalty cases were concluded under the new
authority granted by Congress in the Water Quality Act of 1987.
It is the first year in which every Region concluded cases.
A large proportion of the administrative penalty dollars in
FY 1989 came in Regions 6 and 5 (33% and 12%, respectively). The
largest number of cases were in Regions 6 and 4 (33% and 18%,
respectively). Region 5 exhibited high total dollars in relation
to its number of cases.
The highest median administrative penalties were in Regions 7
and 5 ($56,000 and $25,000, respectively), followed by Regions 9,
3 and 1 ($16,500, $16,000 and $15,000, respectively). Regions
with individual penalties over $75,000 were Regions 1, 2, and 6.
See Figures 13 and 14 for the regional distribution of CWA
administrative penalties (dollars and cases) and median penalties
for FY 1989.
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22
o
o
I
i
u
e
Figure 13
REGIONAL DISTRIBUTION CWA PENALTIES
FY 1969 ADMINISTRATIVE CASES
1O
PQoa CASES
il
Figure I*.
REGIONAL MEDIANS - CLEAN WATER ACT
FY 1989 ADMINISTRATIVE CASES
50 -
40 -
30 -
20-
10
// cases shown above bar
15
11
29
11
34
12
2 3 4 36
REQONS
13
17
9 1O
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23
Safe Drinking Water Act
In the Safe Drinking Water Act program, there was significant
growth in administrative penalties in both the Underground
Injection Control'(UIC) program and the Public Water System
Supervision (PWS) program. Again this year Region 4 had the
highest SDWA penalty dollars overall, primarily from UIC
administrative cases. Both programs maintained their presence in
the judicial cases. Regions 2, 4, 5, 6 and 9 had both judicial
and administrative cases concluded, and Regions 3 and 8
concluded only administrative cases.
Considering the sum of judicial and administrative penalty
dollars in FY 1989 for SDWA as a whole (shown in Figure 15), a
large proportion of the dollars came in. Regions 2, 4, 5, 6, and
8.
Figure 15
REGIONAL PENALTY DOLLARS - SDWA
500
FY 1989
450 -
400 -
350 -
300 -
250 -
200 -
150 -
100 -
50 -
0
JUDICIAL
10
-------
24
Judicial; There is limited value in discussing regional
patterns for SDWA judicial penalties because there have been few
cases: six each year in FY 1987, 1988 and 1989, and two in
FY 1986. The FY 1989 cases include 4 PWS cases and 2 UIC cases.
Regions with cases this year were Regions 2, 4, 5, 6, and 9.
Region 5 obtained the highest individual penalty this year, a
$55,000 penalty in a UIC case.
Administrative; FY 1989 was the third full year of operations
for SDWA administrative penalties, and both UIC and PWS programs
concluded cases (56 UIC and 14 PWS). Figure 16 shows the
regional distribution of SDWA administrative penalties (dollars
and cases). The following discussion will treat the two
component programs separately.
UIC - Region 4 had the preponderance of UIC penalty dollars
again this year (65%), followed by Region 8 (15%). The largest
number of UIC cases were in Regions 4, 5, 6 and 8 (36%, 14%, 27%
and 18%, respectively). The highest medians were in Regions 4, 2
and 8 ($8,750, 6,500 and $5,500, respectively). Regions with
individual penalties over $30,000 were Region 4, which obtained
the statutory maximum of $125,000, Region 2 ($50,000) and
Region 8 ($31,000). Region 4 exhibited high total dollars in
relation to its number of cases.
The UIC program showed a marked increase in the percentage of
cases concluded with a penalty. The overall figure increased
from 42 percent in FY 1988 to 67 percent in FY 1989. There were
still notable differences among the Regions. Region 5 obtained
penalties in 100% of its cases, followed by Region 8 (91%),
Region 6 (88%), Region 2 (50%) and Region 4 (47%). The low
figures are in part a result of the structure of the Safe
Drinking Water Act, which does not separate EPA's authority for
non-
•penalty
authority
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 the previously mentioned programs the only
orders counted are the ones issued under the statute's penalty
provisions.
PWS - Thirteen of the 14 PWS cases this year were concluded
with the statutory maximum penalty of $5,000. The majority of
dollars and ca««« were in Region 3 (6 cases totaling $30,000) and
Region 6 (5 caaas totaling $25,000).
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25
t
I
I
It!
Figure 16
REGIONAL DISTRIBUTION SDWA PENALTIES
70%
60* -J
SOX H
40X H
J0% -\
20% -j
1035 -I
FY 19S9 AOMIMSmATTVC CASES
. cases shown above bar
10
-------
26
Wetlands Protection
The Wetlands Protection program concluded 5 judicial cases and 12
administrative cases in FY 1989. Considering the sum of judicial
and administrative penalty dollars (shown in Figure 17), a large
proportion of the dollars came in Regions 5 and 1.
Each judicial case was in a different Region (Regions 1, 3, 5,
and 10), the larger penalties coming in Region 1 ($50,000) and
Region 5 ($40,000).
8
Fiscal Year 1989 was the second year of administrative penalties
for the Wetlands program. In all, 12 cases were concluded by
Regions 1, 3, 5 and 6. The highest total dollars came in Region
5 ($130,000), and the highest number of cases in Region 6 (4
cases). The highest median penalties were $50,000 in Region 5
and $8,000 in Region 1. The highest individual penalties were
$75,000 in Region 5 and $22,500 in Region 6.
There were several major successes in the area of criminal
penalties for wetlands protection. Although not included in the
chart below, noteworthy is the Region 3 assessment of the highest
criminal penalty, $202,000, in the Pozsgai wetlands case.
180
Figure 17
REGIONAL PENALTY DOLLARS - WETLANDS
CML CASES. FY 1969
!l
JODtCW.
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27
Marine and Estuarine Protection
A total of 2 administrative cases were concluded with penalties
by the Marine and Estuarine Protection program in FY 1989. Both
cases were concluded by Region 2, one for $40,000 and the other
for $20,000.
Stationary Source Air
The Stationary Source Air program showed a decline in judicial
penalty dollars from $8.9 million in FY 1988 to $4.7 million in
FY 1989. The number of cases was slightly down ('from 71 to 67) .
Administrative cases remained at a low level.
Judicial; In FY 1989 Regions 1, 2 and 9 showed the largest
increases in their share of of judicial penalty dollars, and more
modest increases were shown in Regions 4, 8 and 10. The largest
decreases in share of penalty dollars were in Regions 3 and 6.
Region 9 made a significant increase in its share of the number
of cases. Regions 1, 9 and 10 made significant increases in
median penalties compared to FY 1988.
The highest total judicial penalty dollars were in Region 5
(30%), followed by Regions 1, 2 and 9 (16%, 12% and 20%,
respectively). The largest number of cases were concluded in
Regions 2, 5 and 9 (17%, 23% and 19%, respectively). Regions 1
and 5 showed high total dollars in relation to number of cases.
The highest judicial medians in FY 1989 were in Regions 1 and 9
($90,000 and $66,900, respectively), followed by Regions 4, 6
and 10 ($42,500, $45,000 and $56,000, respectively). Medians
decreased by the largest amounts in Regions 2, 3 and 6. The
Regions with individual penalties over $400,000 were Regions 1
and 5. See Figures 18 and 19 for the regional distribution of
Stationary Source Air judicial penalties (dollars and cases) and
median penalties for FY 1989.
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o
u
o
K
28
Figure .18-
REG.IONAL DISTRIBUTION OF PENALTIES
FY 1989 STATKWWW SOURCE JUDICIAL
10
(853 CASES
Figure 19
REGIONAL MEDIANS - STATIONARY SOURCE
FY 1989 JUDICIAL CASES
234567
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29
Administrative; There is limited value in discussing regional
patterns for Stationary Source Air administrative cases, because
there were only two cases in FY 1989, and six cases altogether in
the years FY 1986-1988. In FY 1989, Regions 1 and 5 each
concluded a case. Region 5 obtained a penalty of $100,000, while
Region 1 obtained $1,741.
Mobile Source Air
The Mobile Source Air program is operated by EPA headquarters,
without regional delegation.
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30
LJ
0.
Figure 20
REGIONAL PENALTY DOLLARS
RCRA
FY 1389
10
-------
31
RCRA
The RCRA program showed a significant increase in its judicial
penalty dollars in FY 1989, although fewer cases were concluded
than the previous year. RCRA administrative penalties showed a
slight increase both in dollars and cases. Overall Region 5 had
the highest dollars and number of cases.
Considering the sum of judicial and administrative penalty
dollars in FY 1989 (shown in Figure 20), a large proportion of
the dollars came in Regions 5 and 4.
Judicial; In FY 1989, RCRA judicial cases showed, an increase
in penalty dollars, rising from the FY 1988 level of $3,776,239
to $4,287,500, while the number of cases with penalties declined
from 18 to 11. The bulk of the penalty dollars and cases were in
Region 5 (87% of the dollars and 55% of the cases). The 11 cases
were in four Regions (Regions 4, 5, 9 and 10). The highest
median was in Region 4 ($209,000, reflecting 3 cases), while the
highest individual penalty was $2,778,000 in Region 5 (a record
high for RCRA judicial penalties).
Administrative; Regions 4 and 5 showed significant increases
in their share of RCRA administrative penalty dollars compared to
FY 1988. Region 2 showed a significant increase in its share of
the number of cases. Regions 4, 6 and 10 achieved significant
increases in median penalties over FY 1988.
The highest total administrative penalty dollars came in Region 5
(34%), followed by Regions 4, 6 and 7 (15%, 15% and 11%,
respectively). The largest number of penalty cases was in
Region 5 (23%), followed by Regions 2, 6 and 7 (19%, 12% and 14%,
respectively). Regions 4 and 5 exhibited high total dollars in
relation to number of cases.
.In FY 1989 the highest median administrative penalty was in
Region 4 ($30,000), followed by Regions 1, 3, 5 and 6 ($21,668,
$20,000, $15,125 and $15,000, respectively). The Regions with
individual penalties over $100,000 were Regions 4, 5 and 6. See
Figures 21 and 22 for the regional distribution of RCRA
administrative penalties (dollars and cases) and median penalties
for FY 1989.
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32
o
g
35%
30%
255! -4
20% H
15% H
10% -i
5% 4
Figure 21
REGIONAL DISTRIBUTION RCRA PENALTIES
FY 1989 ADMINISTRATIVE CASES
0%
I
DOLLARS
r
5 6
REDON5
BBS CASES
40
,35 -
30 -
25-
20
15 -i
10
Figure 22
REGIONAL MEDIANS'- RCRA
FY 1989 ADMINST1WTVE CASES
28
10
// cases shown above bar
17
21
11
13
5 * 7
REOONS
10
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33
EPCRA
Sections 302-312 and CERCIA Section 103
A total of five administrative cases were concluded by the
programs under EPCRA Sections 302-312 and CERCLA Section 103 in
FY 1989. This was the first year of penalties for these
programs. The two programs are discussed together here because
they are closely related in practice. Two of the cases involved
violations under both EPCRA Section 304 and CERCLA Section 103,
and they will be mentioned below under both programs.
EPCRA Sections 302-312; Four cases were concluded
under this program. Regions 3 and 4 each concluded one case,
with penalties of $21,250 and $30,000,. respectively. Region 5
concluded two cases with total penalties of $12,666.
CERCLA Section 103; Three cases were concluded under
this program. Region 3 concluded one case with a penalty of
$15/550, and Region 5 concluded two cases with penalties
totaling $6,334.
Toxics Release Inventory (Section 313)
A total of 19 administrative cases were concluded by the Toxics
Release Inventory program in FY 1989. This was the first year of
penalties for this program, and six Regions concluded cases.
The highest total penalty dollars were in Region 10 (33%) and
Region 8 (25%). Regions 2, 3, 4 and 9 also obtained penalties
(4%, 14%, 11% and 13%, respectively). The largest number of
cases were in Regions 10 and 3 (53% and 21%, respectively).
Regions 8 and 9 exhibited high total dollars in relation to
number of cases. Regions with individual penalties over $25,000
were Regions 4, 8 and 9. See Figure 23 for the regional
distribution of TRI penalties (dollars and cases).
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34
ft
§
E
it!
Figure 23
REGIONAL DISTRIBUTION EPCRA PENALTIES
1989
60S
10
CASES
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35
TSCA
The TSCA program showed an overall decline in FY 1989, both in
penalty dollars and number of cases. However, some Regions
nonetheless showed increases in dollars and cases, and the
overall median penalty attained a new record high level.
Regions 3 and 10 showed significant increases in their share of
TSCA penalty dollars compared to FY 1988. (Regions 5 and 7 also
showed modest increases in dollars.) Regions 3, 5 and 10 showed
significant increases in their share of the penalty cases. All
Regions increased their median penalties, with the largest
increase coming in Region 10.
The largest share of penalty dollars was at Headquarters (41%),
followed by Regions 3 and 5 (13% and 12%, respectively). The
largest number of penalty cases was in Region 5 (28%), followed
by Regions 3 and 2 (15% and 11%, respectively).
The highest median penalty was at Headquarters ($35,363),
followed by Regions 1, 2, 3 and 9 ($11,400, $7,800, $8,000
and $7,000, respectively). The highest individual penalties were
$615,650 at Headquarters, $112,000 in Region 2 and $60,000 in
Region 5. See Figures 24 and 25 for the regional distribution of
TSCA administrative penalties (dollars and cases) and median
penalties for FY 1989.
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36
o
g
•-
u
u
e
Figure 24
REGIONAL"DISTRIBUTION TSCA PENALTIES
45%
1234
40
ii
a »-
y~
35 -
30 -I
»\
20 -
15 -
10 -
sH
CASES
Figure 25
REGIONAL MEDIANS - TSCA
FY 1989
# cases shown above bar
15
17
56
REQONS
HQ
w
I
10 HQ
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37
FIFRA
Overall, the FIFRA program showed a slight increase in dollars
and a significant increase in cases in FY 1989. The largest
changes in contribution to total penalty dollars were relative
increases by Regions 3 and 6 and a relative decrease by
Headquarters. Increases in median penalties were achieved by
Regions 3, 4, 6, 7, and 8.
A large proportion of the penalty dollars came from Regions 3, 6,
and 7 (17%, 21% and 15%, respectively). The largest numbers of
cases were in Regions 6 and 7 (both 26%). Regions 1 and 3
exhibited high total dollars in relation to number of cases.
The highest medians were in Regions 1 and 3 ($4,100 and $2,400,
respectively), followed by Regions 4, 8, 9 and 10 ($1,028, $1,320
$1,560 and $1,360, respectively). Individual penalties over
$5,000 were obtained by Regions 1, 3, 5 and 8. See Figures 26
and 27 for the regional distribution of FIFRA penalties (dollars
and cases) and median penalties for FY 1989.
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38
o
u
IE
*
Figure 26
REGIONAL DISTRIBUTION FIFRA PENALTIES
FY 1983
, J
II
REGIONAL MPBlANS - FIFRA
FY 1989
I'Z 3
& 2 -
1 -
17
1
J
10
24
I
14
66
S 6
RCQONS
1O
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APPENDICES
TO
MANAGEMENT REPORT ON EPA FEDERAL PENALTY PRACTICES
FY 1989 • •'
A. Criminal Enforcement
B. Clean Water Act*
C. Safe Drinking Water Act
D. Wetlands Protection
E* Marine and Estuarine Protection
F. Stationary Source Air*
G. Mobile Source Air
H. RCRA, EPCRA Sections 302-312
and CERCLA Section 103
I. FIFRA, TSCA and Toxics Release Inventory*
J. Trends in Program Totals
* Appendix text has been altered to reflect changes reported by
regions.
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APPENDIX A
f cm \
Cggzl
*^^^^^f
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. O.C. 20460
DEC I 4 1989
MEMORANDUM
once of
ENFOMCtMENT AMD
COMFUAMCE MOWTOftlMG
SUBJECT: 1989 Penalties Study
FROM:
TO: .
Criminal Enforcement Program; Use and Levels of Penalties
Paul R. Thomson, Jr.
Deputy Assistant Administrator - Criminal
Gerald A. Bryan, Director
Office of Compliance Analysis and Program Operations
From their inception, most EPA statutes included 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 monetary penalties (fines), criminal
enforcement penalties are also measured by time of incarceration
imposed on individuals convicted and by compliance-related
relief. Indeed, because of the undeniably effective deterrent
effect of imprisonment, jail time obtained at sentencing is the
most onerous and probably the best measure of the effectiveness
of criminal penalties. Compliance-related relief includes suob
things as monetary restitution or actual performance of
corrective action, attendance at or giving of training programs,
community service, guaranteeing environmental compliance during a
term of probation and other punishment tailor-made to suit the
crime. ..Compliance-related relief is usually imposed by a judge
as a condition of probation or as a condition of suspension of
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A-2
all or a portion of a sentence. In contrast to jail tine, which
is completely- unavailable in civil enforcement, compliance-
related relief nay be obtained in both civil and criminal cases.
Finally, it is noteworthy that a crininal conviction
invariably carries additional, collateral consequences which can
be very onerous, including personal stigmatization and the loss
of fundamental civil rights of individuals who are felons; 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 the creation of a
binding determination of culpability which should greatly assist
third-party civil plaintiffs or government agencies in subsequent
civil actions against a convicted defendant. These additional
consequences deserve mention to fully understand the totality of
the punitive and deterrent impact of criminal enforcement.
Background on the History, Nature, and Current Status of the
Crininal 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 fiscal year 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 crininal
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 at the National Enforcement
Investigations Center (NEIC), itself located in Denver, Colorado
and a part of OECM. In 1989, the work of EPA's 47 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. Prosecutor ial 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.
Criminal Penalt
While the Agency has no internally promulgated crininal
penalty policy, the federal government now has a crininal penalty
policy, one which explicitly covers offenses involving the
environment, and it was drafted substantially by our crininal
enforcement attorneys. On November 1, 1987, the Guidelines of
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A-3
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 judicially imposed, and between sentences imposed 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
twice the estimated pecuniary loss caused by the offense, or
three times the estimated pecuniary gain wrongfully obtained by
an environmental criminal, in addition to set statutory amounts.
since criminal cases typically involve multiple charges under a
number of EPA statutes or under Title 18, defendants' exposure to
available maximum penalties can be very large indeed.
During fiscal year 1989, the first two EPA criminal prosecutions
to be sentenced under the Guidelines resulted in 21 and 27-month
prison terms.
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.
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:
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'a
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 NElC'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 exclusively
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 1989
Investigations (referrals 20 26 31 40 41 41 59 60
to DOJ) (does not
include investigations
jointly with FBI and/or
other agencies)
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A-5
Early in 1987, we began keeping nore detailed data with which
to produce additional statistics of interest, including the
following totals:
Referrals
o resulting in a conviction
o in which all charges were
dismissed or all defendants
acquitted
Defendants sentenced
o entities
o individuals
1987
27
2
24
2
1989
43
2
16
16
21
Total amount of fines assessed
(before suspension)
(after suspension)
Total months
o sentenced
(before suspension)
Total
64
47
55
$3,622,876
$2,190,250
1/015 DOS
(84 yrs)
fM«'J2S f",484,666
$1,465,250 $10,190,116
$»> 302 mos
• (25 yrs)
369 mos
(30 yrs)
95 mos
(8 yrs)
324 mos
(27 yrs)
208 mos
(17 yrs)
i
o of incarceration ordered
(after suspension,
before parole)
Judicial Penalty Prof lie,
Accurate data on criminal penalties is not readily available
within the Agency before the year 1987. since 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
O
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A-6
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
the Guidelines of the U.S. Sentencing Commission are applied, we
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 included in sentences
in only about 10% of all cases. Compliance-related relief cannot
be easily quantified and is not tracked statistically.
Highest Penalties
While few in number, the EPA cases brought before 1982, were
brought to address substantial violations. Indeed, the largest
criminal fine ever obtained by EPA was in the criminal case of
U.S. v. Allied'Chemical Corp.. et alir arising out of the actions
of Life Science Products Company. The companies pled guilty to
940 counts in violation of the CWA for unlawful discharges of
kepone which, to this day, still contaminates the James River
below the city of Hopewell, Virginia. In 1976, Allied Chemical
was fined $13,240,000 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 employed criminal
investigators in 1982, some substantial penalties have been
imposed. In fiscal year 1989, the first environmental criminal
sentencings subject to the U.S. Sentencing Commission Guidelines
occurred. The Guidelines, mandated by Congress in 1984, apply to
all federal crimes committed after November 1, 1987, and ensure
consistency in sentencings. Any deviation from the fixed range
of jail time derived by the Guidelines' matrix calculation
requires a judge to state reasons on the record for applying a
different sentence. Such a deviation is appealable by the
Government. Some highlights are:
Year/
Region
1989
I
Summary
Case Description
Vice-President of chemical
company and company (RCRA-
related false .statements)
Penalty Imposed/
Paid/Time Served
v-P: 3 years suspended
$10,000 fine;
Company: $1 million
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A-?
II
III
IV
1988
I
IV
VII
President and Vice-
President of electroplating
firm (CWA/RCRA)
3 Civilian management
personnel at DOD weapons
facility (RCRA)
Private owner of wetland
(CWA)
Private owners of wetland
(CWA)
Major chemical company
(CWA/CERCLA)
Vice-president of real
estate development firm
(CWA)
Owner/president of chemical
brokerage (RCRA)
Manufacturing of epoxies
and grouting compounds
(RCRA, CWA)
President and treasurer
of pesticide manufacturer
(FIFRA)
fine, and as consequence
of plea, entered
remediation order with
state for cleanup
estimated at $7.5 million
12 and 9 months
3 years probation,
1,000 hours community
service, and $50 in court
costs each
27 months, $200,000 fine,
restoration of wetland,
and 5 years probation
(Guidelines case)
21 months and $5,ooo
fine each (Guidelines
case), restoration of
wetlands
$1.1 million ($600,000
to be placed in
environmental trust;
$500,000 to go to U.S.
Treasury)
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-8
1987
V
VII
VII
1986
I
vice-president of a company
operating injection wells
(SDWA)
Principal of a distributor
of grain products contami-
nated with a pesticide
(a joint investigation,
with conviction under CWA,
FDCA, and Title 18)
Two companies owning and
cleaning river barges
(CWA)
An.industrial discharger
POTW (CWA)
President of shipyard
and his company (CWA,
CAA, CERCLA, TSCA)
II
IV
IV —
Two brothers and their
companies exporting
hazardous waste (an FBI-
lead investigation, with
convictions under Title 18)
An ocean resort, its vice-
president and director of
utilities (CWA)
President of a waste 0
treatment company (RCRAf)
9 months imprisonment
(none suspended)
3 years imprisonment
(none suspended)
$375,000 total fines
(none suspended)
$1,025,000 ($225,000 to
be suspended upon
construction of waste-
water treatment works)
$335,000 total fines
($200,000 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 totaling
$550,000, and $66,000
restitution
$600,000 fine for
corporation (none
suspended); the
individual received
smaller fines and terms
of probation)
3 years (none suspended)
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A-9
Food-manufacturing national
company and its plant
manager (CWA)
1985
ZX
Principal operations
officer of an imported
auto emissions testing
facility (Title 18)
Hood-preserving company
(RCRA, CWA)
$450,000 fine on 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 on plant
manager
5 years (4 1/2 years
suspended)
$1,000,000 ($850,000
suspended upon its
payment to restoration
fund for the site)
Typical Penalties
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, !*£*., the average amount of
the typical penalty. Because deterrence is mainly a function of
the likelihood of detection, the certainty and severity of
punishment, the amount of a criminal fine or duration of a
sentence of imprisonment, (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 severe nature and
collateral effects of the "typical" criminal penalty may be
equally important.
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-10
Effect: of Policies and Initiatives
»
In cases involving the intentional adoption of a pattern or
course of non-compliant conduct; a mere fine against .the business
entity is easily passed along to the consumer as just another
"cost of doing business." 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 tvo 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.
Comparison of Regional and National Media Programs, 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 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, unless
-------
A-ll
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-world1* obstacles to statistical
truth, however, OECH 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. Nonetheless, from the available
data we may begin to make some programatic 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 new
criminal enforcement effort. Certainly those Regions and
programs which increase their support for 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 entirely guantified,
these will be the demonstrable benefits 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.
-------
A-12
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CRfMINAL ENFORCEMENT PROGRAM
.
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20 -
10 -
1982
a SUCCESSFUL CASES
84 85 86
FISCAL YFJ^R
87 85
+ DEFENDANTS CONVICTD
1989
-------
-------
APPENDIX B
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, O.C. 20460
JAN I 9 1990
OFFICE OF
ENFORCEMENT AND
COMPLIANCE MONITORING
MEMORANDUM
SUBJECT: CWA Civil Judicial and Administrative Penalty Practices
Report for FY89
FROM: Robert G. Heiss
Associate Enforceme
for Water
James R. BB38FT Sirector
Of f ice SK. Water Enforcement
and/Permits
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 FY89. The penalty numbers represent the decree or order
amount 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 of the
Office of Enforcement and Compliance Monitoring at 382-2879 or
Ken Keith of the Office of Water Enforcement and Permits at 245-
3714.
We look forward to receiving the final agency-wide report
when it is completed.
Attachment
cc: George Alderson
Ken Keith
Rich Kozlowski
Kathy Summerlee
Primtd on Racyded Paper
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•*»
•"
-------
B-2
CWA CIVIL JUDICIAL AND ADMINISTRATIVE
PENALTY PRACTICES REPORT FOR FY89
1.
Use and Levelof Penalties
This report summarizes the use and levels of civil judicial
and administrative penalties in FY89 in cases concluded under the
Clean Water Act's National Pollutant Discharge Elimination System
("NPDES") program.
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
administrative penalty orders in August 1987, and Regional
Offices began imposing penalties shortly thereafter.
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 inability to pay and
litigation considerations. The economic benefit is typically
calculated using EPA's BEN computer software program.
-------
B-3
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 FY89:
a. For the second full year, the availability of
administrative penalty authority, pursuant to the' WQA of 1987;
b. The Clean Water Act settlement penalty policy
which, absent ability to pay or litigation considerations,
requires recoupment of economic benefit and a gravity component;
c. Use of the BEN computer model to calculate
economic benefit; and
d. 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 FY89
included a penalty.* See Table 1. This continues the post-1985
trend of concluding virtually all Clean Water Act civil judicial
cases with a penalty. See Figure 1.
Virtually all administrative penalty actions in FY89 were
concluded with a penalty. See Table 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.
* The one case concluded without a civil penalty was Ashland in
Region III which was also the subject of a criminal case netting
a penalty of over 2 million dollars.
-------
B-4
a.
Number of Cases
The total-number of judicial cases concluded in FY89
(including those concluded without a penalty) was 56. The number
concluded in FY88 was 87, the highest annual total ever. The
FY89 number is a drop to approximately the level reported for
FY86. See Figure 1.
b.
Total Penalties
Total penalties for all concluded judicial cases in
FY89 was $9,744,000. See Table 1. --Total penalties'for FY38 was
$11,885,858, the highest annual total ever. The FY89 total
exceeds the FY87 total of $6,872,940. See Figure 2.
c. Typical Penalties
The median penalty for all concluded judicial cases in
FY89 (including those concluded without a penalty) was $50,000.
See Table 1. This is an increase from FY88 median of $37,500 and
a new high point for Clean Water Act NPDES Cases. See Figure 3.
<*• Highest Penalties
The highest penalty in FY89 was negotiated by Region V
in a concluded case against Koch for $1,540,000. The next
highest penalty was negotiated by Region VIII against
Metropolitan Denver Sewage Disposal District for $1,125.000. See
Table 3.
e. Comparison of Regional Uses and Levels ofJudicial
Penalties
Two Regions concluded cases with penalties of over one
million dollars in FY89. Region V obtained the largest amount of
total penalties, $3,389,000. In addition, Regions III, IV, VI
and VIII obtained penalties of over $1,000,000 total.
In terms of the number of cases concluded, Region IV
concluded the most cases (15) followed by Region V (9) . See
Table 3.
6. Administrative Penalties 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. See Table 4.
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B-5
a. Total Penalties and Number and Type of Cases
In FY89 the total penalties for all concluded NPDES
administrative penalty orders was $2,897,625. See Table 4. This
was an increase of 500% over FY88 which was the first full year
of implementation. The total number of final administrative
penalty orders was 171, more than a four-fold increase over the
40 final administrative penalty orders in FY38. Of the 171
concluded administrative penalty orders., 122 were Class I penalty
orders and 49 were Class II penalty orders. The penalty orders
were issued for a variety of violations: effluent violations
(88); pretreatment violations (39); failure to submit discharge
monitoring reports or submission of late reports (11);
unpermitted facilities or unauthorized.discharges (25); failure
to start or complete scheduled construction (these are frequently
National Municipal Policy violations) (4); and operations and
maintenance violations (4).
b.
Efficiencies of Use
The administrative penalty orders in FY89 were
concluded, on an average, within 159 days of being issued. Class
I cases, on an average, took 138 days to conclude; Class II
cases, 209 days. All of the penalty orders concluded in FY89
were achieved by consent order; none of the concluded cases was
decided as a result of a formal hearing.
c. Typical Penalties
The median penalty for administrative penalty orders
concluded in FY89 was $10,000. This was an increase of 18% over
the FY88 median penalty. The median for Class I actions was
$5,750 and for Class II actions $35,000. Ninety-two cases were
concluded with penalties of $10,000 or more. See Table 4.
d.
Penalties Issued to Municipalities
Sixty-two of the 166 respondents were municipalities.
The median penalty assessed against municipalities ($10,000) was
identical to the median penalty for all administrative penalty
orders concluded in FY89.
e.
Pretreatroent Penalties
Thirty-nine penalties were issued for pretreatment
violations, 27 to industrial users (lUs) and 12 to municipalities
for failure to implement all or part of a pretreatment program.
The median penalty assessed against lUs was $14,000; the median
penalty assessed against a municipality was $18,750.
f. Highest Penalties
The largest penalty order concluded in FY89 was issued
by Region I against an industrial user, Imperial Pearl Company,
-------
B-6
for $100,000. The next highest, issued by Region VI, was for
$98,000 against AT&T Information Systems Inc. See Table 4. The
highest penalty against a municipality was for $65,000, issued to
the City of McAllen, Texas.
g. Comparison of Regional Use and Level of Penalties
Region VI issued almost one-third (54) of the
administrative penalty orders concluded in FY89. In Region VI
authority for the NPDES program is vested in.EPA for all but one
State. Regions IV and X had the second and third largest number
of final administrative penalty orders (29 and 17 respectively).
Region VI obtained the highest amount of penalties
($921,825). Region IX had.the second highest amount of penalties
($370,500). See Table 4.
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TOTAL CIVIL ADMINISTRATIVE CLEAN WATER ACT PENALTIES
FOR ALL CASES CONCLUDED IN FY 89
B-8
REGION
1
I
3
4 -
5
6
7
.8
9
10
TOTAL $
$283,500
$181,250
(134,500
$158,000
$336,000
$921,825
$166,000
$104,950
'$370,500
$241,100
CASES CASES
WITH y/o
PENALTY PENALTY
15
11
5
29
11
54
3
12
13 1
17
TOTAL
CASES
15
11
5
29
.11
54
3
12
U
17
PCT
U/0
PENALTY
OX
OX
OX
ox
ox
ox
ox
ox
7X
ox •
AVG
PENALTY
$18,900
$16,477
$26,900
$5,448
$30,545
$17,071
$55,333
$8,746
$28,500
$14,182
AVG ALL
CASES
$18^900
$16,477
$26,900
$5,448
$30,545
. $17,071
$55,333
$8,746
$26,464
$14,182
MEDIAN
PENALTY
$15,000
$5,000
' $16,000
$5,000
$25,000
$10,300
$56,000
$1,650
$16,500
$5,000
MEDIAN
ALL CASES
$15,000
$5,000
$16,000
$5,000
$25,000
$10,300
$56,000
$1,650
$15,750
$5,000
HIGHEST
PENALTY
$100,000
$76,750
$55.000
$15,000
$60,500
$98,000
$60,000
*35,000
$75,000
$80,000
TOTAL
$2,897,625
170
171
1X $17,045
$16,945
$10,000
$10,000
$100,000
Class I
II
All
$1,018,375 122 122 OX $8,347 $8,347 $5,750 $5,750 $25,000
$1,879,250 48 1 49 2X $39,151 $38,352 $35,000 $35,000 $100,000
$2,897,625 170 1 171 1X $17,045 $16,945 $10,000 $10,000 $100,000
Cases
DISTRIBUTION Of PENALTY SIZES FY 89
ZERO $ <>$5000 <$10000 <$25000 <$50000 <$100000 <$125,000 (NAX.) TOTAL CASES
1 62 16 59 13 19 1 171
-------
B-9
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FIGURE 1
USE OF- PENALTIES IN CWA JUDICIAL CASES
90
70 -
50 -j
50 H
40 -\
30 H
20 H
10 H
FY 1375-1989
1975 76 77 78 79 80 81 82 83 84 85 86 37 88 1989
FISCAL YEAR
wrm PENALTY
PENALTY
-------
B-10
-------
B-ll
FIGURE 3
MEDIAN PENALTIES - CLEAN WATER ACT
ALL CONCLUDED JUDICIAL CASES
60
50 H
40 H
30 H
20 -\
10 H
I !
1975 76 77 78 79 80 B1 82 83 84 S5 86 87 58 1989
FISCAL YEAR
-------
APPENDIX C
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. D.C. 20460
JAN I I 1990
OFFICE OF
WATER
SUBJECT: FY 1989 Penalty Report
FROM: /Robert J. Blanco, Director
"^State Program Division
TO: Gerald A. Bryan, Director
Office of Compliance Analysis and
Program Operations
Attached is the Office of Drinking Water's FY 1989 Penalty
Report. Overall there has been an improvement in most penalty
areas from civil to judicial actions. The narrative and charts
attached gives more specifics on a region by region basis for FY
1989.
If you have any further questions please contact Peter Bahor
for UIC questions at 382-7280 or Betsy Devlin for PWS questions
at 382-2303.
Attachment
cc: Peter Bahor
Connie Bosma
Francoise M. Brasier
Betsy Devlin
David Drelich
John Lyons
Don Olson
Chet Pauls
&
?• '
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C-2
FY 1989 PENALTY REPORT
Use and Levels of Penalties
This report summarizes the use and levels of civil judicial
and administrative penalties in FY 1989 in cases concluded under
the Safe Drinking Water Act ("SDWA").
Safe Drinking Water Act/Public Water System Supervision Program.
The Safe Drinking Water Act (SDWA) of 1974 established the
public water system supervision program under which EPA
promulgates regulations with which all public water systems must
comply. A public water system is defined by the SDWA as a system
"for the provision to the public of piped water for human
consumption which has at least fifteen service connections or
regularly serves at least twenty-five individuals." The PWSS
program is primarily implemented by the states as 54 of 57
jurisdictions have applied for and received primary enforcement
responsibility for the program.
The 1986 Amendments to the SDWA required EPA to promulgate
regulations for many additional contaminants and increased EPA's
enforcement authorities. The amendments provided EPA with the
authority to issue administrative orders for violations of the
SDWA or the national primary drinking water regulations (NPDWRs)
and to administratively assess a penalty of up to $5,000 for
violations of the administrative orders. The amendments also
increased the maximum civil penalty EPA could assess to $25,000
per day of violation and removed the requirement that a violation
be willful in order to assess a penalty.
Safe Drinking Water Act/Underground Infection Control Program.
The authority to seek penalties for violations of the
Underground Injection Control("UIc") programs is found in Section
1423 of the SDWA. When Congress amended the SDWA in June, 1986,
it increased civil judicial penalties for UIC violations from
$5,000 to $25,000 a day.
The legislature also established administrative remedies in
the UIC program, including the authority to issue administrative
compliance orders to violators of SDWA requirements.
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 the UIC
program can only be assessed after providing the respondent with
the opportunity for a hearing.
-------
C-3
Penalty settlement policy for the SDWA's judicial program
and administrative penalty program is governed by the Agency's
general February 16, 1984, "Policy on Civil Penalties."
Influences on the Use and Levels of Penalties.
PWSS Program
. There are two major factors which influence the use of
penalties in the PWSS program. First, the systems in violation
with the NPDWRs are generally small, often serving less than
3,300 persons. Such systems often have difficulty raising the
funds to make the improvements needed to bring the system into
compliance with the regulations. Recognizing this fact, the PWSS
program has generally assessed rather small penalties. The
largest penalty assessed in a civil case has been $37,500.
Secondly, it is important to note that in the PWSS program
EPA does not have the authority to issue an administrative order
with a penalty. A penalty can be assessed only for violating the
administrative order. Compliance with terms of our
administrative orders has been good. Over the past two years, we
have issued 356 final administrative orders and had only 27
complaints for penalty for violating those orders.
QIC Program
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. EPA has
received in settling or litigating SDWA cases in FY 1989.
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.
Statutory Changes to Penalty Authorities.
There have been no changes to the penalty authorities under
the SDWA since the statutory amendments in 1986.
Use of Penalties.
ESS
In FY 1989, 4 of the 5 civil cases concluded had a
penalty. (The one case that did hot was dismissed.)
No final administrative orders had a penalty, but the
program issued 14 complaints for penalty for violating
previously issued administrative orders.
-------
C-4
*
UIC
Fifty-six (56) or sixty-two percent (62%) of the 90
administrative cases were issued with penalties. This
is a 21% increase from FY 1988 in administrative cases
issued with penalties. Two of the three judicial cases
concluded contained a penalty.
Administrative Penalty Profile.
PWS
In FY 1989, the PWSS program issued a total of 14
complaints for penalty for violations of final
administrative orders, assessing a total of $66,000.
Thirteen of the 14 complaints assessed the statutory
maximum (for administratively assessed penalties) of
$5,000. The average penalty was $4,715 and the median
was $5,000. See Table 4. Regions 3,4,6,9, and 10
issued complaints. See Table 6 for the distribution of
complaints by Region.
UIC
There were 90 administrative cases in FY 1989
(including those cases concluded without a penalty).
.See Table 7. This is a decrease from the 95 cases
concluded in FY 1988. In FY 1989 62% pecentage of the
concluded cases had penalties. This is an increase
from 41% of the administrative cases concluded in FY
1988.
The total administrative penalties assessed in FY 1989
is $675,290, this is an increase from $422,890 in FY
1988.
The average amount assessed for all regions is $12,059.
Region IV had the highest average with $22,100. Region
V had the lowest average with $2,469.
The median penalty for FY 1989 is $4,000. See Table 7.
The greatest number of penalties were equal to or less
than $5,000. See Table 5. 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.
The highest penalty in FY 1989 was for $125,000 (the
statutory maximum) collected in Region IV. This is the
second year in a row that Region IV has issued at least
one AO for the ^statutory maximum.
-------
C-5
Judicial Penalty Profile*
PWS
In FY 1989, the PWSS program concluded five (5) civil
cases. In four (4) of these, penalties were assessed
with amounts ranging from $500 to $37,500, for a total
of $56,000. The fifth case was dismissed. Se?- Tables
1,2, and 3 for more detailed information and fc_ a
distribution by Region.
UIC
Two of the three UIC judicial cases concluded in FY
1989 were concluded with a penalty. See Table 1. This
is half the number concluded in FY 1988 (6) & FY 1987
(6). The total judicial penalties for FY 1989 is
$75,000. This is an increase of $26,906 over FY 1988.
The median judicial penalty for FY 1989 was $37,500
this is an increase from $5,000 in FY 1988 and $3,000
in FY 1987.
The highest penalty collected in FY89 was $55,000.
Only Regions V and VI concluded UIC/SDWA judicial
cases. They are as follows:
Region 5 Centaur Petroleum $55,000
Region 6 James Oil Co. $20,000
Comparison of Regional Use and Levels of Penalties.
PWS
Due to the limited number of civil cases, comparisons
of Regional use of penalties is not particularly
useful. The differences in penalties assessed in the
four cases concluded in FYi?1989 were due to the unique
factors of the cases themselves.
Further, there have been only a limited number of
complaints for penalty for violating final
administrative orders and so Regional comparisons are
provisional. Regions III and VI have been the most
aggressive in issuing complaints when any terms of
administrative orders have been violated. Regions that
have not issued any complaints are monitoring systems'
compliance with the terms of final orders and systems
-------
C-6
are remaining in compliance.
UIC
Regions II, III, IV, V, VI, and VIII concluded SDWA
administrative cases in FY 1989. All issued AO's with
penalties except Region III.
For the second consecutive year Region 4 had the
highest number of AOs issued 43 (20 with penalties).
-------
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-------
APPENDIX D
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
JAN 10 1990
OFFICE OF
WATER
MEMORANDUM
SUBJECT
FROM:
TO:
Submission of CWA Section
for FY 1989
404
Report
Suzanne E. Schwartz, Director
Regulatory Activities Division/ ,
Office of Wetlands Protection'
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 administrative and
judicial penalty cases concluded in FY 1989.
Should you have any questions concerning this submission,
please contact me or have your staff contact Joseph DaVia of the
Enforcement and Regulatory Policy Staff at 245-3902.
Attachment
cc: George Alderson (LE-133)
Compliance Policy and Planning Branch
-------
-------
D-3
df.
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. f 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.
s.
• Use of Penalties .
Only recently, since 1985, has-EPA had an active nationwide
presence in Section 404 enforcement. Figure 1 represents EPA's
Section 404 enforcement activities since 1986. Since then, the
Regions have been referring an increasing number of cases to DOJ.
Also, the Regions continue to implement the new administrative
penalty authority, with actions initiated in five Regions.
Nevertheless, the number of EPA 404 enforcement actions remains
relatively small, especially when compared to other Agency
enforcement programs. All the Section 404 cases concluded in
FY 1989 were against persons who discharged without a permit.
Moreover, all administrative and judicial penalty cases concluded
in FY 1989 resulted in assessment of monetary penalties.
Judicial Penalty Profile
Five judicial cases were concluded in FY 1989 equaling the
total number concluded for the previous year. However, the
penalties collected during FY 1989 resulted in a six-fold
increase over that collected in FY 1988. The average'judicial
penalty assessed was $30,000 in FY 1989. See Tables l, 2, and 3
for further analysis of the judicial penalty data.
Administrative Penalty Profile
Twelve administrative penalty cases were concluded during
FY 1989 for unauthorized Section 404 discharges. Eleven cases
were settled by consent agreement; one case was concluded by .
going to hearing. Of the cases concluded in FY 1989, the average
penalty assessed was $16,454. see Tables 4, 5, and 6 for further
analysis of the administrative penalty data.
It should be noted tha% in most Section 404 enforcement
actions, the immediate goal is removal of the illegal discharge
and, 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 Section
404 program issued 113 AO's in«FY 1989. The number of A0*s has
increased steadily since EPA tfegan to strengthen its wetlands
enforcement program in 1985 (See Figure 2).
. t-
-------
D-2
CWA SECTION 404 CIVIL PENALTY REPORT — FY 1989
Program Descr1pt1on
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. EPA and the Corps share 404
enforcement authority. However, 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. Since only
one state (Michigan) has assumed the 404 program, virtually all
404 enforcement remains the responsibility of EPA and the Corps.
The administrative and judicial 404 enforcement actions
discussed below only reflect those initiated solely by EPA or
jointly by EPA and the Corps.
Pgssibl.e Influences on the Useand Levels of CJLvil Penalties
There are several factors which may have affected the amount
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
1990. This guidance specifically addresses the unique .
informational requirements and needs for assessing penalties
under Section 404. 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. Also, many of
the Section 404 cases do not involve large corporations, as is
the case in other Clean Water Act programs. Instead, they are
often "mom and pop" businesses or private individual landowners.
This becomes particularly significant when considering "ability
to pay" in calculating a penalty amount.
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. Experience to date indicates that
many courts are willing to assess relatively large penalties for
-------
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Comparisons
Regional Use and Levels of P
Given the small number of administrative and judicial cases
concluded, a detailed Region analysis is not relevant
-------
D-7
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-------
APPENDIX E
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. D.C. 20460
8 '•"'-
OFFICE OF
WAT6H
MEMORANDUM
SUBJECT:
FROM:
TO:
Marine and Estuarine Protection Penalty Report
£br/FY 198<
/ / i / /
atiojrrs Division
^•^
Gerald A. Bryan, Director
Office of Compliance Analysis & Program Operations
Office of Enforcement & Compliance Monitoring
I am pleased to submit to you the first Office of Marine and
Estuarine Protection (OMEP) penalty report regarding enforcement
activities in marine and near coastal waters. This report
addresses only those penalty cases concluded in FY 1989.
Should you have any questions concerning this report, please
contact our designated enforcement program manager, Rosanna
Ciupek, at 475-6741.
Attachment
cc: Tudor Davies
Robert Heiss, OECH (LE-134W)
George Alderson, OECM (LE-133)
Michelle Killer.
Leslie Baldwin
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E-3
nature?) and its potential for harm to the marine/coastal
ecosystem, rather than a quantifiable number which exceeds
permitted limits. Rate of discharge or amount of discharge are,
however, two numeric factors which can be used to assist in
determining the gravity of the violation. In addition, potential
enforcement actions may involve a Section 103 permit (ocean
disposal of dredged material). The regulatory permit authority
for this program is the U.S. Army Corps of Engineers .(Corps).
EPA has direct enforcement authority for ensuring compliance with
these Corps permits but coordination with the Corps is naturally
a part of these enforcement actions. Another federal actor
regarding marine and coastal water protection is the U.S. Coast
Guard (USCG). Recent legislation (e.g., the Shore Protection
Act) provides surveillance, monitoring and enforcement mandates
and responsibilities to the USCG. Obviously, many OMEP
enforcement activities require additional effort due to the need
for coordination with other federal agencies. This requires the
handling of OMEP enforcement cases in a manner different than
those enforcement actions in EPA programs that are solely the
programmatic responsibility of EPA. •
Levels of Penalties
There were sixteen administrative complaints issued in late
FY88, all by Region II. Cases concluded in FY89 stemmed from
these FY88 administrative actions. All of these actions were for
violations of EPA MPRSA Section 102 permits concerning dumping of
sludge and other waste material. Another two complaints were
issued by Region IX in May, 1989. These Region IX administrative
enforcement actions concerned violations of Corps MPRSA Section
103 permits - permits for the disposal of dredged material into
ocean disposal sites. (EPA is involved in the Corps 103 permit
process and has authority to enforce its provisions.) Total
penalties for Region II's administrative enforcement actions
amount to $1.25 million. Total penalties for Region IX actions
amount to $507 thousand.
MPRSA Penalty Policy
The MPRSA, at Section 105(a), requires EPA to consider three
factors in assessing penalties for violations of the Act: the
gravity of the violations, prior violations, and good faith
efforts to comply vith the MPRSA once notified of the violation.
These factors are also embodied in the EPA policy on Civil
Penalties and the EPA Framework for Statute-Specific Approaches
to Penalty Assessments 14-19.
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E-2
MARINE AND ESTOARINB PROTECTION
PENALTY REPORT FOR 1989
Background
This report summarizes the use and levels of administrative
penalties for cases concluded in FY 1989 by the Marine and
Estuarine Protection program. This is the first year in which
enforcement penalty cases for this program have been included in
the fiscal year enforcement report. Given that Congress recently
enacted numerous statutes that address marine pollution concerns,
this office expects that the availability of more information
will help to increase compliance levels aimed towards protecting
marine and coastal resources in upcoming years.
All FY 1989 enforcement actions were brought under the
administrative penalty authority found in Section 105 of the "
Marine Protection, Research, and Sanctuaries Act (MPRSA) of 1972,
as amended, 33 U.S.C. Sections 1401 et sea. Under this
authority, EPA is authorized to seek administrative penalties of
$50,000 per violation per day (i.e., each day of continuing
violation constitutes a separate offense). Knowing violations
carry criminal fines similar to civil penalties, except
imprisonment for one year may also be imposed for such criminal
activity. The MPRSA also provides for equitable relief by
injuctive action through the District Courts of the U.S.
Complaints were issued for violations of Sections 101(a) of
the MPRSA whereby no discharge of materials for the purpose of
dumping may occur in ocean waters except as authorized by a
permit. Permits authorizing the dumping of material into ocean
waters may be granted under an EPA MPRSA Section 102 (sludge
material) permit or a Corps MPRSA Section 103 (dredged material)
permit.
Program Description
Penalties pursued under the MPRSA involve a number of
factors unique to marine and coastal water environs. Naturally,
the need to have field presence in waters which are not easily
accessible (e.g., deep waters) increases compliance monitoring
burdens. Also, the gravity of the violation regarding harm to
the environment or to public health is often difficult to
ascertain with quantifiable numbers. Determinations of
environmental damage are based upon the possibility or liklihood
of harm (e.g., was the material dumped hazardous or toxic in
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E-5
Program Expectations
Current funding levels for EPA's marine/coastal enforcement
initiatives are limiting. Although resources for enhancing
activities in this area have been proposed, no additional
resources have materialized in budget plans through to FY 1991.
Funding levels will naturally -limit efforts for long-term actions
aimed toward enhancement of enforcement activity and will define
the level of effort anticipated for EPA through FY 1991.
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E-4
Administrative Penalty Profile
EPA concluded two MPRSA Section 105 cases in FY 1989. The
total administrative penalties obtained from these two cases
amounted to $60k. As the number of concluded cases for FY 1989
is relatively small, extensive statistical analysis with respect
to penalty trends regarding these two FY 1989 concluded cases
will not be pursued.
Administrative penalties were collected in all cases
concluded in FY89. The median penalty was $30 thousand, with the
higher penalty assessed being $40 thousand.
Case-specific Profile
The two administrative penalty cases concluded in FY 1989
both were obtained through Region II efforts. In 1988, Region II,
opted to survey compliance with Section 102 permit conditions
regarding activities associated with ocean disposal of sewage
sludge. A high-level of non-compliance was found, thus resulting
in 16 administrative complaints being issued against 8 municipal
sewage authorities and/or their contractors. Subsequent action
by Congress (i.e., the Ocean Dumping Ban Act of 1988) has in
effect banned ocean dumping and all current permittees are under
compliance and enforcement agreements which will phase out such
ocean disposal activity.
Information regarding the two cases concluded in FY 1989 is
as follows:
o Nassau County , NY - administrative complaint
issued in July, 1988. Penalty collected in FY
1989 for the amount of $40,000.
o NY DEP * administrative complaint issued in July,
1988. Penalty collected in FY 1989 for $20,000.
Comparison of Regional Use and Levels of Penalties
Due to the limited number of concluded actions available for
analysis, no detailed regional analysis is attempted here, except
to note a "way to got" for Regions II and IX for their efforts.
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APPENDIX F
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
DEC 2 2 1989
• OFFICE OF
ENFORCEMENT AND
COMPLIANCE MONITORING
MEMORANDUM
SUBJECT:
FROM:
TO:
Submission of CAA Stationary Sources Penalty Practices
Report for FY 89
Michael S. Alushin <£0^rt( (Q. /fev-My*-*-*^ T«"""
Associate Enforcement Counsel -J
Gerald A. Bryan, Director
Office of Compliance Analysis and Program Operations
Attached is the CAA Stationary Sources Civil Penalty
Practices Report covering penalties concluded in FY 89 in
accordance with your memorandum of October 2, 1989. As
requested, the report data and text follow the format outlined in
the memorandum. This report updates the information we submitted
on November 15, 1989 to reflect additional data submitted by some
of the Regions. If there are any questions, please contact Elise
Hoerath of my staff at 382-4577.
Attachment
cc: Gerald Kraus
George Alderson
Primed on Recycled Paper
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F-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 Penalty Policy, issued
September 12, 1984 and revised on March 25, 1987. Before that,
the Agency-wide poicies of 1978 and 1980 governed air penalties.
The current policy covers specific situations such as Prevention t
of Significant .Deterioration (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
There were seventy- two judicial cases concluded in FY 89.
The percentage of cases where a penalty was imposed has remained
high. The percentage of cases concluded with a penalty was 96%
in FY 86, 95% in FY 87, 96% in 88, and 96% in FY 89.
All judicial cases concluded in FY 89 were settled.
There were four administrative cases under Section 120
concluded in FY 89. Two were concluded with penalties, and two
were concluded without penalties because the amount calculated
under the mandated formula was zero.
Judicial Penalty Profile
Highest Penalties
-
In FY 89 there were fifteen cases with penalties over
$100,000. The three highest/penalties were: -
$600,000. „( Region V
$450,;00b' ' ),/Region I
$337,c6ooG £)$Region V
These three large penalties account for 29% of all cash
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F-3
penalties imposed in the Air Program and 4% of the number of
cases concluded in FY 89.
Typical Penalties
This year total judicial stationary source penalties
collected were $4,742,958. This represents a drop from previous
years as total penalties were $8,914,384 in FY 88, $5,542,250 in
FY 87, and $5,258,700 in FY 86. However, the total number of
cases concluded has remained high at 72 cases FY 89, and 74 cases
in FY 88, up from 54 in FY 87 and 50 in FY 86. The major reason
for this change in total penalties, despite the same amount of
cases, is likely due to the absence this year of.any cases with
penalties of over one million dollars. In FY 88, there were
three cases well over one million dollars. These penalties
represented 49% of all FY 88 penalties. In FY 89, the highest
penalty obtained was $600,000. This fluctuation may be due in
part to the large number of asbestos cases the program has been
pursuing, which typically yield lower penalties. On August 22,
1989, the Agency published a revised Asbestos Demolition and
Renovation civil Penalty Policy, which generally increases the
gravity component and attempts to more accurately recoup the
economic benefit of noncompliance in these cases. This should
lead to higher penalties in asbestos cases in the future.
The average penalty was $68,739 in FY 89. This also
represent a drop from previous years as the average penalty in FY
88 was $125,555, $102,634 in FY 87, and $105,714 in FY 86. This
drop again is largely due to the absence of cases with penalties
of one million dollars or more, which can significantly affect
the average. This fact can be shown by looking at the median
penalties, which are usually a better indication of a typical
penalty than the average because averages can be skewed by a few
large penalties. The median penalty was $32,253 in FY 89. This
compares with medians of $30,000 in FY 88, $65,750 in FY 87, and
$37,500 in FY 86. The median therefore actually increased
slightly over FY 88. This shows that the typical penalty this
year was in fact slightly higher than last year, and the high
average and total penalties in FY 88 were largely due to the
three penalties obtained last year which were over one million
dollars.
The median penalty is largely a product of the large number
of asbestos cases the Agency has been pursuing. Of the 27 cases
with penalties less than $25,000/^12 casesjor 44% were asbestos
cases. Two other asbestos cases 'had penalties of $25,000. This
large number of°asbetos cases at the lower end of the penalty
scale has had a significant impact on the median penalty both
this year and last year. F\
The distribution of penaltiesjUlso reflects the influence of
asbestos cases. In FY 86 and 87,^7*7% o'f penalties were $25,000
or greater. In FY 88, only 58%vof penalties were $25,000 or
greater, and one half of the penalties that were below $25,000
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F-4
were asbestos cases. In FY 89, 62% of penalties were $25,000 or
greater. However, 15 of these 45 were less than $50,000 and
seven of those cases 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 Section 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
Section 120 action, Regions have also found that the prospect of
such a penalty can, in some circumstances, cause very accelerted
steps towards compliance by the violating source.
Penalties in Section 120 cases are typically smaller than
Section 113 penalties. The highest ever before this year was
$61,500 imposed by Region V last year. This year Section V
brought a combined Section 120 and Section 113 action which
yielded a total penalty of $120,000, $100,000 of that
attributable to the Section 120 action. Only three other Section
120 actions were brought in FY 89. Two Section 120 cases from
Region II yielded no penalties under the legally mandated formula
for determining Section 120 penalties because the sources were no
longer in violation 30 days after a notice of noncompliance was
issued. Another Section 120 case, brought by Region I, yielded a
penalty of $1741.
The median and average administrative penalty in all cases
with penalties for FY 89 then was $50,870, and $25,435 for all
concluded cases. This compares with an average administrative
penalty in FY 88 of $37,028, and $13,526 for all Section 120
cases concluded through FY 87, and a median administrative
penalty in FY 88 of $39,397 and $8,500 for all cases concluded
through FY 87.
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 Section 120 remedy in relatively
straightforward cases in which the economic benefit of
noncompliance is relatively small. This is likely due to the
fact that Section 120 remedy^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 Section 113 action with its provision for
injunctive relief must be pursued.
Comparisons of Regional Use and Levels of Penalties
0
There may be significant differences in types of violations,
violators, and external factors, such as trends in court rulings
and the number and effectiveness of state delegated programs,
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F-5
among Regions that would explain apparent differences in the use
and levels of penalties. The Regions appear to differ
substantially with respect to air penalties, but a general
pattern is not evident. Regional totals (administrative and
judicial penalties) ranged widely from Region V with $1,433,250
to Region VII with $78,500. Region V also had the highest number
of total cases, judicial and administrative, with 19.
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F-6
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*«° sr«v
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APPENDIX G
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHEVGTON.D.C. 20460
NOV2I £89
MEMORANDUM
OFFICE OF
AMD RADIATION
SUBJECT
FROM:
TO:
.Submission of Office of Mobi.Le Sources
1989 Penalty Dara
Richard D, Wilson, Di rector
Office of Mobile Sources
Gerald A. 3ryan, Director
Office of Compliance Analysis
and Program Operations
Attached is the submission of rhe Office of Mobile
Sources for the 1939 penalty report being compiled by your
office. We have again incorporated the enforcement
activities of the Manufacturers Operations Division with
those of rhe Field Operations and Support Division.
If you have any questions about this material, please
contact Marcia S. Ginley of my staff at 3-776-7524.
*.*
i?
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,-M
•*',
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G-2
PENALTY STATISTICS
'» OFFICE OF MOBILE SOURCES
OFFICE OF AIR AND RADIATION
I- CLEAN AIR ACT, OFFICE OF MOBILE SOURCES: USE AND LEVEL
OF PENALTIES
Two divisions wi.thin 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 t-he 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
certifying 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 achievements have
been the dramatic reduction in the use of lead in gasoline
production and the regulation of the volatility of gasoline.
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 fro a
$10,000 per violation per day statutory penalty. The penalty
for tampering with emission control devices is $10,000 for
new car dealers and manufacturers. The tampering penalty is
$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
cert i(fi cat e(ro'f conformity is $10,000 per vehicle. Reporting
violations U-re also subject to a $10,000 penalty.
II. INFLUENCES ON THE USE AND. LEVELS OF CIVIL PENALTIES
Enforcement Under the New Fuel Volatility Regulations
The fuels volatility regulations were promulgated this
past spring. The regulations require the gasoline industry
to produce and sell gasoline with Reid vapor pressure (RVP)
not: to exceed 9.0 pounds per square inch (psi), 9.5 psi or
JO. 5 psi depending on the geographic area and the month.
One additional psi is allowed for fuels containin- between
9% and 10% ethanol. In 1989 the enforcement period for the
regulations was from June 1 through September 15. This vola-
tility regulation is expected to result in greatly reduced
evaporative hydrocarbon emissions, which in turn results In
decreased ozone pollution levels.
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G-3
Despite many logistical problems encountered, as would
be expected in the first year of a new enforcement program,
this first year was a major success. Approximately 4,000
gasoline samples were taken nationwide from retail stations,
gasoline terminals and refineries. The average RVP was 9.4
psi for all non-ethanol gasoline sampled. The average RVP
of the tested samples was 0.8 RVP below the applicable standard.
Approximately 5% of the samples contained ethanol.
A violation rate of approximately 6% resulted from our
inspections. Sixteen volatility Notices of Violation (NOVs)
were issued in FY 1989 with proposed penalties, totalling
over $113,000.
B. Increased Manufacturer Warranty Enforcement
*
During FY 1989, FOSD has increased its efforts to enforce
the manufacturer warranty provisions of the Clean Air Act.
FOSD has initiated investigations and one enforcement action
as it became aware that manufacturers denied emissions warranty
coverage in numerous instances where required by the Act. With
the advent of I/M programs around the country and increased
vehicle owner awareness of the warranties, numerous complaints
were received by the Agency. One manufacturer warranty NOV
against Ford Motor Company was settled for $92,000 in penalties
and alternative resolution dollars. The settlement included
agreement by the manufacturer to reimburse aggrieved complainanl
and to change its policy to include many engine components
within the emissions warranty. Additional investigations
are ongoing against other manufacturers and are likely to
result in enforcement actions.
C. Continued Lead Phasedown Enforcement
In 1985, the lead phasedown regulations?were amended to
reduce the level of lead permitted in leaded-^gasoline. The
amended regulations also allowed refiners and importers to
"bank" lead rights and later use banked rights;:*to help meet
the more stringent standards applicable^to '-'future quarters.
Data regarding the creation and use of £hesfc*||t|irghts is required
to be submitted to EPA through quarterly reports. Since
violations are often not apparent on the face of these reports,
FOSD began auditing refiners and importers in 1986. The
concentration by FOSD on lead phasedown enforcement has
resulted in fewer NOVs with higher proposed penalties than
when FOSD concentrated on other types of violations. In
1989, FOSD continued its audits and issued eighteen NOVs for
lead phasedown cases proposing over $8 million in penalties.
FOSD settled fifteen lead phasedown cases in FY 1989 for over
$3.2 million in penalties and $1.8 million in alternative
resolution dollars.
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C-i
D. Continued Enforcement of Tampering Initiatives
In August 1986, EPA published a policy regarding after-
roarket catalytic converters that established test procedures,
performance standards and installation requirements for new
aftermarket converters and reconditioned original equipment
converters. Under the policy, replacement converters would
be used only in specified circumstances. The policy became
effective in late 1986. A number of investigations were
initiated since then to determine compliance with the policy.
FOSD began an intensive review of records submitted by the
manufacturers to determine compliance .with the policy. A
substantial number of violations were discovered as a result
of the record review.
The number of general tampering cases has remained high.
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 1989, 265 NOVs were issued for tampering, with proposed .
penalties of approximately $5.5 million. For the sarae period,
there were 159 cases settled with a total of over $380,000
in penalties. .
E. 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 1989,
there were 86 nozzle settlements concluded through one of
these methods.
F. MOD New Imports Initiative
* -.
In FY 1<9.8^9, MOD began its implementation of the new
Imports pro'gram which establishes independent commercial
importers (ICIs) as the entities responsible for the importa-
tion of motor vehicles. To import nonconforming motor
vehicles and motor vehicle engines into the United States an
ICI must obtain a certificate of conformity from :the Certi-
fication Division. To determine compliance with the new
program, HOD conducted 12 inspections of ICIs. As a result
of these inspections, MOD discovered several violations of
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G-5
the regulations governing the imports program and is presently
pursuing civil penalties against two Ids. MOD investigations
into other ICIs will continue into FY 1990.
MOD also investigates whether manufacturers are in
compliance with Title II of the Clean Air Act. In FY 1989,
MOD concluded an investigation of The Dutcher Corporation, a
manufacturer of motor vehicles for the transportation of
handicapped-persons. The Dutcher Corporation introduced
seven of these vehicles into commerce without obtaining a
certificate of conformity to demonstrate compliance with
federal emission standards. The investigation and ensuing
negotiations resulted in a tentative agreement- for a $30,000
civil penalty against The Dutcher Corporation for seven
violations of the Clean Air Act which will be finalized in
FY 1990. In addition to this penalty action, MOD expects to
resolve at least two pending investigations of manufacturers
in FY 1990.
III. USE OF PENALTIES
In FY 1989 100% of FOSD cases concluded with a civil
penalty. No MOD cases reached final resolution this fiscal
year. A total of 296 cases were resolved resulting in civil
penalties of $4,855,356.
IV. JUDICIAL PENALTY PROFILE
For FOSD, there were several significant judicial
penalties awarded. Sixteen cases were resolved resulting in
penalties of $2,312,416. Judgment was entered in 13 fuels
cases resulting in civil penalties of over 1.07 million
dollars. The Pilot/Sonic contamination cases resulted in
penalties of $610,000. Settlement of the Boulos contamination
cases totalled in excess of $350,000. One tampering case,
Shaffer Muffler, was tried and resulted in judgment of the
highest per vehicle penalty yet awarded by a Court. The
Court assessed penalties of $1,750 per vehicle out of a
possible $2,500 for each of twenty-one vehicles after con-
sideration of the defendant's financial difficulties and
other factors. A consent judgment was entered in A Tarricone,
Inc., a lead phasedown case, for a penalty of over 1.16
million dollars. Two FOSD cases are currently being appealed
and are not included in the FY 1989 penalty^ calculations.
V. ADMINISTRATIVE PENALTY PROFILE '^.
The attached chart shows the administrative penalty
profile for FOSD. FOSD resolved 280 cases, all with penalties,
for a total of $2,542,940.
The highest penalty was $656,931 against a refiner under
the lead phasedown program. The smallest were $100 for nozzle
violations after consideration of financial hardship claims.
-------
G-6
FOSD continues to make use of alternative payments to
support public information programs. In addition to the
penalties referenced above, another $2,296,038 was expended
in such endeavors. This included sponsorship of clean air
research studies having national significance, public service
announcements related to tampering or fuel-switching (using
leaded gas in unleaded vehicles) shown on television, mechanic
training courses on emission control devices, and a variety
of other projects.
-------
G-7
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IS^
APPENDIX H
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
171990
SOLID WASTE AND EMERGENCY RESPONSE
MEMORANDUM
SUBJECT: RCRA Civil Administrative and Related Penalty Data
for FY 89 Federal Penalty Practices Report
FROM:
TO:
Bruce M. Diamond, Director
Office of Waste Programs Enforcement
Gerald A. Bryan, Director
Office of Compliance Analysis and Program Operations
Attached is the RCRA Civil Administrative Penalty Data and
accompanying analyses for cases concluded in FY 89. As you
requested, we have utilized the standard data and textual
reporting formats*as per earlier reports.
The RCRA 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.
In addition to the Administrative penalty information for
RCRA, we have also included FY 89 penalty data obtained from our
CERCLA Enforcement Division and issued pursuant to Section 103 of
CERCLA and Sections 302-312 of the Emergency Planning and
Community Right-to-Know Act (EPCRA).
If you have any questions concerning this information,
please have your staff contact Bob Small at (FTS) 475-9375.
Attachments
cc: Glenn Unterberger,
Susan Bromm
Bob Small
(OECH)
-------
-------
H-2
Appendix
FY-89 RCRA Penalty
Data and Analyses
-------
H-3
I. Use pf RCRA Administrative Penalties (Summgry of Major Points)
In FY 89, the U.S. EPA issued 154 final RCRA administrative
actions/ Of these, 95% included a penalty assessment. This is a
five percent increase over FY 88 and a seven percent increase over
that for combined fiscal years 1986 and 1987. Since more penalties
are being assessed, the total FY 89 final administrative penalty
dollars showed a very slight increase over FY 88. The data also shows
that while the median penalty is slightly higher this year, the
average dollar value of assessed penalties is down slightly.
Introduction
Before presenting the analyses derived from the original data, a
brief statement on the quality control measures employed for these
data may be helpful.
Each month (and at the end of each fiscal year) all Regions are
sent cumulative summary reports (RAATS Reports) that list all ad-
ministrative 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 th'at HQ has copies of all administrative actions
issued by them. For this section it should be understood that all
administrative penalty data and analyses are based on hardcopy inpj
of the signed and dated enforcement actions referenced above.
Furthermore, this analysis specifically addresses that subset of
FY 89 administrative actions - primarily consent agreements/final
orders (CAFO's) - that usually consummate 3008(a) complaints and
result in final penalties. ALJ decisions which have resulted in a
penalty decision are also included in Regional statistics. Civil
judicial penalties (i.e., penalties specified in consent decrees,
litigated cases) are considered in the section provided by the Office
of Enforcement and Compliance Monitoring.
The 154 federal administrative actions mostly reference
consent agreements/final orders (CAFO's) issued pursuant to 3008(a)
of RCRA or relevant ALJ decisions. A listing of these and other
types of FY89 Administrative enforcement actions can be found in the
RCRA Administrative Action Tracking System (RAATS).
-------
H-4
II. Data and Analyses; RCRA Program
Table l displays the national data which is described in more
detail below. The highest RCRA administrative penalties recorded for
FY 89 were $137,751 (Region IV), $137,500 (Region VI) and $121,561
(Region V).
During FY 89, the RCRA program assessed $2,512,378 in final RCRA
administrative penalties. This contrasts with $2,393,803 for FY 88
and $1,868,004 for FY 87. These FY 89 figures show an approximate 5%
increase over FY 88 and a 26% increase over FY 87.
The number of actions finalized with a penalty during FY 89 was
146 (95%) - out of a total number of 154 recorded cases. This repre-
sents a 5% increase from FY 88. A comparison of the overall number of
cases for both years, however, shows a somewhat stationary picture
with 154 actions for FY 89 and 151 for FY 88 being completed.
The average final penalty assessment for FY 89 was $17,208, which
is down very slightly from $17,601 in FY 88. However, because there
were fewer non-penalty cases in FY 89, the average penalty for all
concluded cases (which includes orders where the penalty was waived,
dismissed, deferred, or zero) actually rose from $15,853 to $16,314.
Interestingly, while the average penalty was slightly lower in FY
89, the median penalty was up. The median penalty for FY 89 (zero,
waived, dismissed, deferred penalties etc. excluded) was $9,792 and
$8,797 with such actions included. This compares with $9,500 and
$7,667 respectively for FY 88. .
Table 2 and Figure 1 display the frequency distribution of RCRA
FY 89 final administrative penalties by dollar amount. This is the
same basic distribution pattern as seen in FY 88 data. The majority
of RCRA penalties are found in those dollar ranges up to $50,000. The
low number of cases in the higher penalty ranges may simply be indica-
tive of the nature of the administrative process. In very large
potential penalty cases the enforcement action is likely to be
initiated judicially rather than administratively. Any penalties
resulting from such action would then be judicial rather than
administrative in nature.
0
-------
H-5
Comparison of Regional Use and Levels of Administrative Penalties
Total regional (administrative) penalty dollars for FY 89 are
displayed in Table 3 and Figures 2 and 3.
As shown in Table 3, Region V assessed the highest number of
dollars in penalties for any one region with 34% of the national
total. They are followed in decreasing order of total dollars by
Region VI (15%); IV (15%); VII (11%); and II (9%). Together, Regions
iy, V and VI accounted for almost 65% of the total FY 89 administra-
tive penalty dollars. The highest single administrative penalty
recorded for FY 89 was $137,751 (Region IV); the two next highest vere
$137,500 (Region VI) and $121,561 (Region V).
Comparison of regional total penalty dollars between FY 88 and FY
89 showed five (5) regions having increased dollar totals for FY 89
over FY 88; and five (5) regions having decreased dollar totals from
those in FY 88. The Regions showing increases (in order of decreasing
magnitude) were V, IV, X, VI and II. These increases over FY 88 can
mostly be attributed to the fact that more actions were processed in
FY 89 than in the previous year. Region V is an exception - it issued
fewer orders than in FY 88 - but the penalty size of the orders itj
issue were much larger than in the previous year. It is important*
therefore, when considering each Region's FY 89 average penalty to
also consider the number of cases that it processed (Table 3) during
the fiscal year.
>aucu
•
There is considerable variation seen in the number and size of
regional penalties. Among the reasons for such variation are geo-
graphical differences in the density of potential sites, and
aggressive state enforcement programs that pre-empt the need for any
federal action.
o
-------
H-6
III. other Penalty Programs
The Office of Waste Programs Enforcement also manages
another penalty program under section 103 of CERCLA and sections
302-312 of the Emergency Planning and Community Right-to-Know Act
(EPCRA). The enforcement program for Section 313 of EPCRA is
implemented by the Office of Pesticides and Toxic Substances
(OPTS).
Fiscal Year 1989 is the first year in which administrative
penalties have been assessed under this program. The authority
to seek penalties under EPCRA is found in section §325. Under
section 325, EPA can assess penalties administratively for
violations of §§304, 311, and 312. Violation of §§304 and 312
may result in a penalty of up to $25,000 per violation per day.
Violation of EPCRA §311 may result in penalties of up to $10,000
per day. The authority to assess penalties for violations of
CERCLA §103 is found in the new section 109. Under CERCLA §109
EPA can assess penalties of up to $25,000 per day for violations
of 103. CERCLA §109 and EPCRA §325 both allow EPA to seek
penalties judicially and provide criminal fines for violations of
CERCLA §103 and EPCRA §304.
The CERCLA §103 and EPCRA §§302-312 penalty policy is in
draft form and should be completed this fiscal year.
All of the EPCRA/CERCLA §103 administrative cases concluded
in FY89 were concluded with penalties. Twelve complaints were
issued during the fiscal year, with five of the cases resulting
in settlements. All others are ongoing. The total
administrative penalties collected in FY89 is $63,916 for
violations of EPCRA §§304-312 and $21,884 for violations of
CERCLA §103. The highest penalty assessed for EPCRA was $30,000
and the highest for CERCLA §103 was $15,550. A list of the cases
follows:
Region Case
Violation
Penalty
III
III
IV
V
V
Murry Inc.
Hurry Inc.
Consolidated
Minerals Inc.
BF Goodrich
Commonwealth
Edison
CERCLA §103 $15,550
EPCRA §§304, 311, 312 $21,250
EPCRA §§304, 311, 312 $30,000
EPCRA §304 $6,000
CERCLA §103 $3,000
EPCRA §304 $6,666
CERCLA §103 • $3,334
-------
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-------
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
HAY 10 1991
MEMORANDUM
SUBJECT: RCRA Judicial Penalty Report for FY 1989
FROM: A ... Kathie Stein
Associate Enforcement Counsel
for RCRA Enforcement
TO: Gerald A. Bryan, Director
Office of Compliance Analysis and
Program Operations
Attached is the report on RCRA civil judicial penalties
covering cases concluded in FY 1989.
If you have any questions concerning this report, please
call on Stephen Botts at 382-5787.
Attachment
-------
H-15
I. Judicial Penalty Profile
RCRA civil penalties ranged from no penalty to $2,778,000
The penalties imposed under the civil judicial penalty authority
in FY '89 under, the RCRA program are:
Region
4
4
4
5
5
5
5
5'
5
9
10
CASE NAME
American Brass
T&S Brass & Bronze
Wannamaker
Clow Water Systems
Environmental Waste
Modern Plating Corp
Quemetco Inc
U.S. Ceramic Tile
Allegan Metal Finishing
Techalloy Co. Inc
Seafab Metal Corp
PENALTY
242,000
209,000
22,000
725,000
2,778,000
20,000
54,000
98,000
43,000
35,000
61,500
Comparison of Regions
Total regional .judicial penalty dollars for FY '89 are
displayed in Tables lr 2, and 3. Region V reports the highest
judicial penalty total; it is followed in decreasing order of
total dollars by Region IV, X, and IX. Region V had the highest
single judicial penalty reported for FY '89 ($2,778,000).
Use of Penalties
Fifteen (15) judicial actions were concluded under the
Federal RCRA program during FY '89. Of the 15 judicial actions,
11 were concluded with a penalty. This represents an increase
from 46% in FY '88 to 73% for FY '89. Generally, penalties
continue to rise this year. An outstanding penalty ($2,778,000)
was obtained in the Environmental Waste Control case. This
penalty figure tops last year's highest RCRA penalty which was
$1,100,000.
-------
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^60 sr,..
APPENDIX I
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
JAN 2 3 1990
OFFICE OF
PESTICIDES AND TOXIC SUBSTANCES
MEMORANDUM
FY 89 Penalty Report
A. E. Conroy II, Director
Office of Compliance Monitofi
SUBJECT;
FROM:
Frederick F. Stiehl
Associate Enforcement Counsel for
Pesticides and Toxic Substances
TO: Gerald A. Bryan, Director
Office of Compliance Analysis
and Program Operations
Per discussions between Rebecca Torchia of OCM's staff and
George Alderson of your staff, attached is our portion of the
FY 89 Penalty Report narrative.
If you have any questions about the contents of this report,
please contact Mr. John Foley (382-4441) or Mr. Mike Walker
(475-8690) of our respective staffs.
Attachment
Printed on a«yct*i Paper
-------
-------
1-2
TSCA/FIFRA/EPCRA: Use and Levels of Penalties
o Program Description
o Toxic Substance Control Act (TSCA)
The TSCA of 1976 authorized civil administrative
penalties. 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 violations.
TSCA lists several statutory factors which must be
considered 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 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 which
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 Notification), and Sections 8, 12, and 13
(Reporting and Recordkeeping Information).
TSCA Asbestos Abatement Projects; Worker Protection? Final Rule?
Final Compliance Monitoring Strategy
The current TSCA Section 6 Rule, which replaces the previous
Final Rule, was published on February 25, 1987, in the Federal
Register and became effective March 27, 1987. The rule applies
to all state and local government employees who take part in
asbestos abatement work and are not covered by the OSHA Asbestos
Standard. The Final Compliance Monitoring Strategy, issued
November 14, 1989, targets inspections on the basis of tips,
complaints or referrals, and on sites where abatement is planned
or ongoing. During inspection, work practices and records are
checked to determine compliance with the standards set by the
rule.
AHERA Interim Final Enforcement Response Policy
On January 31, 1989, EPA issued the AHERA Interim Final
Enforcement Response Policy. This enforcement response policy
established the enforcement mechanisms and civil penalty
schedules for violations of the regulations under AHERA by the
LEAs and persons other than LEAs who perform AHERA related
-------
1-3
activities ("other persons"), civil penalties of up to $25,000
per day per violation may be assessed against "other persons".
LEAs that fail to conduct inspections or submit management plans,
conduct a response action without a management plan in place, or
which provide false information to the Governor concerning
inspections or deferral requests may also be assessed civil
penalties of up to $5000 per day. Other enforcement responses
which may be used for violations include notices of noncompliance
(NONs), press releases, notification of the State Governor,
criminal referral and injunctive relief.
AHERA Notices of Noncorapliance
As required under the Asbestos Hazard Emergency Response
Act, (AHERA), Local Education Agencies (LEAs), were required to
submit management plans outlining how they would manage asbestos ..
in the schools by October 12, 1988, or request a deferral of this
submission by May 9, 1989. During Fiscal Year 1989, the regional
offices issued 6,960 Notices of Noncompliance (NON's), to LEAs
for failure to submit management plans by October 12, 1988. For
those schools, who fail to come into compliance once they are put
on notice, a civil complaint is issued. In FY 89, approximately
50 complaints were issued to schools for failure to submit
management plans. In addition, the regions are currently issuing
nearly .1,900 NON's to LEAs that have failed to submit plans by
the May 9, 1989, deferred deadline. Approximately 6% of all LEA
nationwide have failed to submit management plans. The states
will provide EPA with a final status report on LEA compliance by
December 31, 1989.
EPCRA Initiatives
On December 19, 1988, EPA inaugurated its EPCRA Section 313
enforcement program by announcing the issuance of 25 civil
administrative complaints for a total of $1.5 million in proposed
penalties. On June 26, 1989, five days before the second year
reports were due, the Agency announced the issuance of civil
administrative complaints to an additional 42 facilities. The
complaints proposed a total of $1.65 million in penalties. By
the end of the fiscal year on September 30, 1989, 123 civil
administrative complaints had been issued for failure to report
for the toxic chemical release inventory. In addition, 1,318
notices of noncompliance were issued to submitters who failed to
file complete and accurate reports.
o Federal Insecticide, Fungicide and Rodenticide Act (FIFRA)
FIFRA Amendments of 1988
On October 25, 1988, an Act to Amend the Federal
Insecticide, Fungicide, and Rodenticide Act (1988 Amendments)
became law, after passing both the Senate and House of
Representatives unanimously. The 1988 Amendments strengthen
-------
1-4
EPA's authority in several major areas, requiring a substantial
acceleration"of the pesticide reregistration activity, imposing
statutory time limits for processing certain types of pesticide
registration activities, and changing EPA's responsibilities and
funding requirements for the indemnification, storage and
disposal of suspended/cancelled pesticides. It also authorizes
collection of fees to support some of these new activities.
The 1988 Amendments contain^a number of changes to
enforcement authorities including:
Pesticides; Criminal penalties are increased-for
registrants, applicants for registration, or other pesticide
producers who knowingly violate the pesticide law.
Unlawful acts: The 1988 Amendments provide that certain
acts, such as submitting false test data, violating
suspension or cancellation orders, failure to submit
required records or allow inspection, will be unlawful.
Records and inspection; Additional authority is provided
for EPA to request records and inspect places where
pesticides are being held, to ensure compliance with storage
and disposal provisions.
o Use of Penalties
o FIFRA: In FY 1989, there were 321 Federal administrative
cases which were closed. Of these cases, 255 or 79% were
settled with a monetary payment made by the respondent.
o- TSCA: Under this statute there were 319 administrative
cases which were closed in FY 1989. 96 per cent of these
cases or 306 were settled with a monetary penalty.
o EPCPJV: 19 Administrative cases were issued in FY 1989,
the first full year of the program. 15 of these cases
were settled.
o Judicial Penalty Profile
o EPA did not file any cases in District Court under TSCA,
EPCRA, or FIFRA during 1989 seeking the imposition of
civil penalties. :
o There are no provisions in either TSCA or FIFRA for the
imposition of civil penalties by District Court Judges.
o Administrative Penalty Profile .
o Highest Penalty FIFRA: The highest Federal
administrative penalty imposed in FY 1989 was for $10,000
in Region 5.
-------
1-5
Highest Penalty TSCA; The highest Federal penalty in FY
1989 was $615,650 collected by Headquarters.
Highest Penalties EPCRA: The highest Federal penalty in
FY 1989 was in Region 8 for $57,800 for failure to report
under EPCRA.
Typical Penalties FIFRA; The average penalty FY 1989 was
$1,366. The median penalty was $1,014. The majority of
the Federal pesticide actions are taken under Section 7
of FIFRA (a violation which incurs a maximum penalty of
$3,200)
Typical penalties TSCA: The average penalty for FY 1989
was $13,216. During this time the median penalty was
$7,000.
Typical Penalties EPCRA! The average penalty for FY 1989
was $12,117. The median penalty was $4,500.
o Comparisons of Regional Use and Levels of Penalties
o FIFRA: Difference in use and levels of penalties can be
primarily attributed to differences in types of
violations and violators. Headquarters generally takes
cases of first impression or national significance.
Additionally, Regions 7 and 8 have primary use
enforcement authority (Section 26) in Nebraska and
Colorado, respectively, and bring all Federal misuse
cases in these states, other regions' caseload mix
varies depending upon the amount of state referrals under
Section 27 or from states operating under Federal grants.
Differences in the use of penalties also arise under the
Section 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
penalties arise because of the various types of
violations and violators among regions and headquarters.
In FY 89, TSCA Sections 5 and 8 cases, which account for
proportionally larger penalties than other TSCA
violations, were handled by Headquarters and Regions 2,
3, and 5. 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.
o EPCRA: Variations in the levels of penalties would be
dependent on: the number of chemicals which a facility
-------
1-6
failed to report, the quantity of the chemical the
facility manufactured, processed or otherwise used, and
the size of the facility as determined by the number of
employees or sales.
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-------
Appendix J
TRENDS IN PROGRAM TOTALS
The graphs in this appendix show trends in the penalty dollars
and cases of seven EPA programs. They reflect data supplied by
the program offices and reported in penalty reports issued by the
Office of Enforcement.
The graphs for Mobile Source Air penalties (page J-5) show data
for Fiscal Years 1980-1985 that reflect a combination of
administrative and judicial penalties, although they were
described as "judicial" in the penalty report covering those
years.
Clean Hater Act
Safe Drinking Water Act
Stationary source Air
Mobile Source Air
RCRA
TSCA
FIFRA
J-2
J-3
J-4
J-5
J-6
J-7
J-8
-------
-------
J-2
£
8s
Q 9
5!
LJ
a.
13
12
11
10
9
5
7
6
5
4
3
2
1
0
TREND IN DOLLARS - CLEAN WATER ACT
KXVNl
1
I
I
I
1
1
1975 76 77 75 79 80 51 82 83 84 85 86 37 88 1989
FISCAL YEAR
JUDICIAL
ADMINISTRATIVE
TREND IN CASES - CLEAN WATER ACT
o
K
ID
240
1975 76 77 78 79 80 81 82 63 84 85
87 88 1989
ADMINISTRATIVE
-------
J-3
1/1
a:
UJ
900
,300 -
I
700 -*
500 H
500 H
t?
j 2 400 -
500 -
200 -
100 -
.v-.'\XN
TREND IN DOLLARS - SDWA
80 81
JUDICIAL
32
83 84
FISC
85 86 87
ADMINISTRATIVE
88
i
89
Id
o
&
K
3
Z
30
;o H
50 -
40 -
20 -
10 -
TREND IN CASES - SDWA
81
82 83 34
FIS
JUDICIAL
85 86 87
ADMINISTRATIVE
88 69
-------
J-4
t/i
K
P
LJ
0. -
u
EE
U
m
D
Z
TRtNO IN DOLLARS - STATIONARY SOURCE
10
5 -
4 -
1 -
^
x \\N.\
'••;-;.i
^
i
^
1
79
30
81
82
JUDICIAL
TREND
FISCAL
85 86
ADMINISTRATIVE
87
88
39
CASES - STATIONARY SOURCE
80
/O -
60 -
50 -
40 -I
30 -
20 -
10 -
?
P
79 SO 81
JUDICIAL
82. 83
•' 'T n;
34
85
86
87
88
89
JTEAR
ADMINISTRATIVE
-------
J-5
Sfl
IE
2 -
TREND iN DOLLARS - MOBILE SOURCE
80 81
3 JUDICIAL
82
FISCAL YEAR
ADMINISTRATIVE
89
TREND IN CASES - MOBILE SOURCE
L.
O
o
500
450 -
400 -
350
300
250
200
150 ^
100
so H
0
SO 31
JUDICIAL
82
84
85 & 86
nff
_TEAR
ADMINISTRATIVE
87
-------
J-6
"REND IN DOLLARS - RCRA
?
uJ
Q.
c J
4 -
81
82
83
JUDICIAL
•V<«.'.V
•V«W.<
•iftK-M -., yv
«a«^ <-^x
nSCAL.YEAR
^^ ADMINISTRATIVE
39
TREND IN CASES - RCRA
CJ
u.
0
3
2
81
62
JUDICIAL
86
JTEAR
ADMINISTRATIVE
87
85
89
-------
J-7
IN DOLLARS - TSCA
Id
CL
J
5 -I
4 -
78 79 80 51
82 83 84
FISCAL YEAR
TREND IN CASES - TSCA
L.
o
It
u
en
2
D
Z
700
600 -
500 -
400 -
300 -
200 -
100 -
78 79 80 81 82 83 84 85 86 87
89
FISCAL YEAR
-------
J-8
500
450 H
£
57
o'?
Q8
II
£ -'
uj
a
ifl
u
o
u.
o
Q:
u
CD
3
81
260 -
240 -
220 -
200 -
750 -
160 -
140 -
120 -
100 -
80 -
60 -
40 -
20 -
0
81
TREND IN DOLLARS - FIFRA
32
56
89
TREND IN CASES - FIFRA
82
33
84 85
FISCAL YEAR
86
87
88
89
-------
-------
FIGURE 3
Results of simulation for the (5,2) design
I
s
o>
§
S
i
I
a.
10 30 50 70 90 110 130 150 170 190
True mean PAH concentration in an EU (ppm)
• Var. = 1.00 + Var. = 1.64 • Var. = 3.17
FIGURE 4
Results of simulation for the (5,3) design
ca
c
1
"8
0)
o
i
30 50 70 90 110 130 150 170
True mean PAH concentration in an EU (ppm)
Var. = 1.00 + Var. = 1.64 • Var.
190
3.17
quality of data required to support deci-
sions witn tne desired certainty. The most
important benefits of this approach are
that the decisions regarding Superfund
site remediation can be made at the de-
sired level of certainty, and that the pro-
ject manager has specific quantitative cri-
teria for deciding how much data is
enougn.
r i Qjai::y Ass jrance Management Staff
e oome^t o' Data Quality Defectives
Description of Sta'ges I ana ll" In EPA Infor-
mation Guide. EPA Washington. D C . July
1986
(2) Environmental Protection Agency Office
of Emergency and Remedial Resoonse.
"RI/FS Improvements Phase ll. Streamlining
Recommendations" EPA Washington. D.C .
January 1989: OSWER Directive No 9355.3-
06.
(3) Environmental Protection Agency "Re-
gion IV Remedial Investigation Report for this
Uncontrolled Hazardous Waste Site". EPA
Washington. DC. 1988.
(4) Environmental Protection Agency Risk
Assessment Guidance tor Suoertuna
Human Health Evaluation Manual. EPA.
Washington DC-Ju^eSO "989 araft Nets
The calculations useo :o estate r6asorao>e
maximum exposure in this case stuoy are
found m Reference 6.
(5) Connor. B National Utin:y Co^ttactO' s
Association. Arlington. Va persona1 cor~~^-
nicatior. Reaso"aDieness o* tn-s estate
was confirmed Dy EPA ORD arc 3egio° iv
nsK assessment exoerts
(6) Office of Emergency ar-a Re^e^a- Pe-
sponse Suoerfrfc PJOI/C *tes'.'h Eva'-uaiiy
Manual OSWER.EPA Was- -aw D
tooer 1986. EPA 5-C '-66C60
Acknowledgments
Oc-
a^a.s .stec oe'ov. o sves a s..o-
stan!'ve ro:e T t^e oeve'cc""*": ;: :~~ DOOs
•'or rrvis lazarcous was:e s-;e Peg :- •••. ^sea
:ne oiarnng ss^es -a'sec t-r^.;1- "r DOC
process :ose; sjrvey oesa' co'?"s '"s 1:-=
DOOs) for.rre case s:^a> T"e DOCs re-
*ere jsec as tie oasis ;or oo: ~ :-y:~6
oossioie survey aes.g^s ;or r s s :e r~e
DOG O'ocess ar-a its aaaota: or :: S^ce-- '
tuna planning sst.es '$• re 's-ec: 5 -'.est-
gat:on/feas.Di''t> st^oy .-.as -ec cv re o_a :-, •••
assurance -r-.a.-age~e-t sta" .v r DGO ac-
piication suDoor: ''c-"- Resea.-c- T-;a~3-e i--
.sniLiie. Montana State u^ vefs;:y. a.^c NUS
Corp The aurors oi r-s saoe- -a^e s--^a-
nzed tne outputs o: a se' es o; act-vves -r. •
which aii o' t"ese ^civ-.c^ais oart-C'oateo Q--
'ecny Jar^es P'c^e::. D" D anc fla-aa-: Ryt .
P*^ D Monta-a State u- .-e-s •>• Rooe't Huo-
Darc. NUS Core Euge"e P Braitiy. C An-
orew C:aytor Dar-e' i Wc^ae1. Mc^ae'
Messner. Research Tr:a-gie mst.t^te. E ^er
Ak>n. Mereditr Anaerson Wil'iar- Bc'ev Bev-
erly Houston. Davio K.eus-e- M D La •
Wiinam Panon. EPA Region iv. Dear. * Jeo-
lune. Ph D EPA Heaaouaners Qua:.:/ ass^r-
ance rr.anagemeni staff
Dean Neptune Ph.D.. is an environmen-
tal protection specialist on EPA's Quality
Assurance Management Staff, in the Of-
fice of Research and Development
(RD680. 401 MSt.. S.W.. Washington.
D. C. 20460: 202-475-9464).
Eugene R Brantty is manager of the Re-
search Triangle Institutes Environmental
Research Planning Department (RTI.
1717 Massachusetts Ave. N.W. Suite
102. Washington, D.C.. 20036: 202-332-
5102) and project manager tor RTl's
Technical Support Contract to the EPA's
Quality Assurance Management Staff.
Michael J. Messner is a research envi-
ronmental scientist in the Chemistry and
Process QA Department of RTl's Center
for Environmental Quality Assurance (RTI.
Research Triangle Park. N.C. 27709:919-
541-6126).
Daniel I. Michael is a research environ-
mental scientist for the Research Triangle
Institute's Environmental Research Plan-
ning Department in Washington. D.C.
(202-332-5102).
HMC MAY/JUNE 1990 27
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