United States C."v? o'
Environmental Protection Aom •• Law/ juoqes
Agency Wasrvnqton, fX" 20460
4>EPA Administrative Law Judges
& EPA Administrators
Civi! Penalty Decisions
(Under TSCA)
Volume: 3
January, 1985 to December, 1985
Cotnpi 1 ed by :
U.S. Environmental Protection Agency
Office of the Hearing Clerk
401 M Street, S.W.
Washington, D.C. 20460
(30U 382-4865
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oc, pr p3| p c: •
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY'
BEFORE THE ADMINISTRATOR
In the Matter of ]
NORTH BRUNSWICK TOWNSHIP SCHOOL DISTRICT ]
j
T Docket No.
] II-TSCA-ASB-85-0109
Respondent j
Toxic Substances Control Act - "Asbestos-in-Schools .Rule"
Penalty of $1 500-assessed f or vi ol ation. of notijfi cati on and
recordkeepi ng~reqlH rements^" i s appropri ate--where;,; as'-he'rey- ther-
respondent had expended in-excess of-$175,000.00"for removal"of
asbestos-containing materials, and had complied with the regula-
tions subsequent to the issuance of the complaint.
Thomas Lieber, Esquire, Assistant Regional Counsel,
Waste and Toxic Substances Branch, Office of Regional
Counsel; and James C. Woods, Esquire, Assistant Regional
Counsel, Office of Regional Counsel, United States Environ-
mental Protection Agency (Region II), 26 Federal Plaza,
New York, New York 10278, for the complainant.
Anthony B. Vignuolo, Esquire, Borrus, Goldin, Foley,
Vignuolo, Hyman and Stahl, 860 U. S. Highway 1, Route I/
Route 130 Circle, Post Office Box 1973, North Brunswick,
New Jersey 08902, for the respondent.
Before: J. F. Greene, Administrative Law Judge.
Decided December 31, 1985.
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INITIAL DECISION
This matter arises under 15 U.S.C. 2615(a)(l), Section
16(a)(l) of the Toxic Substances ControlAct, 15 U.S.C. 2601 e_t
seq. , hereafter "the Act," and certain regulations relating to fri-
able asbestos-containing materials in schools _]_/ issued pursuant to
autiiority contained therein 2J at 40 CFR sections 763.100 through
763.119 (Subpart F). In this civil action, the United States Environ
mental Protection Agency, whose Director, Environmental Services
Division, Region II, is^the complainant herein, seeks assessment of
civil penalties against the respondent pursuant to 15 U.S.C. 2615
(a)(l) and 2(B) for alleged violations of the Act and the Friable
Asbestos-Cohtai hing i^a'ieriali/i ri-'^chobl-s regul ati onsMhereaf ter-
"the Rule");
Specifically the complaint alleges that the respondent school
district violated certain recordkeeping and notification requirements
contained in the Rule by failing to develop and maintain records in
three schools, and by failing to warn employees in two schools of
the location of friable asbestos-containing materials. The complaint
further charged that parent-teacher associations had not been noti-
fied of the results of inspections, as required by the Rule, 'The
penalty sought by the complainant for these violations is $13,300.00.
The facts in this matter are not in dispute. 3/ What is
!_/ The "asbestos in schools rule".
2J See Section 6(e)(l), 15 U.S.C. 2605(e)(l).
3/ See Court Exhibit 1, and TR p. 12.
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disputed, and was the principal subject of the hearing, was the
appropriateness of the penalty sought by the complainant for the
alleged violations. After careful deliberation and review of all
the evidence, it is concluded that the proposed penalty should be
reduced substantially, owing to (a) the amount of money expended
by the respondent to reduce or remove asbestos-containing friable
materials from its schools; (b) good faith efforts of the respon-
dent to comply with State and federal government regulations rela-
ting to friable asbestos-containing materials in the schools, and
(c) the fact that, as of the date of the trial herein the viola-
tions charged had been abated. Although these factors are consid-
ered sufficient io reduce, the .penalty, to, .the_leyel -asses-sed^.^some;
consideration;; w.as. .given :to . the respondent'snotunreasonabl e: re-
liance upon two contractor's reports as to the condition of the"
schools, although it is noted that reliance upon contractors does
not constitute a defense to the.violations charged.
It is undisputed that the respondent expended approximately
$177,000 between 1977 and the date of the trial of this matter. 4/
$120,000 of this amount was spent between 1977 and 1979, before
the effective date of the Rule but after the State of New Jersey
had moved to inspect and attempt to control friable asbestos-con-
taining materials in schools (R. Ex. 2, State of New Jersey Guidance
Document•for Eliminating Health Risks from Sprayed On Asbestos-
Containing Material in Buildings; May, 1977). After the January,
4/ Stipulation 2; TR p. 12.
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1985, inspection by the U. S. E. P. A., the respondent contracted
to remove or repair friable asbestos-containing materials from the
areas in question at a cost of about $57,000.00. 5_/ These expen-
ditures were substantial, and demonstrate the respondent's willing-
ness to undertake an expensive effort to remove the hazardous
materials.
There is additional evidence of good faith on the part of
the respondent. The 1979 removal of friable materials was followed
by inspections by both the contractor and State officials (TR p. 62)
A test to verify the quality of the air in the schools was conduc-
ted, as well, by another contractor (TR p. 62). In 1984, a con-
tractor was~retai neditto;1 obk-.agai.h"~ to"be : sure that .the respondent
was "still a n^ compliance, -'~f£ Tp^jj 4) Ir^" A11 of" the school s" we're'-tb'ere-
upon re-examined. The contractor's report stated that asbestos-
containing material was present, but that it was nonfriable. The
respondent theruundertook to determine what its obligations were re-
garding notification where asbestos-containing but nonfriable mater-
ial was found. 6/ Additionally, it invited the New Jersey Depart-
ment of Health to inspect the schools. This inspection resulted in
5/ TR p. 67; the E.P.A.'s inspection noted friable materials
in the insulation which covered a boiler (no longer in use) in
the boiler room of one of the schools; friable materials in the hot
water tapping of another school (also in a boiler room). That the
friable materials contained asbestos was assumed, because the re-
spondent's contractor had said that the materials contained as-
bestos. TR p. 36^
6_/ Respondent's assistant superintendent testified that he
had telephoned an E.P.A. inspector for guidance on notification
requirements where non-friable asbestos-containing materials were
found, and says he was told that notification under those circum-
stances was unnecessary. See generally TR p. 81 ff.
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the discovery of friable materials in two locker rooms. The mater-
ial was subsequently removed, TR p. 67. It should be noted also that
when the U.S. E. P. A. inspectors arrived to inspect the buildings,
the respondent provided to them a report made by respondent's contrac-
tor that enabled the inspectors to go directly to those areas point-
ed out by the contractor for their inspection.
Respondent urges the reduction of the penalty to zero or to
a minimal level. However, it is admitted that violations of the
notice and recordkeeping provisions of the Rule did occur; and it
may also be observed that respondent's effort to determine the ex-
tent of its notification responsibilities in connection with non-
friable materials (asbestos-containing) by telephoning an E.P.A.
inspector were, not sufficiently . carefun-, -.The Rule may or:may~-not' •
be simple to-loc^ateTraod understand ;, but, there., is. no" questi on .that;
it is written clearly enough for the regulated community to com-
prehend, with a small effort, the nature and extent of the respon-
sibilities that arise under the Rule's provisions.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
1. Respondent North Brunswick Township School District is a
local education agency as defined at 40 CFR S763.103(e), and
is subject to the Act and to the requirements of the Rule.
2. Respondent operates one high school, one middle school, and
four elementary schools with a total enrollment of 3200 pupils;
it has a total of 300 employees. C. Ex. 1.
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3. As of January 9, 1985, the date of the U. S. E. P. A.
inspections, respondent had not compiled and maintained records
as required by 40 CFR S763.117(a)(3) with respect to the North
Brunswick Township High School. As of the same date, with
respect to the Linwood Middle School where friable asbestos-
containing materials were found in a boiler room, respondent had
failed to warn and notify as required by 40 CFR §763.111(a)(b) (c)
and (d) and.had failed to compile and maintain records as required
by 40 CFR §763.114(a)(l), (2), (3), (4)(i), (4)(ii), (5) and (6).
As of the same date, with respect to the Livingston Park Elemen-
tary School, where friable asbestos materials were located in a
boiler room.; the: respondent had failed :to warn and; tor notify." as
required by: 40. CFR;-S763~.311 (a) (b) (c)and. (d)'3' and haa. faiJejd .to.
compile and maintain records as required by 40 CFR S763.114(a)
(1), (2), (3), (4)(i), 4(ii), (5) and (6).
"4. It is concluded that the respondent violated Section
15(1)(C) of the Act, 15 U.S.C. 2615, by failing to comply with
the provisions of the Rule set out above.
5. It is concluded that a civil penalty of $1500.00 is
appropriate in this matter, based upon the significant amounts
the respondent has expended to remove friable asbestos-contain-
ing materials from its schools, based upon the location of the
materials found by the U. S. E. P. A. inspectors, based upon
good faith efforts of the respondent to comply with early State
requirements and then with federal requirements, and based upon
the fact (uncontroverted in the record) that the violations had
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been abated as of the date of the trial of this matter.
TR pp. 67-70.
ORDER
Pursuant to section 16(a)(l) of the Toxic Substances
Control Act, 15 U.S.C. S2615(a)(l), a civil penalty of $1500
is hereby assessed against respondent North Brunswick Township
School District for the violations of the Act found herein.
Payment of the full amount of the civil penalty assessed
shall be made within sixty (60) days of the service of the
final order-by;submitting a c.ertifjied or/, cashier's, check.pay-
able to thecJJnJ ted: S.tates 1 of ^America *; The_check shall-ibe ma.i1.e~d.
to:
EPA - Region 2
Regional Hearing Clerk
P. O. Box 360188M
Pittsburgh, PA 15251
J;" F. GREENE
/^Administrative Law Judge
Washing to n, D. C. ^
December 31, 1985 ' •
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40
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BEFORE THE ADMINISTRATOR
U.S. ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, B.C.
In re :
Electric Service Company,
Respondent
TSCA Docket No. V-C-024
TSCA Appeal No. 82-2
FINAL DECISION
Respondent, Electric Service Company, appeals from a
decision by Administrative Law Judge Marvin E. Jones in a
proceeding brought by Complainant, Director of tbe Enforcement
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Division, Region V, U.S. Environmental Protection Agency, under
the authority of §16(a) of the Toxic Substances Control Act
I/
(TSCA), 15 U.S.C. §2615(a). This proceeding was instituted
by a complaint issued March 24, 1981, and amended on June 29,
J_/ TSCA §16(a)(l) provides as follows:
"Civil. (1) Any person who violates a pro-
vision of Section 15 shall be liable to the United
States for a civil penalty in an anount not to
exceed $25,000 for each such violation. Each day
such a violation continues shall, for purposes of
this subsection, constitute a separ ate . vio lation of
Section 15."
TSCA §15 provides, in pertinent part, that it shall be
unlawful for any person to "(1) fail or refuse to comply
with . . . (B) any requirement prescribed by § . . . 6, or (C)
a-h y rule promulgated under § . . . 6."
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21
1981, In which Respondent Is alleged to have violated the
disposal, storage, marking and recordkeepIng regulations for
PCBs Issued under §6(e) of TSCA. 40 CFR Part 761 (1978).
Complainant alleged that Respondent Improperly disposed
of PCBs, Improperly stored PCBs, failed to mark PCB items and'
failed to keep records, all In violation of the regulations.
A civil penalty of $35,000 was proposed In the complaint. A
hearing was held on March 24 and 25, 1982, In Chicago, Illinois
In his initial decision, the presiding officer found that
Respondent had failed to comply with the regulations as charged,
He assessed a civil penalty of $47,500 instead of the $35,000
I/
proposed in the complaint.
On appeal, Respondent asserts both procedural and substan-
tive grounds for finding that in some cases it did not violate
the PCB rules and in other cases, if it did fall to comply with
*/
the regulations, the violations were minor. Therefore,
Respondent argues that the civil penalty should be reduced or
eliralnated.
2_/ The June 29, 1981, amendment made no substantive changes in the
complaint, but clarified that three distinct storage areas were
the subject of the complaint.
_3_/ The presiding officer recommended that 50% of this penalty be
remitted If Respondent demonstrated compliance with the regulation?;
within a reasonable length of time. (See Initial Decision, p. 37).
4/ Respondent's brief on appeal Is entitled "On Respondent's
R-equest for a Hearing." However, there Is no further discussion
of this request in the brief. In any event, no issues have been
raised on appeal which would require oral argument.
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For the reasons stated below, the initial decision is re-
versed in part, modified in part and affirmed in part. I have
reversed the presiding officer's conclusion that all of the
samples taken from Respondent's property were representative
samples. I have also set aside the presiding officer's finding
regarding the basis for the adroissibi1ity of certain evidence.
Finally, I have modified the civil penalty proposed by the
presiding officer. Except as noted above, the initial decision
is affirmed, and its findings of fact, conclusions of law and
reasons therefor, are adopted and incorporated by reference in
i/
this final decision.
Background
RespVndent, Electric Service Company, has been in the
business of selling and rebuilding transformers since 1929 and
has been handling PCBs at its current location since 1951. Its
facilities include an "old" building which contains a workpit
area where PCBs are usually stored for disposal, a "new" building,
apparently constructed during the spring of 1980, where PCBs are
also stored for disposal, and eight bulk storage tanks (at least
!>7 That an appellate administrative tribunal may adopt the find-
ings, conclusions, and rationale of a subordinate tribunal without
extensive restatement is wel1-se111ed . United States v. Orr, A74
F.2d 1365 (2d Cir. 1973); Carolina Freight Carrier Corporation v.
United States, 323 F. Supp. 1290 (W.D.N.C. 1971); In re Chemical
Waste Management, Inc., RCRA (3008) Appeal No. 84-8, Order Adopt-
ing the Presidinj; Officer's Initial Decision as Final Agency Action
(September 5, 19B4); and cnses cited in Ciba Geigy v. Farmland In-
dustries, FIFRA Comp. Dkt. NOR. 33, 34 and 41 (Op. of the Judicial
Officer, April 30, 1981) .
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14 years old) which, at the beginning of this action, were kept
outside. Three of the bulk storage tanks (filled with PCB contam-
inated soil) have since been moved inside the new building;
the rest remain outside.
Respondent's place of business was inspected on three
occasions. At the time of the initial inspection on May 21,
1980, the EPA inspector observed an employee sweeping up debris
in the workpit area in the "old" building. The drums of PCBs
which were usually stored in this area had been temporarily
removed to an area immediately adjacent to the workpit so that
the workpit could be used to repair a large transformer. Al-
though the individual drums were marked as PCB containers,
neither the workpit area nor the area adjacent to the pit was
marked as a PCB storage area. The employees who were working in
these areas at the time of the first inspection, including the
employee who was sweeping up the debris, were not wearing protec-
tive clothing. Th'e inspector took a sample of the debris, which,
after analysis, was found to contain concentrations of PCBs well
i/
over the regulatory limit. The inspector also spotted various
40 CFR §761.l(b) provides in relevant part:
[T]he terms PCB and PCBs are used in this rule to refer
to any chemical substances . . . that contain 50 p pm
(on a dry wei g h t basis) or 'greater of PCBs .
Any chemical substances and combinations that contain
less than 50 ppm PCBs because of dilution, shall be
included as PCB and PCBs unless otherwise specifically
provided. Substances that are regulated by this rule
include ... soils, materials contaminated as a result
of spills . . . . .(Emphasis added.)
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oily pools in the outdoor storage area and took samples from
these pools, which were later found to contain very high concen-
trations of PCBs. Complainant partially based its charge that
Respondent disposed of PCBs in violation of the regulations on
1J
these samples. .40 CFR §761.10. The inspector also discovered
that the storage area in the new building did not contain
required curbing, that individual PCS containers, although
marked, were not dated, and that an annual report had not been
prepared, all in violation of the PCB regulations. 40 CFR
§§§761.20, 761.42 and 761.45. See Ex. C-l, Report on Inspection
to Determine Compliance.
A second inspection was conducted on August 8, 1980, at
Complainant-*' s request, but without a valid authorization, by
an employee of the Ohio Environmental Protection Agency (OEPA).
Samples were taken from the outdoor bulk storage tanks. The
analyses of these samples showed that the tanks contained PCBs
in high concentrations. The tanks were not marked or stored in
accordance with the regulations. 40 CFR § § 76 1 .20(a)(1) and
761.42(b) and (c). Another sample taken from the soil near
these tanks had a high concentration of PCBs. Complainant
T_l 40 CFR §761.2(h) defines "disposal" to mean to:
. . . intentionally or accidentally discard, throw away,
or otherwise complete or terminate the useful life of PCBs
and PCB Items. Disposal includes actions related to con-
taining, transporting, destroying, degrading, decontami-
nating or confining PCBs and PCB Items.
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partlally based Its charge that Respondent violated the disposal
regulations on this sample. 40 CFR §761.10. See Ex. C-l.
A third Inspection was conducted on February 11, 1982,
after the complaint had been fl-led, to determine If -Respondent,
nearly four years after the PCB regulations went Into effect
(and almost two years after the Initial EPA Inspection), had
taken any corrective action to come Into compliance with the
regulations. The Inspector found that although the storage
areas had been narked, no secondary containment had been provided
for the bulk storage tanks (some of which had been moved Inside)
and no records or annual documents had been prepared as required
by the regulations. See Ex. C-1 I, Reinspectlon Report. In
other words^, although Respondent had taken some minimal action,
such as marking the storage areas, It still Ignored many of the
£/
requirements of the regulations.
Admlss ibilIty of Evidence Obtained During the Second Inspection
As explained in the "Background" section, supra, the vio-
lations alleged In the complaint are based on the first two
inspections: one conducted on May 21, 1980, by a U.S. EPA
inspector, and one conducted on August 8, 1980, by an OEPA
inspector. Respondent argues that the evidence gathered by
the Ohio Inspector was erroneously admitted into the record
because the Inspection was not carried out in accordance with
87 Respondent has not been charged with any violations based on
this Inspection.
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the requirements of TSCA, namely, that the inspection be conducted
by a "duly designated representative" of the U.S. EPA and -that
written notice of the inspection be given at the time of the
I/
Inspection. The presiding officer, although finding that
the Ohio inspector had not met the notice requirement of TSCA,
admitted the evidence because he determined that the Ohio
inspector was conducting an inspection pursuant to authority
vested in him by Ohio law, which did not require written notice,
and, therefore, the presiding officer reasoned, it was not
necessary for the inspector to comply with the requirements
!£/
of TSCA; Initial Decision, Finding of Fact 30, p. 16. I
9/ Section 11 of TSCA provides in pertinent part that:
the Administrator, and any duly designated repre-
sentative of the Administrator, may inspect any
establishment, facility, or other premises in which
oheraical substances or mixtures are manufactured,
processed, stored, or held before or after their
distribution in commerce and any conveyance being
used to trans'port chemical substances, mixtures,
or such articles in connection with distribution
in commerce. Such an inspection may only be made
upon the presentation of appropriate credentials
and of a written notice to the owner, operator, or
agent in charge of the premises or conveyance to be
inspected. A separate notice shall be given for each
such inspection, but notice shall not be required for
each entry made during the period covered by the
inspection. Each such inspection shall be commenced
and completed with reasonable promptness and shall be
.conducted at reasonable times, within reasonable
limits, and in a reasonable manner. (Emphasis added.)
10/ Chapter 6111 of the Ohio Revised Code (Water Pollution Control
Statute) authorizes inspections by Ohio officials without written
notice. Official notice was taken of Chapter 6111, T. 161. See
a-l so Initial Decision at 3A.
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disagree with this reasoning; however, as explained below, I
nevertheless conclude that the evidence is admissible.
The evidence in the record establishes that the inspec-
tion did not satisfy the requirements of TSCA. The inspector
\
admitted that he was not a duly designated representative of
the U.S. EPA and that he did not provide the requisite written
1L/
notice. T. 176-177. In fact, at the time of the inspection,
Ohio inspectors were not even authorized to conduct inspections
under TSCA. T. 176-177. More importantly, the evidence demon-
strates that the Ohio inspector conducted his inspection at the
request "of the U.S. EPA. The inspection report, for example,
states that "(tjhe [US] EPA requested the assistance of the
Ohio EPA to^do additional sampling of the facility on August 8,
1980, to support the earlier investigation." Ex. C-l, Report
on Inspection to Determine Compliance (prepared by U.S. EPA).
T. 94-95. In other words, the Ohio inspector was not conducting
a separate and wholly independent state investigation; he was
acting as U.S. EPA's agent. Therefore, since he conducted the
inspection on U.S. EPA's behalf, I conclude that the inspector
should have been a "duly designated representative" of the
Agency when the inspection was conducted, regardless of his
authority under Ohio law, and he also should have given written
notice to the Respondent at the time of the inspection. Because
neither of these statutory requirements was met, Respondent's
III See note 9, supra.
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argument that this inspection was not authorized by TSCA is
well taken.
This conclusion, however, is not dispositive of the issue
under discussion. Complainant established that Respondent in
effect consented to the inspection by the Ohio inspector by
failing to voice any objection to it. Mr. Mondron, the Respond-
ent's sales manager, allowed the inspector to enter the premises
without protest; in fact, he was helpful and gave assistance to
the inspector. T. 262. These actions by Mr. Mondron operate as
a waiver of any right to challenge the adraissibi1ity of the evi-
dence on appeal, for consent has "traditionally been considered
a waiver" of substantive or procedural limitations to searches.
McCorraick, On Evidence §175 (2d ed. 1975). Therefore, the evi-
••" 137
dence obtained by the Ohio, inspector is admissible.
12/ Respondent concludes that the evidence obtained as a result of
an unauthorized inspection is not admissible. Although not expli-
citly stated, such" an argument would be based on the protection
afforded by the Fourth Amendment against unreasonable searches and
seizures, and the judge-made exclusionary rule which prohibits the
use of evidence obtained through such illegal searches or seizures
However, it is not clear from the case law that such protection is
available in civil proceedings, or if it is, that the appropriate
remedy would be to exclude the evidence. See Immigration and Natu-
ralization Service* v. Adan Lope z-Mendoza, 52 U.S.L.W. 5190 (U.S.
July 5, 198.4). It is unnecessary to decide this issue, however,
because I find that Respondent consented to the inspection.
13/ Even if Respondent's consent to the inspection did not
operate as a waiver of the TSCA notice requirements, the evidence
gathered during the inspection is still admissible because Re-
spondent did not raise a timely objection to its admission during
the hearing. See Wainwright v. Sykes, 433 U.S. 72, 86 (1977)
(-next page)
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Representativeness of the Samples
Because the scope of the PCB regulations is generally
limited to PCBs in concentration of 50 ppra or greater, it is
Complainant's burden to prove that the PCBs in question ex-
li/
ceeded the regulatory limit. As determined in previous
cases, it is not always necessary to take samples to prove a
violation; circumstantial evidence may be sufficient to prove
J_5/
that the PCBs in question were over the regulatory limit.
In this case, the U.S. EPA and OEPA inspectors took samples to
prove the concentrations of PCBs in the storage tanks, in the
pools,..in the soil, and in the debris. See "Background," at
4-6, supra. Respondent argued that these samples were not
"representative of the medi[a] from which [they were] taken"
• -%
and are, therefore, of no probative value. Appellate Brief at
(Footnote No. 13 cont'd)
(failure to raise- a contemporaneous objection to admission of a
confession). See generally, McCorraick, On Evidence §180 (2d ed .
1972). Complainant's Ex. C-3(b), which contains the results of
the analyses performed on the samples taken during the August 8
inspection, was admitted in evidence without objection (T. 91)
before Respondent raised an objection to Complainant's Ex. C-l,
which also contained the results of the analyses, although in
summary form. _T. 202-203. Therefore, Respondent had not raised
a timely objection.
1 4 / See note 6, supra, and In the Matter of Robert Ross & Sons,
Tnc.~TSCA Appeal No. 82-4 at 8, n. 12 (Final Decision, April 4,
1984).
15/ See In re National Railroad Passenger Corporation (AMTRAK)
TSCA Appeal No. 82-1, 101 ALC 168 (1982). In that case, labels
identifying transformers as PCB transformers were sufficient to
-prove the requisite PCB concentration.
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12. In support of its argument. Respondent cites two EPA
documents which provide guidance on taking representative- sara-
li/
pies. Respondent argues that the procedures suggested in
these manuals were mandatory and that the inspectors' failure
to follow them means that the samples were not representative.
According to the presiding officer, however, the guidance in
the Agency manuals was "[merely] directory." He also found
that the "samples . . . were representative of the contents of
12.1
the pools and containers sampled." Conclusion of Law 1.
On appeal, Respondent argues that the presiding officer
erred in concluding that the procedures in the manuals were not
mandatory and that the samples were, in fact, representative.
16/ "TSCA Inspection Manual" and "Samples and Sampling Procedures
for Hazardous Waste Streams," Respondent's Exhibits A and 5, res-
pectively. Only pp. 3, 32 and 38 of "Sampling Procedures" were
admitted in evidence. Respondent also alleges that none of the
samples was bagged and taped closed with the Official Seal in
accordance with the Agency's recommended chain of custody proce-
dures and that this failure also fatally discredits the evidence.
See TSCA manual, pp. 3-39, 3-40. However, as noted in the discus-
sion in the text, the guidance in the manuals cited by Respondent
is not binding on the Agency, and, therefore, this argument fails.
Respondent introduced no other evidence to demonstrate that the
samples were in fact tampered with or to otherwise question the
integrity of the samples.
17/ The presiding officer did not make any specific findings on
the representativeness of the debris and soil samples; neverthe-
less, he concluded that Respondent violated the disposal regu-
lations based on these samples. See Initial Decision, Conclusions
'of Law Ab and c. Respondent attacks the representativeness of
all the samples. Appellate Brief at 14 ("none of the.samples
at issue can be considered representative . . . .").
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1. Failure to Follow Procedures in Agency Manuals
Respondent argues that the samples taken by the EPA 'and
OEPA Inspectors were not representative samples because the
inspectors did not follow sample collection procedures "required
by U.S. EPA documents. See Appellate Brief at 13. I disagree.
First, it is clearly stated in the manuals that they
provide general guidance; therefore, it is within an inspector's
discretion, based on experience and the specific circumstances
of the inspection site, to deviate from these procedures. For
example, it is stated in the TSCA Inspection Manual that:
Because it is impractical to sample everything that
might contain PCBs, EPA has established sampling
guidelines intended to assist the inspector in making
sampling determinations.
- -\
These guidelines set out general principles for
sampli ng . . .
The wide variety of field situations that will be
encountered make it impossible to specify in advance
exactly when samples should or should not be taken.
This final judgment must be made by the inspector.
TSCA Inspection Manual, Vol. 2, Ch. 2, p. 57 (emphasis in
original).
Second, although an Agency's properly promulgated rules
and regulations are genera 1-1 y binding on it as well as on
!!/
the public, it has been held in a variety of cases that
18/ "[A)n agency is as much bound by its own properly promulgated
rules as the persons affected by them." 3 Mezines, Stein &
Gruff, Administrative l.nw, §13.03, 13-37-13-38 (1977). Although
fnextpnge)
-------
-13-
guidelines, such as the ones in issue, which have not been
published in the Federal Register -and have not been promulgated,
are not "properly promulgated rules." Therefore, they do not
have .the force and effect of law and are not binding on either
the public or the Agency. For example, ~[i]t is hornbook law
that informal publications all the way up to revenue rulings
are simply guides to taxpayers, and a taxpayer relies on them
at his peril." Caterpillar Tractor Co. v. United States, 589
F.2d 1040, 1043 (Ct. Cl. 1978). See also Schweiker v. Hansen,
450 U.S. 785, 789 (1981) (Social Security Claims Manual "has no
legal force, and it does not bind the SSA."); National Wildlife
Federation v. U.S. Forest Service, F. Supp. , {21 ERC
1225, 1229]^ (D. Or. April 3, 1984) (Forest Service guidelines
"were merely recommendations" until explicitly mandated by
legislation). In this case, the guidance was meant only for
internal Agency use and was not binding on either party. See
United States v. Armada Petroleum Corp., 562 F. Supp. 43, 51-52
(S.D.Tex. 1982) ("la]s the [Department of Energy enforcement]
(Footnote No. 18 cont'd)
an agency's own rules and regulations are generally binding,
there are several exceptions to that rule. For example, if
rules or regulations only address the Agency's internal proce-
dures and do not "confer procedural benefits upon individuals,"
it is with'ini an agency's discretion to administer even its own
procedural rules as it deems necessary. American Farm Lines v.
Black Ball Freight Service, 397 U.S. 532, 538 (1970), cited in
United States v. Fitch Oil Co., 676 F. 2d 673, 678 (Temp. Emer.
Ct. App. 1982). See generally 3 Nezines, Stein & Gruff, Adraini-
s'trative Law, §13.03, 13-38 to 13-40 (1977); 2 Davis, Admini-
strative Law Treatise, §7.21 (2d ed. 1978).
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-u-
reanual was an internal docuraenc and not an official regulation.
It was not binding i . . ."). Therefore, any failure of the
inspectors to follow the procedures in the manuals is, as the
presiding officer found, "irrelevant" for purposes of this> case,
Initial Decision at 27.
',
2 . Probative Value of the Samples
A representative sample is one which is considered to be
representative of some larger body or mass such as the contents
of a container or a defined area of soil. For example, rather
than testing the entire contents of a drum, a sample can be
taken which, if the proper procedures have been observed,
should have the same composition as the drum's contents. In
other words, this sample is "representative" of the drum's
contents. A "grab" sample can also be taken from the drum;
however, a grab sample is taken without following any specific
procedures to ensure that the sample is representative. A grab
sample does not reveal anything about the contents of the drum
as a whole; it only provides information about itself. See In
the Matter of Robert Ross, TSCA Appeal No. 82-4 at 9, Final
Decision, April 4 , 1984. In this case, both representative and
grab samples were taken.
The OEPA inspector took samples from Respondent's outdoor
bulk storage tanks, which contained various amounts of liquid.
Each had a capacity of about 735 gallons and none was more than
one quarter full» See "Background." One of the EPA guidance
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-15-
roanuals suggests that samples should be taken from the upper,
middle, and lower portions of tanks and then combined into a
composite sample, to obtain a representative sample. Respon-
dent's Ex. 5. The inspector did not follow this procedure;
nevertheless, it is apparent from his testimony that the samples
which he took were in fact representative samples:
~[T]he type of sampling I was doing with a glass tube
simultaneously samples the top, middle and bottom
portion as long as I can reach from the top of the tank
all the way down to the bottom of the tank and I can
touch the bottom of the tank with the bottom of the
tube, then I have extracted a sample covering every
layer of the tank.. They were not individual samples
taken and combined, there were a series of samples
taken to provide me with an adequate sample volume.
However, each time I took a sample, it was covering
each of the levels." T. 180-181.
Therefore, .-vthe presiding officer correctly determined that these
particular samples were representative and his conclusion is
affirmed in that regard. However, the same cannot be said for
the samples taken by the U.S. EPA inspector.
The U.S. EPA inspector took samples from "pools" of oil,
soil, and debris. Sample SOj was taken from a small pool in
Respondent's yard; Sample SO^ was taken from some damp soil
adjacent to the pool; Sample 505 was taken from some debris
inside a building; and Sample SOy was taken from another little
«
pool just below an exhaust pipe. Ms. Young, the U.S. EPA
inspector, described how she took the samples:
QUESTION: (Mr. Seltzer, for Respondent)
Now, Ms. Young [EPA Inspector], could you describe how you
took the samples of oil and debris?
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-16-
ANSWER:
The oil samples [803 and $07] were taken by using a glass
pipette with a squeeze bulb. The samples were then put in
glass vials.
The soil samples {SO^] or debris samples [505] are taken
with a scoop and the material is then identified with the
proper sample number.
QUESTION:
And could you specifically describe the sample you took
from the cement floor in the front of the work pit?
ANSWER:
That was a debris sample, that was a debris sample, the
employee was sweeping and I took a sample of the debris
with another scoop and put it in the container and put a
sample number on it.
QUESTION:
And -h-ow many soil samples did you take on that day?
ANSWER:
I took one soil, the one I call a soil sample is the one
by the puddle that had 550 parts per million. The others
I call debris samples, because they contain debris and
dirt and a lot of other things.
Now, the first two samples only contained rock and what
not that was in the storage area where the transformer
was, because that was taken beneath two old transformers
that were outside, stored outside.
QUESTION:
And so you took a single grab sample of soil, is that
right, you said you took one sample of soil?
ANSWER:
Right.
T. 131-132.
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-17-
This testimony establishes that the U.S. EPA inspector
took only "grab" samples, not representative samples. Therefore,
the presiding officer's conclusion that these samples were rep-
resentative is set aside. However, even though these samples
!!/
are not representative, they still have probative value.
As explained above, we use representative samples to show
the quality or condition of a larger body from which the sample
is taken. Thus, if proof of a violation depends on producing'
evidence that accurately describes some quality or condition of
the larger body (for example, its PCB concentration level), a
represe~ntative sample is essential, for no inferences about the •
larger body can be drawn from a meiu grab sample. In the
present case, however, proof of tha disposal violations does
not hinge on accurately describing the condition or quality of
some larger body. Instead, it hinges; on proof of an uncontrolled
discharge of PCBs. Under such circumstances, the "sample" itself
i s the uncontrolled discharge, the improper disposal, or, so to
speak, the corpus delicti. Therefore, the violations may be
established by simply proving two things: (1) that the samples
themselves contain PCBs in concentrations exceeding 50 ppm; and
(2) that the PCBs were not disposed of properly, a conclusion
which may be inferred from where the PCBs were found. The grab
samples were taken from debris, soil'and pools of liquid on Respon-
197 See, e.g., In the Hatter of Robert Ross & Sons, Inc.,
TSCA Appeal No. 82-4 at 8, n. 12 (Final Decision, April 4, 1984)
(concerning the application of the Agency's anti-dilution policy).
-------
-18-
dent's property and are surely "evidence of uncontrolled discharges
[improper disposals] at [Respondent's] facility." Initial
Decision at 29. So long as the samples contained concentrations
of PCBs over the regulatory limit, they are evidence which, if
unrebutted, is sufficient to establish improper disposal.
Therefore, although 1 ara setting aside the presiding officer's
conclusion that the samples taken by the U.S. EPA inspector
were representative, I also find that no error resulted from--
relying on these samples to prove the disposal violations.
Proposed Civil Penalty
TS.CA §16(a) authorizes civil penalties in the amount of
$25,000 for each violation, and each day a violation continues
is a separate violation. The nature, circumstances, gravity of
- ->
the violation, ability to pay, prior violations and other such
20/
matters are to be considered in determining the penalty.
A total penalty in the amount of $35,000 was proposed by
Complainant, consisting of $5,000 for the alleged disposal vio-
lations, $5,000 for the alleged marking violations, $15,000 for
the alleged storage violations and $10,000 for the alleged
recordkeeping violations. According to Complainant, this penalty
20/ Section 16(a)(2)(B) lists the following for consideration:
". . . the nature, circumstances; extent and
gravity of the violation or violations and with
respect to the violator, ability to pay, effect on
ability to continue to do business, any history of
prior such violations, the degree of culpability,
and such other matters as justice may require."
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-19-
was moderate and was requested because it expected Respondent
to act quickly to come into compliance and because Respondent
21/
is a relatively small company. See Complainant's Brief,
dated April 22, 1982, at 52. The presiding officer, however,
increased the total penalty by $12,500 to $47,500, stating that
t
"the penalties proposed are insufficient, and that an appropriate
penalty to be assessed is $47,500." Initial Decision at 37.
In conjunction with this increase, he also recommended - that 50Z -
of the increased penalty of $47,500 ($23,750) be remitted if
Respondent:
1.- prepared records and annual documents in accordance
with §761.45;
2. reduced the concentration of PCBs which were the
_result of uncontrolled discharges (disposals] to
"background levels"; and
3. dated and stored PCB Articles and Containers as
required by §§761.20 and 761.42. 227
21/ Complainant followed the Agency's penalty guidelines in
determining the proposed penalties. See Complainant's Ex. C-2,
PCB Penalty Policy. Penalties are determined in two stages.
First, the "gravity" of the violation is determined and then
adjustments are made to the "gravity" based penalty to reflect
the other matters which may be considered in determining the
penalty. See note 20, supra. The guidelines provide a range
of penalties which may be assessed depending on the seriousness
of the violation. See In the Matter of Bell & Howell Company,
TSCA-V-C-033, 034, 035 (Final Decision, December 2, 1983), for
a discussion of the penalty guidelines.
22/ Although §16(a) of TSCA authorizes the Administrator to
"assess" acivil penalty" for violations of the PCB regulations,
" [ t ] h i s is not meant to infer, however, that a final order . . .
cannot address matters other than - monetary penalties." See In
the Matter of Chemical Waste Management, Inc., Order Granting
Ifeave to Intervene, TSCA Appeal No. 84-3 at 12, n. 12 (May 23,
1984).
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-20-
Respondent contends that the presiding officer erred in
his penalty determination because he did not explain, as required
by the regulations, his specific reasons for establishing a
penalty different from the one proposed by Complainant. Re-
spondent also objects to the penalty assessment on the grounds
that the penalties proposed for the failure to mark the storage
areas and failure to prepare annual reports are "disproportion-
ate to the nature of the viol ation[s] . " See Appellate Brief at
29 and 31. Finally, Respondent argues that the presiding of-
ficer erred because he did not consider various mitigating
factors in making his civil penalty determination. For the fol-
lowing reasons, I am assessing a penalty of $35,000 as proposed
23/
by Complainant.
The regulations governing this proceeding give the presid-
ing officer the discretion "to assess a penalty different in
amount from the penalty recommended to be assessed in the com-
23 / The regulations give the presiding officer considerable
discretion in setting a penalty. 40 CFR §22.27(b). Although
he must "consider" any penalty guidelines, he is not bound by
them. In Bell & Howell, note 21, supra, it was held that when
a presiding officer changes the penalty proposed in the complaint
but still assesses a penalty within the ranges provided in the
penalty guidelines, "absent unusual or other compelling circum-
stances, it would be inappropriate on appeal to change the
penalty . . . ." Bell & Howell at 19. Therefore, where no
abuse of discretion is shown, I will not substitute my judgment
for that of the presiding officer so long as the reasons for
changing the penalty have been stated with specificity. In the
instant case, however, it is not possible, as explained in the
text, to determine the precise penalty assessed for each violation
and to determine, therefore, if the penalty falls within the
-ranges recommended in the penalty guidelines.
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-21-
plaint, I so long as he] set(s) forth In the initial decision
the specific reasons for the increase or decrease." 40 CFR
§22.27(b). Here, the presiding officer increased the penalty
by $12,500 because, in his opinion, the record demonstrated Re-
spondent's general disregard for the requirements of the PCS
t
regulations. See Initial Decision at 35. Similarly, he pro-
vided for a 50% across-the-board reduction in the penalty if Re-
spondent took action to come into compliance with the regulations.
These reasons do not satisfy the specificity standards of 40 CFR
§22.27(b), because in neither instance does the presiding officer
explain how the increase or decrease should be allocated among the
disposal, marking, storage and recordkeeping violations. This
lack of specificity makes it nearly impossible to discern his
reasons for changing the penalty recommended in the complaint.
Although it might be reasonable to assume that the increase of
$12,500 is to be allocated on a pro rata basis, the same assump-
t
tion cannot be made for the decrease, because the presiding
officer did not consider the differing costs of each remedial
action. For example, to prepare the required annual documents
and mark the containers should be relatively easy, inexpensive
tasks; however, to clean up the contaminated soil to some
"background" level could result in significant costs. Should
the same credit be given for each act of compliance (or noh-"
compliance)? The initial decision does not address this
question. In addition, the presiding officer did not state
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-22-
what concentration of PCBs would satisfy his cleanup to "back-
2W
ground leve1"-. requirement. Accordingly, because of the. lack
of specificity in the changed penalty and its possible prejudice
!!/
to Respondent on appeal, I cannot adopt it.
In addition to challenging the general increase in the
penalty proposed by the presiding officer, Respondent also ob-
jected to the assessment of penalties for the marking and
recordkeeping violations. Regarding the marking violations,
Respondent contends that because the individual containers
in the various storage areas were marked, it has "effectively
complied with the marking requirements . . . ." Appellate
Brief at 30. However, 40 CFR §761 .20(a)(10) requires the
storage area to be marked in add i t ion to the individual con-
tainers. To adopt Respondent's argument.would eliminate a
clear requirement of the regulations. By marking the storage
area itself in addition to the individual containers, personnel
are warned be fore' they enter the storage area so they may take
2A / Complainant submitted a "Citation of an Additional Authority,'
received here on February 10, 198A, to support its position that
Respondent should clean up its facility so that PCBs are below
the 50 ppm level, the usual regulatory threshold. In the case
cited, In the Matter of General Electric, Aircraft Engine Group,
Docket No. TSCA-V-C-147 (January 27, 1984), Respondent was
ordered to clean up spilled PCBs to the lowest level possible by
normal clean up methods. Respondent, however, had no opportunity
to present evidence on this issue during the course of the
proceedings. Therefore, consideration of Complainant's submission
would violate Respondent's right to due process.
25/ As explained in nn. 21 and 23, supra, the presiding officer
has considerable discretion in fashioning penalties and remedies.
Nothing in this decision should be read as limiting that discre-
tion, if properly exercised.
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-23-
appropriate precautions. Initial Decision at 32. The $5,000
penalty proposed by Complainant was based on the failure to
mark several storage areas. Based on my review of the record,
I have concluded that the penalty was appropriate.
Concerning the $10,000 penalty proposed by Complainant
for the failure to maintain records and prepare annual documents
for 1978, 1979, and 1980, Respondent argues that it did maintain
adequate records and, therefore, the failure to prepare annual
reports was merely a "technical" violation for which little or
no penalty should be assessed. Respondent's so-called records
are clearly inadequate, and it admits no annual reports were
prepared. See Complainant's Ex. C-20 (Respondent's "records.").
I have previously explained the importance of preparing accurate,
contemporaneous records. See In re Briggs & Stratton Corp.,
101 ALC 116, 119 (1982). Based on my review of the record,
$10,000 is an appropriate penalty for the violations.
Complainant also proposed penalties of $15,000 for the
storage violations and $5,000 for the disposal violations.
In considering those as well as the other penalties proposed
by Complainant, I have taken into account the various mitiga-
ting factors raised by Respondent as reasons for reducing the
proposed penalties. Although Respondent has taken some actions
to improve the storage of PCBs, it is evident from the record
that Respondent was in violation of the regulations for at
least two years. In addition, it cannot be ignored that there
were several instances of unlawful disposal, even though they
-------
-24-
roay have been accidental. The penalties proposed by Complainant
were moderate, significantly less than the maximum penalties
which could have been assessed for the violations. Therefore,
based on my review of the entire record and in consideration of
the factors in the Act, I have determined that the penalty of
•.
$35,000 proposed by Complainant is appropriate.
FINAL ORDER
The Initial Decision of the presiding officer, insofar as
he found that Respondent, Electric Service Company, violated
the disposal, marking, storage and recordkeeping requirements
for PCBs, 40 CFR Part 761 (1978), is adopted as the agency's
final decision, with the following exceptions:
1. Conclusion of Law 1 is not adopted insofar as it
"•"States that samples taken "were representative of the
pools ... sampled."
2. Finding of Fact 30 stating that the August 8, 1980
inspection was conducted "under the authority of the
Ohio Water Pollution Control Act" is not adopted.
A civil pena-lty of $10,000 is assessed for the recordkeep-
ing violations, $5,000 is assessed for the marking violations,
$15,000 is assessed for the storage violations, and $5,000 is
assessed for the disposal -violations. The total civil penalty
"assessed is therefore $35,000.
Payment of the full amount of the civil penalty ($35,000)
shall be made within sixty (60) days of service of this final
order, unless otherwise agreed to by the parties. A cashier's
check or certified check payable to the Treasurer, United States
-------
-25-
of America, for the full amount, shall be forwarded to the
Regional Hearing Clerk.
So ordered.
Ronald L. McCallum
Chief Judicial Officer (A-101)
Dated: JAN 7 1935
27/ Payment of the penalty shall not relieve Respondent of
responsibility for complying with the regulations or otherwise
preclude the Agency from taking further enforcement action for
-any failure to comply with the regulations.
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CERTIFICATE OF SERVICE
I certify that copies of the foregoing Final Decision in
the matter of Electric Service Company, TSCA Appeal No. 82-2,
were delivered to each of the following persons, in the manner
indicated:
By 1st Class Mail,
postage prepaid:
By Band Delivery:
Martin S. Seltzer
Porter, Wright , Morris
3722 Broad Street
Columbus , OH 43215
& Arthur
Michael J. Walker
Assistant Regional Counsel
U.S. EPA, Region V
230 South Dearborn Street
Chicago, IL 60604
Craig Bened i ct
U.S. Attorney's Office
369 Federal Building
100 Clinton Avenue
Syracuse, NY 13201
Valdus Adamkus
Regional Administrator
U.S. EPA, Region V
230 South Dearborn Street
Chicago, IL 60604
Mary Langer
Regional Hearing Clerk
U.S. EPA, Region V
230 South Dearborn Street
Chicago, IL 60604
Bessie Hammiel
Hearing Clerk
U.S. EPA Headquarters
401 M Street, S.W.
Washington,: DC 20460
Dated:
"7k- ,
M. Gail Wingo
Secretary to the Chief
Judicial Officer
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41
-------
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY <,
BEFORE THE ADMINISTRATOR
,
In the Matter of ) .
)
Transformer Service (Ohio), Inc., ) Docket No. TSCA-IX-84-0013
Respondent )
Toxic Substances Control Act - Rules of Practice - Accelerated
Decisions - Evidence - Where affidavits and documentary evidence clearly
established that Respondent had stored PCBs for disposal in February 1979
and failed to remove and properly dispose of the PCBs prior to January 1,
1984, as required by 40 CFR 761.65(a), an accelerated decision finding
Respondent in violation of the cited regulation would be issued as there
was no issue of material fact relating to said violation which required
a hearing.
Toxic Substances Control Act - Rules of Practice - Accelerated
Decisions - Determination of Penalty - Where appropriateness of proposed
penalty for violation of the Act was in issue, Respondent was entitled to
a hearing as to the amount of the penalty, notwithstanding Complainant's
contention penalty had been determined in accordance with PCB Penalty
Policy (45 FR 59770, September 10, 1980).
Counsel for Respondent: Jeffrey J. Casto, Esq.
Akron, Ohio
Counsel for Complainant: David M. Jones, Esq.
Office of Regional Counsel
U.S. EPA, Region IX
San Francisco, California
-------
Accelerated Decision
The captioned proceeding was commenced by the Issuance on April 16,
1904, of a complaint by the Director, Toxics and Waste Management Division,
U.S. EPA, Region IX, charging Respondent, Transformer Service, Inc., with
a violation of the Toxic Substances Control Act (15 U.S.C. 2601 et seq.) and
40 CFR 761.fi5(a) in that PCRs stored for disposal at the BKK site, Beatty,
Nevada, prior to January 1, 1983, had not been removed and disposed of
prior to January 1, 1984. It was proposed to assess Respondent a penalty
of $10,000 for this violation.
Respondent answered, denying that it presently or had ever maintained
any PCB containers at the mentioned BKK site. Respondent alleged, inter
alia, that-.the PCR containers stored at the BKK facility in Beatty, Nevada,
were under the constructive control of Transformer Service (Ohio), Incor-
porated (TSO), an Ohio corporation, separate and distinct from Transformer
Service, Incorporated (TSI), a New Hampshire corporation. It was further
alleged that, but for the intentional and tortious interference by BKK, TSO
would have removed and disposed of the PCB containers stored in Beatty,
Nevada, prior to January 1, 1984.
In the prehearing exchange directed by the ALJ, Respondent furnished
copies of certificates from the Secretaries of State of Ohio and New
Hampshire certifying that TSI was a corporation of the State of New
Hampshire in good standing as of September 27, 1983, and that TSO was a
corporation of the State of Ohio in good standing as of August 6, 1984.
-------
3
It was alleged that the corporations have no common officers, directors
or shareholders. Included in the documents supplied was a copy of a
purchase order, dated February 2, 1979, to RKK Company of Nevada v/hereby
. »
Transformer Service, Inc., 680 East Market Street, Akron, Ohio, called
for the transportation from Hayward, California and the storage at the
BKK facility, Beatty, Nevada, of approximately 125 gallons of PCB liquid
waste. Also included was a copy of ISO Hazardous Waste Manifest No. 0463
reflecting the shipment on March 24, 1984, from the BKK facility in
Beatty, Nevada, of 100 gallons of PCBs in two 55-gallon drums, two 55-
gallon drums containing an unstated quantity of hazardous waste (appar-
ently a combustible liquid), three empty 55-gallon drums, and five empty 5-
gallon cans, which were apparently PCB contaminated. The manifest stated
that the liquids were to be incinerated at Rollins, Deer Park, Texas,!/
while the solids were to be buried at SCA or other EPA approved landfill.
Respondent alleged that in December 1983, TSO had made arrangements
with Rollins Environmental Services, Inc. to pick up all PCB materials
it had generated, which were located at the BKK site in Beatty, Nevada,
and that, notwithstanding the fact Respondent was current with all pay-
ments for storage, it was informed for the first time that the material
could not be'released without a payment in advance of $1,629.00 by certi-
fied check. Respondent stated that it had never agreed to this requirement
and that it was not a part of any contract between the parties. Respondent
further alleged that even if the material had been released, it would have
If This-Is one of the few EPA approved sites for the incineration
of PC^s and indicates that all liquids were or contained PCBs. The
California Liquid Waste Hauler Record (enclosure to Complainant's proposed
Exh 4), reflecting shipment of the material to the BKK Nevada site on
February 12, 1979, indicates that the drums contain PCB waste in liquid
and sludge form.
-------
been impossible to properly dispose of the material prior to January 1,
1904, because all EPA approved incinerators were [operating] at full
capacity.
Under date of September 28, 1984, Respondent filed a motion to
dismiss upon the ground that Complainant had instituted action against .
the wrong party in that TSI, a New Hampshire entity, and ISO were
separate corporations, that TSI did not engage in any activity or generate
any wastes in Hayward, California or in Region IX which are the subject
of this action, did not issue or direct the issuance of a purchase order
from ISO to BKK for pick-up and storage of the PCB containers, did not
pay for the storage of said containers nor have any role in the pick-up
and d.isposal of said materials from BKK on March 24, 1984. Supporting
the motion were the affidavits of Richard Casarano, operations manager
for TSI and Marion O'Hear, office manager for TSO from April of 1982
through Kay of 1984.
Mr. Casarano1s affidavit states that TSI is a New Hampshire
corporation formed on November 20, 1952 and is currently in good standing
and that TSI has never owned or controlled any PCB containers at the BKK
site in Beatty, Nevada. The affidavit of Ms. O'Hear is to the effect
that as office manager of TSO she had care, custody and control of corporate
books and records, that in a review of such records she had found Purchase
Order No. 3097, dated February 2, 1979, from TSO to BKK for the transfer
of PCB items for storage, that these PCB items were from jobs performed
by TSO and that TSI had no authority or control over the work which
generated any of the PCB items, that all payments to BKK for storage
charges were irtade by TSO, that attempts on December 29, 1983, to have
-------
the PCB items picked up from BKK by Rollins Environmental Services were.
unsuccessful, because BKK demanded a certified check In the amount of
$1,629.00 prior to release of the items and because BKK had no personnel
on the site to release the items and that on March 24, 1984, ISO arranged
for and effectuated the removal of the PCB items from the BKK site and
their subsequent disposal in accordance with all applicable federal, state
and local regulations.
Accompanying the motion to dismiss was a motion by Respondent to
prohibit Complainant from introducing evidence not provided in the
prehearing exchange report. The motion alleged that Complainant had
not complied with the ALJ's directive that Complainant furnish names of
expected witnesses and summaries of expected testimony to support the
allegations in Paragraphs 1, 2 and 4 of the complaint, but had merely
provided a group of documents without summarizing their relevance to the
action or which paragraphs of the complaint they were deemed to support.
Complainant's response to the motion included a motion for an
accelerated decision and a motion to amend the complaint to substitute
ISO as the respondent in lieu of TSI. Supporting the motion for an
accelerated decision was an affidavit of H. Laverne Rosse, of the Depart-
ment of Conservation and Natural Resources, State of Nevada, whose
inspection of the BKK facility on January 24, 1984, led to the
institution of the present proceeding. Mr. Rosse states that on the
above date he met at the BKK facility near Beatty, Nevada with
Mr. Clarence Gieck, Technical Manager for BKK, for the purpose of
inspecting the facility for compliance with the Toxic Substances'
Control Act. .Mr. Rosse further states that BKK's storage inventory
record which was mode available to him, showed three entities storing
-------
PCB liquid waste beyond the regulatory deadline and that one of these
was identified as Transformer Service, Inc., P. 0. Box 1077, Concord,
New Hampshire.I/ A BKK customer list, attached to the affidavit,
identifies a fourth entity as Transformer Service, 680 E. Market Street,
Akron, Ohio. A notation on this list indicates that the last mentioned..
firm had seven drums and five empty 5-gallon cans in storage as of
December 27, 1983.
Also attached to Mr. Rosse's affidavit is a copy of a letter, dated
November 3, 1983, from BKK to Transformer Service, Inc., P. 0. Box 1077,
Concord, New Hampshire, Attention: Stephen Booth, General Manager,
concerning the PCB containers and drums in storage at the BKK facility.
The letter pointed out that it was very important that the addressee
:
read the enclosed notice regarding the requirement for the removal and
disposal of all PCB articles and containers placed in storage prior to
January 1, 1984. The notice referenced EPA's regulations implementing
the Toxic Substances Control Act, 40 CFR Part 761, and stated in perti-
nent part: "You, as generator and title holder of the PCBs which have
been in our storage facility before January 1, 1983, must have them
removed from storage and disposed of prior to January 1, 1984."
In further support of the motion for an accelerated decision,
Complainant submitted the affidavit of Clarence W. Gieck, Technical
Manager of BKK. Corporation, mentioned previously. Mr. Gieck says that
records at the BKK facility, Beatty, Nevada, reflect that PCB waste
owned by Transformer Service, Inc. was placed in storage in February 1979,
and removed from storage on March 24, 1984. Mr. Gieck also says that the
2/ A notation under the name Transformer Service, Inc. indicates
that Stephen Booth is General Manager and that Marian [Booth], Greg Booth
and Jeff Casto, all with Akron, Ohio phone numbers are contact people.
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BKK letter addressed to Transformer Service, Inc., Concord, New Hampshire,
dated November 3, 1983, signed by him, was sent certified mail, return
receipt requested and was sent to and acknowledged by the company known
to BKK Corporation as the owner of the PCB items identified in the letter.
Without ruling on the motion for an accelerated decision or on
Respondent's motion to prohibit Complainant from introducing evidence not
provided pursuant to the prehearing exchange, the ALJ by an order, dated
October 23, 1984, granted Complainant's motion to amend the complaint and
allowed Respondent 20 days in whichrto file an answer. As indicated
previously, the amended complaint substituted ISO as Respondent in lieu
of TSI. The factual allegations, including the amount of the proposed
penalty, were identical with the original complaint,
TSO answered under date of October 31, 1984, admitting that it was
a corporation of the State of Ohio, whose principal place of business was
formerly 680 E. Market Street, Akron, Ohio, and that it did own PCB con-
tainers at the BKK of Nevada site near Beatty, Nevada. TSO also admitted
that it stored PCB containers at the mentioned BKK site on or about
January 24, 1984, but denied that the containers were placed in storage
for disposal and denied that the containers were subject to the require-
ments of 40 CFR 761.65(a). Respondent alleged that compliance with.40
CFR 761.65(a) was impossible, because the demand for disposal before
January 1, 1984, exceeded the capacity for disposal at approved sites in
an approved manner. TSO repeated its previous, allegations concerning BKK's
intentional and tortious inference with its efforts to remove the containers
•prior to January 1, 1984, but for whose actions the containers allegedly
would have been removed and disposed of prior to said date.
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8
Under date of November 7, 1984, Complainant filed a motion for a
ruling on Respondent's motion to dismiss complaint. ISO has not
responded to the motion. A fair reading of the motion indicates that
it is a reiteration of Complainant's motion for an accelerated decision
and it will be so treated.
The basic thrust of the motion is that ISO's denial in the answer
to the amended complaint that the PCB items were placed in storage for
disposal at the RICK site is contradicted by the affidavit of Marion O'Hear
furnished in support of Respondent's motion to dismiss upon the ground
Complainant had sued the wrong party. Emphasis is placed upon Paragraph 3
of Ms. O'Hear's affidavit which states that she had located PO No. 3097,
dated February 2, 1979, which was forwarded to BKK for transfer of PCB
items for storage. Complainant also emphasizes Paragraph 9 of Ms. O'Hear's
affidavit which states, inter alia, that ISO has disposed of all of said
items [PCB items in storage at BKK] in accordance with all applicable
federal, state and local regulations. Complainant says this necessarily
means the items were stored for disposal, that ISO's present denial is
lacking in credibility and should be given no effect and that Respondent's
answer raises no material issues of fact which require a hearing.
If the requested relief is granted. Complainant asks that the amount
of the penalty be reviewed in accordance with § 22.27(b) of the Rules of^
Practice. Complainant says that the proposed penalty of $10,000 was based
upon the PCB Penalty Policy (45 FR 59770 et seq., September 10, 1980) and
that potential damage was based upon a quantity of 385 gallons of PCB
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fluid (seven 55-gallon drums). In determining the amount of the penalty,
Complainant says that the ALJ should consider the dilatory tactics engaged
in by Respondent as to the identity of the responsible party and the
contradictory statements referred to above in the answer to the amended
complaint, which Complainant asserts were knowingly false. Complainant.
says that representations have been made that ISO is without funds to
pay any penalty and that it has learned that Walter H. Booth is Treasurer
of both TSI and ISO and that Stephen W. Booth, President of TSI, and
Gregory A. Booth, President of ISO, are believed to be brothers. Complain-
ant also notes that Jeffrey J. Casto, Respondent's attorney, is agent for
both corporations in the State of Ohio. Complainant appears to be taking
the position that this is a case warranting piercing of the corporate
veil, so that any penalty levied against ISO may also be assessed against
TSI.
Conclusions
1. The affidavits and documentary evidence referred to above, establish
that Respondent, Transformer Service (Ohio), Inc., placed PCBs and
PCS containers in storage for disposal at the BKK of Nevada, Inc..
facility near Beatty, Nevada, in February 1979 and that these items
were not removed from storage and disposed of prior to January 1,
1984. . ... ':•:.-'
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10
2. Respondent has thus violated § 15 of the Toxic Substances Control
Act (15 U.S.C. 2614)1/ and 40 CFR 761.65(a) and is liable for a
civil penalty in accordance vnth § 16 of the Act.i/
3. Notwithstanding Complainant's assertion that the proposed penalty
vias determined in accordance with the PCB Penalty Policy (45 FR
59770 et seq.), Respondent, in accordance with § 22.15 of the Rules
of Practice (40 CFR Part 22), is entitled to a hearing as to the
amount of the penalty.
Discussion
The faxt that TSO placed PCBs and PCB containers in storage for disposal
in February 1979 and failed to remove and properly dispose of said PCBs
prior to January 1, 19R4, thus violating the Act and regulations, is
considered to be clearly established and no further discussion in that
regard is warranted.
Section 22.15(a) (40 CFR 22.15(a)) of the Rules of Practice provides
..in pertinent part: "Where respondent (1) contests any material fact upon
which the complaint is based; (2) contends that the amount of the penalty
3/ Section 15 entitled "Prohibited Acts" (15 U.S.C. 2614) provides
in pertinent part: "It shall be unlawful for any person to (1) fail or
refuse to comply with (A) any rule promulgated or order issued under
section 4, (B) any requirement prescribed by section 5 or 6 or (C) any
r-ule promulgated or order issued under section 5 or 6."
The rule involved here (40 CFR 761.65) was promulgated "under § 6
of the Act. •" ' > ' • ...
4/ This necessarily disposes of Respondent's motion that Complain-
ant be" prohibited from introducing evidence allegedly not furnished in
its prehearing report. .- .: . . .
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11
proposed in the complaint * * * is inappropriate; or (3) contends that he
is entitled to judgment as a.matter of law, he shall file a written answer
to the complaint with the Regional Hearing Clerk." VJhile Respondent has
not specifically contended that the amount of the proposed penalty is
inappropriate, it has alleged that EPA's enforcement of the Act and regu-
lations, under the circumstances present here is arbitrary and capricious.
Accordingly, it is concluded that the appropriateness of the penalty has
been placed in issue.
Complainant says that it has information that ISO is without funds to
pay the penalty and it is noted that ability to pay is among the factors
the Administrator is required to consider in determining the amount of the
penalty (§ 16(a)(2)(B)). Moreover, while the alleged tortious inference
by BKK with Respondent's efforts to remove the PCBs from storage and the
unavailability of approved sites for disposal of PCBs may not be legal
excuses for the violation here determined, they may, nevertheless, qualify
as "other matters as justice may require" within the meaning of § 16(a)(2)
(B) of the Act, and thus warrant a lower penalty. Of course, the alleged
dilatory tactics engaged in by Respondent as to the identity of the
responsible party and its alleged intentional falsification as to whether
the"PCBs were stored for disposal may also be matters for consideration in
this respect. This merely buttresses the conclusion that determining the
amount of a penalty on what is in effect a motion for summary judgment is
seldom, if ever, appropriate. • '
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12
Complainant's suggestion that the penalty assessed against ISO may
also he levied against TSI depends upon a showing that the two corporations
are in effect operated as one and for example, have common books, records,
officers, offices and stockholders. If Complainant intends to press this
position, it is clearly an additional reason why summary judgment as to the
penalty is not appropriate.
Order
Respondent, Transformer Service (Ohio), Inc. having violated § 15 of
the Toxic Suhstances Control Act (15 U.S.C. 2614) and 40 CFR 761.65 is
liable for a civil penalty in accordance with § 16 of the Act (15 U.S.C.
2615). Complainant's motion for an accelerated decision as to the amount
of the penalty is denied. The parties shall report on or before March 1,
1985, as to whether this matter has been or will be settled.
Dated this /f day of January 1985.
Spacer T. Nissen
Administrative Law Judge
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CERTIFICATE OF SERVICE
This is to certify that the original of this Accelerated Decision,
dated January 16, 1985, in re: Transformer Service (Ohio), Inc., was
mailed to the Regional Hearing Clerk, Reg. IX, and a copy was mailed to
each party in the proceeding as follows:
Jeffrey J. Casto, Esq.
Roetzel and Andress
75 East Market Street
Akron, Ohio 44308
David M. Jones, Esq.
Office of Regional Counsel
Environmental Protection Agency
Region IX
215 Fremont St.
San Francisco, California 94105
January 16, 1985 Helen F. Handon
Secretary
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42
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BEFORE THE UNITED STATES
ENVIRONMENTAL PROTECTION AGENCY
In Re: ) r'.L
)
CHEMICAL WASTE MANAGEMENT, INC., ) \~
) ^.
Respondent. ) TSCA DOCKET NO.
PROCEEDINGS UNDER ' ) 84-H-03 2.
) •'
15 U.S.C. §2615 ) ro
42 U.S.C. §6928 and ) -=-
40 C.F.R. §22 )
CONSENT AGREEMENT AND ORDER
The parties herein, the United States Environmental
Protection Agency and its Administrator ("EPA") as Complainant,
the State -of Alabama ("State") as Intervenor and Chemical
Waste Management,-Inc. ("CWM") as Respondent, having consented
to entry of this Consent Agreement and Order ("Agreement"),
NOW THEREFORE, before the taking of any testimony,
without any admission of violation or adjudicat-ion-of any
issues of fact or law herein, the parties agree to comply
with the terms of this Agreement and the attached Order.
I. PRELIMINARY STATEMENT
A. EPA has personal jurisdiction over the parties
consenting hereto and over the subject matter of actions
pursuant to Section 16 of the Toxic Substances Control Act, 15
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-2-
U.S.C. ^Section 2615 ("TSCA") and Section 3008 of the Resource
Conservation and Recovery Act of 1976, as amended ("RCRA")-
42 U.S.C. §§6928(a)(l) and (g).
B. The objectives of this Agreement include, without
limitation:
1. Assuring the disposal of the existing inventory
of liquid PCBs currently in storage at CWM's Emelle, Alabama
facility in conformance with the disposal schedule set forth in
paragraph IV, below;
2. Resolving all civil claims or civil causes of
action under any environmental law or regulation that the
Complainant or the State may have with respect to the Emelle
facility based upon facts known to the Complainant or the State
on or before October 12, 1984;
3. Assuring that the environmental audit provi-
sions set forth herein will be implemented in accordance with
this Agreement to evaluate and modify, as may be appropriate,
CWM' s waste operation and environmental management systems,
practices, and policies as they affect RCRA and TSCA compliance
at the Emelle facility;
4. Authorizing and approving CWM's treatment,
storage and disposal of PCBs at the Emelle facility under
modified conditions which specify the requirements to be met by
CWM by synthetically lining new PCB cells, shallow PCB well
monitoring, and PCB leachate collection at the facility;
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-3-
5. Assuring that provisions specified herein
regarding groundwater monitoring, surface impoundments and
facility records, and RCRA liquid waste solidification are
implemented; and
6. Assuring that the waste impact/hydrogeolo-
gical study as set forth herein will be implemented in
accordance with this Agreement.
C. For purposes of this Agreement only and in order
to avoid litigation and settle the civil claims which EPA or the
State of Alabama may have against CWM as of October 12, 1984,
Respondent consents to the entry of this Agreement. The parties
agree that this Agreement does not constitute evidence or admis-
sion by CWM of any violation of law or regulation. For purposes
of this Agreement only, CWM agrees that EPA or the State may
properly bring an action to compel compliance with the terms and
conditions contained herein in Federal District Court or before
an Administrative Law Judge appointed pursuant to 40 C.F.R. §22.
By signing this Agreement, CWM does not prejudice and specifically
preserves any right, remedy or defense it may have with respect
to any action related or unrelated to the subject matter of this
document, provided however, that in any action brought by EPA or
Alabama to compel compliance with the terms of this Agreement
CWM shall be limited to the defenses of Force Majeure, compliance
with this Agreement and physical impossibility. By signing this
Agreement, EPA and the State agree to act reasonably in performing
their obligations under this Agreement.
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D. In part, it is the intent of this Agreement to
resolve civil allegations of violations of TSCA and RCRA referred
to in this Agreement. In implementing the provisions of this
Agreement and except to the extent provided for Herein, the
parties are not authorizing violations of federal laws or regula-
tions, or state and local laws not inconsistent with or preempted
by federal requirements.
E. EPA will publish notice of this Agreement in the
Federal Register.
II. PARTIES BOUND
A. The parties to this action are.:
1. Complainant, the United States Environmental
Protection Agency and its Administrator ("EPA");
2. Intervenor, State of Alabama, on behalf of
all branches, agencies, departments, establishments, instrumen-
talities, bureaus, subsidiaries, boards or commissions and any
_pthe.r .entity of the Government of the State of Alabama (the
"State"); and
3. Respondent, Chemical Waste Management, Inc.,
("CWM"), a corporation organized and existing under the laws of
Delaware with its headquarters in Oak Brook, Illinois.
B. This Agreement shall apply to and be binding
upon all parties to this Agreement, their directors, officers,
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-5-
all persons or entities acting under or for them. Each signatory
to this Agreement certifies that he/she is fully authorized by
the party or parties whom he/she represents to enter into the
terms and conditions of this Agreement, to execute the Agreement
on behalf of the party represented and to legally bind such
party.
III. FINDINGS OF FACT
A. CWM is a domestic corporation incorporated under
the laws of the State of Delaware.
B. CWM is in the business of transportation, storage,
and disposal of waste materials including PCBs and RCRA wastes.
C. CWM owns and operates a facility in Emelle,
Alabama for inter alia, storage of waste materials including
PCBs and RCRA wastes ("Emelle facility"). The Emelle facility is
an existing hazardous waste management facility as defined in
40 C.F.R. §260.10, which treats, stores, or disposes of hazardous
waste, as defined by section 1004(5) of RCRA, 42 U.S.C. §6903(5)
and 40 C.F.R. Part 261.
D. EPA filed an administrative complaint on
January 24, 1984, alleging that CWM had violated 40 C.F.R.
§761.65(a) by the storage of PCBs beyond January 1, 1984 at
the Emelle facility.
E. CWM filed an answer denying any violations and
raising affirmative defenses.
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F. CWM is Che owner and operator of the "M/T Vulcanus
I and II," two ships designed for the incineration of liquid
materials, including liquid wastes such as PCBs.
G. EPA, under authority of the Marine Protection,
Research, and Sanctuaries Act of 1972, 33 U.S.C. §§1401 et. seq. ,
issued a research permit (HQ-81-002) to CWM which became effective
on October 21, 1981.
H. Research permit, HQ-81-002, allowed CWM to use
its ships and their incinerators in a number of test burns in
order to determine whether PCBs could be disposed of by shipboard
incinerators, and if so, under what conditions.
I. CWM entered into contracts to. receive PCBs at the
Emelle facility and to receive PCBs at other locations and to
transport these materials to the Eraelle facility for three test
burns pursuant to the research permit referred to in Paragraph H.
J. Two test burns occurred during the periods
December 22, 1981 - January 2, 1982 and August 15-23, 1982.
K. On September 15, 1982, EPA informed CWM that no
further test burns would be necessary. The term of the research
permit expired on October 12, 1982.
L. Following this research project, CWM still has
PCB materials remaining in storage at the Emelle facility.
M. CWM applied for special operating permits for
both the M/T Vulcanus I and II as incineration vessels in 1981.
N. Following October 12, 1982, CWM had committed to
and stored additional PCBs at the Emelle facility prior to
anticipated permit issuance.
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0. 40 C.F.R. §761.65(a) states:
Any PCB Article or PCB Container stored
for disposal before January 1, 1983 shall
be removed from storage and disposed of
as required by this part before January 1,
1984. Any PCB Article or PCB Container
stored for disposal after January 1, 1983,
shall be removed from storage and disposed
of as required by Subpart D within one year
from the date when it was first placed into
storage.
P. On July 2, 1983, Frank R. Krohn, Vice President
of CWM, informed EPA that as of January 1, 1984 some PCBs might
be in storage for more than one (1) year and, assuming that 40
C.F.R. §761.65(a) might apply to such storage, asked for a
waiver of 40 C.F.R. §761.65(a).
Q. By letter of August 23, 1983, EPA notified CWM
that waivers of 40 C.F.R. §761.65(a) were not available.
R. CWM has attempted to secure alternate disposal
methods for its PCB inventory.
S. On January 1, 1984, some of the PCBs in storage
at the Emelle facility had been in storage for more than one (1)
year.
T. On March 23, 1984, EPA and CWM executed a proposed
agreement to resolve the administrative enforcement action
and submitted it for consideration by the EPA Judicial Officer..
U. The State moved to intervene in the administrative
enforcement action.
V. On May 22, 1984, EPA denied CWM's applications for
permits to utilize its incinerator ships for disposal of PCBs.
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W. On May 23, 1984, EPA's Judicial Officer granted
the motion of the State to intervene in the administrative
enforcement action and referred the matter to an Administrative
Law Judge for disposition.
X. On December 19, 1984, EPA filed an amended
complaint alleging violations of the following regulations:
1) 40 C.F.R. §265.74; Availability Retention and
Disposition of Records
•
2) 40 C.F.R. §265.314; Special Requirements on
Liquid Wastes
3) 40 C.F.R. §265.90(c); Ground Water Monitoring
Applicability
4) 40 C.F.R. §265.91(a)(2); Ground Water Monitoring
System
5) 40 C.F.R. §265.15(d); General Inspection
Requirements
Y. On December I9, 1984, CWM filed an answer to the
amended complaint denying any violations and raising affirmative
defenses.
Z. CWM has cooperated with EPA and the State in good
faith in resolving the matters covered by this Agreement.
IV. DISPOSAL SCHEDULE
In order to dispose of the 2.8 million gallon inventory of
liquid PCBs stored at the Emelle facility as of August 1, 1984
subject to this Agreement, CWM shall undertake the following
actions:
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A.l. The inventory of liquid PCBs shall be removed from
Che Emelle facility for shipment to EPA permitted incinerators no
later than the following schedule:
Cumulative Amount Shipped
Date (gallons)
December 31, 1984 430,000
March 31, 1985 970,000
June 30, 1985 1,510,000
September 30, 1985 2,050,000
December 31, 1985 Entire Inventory of 2.8
Million Gallons Depleted
A.2. Notwithstanding the disposal schedule in Sub-
paragraph IV.A.I. above, with respect to each PCS storage tank
at the Emelle facility, the PCBs in each such tank shall not
be r.emoved for shipment unless the tank sampling and analysis
pursuant to Appendix B below shows that no 2,3,7,8
tetrachlorodibenzo-p-dioxin (TCDD) is detected. For each tank
in which 2,3,7,8 TCDD is not detected, the PCBs in that tank
shall be removed for shipment promptly in accordance with the
above schedule, provided, however, that each of the milestones
contained in such schedule shall be extended for a period of
time equal to the period from December 11, 1984 to the date
*
negative analytical results required by Appendix B for respective
quantities as shown in such schedule are received by CWM and
EPA. For each tank in which 2,3,7,8 TCDD is detected, the PCBs
in that tank shall remain in storage until EPA identifies in
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writtng to CWM a facility which has all necessary Federal and
State authorizations for the disposal of such waste. When such
a facility is identified, CWM shall make reasonable efforts to
utilize such facility for disposal of the waste, but CWM shall
not be obligated to violate any law by such utilization or be
obligated to sustain unreasonable disposal costs. A schedule for
such disposal shall be mutually agreed upon by EPA and CWM provided,
however, that in the event of a dispute, any party may petition
the Administrative Law Judge for an order resolving the dispute.
B. It is the intent of this Agreement that, except as
set forth in Paragraph IV.C. below, each load of PCBs from the
Emelle facility shall be incinerated within 90 days after receipt
by the PCS.incinerator. CWM agrees that, if the PCB incinerator
is owned by CWM (or its parents, subsidiaries or affiliates),
each load of PCBs from the Emelle facility shall be incinerated
within 90 days after receipt. CWM will use its best efforts to
require any contracting owners or operators to incinerate each
load within 90 days after receipt and will monitor to determine
whether this 90 day period has been met._ CWM shall provide to
EPA certificates of incineration for all PCBs disposed of in
accordance with the terms of the disposal schedule contained in
this paragraph.
C. With respect to any PCB material which may be
stored in the approximately 150,000 gallon tank dedicated to the
temporary storage of Emelle PCBs at ENSCO's El Dorado, Arkansas
PCB incinerator facility, such PCBs shall be transferred to the
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ENSCO PCB liquid feed system for incineration within 90 days of
the receipt of the final shipment of PCBs from the Emelle
facility.
D. The disposal schedule contained in paragraph
IV.A above contemplates utilization of two currently permitted
PCB incinerators. Circumstances beyond the control of CWM
despite the exercise of all reasonable efforts may occur which
impair or prevent the operation of these incinerators such that
the disposal schedule of this Agreement is not achievable.
Such circumstances shall result in the extension of the disposal
schedule for necessary repairs to be made. Such extension shall
be for a reasonable period of time as determined by EPA in
consideration of the circumstances. In the event CWM fails to
resume use of the incinerators within such time period, CWM
will pursue all reasonably available disposal options taking
into account impact on nationwide PCB storage or disposal
capacity, market costs, and other factors bearing on the
reasonableness of such alternatives.
V. RECEIPT OF PCBs
A. Except as provided in Paragraph V.B. below, as
«
of the effective date of this Agreement, CWM shall not enter into
new contracts for the receipt of shipments of bulk liquid or
drummed liquid PCBs at the Emelle facility.
B. CWM may enter Into new contracts for the receipt
of bulk liquid or drummed liquid PCBs at the Emelle facility,
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subject to 40 C.F.R. §761 and applicable requirements, if:
1. CVM is acting as a PCS disposal "broker";
"Broker" means any entity.or person who:
a. disposes or arranges for the disposal of
any PCBs at a facility owned by another
person or entity not a parent, subsidiary
or affiliate of CWM, or
b. stores or transports PCBs that have been
removed from service prior to disposal
at a facility owned by another person or
entity not a parent, subsidiary or
affiliate of CWM
or;
2. At the time such contract is entered CWM has
the ability to dispose of such PCBs in compliance with disposal
regulations and 40 CFR §761.65(a) and without commingling newly
received PCBs with the existing PCBs subject to the disposal
schedule in Section IV.A.; or
3. EPA has approved in writing of such receipt.
C. CWM may continue to enter into contracts for the
disposal of capacitors and transformers containing PCBs and may
honor existing contracts for the disposal of PCBs consistent
with federal regulations.
D. By this Agreement, CWM is authorized to treat,
store or dispose in accordance with 40 C.F.R. §761, PCBs specified
in subparagraph 3 below, with the following modified requirements:
1. Groundwater Requirement
For the Emelle facility, EPA waives the require-
ment for landfill bottoms to be at least fifty (50) feet from
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the historical high water table (40 C.F.R. $ 761.75 (b) (3)) . The
Regional Administrator of EPA Region IV may revoke the waiver of
the fifty (50) foot separation requirement with respect to the
construction of any future disposal cell, if there is evidence
•
showing that the operation of such a cell will present an
unreasonable risk of injury to health or the environment from
PCBs, or, if the Regional Administrator finds that changes of
law require revocation for future cells to be constructed after
such findings.
2. New PCB Disposal Cells
New PCB disposal cells (PCB disposal cells
only) will be designed in accordance with the plans and
specifications as submitted to EPA on June 11, 1984, as amended
on June 21, 1984, and as approved by EPA on July 12, 1984,
together with such design requirements which may legally be
required in the future. The design documents describe the type
of liner to be used, the leachate collection and removal system,
the cover system, and the run-on/run-off control measures. CWM
also will provide three (3) feet of compacted chalk as a base on
which to place the liner.
3. PCB Waste Types
The following categories of PCB waste may
be disposed of in PCB disposal cells:
Solid PCBs (less than or greater than
500 ppm)
Incinerator ash
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Drained and flushed transformers and
small capacitors
Solidified liquid PCBs less than 500
ppm
Any other PCBs or PCB articles which
under EPA regulations may be disposed
of in PCB disposal cells-
4. Leachate Management
Leachate in lined cells will be measured,
sampled, and pumped, as required, on a minimum 31 day basis.
At no time shall the leachate in lined trenches exceed 30 cm
above the rim of the leachate collection sump. Records will
be maintained of the disposal of all leachate removed from the
trenches. Records will be maintained on leachate depth
measurements and said leachate samples will be monitored for
quantity and detailed physical and chemical analysis of the
characteristics of the leachate.
5. Amended Approval
The existing PCB approval under 40 C.F.R.
§761.75 will be revised to be consistent with these requirements
in coordination with the issuance of any RCRA permit(s)
for the Emelle facility issued to the facility's operator.
6. Shallow Veil Monitoring
EPA and the State will be consulted on all
shallow (chalk monitoring wells) well locations and specifications
to be installed pursuant to 40 C.F.R. §761.41. Prior to construc-
tion, CWM will consult with the State regarding well locations
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and specifications and will obtain EPA approval in writing in
accordance with EPA regulations.
7. EPA Findings
This waiver and authorization is based on
findings of fact issued by the Regional Administrator of Region
IV on November 6, 1984, pursuant to 40 C.F.R. §761.75. Such
findings for this landfill approval are found in the docket fpr
this case.
E. EPA has inspected the Emelle PCB storage facilities
and at the time of such inspection found the Emelle PCB storage
facilities to be in compliance with the applicable PCB storage
requirements of 40 C.F.R. §761.65(b).
VI. INSPECTION AND ENVIRONMENTAL AUDIT PROGRAM
A.I Within thirty (30) days of the effective date
of this Agreement, CWM shall implement the Inspection Program
for PCB liquid storage attached hereto as Appendix A.
2. CWM agrees to cooperate with EPA, upon proper
notice but without warrant, .during lawful inspections conducted
to monitor compliance with this Agreement, provided, however,
that during such inspections EPA shall not request or seek to
obtain any environmental audit or internal compliance documents
which are not required to be maintained by law or regulation and
which are prepared pursuant to the environmental management
program described and evaluated in Section VI of the Agreement.
3. If EPA requests the Audit report and documents
prepared in connection with the Audit report by CWM's
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Environmental Management Department after six months following
the date of delivery of the Audit recommendations described in
subsection B.3., CWM shall provide such documents. Any documents
prepared by CWM in connection with the Audit report, excluding
documents prepared by CWM's lawyers, shali be made available to
EPA in accordance with the above. EPA agrees that such documents
shall not be used to initiate a civil enforcement action or as
direct evidence of a violation, but may be used as evidence of
the existence of any violation which may remain uncorrected
beyond six months after the delivery of the Audit report and as
evidence of knowledge or duration of a violation provided; however,
that CWM does not waive any legal rights it may have to object to
the admissability of such evidence. It is intended that
documents prepared for CWM pursuant to this Section VI and VII
are not required by law or regulation.
B. ENVIRONMENTAL AUDIT
1. CWM shall propose to EPA's Office of
Enforcement and Compliance Monitoring (OECM) through Barrett
Benson within thirty (30) days of the effective date of this
Agreement the scope of work for the services of a third party
consultant, as well as its proposed consultant, who shall be
expert in environmental auditing, environmental management
systems and RCRA and TSCA waste management operations. This
scope of work and consultant shall be agreed upon by EPA and CWM
in writing, prior to the consultant commencing the performance
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of the professional services as more fully set forth herein
below. The consultant will be retained and the scope of work
will be designed to review waste operation and environmental
management systems at the Emelle facility and in the CWM
corporate Environmental Management Department as they affect
RCRA and TSCA compliance at the Emelle facility.
2. Within one hundred eighty (180) days after
agreement upon the scope of work and the consultant, said third
party consultant shall report in writing to CUM. This report
\
shall:
a. Identify and describe the existing
facility waste management operations and the Environmental
Management Department environmental management systems, policies
and prevailing practices as they affect RCRA and TSCA compliance
at the Emelle facility.
b. Evaluate such operations and systems,
practices and policies and identify and describe fully the
perceived weaknesses in such operations and systems, practices
and policies by comparing them, to the extent practicable, to:
i. their ability to promote compliance
with applicable RCRA and TSCA requirements;
ii. the existing practices, programs
and policies of other RCRA/TSCA waste management corporations
operating within the continental United States;
iii, the history of Emelle operations
in terras of its compliance programs, its compliance record
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and its environmental management practices over the previous
five years;
iv. the available literature and
consultant's experience pertinent to regulatory compliance
programs, practices and policies currently operative in the
chemical and waste management industries in the continental
United States.
The consultant shall apply its expertise
and judgment to the foregoing data base utilizing such factors
as the consultant believes to be relevant and appropriate (which
factors shall be stated in the report).
c. Based on the evaluation required in
paragraphs VI.2.a. and b. above, the consultant shall identify
and describe fully with supporting rationales the perceived
areas, if any, where CWM's waste management operations and
environmental management systems, practices and policies may be
improved as they affect Emelle regarding RCRA and TSCA compliance
obligations, listing specific options for any improvements at
Emelle in the following specific areas:
i. compliance and waste management
operation, staffing, education and experience requirements.
ii. compliance management budget, lines
of authority to CWM's corporate Environmental Management
Department and relationship to the operating facility manager.
iii. personnel training for individual
employee compliance obligations and emergency spill response.
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Iv. Operations and Maintenance
procedures for pollution prevention and waste management
equipment.
v. preparation of self-monitoring
reports required to be filed with the State and EPA.
vi. evaluation of waste management
operations and pollution prevention equipment in terms of
adequacy of design and compatibility with wastes being passed
through said equipment.
vii. preparation of Quality Assurance
(QA) and Quality Control (QC) programs for sampling and
analysis and for environmental testing procedures, including
Emelle laboratories and contract laboratories for Emelle.
viii. preparation and review of Incident
Reports evaluating causes of pollution prevention and waste
management equipment malfunctions, improper waste handling,
and/or breakdowns, with specific recommendations for corrective
steps and preventive OkM, along with reporting procedures for
these recommendations to corporate headquarters.
3. CWM shall notify EPA upon receipt of such report
and within ninety (90) days after receipt of a final report, CWM
shall submit to EPA that portion of the report containing all of
the recommendations of the consultant together with CWM's
evaluation of each option it has selected for adoption and the
reasons for rejecting other options. The report by CWM shall
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-20-
set forth the specific actions the company shall take and a
schedule for implementation of the recommendations adopted by
CWM.
4. All documents submitted to EPA pursuant to
Paragraph VI shall be kept confidential to the extent authorized
by law.
VII. COMPLIANCE OFFICER PROGRAM
CWM shall not discontinue its compliance officer program
at Emelle or modify the scope of its regulatory coverage or the
reporting relationships of this CWM compliance official to the
company's Environmental Management Department, without prior
written-notice to EPA detailing the modifications or the reasons
for its discontinuance.
VIII. WASTE IMPACT/HYDROGEOLOGICAL STUDY
A.I. By means of one or more independent contractors
agreed to by CWM and the Alabama—Department of Environmental
Management (ADEM) in consultation with EPA, CWM will perform the
following chalk compatibility and permeability testing and
analyses in accordance with ASTM-D 2434, with modifications
to ASTM-D 2434 as approved by ADEM. Two intact chalk cores will
be obtained by CWM with ADEM present from the unweathered zone
at an elevation of approximately one hundred fifty (150) feet
above mean sea level (msl). These core samples will be analyzed
for permeability, mineralogy, specific gravity, total porosity,
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and cation and anion exchange capacity before and after the
test. Leachate samples will be obtained from PCB landfill cells
utilized after November 19, 1980 and each sample characterized
using EPA approved methodology for "priority pollutants"
and metals. Leachate samples will also be obtained from each
RCRA landfill cell utilized after November 19, 1980 and each
sample characterized using EPA approved methodology for "priority
pollutants" and metals. After analysis of the leachates, CWM
will select one RCRA landfill leachate sample and one TSCA landfill
leachate sample, or a composite of the RCRA leachate and a compo-
site of the TSCA leachate (selection to be approved by ADEM in
consultation with EPA) and test with the core samples as follows:
Sufficient" pore volumes of leachate sample will be passed through
the core samples in order to provide adequate volume for analysis
by EPA approved methodology for the same parameters found in the
initial characterization.
2. Based on the above testing and analyses by the
contractor, a report describing these test results will be
produced by CWM and submitted to the State and OECM.
B.I. By means of one or more independent contractors
agreed to by CWM and ADEM in consultation with EPA, CWM will per-
form a study of the chalk in the area of trenches 1, 3, 4, 5, 6,
and 7. CWM, in agreement with ADEM, and in consultation with
EPA, will develop a sampling and analytical program as described
herein to characterize the study area. This program will consist
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of a field Investigation to determine the nature of the chalk,
the depth of the zone of saturation, and groundwater sampling
and analysis. The groundwater samples will be analyzed for
priority pollutants and metals. Groundwater sampling and
analysis will utilize five to ten groundwater monitoring wells
installed for purposes of this study. Such wells will be lo-
cated after consultation with ADEM and will be sampled upon
completion and development, then quarterly for one year for a
total of four samplings. CWM will not grout and seal these
wells without the prior approval of ADEM in consultation with
EPA.
2. Individual leachate samples from trenches 1, 3,
4, 5,6 and 7 also will be individually analyzed by EPA approved
methodology for "priority pollutants" and metals. Further, to
the extent practicable based upon available records, CWM's
contractor will describe the construction and historical
operation of these trenches to Include types of compounds and
state of compounds.
3. The above study by the contractor and a report
to be produced by CWM will be submitted to the State and OECM
describing the results of the study regarding the integrity
of the study area and effects, if any, of disposal on the area.
IX. RCRA COMPLIANCE REQUIREMENTS
With respect to interim status standards at the Enielle facility:
A. CWM shall record inspections in inspection
logs as required by 40 C.F.R. §265.15(d), including but not
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-23-
limited to, the daily recordation of accurate surface impoundment
freeboard measurement levels recorded by rounding down to the
next six inch level (e.g., between 2' and 2" 6" is recorded as
2') from the top of the dike for each surface impoundment in
operation.
B. CVTM shall retain and furnish upon request, in
accordance with 40 C.F.R. §265.74, all records required by
40 C.F.R. §265, and such records shall be made available at all-
reasonable times for inspections, by any officer, employee, or
representative of EPA who is duly designated by the Administrator.
C. On October 11, 1984, EPA's Region IV and the State
found CVM's groundwater assessment plan and analytical protocol
acceptable, to meet the requirements of 40 C.F.R. §265.93. CVM
has begun and shall continue to implement said plan and protocol
as follows:
1. All deep wells //1-8 shall be sampled and the
samples analyzed for Appendix VIII constituents using the protocol
proposed by the Environmental Testing and Certification Corporation
and approved by EPA Region IV on October 11, 1984.
2. CVM will begin a workover (rescreening) of well
#5 upon completion of the groundwater assessment and review of the
analytical results by EPA and the State. Veil //5, presently
screened in the Lower Eutaw Formation will be recompleted by CVM
in the sands of the Upper Eutaw Formation. Once the workover has
been completed, water level measurements shall be made by CVM in
wells //5-8 and the groundwater gradient shall be reevaluated for
the Upper Eutaw Formation.
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3.* Upon completion of subparagraph 2 above, CWM
shall present its gradient reevaluation to EPA Region IV and ADEM.
4. Depending on whether the gradient is
determined to be due north or northeast, a new well will be
constructed at one of the two locations which have been agreed
to by EPA, ADEM, and CUM, and which have been physically marked
by stakes at the Emelle facility.
5. Within fifteen days following the effective
date of this Agreement, CWM shall produce and thereafter maintain
a demonstration for a waiver of the groundwater monitoring
requirements set out in 40 CFR §265.91(a)(2) . The waiver
demonstration shall document the low potential for migration
of hazardous wastes or constituents from the facility via the
uppermost aquifer to water supply wells or surface waters.
The waiver demonstration must meet the requirements of 40 C.F.R.
§265.90(c). The waiver demonstration shall also confirm the assump-
tion that the time of travel for waste constituents to reach
the Eutaw Formation or the nearest surface waters at
the Emelle facility exceeds one thousand years.
6. Forty-five (45) days after the effective
date of this Agreement, CWM shall provide to EPA and to ADEM a
Proposed Plan and Protocol the purpose of which is to confirm
the assumption set out in Subsection 5 above. The Proposed Plan
and Protocol must include the following:
a. Locations and numbers of monitoring wells to be
completed at varying depths within the chalk and intersecting
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-25-
known fractures and sited approximately but not more than twenty
(20) feet from the top of the trench wall (where the trench wall
location is known) and approximately but not more than fifty (50)
feet from the trench wall (where the trench wall exact location
is unknown), adjacent to the waste management boundary as defined
by EPA. The proposal shall specify well location, design,
construction methods and completion methods. For any existing
well to be used to satisfy the requirements set out above,
complete construction data must be submitted, e.g. , all construc-
tion materials, depth of screened zone, type of sealant in annulus
and method of well development used. It is anticipated that the
plan will provide for approximately twenty (20) cored wells
around the outside perimeter of the waste management area,
completed to a depth below the bottom of the adjacent trenches,
with a minimum of one (1) well adjacent to the outside wall for
each perimeter trench and a minimum of two (2) background wells.
In addition, it is anticipated that fifteen (15) more wells will
be installed in areas along the perimeter to be determined on
the basis of the core examination. The wells to be installed as
a part of the Waste Impact/Hydrogeological Study set forth in
Paragraph VIII of this Agreement may be used as part of this
program. To the extent that existing wells are determined to be
appropriate for this monitoring purpose, they may be proposed
for approval in lieu of new wells.
b. The results of the hydrogeologic study of the
chalk outlined in Paragraph VIII of this Agreement must also be
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-26-
used tn the analysis done to verify the aforementioned assumption.
c. Detailed well sampling, analysis and chain of
custody procedures including identification of contract labora~
tories to be used. Prior to any sampling of these wells by CWM,
the company shall give to EPA and ADEM at least fourteen (14)
days notice of such sampling. EPA and ADEM shall have a right
of access for the sampling and independent analysis of all wells'
subject to this Plan and Protocol. CWM shall have the right to
split all such samples. Sampling and analysis required in
Subparagraph five above shall include water elevation, TOC, TOX,
specific conductance, pH, lead, chromium, cadmium, mercury,
arsenic, barium, selenium, phenols, toluene, trichloroethane,
ethyl benzene, napthalene, methylene chloride, 1,2-dichloroethane,
1,1,1,-trichloroethane, trichloroethylene, tetrachloroethylene
and carbon tetrachloride.
7. Following receipt of the above Proposed Plan and
Protocol, EPA and ADEM shall review such proposal and shall,
within thirty (30) days, present to CVM comments on and
recommended modifications to such proposal.
8. If CWM agrees to the recommended modifications, CWM
shall submit to EPA and ADEM a Proposed Final Plan and Protocol
which incorporates such modifications, and shall begin to
implement such plan within twenty (20) days.
9. If CWM disagrees with one or more of the recommended
modifications, Walter Barber (CWM), Barrett Benson (EPA), and
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Buddy Cox (ADEM) shall meet for a period not to exceed thirty
(30) days to attempt to resolve such disagreements. Upon
resolution, CWM shall modify its plan as appropriate to begin
to implement it within twenty (20) days. In the event the
disagreement cannot be resolved as set forth above, any party may
petition the Administrative Law Judge for an order resolving the-
dispute.
10. Following completion of each analysis required by
the above plan, CWM shall report all results to EPA and ADEM.
11. If the sampling results and analysis of the wells
required by this Plan or other hydrogeologic data demonstrate
that the assumption used as the basis of the waiver is no longer
valid, EPA may take appropriate legal action.
D. CWM shall solidify bulk or noncontainerized
liquid waste or waste containing free liquids in accordance with
the requirements of 40 C.F.R. §265.314 as follows:
1. CWM shall construct and operate its
waste solidification operations for new trenches in accordance
with the criteria set forth in Subparagraph 2 below. CWM shall
submit an amendment to its Part A application not later than
December 7, 1984, and EPA will approve such amendment provided
it meets the criteria in Subparagraph 2 below.
2. CWM shall construct such waste solidification
operations to meet the following criteria:
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a. Mixing areas will be provided with a
liner of three (3) feet of recompacted chalk and will be built
up with additional layers of chalk as the landfill is utilized.
b. CWM will maintain a minimum of two (2)
feet of freeboard in mixing areas and will compact mixing area
dikes to minimize erosion and to preserve structural integrity.
c. Mixing areas will be closed as landfills
in conformance with 40 C.F.R. Subpart G and 40 C.F.R. §265.310.
3. CWM is authorized to utilize the above
described waste solidification process until May 8, 1985.
Nothing in this paragraph shall be construed to waive, impair,
release or-affect the respective rights, obligations, responsi-
bilities or available remedies of the parties with regard to the
liquid in landfills provisions of the Hazardous and Solid Waste •
Amendment of 1984 after May 8, 1985.
X. NEW SOLIDIFICATION TECHNOLOGY
CWM voluntarily agrees to complete the construction of
a new mechanical out-of-ground liquid waste solidification
technology by December 31, 1985 and agrees to test, startup,
shakedown, and, if feasible, commence operation of the technology
by no later than July 1, 1986. Nothing in this paragraph shall
limit CWM's obligation to comply with applicable waste solidifi-
cation requirements.
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XI. STATUS REPORTS
A. CWM will provide EPA and the State with monthly
reports identifying all bulk liquid PCBs stored at the Emelle
facility which are intended for incineration. Each report shall
contain: (1) the quantities of PCBs in storage at the facility;
(2) the amounts of PCBs that were removed from storage during
the month and their destination; (3) the amounts, date of
receipt, and customer identity of additional shipments of PCBs
received during the month; (4) a description of any
inspections required by the Inspection Program described in
pagragraph VI.A that took place during the previous month; and
(5) for the initial report, the storage capacity of the facility
The reports for each month are due thirty (30) days after the
end of the reporting period and must be certified .as true and
correct by knowledge and belief and signed by a responsible CWM
official.
B. CWM shall provide EPA with quarterly reports of
the amounts of bulk liquid PCBs which are intended for incinera-
tion and which are stored by CWM at all of its facilities,
including CWM's subsidiaries and joint ventures but excluding
the Emelle facility, transfer facilities, and recently acquired
SCA facilities. These reports shall contain: (1) the amount
of PCBs at the facility; (2) the location of the facility; (3)
a listing of all additional shipments of PCBs received during
the quarter; (4) the name of the customer of CWM supplying the
PCBs during the quarter; (5) the date the additional PCBs were
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received by CWM; (6) the amount of the additional PCBs received
by CWM; and (7) for PCBs removed from the facility, the destina-
tion of each shipment. If CWM is acting as a PC3 disposal
"broker", CWM also shall provide the date when the PCBs are to
be delivered to the disposer and the name of the disposer.
C. With respect to Waste Management, Inc.'s recently
acquired SCA facilities "(excluding transfer facilities), CWM
shall provide EPA with semi-annual reports of the amounts of
bulk liquid PCBs which are intended for incineration and which
are stored by CWM at such facilities. These reports s-hall
contain: (1) the amount of PCBs at the facility; (2) the location
of the facility; (3) a listing of all additional shipments of
PCBs received during the reporting period; (4) the name of the
customer of CWM supplying the PCBs received during the period;
(5) the date the additional PCBs were received by CWM; (6) the
amount of the additional PCBs received by CWM; and (7) for PCBs
removed from the facility, the destination of each shipment. If
CWM is acting as a PCB disposal "broker," CWM also shall provide
the date when the PCBs are to be delivered to the disposer and
the name of the disposer.
D. With respect to all CWM facilities which receive
transformers (exluding transfer facilities), CWM shall provide
EPA semi-annual reports which shall contain: (1) the number of
transformers received during the reporting period; (2) the number
of transformers in storage at the end of the reporting period;
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(3) the name of the customer supplying the transformer during
the period; (4) the date the transformer was received; and (5)
the destination of transformer removed from the facility.
E.I All reports shall be sent to:
Barrett Benson
National Enforcement Investigations Center
Building 53, Box 25227
Denver, CO 80225
2. Reports required by paragraph XI.A
involving only the Emelle facility also shall be sent to;
Joe E. Broadwater, Director
Alabama Department of Environmental
Management
F. CVM may claim the information contained in the
reports a's confidential business information, and EPA and the
State shall keep such information confidential to the extent
authorized by law. Nothing herein shall be construed as limiting
Alabama's belief that hazardous waste manifests should be
considered public documents.
G. The reports for paragraphs XI.B, C, and D are due
ninety (90) days after the end of the reporting period.
XII. PENALTIES
A. Within thirty (30) days of the effective date of
this Agreement, the CVM shall remit to EPA a check in the amount
of four hundred and fifty thousand dollars ($450,000) ($300,000
of which is in settlement of civil TSCA claims and $150,000 of
which is in settlement of civil RCRA claims alleged in the
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complaint) and to the State of Alabama Attorney General a check
for one hundred fifty thousand dollars ($150,000).
B.I In the event EPA believes that CWM has failed to:
a. Comply with a milestone contained in
paragraph IV.A;
b. Comply with the requirements of paragraph
IV.B;
c. Provide the reports described in the
status report requirements of paragraph
XI.A, B, C and D;
d. Perform the groundwater monitoring
of paragraph IX.C; and
e. Comply with the liquid solidification
requirements of paragraph IX.D.
"EPA shall notify CWM of the alleged failure and shall
provide CWM fifteen (15) days in which to remedy the alleged
failure.
2. If CWM has failed to remedy the alleged
failure within said fifteen (15) day period and it is not in
compliance with this Agreement, CWM shall pay stipulated
penalties from the "Hate ot violati~6rf ~as~ follows:
a. $500.00 per day for failure to comply
with a milestone contained in paragraph
IV until CWM has reduced the inventory
to the milestone level;
b. $500.00 per day for failure to incinerate
PCBs within ninety (90) days of receipt
at a CWM incinerator until such incinera-
tion occurs.
c. $100.00 per day for failure to provide
the status reports described in paragraph
XI.A, B, C and D;
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d. $5000.00 for failure to perform any of the
following subparagraphs: subparagraphs
IX.C. 1, 2, 3", 4, 5 and 6.
e. $100.00 per day for failure to comply
with the liquid solidification requirements
of paragraph IX.D.
3. Excluding paragraphs IX.A. and B., the above
stipulated penalties are the exclusive penalties which EPA or
the State may obtain from CWM for failure to comply with the
requirements of this Agreement.
Nothing in this subparagraph shall be construed as
limiting the ability of EPA or the State to compel specific
enforcement of this Agreement or to seek injunctive relief to
abate a condition which may present an imminent and substantial
endangerment, or to take action under the Section 7 imminent
hazard provision of TSCA as referred to in Paragraph XIV.
XIII. FORCE MAJEURE
If CWM fails to comply with any performance date or
other requirement of this Agreement and such failure is caused
by persons or events beyond the control of CWM, despite the
exercise of all reasonable efforts, such failure shall not be
considered a violation of this Agreement. When circumstances
are occurring or have occurred which may delay the completion of
any requirement of this Agreement, CWM shall notify EPA and the
state in writing of the reason(s) for and duration or expected
duration of such delay, the measures to be taken by CWM to
prevent or minimize the delay and the timetable by which those
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measures will be implemented. Such notice shall be sent no later than
thirty (30) business days excluding Saturdays, Sundays, and holidays
following the date CWM's Environmental Managerent Department becones aware
of the occurrence. CWM's Environmental Management Department will be
responsible for monitoring the implementation of all aspects of CWM's
performance under this Agreement. CWM's failure to notify EPA and the State
of the fact of the delay shall constitute a waiver of claims or defenses
under this provision. EPA will notify CWM no later than thirty (30)
business days excluding Saturdays, Sundays, and holidays of its objection of
such excuse. Failure of EPA to notify CWM of such objection shall
constitute a waiver of the Agency's objection to such excuse. Any disputes
which may arise under this provision shall be resolved in accordance
Paragraph I.C. However, in such proceeding, the burden of proof of such
Force Majeure defense shall lie with CWM.
XTV. COVENANT NOT TO SUE
A. In consideration of CWM's consent to this .Agreement, EPA and
the State hereby covenant not to initiate or maintain any civil claim or
civil cause of action against CWM, its parent, subsidiaries, or present or
former employees thereof, with respect to the Emelle facility based on facts
or circumstances known by EPA or the State or their agents, employees, or
contractors as of October 12, 1984. EPA also covenants not to initiate or
maintain any civil claim or civil cause of action against CWM, its parent,
subsidiaries, or present or former employees thereof, based on the storage
or disposal of 2, 3, 7, 8 TCDD identified pursuant to subparagraph IV. A. 2.
and Appendix B.
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B. Nothing in this Agreement shall be construed to
limit the ability of the United States or the State of Alabama
to initiate or maintain any criminal proceeding or take any
action against any person to abate, prevent, or order the abate-
ment of any condition which now or hereafter may present an
imminent and substantial endangerment or to expend and thereafter.
recover any moneys in responding to any release or threat of
release of any hazardous substance, or bring an action under the
Section 7 imminent hazard provisions of TSCA.
C. Except as noted above, this Agreement shall not
operate to release, waive, limit or impair in any way any claims,
rights, remedies or defenses of the United States, the State of
Alabama or CWM against any person or entity not a party hereto,
provided, however, that for any violations of 40 C.F.R. §761.65(a)
by customers of CWM relating to the PCBs subject to the disposal
schedule contained in Paragraph IV, this Agreement represents a
full resolution of such violations.
XV. FINAL IMPLEMENTATION
Except for paragraphs V.D. and IV.A.2., CWM's obligations
under this Agreement shall end when the PCBs from the tanks in which
2,3,7,8 TCDD is not detected pursuant to Subparagraph IV.A.2. and
Appendix B have been incinerated at EPA approved PCS incinerators, pro-
vided, however, that with respect to the Environmental Audit required
by paragraph VI.B., the Waste Impact/Hydrogeological Study required
by paragraph VIII, and the New Solidification Technology required
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by paragraph X, CVM's obligations to complete such audit, such
study and such solidification technology will end respectively when
the audit report has been submitted to EPA, the study report has
been submitted to EPA and the State, and the solidification tech-
nology has been constructed and commenced operation in accordance
with paragraph X.
XVI. NOTIFICATION
Wherever this Agreement requires notice or submission of
reports, information, or documents to EPA, such information shall
be submitted to the Barrett Benson, National Enforcement
Investigations Center, Building 53, Box 25227, Denver, Colorado,
80225. Any notice and submission of reports, information or
documents under paragraphs IV.D. (Disposal Schedule), VII.
(Compliance Officer Program), XII.B.I (Stipulated Penalties,
and XIII. (Force Majeure) shall also be sent to Richard H. Mays,
Senior Enforcement Counsel, Office of Enforcement and Compliance
Monitoring, U.S.E.P.A., 401 M Street, S.W., Washington, D.C.,
20460.
XVII. MODIFICATION
This Agreement may be modified upon written approval
of all parties hereto.
XVIII. EFFECTIVE DATE OF AGREEMENT
This Agreement shall be considered binding and in full
effect upon approval by the Administrative Law Judge to whom this
matter has been assigned.
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XIX. SINGLE AGREEMENT
All of the terms and conditions of this Agreement
together comprise one agreement. Each of the terms and
conditions is consideration for all of the other terms and
conditions. In the event that this Agreement (or one or more
of its terms and conditions) is held invalid or is not executed
by all of the signatory parties in identical form or is not
approved in such identical form by the Administrative Law
Judge to whom it has been assigned, then the entire Agreement
shall be null and void.
XX. CWM'S ENVIRONMENTAL COMMITMENT
CVM's implementation of the Waste Impact/Hydrogeo-
logical Study (paragraph VIII), Environmental Inspection and
Audit (paragraph VI), Compliance Officer Program (paragraph VII),
Status Reports (paragraph XI), and New Solidification Technology
(paragraph X) represent a combined environmental monetary
commitment by CWM in excess of $1.5 million.
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
(>oun
RICHARD H. MAYS
SeVl'or Enforcement Counsel
Office of Enforcement and Compliance
Monitoring
U.S. Environmental Protection Agency
Ai E. CONROY II
Director Compliance Monitoring Staff
U.S. Envi ronmental^-Protect ion Agency
DATED:
/ / '
DATED:
GENE A.. LUCERO
Director Office of Waste Programs
Enforcement
U.S. Environmental Protection Agency
CrfARLES JETER
Regional Administrator, Region IV
U.S.^Environmental Protection Agency
r
DOtJGLA^/GREHNHAUS
Attorney-Advisor
Office of Enforcement and Compliance
Monitoring - Waste
U.S. Environmental Protection Agency
DATED:
I '
DATED:
/
/ /
DATED:
ARTHUR WILEY RAY 7 '
Attorney-Advisor'
OECM-Special Litigation Division
U.S. Environmental Protection Agency
DATED:
7 ^/
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-39-
STATE OF ALABAMA
By:
CHARLES GRADDICK
Attorney General
State of Alabama
DATED
R. CRAIG
Assistant Attorney General
State of Alabama
DATED
CHEMICAL WASTE MANAGEMENT
By:
ROG£R c.
Senior Cou'nsel
Chemical Waste Management, Inc.
J. BRIAN MOLLOY
Wald, Harkrader and Rc^ss
Counsel for Chemical Waste
Management, Inc.
DATED:
DATED:
7 /
APPROVED
ADMITNISTRATIVE LAW JUDGE
T
DATED:
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43
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BEFORE THE ADMINISTRATOR
U.S. ENVIRONMENTAL PROTECTION AGENCY,"."
WASHINGTON, D.C. ' ./.-.
'
In the Matter of:
Robert Ross & Sons, Inc.
Respondent
Docket No. TSCA-V-C-008
TSCA Appeal No. 82-4
ORDER DENYING APPEAL; ELECTION NOT TO
REVIEW SUA SPONTE
This order denies EPA Region Vs motion to file its appeal
out of time from a decision of an Administrative Law Judge
(presiding officer) awarding attorney's fees to Robert Ross &
Sons, Inc. under the Equal Access to Justice Act (EAJA), 5 U.S.C
§504. Section 504 of the EAJA provides that a party which has
prevailed in an adversary adjudication conducted by a Federal
agency is entitled to an appropriate award of attorney's fees
and other expenses unless the position of the agency as a party
I/
to the proceeding was substantially justified. Robert Ross
prevailed in an administrative enforcement proceeding brought
against it by EPA Region V for allegedly disposing of PCBs
(polychlorinated biphenyls) in violation of Section 16(a)
_!_/ Also, the EAJA provides that an award of attorney's fees
would be inappropriate if "special circumstances" would make
such an award unjust. The "special circumstances" exemption
was intended to give government agencies latitude in bringing
sa-called test cases, so that an agency's willingness to bring
such a case would not be chilled by the prospect of having to
pay attorney's fees should the agency fail to prevail. Th-^
"special circumstances" exemption is mentioned here in passing;
it is not in issue in this case.
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-2-
of the Toxic Substances Control Act (TSCA), 15 U.S.C. §2615(a),
and the Agency's implementing regulations, 40 CFR §761.10(a)
(1979) .
Having prevailed, Robert Ross applied for attorney's fees
and other expenses under the EAJA. The Chief Judicial Officer
referred Ross' application for attorney's fees to the presiding
I/
officer for his consideration. After reviewing Region V's .
evidence against Robert Ross, the presiding officer concluded
that EPA was not substantially justified in bringing an enforce-
ment action under TSCA and he awarded Robert Ross attorney's
I/
fees and expenses in the amount of $71,243.17.
2/ Robert .Ross prevailed on the administrative trial level
before the presiding officer (Initial Decision, Docket No.
TSCA-V-C-008, February 1, 1982) and, it prevailed in the
administrative appeal before the Administrator (Final Decision,
TSCA Appeal No. 82-4, April 4, 1984).
3_/ Ross erroneously applied to the Chief Judicial Officer for
attorney's fees and expenses, rather than to the hearing officer
who presided over the underlying action which gave rise to the
claim for fees and expenses. See 40 CFR §17.21 (1984).
4/ This was $7,391.28 less than requested by Ross in its
application. The total award requested was $78,634.85. Ross
requested $52,143.75 for attorney's fees; $24,237 for expert
witness fees; and $2,254.10 in miscellaneous fees and expenses.
(The $78,634.85 total includes fees incurred in connection with
bringing the EAJA suit. Expenses incurred in bringing a success-
ful EAJA suit are clearly recoverable. Cianciarelli v. Reagan,
729 F.2d 80 (D.C. Cir. 1984).) The reduction by the presiding
officer was based on his finding that the fees and expenses
claimed for expert witnesses exceeded the $24.09/hour rate
ceiling allowed for expert witnesses pursuant to 40 CFR
§17.07(b)(l) (1983). The $52,143.75 requested for attorney's
fees was not reduced.
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-3-
Although the presiding officer's decision was appealable,
Region V failed to file an appeal within the 20-day time limit
specified in the rules. See 40 CFR §§17.27 and 22.30 (1984).
Having missed the deadline by almost two full weeks, the Region
made a motion to file its appeal out of time based upon the
claim that its Counsel was "out of the office and unavailable
to respond" when the presiding officer's decision was received.
Left totally unexplained was why, and for how long, Counsel was
"out of the office." No other reason was provided by the
Region for its failure to file a timely appeal. In a timely
response to Region V's motion, Robert Ross objected to the
Region's request to file its appeal out of time. Since the
Region has provided no legitimate excuse for it's failure to
y
file its administrative appeal on time, Region V's motion to
file an appeal out of time is denied.
5/ Section 22.07(b) of the Agency's Consolidated Rules of Practice
(40 CFR Part 22), which applies to EAJA proceedings (See 40 CFR
§17.27), states:
"The motion [for extension of time] shall be filed
in advance of the date on which the pleading, document
or motion is due to be filed, unless the failure of
a party to make timely motion for an extension of time
was the result of excusable neglect. (Emphasis added.)
The bare assertion by the Region, without additional explanation,
that Counsel was "out of the office and unavailable to respond"
hardly constitutes excusable neglect. See In re Four Season
Securities Law Litigation, 493 F.2d 1288, 1290 (10th Cir.,
1973); Magham v. Young, 154 F.2d 13 (1940); Citizens Protective
League, Inc. v. Clark, 178 F.2d 703 (D.C. App., 1949); U.S. ex
rel Robinson v. Bar Association of District of Columbia, 190
F,2d 664 (D.C. App. , 1951).
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-4-
In cases where there is no appeal, the presiding officer's
initial decision automatically becomes the Agency's final order
by operation of law unless the Administrator, or his delegatee,
elects to review the presiding officer's decision sua sponte.
i/
40 CFR §22.27(c) (1984). If the decision of the presiding
officer (together with all the findings of fact and conclusions
of law contained therein) appears to be correct there is no
need for sua_ sponte review. In this case, the presiding officer's
decision awarding Robert Ross fees and expenses, and each and
every finding of fact and conclusion of law contained therein,
appear to be correct. Accordingly, there is no need for sua
sponte review and the presiding officer's decision awarding
fees and expenses therefore constitutes the Agency's final
y
order by operation of 40 CFR §22.27(c) (1984).
6/ In this instance the Agency's Part 22 Rules of Practice are
applicable, 40 CFR Part 22 (1984). See 40 CFR §17.27 (1984).
Under those Rules the Administrator has 45 days from the date
the initial decision is served on the parties to decide whether
to elect sua sponte review. In this case by order of the Chief
Judicial Officer dated October 25, 1984, the 45 day sua sponte
period was stayed pending review of the Region's motion to file
its appeal out of time. As discussed above the Region's motion
to file out of time has been denied; stay of the 45 day sua
sponte period is hereby lifted.
7/ An initial determination by an ALJ on an application for
attorney's fees is referred to as a "recommended" (rather than
an "initial") decision in the Agency's EAJA regulations, 40 CFR
(next page)
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-5-
Region V is hereby directed to immediately disburse
$71,243.17 to Robert Ross & Sons, Inc.
So ordered.
si s>
•-' v
Ronald L. McCallum
Chief Judicial Officer
Dated :
(Footnote No. 7 cont'd)
§17.26 (1984). The Administrative Procedure Act (APA),
5 U.S.C. §557, uses "recommended decision" as a term of art,
and requires an agency review procedure for recommended decisions
which is somewhat different than that prescribed by the APA for
initial decisions. A presiding officer's initial decision
can become the agency's final decision automatically without
further proceedings by the agency. By contrast, where the
presiding officer makes a recommended decision, the agency must
itself consider and determine all "issues properly presented.
For reasons too lengthy to fully explicate within the context
of this short opinion, it appears that the term "recommended
decision" contained in the Agency's EAJA regulations was not
intended in the APA sense. Accordingly, the Agency need not
reconsider and redetermine all issues already properly considered
and determined by the presiding officer; rather the decision of
the presiding officer automatically becomes final agency action
as previously explained.
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CERTIFICATE OF SERVICE
This is to certify that a copy of the foregoing Order
Denying Appeal; Election Not to Review Sua Sponte in the Matter
of Robert Ross & Sons, Inc., TSCA Appeal No. 82-4, has been
mailed or hand delivered to the following:
Honorable Spencer T. Nissen
Administrative Law Judge
EPA Headquarters (A-110)
401 M St., S.W.
Washington, DC 20460
Michael J. Walker, Esq.
Eric P. Dunham, Esq.
Office of Regional Counsel
EPA Region V
230 South Dearborn St.
Chicago, IL 60604
Richard D. Panza, Esq.
Marsha L. Nicoloff, Esq.
Wickens, Herzer & Panza Co., L.P.A.
1144 West Erie Avenue
Lorain, OH 44052
Mary Langer
Regional Hearing Clerk
EPA Region V
230 South Dearborn St.
Chicago, IL 60604
Bessie L. Hammiel
Hearing Clerk
EPA -Mail Code A-110
Washington, DC 20460
0-
M. Gail Wingo
Secretary to the Chief
Judicial Officer
Dated:-
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44
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
BEFORE THE ADMINISTRATOR
In the Matter of )
Electric Utilities Company, ) Docket No. TSCA-V-C-011
Respondent )
1. Toxic Substances Control Act - PCBs - A proceeding to assess civil
penalties for violation of the PCB Ban Rule is not automatically
stayed by Respondent's filing of a petition in bankruptcy, but falls
within the exclusion provided by 11 U.S.C. 362(b)(4) and (b)(5).
2. Toxic Substances Control Act - PCBs - A proceeding to assess a civil
penalty is not mooted by the filing of a Chapter XI bankruptcy
petition by a corporate respondent, first, because the assessment
of a civil penalty reduces the claim to a fixed amount, second,
because the EPA is entitled to have the merits of its case resolved,
and third, because the penalty may be relevant in assessing future
penalties against the reorganized respondent.
3. Toxic Substances Control Act - PCBs - Penalty of $55,000 proposed in
the complaint assessed against Respondent who has defaulted notwith-
standing Respondent's intervening bankruptcy.
Appearances:
Eric Cohen, Esquire, United States Environmental Protection
Agency, Region V, Chicago, IL, for Complainant.
Mr. Richard L. Mauser, President, Electric Utilities Co., 309
Anderson Avenue, Farmville, N.C., Respondent.
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ORDER ON DEFAULT
This is a proceeding under the Toxic Substances Control Act ("TSCA"),
section 16(a), 15 U.S.C. 2615(a) for the assessment of civil penalties for
violations of the EPA's regulations governing the manufacturing, processing,
distribution and use of polychlorinated biphenyls ("PCB Ban Rule"), 40 CFR
Part 761. !_/ The proceeding was instituted by a complaint issued by the EPA,
Region V, charging Respondent Electric Utilities Company with the improper
storage and disposal of PCBs, and the failure to properly mark its PCBs.
A penalty of $55,000 was requested. Respondent answered, admitting that
some PCBs had not been stored in full requirements with the PCB Ban Rule,
but asserting that in charging Respondent with the improper storage and dis-
posal of other PCBs, the EPA was relying on samples which had been improperly
collected and were contaminated. Respondent also denied the marking violation.
Finally, Respondent contended that the proposed penalty was unreasonably large
and that payment would adversely affect its ability to continue in business.
The matter is before me on the question of whether to issue a default order as
authorized by 40 CFR 22.17.
!_/ TSCA, section 16(a) of the Act, provides as follows:
(a) Ci vil. (1) Any person who violated a provision of section
15 shall be liable to the United States for a civil penalty in an
amount not to exceed $25,000 for each such violation. Each day such
violation continues shall, for purposes of.this subsection, con-
stitute a separate violation of section 15.
Section 15 of the Act, 15 U.S.C. 2614, provides in pertinent
part that "It shall be unlawful for any person to (1) fail or
refuse to comply with . . . (c) any rule promulgated or order issued
under section 6 . ..." The PCB Ban Rule was issued under section
6(e) of the Act, 15 U.S.C. 2605(e).
- 2 -
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Respondent requested a hearing in its answer and the case was
assigned to me by order of the Chief Administrative Law Judge on April 7,
1983. On April 15, 1983, I wrote the parties directing the filing of a
prehearing exchange by June 6, 1983, unless the case were settled. At
the request of both parties the time to make the prehearing exchange was
extended first to September 6, 1983, and then to December 6, 1983, to '
allow settlement discussions to continue. On October 25, 1983, the EPA
was notified that Respondent had filed a petition in bankruptcy under
Chapter 11 of the Bankruptcy Act. By my letter of May 4, 1984, the
parties were advised that I did not consider this matter automatically
stayed by the bankruptcy proceeding. Several extensions, however, were
thereafter granted to permit settlement negotiations to continue. These
negotiations have been unsuccessful and have apparently reached a stage
where it would serve no purpose to continue them. 2J Complainant sub-
mitted its prehearing exchange on November 6, 1984. Respondent has made
it plain that it has no intention of submitting its prehearing exchange
although Respondent has been continually warned that failure to do so
would subject it to a default order.
As to whether this proceeding is subject to the automatic stay pro-
visions of the Bankruptcy Code, 11 U.S.C. 362, it is clear that since
this is a proceeding to assess a civil penalty for failure to comply with
the environmental laws, it is not, but is excluded from the stay provisions
by 11 U.S.C. 362(b)(4) and (b)(5). See Penn Terra Ltd..v. Dept. of
Environmental Resources, 733 F.2d. 267 (3d Cir. 1984) (state proceeding to
2J See Complainant's letter of January 14, 1985
- 3 -
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compel debtor to correct environmental damage not automatically stayed);
NLRB v. Evan's Publishing Co., 639 F.2d 291 (5th Cir. 1981) (Unfair labor
practice proceeding before NLRB against debtor for reinstatement of
employees and for back pay not automatically stayed); In re. Tauscher, 7
Bankr. 918 (E.D. Wise. 1981) (Proceeding to assess civil penalties against
debtor for violation of Fair Labor Standards Acts not automatically stayed).
In Kovacs v. Ohio, 717 F.2d 9R4, (6th Cir. 1983), aff'd, 53 U.S.L.W. 4068
(U.S. January 9, 1985), the court held that enforcement of what was in
essence a money judgment for expenses in cleaning up a site was stayed but
recognized that a proceeding to assess a penalty would not have been stayed.
The court stated, 717 F.2d at 988,
If Ohio had elected to have a money penalty
assessed against Kovacs for the environmental
damage he caused, we would have faced a
different question. Proceedings to assess
such a penalty would not have been subject to
the automatic stay of § 362, although enforce-
ment of the assessment would have been stayed.
This proceeding not being subject to an automatic stay, it remains to
be considered whether there are any other reasons why it should not go forward.
It could, of course, be argued that the bankruptcy proceeding has for
all practical purposes mooted these proceedings, in view of Respondent's
statement in its letter of December 11,.1984, that Respondent "has very
little money left" which is going to be distributed under the supervision
of the plan approved by the bankruptcy court. There are several reasons,
however, why this proceeding is not moot.
- 4 -
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First, the assessment of a civil penalty does reduce the penalty to
a fixed amount against Respondent for purposes of determining its treat-
ment in the plan of reorganization. 3_/
Second, the EPA is entitled to a resolution of the merits of its
charges, see NLRB v. Autotronics, Inc.. 434 F.2d 651 (8th Cir. 1979).
This has special significance here since the bankruptcy is a Chapter XI
proceeding which contemplates Respondent's continued operation in some
reorganized form.
Finally, this proceeding may also have relevancy in the event that
the reorganized company is cited again for a violation of TSCA, since in
the assessment of a civil penalty account must be taken of a respondent's
prior history of violations. £/
Respondent's attorney in a letter of November 5, 1984, states that
the bankruptcy judge has forbid Respondent to incur any more legal expense
in defending this and other related environmental actions beyond November 1,
1984. Presumably that action lies within the discretion of the bankruptcy
court. Since this proceeding has not been stayed, it is to be hoped that
Respondent also made clear to the bankruptcy court the consequence of
abandoning its defense, namely, subjecting Respondent to a default judgment.
3/ The EPA's claim was apparently listed on Respondent's schedule as a
disputed, contingent or unliquidated claim. See letter of N. Hunter Wyche,
Jr. to EPA Region V dated October 25, 1983. This proceeding, of course,
reduces the claim for a civil penalty to a sum certain. Since the claim
is against a corporation and not an individual debtor, it would appear
that it is not a claim which is excepted from discharge under 11 U.S.C. 523,
How the claim is entitled to be treated under a Chapter XI plan is not
decided here.
47 TSCA, section 16(a)(2)(B), 15 U.S.C. 2615(a)(2)(B).
- 5 -
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Accordingly, Respondent Is found in default for failure to make the
prehearing exchange directed in my letter of April 15, 1983. Respondent's
default constitutes for purpose of this proceeding an admission of all
facts alleged in the complaint and a waiver of Respondent's right to a
hearing. The findings of fact set forth below, however, are based not only
on the complaint but on admissions in Respondent's answer and on information
contained in Complainant's prehearing exchange, which is incorprated into
the record in this proceeding.
Findings of Fact
1. On or about October 22, 1979, Respondent was storing for disposal
drums and a tank truck containing PCBs.
2. Said drums and tank truck were stored in an area which did not have
adequate roof and walls to prevent rain water from reaching them as
required by 40 CFR 761.65(b)(1)(i) (formerly 761,42(b)(1)(ii)), and
which did not have adequate floor and curbing as required by 40 CFR
765 (b)(l)(ii) (formerly 761.42(b) (1) (i i)).
3. On or about October 22, 1979, Respondent maintained a sewage collection
system containing sludge with an excess of 800 parts per million PCBs
and water with 56 parts per million PCBs.
4. Said PCBs in Respondent's sewage collection system have been disposed
of in a manner not authorized by 40 CFR 761.60 (formerly 761.10).
5. On or about October 22, 1979, the PCB drums and tank truck referred to
in Finding No. 1 above, were not marked as required by 40 CFR 761.40
(formerly 761.20).
- 6 -
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Conclusions of Law
1. Respondent has improperly stored PCBs for disposal in violation of
40 CFR 761.65, and TSCA, section 15, 15 U.S.C. 2614.
2. Respondent has improperly disposed of PCBs in violation of 40 CFR
761.60 and TSCA, section 15.
3. Respondent has improperly marked PCB containers in violation of
40 CFR 761.40, and TSCA, section 15.
The Penalty
Pursuant to 40 CFR 22.17(a), the penalty proposed in the complaint of
$55,000 is the penalty assessed. It is recognized that TSCA does specify
that in determining the appropriate penalty, account must be taken of
Respondent's ability to pay. _5/ Respondent by its default, however, has
waived its right to contest the penalty on this ground, _6_/ Further, insofar
as the penalty is dischargeable by virtue of its being included in a re-
organization plan, a point which is not decided here, the question of
Respondent's ability to pay would seem to be merged into the question before
the Bankruptcy Court of how the claim is to be treated under the plan.
_§/ TSCA, section 16(a)(2)(B),
6/ See 40 CFR 22.17(a).
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ORPER I/
Pursuant to section I6(a) of the Toxic Substances Control Act, 15 U.S.C,
26l5(a), a civil penalty of $55,000 is hereby assessed against Respondent,
Electric Utilities Co., for violations of the Act found herein.
Payment of the full amount of the penalty assessed shall be made within
sixty (60) days of the service of the final order upon Respondent by for-
warding to the Regional Hearing Clerk a cashier's check or a certified check
payable to the United States of America.
Gerald Harwood
Administrative Law Judge
DATED:
6/ Pursuant to 40 CFR 22.l7(b), this order constitutes the initial decision
Tn this matter. Unless an appeal is taken pursuant to 40 CFR 22.30, or the
Administrator elects review this decision on his own motion, this decision
shall become the final order of the Administrator. See 40 CFR 22.27(c).
- 8 -
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45
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BEFORE THE ADM I fOI STRATOR
U.S. ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C.
<-'/'
o
In the Matter of:
N.O.C., Inc., t/a Noble Oil
Company
Respondent
TSCA Appeal No. 84-2
f/
FINAL DECISION
I/
Respondent, Noble Oil Company, appeals from a deci-
sion of Administrative Law Judge Spencer T. Nissen (presiding
officer), in this civil penalty proceeding brought by Complain-
ant, Director, Enforcement Division, Region II, United States
Environmental Protection Agency, under the authority of
§16(a) of the Toxic Substances Control Act (TSCA), 15 U.S.C.
y
§2615(a). In that decision, the presiding officer deter-
mined that Respondent failed to mark a PCB container, failed ,to
!_/ When the complaint was issued, Respondent operated under the
name of Noble Automotive Chemical & Oil Company.
2/ TSCA §16(a)(l) provides as follows:
"Civil. (1) Any person who violates a pro-
vision of Section 15 shall be liable to the United
States for a civil penalty in an amount not to ex-
ceed $25,000 for each such violation. Each day
such a violation continues shall, for purposes of
this subsection, constitute a separate violation of
Section 15."
TSCA §15 provides, in pertinent part, that it shall be un-
lawful for any person to "(1) fail or refuse to comply with . .
(B) any requirement prescribed by § ... 6, or (C) any rule
promulgated under § ... 6."
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have a Spill Prevention Control and Countermeasure (SPCC) Plan,
and failed to maintain records, all in. violation of the PCB
regulations, 40 CFR Part 761 (1980). The presiding officer
recommended that the civil penalty of $40,000 requested by
Complainant be assessed against Respondent. After the initial
decision was issued, Respondent moved to reopen the proceeding
so that it could introduce additional scientific evidence or,
in the alternative, to introduce evidence concerning the civil
penalty. See Motion to Reopen Hearing dated January 19, 1983.
The presiding officer denied the motion and the instant appeal
I/
was filed. See Decision Denying Motion to Reopen the Hearing
dated May 16, 1983 and Respondent's Brief and Appendix on Appeal
to the Judicial Officer dated July 20, 1983.
On appeal Respondent argues that the presiding officer err-
i/
ed because he determined that the PCB regulations were enforceable;
because he determined that Complainant's failure to a take repre-
5/
sentative sample was not fatal to its case; because he de-
3_/ Complainant filed a brief in opposition to the appeal. See
""Complainant-Appellee's Brief to the Judicial Officer" dated
September 1, 1983.
_4/ Based on its argument that the PCB regulations were unenforce-
able, Respondent brought an action in district court to enjoin
the presiding officer from issuing a decision. See Noble
Automotive Chemical & Oil Co. v. EPA, F. Supp. [19 ERC
1044] (D.N.J. 1982). The courf rejected Respondent's argument.
Noble Automotive at 1046-1047.
5/ The conclusion reached by the presiding officer, namely, that
it is not always necessary to take a representative sample to
prove a violation of the PCB regulations, was also reached in
two recently issued final decisions. See In re Electric Service
Company, TSCA Appeal No. 82-2, Final Decision dated January 7,
1985; and In the Matter of Robert Ross & Sons, Inc., TSCA Appeal
No. 82-4, Final Decision dated April 4, 1984.
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-3-
termined that Complainant established the chain of custody of
the sample; and because he determ ined'.tha t Complainant followed
appropriate analytical techniques in analyzing the sample to
determine its PCB concentration. Respondent also argues that
the presiding officer's denial of its motion to reopen the
y
hearing was an abuse of discretion. All the arguments raised
by Respondent on appeal were raised below and were thoroughly
considered and rejected by the presiding officer. I do not
agree that the presiding officer erred in his determinations
or that he abused his discretion in denying the motion to.reopen,
The initial decision is, therefore, affirmed. All findings
of fact, conclusions of law and reasons therefor in the initial
decision are adopted and incorporated by reference in this
y
final decision.
6_/ The presiding officer concluded that Respondent's evidence
was "largely cumulative" and, therefore, "cannot support a
motion to reopen the record." Decision Denying Motion at 26.
See 40 CFR §22.28(a), Motion to Reopen Hearing. I would also t
emphasize that Respondent failed to "show good cause why such
evidence was not adduced at the hearing" as required by the re-
gulations governing this proceeding. See 40 CFR §22.28(a) and
discussion in the Decision Denying Motion at 21-22.
y That an appellate administrative tribunal may adopt the find-
ings, conclusions, and rationale of a subordinate tribunal with-
out extensive restatement is well-settled. United States v. Orr,
474 F.2d 1365 (2d Cir. 1973); Carolina Freight Carrier Corpora-
tion v. United States, 323 F. Supp. 1290 (W.D.N.C. 1971); In re
Electric Service Company, TSCA Appeal No. 82-4, Final Decision
(January 7, 1985); In re Chemical Waste Management, Inc., RCRA
(3008) Appeal No. 84-8, Order Adopting the Presiding Officer's
Initial Decision as Final Agency Action (September 5, 1984); and
cases cited in Ciba Geigy v. Farmland Industries, FIFRA Comp.
Dkt. Nos. 33, 34 and 42 (Op. of the Judicial Officer, April 30,
1981).
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-4-
Final Order
The initial decision of the presiding officer is adopted as
the Agency's final decision. A civil penalty of $15,000 is
assessed for failure to mark a PCB container, $15,000 for fail-
ure to have a Spill Prevention Control and Countermeasure (SPCC)
Plan and $10,000 for failure to maintain records of each batch of
PCBs added to the container. 40 CFR §§761.20(a)(1 ) , 761.42(c)(7)
(ii) and 761.42(c)(8). The total civil penalty assessed is
therefore $40,000.
Payment of the full amount of the civil penalty ($40,000)
shall be made within sixty (60) days of service of this final
order, unless otherwise agreed to by the parties. A cashier's
check or certified check payable to the Treasurer, United States
of America, for the full amount, shall be forwarded to the
Regional Hearing Clerk.
So ordered.
Dated:
8 1935
Ronald L. McCallum
Chief Judicial Officer (A-101)
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CERTIFICATE OF SERVICE
I certify that copies of the foregoing Final Decision In
the Matter of Noble Oil Company, TSCA Appeal No. 84-2, were
sent to the following individuals in the manner indicated:
By 1st Class Mail,
Postage Prepaid:
By Hand Delivery:
Alan G. Kelley, Esq.
Greenberg, Kelley & Prior
196 West State Street
Trenton, NJ 08608
William E. Sawyer, Esq.
Office of Regional Counsel
U.S. EPA, Region II
26 Federal plaza
New York City, NY 10278
Ms. Cynthia Pabon
Regional Hearing Clerk
U.S. EPA, Region II
26 Federal plaza, Room 908
New York City, NY 10278
Spencer T. Nissen
Administrative Law Judge
U.S. EPA Headquarters
401 M Street, S.W.
Washington, DC 20460
Bessie Hammiel
Hearing Clerk
U.S. EPA Headquarters
401 M Street, S.W.
Washington, DC 20460
rj to ^ (I
{• L-
M. Gail Wingo
Secretary to the Chief
Judicial Officer
Dated:
28
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46
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BEFORE THE ADMINISTRATOR
U.S. ENVIRONMENTAL PRQTECTION AGENCY -p
WASHINGTON, D.C. IT
In the Matter of: ) ..
\
} <
Rocky Mountain Prestress, Inc., ) TSCA Appeal No. 84-3
and AERR Co., Inc. , ) .
)
Respondents )
)
TSCA-PCB-83-017 )
FINAL DECISION
Complainant, Director of the Enforcement Division, Region
VIII, United States Environmental Protection Agency (EPA),
issued a complaint against respondents, Rocky Mountain Prestress,
Inc. (RMP) and AERR Co., Inc., under the authority of §16(a) of
I/
the Toxic Substances Control Act (TSCA) 15 U.S.C. §2615(a)
for an alleged violation of the regulations implementing Section
V
6(e) of TSCA. Respondents denied the violation and a hearing
_!/ TSCA §16(a)(l) provides as follows:
"Civil. (1) Any person who violates a pro-
vision of Section 15 shall be liable to the United
States for a civil penalty -in an amount not to ex-
ceed $25,000 for each such violation. Each day
such a violation continues shall, for purposes of
this subsection, constitute a separate violation of
Section 15."
TSCA §15 provides, in pertinent part, that it shall be un-
lawful for any person to "(1) fail or refuse to comply with . . .
(B) any requirement prescribed by § . . . 6, or (C) any rule
promulgated under § . . . 6."
^/-Section 6(e) of TSCA required the Administrator to promulgate
rules regulating the manufacturing, processing, use, disposal and
distribution in commerce of polychlorinated biphenyls (PCBs).
Those regulations are in 40 CFR Part 761 (1983).
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-2-
was held before Administrative Law Judge Thomas B. Yost (presiding
t
officer). The presiding officer issued an initial decision in
which he determined that respondents had violated the regulations
and he assessed civil penalties against each. Both respondents
appealed the initial decision, although on different grounds.
V
The initial decision is affirmed, and all findings of fact,
conclusions of law and reasons therefor in the initial decision
I/
are adopted and incorporated by reference in this final decision.
Since the parties have not raised any new matters on appeal that
are material to the outcome, the discussion below is provided only
to emphasize certain significant aspects of the initial decision.
Background
Respondent Rocky Mountain Prestress (RMP) is a manufacturer
of precast prestress concrete products. Unpaved roads on the
plant grounds connect storage, fabrication and administrative
areas. A state permit regulating the plant's air emissions re-
quires that RiMP oil its roads twice a year to control dust. To
comply with this requirement, RMP hired respondent AERR to oil
_3/ The Chief Judicial Officer, as the Administrator's delegatee,
has the authority to issue final decisions in administrative
civil penalty cases brought under TSCA. 40 CFR Part 22 (1983).
4/ That an appellate administrative tribunal may adopt the
findings, conclusions, and rationale of a subordinate tribunal
without extensive restatement is well-settled. United States
v. Orr, 474 F.2d 1365 (2d Cir. 1973); Carolina Freight Carrier
Corporation v. United States, 323 F. Supp. 1290 (W.D.N.C. 1971);
In re Electric Service Company, TSCA Appeal No. 82-4, Final
Decision (January 7, 1985); In re Chemical Waste Management,
-Inc., RCRA (3008) Appeal No. 84-8, Order Adopting the Presiding
Officer's Initial Decision as Final Agency Action (September 5,
1984); and cases cited in Ciba Geigy v. Farmland Industries,
FIFRA Comp.'Dkt. Nos. 33, 34 and 42 (Op. of the Judicial Officer,
April 30/1981).
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-3-
its roads on May 28, 1983.
In early May, an EPA inspector conducted a routine inspec-
tion of RMP's facility, checking for the presence of electrical
equipment containing PCBs. No such equipment was found. How-
ever, during the inspection an RMP employee mentioned to the
EPA inspector that RMP was going to have its roads oiled soon
by AERR so that it would be in compliance with its state permit.
On May 26, shortly before RMP's roads were to be oiled, an EPA
inspector again visited RMP. This time the inspector took soil
samples which were subsequently shown to have low concentrations
of PCBs (5 ppm). On June 2, after the roads were oiled, more
soil samples were taken. Tests of the soil sampled showed PCBs
in concentrations of 37 ppm. Because "[t]he use of waste oil
that contains any detectable concentration of PCB as a ...
I/
dust control agent is prohibited," complainant charged
respondents with violating the PCB regulations.
Discussion
On appeal, respondent AERR argues that the presiding
officer erred because the record does not support his finding
that the oil used by AERR contained PCBs; because he failed .to
grant AERR1s motion for a mistrial; and because he admitted
6/
evidence that AERR had previously oiled RMP's property.
S/ 40 CFR §761.20(d).
6/ In its brief on appeal, respondent lists five issues as a
-basis for reversing the initial decision: (1) whether the
record supports the "opinion" of Judge Yost that AERR Co.'s oil
contained detectable limits of PCBs; (2) whether the record
(next page)
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-4-
Therefore, respondent AERR requests that the Administrator
t
review the presiding officer's opinion, or, in the alternative,
provide "a new hearing before a different hearing officer. ..."
Brief on Appeal at 11.
The sole issue raised on appeal by respondent RMP is the
scope of the term "use" in the PCS regulations. RMP argues
that the applicator of the PCB contaminated oil, in this case
AERR, is the "user" of PCBs; RMP argues that it is not a "user"
within the meaning of the regulations. RMP concludes, therefore,
that it has not violated the regulations. I briefly discuss
the arguments raised by AERR and RMP below.
The first argument made by AERR is that complainant failed
to prove that AERR oil contained PCBs and, therefore, the pre-
(Footnote No. 6 cont'd)
supports the findings that the PCBs found at the RMP facility
resulted from a single application by AERR Co. on May 28, 1983;
(3) whether Judge Yost committed reversible error in denying
AERR Co.'s motion for mistrial; (4) whether Judge Yost committed
reversible error in his ruling on evidentiary issues; and (5)
whether the record supports the findings and statements of
Judge Yost that AERR Co. had not cooperated in the investiga-
tion. Brief on Appeal at 2. However, in the body of the brief,
respondent only separated the issues into three categories. To
avoid confusion, I have chosen to discuss the issues following
the three category format respondent used in the body of its
brief. As for the fifth issue, whether the record supports
Judge Yost's statements that respondent did not cooperate in
the investigation, respondent does not provide any support for
this argument; indeed, in his initial decision, the presiding
officer did not state that respondent did not cooperate in the
investigation, but only that respondent had not participated in
the cleanup of the property. See Initial Decision at 11. In
any event, respondent in no way demonstrates how such a finding,
.even assuming the presiding officer had actually made such a
finding, prejudiced it. Therefore, no further discussion of
this issue is needed.
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-5-
siding officer erred in finding that AERR violated the PCB regu-
4
lations. I do not agree. The evidence in the record establishes
that different concentrations of PCBs were found on respondent
RMP's roads before and after oiling, i.e., 5 ppm before and 37 ppm
after. Respondent AERR does not dispute these test results, but
I/
argues that because different PCBs or "Arochlors" were found
on the two occasions, AERR's oil did not contain PCBs. This
argument is not persuasive and was not supported by anything in'
the record. Mr. Topolski, an expert witness called by respondent
RMP, explained that the higher concentration Arochlor could
"mask" or hide the other Arochlors at lower concentrations.
T.198. Mr. Topolski also mentioned other possible explanations,
such as degradation or incomplete chemical reaction, which
would account for this difference. T.195,204. Although the
test results may be only "circumstantial" evidence, they are
certainly sufficient to support the presiding officer's con-
clusion that AERR's oil contained PCBs, considering that the
road contained minimal concentrations of PCBs before oiling
and that the tests revealed a significant increase in the concen-
§/~
tration of PCBs after oiling. This evidence is unrefuted.
7_/ "Arochlor" is a Monsanto tradename for its PCB products.
The Arochlors were numbered, i.e., 1242, 1254, 1260, to indicate
the percentage of chlorine in the product. Monsanto developed
various standards based on this classification against which
unknown PCBs could be compared to identify the concentration of
PCBs. The tests of the samples taken on May 26 indicated the
presence of Arochlors 1242, 1254 and 1260; .the test of the sample
taken on June 2 indicated Arochlor 1254.
8_/ See In re National Railroad Passenger Corporation (AMTRAK),
TSCA Appeal No. 82-1, 101 ALC 168 (1982) (circumstantial evidence
may be used to prove concentration of PCBs) .
-------
-6-
I
Next, respondent AERR argues that the presiding officer
i
erred because he did not grant its motion for mistrial. During
the course of the hearing, J. William Geise, witness for com-
plainant, testified that he was aware that respondent AERR was
the subject of a criminal investigation by complainant; he did
not know the status of the investigation. T.104-107. Based on
this testimony, respondent moved for a mistrial. T.107. The.
presiding officer denied the motion. T.109. The presiding
officer assured respondent that he would not consider the
information, and, contrary to respondent's contentions, there
is no indication in the initial decision that he did. Moreover,
the burden is on respondent to show that the information had an
improper influence on the presiding officer, for "[t]he presiding
officer is not a lay juror whose ability to be impartial is
irreparably damaged from having given previous consideration to
highly prejudicial material. The presiding officer is an
experienced Administrative Law Judge and, until shown otherwise,
is presumptively able to disregard prejudicial material . . . ."
In the Matter of Bell s Howell Company, TSCA-V-033, 034, 035,
Final Decision at 10-11, n.6, dated December 2, 1983 (regarding
motion requesting disqualification of presiding officer) .
Respondent has not sustained its burden here.
Finally, respondent AERR argues that it was error for the
presiding officer to admit evidence establishing that AERR had
oiled Respondent RiMP's roads on other occasions before the
oiling in issue took place. Respondent AERR contends that this
evidence "prejudiced the finder of fact with the unspoken impli-
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-7-
cation that 'even if we cannot prove they [AERR] did it this
time, they (AERR) must have done it in the past.1" Again, I
find respondent's argument without merit. The rules governing
this proceeding give the presiding officer broad discretion in
admitting evidence. "The Presiding Officer shall admit all
evidence which is not irrelevant, immaterial, unduly repetitious,
or otherwise unreliable or of little probative value, . . ."
40 CFR §22.22. It was clearly within the presiding officer's
discretion to admit the evidence in question. It was introduced
for the limited purposes of establishing the relationship be-
tween the respondents and to show how much oil had been applied
during other oilings (T.151,161); it was not the basis of any
violation alleged in the complaint nor does the fact that
respondent AERR oiled RMP's roads on other occasions appear to
have been given any weight in determining that respondent AERR
committed the one violation with which it was charged. On the
contrary, the presiding officer stated "that the record reveals
that RMP has used AERR Co. in the past as a supplier of dust sup-
pression oil without any apparent repercussions." Initial Decision
at 10. Respondent has shown no error.
Concerning respondent RMP's argument "that it has not made
any 'use' of PCB-contaminated waste oil within the meaning of
the subject regulation," I do not find that argument persuasive.
The PCB regulations apply "to all persons who manufacture,
process, distribute in commerce, use or dispose of PCBs or
PCB Items." 40 CFR §761.l(b). The particular section in the
regulation that RMP violated states that "[t]he use of waste
-------
-8-
oil that contains any detectable concentration of PCB as a
t
sealant, coating or dust control agent is prohibited. Pro-
hibited uses include but are not limited to road oiling, general
dust control. . . ." 40 CFR §761.20(d). The term "use" is not
defined in the statute nor in the regulations. RMP argues that
"the term 'use1 as employed in the PCB Ban Rule was intended to
refer and apply only to those persons or entities who directly
'employ1 or 'make use of' contaminated waste oil through direct
application to a prohibited use, not to innocent third
parties. . . ." Although RMP was not reauired to pay any
i/
monetary penalty, it is concerned that "its record should
not be unfairly tarnished with an official violation due to the
broad and loose construction of 'use' employed in the Initial
Decision." RMP Reply Brief at 3.
The "broad" and "loose" construction of use adopted in the
initial decision is supported by the definition of use, in a
non-technical sense, found in Black's Law Dictionary: "The 'use'
of a thing means that one is to enjoy, hold, occupy, or have some
manner of benefit thereof." Black's Law Dictionary (5th Ed.,
1979) at 1382. This broad interpretation of the term is consis-
tent with the remedial purposes of the regulations. See In re
Briggs & Stratton Corporation, 101 ALC 116 (TSCA Appeal No.
81-1, decided February 4, 1981). There can be no doubt that
9_/ In the initial decision, the presiding officer assessed a
penalty of $5,000 against RMP; however, the penalty was reduced
to zero because RMP cleaned up its property. See Initial Decision
at 20 and Order dated November 9, 1984, reducing the penalty to
zero .
-------
-9-
respondent RMP was "using" the contaminated oil to control
dust. The fact that the use was inadvertant is of no consequence
"Proof that a respondent knowing or willfully violated a regula-
tion is not an element of the offense for purposes of assessing
civil penalties." Amtrak at 170. Therefore, the presiding
officer committed no error.
FINAL ORDER
A civil penalty of $8,990.00 is assessed against respondent
AERR Co., Inc. for using waste oil which contained detectable
concentrations of PCBs to oil roads. 40 CFR §761.20(d).
Payment of the civil penalty ($8,990.00) shall be made within
sixty (60) days of service of this final order, unless otherwise
agreed to by the parties. A cashier's check or certified check
payable to the Treasurer, United States of America, for the
full amount, shall be forwarded to the Regional Hearing Clerk.
A civil penalty of $5,000.00 is assessed against respondent
Rocky Mountain Prestress, Inc. for using waste oil which con-
tained detectable amounts of PCBs to control dust. 40 CFR
§761.20(d). However, pursuant to the presiding officer's order
of November 9, 1984, the penalty is reduced to zero.
So ordered .
Ronald L. McCallum
Chief Judicial Officer (A-101)
Dated:
^'81385
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CERTIFICATE OF SERVICE
I certify that copies of the foregoing Final
the Matter of Rocky Mountain Prestress, Inc., and
TSCA Appeal No. 84-3, were sent to the following
in the manner indicated:
Decision In
AERR Co., Inc
i nd ividuals
Certified Mail,
Return Receipt Requested
By 1st Class Mail,
Postage Prepaid:
By "Hand Delivery:
Gary E. Parish
R. Daniel Shied
AERR Co., Inc.
2660 Petro-Lewis Tower
Denver, CO 80202
Gregory J. Hobbs, Jr.
Zach C. Miller
Davis, Graham & Stubbs
P.O. Box 185
Denver, CO 80201
Jo Lynn Meacham
Regional Hearing Clerk
U.S. EPA, Region VIII
1860 Lincoln Street
Denver, CO 80295
Honorable Thomas B. Yost
Administrative Law Judge
U.S. EPA, Region IV
345 Courtland Street, N.E.
Atlanta, GA 30365
Daniel Hester, Esq.
Office of Regional Counsel
U.S. EPA, Region VIII
1860 Lincoln Street
Denver, CO 80295
Bessie Hammiel
Hearing Clerk
U.S. EPA Headquarters
401 M Street, S.W.
Washington, DC 20460
Dated:
APR - 8 1985
M. Gail Wingo
Secretary to the Chief
Judicial Officer
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47
-------
BEFORE THE ADMINISTRATOR
U.S. ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C.
In the Matter of:
Cotter Corporation
)
(Schwartzwalder Uranium Mine), )
- >
Respondent )
)
Docket No. TSCA 81-004 )
TSCA Appeal No. 84-1
co
cr>
FINAL DECISION
co
CD
Complainant, Director of the Enforcement Division,
Region VIII, United States Environmental Protection Agency
(EPA), issued a complaint against respondent, Cotter Corpora-
tion (Schwartzwalder Uranium Mine), under the authority of
§16(a) of the Toxic Substances Control Act (TSCA) 15 U.S.C.
I/
§2615(a) for alleged violations of the regulations imple-
!_/ TSCA §16(a)(l) provides as follows:
"Civil. (1) Any person who violates a pro-
vision of Section 15 shall be liable..to the United
States for a civil penalty in an amount not to ex-
ceed $25,000 for each such violation. Each day
such a violation continues shall, for purposes of
this subsection, constitute a separate violation
of Section 15."-
TSCA §15 provides, in pertinent part, that it shall be
unlawful for any person to "(1) fail or refuse to comply with
. . . (B) any requirement prescribed by § ... 6, or (C) any
rule promulgated under 5 ... 6."
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-2-
!/
menting Section 6(e) of TSCA. A hearing was held be-
I
fore Chief Administrative Law Judge Edward B. Finch (presiding
officer). The presiding officer issued an initial decision
in which he found eight violations of the regulations. The
I/
total amount of the civil penalty assessed was $58,650.00.
Respondent appeals the civil penalties assessed for three of
the violations.
Respondent argues that the three penalties in question,
i.e., those assessed for the two disposal violations ($17,000
each) and the recordkeeping violation ($10,000), were not asses-
sed in accordance with the Agency's Civil Penalty Guidelines, 45
Fed. Reg. 59770 (1980), and should be reduced in accordance with
~~" I/
the guidelines. Complainant, in its response to respondent's
appeal, contends (1) that the guidelines are just that, guidelines,
2/ Section 6(e) of TSCA directs the Administrator to promulgate
rules regulating the manufacturing, processing, use, disposal
and distribution in commerce of polychlorinated biphenyls (PCBs).
Those regulations are in 40 CFR Part 761 (1980).
3/ The original complaint charged the respondent with fourteen
(14) violations; 'two were dismissed by stipulation; four were
dismissed by the presiding officer. The total penalty proposed
by complainant in the complaint was $106,950.00; this was reduced
to $69,000.00 because of the dismissed violations. The presiding
officer reduced the penalty by an additional 15% to $58,650.00
because the record did not support complainant's adjustment up-
ward of the penalty based on respondent's "bad attitude." See
Initial Decision at 44.
_4/ Under the PCB Penalty Guidelines, penalties are determined in
two stages. First, the "gravity" of the violation is determined
and then adjustments are made to the "gravity" based penalty to
reflect the other matters which may be considered in determining
(next page)
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-3-
and although the presiding officer must consider them in assessing
«
a penalty, he is not bound by them and (2), in any event, the
penalties assessed are consistent with the evidence of record and
the penalty guidelines. I agree with complainant.
As I have previously stated, "[t]he regulations give the pre-
siding officer considerable discretion in setting a penalty. 40
CFR §22.27(b). Although he must 'consider' any penalty guidelines,
he is not bound by them." In re Electric Service Company, TSCA
Appeal No. 82-2 at 20, n.23. (Final Decision dated January 7,
1985). In the initial decision, the presiding officer assessed
the penalties proposed by complainant for these violations, save
the adjustment made by complainant for respondent's "bad attitude."
In accordance with the regulations, the presiding officer
explained his reason for not adopting that adjustment. Initial
Decision at 44. See 40 CFR §22.27(b). ("If the Presiding
Officer decides to assess a penalty different in amount from
the penalty recommended to be assessed in the complaint, the Pre-
(Footnote No. 4 Cont'd)
the penalty. See TSCA Sec. 16(a)(2)(B). The guidelines pro-
vide a series of penalties which may be assessed depending on
the seriousness ("minor," "significant," or "major") of the
violation. See In the Matter of Bell & Howell Company, TSCA-V-
C-033, 034, 035 (Final Decision, December 2, 1983), for a dis-
cussion of the penalty guidelines. In this case, each disposal
violation was characterized as "significant" and assessed a
$17,000 penalty; respondent argues they were "minor" and that
it should be assessed only $5,000 for each violation. Regarding
the recordkeeping violation, respondent argues that it should
be categorized as a "significant" rather than a "major" violation
and that the penalty should be reduced from $10,000 to $6,000.
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-4-
siding Officer shall set forth in the initial decision the
t
specific reasons for the increase or decrease.") "Where no
abuse of discretion is shown, I will not substitute my judgment
for that of the presiding officer so long as the reasons for
changing the penalty have been stated with specificity."
Electric Service at 20, n.23. No abuse of discretion has been
5/
shown here. Therefore, the initial decision is affirmed, and
all findings of fact, conclusions of law and reasons therefor in
the initial decision are adopted and incorporated by reference
i/
in this final decision.
FINAL ORDER
The initial decision of the presiding officer is adopted
as the Agency's Final Decision. A civil penalty of $58,650.00
is assessed against respondent in accordance with Section 16(a)
of the Toxic Substances Control Act (TSCA). Payment of the entire
amount of the civil penalty ($58,650.'00) shall be made within sixty
5_/ The Chief Judicial Officer, as the Administrator's deleaatee,
has the authority to issue final decisions in administrative
civil penalty cases brought under TSCA. 40 CFR Part 22 (1983).
6/ That an appellate administrative tribunal may adopt the
findings, conclusions, and rationale of a subordinate tribunal
without extensive restatement is well-settled. United Staves
v. Orr, 474 F.2d 1365 (2d Cir. 1973); Carolina Freight Carrier
Corporation v. United States, 323 F.Supp. 1290 (W.D.NC. 1971);
In re Electric Service Company, TSCA Appeal No. 82-4, Final
Decision (January 7, 1985); In re Chemical Waste Management,
Inc., RCRA (3008) Appeal No. 84-8, Order Adopting the Presiding
Officer's Initial Decision as Final Agency Action (September 5,
"1984); and cases cited in Ciba Geigy v. Farmland Industries,
FIFRA Comp. Dkt. Nos. 33, 34 and 42 (Op. of the Judicial Officer,
April 30, 1-981) .
-------
-5-
(60) days of service of this final order, unless otherwise
«
agreed to by the parties. A cashier's check or certified check
payable to the Treasurer, United States of America, for the
full amount, shall be forwarded to the Regional Hearing Clerk.
So ordered. .
7'
Ronald L. McCallum
Chief Judicial Officer (A-101)
Dated:' APR I 6 1985
-------
CERTIFICATE OF SERVICE
I certify that copies of the foregoing Final Decision In
the Matter of Cotter Corporation (Schwartzwalder Uranium Mine)
TSCA Appeal No. 84-1, were sent to the following individuals
in the manner indicated:
By Certified Mail,
Return Receipt Requested
By 1st Class Mail,
Postage Prepaid:
By Hand Delivery:
Ms. Charlotte L. Neitzel
Holme Roberts & Owen
Attorney for Cotter Corporation
1700 Broadway, Suite 1800
Denver, CO 80290
Jo Lynn Meacham
U.S. EPA, Region VIII
1860 Lincoln Street
Denver, CO 80295
Stephen B. Cherry, Esq.
Enforcement Division
U.S. EPA, Region VIII
1860 Lincoln Street
Denver, CO 80295
Honorable Edward B. Finch
Chief Administrative Law Judge
Office of Administrative Law
Judges (A-110)
Environmental Protection Agency
401 M Street, S.W.
Washington, D.C. 20460
Bessie Hammiel
Hearing Clerk
U.S. EPA Headquarters
401 M Street, S.W.
Washington, DC 20460
M. Gail Wingo
Secretary to the Chief
Judicial Officer
Dated: APR I 6 1985
-------
43
-------
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
BEFORE THE ADMINISTRATOR
In the Matter of )
)
Lamar and Frances Thumm )
and ) Docket No. TSCA-V-C-222
Holtzman and Silverman Builders, )
)
Respondents )
Toxic Substances Control Act - Effective Date of Regulation - Disposal -
Rules of Practice - Burden of Proof - Evidence — Where evidence established
that drums containing PCBs were placed in a disposal site several years prior
to the April 18, 1978, effective date of the PCB disposal rule, such disposal
was not a violation of the rule. Note at 40 CFR 761.60 (44 FR 31545, May 31,
1979) construed. Even if "disposal" as defined by the rule be interpreted as
encompassing leaks or discharges from the drums, there was no evidence of such
leaks or discharges from drums containing PCBs after the effective date of the
rule and Complainant failed to carry its burden of proving the violation
charged.
Toxic Substances Control Act - Effective Date of Regulation - Disposal -
Rules of Practice - Burden of Proof - Inferences — Where evidence failed to
establish that PCB soil contamination at disposal site was attributable to
discharges from drums containing PCBs and the most reasonable inference from
-------
all the evidence was that the contamination was attributable to disposals of
PCBs which occurred prior to the effective date of the regulation, Complainant
failed to establish that the disposal was a violation of the rule notwith-
standing the contention that a disposal prior to the effective date of the
regulation was an affirmative defense the burden of proof of which was on
Respondent. Electric Service Company, TSCA Appeal No. 82-2 (Final Decision,
January 7, 1985) distinguished.
Toxic Substances Control Act - Rules of Practice - Burden of Proof —
Section 22.24 of the Rules of Practice (40 CFR Part 22.24) providing that
following establishment of a prima facie case by Complainant, the Respondent
shall have the burden of presenting and of going forward with any defense to
allegations set forth in the complaint, is a rule as to the presentation of
evidence and does not shift burden of proving violation charged, which remains
on Complainant.
Appearance for Respondents - Lamar and Frances Thumm
Stephen D. Weyhing, Esq.
Miller, Canfield, Paddock and Stone
Lansing, Michigan
Appearance for Respondent - Holtzman and Silverman Builders
John W. Voelpel, Esq.
Elizabeth A. Lowery, Esq.
Honigman, Miller, Schwartz and Cohn
Detroit, Michigan
Appearance for Complainant - John Van Vranken, Esq.
Office of Regional Counsel
U.S. EPA, Region V
Chicago, Illinois
-------
Initial Decision
This is a proceeding under § 16(a) of the Toxic Substances Control
Act (15 U.S.C. 2615). The proceeding was commenced by the issuance on
March 24, 1984, of a complaint by the Director Waste Management Division,.
U.S. Environmental Protection Agency, Region V, Chicago, Illinois, charging
Respondents, Lamar and Frances Thumm and Holtzman and Silverman Builders,.
with disposal of polychlorinated biphenyls (PCBs) in violation of § 2614
of the Act and regulations promulgated thereunder, 40 CFR Part 761.I/ It
was proposed to assess Respondents a penalty of $25,000.
Lamar and Frances Thumm, hereinafter Thumms, answered denying knowledge
of and responsibility for the alleged disposal for the reason that pursuant
to a land contract, dated May 18, 1973, they had surrendered possession,
control and rights to the property in question to Holtzman and Silverman
Builders. Holtznan and Silverman (H&S) answered, denying responsibility
for the alleged disposal and alleging, inter alia, that fee title to the
property was in the Thumms and that any dumping on the property occurred
prior to the time H&S assumed possession thereof. A hearing on this matter
was held in Lansing, Michigan on November 13, 14 and 15, 1984.
II Sec. 15 of the Act entitled "Prohibited Acts" provides in part:
It shall be unlawful for any person to—
(1) fail or refuse to comply with (A) any rule promul-
gated or order issued under section 4, (B) any requirement
prescribed by section 5 or 6, or (C) any rule promulgated or
order issued under section 5 or 6;
* **-*
The instant rules were promulgated under § 6.
-------
Based on the entire record including the proposed findings and con-
clusions of the parties, I find that the following facts are established:
Findings of Fact
*
1. The property in question, containing approximately 62 acres is
described as the west 1019.04 feet of the Northwest 1/4 of Section
25, Township 3 South (Ypsilanti), Range 7 East, Washtenaw County,
Michigan (Land Contract, H&S Exh 9). The property is known as the
Textile Road property or site, being bounded on the north by Textile
Road, on the west by Bunton Road and on the east by a Ford Motor
Company Plant. The property was purchased by Lamar and Frances
Thumm in August of 1947 (Warranty Deed, H&S Exh 31).
2. From the time the Thumms purchased the property until they entered
into a land contract with H&S in May of 1973, the property was in
continuous use as a source for the extraction of sand, gravel and
aggregate (Tr. 497-99). The excavation, together with the naturally
high water table, resulted in approximately two-thirds of the property
being covered by artificial ponds (Atwell-Hicks, Inc. Report, dated
May 1, 1973, H&S Exh 7). The principal pond, sometimes referred to as
a lake, occupied the eastern and southern portion of the property
(photos, H&S Exhs 10-14).
3. As a source of material to fill excavated areas, Mr. Thumm allowed
dumping on the property (Tr. 505). Most of the dumping was accom-
plished by one Harold Handley, who had a contract to haul fly ash and
cinders from the General Motors Willow Run Plant (Tr. 505-535).
-------
Mr. Thumm estimated that Handley hauled fly ash and cinders to the
site for 15 years, until he lost the contract. He, Thumm, also
allowed broken concrete and dirt to be dumped on the property (Tr.
514-15, 544). The previously mentioned Atwell-Hicks Report (H&S
Exh 7) reflects that the front 500 to 600 feet of the property,
that adjoining Textile Road, was covered to a depth of seven to ten
feet with artificial cinder fill, including trash, wood, bricks and .
soil in an uncompacted state.
4. Mr. Thumm insisted that he did not allow rubbish and tin cans to be
unloaded on the property, stating that he sent people with that kind
of material to the public dump (Tr. 506). He acknowledged, however,
that he was not on the site at all times, that Mr. Handley had access
to the site and hauled thereto seven days a week, that fill material,
other than fly ash and cinders, was being delivered to the property
until the closing [of the land contract] and that he did not generally
inspect material delivered by Handley or others (527, 534-35, 537-38,
I 544-45, 560-61). Wooden block, apparently flooring, from the adjacent
s
i
! Ford Motor Company plant was also delivered to the site, Mr. Thumm
\
using some as fuel in the stove in his shop and selling the balance
(Tr. 506, 541, 546-47).
5. Mr. Vaughn Williams was an employee of Lamar Thumm from March 1, 1955
until October 31, 1973 (Tr. 567, 569-70). Although he performed other
tasks such as operating a front-end loader and repairing equipment, his
principal function was as a crane or dragline operator, excavating
sand and gravel. Mr. Williams described the Textile Road site when
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he arrived in 1955 as "just bare property" partially dug out. He
stated that you couldn't dig without hitting water, that the site was
not heavily vegetated and that he did not recall a single tree being
on it at the time. He testified that the property was still quite
bare when he left at the end of September 1973, with a few poplar trees
along the bank close to the Ford Motor Company property line. This
testimony is substantially supported by aerial photos of the property
taken in June of 1973 (H&S Exhs 10-14).
6. Vehicle entrance to the Thumm property is from Textile Road from which
a road, referred to as the north-south road, extends southward to the
gravel-wash plant. In early 1973, Mr. Williams constructed a rough
road or trail, sometimes referred to as a two-track, east of the north-
south road and north of the principal pond (Tr. 571). Mr. Thumm stated
that the two-track was constructed in the spring of 1972 or 1973 (Tr.
512). This roadway extended east to the Ford boundary and then south
along the pond. Mr. Williams explained that his reason for constructing
the two-track was so that a truck could get in there and 50 to 100 feet
of original earth along the Ford boundary could be removed prior to sale
[of the property]. He testified that the area where the two-track was
constructed was visible from the north-south road. He confirmed
Mr. Thumm's testimony relative to dumping on the property, stating that
Mr. Handley stopped hauling fly ash in late 1972, that only dirt or
broken concrete was brought in thereafter and that he would check loads
[of material to be dumped], if he saw a strange truck (Tr. 602-03). He
-------
did not, however, remenber any concrete piles or peculiar odors on the
property (Tr. 597, 601).
7. Under date of April 7, 1973, the Thumms entered into an agreement
for the sale of the Textile Road Property to Holtzman and Silverman
(Offer to Purchase Real Estate, H&S Exh 7). The agreement provided,
inter alia, that the buyer would have 30 days to enter the premises
for the purpose of taking soil borings to determine suitability of •
land for the purchasers intended use. If the property was determined
to be unsuitable, the purchasers could by written notice withdraw the
offer and obtain a refund of the deposit. The agreement further pro-
vided that dumping shall continue as is until buyer notifies seller
of intent to close, then dumping shall cease, that the seller would
have until September 1, 1973, for removal of approximately 7,000 yards
of processed material (fill, sharp and masonry sand) and seller was
to have use of garage and storage building until September 1, 1973.
8. H&S engaged Atwell-Hicks, Inc., an engineering and surveying firm,
to perform the soil exploration work envisaged by the offer to pur-
chase (Work Order, dated April 9, 1973, H&S Exh 18). This resulted
in the report previously mentioned (findings 2 and 3) and soil boring
^ drawings (H&S Exhs 8, 19). The report apparently indicated that soil
conditions were satisfactory for H&S's intended use and under date of
May 18, 1973, the Thumms and H&S entered into a land contract for the
sale of the Textile Road site (H&S Exh 9). The contract provided that
after a down payment the purchase price would be paid in equal instal-
ments TO not more than ten years. The contract further provided that
-------
8
the sellers surrendered possession immediately, except that they would
have the use and occupancy of the garage and storage building and
surrounding area without payment of rent until September 1, 1973, and
the right until the same date to remove approximately 7,000 cubic yards
of previously processed sand. At the time the contract was executed,
the Thumms also executed a warranty deed to the property, which was
held in escrow by the title company (Tr. 515). The Thumms vacated the
property on September 30, 1973, having been granted a one month
extension of the occupancy period by H&S (Tr. 531).
9. On March 22, 1983, Mr. Gene Hall of the Michigan Department of Natural
Resources (MDNR) accompanied by a Robert Col burn of the Washtenaw County
, Health Department, inspected the Textile Road property (Tr. 9, 10;
Pollution Investigation Report, EPA Exh 3). They were allowed on
the property by a Mr. Kenneth Mangus, identified as a caretaker.
The inspection was conducted in response to a telephonic report of
drums being deposited near a gravel pit. Material in the drums
appeared to be old machine oil. Mr. Mangus reportedly told Mr. Hall
that the drums had been there as long as he had worked there, 12
years or more (Tr. 32, 92; EPA Exh 3). The drums were in an area
north of the pond and east of the north-south road (Sketch, EPA Exh 2).
Because of a heavy snow cover, no samples were taken on this inspection.
10. Mr. Hall, accompanied by a Mr. Bob LaMere also of the MDNR, and
Mr. Colburn of the Washtenaw County Health Department, made a second
inspection of the Textile Road property on April 12, 1983. The snow
had disappeared and 40 drums were lying in a disorderly state in an
-------
area of approximately 1500 sq. ft. (Tr. 11, 68). Several piles of
wooden blocks of the type typically used for factory flooring were
observed (Tr. 18). The drums were in a state of disrepair, some were
rusting, some having open tops, some having open bungs and some having
what appeared to be bullet holes. Some of the drums were protruding
from sludge piles (Tr. 18, 29, 30 and 68). Although there is some
confusion in the record as to the precise number of samples taken, it
appears that five samples were taken from drums and in addition, two
soil samples and two water samples were collected (Tr. 12, 13, 34,
78, 79; EPA Exhs 2 and 3). Scans conducted by a gas chromatograph
revealed the presence of PCBs (Aroclor 1254) in two of the drum samples
(Drum Nos. 3 and 5, Lab Nos. 27889 and 27891) of 61 ppm and 210 ppm,
respectively, and in the two soil samples (Nos. 7 & 8, Lab Nos.
27893 and 27894) of 500 ppm and 160 ppm, respectively (Tr. 150;
Environmental Laboratory Analysis, EPA Exh 1 and Lab Log No. 1998,
EPA Exh 8). The soil samples were taken in an area of stained soil
to the west of where the drums were located (Sketch, EPA Exh 2).
11. A third inspection of the Textile Road property was conducted on
June 29, 1983 (Tr. 170; PCB Compliance Inspection Report, EPA Exh 10).
This additional inspection was conducted by representatives of the
MDNR (Mr. Gene Hall and Ms. Margaret Fields) as a result of a meeting
held at the Washtenaw County Health Department on June 23, 1983,
attended by representatives of the MDNR, Washtenaw County Health
Department, Mr. Lewis Thumm, an attorney and son of the Thumms, and
Messrs. Gilbert Silverman and Dan Baumhardt of Holtzman and Silverman
-------
10
Uti
-<:ir •:•-.
lft<
HP
,!~V--"»1-..
and HAS's attorney, John W. Voelpel, wherein it was agreed that
additional samples would be taken (Tr. 220; EPA Exh 13). Additional
soil and sediment samples, a water sample and a wood shaving sample
were taken (Transmittal of Evidence and Laboratory Analysis, Thumm
Exh 3). The locations where the samples were taken is shown on a
sketch drawn by Ms. Fields (Tr. 177, 179-80, EPA Exh 11). Ms. Fields
took the wood shaving sample (from a pile of wooden blocks 200 feet
west of the drum site), because she had prior experience with high
PCB concentrations in wooden block floorings (Tr. 199-200). Piles
of broken concrete piles and wooden blocks were observed to the right
and left of the two track (Tr. 174; Sketch). A roughly triangular
shaped area to the west of the drum area on .the sketch is the area of
stained soil. One of the photos taken by Ms. Fields (EPA Exh 4, Photo
5) appears to show wooden blocks scattered around the stained-soil area.
Ms. Fields testified that because of the lack of vegetation in the
stained-soil area, it was not possible to determine where the two-track
ended (Tr. 223-24). Her sketch, however, shows the two-track extending
in a direction through the area of dump piles and where at least two of
the drums were located. The drum area, oblong in shape and estimated
by Ms. Fields to be 90 feet in length, had been enclosed by a snow
fence since the first inspection.
12. The samples were delivered to the Environmental Research Group (ERG)
laboratory on July 6, 1983, and tested for PCBs (Aroclor 1254) with the
result that two of the samples, Lab Nos. 92258 and 92259, showed concen-
trations of 100 and 360 ppm, respectively (Analytical Report, EPA Exh 5
-------
11
and Extraction Sheet, EPA Exh 6). These laboratory sample numbers corre-
spond to Sample Nos. 81012C and 81012D and were taken from sediments at
the pond edge (southwest corner of drum area) and from surface soil at a
point approximately 35 feet west of the fence surrounding the drum area.
The nearest drum was approximately 30 feet from the location where
Sample No. 81012C was taken (Tr. 198). A sample of what was described
as "black material" taken between two drums (No. 81012E) showed a PCB
concentration of 4.5 ppm (EPA Exh 10). A soil boring sample (No. 81012J)
taken in the drum area at a depth of eight feet, which was the depth of
the water table, revealed a PCB concentration of 22 ppm. The sample
from the wooden block showed a PCB concentration of 11 ppm.
13. Mr. Gilbert Silverman, partner in H&S, testified that the Thumms
complied with the condition of the offer to purchase that dumping
was to cease as soon as the buyer notified seller of intent to
close (Tr. 282, 323). He further testified that since the date of
closing, neither he nor any other agent or employee of H&S had
authorized any dumping on the property (Tr. 301). While he acknow-
ledged that he had inspected the Textile Road property once or twice
prior to execution of the offer to purchase and at least once there-
after, he denied seeing any drums on the property until June of 1983
(Tr. 319-20, 340). He explained that he had driven along the north-
south road and looked at the lake, but that foliage along either side
of the route would have made it impossible to see the drums. According
to Mr. Williams (finding 5), however, he observed Mr. Silverman's car,
a white Mercedes-Benz, proceed along the two-track north of the lake,
-<
the area where the drums were found, at least three times in the
-------
12
spring of 1973 (Tr. 576-77, 584, 587-88). He acknowledged that
Mr. Silverman had identified himself only on the third occasion and
that he could not be certain his prior observations of the Mercedes
were visits by Mr. Silverman.
14. Mr. Kenneth Mangus, identified as a caretaker (finding 9), testified
that there were barrels interspersed with sludge piles and rags and
creosote blocks in the area immediately north of the lake when he
first visited the Textile Road property in 1969 (Tr. 417, 421-22). • He
was on the property because he was told there was "good fishing" in
the lake. Thereafter, he visited the property for the purpose of
fishing six to ten times a year until 1973 when he had a back opera-
tion and was unable to work (Tr. 416, 419, 423-24). In 1974 and
1975, while recovering from his back operation, he was on the
property as frequently as four or five days a week (Tr. 424, 433).
He testified that prior to the time the drums were removed there
S-5
|| had been no change in the sludge piles (Tr. 423). In 1980, he made
Hi
H a deal with Mr. Silverman to look after the property and clean up
jj trash in exchange for hunting and fishing rights (Tr. 420, 432).
!|$ This is the reason he had a key to the gate at the Textile Road
Hfl entrance to the property, which he still possessed at the time of
Up the hearing. He testified that the gate was installed in 1974 or
1975 (Tr. 439). He described the trash dumped on the property as
consisting of household and commercial, including roofing debris and
"different things of that nature" (Tr. 420). He said the dumped
material was spread or piled past the buildings at the entrance and
SP
Kv'jjiju
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13
back to the road (Tr. 421). The piles ranged in size from one garbage
bag to as many as 15. He denied ever working on the property and
denied making the statement attributed to him in the Pollution Investi-
gation Report (finding 9) that the drums had been there as long as
he had worked there (Tr. 441). He didn't tell Mr. Silverman or
anyone else from H&S about the drums, because he assumed H&S was
aware of their presence (Tr. 444).
15. Mr. James Kovalak hauled sand and gravel from the Textile Road property
from the mid-1960s until the pit was closed (Tr. 449-50). He estimated
. that he was on the property 10 to 20 times a year during that period.
From November 7, 1973, until March 31, 1976, H&S leased the property
to Emery Garlick (Tr. 325-26; H&S Exh 15). Mr. Garlick used the
property for the storage of earth moving equipment (Tr. 294, 452-53).
In 1973, Mr. Kovalak was employed as a master mechanic by E. W. Garlick
Company (Tr. 452). He reported for work at the Textile Road property
where a cement block building close to the Textile Road entrance was
used as a shop (Tr. 453, 455). He testified that he walked around
the site the first day he was there as an employee of E. W. Garlick
and observed between 30 and 50 55-gallon drums, piles of creosoted
flooring blocks and concrete in the area immediately north of the
H lake (Tr. 455-56). He didn't recall the precise date, but asserted
Is
|| that it was cold out (Tr. 462). He examined two or three of the
;<£3
%•,*
H drums to determine if they contained anything salvageable, finding
IE! that some contained an oily substance and some a liquified tar that
;fe!
-jS]
lH had hardened (Tr. 457). He testified that the drums were basically
-------
14
on the surface and that there was no indication of spills from the
drums (Tr. 463). He did not recall any dump piles and did not know
whether the drums were still there when he was last on the property
in 1976 (Tr. 456, 458). He denied that there was any dumping on the
property, while the Garlick equipment was there, but acknowledged that
neither he nor any other employee of E. W. Garlick was there at all
times (Tr. 456, 461-62).
16. Dr. Lynn S. Fichter, presently an Associate Professor of Geology at'
James Madison University, Harrisonburg, Virginia, was employed as an
. assistant driller and rodman by Atwell-Hicks during the first half of
1973 (470-72). As an employee of Atwell-Hicks, he participated in the
site exploration work on the Textile Road property performed by Atwell-
Hicks for H&S in April of 1973 (Tr. 474-75; Map, H&S Exh 20).
1
1 Dr. Fichter's time card (H&S Exh 23) reflects that he was at the site
i
on April 10, 17, 19 and 20, 1973. The map drawn by Dr. Fichter at
the time (H&S Exh 20) bears a date of April 10, 1973 and shows dump
piles in an area to the east of the north-south road and immediately
north of the lake. Immediately to the north of this notation is a
H notation to the effect that "man on job said this area largely filled
I
|p with cinders to about 81 deep." The area east of the lake, adjoining
III the Ford Motor Company property, contained the notation "area freshly
!j| filled." Dr. Fichter did not recall talking to the individual identi-
||| fied as "man on job" (Tr. 478). He remembered a strong chemical odor
J||i coming from the dump pile area, that there were bundles of rags in
that area and wooden blocks scattered around, but did not recall
y^ " ' >.
5m£ ^
S&
&n
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15
whether or not he saw any drums (Tr. 479-80, 487). He did not recall
any indication of chemical spills and attributed the dark soil and lacl
of vegetation in the area to the presence of cinders (Tr. 490). The
Atwell-Hicks Report (H&S Exh 7) does not mention the presence of drums
and Mr. Silverman acknowledged that Atwell-Hicks did not report the
presence of any barrels (Tr. 339). Dr. Fichter did see drums in the
dump piles when he returned to the site in 1983 at the request of
counsel for H&S (Tr. 482, 486-87). He asserted that the dump piles di<
not appear to have changed from the way they were in 1973 (Tr. 480).
On his 1983 visit, he was impressed by the amount of vegetation on
the site in contrast to the situation in 1973 when "we had a pretty
clear view of just about all of the property" (Tr. 489).
17. As indicated previously (finding 8), the Thumms vacated the property
on September 30, 1973. Mr. Thumm testified that there were no drums
in the area north of the lake at the time (Tr. 519). He didn't recall
any sludge piles, rags or chemical odors being in that area when he
left (Tr. 520). Mr. Williams confirmed Mr. Thumm1s testimony that
there were no drums or barrels on the property when the property was
vacated, asserting that the only drums he ever saw on the property
were containers of crankcase oil for the machinery (Tr. 581). He
stated that when a barrel was empty, it was returned to the oil
conpany.
18. Dr. Charles Olson, a Professor of Natural Resources at the University
of Michigan, qualified as an expert in photo interpretation (Tr. 371-
75; Curriculum Vitae, H&S Exh 24). Testifying with reference to a
-------
19.
16
map of the property (H&S Exh 25) he made from aerial photographs taken
in April of 1972 (H&S Exh 26) and June of 1973 (H&S Exh 10), Dr. Olson
identified 15 cylindrical objects in an area immediately north of the
northeast corner of the lake, identified as Nos. 3 and 3A, on a plastic
overlay of the property (Tr. 376, 378-81, 383, 391, 392-93, 395, 397-98;
H&S Exh 29). He testified that the dimensions of the objects were three
feet in length and two feet in diameter, plus or minus six inches,
approximating the dimensions of a 55-gallon drum, which he determined
to be 35 and 1/2 inches in length and 22 and 1/2 inches in diameter
(Tr. 398-99). He further testified that there could have been more
such objects, hidden under vegetation, other objects or by shadows.
He indicated that the barrel-like objects did not appear on the
April 1972 photograph, H&S Exh 26 (Tr. 389, 413). Dr. Olson described
the area bounded by a dotted line surrounding the number 3 on the map
(H&S Exh 25) as an area of very dark tone, almost black on the April
1972 photograph (Tr. 386). He visited the site in late October 1984
and was asked whether he saw anything that might have produced the
dark area. He replied that there were several things such as piles
of old rags, papers, some oily material that looked like solidified
asphalt and that the ground seemed to be stained or soaked with this
similar material, giving an overall dark toned impression. The dark
ground is shown on one of the photographs he took during his October
1984 visit (H&S Exh 27, photo H).
Under cross-examination, Dr. Olson acknowledged that he could not
testify that the cylindrical objects were in fact 55-gallon drums,
ii
-------
17
but only that they were of the size to be 55-gallon drums (Tr.
408). Mr. Thumm and Mr. Williams testified that the cylindrical
objects described by Dr. Olson could have been piles of dirt (Tr.
549, 600). Mr. Williams explained that a small, five-cubic-yard
load of dirt would settle and wash-out so as to be of the approximate
dimensions of the objects noted by Dr. Olson. Dr. Olson indicated
that the only change he observed in the terrain on his October 1984
visit in the area north of the lake identified by the number 3 on
H&S Exh 25 from that in the April 1972 and June 1973 photographs
(H&S Exhs 26 and 10) appeared to be reshaping of the dump piles,
which may have resulted from removal of the barrels (Tr. 400).
20. There was one payment remaining to be made under the land contract
with the Thumms, when the drums were discovered. H&S refused to make
this payment and by letter, dated October 22, 1983 (H&S Exh 16),
informed the Thumms that its recent investigation disclosed that
the toxic substances were present on the property prior to the
closing date of the land contract. The letter stated that because
of the presence of these toxic substances H&S would not be in a
position to develop this property for its intended purpose,.?./
that H&S regarded the contract as rescinded and enclosed a quit-claim
deed conveying H&S's interest in the property to the Thumms. The
*
Thumms refused to accept this conveyance and by letter to H&S, dated
- v 2J Mr. Silverman testified that the property was not developed,
because Farmer Jack's Supermarket would not rent a store at that location
(Tr. 341).
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18
November 15, 1983 (Thumm Exh 6), counsel for the Thumms returned the
quit-claim deed marked "VOID." The letter stated that the Thumms
did not consider the contract rescinded and that they would not take
any action to rescind the contract or foreclose on the property.
21. From April 1976 to sometime in 1977, the Textile Road site was
leased to one Robert Forrester, who ran a portable welding operation
and maintained equipment on the property (Tr. 296-97, 440). Between
1979 and 1981, the property was used by Village Green Management
Company, a H&S unit, for the storage of construction trailers and
equipment (Tr. 297-98). In April of 1984, H&S arranged for the
removal of the drums from the Textile Road Property and for their
proper disposal at a cost of $5,235.00 (Recovery Specialists, Inc.'s
invoice, dated April 23, 1984, H&S Exh 17). The invoice reflects
the removal of 49 drums.
22. When asked whether any of the drums he observed on his April 12,
1983, inspection of the Textile Road site were leaking, Mr. Hall
answered in the affirmative, stating that some of the drums had visible
leaks (Tr. 11). On cross-examination, however, he could not recall
whether there was any liquid on the outside of any of the drums sampled
and denied seeing any actual flowing or discharging from any of the
drums (Tr. 60-62, 106). He stated that a sludge appeared to have run
out of one or two of the drums and solidified and as to an undetermined
number of drums, material appeared to have flowed out of the drums at
an unknown prior time (Tr. 106-07). The soil around the drums was
discolored (Tr. 64).
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19
23. Ms. Fields testified that the drums were surrounded by what she
referred to as metal filings (Tr. 175). She defined leaking as a
fluid material dripping and having evident motion and stated that she
could not say [any such motion] was present. She could not remember
whether she saw any liquid on the outside of the drums previously
sampled by Mr. Hall and could not identify any drums having leaks or
discharges (Tr. 205). She indicated that some drums were corroded
to the extent that material was in contact with the ground, but did
not recall whether it was in liquid form or a form she thought would
likely contain PCBs (Tr. 198-99).
24. Mr. Mangus initially answered in the affirmative the question of
whether any of the drums he saw on the Textile Road site in 1983
were leaking their contents on the ground (Tr. 444). Under further
questioning, however, he denied remembering that he saw any liquid
flowing or discharging from the drums in 1983 and could not positively
state that he ever saw any liquid flowing or discharging from any
of the drums (Tr. 447).
25. Dr. Sheldon Simon, coordinator of the EPA Region V PCB Program, testi-
fied as to the calculation of the proposed penalty (Tr. 243-44;
Concurrence Request For Administrative Action, EPA Exh 16). He
testified that the penalty was calculated in accordance with the
PCB Penalty Policy, 45 FR 59770 et seq., September 10, 1980 (Tr.
246). He explained that because of the potential for impact on the
environment this was considered a Level 1 or the most severe type
of violation (Tr. 247). This determination was based on the fact
that PCBs at concentrations in excess of 50 ppm were found at two
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20
locations on the property (EPA Exh 11). He further explained that
because of the potential for impact on the environment and on ground-
water, the extent of the violation was considered major (Tr. 248).
He stated that this determination was based in part on the fact
PCBs at a concentration of 22 ppm were found at a depth of eight
feet, groundwater level, indicating the possibility of percolation
and contamination. He considered that the entire area of stained -soil
shown on the sketch (EPA Exh 11) was contaminated, asserting that it
was well over 760 square feet and in the major extent category of the
matrix system (Tr. 248). He acknowledged that if the PCBs had been
placed in the soil at the site prior to 1978, no penalty would be
appropriate (Tr. 256). He further acknowledged that he did not
consider the amount or volume of PCBs in the drums in determining
the penalty (Tr. 260-61, 272-73). He had no information as to the
ability of the Thumms or H&S to pay and his only knowledge of the
culpability of the Thumms was based on ownership of the property
(Tr. 268-69). Dr. Simon stated that because of the limited solu-
bility of PCBs in water he wouldn't expect to find more than 50 ppm
PCBs in water samples.
Conclusions
1. The evidence establishes that the drums were placed on the Textile
Road property sometime prior to execution of the land contract on
May 18, 1973.
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21
2. The evidence will not support a finding that PCB soil contamination
at the site is attributable to leaks or discharges from the drums.
3. Although it is clear that H&S did not authorize any dumping on the
property after execution of the land contract, household trash and
commercial type waste were deposited on the property at various times
after the Thumms vacated the site on September 30, 1973. This
dumping appears to have been chiefly household type trash, does not
appear to have involved PCBs and does not appear to have extended
to the area north of the pond at issue here. In any event, there
is no evidence to the contrary and under the circumstances, all
authorized dumping having ceased on or before execution of the land
contract on May 18, 1973, the most reasonable inference is that the
dumping resulting in the soil contamination occurred prior to that
date.
4. A placement or disposal of PCBs which took place prior to the effec-
tive date of the regulations is not a disposal for which responsibility
under the Act attaches.
5. Notwithstanding that the contention a disposal or disposals of PCBs
occurring prior to the effective date of the regulations is in the
nature of an affirmative defense, the burden of proof of which is on
the Respondents, under § 22.24 of the Rules of Practice (40 CFR Part 22)
the burden of persuasion that the violation occurred as charged in the
complaint remains with Complainant. Under the circumstances present
here, Complainant has not discharged that burden.
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22 g
I
6. Complainant has not established the violations alleged iiplaint |:
and the complaint will be dismissed. £,
Discussion !••
i; ,
Although Mr. Mangus testified that the drums were on thcRoad
property the first time he was at the site to fish in 1969, i:luded
£-..':•
%•£
that he is mistaken as to the date. This is because the dirtthe |i.-
two-track as shown on the sketch drawn by Ms. Fields (EPA Exhnds §^
W^
through the area where the dump piles and at least two of there f^
'*?'.
found. This is rather persuasive evidence that the dump pi lams £^
were deposited after construction of the two-track. Accordir i|r
Mr. Williams, he constructed the two-track in early 1973, whiiutnm
recalled that this road was constructed in the spring of 1972,
The April 1972 aerial photograph (H&S Exh 26) doesn't appear .he
two-track and it is concluded that this roadway was construct
this photograph was taken. Some support for this conclusion led
by Dr. Olson's testimony to the effect that the April 1972 phdoes
not reflect the presence of any cylindrical, barrel-like obje
Dr. Fichter, who as an employee of Atwell-Hicks was at t
several times during the period April 10 to April 20, 1973, ais
engaged in soil exploration work in close proximity to the loere
the drums were later discovered, did not recall the presence 'urns.
The map drawn by Dr. Fichter (H&S Exh 20) reflects the presemp
piles in the drum location area and he recalled chemical odorJing
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23
piles or bundles of rags and wooden blocks scattered around. Moreover, he
had a "pretty clear view of just about all of the property" (finding 16).
Under these circumstances, the fact that he did not recall their presence
would seem to be persuasive evidence that the drums were not there. More
significant, however, is Dr. Fichter's testimony that the dump piles did not
appear to have changed between April of 1973 and the time of his August 1983
visit. This testimony is supported in part by Mr. Mangus, who stated that
there was no change in the sludge or dump piles until the drums were removed.
It is therefore concluded that the drums were on the property at the time
of Dr. Fichter's April 1973 soil exploration work. This conclusion is
consistent with the cylindrical, barrel-like objects Dr. Olson observed
in the Oune 1973 aerial photograph (H&S Exh 10) and, of course, is con-
sistent with Mr. Kovalak's testimony that he saw the drums on the Textile
Road site sometime in the fall of 1973.1/
According to Mr. Kovalak, who observed the drums on the site in the
fall of 1973, there was no indication of any spills from the drums. All
witnesses, who observed the drums on the site and who indicated that they
may have seen some active leakage or discharges, recanted this testimony
on further examination (findings 22-24). Moreover, there was no testimony
or evidence as to leakage from the two drums, samples from which showed
PCS concentrations in excess of 50 ppm. While there was evidence of
discharges from several of the drums at undetermined prior times, the sample
3/ Mr. Thumm and Mr. Williams are found to be credible, but mistaken
witnesses, who may simply have attached no significance to the drums and thus
did not recall their presence. The same may well be true of Mr. Silverman
who visited the site at least once prior to April 7, 1973 and at least once
thereafter and appears to have driven his car in the precise area where the
drums were discovered, but who denied seeing any drums on the site until
Oune of 1983.
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24
of a "black material" taken from between two drums which may have resulted
from a discharge therefrom, showed a PCB concentration of only 4.5 ppm.
No drum was nearer than 30 feet from the point where soil and sediment
samples, showing PCB concentrations in excess of 50 ppm, were taken. Thus,
the evidence does not support a finding that PCB contamination at the site
is attributable to discharges from the drums.
The record shows that permissible or authorized drumping on the property
ceased no later than the date of the execution of the land contract, May 18,
1973. The record also shows that there were instances of unauthorized
dumping after September 30, 1973, when H&S assumed possession of the property,
Although this dumping involved some commercial type waste, it appears to have
been chiefly household type trash and does not appear to have involved waste
of the type containing PCBs here concerned. Moreover, this dumping does
not appear to have extended to the stained-soil area immediately north
of the pond. In any event, there is no evidence to the contrary and the
most reasonable inference is that the dumping resulting in the soil
contamination occurred on or before the execution of the land contract
on May 18, 1973. Ms. Fields had prior experience with high PCB concentra-
tions in wooden block factory flooring and the evidence is clear that
such flooring from the adjacent Ford Motor Company plant was deposited
on the property prior to May 18, 1973. Although the wood shavings sample
collected by Ms. Fields was taken from a pile of wooden blocks some 200'
west of the drum site and shows a PCB concentration of only 11 ppm, it is
of some significance that one of the photos she took shows wooden blocks
scattered around the stained-soil area. Moreover, the photo of a portion
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25
of the stained-soil area taken by Dr. Olson in October 1984 (H&S Exh 27,
Photo H) shows a wooden block or a fragment thereof. If it be regarded
as tenuous to infer from these facts that the disposals resulting in the
soil contamination occurred prior to May 18, 1973, it would be sheer
speculation^/ to infer that such disposals occurred after the effective
date of the rule. Moreover, as pointed out infra at 31-35, the burden
of establishing the violation charged remains with Complainant and if
the inference that the disposals resulting in the soil contamination
occurred prior to the effective date of the rule be regarded as equally
probable as the inference that the disposals occurred subsequent to that
date, the decision, of necessity, would be adverse to Complainant.^./
The note at 40 CFR 761, Subpart D (1984) provides in pertinent part:
"Note—This Subpart does not require removal
of PCBs and PCB Items from service and disposal
earlier than would normally be the case. However,
when PCBs and PCB Items are removed from service
and disposed of, disposal must be undertaken in
accordance with these regulations. PCBs (including
soils and debris) and PCB Items which have been
placed in a disposal site are considered to be "in
service" for purposes of the applicability of this
Subpart. This Subpart does not require PCBs and
PCB Items landfilled prior to February 17, 1978 to
be removed for disposal. However, if such PCBs or
PCB Items are removed from the disposal site, they"
4/ It is well settled that inferences necessary to support a verdict
or judgment may not rest on mere surmise and conjecture. Kent Lumber Co.,
Ltd. v. Illinois Central R. Co., 65 F,2d 663 (5th Cir. 1933).
5/ See Ft. Smith Gas Co. v. Cloud, 75 F.2d 413 (8th Cir. 1935)
(Where proved facts give equal support to each two inconsistent inferences,
judgment must go against party upon whom rests the burden of sustaining
one of these inferences as against the other).
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26
"must be disposed of in accordance with this
Subpart. Other Subparts are directed to the
manufacture, processing, distribution in
commerce, and use of PCBs and nay result in
some cases in disposal at an earlier date than
would otherwise occur."
(See 44 FR No. 106, May 31, 1979, at 31545).
Neither the note in the initial PCB rule (43 FR No. 34, February 17,
1978, § 761.10, at 7157), nor the explanation thereof!/ specifically
provided that PCBs disposed of prior to effective date of the regulations
(April 18, 1978) were considered to be in service. This omission was
supplied by an Addendum to the Preamble (43 FR No. 149, August 2, 1978,
at 33918-19) providing as follows:
6/ The explanation at 43 FR 7151-52 provides in part:
Changes In § 761.10 Disposal of PCB's
A new section 761.10(b)(3) has been added to
the final rule to allow the use of chemical waste
landfills for disposal of soil and debris contami-
nated with PCB's as a result of a spill or from
placement of PCB's in a disposal site prior to the
effective date of these regulations. Under the
proposed rules, incineration would have been required.
This change was made to permit the use of a more
practical disposal method for the large volumes of
soil and debris, such as trash, trees, lumber, and
other rubbish, that may be involved in a .spill clean-
up operation or in removal or excavation of materials
from an old disposal site, such as a pit, pond lagoon,
dump, or landfill. This provision does not apply to
PCB liquids, slurries, industrial sludges, damaged PCB
articles, or any production wastes related to PCB
processing or manufacturing; such items must be disposed
of in accordance with Section 761.10(b)(l) or (2).
"This explanation is subject to the interpretation that disposal in accordance
with the PCB~ru1e was only required when PCBs were removed from the disposal
site.
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27
"Section 761.10(b)(3) states: "Soil and debris
which have been contaminated with PCB's as a result
of a spill or as a result of placement of PCB's in a
disposal site prior to the publication date of these
regulations shall be disposed of (i) in an incinerator
which complies with annex I, or (ii) in a chemical
waste landfill." This requirement as others, is quali-
fied by the general Note which appears at the beginning
of § 761.10. This Note specifically states that these"
regulations do not require the removal of any PCB's
from service earlier than would otherwise be the case.
However, when they are removed from service and disposed
of, disposal must be in accordance with the regulation.
PCB-containing soil and debris which have been
placed in a disposal site are considered to be "in
service" for purposes of the applicability of the Note
discussed in the last paragraph. Therefore, § 761.10
(b)(3) does not require PCB-contaminated soil or debris
landfilled prior to February 17, 1978 to be removed for
disposal. However, if such soil or debris is removed
from the disposal site, it must be disposed of in
accordance with the regulation."
The 1979 version of the Note made it clear that the Note applied to
PCBs and PCB items in addition to contaminated soil and debris. In A11 en
Transformer Company, TSCA Appeal No. 81-3 (Final Decision, March 23, 1982),
it was held that runoff or leachate from soil contaminated with PCBs as
a result of a spill which occurred prior to the effective date of PCB rule
was not a disposal which violates the requirements of the rule. Complainant
argues that the Note, properly interpreted equates "disposal sites" with
"landfills" and that it is only PCBs and PCB items landfilled prior to
February 17, 1978, that do not have to be removed for proper disposition
(emphasis supplied) (Posthearing Brief at 7). Complainant asserts that
the PCBs involved here were not landfilled, that accordingly, the Note does
not apply and that Respondents are responsible for proper disposition of
P£Bs at the Textile Road site irrespective of the time of placement.
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28
Conplainant further argues that Allen Transformer, supra, did not directly
decide whether the term "disposal site" in the Note is meant to be broader
than "landfill" and urges that to the extent dicta in that decision suggests
otherwise, it be disregarded (Id. at 8). Complainant says that even if the
Note be interpreted to exclude from the PCB disposal regulations soil
contaminated with PCBs as a result of a disposal which occurred prior to
the effective date of the regulations, the drums are fundamentally different,
It is argued that to allow drums such as those at the Textile Road site to
be excluded from the PCB disposal regulations (assuming they were placed on
the site prior to the effective date of the regulations) would remove large
quantities of PCBs from regulatory control.
Conplainant acknowledges that the Note uses the terms "disposal site"
and "landfill" interchangeably, and the attempt to limit the scope of
"disposal site" to "landfilV'Z/ is rejected. The Note simply does not
distinguish between the two terms and because, as previously pointed out,
the Note itself was amplified to clarify an ambiguity as to the intent of
the regulations, any such distinction surely would have been clearly set
forth, if intended. In Allen Transformer, supra, the Judicial Officer
rejected Complainant's argument that the broad definition of disposal in
7/ While the regulations define the term "chemical waste landfill,"
40 CFR" 761.2(e) (43 FR at 7157) and 40 CFR 761.3 (1984) (44 FR, May 31,
1979, at 31543), they do not define the term "landfill." A landfill is
defined as "a disposal of trash or garbage by burying it under layers
of earth in low ground." Webster's New International Dictionary, 3rd
Ed. 1967.
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29
the regulation,^/ which includes uncontrolled discharges, covered leaching
or runoff from spills occurring prior to the February 17, 1978, publication
date of the regulations in the following language: "However, this argu-
ment cannot be reconciled with the Agency's intention as expressed in the
Note, discussed supra, where the Agency grants a blanket exemption from the
disposal requirements for PCBs which were placed in a "disposal site" or
"landfill" prior to February 17, 1978." (Slip Opinion at 4). This language
is not consistent with the limitation of disposal site advocated by
Complainant herein and even if I disagreed with the Judicial Officer's
reading of the Note, which I do not, I would not be free to reach a
contrary conclusion.
In view of the foregoing, soil contaminated with PCBs as a result of
a disposal occurring prior to the effective date of the PCB rule is outside
the coverage of the regulation and not a violation thereof. Notwithstanding
Complainant's contention that the drums are fundamentally different, the
same ruling is applicable. It is recognized, of course, that the drums
being regarded as in service, discharges or leaks therefrom can be regarded
8/ Disposal is defined in the regulation (40 CFR 761.3, 1984) as
follows:
"Disposal" means intentionally or accidentally
to discard, throw away, or otherwise complete or
terminate the useful life of PCBs and PCB Items.
Disposal includes spills, leaks, and other uncon-
trolled discharges of PCBs as well as actions
related to containing, transporting, destroying,
degrading, decontaminating, or confining PCBs
and PCB Items.
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30
as disposals!/ for the purpose of the PCB rule. This contention,
however, no less than the leaching or runoff involved in Allen Transformer,
supra, is simply inconsistent with the blanket exemption in the Note for
PCBs placed in a landfill or disposal site prior to February 17, 1978.
Even if this conclusion were otherwise, it should be emphasized that the
drums have been on the site since at least May 18, 1973, that there is no
evidence soil contamination at the site is attributable to leaks or
discharges from the drums, no evidence of when the leaks or discharges
from any of the drums occurred, and no evidence of leaks or discharges
from drums containing PCBs at concentrations in excess of 50 ppm.
Complainant, relying heavily on Electric Service Company, TSCA-V-C-024
(Initial Decision, August 10, 1982), Final Decision, TSCA Appeal No. 82-2
(January 10, 1985), asserts that the contention PCBs were placed on the
site prior to the effective date of the regulations is an affirmative
defense, which must be proved by Respondent (Posthearing Brief at 6, 7).
Complainant also relies on the general rule that where a matter is
peculiarly within the knowledge or control of a party, the burden is upon
him to prove it (Id. at 9). Electric Service Company, supra, is, however,
clearly distinguishable and does not control here. This is because
9/ The definition of disposal did not include leaks until September 24,
1982. See 4-7 FR No. 165, August 25, 1982, at 37342 et seq. and Liberty Light
and Power, TSCA Appeal No. 81-4 (Final Decision, October 27, 1981).
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31
Respondent in that case had handled transformer oil at its facility since
1951 and discharges of oil containing PCBs were recent to the date of
inspection, clearly occurring long after the effective date of the regula-
tion, as evidenced by the fact the oil had not percolated into the soil.
Here, by contrast, there is no evidence of regular handling of PCBs and
no evidence of recent discharges of PCBs on the property.
Complainant takes the position that it established a prima facie case
by showing the disposition of PCBs (soil contamination) in excess of the
50 ppm regulatory limit. Complainant asserts that in accordance with
§ 22.24 of the Rules of Practice, Electric Service Company, supra, and the
rule that where a matter is peculiarly within the knowledge of one of the
parties, the burden is on him to prove it, Respondents have failed to
discharge their burden of proving that the disposals occurred prior to the
effective date of the regulation. If it be conceded that Complainant has
made out a prima facie case, it is, nevertheless, concluded that the
violation charged has not been established. Section 22.24 of the Rules of
Practice (40 CFR Part 22) provides:
"§ 22.24 Burden of presentation; burden of persuasion
The complainant has the burden of going forward
with and of proving that the violation occurred as set
forth in the complaint and that the proposed civil
penalty, revocation, or suspension, as the case may be,
is appropriate. Following the establishment of a prima
facie case, respondent shall have the burden of present-
ing and of going forward with any defense to the allega-
tions set forth in the complaint. Each matter of con-
troversy shall be determined by the Presiding Officer
upon a preponderance of the evidence."
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32
It is significant that the quoted rule uses the term "proving" in
connection with the establishment of the violation charged, but not with
respect to the Respondent's presentation of a defense. It is therefore
concluded that this section is a rule as to the presentation of evidence
after Complainant's establishment of prima facie case and does not change
the burden of proof which remains on Complainant at all times. While
Electric Service Company is susceptible of a contrary interpretation, the
facts in that case, as we have seen, are clearly distinguishable.
There remains for consideration the often stated rule that where a
matter is peculiarly within the knowledge of one of the parties the burden
is on him to prove it.l?_/ This, however, is considered to be loose
lanaguage and that what is actually meant is the burden of production.
See, e.g. United States v. Bull Steamship Line, 146 F.Supp 210 (S.D. N.Y.),li/
affirmed 274 F.2d 877 (2nd Cir. 1960); Herriam v. Venida Blouse Corporation,
et a! ., 23 F.Supp 659 (S.D. N.Y. 1938);!!/ Wigmore on Evidence, 3rd Ed.
10J One of the earliest statements of the purported rule is Selma,
Rome and Dalton R. Co. v. United States, 139 US 560, 35 L.Ed 266 (1891)
where the Court stated as follows: "Burden of proof lies on the person
who wishes to support his case by a particular fact which lies more
particularly within his knowledge or of which he is supposed to be cogni-
zant." The-fact at issue in that case, however, was whether plaintiff
had been paid for delivery of mail for which suit was brought by the
Confederate government, a fact essential to its case and obviously w-ithin
plaintiff's knowledge or presumed knowledge.
ll/ The Court stated: "It is often a controlling factor in deciding
whereTo throw the burden of producing evidence—and obviously it ought
to be—that the proper party to charge is he alone who could discover
the truth." (emphasis supplied) (146 F.Supp at 213).
12/ "The party who is in the best position to know the facts bears
the burden of explanation." 23 F.Supp. at 661.
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33
§ 2485 and 31A C.J.S. Evidence. §§ 103 and 110. Cf. Texas Department of
Community Affairs v. Burdine, 450 US 248 (1981) (burden of explanation after
plaintiff has established a prima facie case in a Civil Rights Act case).
Moreover, the duty of production, or of going forward with evidence, does
not change or shift the burden of proof, sometimes referred to as the
burden of persuasion, which remains with the plaintiff (Complainant herein)
at all times.il/
Here, as indicated previously, the evidence establishes that the drums
were on the site several years prior to the effective date of the regulation
and there is no showing that PCB soil contamination at the site is attributab"
to leaks or discharges from the drums. On the contrary, the most reasonable
inference is that the soil contamination is attributable to PCB disposals
occurring prior to the effective date of the regulation. It follows that
Complainant has failed to establish a violation of the rule as charged and
the complaint will be dismissed.
13/ See 29 Am. Our. 2d Evidence, § 131 which provides in part: "In
other words, where the evidence is entirely within the possession of one
of the parties to a case or where a particular fact necessary to be
proved rests peculiarly within the knowledge of one of the parties, it
is his duty to produce it or to come forward with the proof. * * * This
rule, some times referred to as the rule of convenience, is merely one
as to the procedure at the trial, and does not change the burden of
proof or free the plaintiff from the rule that he cannot invoke the
consideration of the jury [fact finder] unless there is some substantial
evidence upon which to base the essential findings in his favor."
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34
Conclusion
The complaint is dismissed.
Dated this
day of April 1985.
SprfrfcerT. Nissen
Administrative Law Judge
14/ Unless appealed in accordance with § 22.30 of the Rules of
Practice (40 CFR Part 22) or unless the Administrator elects, sua sponte
to review the same as therein provided, this decision will become the
final order of the Administrator in accordance with § 22.27(c).
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49
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't
•
•^^
UNITED STATES ENVlKO;-?-lEMTAL PROTECTION AGENCY
BEFORE THE ADMINISTRATOR
IN PE )
) TSCA-III-O57
J F Sc M COMPANY, INC. )
) INITIAL DECISION
Respondent )
1. Toxic Substances Control Act - Motions for Accelerated Decision -
Where the Respondent in his answer admits violation of all counts
in the ccrnplaint, a motion for accelerated decision on the issue of
liability properly granted.
2. Toxic Substances Control Act - Penalty Assessment - Where
Respondent demonstrates inability to pay and/or adverse effect of
penalty on ability to continue in business, the penalty mist be
adjusted in a manner consistent with the penalty policy.
3. Toxic Substances Control Act - Mitigation of Penalty - Where the
Agency's primary concern is proper disposal of PCB items and clean-
up, the penalty rray be mitigated upon Respondent's ccnpletion of such
activities.
Appearances:
James T. tteisel, Esquire
Huntington, West Virginia
For the Respondent
Martin Harrell, Esquire
U.S. Environrrental Protection Agency
Philadephia, Pejinsylvania
For the Complainant
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- 2 -
INITIAL DECISION
Preliminary Statement
Tliis is a proceeding under § 16(a) of the Toxic Substances Control Act
(15 U.S.C. 2615(a)), instituted by a corplaint issued on March 21, 1934 by the
Director of the Hazardous Waste Management Division, Region III, United States
Environ;rental Protection Agency (EPA or the Agency ), against J F & M Carjxany,
Inc., (the Respondent), a sole proprietorship owned and operated by Robart Earl
Johnson, Jr., located in Huntington, West Virginia. The complaint enumerated
six (6) counts of alleged violations of the Act for which a proposed penalty in
the amount of $83,000.00 was assessed. TV>e Respondent filed an answer on
April 19, 1934 in which it admitted the allegations in the complaint and asked
for a hearing in the matter.
By letter dated September 13, 1984, the undersigned issued a pre-hearing
letter which, among other things, directed the parties to file certain speci-
fied pre-hearing information by a date certain if the matter could not be
informally settled prior to that time. By notion dated November 20, 1984,
counsel for the Ca-rplainant sought a default order in this matter for failure
of the Respondent to file the pre-hearing responses ordered by the above-
mentioned letter. Ihe Respondent had in fact failed to respond to the require-
ments of the pre-hearing letter. By an undated letter received in my office on
December 6, 1934, the Respondent replied to the motion. The letter frcm
Mr. Johnson, who at that time was appearing pro se, stated that he wished to
contest the proposed penalty and that his failure to provide the pre-hearing
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- 3 -
iraterials v.v.s based on his nisurrlrrstArrKng of the proecvlurcs in the that
he thought a hearing was going to be hold in either HuntiiyjLon or
Wheeling, West Virginia and, therefore, no further action was required of
him prior to the hearing. Mr. Johnson reiterated his position that he
did not deny any allegations in the complaint, but advised that he did
not have the resources to dispose of the PCB items at the present time,
but he might be able to dispose of small quantities of materials over an
extended period of time. With the letter Mr. Johnson enclosed tax .
returns for the years 1980 to 1984, inclusive, and the original procure-
ment contract between himself and Appalachian Power Company, the source
of much of his PCB items.
By Order dated December 6, 1984, the undersigned advised counsel for
the Ccnplainant that he would treat the above-mentioned letter as a
response to the motion and ordered that counsel for the Complainant
examine the documents attached to the letter and advise, no later than
January 4, 1985, as to how he wished to proceed in the matter and that
the Court would defer ruling on the default motion. By letter dated
December 14, 1984, counsel for the Complainant advised that he wished the
Court to treat his heretofore filed notion for default as a motion for
accelerated decision as to liability of the Respondent and further
stated that he would be amenable to a hearing solely on the question of
the amount of the penalty and suggested Wheeling, West Virginia as the
location therefore. The Court ruled that the motion for accelerated
decision as to liability would be granted. The hearing on the penalty
would be held on February 12, 1985 in Charleston, West Virginia. A
He.aring was held on that day in Charleston at which time the Respondent
appeared, represented by James T. Meisel, attorney, Huntingdon, West
Virginia.
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- 4 -
Following the hearing, a briefing schedule vis ostal->li:.ln>l a:xl the
parties have filed initial cu>i re-ply briefs, propos<_>d fi)>Ur/js of fact
and conclusions of law.
Findings of Fact
1. Respondent is a corporation which is incorporated and does
business in the State of West Virginia.
2. Respondent constructs power centers for customers involved in
ndiiing and processing coal. The Respondent also engages in the repair
and sale of electric transformers. Respondent's facility is located
at 1632 8th Avenue, Huntingdon, West Virginia.
3. EPA personnel inspected Respondent's facility August 23, 1933.
At that tin>3, the Respondent's facility contained one PCB transformer.
Additionally, the Respondent was storing approximately 900 large, high
voltage PCB capacitors.
4. Pursuant to 40 C.F.R. § 761.4O(c) (2), the Respondent was required
to mark the 900 PCB large, high voltage capacitors placed into storage for
disposal. The inspection revealed that the Respondent had failed to mark
these capacitors with the appropriate PCB identification nark specified
in 4O C.F.R. § 761.45.
5. Pursuant to 40 C.F.R. § 761.40(a) (10), the Respondent was
required to mark the storage area containing the 900 large, high voltage
PCB capacitors with the appropriate identification mark specified in
40 C.F.R. § 761.45. The inspection revealed that the Respondent had
failed to properly mark the storage for disposal area.
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- 5 -
6. Pursuant to 40 C.F.R. § 761.40(c)(l), the Rcsjxxxient v.-as required
to mark its transformer as being a PCS trans former. The inspection
revealed that the Respondent had failed to properly mark the transformer
with the appropriate identification mark required by 40 C.F.R. § 761.45.
7. Pursuant to 40 C.F.R. § 761.60(d), any spill or uncontrolled
discharge of PCB fluid, constitutes disposal of PCBs. The EPA inspector
discovered that PCB fluid had leaked from sane of the PCB capacitors onto
the floor of the storage area. The EPA inspector took a sample of the .
PCB fluid which had leaked onto the floor and had it analyzed for PCB
concentration. Test results showed that the sarrple contained 170,000
ppm PCB. Pursuant to 40 C.F.R. § 761.60(3), the Respondent was required
to dispose of the PCB fluid in an incinerator which met the requirements
of 40 C.F.R. § 761.70.
8. Pursuant to 40 C.F.R. § 761.30{a) (l) (ii), the Respondent was
required to inspect PCB transformers stored for reuse at least once
every three months. The inspection revealed that the Respondent was
storing one PCB transformer for reuse. This transformer contained at
least 250 gallons of PCB fluid. Ihe Respondent failed to inspect this
transformer as required by 40 C.F.R. § 761.30(a) (1) (ii).
9. Under 40 C.F.R. § 761.65(b) (1), an owner or operator of a
facility used to store PCBs or PCB items designated for disposal must
provide a storage area with walls, roof and an impervious floor which
has continuous curbing at least six inches high.
10. The inspection revealed that the Respondent has stored for
disposal 900 large, high voltage capacitors in a building which lacked
a.TOof and which lacked continuous curbing.
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- 6 -
11. Pursuant to 40 C.F.R. § 761.G5(c) (5), all 1XZB articlos in storage
for disposal mast be checked at least once every 30 days for leaks. The
inspection revealed that the Respondent had not checked the 9OO PCB
capacitors stored for disposal at least once every 30 days.
12. Pursuant to 40 C.F.R. § 761.65(c) (8), PCB articles nust be dated
v'nen they are placed into storage for disposal. The inspection revealed
that the Respondent had not dated the 900 PCB capacitors v?nen they were
placed into storage for disposal.
13. Under 40 C.F.R. § 761.180(a), each owner or operator of a facility
using or storing at one time at least 45 kilograms (99.4 pounds) of PCBs
contained in PCB container(s) or one or more PCB transformers, or 50 or
more PCB large high or low voltage capacitors must maintain records on
the disposition of PCBs and PCB items. These records shall form the
basis of an'annual document prepared for each facility by July 1 covering
the previous calendar year.
14. The inspection revealed that the Respondent had failed to prepare
annual documents for the 1978, 1979, 1980, 1981 and 1982 calendar years.
15. EPA contractors sampled fluid vfriich had leaked frcro PCB large,
high voltage capacitors in the storage area in September 1983, and had the
samples analyzed for PCB contamination. Laboratory analysis revealed PCB
concentrations in spilled fluid of up to 170,000 parts per million (ppm.)
PCB. Laboratory analysis of soil samples taken outside the facility
showed PCB concentrations of 700 and 660 ppm respectively.
16. EPA contractors took "soil samples in July 1934 from" locations
near the facility's main entrance. Laboratory analysis of these samples
revelaed PCB concentrations of 1,300 ppn\ and 14O,OOO ppm.
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- 7 -
Discussion
As indicated above, the Respondent admittted all of the allegations
in the carplaint and pursuant to my previous Order had been adjufged to
have violated the counts described in the coiplaint. The Hearing held
in West Virginia was for the sole purpose of determining the appropriate
civil penalty to be assessed in this case. -
The complaint broke down the proposed penalties as follows: Count I-
violation of marking requirements, $15,000.00; Count II-violation of •
narking requiremBnts, $10,000.00; Count Ill-violation of disiX>sal require-
ments, $5,000.00; Count IV-violation of use requirements, $13,000.00;
Count V-violation of storage requirement, $15,000.00; and Count VT-
violation of recordkeeping requirements, $25,000.00.
In response to my pre-^earing letter, the Ccrrplainant filed a state-
ment describing in general terms how the penalties were determined and
stated that the penalty was calculated using the penalty matrix contained
in the PCB penalty policy. Since the threat exists that direct human
contact with the PCBs could occur and that there already "has been some
migration of PCBs, EPA believed that the nature, circumstances, extent
and gravity of these violations were very significant. The Respondent is
storing a considerable amount of PCB items on his property and there has
been significant contamination of the buildings, with limited contamina-
tion outside the facility.
The Complainant's pre-hearing filing stated:
"EPA did not adjust the proposed penalty in the corrplaint based on
the Respondent's ability to pay, the effect on his ability to stay in
business, history of prior violations, the degress of culpability and
other matters as justice may require. ffcwever, as I have indicated
previously, EPA's primary concern is securing the disposal of the PCB
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- 8 -
itcr.s' and clcan-up of the property. KPA is willing to mitin.tte the penalty
in exchange for disposal and clcan-up. B'jvever, Mr. Jdlinson has indicated
that he can not pay for such remedial action. EPA is willing to rtOuce the
penalty based upon a showing of the effect the payment will have upon the
Respondent including his ability to ccnply with the PCB regulations and to
obtain disposal and clean-up." . '•••'. .
At the Hearing only two witnesses testified, one for each party.
The witness for the Complainant was Marilyn Bacarella, an EPA employee,
who calculated.the proposed penalty_set forth in the complaint.
Ms. Bacarella's testimony consisted of her going through the various
counts of the ccrnplaint and describing how she arrived at the proposed
penalties for. each of such counts using the above-mentioned PCB p3nalty
policy. Her testimony indicated that the initial proposal that she made
to the Office of Regional Counsel differs somewhat from the breakdown
described in the ccrnplaint but that the total amount is the same as she
originally had proposed. The main difference between the witness*
proposal and what the ccrnplaint ultimately suggested was in the area of
failure of the Respondent to prepare annual documents for the years 1978,
1979, 1980, 1981 and 1982. The witness originally proposed a penalty of
$10,000.00 for each of the four years involved and arrived at a penalty
of $40,000.00 for the recordkeeping violation. She then added 1983 to
this total, adding another $10,000.00 making the recordkeeping penalty
$50,000.00. However, to mitigate the impact of such a high recordkeeping
penalty, the Agency decided to reduce this penalty to $25,000.00. The
other change was for the storage for disposal violation and originally
that figure was sore^hat lower and upon re-evaluation of this violation
and considering that there were 900 capacitors involved, the penalty was
determined to be $15,000.00.
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- 9 -
-I have no particular quarrel with the v.-ay in which the /Vjcncy
calculated the proposed penalty as it appears in the ca-rplaint, 'hcvover,
as indicated above, the Agency did not consider the Respondent's ability
to pay or the effect of the penalty'on its ability to stay in business.
The income tax returns provided by the Respondent indicate that its gross
sales for the years in question are as follo-s's: 1980 - $116,734.00; .
1981 - $179,530.00; 1982 - $193,864.00; and 1983 - $60,133.00. The penalty
policy suggests that when there is a claim of inability to pay, proffered
by the Respondent, coupled with documentary evidence to support such
claim, the total sales for the last four years be averaged and multiplied
by four per cent thus arriving at a figure which the policy indicates,
represents a penalty with which the Respondent should be able to pay. In -
this case, the gross annual sales total $550,261.00. When divided by 4
this equals $137,565.00 as an average and when this is multiplied by four
per cent, we arrive at a figure of $5,502.00.
A thorough discussion of this portion of the penalty policy appears
in the case of Rocky Mountain Prestress, Inc., and AERR.OO., Inc., TSCA
Decision PCB-83-017, issued on August 23, 1984, at pages 17, 18, and 19.
In his post-hearing briefs, counsel for the Respondent argued that
his client Trade a good-faith effort to ccrtply with the regulations and
,in fact, had spent $8,000.00 or $9,000.00 in an effort to conply with
certain portions of the regulations subsequent to the issuance of the
complaint. This expenditure had to do with placing a roof over the area
where the PCB materials were stored and laying down a wooden barrier in
association with approved absorbent materials in an attempt to contain any
spilled PCBs that the inspector found to be present on the Respondent's
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- 10 -
property. I am not particularly inpressod with the Respondent's of foi-t3
to caiTply with the regulations since he had obtained these materials in
1974 and although he admitted in his testimony that he knew that there
were certain restrictions on the use and handling of the PCB containing
materials, he made no effort to determine from any reliable source exactly
what these requirements were. He instead merely relied on sane vague
conversations he had with representatives of the power corrpany. from whom
he obtained most of the articles in question. He made no effort to obtain
any of the regulations relative to the storage, handling or use of FCB
articles prior to the inspection by EPA. The regulations as they apply
to PCBs were published in the Federal Register and such publication
constitutes legal notice to the world at large of the requirements con-
tained therein and the Respondent is charged with the constructive notifi-
cation and knowledge of the requirements of said regulations. The fact
that he waited until the violations were brought to his attention by the
EPA inspector prior to taking protective measures, does not in my judge-
ment demonstrate the presence of good faith or due care in the handling
of what everyone now recognizes to be a dangerous and toxic material.
Under the circumstances I see no rationale for adjusting the proposed
penalty based on good faith efforts on the part of the Respondent.
As a matter of fact, one could argue that his cavalier attitude toward
*
the handling of these toxic materials should result in an increase in
the proposed penalty, rather than a decrease.
Further discussion of the proposed penalty in regard to an individual
assessment of each of the violations would in my judgement be a useless
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: - 11 -
enterprise given the clear mandate of the penalty policy r.s it applies to
the ability to pay on the part of a given Respondent. My position in this
regard is set forth in the Rocky Mountain case, supra, on page 19 of the
decision where it is stated that: • • -
"Although the' court is not absolutely bound by any published penalty
policy of the Agency in assessing an appropriate penalty in these cases,
should the court deviate from the terms thereof it must explain the
reasons for such differences. In this particular case, I am unable to
establish a creditable argument for increasing the assessed penalty
against AERR.CO. given the clear language of the penalty policy and the
absence of any other factors which would argue against its application in •
this case. Unlike irost of the numbers suggested by this penalty policy,
which involve a great deal of subjective evaluation, the 'ability to pay'
portion of the policy is totally objective in that it requires only the
application of arithmetic to arrive at a given figure. Since I have no
reason to suspect the figures provided by AERR.CO. in response to the
court's post-hearing order and the clear, unequivocable language of the
penalty policy applicable to these proceedings, I nust reduce the
assessed penalty applicable to AERR.CO. fron $20,000.00 to $8,990.00,
based on its inability to pay."
Based upon the above discussion, I have no alternative but to reduce
the proposed penalty of $83,000.00 to $5,502.00.
In arriving at this conclusion, I have carefully considered the
entire record in this case, consisting of the transcript, the exhibits
and the briefs of all the parties. All contentions of the parties
presented have been considered, and whether or not specifically mentioned
herein, any suggestions, requests, etc., inconsistent with this Initial
Decision are denied.
ORDER1/
Pursuant to 16(a) of the Toxic Substances Control Act (15 U.S-C.
2615(a)), a civil penalty of $5,502.00 is hereby assessed against— - --
Respondent, J F & M Conpany, Inc., for the violations of the Act found
herein.
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- 12 -
Given the Complainant's willingness to mitigate the proposed penalty
in exchange for securing disposal of the PCB itars and clean-up of the
property, it is further ordered that the penalty herein assessed may be
reduced to zero if the Respondent will clean-up the .subject site and
properly dispose of the FCB items in accordance with a protocol to be
prepared by the Agency, consistent with the requirements of the Act and
the; regulations promjlgatcd pursuant thereto. Such clean-up and disposal
shall be carmenced within sixty days of the date of the preparation of the
protocol and certified to by the Conplainant. Failure to acccnplish such
clean-up and disposal shall result in the assessment of the full $5,502.00
penalty herein estabished against said Respondent. Should the Respondent
fail to ccnply with the conditions set forth herein within the time periods
established, payment of the full anount of the civil penalty assessed
shall be made within sixty days of service of the final order upon
Respondent by forwarding to the Regional Hearing Clerk, a cashiers' check
or certified check payable to__tJie__United States of America.
Ihotes'B. Yos£
Administrative Law Judge
EATED: May 20, 1985
^J Unless an appeal is taken pursuant to § 22.30 of the interim rules of
practice, or the Administrator elects to review this decision on his own
notion, the Initial Decison shall become the final order of the
Administrator. (See § 22.27(c)).
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UNITED STATES
ENVIRONMENTAL PROTECTION AGENCY
BEFORE THE ADMINISTRATOR
In the Matter of
Weed Heights Development Co.,
Docket No. TSCA-09-84-0010
Application for Attorneys' Fees
and Expenses Under the Equal
Access to Justice Act.
Equal Access To Justice Act. Failure to provide net worth
documentation required by 40 C.F.R. 17.12 pursuant to Order
provides justification for entry of a Default Order result-
ing in dismissal of application for attorneys' fees.
Appearances:
Patrick V. Fagan, Esquire
Mike Soumbeniotis, Esquire
Allison, Brunetti, MacKenzie, Hartman,
Soumbeniotis & Russell, Ltd.
P. 0. Box 646
Carson City, NV 89702
Counsel For Respondent
David M. Jones, Esquire
Office of Regional Counsel
U. S. EPA, Region IX
211 Fremont Street
San Francisco, CA 94105
Counsel For Complainant
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DEFAULT ORDER*
This proceeding arises from an application by Weed Heights Development
Company (Weed Heights or Applicant) for attorneys' fees and expenses pursu-
ant to the Equal Access to Justice Act (EAJA), (5 U.S.C. 504) and the
Environmental Protection Agency's (EPA) implementing regulations, 40 C.F.R.
Part 17.
The application results from a Complaint issued by EPA on January 30,
1984, charging Weed Heights with violations of the Toxic Substances Control
Act (15 U.S.C. 2601, et seq.) involving inspection/use conditions, inade-
quate marking, improper storage and inadequate recordkeeping of PCB trans-
formers. VJeed Heights answered, denying liablity in that the six transformers
referenced in the investigative report were never owned by Weed Heights.
Exhibits attached to the Answer provided evidence that the said transformers
had been sold or transferred by Anaconda Minerals Company, the former owner
of the Weed Heights property and the transformers, prior to Weed Heights'
acquisition of the property in December 1982.
Thereafter, on June 6, 1984, Complainant EPA filed Motion For Leave
To File First Amended Complaint. The motion was granted and, in effect,
added two additional Respondents, Mesaba Service and Supply Co., and
Martin Electric Co. Again, in its Answer, Weed Heights asserted the
same defense of nonownership.
Subsequently, Weed Heights filed Motion To Dismiss And/or For Acceler-
ated Decision citing lack of ownership or interest in the transformers and
referencing documentary proof thereof.
*This Default Order shall constitute the Initial Decision in this Proceed-
ing. 40 C.F.R. 22.17(b)
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- 2 -
Complainant's Response to said Motion To Dismiss was dated June 22,
1984. Rule 22.16(b) of the Consolidated Rules of Practice require that a
party's response to any written motion must be filed within ten (10) days
after service of motion. Failure of Complainant to comply with this Rule
formed one of the bases upon which the Motion To Dismiss was granted.
Sec. 22.20 of the Rules of Practice provides that:
The Presiding Officer, upon motion of the
respondent, may at any time dismiss an action
without further hearing or upon such limited
evidence as he requires, on the basis of fail-
ure to establish a prima facie case or other
grounds which show no right to relief on the
part of the complainant.
Respondent Weed Heights provided documentary proof that it does not
own or have any interest in the transformers which are the subject of this
Complaint.
Complainant's response to said motions states that the inspection
report filed by the EPA field investigators records no disclaimer of title
to the transformers or responsibility for same by Mr. Darrell W. Johnson
on behalf of his employer or principal, Weed Heights Development Company.
And that this, among other things, leads to the assumption that title was
still in Weed Heights. The documentary evidence submitted by Respondents
nullifies this assumption.
Complainant states that the purpose of the First Amended Complaint
was to determine "just who is the owner of this personalty and where does
the responsibility for compliance with TSCA repose." The Order Granting
the Motion to Dismiss states that the forum for that determination is by
means of a more thorough investigation and not in a formal hearing.
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- 3 -
And further, the fact that the transformers were located on the
premises of Weed Heights does not place liability upon V.'eed Heights, especi-
ally in view of the arrangements made between Mesaba Service and Supply Co.
and Martin Electric Company, the subsequent owners of the transformers,
to remove them from that location. Complainant did not appeal the Order
Granting Motion To Dismiss.
Complainant filed a Motion To Dismiss the application for attorneys'
fees stating in part, as follows:
"Section 17.12, Net Worth Exhibit, provides in pertinent part as
follows:
(a) Each applicant. . .must submit with its application
a detailed exhibit showing its net worth at the time the pro-
ceeding was initiated. . . The exhibit may be in any form
that provides full disclosure of assets and liabilities of the
applicant and any affiliates and is sufficient to determine
whether the applicant qualifies under the standards of 5 U.S.C.
The application submitted by Weed Heights Development Company contains
references to the affidavits of Don H. and Joy Tibbals which are apparently
intended to satisfy the provisions of Section 17.12(a) cited above. The
affidavits attached to the application make reference only to the net worth
of Weed Heights Development Company at the time the proceedings were initi-
ated and there is no "detailed exhibit" which will meet the requirements of
the regulation cited above.
The Court agreed and in Order dated March 5, 1985, advised Respond-
ent:
The information provided in the application and affidavits
is not sufficient to determine the qualification of Weed
Heights for an award. In order to give consideration to this
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- 4 -
application, the provisions of 40 CFR 17.12 must be fulfilled.
This information shall be filed with the Regional Hearing
Clerk no later than March 27, 1935.
No response having been received from Respondent to this Order an
Order To Show Cause l/hy Default Order Should Not Be Issued was filed
May 2, 1985, requiring the parties to file responses thereto no later than
May 21, 1985. Respondent did not submit a response.
It is therefore ordered that the application for attorneys' fees and
expenses under the Equal Access To Justice Act filed by Respondent in this
proceeding is dismissed with prejudice for failure to submit the net worth
documentation required by 40 C.F.R. 17.12 pursuant to Order.
It is so ordered.
Dated:
Edward B. Finch
Chief Administrative Law Judge
Washington, D. C
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CERTIFICATION
I hereby certify that the original of this Default Order was hand-
delivered to the Hearing Clerk, U. S. EPA, Headquarters, and three copies
were sent by certified mail, return receipt requested, to the Regional
Hearing Clerk, U. S. EPA, Region IX, for dissemination pursuant to 40
C. F. R. 22.27(a).
B. Soisvert
Legal Staff Assistant
n * .. -
Dated:
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51
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
BEFORE THE ADMINISTRATOR
In the Matter of
Fremont City Schools,
Respondent
Docket No. TSCA-V-C-264
CO
Toxic Substances Control Act - Friable Asbestos - Containing Materials
in Schools - Substantial Compliance - Determination of Penalty - Where
evidence indicated that purpose of asbestos-in-schools rule (40 CFR Part
763, Subpart F) had been substantially served, penalty determined in
accordance with TSCA Civil Penalty System (45 FR 59770) and guidance there-
under was determined to be inappropriate and independent determination of
penalty was made.
Appearance for Complainant: James M. Thunder, Esq.
Assistant Regional Counsel
U.S. Environmental Protection Agency
Region V
Chicago, Illinois
Appearance for Respondent: Thomas G. Dent, Esq.
Seyfarth, Shaw, Fairweather & Geraldson
Chicago, Illinois
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Initial Decision
This proceeding under § 16(a) of the Toxic Substances Control Act
(15 U.S.C. 2615(a)) was commenced by the issuance on September 11, 1984,
of a complaint by the Director, Waste Management Division, U.S. EPA,
Region V, Chicago, Illinois, charging Respondent, Fremont City Schools,
Fremont, Ohio with violations of § 15 of the Act (15 U.S.C. 2614) and regu--
lations promulgated thereunder, 40 CFR Part 763, Subpart F.I/ Specifically,
Respondent was charged with failure to maintain records required by 40 CFR
§ 763.117(a)(3) and § 763.114, and failure to comply with the warning and
notification provisions of § 763.111(a) and (d). A penalty of $1,300 for
each of five separate counts was proposed for a total of $6,500.
Respondent answered, alleging, inter alia, that "we" considered Respon-
dent was in full compliance with the regulations because of a workshop con-
ducted by the Ohio Department of Education and EPA personnel, that the term
"administrative office" in the regulations was interpreted as the school
I/ Section 15, Prohibited Acts, of the Act (15 U.S.C. § 2614) provides
in pertinent part:
It shall be unlawful for any person to--
(1) fail or refuse to comply with (A) any rule promulgated
or order issued under section 4, (B) any requirement prescribed
by section 5 or 6, or (C) any rule promulgated or order issued
under section 5 or 6;
* * *
•
The rules here concerned were promulgated under Section 6.
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system's Central Office and that when these matters were brought to its
attention by the inspection, Respondent immediately proceeded to comply
prior to receipt of the complaint (letter with enclosures from Kent R.
Watkins, Superintendent of Schools, dated September 27, 1984). Respondent
requested that the proposed penalty be waived as that sum would be helpful
in the purchase of textbooks and other necessary educational supplies.
By letter, dated January 25, 1985, counsel for Respondent informed
the ALJ that the parties were unable to resolve the matter and that
Respondent admitted there were technical reporting violations of the Act.
The letter stated, however, that these violations were due to misinforma-
tion or insufficient information received by Respondent's representative at
a state-run seminar and argued that the steps Fremont had taken were equiva-
lent to those technically required and amounted to substantial compliance
with the Act. Counsel stated that Respondent considered the fine proposed
in the complaint and in Complainant's final settlement offer excessive and
that Respondent wished to contest it. The letter requested that the review
(decision) be based upon documention and written memoranda as Respondent was
without available funds to pursue this matter at a hearing.
By letter, dated March 5, 1985, the ALJ allowed the parties until
April 5, 1985, to submit any additional evidence, such as affidavits or
other documents, which they contended should be considered in determining
the amount of the penalty and any arguments the parties wished to make in
that regard. Complainant submitted documents and argument under date of
April 4, 1985, while counsel for Respondent confined itself to argument
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(letter, dated April 10, 1985). Complainant availed itself of the right to
file a reply memorandum (letter, dated April 17, 1985), but Respondent has
elected to stand on the arguments and documents previously submitted.
Based on the entire record including the arguments of the parties, I
find that the following facts are established:
Findings of Fact
1. Respondent, Fremont City Schools, Fremont, Ohio, is a Local Education
Agency (LEA) as defined in 40 CFR § 763.103(e).
2. On July 18, 1984, Respondent's facilities were inspected by an authorized
representative of the U.S. EPA to determine compliance with regulations
concerning Friable Asbestos-Containing Materials in Schools (40 CFR Part
763, Subpart F). The LEA presented EPA Form 7730-1 "Inspection for
Friable Asbestos-Containing Materials," signed by its Supervisor of
Buildings and Grounds on June 15, 1983, as a summary of its compliance
efforts. This document reflects, inter alia, that nine schools have been
inspected for friable materials in accordance with 40 CFR § 763.105, and
that two schools have friable asbestos materials totaling 100,300 square
feet.
3. The inspection revealed that at Fremont Junior High and Stamm Elementary
Schools, Respondent did not have on file at e'ach school a certified state-
ment indicating the absence of friable asbestos materials as required by
40 CFR § 763.117(a)(3) (Inspection Report, Complainant's Exh 1).
-------
4. At Atkinson Elementary, Fremont Ross High and Washington Elementary
Schools, LEA records indicated the presence of friable materials. The
friable materials at Atkinson Elementary School contained less than 1%
asbestos and were not asbestos-containing materials as defined by 40
CFR § 763.103(c). The inspection revealed that laboratory reports of
analyses of these materials, including, inter alia, an estimate of the
percent of asbestos content, and a diagram, blueprint or written
description identifying the locations and approximate areas in square
feet of friable materials and other records were not maintained at
Ross High and Washington Elementary Schools as required by 40 CFR §
5. The inspection further revealed that Respondent had failed to post in
the primary administrative and custodial offices and faculty common
rooms at Fremont Ross High School and Washington Elementary School the
>
"Notice to School Employees" (EPA Form 7730-3) as required by 40 CFR §
763.111(a). Respondent had also failed to directly notify parents of
its pupils of the results of inspections and analyses of friable
absestos materials at Fremont Ross High School as required by 40 CFR
§ 763.111(d).
6. A newspaper, the Fremont News Messenger, published articles concerning
the presence of asbestos in Fremont schools on September 9, 1980,
April 29, 1981 and September 2, 1982 (Exhs G, Y-l and Y-2). At Fremont
Ross High and Washington Elementary Schools a "Notice to Employees
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and Parent-Teacher Associations" of the presence of asbestos, dated
Oune 16, 1983, and a "Guide for Reducing Asbestos Exposure" (EPA Form
7730-2) were distributed to employees with paychecks on June 17, 1983
(Exhs M and N). There is no parent-teacher association (PTA) at
Fremont Ross High School. A school calendar indicating the presence
of asbestos was distributed to every family having students in Fremont
Ross High School at a date not certain from the record (Exh H). A
"Notice to School Employees" (EPA Form 7730-3) was posted in the
entrance to this school at the time of the inspection. A November 198A
Ross High School newsletter (Exh BB) informed students and parents that
all ceilings at this school, except the gym, industrial arts, ag shop
and kitchen are constructed of material containing 35% asbestos fibers.
7. At the Washington Elementary School, the parent-teachers association
(PTA) was notified in writing of the presence and location of friable
asbestos-containing materials on Oune 21, 1983 (Exh VI). Memoranda from
Respondent's Supervisor of Buildings and Grounds (Exhs Z and AA) reflect
that he was of the opinion the deadline for compliance with the EPA
asbestos in schools regulation was Oune 27 or 28, 1983.2/ /\ "Notice to
School Employees" (EPA Form 7730-3) was posted in the lobby at the time
of the inspection (Inspection Report at 4).
y The regulation was issued on May 27, 1982 (47 FR 23360) and required
compliance with all portions of th-e rule by May 27, 1983. It is noted, how-
ever, that the guidance on penalties, "Assessing An Administrative Penalty"
(Complainant's Exh 3), refers to a deduction from the amount of the penalty
.for expenditures in abating or controlling friable asbestos materials and
states in pertinent part: The deduction should not exceed 80% of the penalty
if the LEA has not notified the PTA (or parents) and school staff of any
asbestos hazard remaining in the school after Oune 28, 1983. (An SWC could
allow remission of the remaining 20% when the proper persons are notified.)
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8. Following the inspection, Respondent proceeded immediately to file
certificates to the effect that Fremont Junior High and Stamm Elemen-
tary Schools had been inspected and did not have any friable materials
containing 2% or greater asbestos.A/
9. The undated certificate for Atkinson Elementary School is to the effect
that this school has friable materials containing less than 1% asbestos
(Exh C-l). Samples and analyses upon which this determination is based
were taken and conducted in June 1983 (Exhs D-2-D-4). Following the
EPA inspection, Respondent filed in the administrative office of this
school a sketch showing the extent of and percent of friable materials
(Exh D-l) and an undated certificate to the effect that the requirements
of the regulation relative to "Asbestos Containing Materials in Schools
Identification and Notification" had been satisfied at this school (Exh
E).
10. Samples taken from the reading room and a classroom at Washington Eleme?
tary School and from Classroom Mos. 18 and 74 and the center hallway ne,
the cafeteria at Fremont Ross High School revealed 35% asbestos (Microb
3/ Respondent's undated Exhibits A-.l and A-2, B-l and B-2. While the
certificates indicate the schools do not have any friable materials containi
2% or greater asbestos, the regulation defines "asbestos-containing material
as any material which contains more than 1 percent asbestos by weight (40 CF
§ 763.103(c)). A memorandum from Respondent's Supervisor of Buildings and
Grounds, dated June 13, 1983, indicates that he was informed at a workshop
conducted by the Ohio Department of Education in Toledo on May 26 not to wor
about EPA regulations if laboratory results show under 2% asbestos (Exh AA).
The Interim Method of the Determination Of Asbestos In Bulk Samples (Polari;
Light Microscopy) (40 CFR 763, Subpart F, Appendix A) indicates that no date
for measuring accuracy and precision are currently available and that in del
mining percent asbestos "values reported should be round to the nearest perc
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8
Laboratories' Certificate of Analysis, dated June 20, 1983). The undated
certificate for Fremont Ross High School (Exh J-l) indicates that friable
asbestos is in ceilings at all areas except industrial arts, gymnasium
and agriculture shop. Following the EPA inspection, Respondent proceeded
to post the Notice to School Employees (EPA Form 7730-3), which previ-
ously had been posted only in the lobbies or entrance of these schools,
in the administrative offices, faculty lounges, custodial offices and
boiler rooms at Fremont Ross High and Washington Elementary Schools.
11. Following the EPA inspection, Respondent proceeded to file in the
administrative offices at Frenont Ross High and Washington Elementary
Schools sketches showing extent and percent of friable asbestos materials
(Exhs J-3 and S). Respondent also proceeded to establish and maintain
in the administrative offices at these schools "A Guide for Reducing
Asbestos Exposure" (EPA Form 7730-2), a copy of "Asbestos-Containing
Materials in School Buildings," Parts 1 and 2 (EPA No. 000090) and state-
ments that the requirements of the rule have been satisfied (Exhs N, 0,
V, W and X)
12. It appears that the Sandusky County Health Department made a survey of
Ross High School for the presence of asbestos on July 17, 1980 (memoran-
dum, dated September 10, 19R2, Exh Z) and that Respondent made additional
inspections of other buildings in July and August of 1980. These surveys
resulted in a finding of asbestos in the South Wing of Atkinson School,
in the reading room and one classroom at Washington School and in all
-------
areas of Ross High School except industrial arts, gymnasium and
agriculture shop. Additional samples were taken from Atkinson and
Washington Elementary Schools and Fremont Ross High School on June
20, 1983, resulting in the asbestos content determinations previously
mentioned (finding 10). Respondent appears to have had a program for
the prompt repair of damaged areas containing asbestos since the sum-
mer of 1980.A/ Respondent also appears to have been informed by the
State Department of Education and the local Board of Health that "(s)o
long as no damage [to areas containing asbestos] occurs, no harm from
asbestos fiber can occur" (Exhs I and AA). The latter exhibit indi-
cates that in addition to the information previously described as having
been imparted at the workshop in Toledo conducted by the Ohio Department
of Education (note 3, supra) attendees were instructed that "the only
action we must take to comply with EPA regulations is to identify build-
ings having friable building materials. (Friable means - 'easily
A/ Memoranda,'dated September 10, 1982 and June 13, 1983, Exhs Z and
AA. The former exhibit states that two restroom ceilings in the Atkinson
School were replaced in the summer of 1980 and that a portion of the south
hallway ceiling was repainted in 1978. The memorandum further states that
all asbestos ceilings at Ross High were repainted in 1977 and that these
buildings are inspected each summer and damaged areas immediately repaired.
The memorandum of Oune 13, 1983, referring to Atkinson, Washington and Ross
High Schools, states that to date we have repaired any damaged areas and all
"ceilings have been painted during the past five years. The newspaper article
of April 29, 1981 (Exh y-2), reports that S798 was spent in replastering
restroom ceilings at Atkinson and that asbestos in ceilings was removed
prior to the plastering.
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10
crushable by hand pressure1 — even if surface coated with paint.)
We must also notify the employees and P.T.A. p_r_ parents by June 27,
1983. "I/
13. On March 26, 1984, Microbac Laboratories made an air test for possible
asbestos fibers at Ross High and Washington Elementary Schools (memo-
randum, dated March 26, 1984, Exh BB). The samples were conducted
while school was in session and resulted in a determination of 0.024
fibers per cubic centimeter (main office area) at Ross High and 0.029
fibers per cubic centimeter (reading room) at Washington Elementary
School. The cited memorandum indicates that most of the fibers appeared
to be cellulose and that under present standards, EPA believes that air
is safe up to 2.0 fibers per cubic centimeter.
5/ Describing further steps intended for compliance, the cited memo-
randum provides:
We plan to take the following action in order to comply with the
EPA regulations before the June 27, 1983 deadline:
- To post the EPA Form 7730-3 Notice to School Employees
in Atkinson, Washington and Ross High School. (See Copy
A attached.)
- Also, distribute the EPA Form 7730-2, A Guide for
Reducing Asbestos Exposure to all employees in buildings
involved. (See Copy C attached.)
- Notice mailed to parent-teacher association. (See Copy C
attached.)
- Complete the necessary forms and file as required with
the EPA and the State Department of Education.
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11
14. The proposed penalty was determined in accordance with the TSCA Civil
Penalty System (45 FR 59770, September 10, 1980) and guidance issued as
to the application of the policy to the asbestos in school regulation
(Complainant's Exhs 2 and 3). In applying the matrix in the penalty
policy (45 FR at 59771), the guidance indicates that the "extent of the
violation," i.e., amount of potential risk to human health for all vio-
lations of the asbestos in school regulation, is in the significant
category. Complainant determined that the circumstances of the viola-
tion," or the probability that the violation has impaired the ability
of the Agency and the public to assess the health hazard involved, was
low range or Level 6. Level 6 violations are those where the LEA has
made a good faith effort to comply with the rule, but has fallen short
of full compliance. Application of these principles and the matrix
system resulted in a proposed penalty of $1,300 for each of the five
counts in the complaint.
5_/ (contd)
In addition, we plan to do the following:
- To instruct maintenance personnel with important points
when working in these buildings.
- Continue to monitor all ceilings in these buildings for
physical damage and repair any damaged area as soon as
possible.
- Continue to cooperate with the EPA and local Board of
Health.
- Continue to paint these ceilings with latex paint when
decorating or after any repair.
- Continue to inform the Board, Superintendent, employees
and P.T.A. of any changes in regulations and procedures.
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12
Conclusions
1. The record reveals that the purpose of the asbestos-in-schools rule
(40 CFR Part 763, Subpart F), i.e., notification of those exposed to
asbestos, has been substantially served.
2. The penalty calculated by Complainant in accordance with the guidance
on Assessing An Administrative Penalty appears to make no allowance
for the foregoing conclusion and is inappropriate.
3. An appropriate penalty for the violations herein found is the sum of
$1,600.
Discussion
The findings support, and Respondent concedes, that there were viola-
tions of the Act and regulations (40 CFR Part 763, Subpart F). Accordingly,
the only matter for determination is the amount of an appropriate penalty.
In making this determination, I am required to consider, but am not bound
by civil penalty guidelines issued under the Act (40 CFR § 22.27(b)).
The proposed penalty appears to have been calculated in accordance with
the TSCA Civil Penalty System (45 FR 59770, September 10, 1980) and guidance
for "Assessing An Administrative Penalty" (note 2, supra). The guidance
indicates that all violations of the asbestos-in-schools rule are placed in
the significant category for the purpose of determining the extent of the
violation, i.e., amount of potential risk to human health, and applying the
matrix in the TSCA Civil Penalty System (45 FR 59771). Because of this fact
and the fact that all violations were placed in the low range (Circumstances
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13
Level 6), the result is that an identical penalty ($1,300) is being assessed
for the violations at each school. The inescapable conclusion is that the
penalty for the more serious violations (Fremont Ross High School) is too
low or that for the least serious violations (Fremont Junior High and Stamm
Elementary Schools) is too high. Because the purpose of the rule, i.e.,
notification of those exposed to asbestos has been substantially served, it
is my conclusion that a penalty determined in accordance with the guidance is
i nappropri ate.
Anong the factors § 16(a)(2)(B) of the Act requires the Administrator
to consider in determining the amount of the penalty are the "nature, circum-
stances, extent and gravity of the violation or violations." The purpose of
the asbestos-in-schools rule is that persons be notified of exposure to
asbestos so as to avoid or reduce the risk of such exposure. The most serious
violation from the point of view of gravity is the failure to notify the
parents of pupils directly of the results of inspections and analyses of
friable materials at Ross High School, there being no parent-teacher organi-
zation at this school. The reason, of course, is that such failure makes it
more likely that the purpose of the rule, notification of asbestos exposure,
will be frustrated. The extent of asbestos-containing material at Ross High
School makes it unlikely that one could attend or work at this school with-
out exposure to areas containing asbestos. Consequently, the failure to have
on file at the administrative office of this school the laboratory reports
and a diagram or blueprint showing asbestos and sampling areas is unlikely to
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14
have increased the potential risk to human health. Likewise, "Notice to
School Employees" (EPA Form 7730-3) was posted in the entrance to this school
and a similar form "Notice To Employees and Parent-Teacher Associations"
distributed to each employee. Also distributed to each employee was a
"Guide for Reducing Asbestos Exposure" (EPA Form 7730-2). Accordingly, it
is highly unlikely that failure to post "Notice to School Employees" in the
common rooms of this school denied any employee knowledge of the presence
of asbestos, which after all is the purpose of the posting requirement.
Under all the circumstances, an initial gravity based penalty of $1,200 for
the violations at Ross High School is appropriate.
At VJashington Elementary School, the PTA was notified of the presence
of asbestos and a "Notice To School Employees" was posted in the lobby.
Additionally, as at Ross High School, a very similar form "Notice To School
Employees and Parent-Teacher Associations" and a "Guide for Reducing Asbestos
Exposure" were distributed to each employee. Under the circumstances, the
violations at this school, i.e., failure to post "Notice to School Employees"
in the common rooms, failure to maintain in the administrative office labora-
tory reports of analyses of asbestos, correspondence relating thereto and a
diagram or blueprint showing asbestos and sampling areas, is not likely to
have appreciably increased the potential risk to human health. A gravity
•
based penalty of $500 is considered appropriate.
Friable asbestos materials were not present at Atkinson Elementary
School and the violations consisted -in the failure to maintain in the admini-
strative office the blueprint or diagram showing areas of friable materials,
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15
areas where samples were taken and a copy of all laboratory reports and
correspondence concerning analysis of samples as required by 40 CFR § 763.
114(a)(4) and a certification that the requirements of the rule have been
satisfied as required by § 763.114(a)(6). Violations at Fremont Junior
High and Stamm Elementary Schools consisted of failure to file the certifi-
cation required by § 763.114(a)(6), friable materials not being present at
either of these schools. An appropriate penalty for the violations at
Fremont Junior High and Stamm Elementary Schools is $100 each and for the
violations at Atkinson Elementary an appropriate penalty is $200.
This brings us to the "violator" portion of TSCA § 16(a)(2)(B), which
requires consideration of, inter alia, ability to pay, degree of culpability
and such other matters as justice may require. The record reveals that
Respondent was aware of the rule and made a good faith effort to comply.
Even as to the violation considered most egregious, i.e., failure to directly
notify all parents having students in Ross High School of the results of
inspection and analysis of friable asbestos materials, the record shows
substantial compliance, a calendar showing the presence of asbestos having
been distributed to each family having students in the school. In this
connection, it is worthy of note that the summary of actions Respondent
intends to take in order to comply with the regulations (note 5, supra),
which reflects a fair understanding of the regulation, does not mention
notifying parents of students at Ross High School of the presence of asbes-
tos.1 While an affidavit from an attendee of the workshop conducted by the
'
Ohio Department of Education would have been hopeful, it may well be that
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16
Respondent was misled as to the requirements for strict compliance with
the rule by statements made at the workshop. Such an event would be
among "other matters as justice may require" warranting a substantial
downward adjustment in the amount of the gravity based penalty. Moreover,
although Respondent may not have been responsible therefor, the record
reflects a substantial amount of newspaper publicity concerning asbestos
problems in Fremont schools, making it unlikely many parents would be
unaware of that fact. When the omissions were called to its attention,
Respondent proceeded promptly to comply. Under the circumstances, a down-
ward adjustment of $500 is appropriate in the gravity based penalty deter-
mined for violations at Ross High School.
The remainder of the gravity based penalties are sufficiently nominal
that no downward adjustment is considered to be appropriate. A total penalty
of $1,600 will be assessed against Respondent, Fremont Ross High School, for
the violations of the Act herein found.£/
Order
Having violated § 15 of the Toxic Substances Control Act (15 U.S.C. 2614)
and regulations promulgated thereunder (40 CFR Part 763, Subpart F) as charged
in the complaint, a penalty of $1,600 is assessed against Respondent, Fremont
City Schools, in accordance with § 16(a) of the Act (15 U.S.C. 2615). Payment
6/ The civil penalty guidance reflects that sums spent on asbestos
abatement and control may be credited against the penalty '(note 2, supra)
and invoices or vouchers detailing amounts expended for this purpose may
well have resulted in a substantial reduction in the penalty proposed by
Complainant.
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17
will be made by sending a certified or cashier's check in the amount of $1,600
payable to the Treasurer of the United States to EPA Region V (Regional Hear-
ing Clerk), P. 0. Box 70753, Chicago, Illinois 60673, within 60 days of
receipt of this order.Z/
Dated this
day of June 1985.
Spefrcer . Nissen
Administrative Law Judge
_7_/ Unless appealed in accordance with 40 CFR 22.30 or unless the
Administrator elects, sua sponte, to review the same as therein provided,
this decision will become the final order of the Administrator in accord-
ance with 40 CFR 22.27(c).
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52
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
BEFORE THE ADMINISTRATOR
In the Matter of )
>
Transformer Service (Ohio), Inc., ) Docket No. TSCA-IX-84-0013
)
Respondent )
Toxic Substances Control Act - Rules of Practice - Default Orders -
Assessment of Penalty - Where an accelerated decision finding that Respon-
dent had violated the Act as charged in the complaint had been issued and
only issue remaining was appropriateness of penalty and Respondent failed
without explanation to appear at duly noticed hearing set for the purpose
of receiving evidence on that issue, penalty proposed in the complaint
would be conclusively deemed appropriate.
Appearance for Complainant: David M. Jones, Esq.
Office of Regional Counsel
U.S. EPA, Region IX
San Francisco, California
Appearance for Respondent: None
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Default Order
This is a proceeding under § 16(a) of the Toxic Substances Control Act
(15 U.S.C. 2615). The complaint, issued on April 16, 1984, charged Respon-
dent with violations of the Act and regulations in that PCBs stored for
disposal at the BKK site, Beatty, Nevada, prior to January 1, 1983, had not
been removed and disposed of prior to January 1, 1984, as required by 40 CFR
§ 761.65(a). A penalty of $10,000 for the violation was proposed to be
assessed. Facts surrounding the violation and leading to an amendment of
the complaint for the reason that the action was instituted against the
wrong party are fully set forth in the accelerated decision issued by the
undersigned on January 16, 1985, which is incorporated herein by reference,
and will be repeated here only insofar as necessary to an understanding of
the decision reached.
The complaint, as originally issued, named Transformer Service, Inc.
(TSI) as respondent. However, upon Respondent's presentation of evidence
that it was a New Hampshire corporation separate and distinct from Trans-
former Service (Ohio), Inc., an Ohio corporation, which was the actual
owner and generator of the wastes involved, the complaint was amended to
name Transformer Service (Ohio), Inc. (TSO), as respondent ..I/ The plead-
ings and documentary evidence (a purchase order and manifests) established
\J Although Respondent has alleged that TSI and TSO are separate
and distinct corporations having no common officers, directors or share-
holders, a Dun & Bradstreet report, dated May 15, 1985, attached to
counsel's posthearing memorandum, indicates that Greg Booth is President
and that Maureen Booth is Secretary of TSO. These individuals were identi-
fied as contact people for TSI in records maintained by BKK concerning the
PCBs in storage here concerned.
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that in February 1979, ISO had ordered the transportation from Hayward,
California and the storage at the BKK facility, Beatty, Nevada, of approxi-
mately 125 gallons of PCB liquid waste and that this waste was not removed
from the mentioned site for proper disposal until March 24, 1984. These
facts were deemed to establish that ISO had violated 40 CFR § 761.65(a),
which requires that PCB articles or containers stored for disposal before
January 1, 1983, be removed from storage and disposed of in accordance with
Subpart D prior to January 1, 1984. While no issue of material fact relat-
ing to the violation remained, Respondent was held to be entitled to a
hearing in accordance with 40 CFR Part 22 as to the appropriateness of the
proposed penalty.
A notice setting the hearing at EPA Headquarters, in Washington, D.C.,
one of the locations Respondent's counsel had previously agreed was appropri-
ate, on Thursday, May 2, 1985, at 9:30 a.m. was issued on March 20, 1985.
Under date of March 25, 1985, Roetzel and Andress, Akron, Ohio, by and
through Jeffrey J. Casto filed notice of withdrawal as counsel of record for
Respondent.
Respondent did not appear at the date and time duly set and noticed for
hearing as stated above and has not made any effort to explain such failure.
Testimony from Complainant's sole witness is to the effect that the penalty
was calculated in accordance with the PCB Penalty Policy (45 FR 59770,
September 10, 1980) upon the assumption that the seven drums stored at the
BKK facility on February 2, 1979, which were removed on March 24, 1984, each
contained 55 gallons of PCB fluid. This assumption is not supported by the
-------
documentary evidence, the purchase order of February 2, 1979, calling for
the transport and storage of approximately 125 gallons of PCB liquid waste
and the manifest of March 24, 1984, by which the material was removed from
storage, indicating that three of the drums were empty and that PCB liquids
in two drums totalled 100 gallons.
The witness testified, however, that Respondent was considered to have.
knowledge of the PCB rule, indicating that the violation was willful and
that in accordance with the penalty policy, a 25% upward adjustment in the
penalty .for culpability was warranted. The witness further testified that
the penalty as adjusted ($14,000) was for a one-time violation and that if
this were regarded as a continuing violation and the mentioned sum multi-
plied by the 58 (actually 60) days between the date of inspection of the
BKK facility (January 24, 1984) and the date Respondent contracted for
removal of the PCB items (March 24, 1984), an appropriate penalty would be
the sum of $812,000.
In his posthearing memorandum, counsel for Complainant alludes to the
above facts, but appears to recognize that 40 CFR § 22.27(b) precludes the
ALJ from raising the penalty proposed in the complaint where respondent has
defaulted, and argues that $10,000, the amount proposed in the complaint, is
appropriate.
By failing.to appear at the hearing without explanation, Respondent is
in default and in accordance with 40 CFR § 22.17(a), the penalty proposed in
the complaint is due and payable 60 days after entry of a final order.
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Order
Respondent, Transformer Service (Ohio), Inc., having violated Section
14 of the Toxic Substances Control Act (15 U.S.C. 2614) and regulations
thereunder (40 CFR § 761.65), as charged in the complaint, a penalty of
$10,000 is assessed against Respondent in accordance with § 16(a) of the
Act (15 U.S.C. 2615). Payment of the full amount of the penalty shall be
made by forwarding a cashier's or certificate check payable to the Treasurer
of the United States to: EPA - Region IX (Regional Hearing Clerk), P. 0.
Box 360863M, Pittsburgh, Pennsylvania 15251, within 60 days of receipt of
this order.jL/
Dated this *v^ ? day of June 1985.
Spfcricer T. Nissen
Administrative Law Judge
2J In accordance with 40 CFR § 22.17(b) this Default Order constitutes
an initial decision and unless appealed in accordance with 40 CFR § 22.30,
or reviewed by the Administrator, sua sponte, as therein provided, will
become the-final order of the Administrator in accordance with 40 CFR § 22.
27(c)
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53
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
BEFORE THE ADMINISTRATOR
In the Matter of )
)
Madeira City Schools, ) Docket No. TSCA-V-C-302
)
Respondent )
1. Toxic Substances Control Act - Asbestos in Schools Rule - A school
comprised of five single story buildings interconnected by covered
walkways must be listed as having five associated buildings rather
than as one building for purposes of records under section 763.114
(a).
2. Toxic Substances Control Act - Asbestos in Schools Rule - the written
notice to school employees required by section 763.111(5) requires
individual written notice to each employee and is not satisfied by
wide posting in the school of EPA Form 7730-3 "Notice to School
Employees."
3. Toxic Substances Control Act - Asbestos in Schools Rule - the notice
to the PTA required by section 763.1ll(d) must be given promptly by
the local education agency upon discovering the presence of asbestos
material in the schools and cannot be deferred until the asbestos
has been removed or encapsulated.
4. Toxic Substances Control Act - Asbestos in Schools Rule - penalty of
$1200 assessed for violation of the notification and recordkeeping
requi rements.
Appearance for Complainant: James M. Thunder, Esquire,
Office of Regional Counsel
U.S. Environmental Protection Agency
Region V, 230 South Dearborn Street
Chicago, IL 60604
Appearance for Respondent: J. Michael Fischer, Esquire
Ennis, Roberts & Fischer Co.
1000 Mercantile Library Building
Cincinnati, OH 45202
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-2-
Decislon on Motion for Accelerated Decision
This is a proceeding under the Toxic Substances Control Act ("TSCA"),
section 16(a), 15 U.S.C. 2615(a), for the assessment of civil penalties
for violation of a rule promulgated under section 6 of the Act, 15 U.S.C.
2605. The rule establishes requirements for the identification and notifi-
cation of friable asbestos-containing materials in schools ("Asbestos in
Schools Rule"), 40 C.F.R. sections 763.100-763.119. !_/ The complaint
i-ssued by the EPA charges that Respondent, Madeira City Schools of Madeira,
Ohio, violated certain recordkeeping and notification requirements of the
rule. A penalty of $4,900 was requested. Respondent answered denying
the violations charged, and its liability for a penalty.
The matter is now before me on Complainant's motion for an accelerated
decision under the Rules of Practice, 40 C.F.R. section 22.20. Respondent
in its response to the motion agrees that there is no dispute about the
material facts, and contends that on the undisputed facts judgement should
be rendered in its favor.
Complainant's motion and Respondent's response and the relevant papers
of record demonstrate that there are no genuine issues of material fact in
]_/ TSCA, section 16(a) provides in pertinent part as follows: "(1) Any
person who violates a provision of section 15 shall be liable to the United
States for a civil penalty in an amount not to exceed $25,000 for each such
violation. Each day such violation continues shall, for the purposes of
this subsection, constitute a separate violation of section 15."
TSCA, section 15, makes it unlawful among other acts, for any person to
"(1) fail or refuse to comply with . . . (c) any rule promulgated . . .
under section . . . 6."
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-3-
this case. 2/ For the reasons stated below a penalty of $1200 is assessed
against Respondent.
Findings of Facts
1. Respondent Madeira City Schools, Madeira, Ohio, is a local education
agency as defined in 40 C.F.R. 763.103(e), and is subject to the re-
quirements of the Asbestos in Schools Rule. 3/
2. Respondent operates three schools: an elementary school (DuMont
Elementary School); a middle school (Sellman Middle School); and a
high school (Madeira High School). Affidavit of William G. Williamson
submitted with Respondent's response to Complainant's motion (hereafter
"Williamson affidavit").
3. In 1982, the Hamilton County Board of Health inspected Respondent's
schools for asbestos. This was done pursuant to a recommendation by
the Ohio Department of Education that the inspection required by the
EPA's regulations could be conducted by a county board of health. No
areas were found where asbestos problems might be present. Williamson
affidavit, pars. 2, 3, and Exh. A.
4. In 1984, on being advised that the inspection by the Hamilton County
Board of Health may not be acceptable to the EPA, Respondent had the
schools reinspected by PEDCo Environmental, Inc., an engineering
firm specializing in asbestos related matters. Williamson affidavit,
par. 4.
2/ Complainant has also filed a reply to Respondent's response. While
the rules do not specifically provide for replies by the moving party,
Complainant's reply will be considered because it discusses an issue raised
in Respondent's response, the applicability of the exemption in 763.117(c)
(2)(i), and also because it narrows the issues with respect to the high
school.
3/ Respondent has never denied that it is subject to the Asbestos in
Schools Rule.
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-4-
5. The inspection by PEDCo as reported on July 5, 1984, disclosed that
friable asbestos was present in the DuMont Elementary School and
Sellman Middle School. No friable asbestos was found in the Madeira
High School. Wiliamson affidavit, par. 5 and Exh. E.
6. On August 29, 1984, Maurice Horwitz of the United States Environmental
Protection Agency inspected Respondent to determine its compliance with
Asbestos in Schools Rule. Affidavit of Maurice Horwitz submitted with
Complainant's motion for accelerated decision (hereafter "Horwitz
affidavit"). In his report of the inspection, the inspector confirmed
that there were no friable materials present at the high school, and
that the asbestos present at the Sellman School was either encapsulated
or removed. Friable areas, however, were still found at the DuMont
School. Report of EPA's inspection on August 29, 1984, submitted as
part of Complainant's prehearing exchange (hereafter "EPA Inspection
Report").
7. The Madeira High School consists of five one story buildings connected
to each other by covered cross-walks. Inspection Report at 2.
8. A file containing asbestos related documents and materials was main-
tained at the principal's office at the Madeira High School. Among
the papers in this file were the following:
a. Reports of the inspections made by the Hamilton County
Board of Health in 1982, and by PEDCo dated July 5, 1984.
Neither of these reports made reference to the Madeira High
School.
b. Two completed EPA Forms 7730-1, "Inspections for Friable
Asbestos-Containing Materials", one form dated October 11,
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-5-
1982, filed after the Hamilton County Board of Health inspec-
tion, and one dated July 26, 1984, filed after the PEDCo
inspection. Williamson affidavit, par. 11 and Exh. I.
9. The EPA Form 7730-1 showed that three schools had been inspected
for friable materials, and the July 26, 1984 form, showed that
friable materials was present in two schools. The schools were not
identified by name. Horwitz affidavit; Williamson affidavit, Exh. I.
10. After being notified by PEDCo that friable asbestos-containing
material was found at the DuHont Elementary School and Sellman
Middle School, Respondent posted EPA Form 7730-3, "Notice to School
Employees," in every area of the schools where friable asbestos
material was located as well as in other conspicuous places in the
buildings such as the teacher's lounge and the employee's lounge.
Respondent also orally notified the employees of the DuMont School of
the presence of asbestos and furnished each individual with a copy of
EPA Form 7730-2, "A Guide for Reducing Asbestos Exposure." Williamson
affidavit, par. 8 and Exhs. F and G thereto; Horwitz affidavit, par. 11,
11. Respondent acted immediately to carry out PEDCo's recommendations for
the removal or encapsulation of friable asbestos material found in
the DuHont Elementary and Sellman Middle Schools. By the time of the
EPA inspection on August 29, 1984, all asbestos-containing material
at the Sellman School had either been encapsulated or removed. The
work at the DuMont School was "substantially" completed at the time of
inspection and was fully completed on August 30, 1984, or shortly
thereafter. Williamson affidavit, par. 9, and Exh. K thereto; EPA
Inspection Report.
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-6-
12. On August 30, 1984, Respondent sent a letter to PTA leaders inviting
them to an inspection tour of Respondent's schools to show them how
Respondent had contained and removed all friable asbestos. This in-
spection tour was conducted on September 6, 1984, and an additional
tour was conducted later in September for those PTA leaders and
members who could not make the first one. Williamson affidavit, par.
10 and Exh. H thereto.
Discussion, Conclusions and Penalty
The EPA has proposed a penalty of $1300 for Respondent's failure to
have the required records at Madeira High School and a penalty of $3600
for Respondent's failure to comply with the warning and notification re-
quirements at the DuMont Elementary School. These penalties, it claims,
are in accord with the EPA's guidelines for assessment of civil penalties
under TSCA, section 16, 45 Fed. Reg. 59779 (September 10, 1980), and the
EPA's revised enforcement response policy for the Asbestos in Schools Rule,
dated June 22, 1984.
An argument made by Respondent which should be considered at the out-
set is its claim that it is exempt from the requirements of the rule by
reason of the fact that its program for removing and encapsulating asbestos
material was "substantially" completed on August 29, 1984, the date of the
inspection, and was fully completed either the next day or in any event
before September 6, 1984. 4/ The pertinent exemption is 40 C.F.R. 763.117
(c)(2)(i), which provides as follows:
4/ Respondent's response to Complainant's motion for an accelerated decision
at 10-11. The Williamson affidavit is somewhat ambiguous on the actual date
of the completion of the abatement program, but it seems clear from the affi-
davit that the work had been completed at the time of the PTA inspection on
September 6, 1984. See Williamson affidavit, pars. 9 and 10.
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-7-
(2) No provision of this subpart ap-
plies to any school if:
(i) The local education agency has
conducted abatement programs that
result in the elimination of all friable
asbestos materials from the school either
by removal or encapsulation of the materials.
Conplainant, reading the exemption in conjunction with 40 C.F.R.
763.115(a), requiring compliance with the rule by June 27, 1983, contends
that the exemption applies only to schools in which all the asbestos had
been removed or encapsulated by that date. _5/ It is not entirely clear
either from the wording of the exemption or from the legislative history
that the exemption should be so construed that a school abating its as-
bestos material subsequent to June 27, 1983, would not thereafter be
exempt from the rule. _6/ It is not necessary to consider the question
further, however, since it seems clear from its wording that the exemp-
tion does not apply to either the DuMont School or the Madeira High School,
the only two schools for which violations are charged. With respect to
the DuMont School, Respondent says that the abatement program was "sub-
stantially completed" on that date. The exemption is for schools which
5/ Complainant's reply to Respondent's response at 4-5.
6f See preamble to the final rule, 47 Fed. Reg. 23367, where the Agency
stated as follows:
The Agency has also determined that in a school
where previously discovered friable asbestos-
containing material has been removed or satis-
factorily encapsulated so that it is no longer
friable, the provisions of the rule should not
apply. By undertaking these corrective actions,
school officials not only will have substantially
complied with the identification requirements,
they will also have removed the types of materials
which are the focus of the recordkeeping and noti-
fication parts of this rule.
This language would not seem to place a time limit on when the school could
take advantage of the exemption, so far as further compliance is required.
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-8-
have eliminated all friable asbestos material. Since there was still
friable asbestos material at the school that had not been encapsulated
or removed, the exemption did not apply to the DuMont School, as of the
date of the inspection. The Madeira High School is not covered by the
exerption because it is not a school in which an abatement program for
the encapsulation or removal of asbestos has been undertaken. Schools
which contain friable materials apparently are not exempted at least
under this particular provision simply because no asbestos materials
have been found.
The Madeira High School .Recordkeeping Violation
Complainant raises only the issue of whether the records for this
school were deficient in that they did not list all school buildings
associated with the school and indicate that each had been inspected for
friable materials as required by 763.114(a)(2). It concedes, that the
violation of section 763.114(a)(l), charged is de mini mis and that there
has been no violation of section 763.114(a) (6). _7_/
According to the record, the five buildings which comprise the high
school are connected with covered walkways, and Respondent states that each
building houses a particular function or segment of the educational program,
e.g., administrative offices, gymnasium, laboratories. JB/ The EPA's
construction of the rule as requiring that the school be listed as having
7/ See Complainant's reply at 1. The reference to section 763.114(a)(3),
Ts obviously in error since no violation of that provision was charged in
the complaint, and it is assumed therefore that what was intended was
section 763.114(a)(6).
Bf Respondent's response to Complainant's motion for an accelerated
decision at 1, n. 1. Respondent's description is consistent with the
description of the school in the EPA's inspection report as five one
story buildings connected to each other with covered crosswalks.
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-9-
five buildings even though constructed as Respondent contends is in accord-
ance with the normal use and meaning of the word "building." Respondent's
contention that a "building" can also mean several buildings connected
together by walkways seems a more technical construction. It is a general
rule of construction that words in a statute are to be given their ordinary
meaning unless it is indicated either in the statute or its legislative
history that the word is to be given a technical meaning. Burns v. Alcala,
580 U.S. 575, 580-81 (1975); Jones v. Liberty Glass Co., 332 U.S. 524, 531
(1948). Here, I find no indication that the word building is to be used
in other than its ordinary sense. In assessing the penalty, however, the
significance of not listing the high school as five separate buildings
must also be considered. Recordkeeping under the rule serves two purposes,
it provides the EPA with a means of verifying compliance and it also pro-
vides notice and warning of the presence of friable asbestos-containing
materials. BJ Practices, accordingly, which result in records that are
ambiguous or vague with respect to the inspection of and presence of
asbestos materials in the schools should be proscribed. It does not seem
likely, however, that the failure to mention that there are five buildings
associated with the high school would leave a person looking at the records
and knowing that they apply to the high school in doubt as to whether all
buildings were covered by the records. Possibly, the importance of listing
the high school as five buildings and the potential for harm if it is not,
is better assessed if asbestos-containing materials had been found in the
school. On this record, however, this particular violation does appear to
be minor in extent.
9/ See preamble to proposed rule, 45 Fed. Reg. 61978 (September 17, 1980).
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Complainant also contends that the records did not Indicate whether
any of the buildings of the high school had been Inspected for friable
material or whether there was or was not such material present in any of
the buildings. IP/ This is not totally true for there are reports in the
file of a sample having been taken and analyzed from the "H.S. Boiler Room,"
and of a sample having been taken and analyzed from the "High School South
Gym," during the inspection by PEPCo in 1984. Both reports disclosed that.
although friable materials were present, no asbestos was observed. 11/ Also,
since the records showed that three schools were inspected and friable
asbestos materials found in only two, the DuMont Elementary School and the
Sellman Middle School, one carefully reading the records would undoubtedly
be able to glean from them that there was no friable asbestos material at
the high school. Such records, however, cannot be considered as an adequate
substitute for records that on their face expressly state that the high
school has been inspected and whether or not any buildings in the high
school have friable materials present, which is what the rule actually re-
quires. The risk of harm arising from this deficiency in the records,
nevertheless, is also minor. In view of what the record discloses about
Respondent's conscientious efforts to comply with the rule, it is safe
to assume that if friable asbestos material had been found in the high
school, it would have been disclosed with the same detail of information
that was provided with respect to the two schools where friable asbestos
was found. 12/
ID/ Complainant's motion for accelerated decision at 3.
11 / Williamson affidavit, Exh. I.
]2f See letter from PEDCo dated July 5, 1984, in Exh. I to the Williamson
affidavit.
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-11-
Accordingly, for the reasons stated, I find that recordkeeping viola-
tion charged with respect to the Madeira High School is minor in extent
and not significant as claimed by Complainant, and that the appropriate
penalty is $200.
The Notification Violations at the DuMont Elementary School
Respondent contends that compliance with the requirements that
persons employed at the DuMont School be given written notice of the pre-
'sence of asbestos-containing materials as required by 40 C.F.R. 763.111
(b), was accomplished by Respondent posting EPA Form 7730-3 in the areas
where friable asbestos material was found and also in other conspicuous
places in the building such as the teacher's lounge and the employee's
lounge. 13/ Contrary to what Respondent argues, the rule requires individ-
ual written notices to each employee. This is in accord with the usual
construction of a requirement for giving written notice. See N.L.R.B v.
Vapor Recovery Systems Co., 311 F.2d 782, 785 (9th Cir. 1962). Moreover,
it is clear from a study of the rule itself and of Form 7730-3, that the
posted notice and the notice to individual employees were to serve two
separate but complementary purposes. Form 7730-3 alerts those who read
it to the presence of friable asbestos-containing material in the school
and where they may obtain more complete information about it. The notice
to each employee insures that he or she will be informed of the actual
location in the school of the friable asbestos-containing material. While
Respondent has listed on Form 7730-3 the location by room or building area
13/ Respondent's response at 9.
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where the asbestos material is present, this is not the actual information
called for on the form. 14/
Nevertheless, although written notice was not given to the individual
employees, Respondent did apparently orally notify them of the location
of friable asbestos material and also furnished each non-teaching employee
with a copy of EPA Form 7730-2 "A Guide for Reducing Asbestos Exposure."
When these actions are combined with the wide posting of Form 7730-3,
the probability of persons being unwittingly exposed to asbestos once
Respondent learned of its presence seems very small.
With respect to notifying the PTA leaders as required by 40 C.F.R.
763.111(d), Respondent contends that it did more than what the law re-
quires by conducting a personal tour of the building for all PTA leaders
and members shortly after the EPA had made its inspection. The violation
arises, however, from the fact that Respondent did not give prompt notice
but waited until it had completed its abatement program for removing or
encapsulating the asbestos material. Respondent's letter of August 30,
1984, to the PTA leaders suggests that Respondent did so because it was
concerned in not making the PTA overly anxious and causing them to react
excessively to the fact that asbestos materials had been found in the
schools. 15/ The rule, however, must be construed as requiring prompt
notice in the absence of some indication to the contrary. Any question
about this is resolved by an examination of the legislative history.
14/ The rooms and building areas having asbestos-containing material were
noted in the space on the form in which Respondent was to give the building
and room where the record of the inspection, a diagram of the locations of
the asbestos-containing materials and a copy of the EPA regulations were
available. Williamson's affidavit, Exhs. Fl and F2.
15/ See Williamson affidavit, Exh. 4.
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In responding to comments on the proposed rule in its analysis of comments,
the EPA stated as follows:
The Agency disagrees that the schools should not send
notices to parents or parent-teacher associations until after
abatement work is conducted. As noted previously, EPA does not
believe that all schools with an asbestos problem will require
abatement work and the Agency does not want to encourage local
education agencies to undertake such activity unnecessarily.
Furthermore, because abatement work will be more costly and re-
quire some preparations, EPA finds that schools will act more
slowly to carry out remedial programs than they will to carry
out detection programs. The Agency finds that employees and
parents should be notified promptly, before schools begin re-
medial work. 16/
It is also to be noted that in the preamble to the final rule, the
EPA recommended specific wording for the notice to parents to avoid any
over-reaction by them, which wording could also be used, it would seem, on
notices to the PTA. 17/
Taking into account, however, the fact that Respondent immediately
acted to remove or encapsulate the asbestos material after learning of
its presence at the school, that this work was substantially completed
by the time of the EPA's inspection, and completed very shortly thereafter
so as to remove all risk of exposure, and also the evidence generally in-
dicating that Respondent even though it did not meet all the requirements
of the rule did act responsibly in endeavoring to keep the school popula-
tion from being exposed to asbestos, it would appear that the risk of
harm created by the delay in notifying the PTA, was only a minor one.
1_6/ USEPA, OPTS, OTS Analysis of Comments (January 1982) at 37-38. Since
this document is listed as a support document (No. 4) in the preamble to
the rule, see 47 Fed. Reg. 23367 (May 27, 1982), and is frequently referred
to in the preamble, there is no question of its being part of the legislative
history of the rule. Although not cited by Complainant, I may take official
notice of its content so long as Respondent is informed of the source. See
Banks v. Schweiker, 654 F.2d 637 (9th Cir. 1981).
YU 47 Fed. Reg. 23366.
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Accordingly, I find that the appropriate penalty for the notification
violations at the DuMont School is $1000. It is recognized that this is a
considerably greater reduction in the penalty set by the EPA's guidelines
than the 40% proposed by the EPA. Taking into account, however, Respondent's
good faith efforts to comply with the rule, that while Respondent's first-
inspection probably did not meet the EPA's requirements, Respondent had good
faith reasons for believing it did, that Respondent promptly had the school
reinspected on learning that the first inspection was inadequate, that it
prorrptly acted to remedy the situation once it learned that there was fri-
able asbestos material in the schools, and that its efforts although falling
short of full compliance did minimize the risk of exposure, it is believed
that this reduction is proper.
Conclusion
It is concluded that Respondent has violated the Asbestos in Schools
Rule, 40C.F.R. 763.111(b) and (d) and 763.114(a)(2). It is further con-
cluded that a penalty of $1200 should be assessed for these violations.
ORDER 18/
Pursuant to section 16(a)(l) of the Toxic Substances Control Act,
15 U.S.C. 2615(a)(l), a civil penalty of $1200 is assessed against
Respondent Madeira City Schools, for the violations of the Act found
herein.
18/ This accelerated decision disposes of all issues in the case and con-
stitutes the initial decision of the Administrative Law Judge. 40 C.F.R.
22.20(b). Unless an appeal is taken pursuant to section 22.30 of the rules
of practice or the Administrator elects to review this decision on his/her
own motion, the Accelerated Decision shall become the final order of the
Administrator (see 40 C.F.R. 22.27(c)).
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Payment of the full amount of the civil penalty assessed shall be
made within sixty (60) days of the service of the final order by submitting
a certified or cashier's check payable to the United States of America and
mailed to:
EPA - Region V
(Regional Hearing Clerk)
P.O. Box 70753
Chicago, IL 60673
Gerald Harwood
Administrative Law Judge
DATED: September 11, 1985
Washington, D.C.
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54
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UNITED STATES
ENVIRONMENTAL PROTECTION AGENCY
BEFORE THE ADMINISTRATOR
IN THE MATTER OF: )
)
MEXICO FEED & SEED COMPANY, INC., ) TSCA Docket No. VII-84-T-312
)
AND ) AND
)
JACK PIERCE d/b/a ) TSCA Docket No. V1I-84-T-323
)
PIERCE WASTE OIL SERVICE, INC., ) (CONSOLIDATED)
)
RESPONDENTS )
TOXIC SUBSTANCES CONTROL ACT (TSCA) - PARTIES
1. Motion to make an individual shareholder and officer of a corporation a
Party-Respondent will be granted on the showing that said individual
actively defended the subject Complaint, after receiving notice of the
alleged violation and institution of the action, hired counsel, partici-
pated in preparation of the defense, attended the hearing and testified
concerning the violations alleged in said Complaint. Under said facts,
the individual has entered his appearance hy actively preparing the
defense and no other service or formal amendment of the pleadings is
necessary.
TOXIC SUBSTANCES CONTROL ACT (TSCA) - CONTRACTS
2. Where essential elements of an alleged attempted sale were left to be
negotiated, there was no agreement or meeting of the minds of the parties
to such negotiations and no sale resulted.
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TOXIC SUBSTANCES 'CONTROL ACT (TSCA) - CORPORATIONS
3. Respondent was not released of his personal liability by simply showing
the organizing of a corporation in the State of Delaware when it further
appeared that the Delaware corporation wholly failed to comply with the
laws of the State of Missouri and had no authority to make a contract or
transact business in Missouri.
TOXIC SUBSTANCES CONTROL ACT (TSCA) - CORPORATIONS
4. The corporate laws of the States of Delaware, Illinois and Missouri have
a common intent and objective, that is, to make available corporate assets
to bona fide creditors and provide for following said assets, or the
proceeds thereof, and to thus place liability, to such extent, on the
person or persons into whose hands the assets, or proceeds, have fall'en.
APPEARANCES
For Complainant:
For Respondent JACK PIERCE:
For Respondent MEXICO FEED
AND SEED CO., INC.:
Henry F. Rompage, Attorney
Office of Regional Counsel
U.S. Environmental Protection Agency
Region VII
726 Minnesota Avenue
Kansas City, Kansas 66101
G. Edwin Proctor, Esquire
HEAVNER, JARRETT & KlMBALL, P.C.
Suite 900, Bryant Building
1102 Grand Avenue
Kansas City, Missouri 64108
Arthur A. Benson IL, Esquire
BENSON & McKAY
911 Main Street, Suite 1430
Kansas City, Missouri 64105
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1NITIAL DECISION
On July 20, 1984, separate Complaints were filed by the Regional
Administrator of the United States Environmental Protection Agency (hereinafter
"EPA", "the Agency" or "Complainant"), Region VII, against Mexico Feed & Seed
Company, Inc., North Jefferson Street, Mexico, Missouri (hereinafter "Respondent
Mexico" or "Mexico"), Jack Pierce, an individual formerly doing business as
Pierce Waste Oil Service, Inc. (hereinafter "Respondent Pierce" or "Pierce" or
"PWO") and Moreco Energy, Inc. (hereinafter "Moreco"). The allegations of each
Complaint charge identical violations of the Toxic Substances Control Act ("TSCA")
as shown by an investigation made by an authorized representative of Complainant
on June 27, 1984, and July 5, 1984. On April 4, 1985, the Complaint against
Moreco was dismissed without prejudice as requested by Complainant in its -Motion
to Withdraw Complaint, dated March 28, 1985, after said Complaints had been con-
solidated for hearing. The Consolidated Complaints against Respondents Mexico
and Pierce charge that samples taken from four waste oil tanks located on a site
which is part of a three-acre tract leased and controlled by Mexico and owned by
one J. F. Covington, \J contained significant amounts of PCB; that said site was
leased by Covington to Pierce, around 1964, allowing Pierce to place one and,
thereafter, three additional, oil tanks thereon, which were owned by Pierce.
Count One charges that the four tanks are PCB containers (40 C.F.R. 761.3[v]) and
•
contained PCB on the date of said inspection; that Respondents failed to main-
tain said PCB containers in a facility meeting the requirements of 40 C.F.R.
761.65(b)(1); that there was no Spill Prevention and Countermeasure Plan as required
I/ The record shows that, since around 1959, Mexico Feed & Seed, including the
business and real estate, was the sole property of said J.F. Covington and wife
(Transcript [hereinafter "TR") T-239) until said business was incorporated
January 1, 1980 (TR 238). The corporation has leased the real estate and equip-
ment from Covington since its formation January 1, 1980.
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by 40 C.F.R. 761 .65(c)(7)(ii ) or documentation that the design, construction
and operation of the tanks conformed to the requirements of 761.65(c)(7)(1);
and that said PCB containers were not dated when placed In storage and that said
failures violated Sec. 15(1) of TSCA, 15 U.S.C. 2614(1).
Count Two charges that said PCB containers were not marked, in violation of
40 C.F.R. 761.40(a)(l) , which requires that, as of July 1, 1978, PCB containers
shall be marked as provided by Section 761.45(a), and that such failure violates
said Section 15(1) of TSCA.
Count Three charges Respondents with failure to develop and maintain records,
beginning July 2, 1978, on the disposition of PCBs and PCB Items and to prepare
and maintain an annual document each July 1, covering the calendar years 1978
through 1983, and to include information specified at Section 761.180(a) (1 ) through
(3) in violation of said Section 15(1) of TSCA.
Count Four charges that a composite soil sample taken from a spill (see
40 C.F.R. 761.60[d][1 ] ) between the above tanks was analyzed and found to contain
330 parts per million (hereinafter "ppm") PCB, and that Respondents have thus vio-
lated TSCA by disposing of PCBs while not following the requirements of 40 C.F.R.
761.60(a). For said alleged violations, said Complaint proposes the assessment
of civil penalties totaling $65,000: $15,000 on each of Counts One and Two,
$10,000 on Count Three and $25,000 on Count Four. At the hearing, held herein
on June 11, 1985, the parties stipulated on the record (TR 5) prior to the taking
of evidence, that Complainant "would make a prima facie case for a civil penalty
of $29,000" and that the Complaint is by Complainant amended to propose penalties
totaling $29,000 instead of $65,000, and that EPA agrees not to seek penalties
exceeding $29,000. In addition, the parties stipulated (Complainant [hereinafter
"C"] Exhibit [hereinafter "EX"] 1) as follows:
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1. That on or about June 27, 1984, and July 5, 1984, David Ramsey, EPA
Region VII Consumer Safety Officer, conducted an investigation at Mexico Feed
& Seed Company, Inc., at Mexico, Missouri.
2. That during the inspection referred to in Stipulation No. 1, Mr. Ramsey
found on the premises four waste oil tanks.
3. In approximately 1967, the principals of Pierce Waste Oil Service, Inc.
and Mexico Feed and Seed Company, Inc. entered into a verbal lease agreement
for the placement by Pierce Waste Oil Service, Inc. of waste oil tanks on the
premises of Mexico Feed & Seed Company, Inc.
4. That during the inspection referred to in Stipulation No. 1, Mr. Ramsey
properly sampled, sealed, identified and shipped to the EPA NEIC Laboratory,
Denver, Colorado, oil from the four tanks referred to in Stipulations No. 2
and 3.
5. That EPA NEIC Laboratory personnel properly conducted analysis of the four
oil samples referred to in Stipulation No. 4 and said analysis of the four oil
samples referred to in Stipulation No. 4 established the east-central tank con-
tained oil of 80% PCB content; the west-central tank contained oil of 74% PCB
content; the north tank contained oil of 730 ppm PCB content, and the south tank
contained oil of 160 ppm PCB content.
6. That the four tanks referred to in Stipulations No. 2, 3, 4 and 5 are "PCB
•
containers" as defined at 40 C.F.R. §761.3('v).
7. That two of the four tanks referred•to above, specifically the east-central
and west-central tanks, are subject to the regulations of April 18, 1978; and
two of the tanks, specifically the north and south tanks, are subject to the
regulations of July 1, 1979.
8. That the four tanks referred to above were not stored in a facility meeting
the requirements of 40 C.F.R. §761.65(b)(1), as required by 40 C.F.R. 761.60(c)(3).
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9. That prior to July 1, 1979, said tanks were not subject to the storage
regulations at 40 C.F.R. 761.60(c)(3).
10. That, in regard to the four tanks referred to above, there was no Spill
Prevention Control and Countermeasure Plan prepared or implemented, as required
by 40 C.F.R. 761.65(c)(7)(ii) .
11. That prior to July 1, 1979, said tanks were not subject to a requirement
for a Spill Prevention Control and Counterroeasure Plan pursuant to the require-
ments of 40 C.F.R. 761.65(c)(7)(il).
12. That in regard to the four tanks above, there was no documentation that the
tanks were designed, constructed and operated in compliance with 29 C.F.R. 1910.106,
as required by 40 C.F.R. 761.65(c)(7)(i).
13. That prior to July 1, 1979, said tanks were not subject to the design, con-
struction and operation requirements at 29 C.F.R. 1910.106, as required by
40 C.F.R. 761.65(c))7)(i).
14. That the four tanks referred to above were not dated when placed in storage
as required by 40 C.F.R. 761.65(c)(8).
15. That prior to July 1, 1979, said tanks were not required to be dated when
placed in storage as required by 40 C.F.R. 761.65( c) (8) .
16. That the four tanks referred to above were not marked with the mark ML as
described at 40 C.F.R. 761.45(a) and required by 40 C.F.R. 761.40(a) (1).
17. That prior to July 1, 1979, said tanks were not required to be marked with
the mark ML as required by 40 C.F.R. 761.40(a)(1).
18. That, in regard to the four tanks above, there were no records developed
or maintained or annual report prepared as required by 40 C.F.R. 7ftl.l80(a),
for the years 1979, 1980, 1981, 1982 and 1983.
19. That prior to April 18, 1978, there were no requirements to develop and
maintain records or annual reports.
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20. That during the inspection referred to In Stipulation No. 1, Mr. Ramsey
properly collected a composite soil sample from an oil spill between the tanks
referred to above, and properly sealed, identified and shipped said soil sample
to the EPA NEIC Laboratory, Denver, Colorado.
21. That EPA NEIC Laboratory personnel properly conducted analysis of the soil
sample above, and said analysis of the soil sample referred to in Stipulation
No. 20 established the presence of 330 ppra PCB.
22. That pursuant to 40 C.F.R. 761.60(d)(l) and 761.60(a), there was a disposal
of PCBs not in accordance with 40 C.F.R. 761.60(a).
23. That prior to April 18, 1978, the disposal of PCBs which occurred prior to
said date were not regulated.
I find that by said Stipulations the charges in the Complaint are by the
Respondents admitted and the determination shall be made herein whether all or
any one or more of the parties are responsible for the said violations and the
payment of $29,000 total penalty agreed upon as an appropriate penalty for said
violations. On the basis of the evidence educed at the hearing, the exhibits
received in evidence and upon consideration of the post-hearing submissions of
the parties, I hereby make the following
FINDINGS OF FACTS
1. Mexico Feed & Seed Co., Inc. (hereinafter "Mexico") is a Missouri Corporation
authorized to do business from -and after January 1, 1980 (Transcript (hereinafter
"TR") 238). Prior to 1980, said business was a -sole proprietorship (TR 239)
owned by James F. Coving ton.
2. Mexico was and is located at the north city limits of Mexico, Missouri, on
three acres (TR 237) which is the corner portion of a 55-acre tract (TR 237)
acquired by Covington in 1959 (TR 238).
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3. Covington has been In the feed and seed business for 36 years , has operated
a farm for 50 years and has never been In the waste oil disposal, or any other,
business (TR 236).
4. Mexico has at all times since its incorporation leased said three acres
from Covington and wife (Respondent [hereinafter "R"] Mexico [hereinafter "M")
Exhibit [hereinafter "EX") 5; TR 255). The tract so leased inclines the area
of land on which subject four oil tanks were placed by Respondent Pierce (TR
257); said tanks are located on an area off the side entrance where ingress and
egress is afforded without interfering with the Mexico operation (TR 240).
5. Covington's first contact with Respondent Pierce was circa 1964 after
Covington was contacted by Eugene Affloter, a Pierce employee (TR 258, 264), who
inquired about the availability of an area of land for the placement of one
tank (TR 258).
6. Respondent Jack Pierce verbally made a deal with Covington, circa 1967, to
place storage tanks on subject Mexico tract for an agreed rental charge of $150
per year, as a result of his trip to Mexico, Missouri, for that purpose (TR
32).
7. Pierce is retired from Pierce Waste Oil Service, Inc. (hereinafter "PWO"]
of Springfield, Illinois, whose business vas picking up waste oil, I.e., its
truck drivers picked up waste oil from service stations and factories and trans-
ported it to places where it was sold (TR 31).
8. Jack Pierce operated said business for 30 years (TR 31) until sale of the
assets used in said business to Motor Oils Refining Technology Co ("MORECO") on
or about March 5, 1983 (R Pierce [hereinafter "P") EX 2; TR 51).
9. PWO is a Delaware Corporation formed by Respondent Jnck Pierre sometime In
1964 (R-P EX 9; TR 44), which continued up until the retirement of Jack Pierre
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-9-
(TR 44), after which it was dissolved (TR 72) in 1983 or 1984 (TR 58) following
the sale of the assets of PWO and the assets of the other Pierce companies (TR 52).
10. Other Pierce companies in which Respondent Pierce held ownership were
Industrial Fuels, Inc., Central Refining Co., Inc. and Trl-State Oil, Inc. (TR 52).
11. The assets sold were identified in said Asset Purchase Agreement (R-P EX 2
[see document referred to as R-P "Exhibit A"]; TR 54). The subject tanks and
ground lease in Mexico were not there listed (TR 55); contents of the tanks were
not there listed (TR 174).
12. At all pertinent times, Jack Pierce was Chief Executive Officer and
President of PWO (TR 50); Pierce testified he was authorized to generally con-
duct business for PWO which included entering into Icnse agreements (TR 50),
and that he could make all decisions for PWO if he wanted to, although he does
not remember any express authority, from PWO's Board of Directors, or resulting
froa a corporate meeting, to enter into a lease for the corporation (TR 48).
13. Upon formation of said PWO, Inc., in 1964, Jack Pierce's brother, Perry
Pierce, and Perry's wife, served as officers and on the Board of Directors; later,
Jack Pierce's son, Martin Pierce, served on the Board (TR 46). At that time,
Jack Pierce owned 49 shares, his wife one share; Perry Pierce then owned 49
shares and Perry's wife, one share (TR 47).
14. Jack Pierce was paid a salary by said corporation, hut no other person was
paid a salary. No-dividends were paid by the corporation. Perry Pierce, although
a holder of one-half of the corporate stock, received no salary, dividends or
other pecuniary benefit (TR 48).
15. Jack Pierce acquired all of the equipment nnd nssots of PWO (TR 50).
16. Pierce testified that in 1973 or 1974, Coviiv'lon ask<\1 Pierce what he would
take for the 10,000-gal Ion tank; Pierce did not r.lvc Coving ton an answer (TR 37);
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that later, Pierce asked Covington if he would give up three years' rent for all
the tanks, and that Covington agreed to the deal proffered (TR 38).
17. Pierce testified that his reason for the aforesaid agreement was that "we
were going to pull out of there" as soon as "we got to the point where we could
put on bigger trucks" (TR 38-39).
18. Pierce continued in operation at the Mexico site until August or September,
1976, when a final pull-out was made (TR 39).
19. The last rental check paid by Pierce was in the amount of $400 (two years'
rent at the increased rental rate of $200 per year) and dated 1-11-73 (although
it was meant to be correctly dated 1-11-74), payable to Mexico Feed and Seed
Co., purportedly drawn on the account of Waste Oil Service and purportedly
signed by Jack Pierce, an individual. There was no indication on the check of
the purpose for which said payment was made, but Pierce testified that he
anticipated free rent for the years 1975, 1976 and 1977, and that his pull-out
in September, 1976, was before the end of his "free rent" period (TR 41),
because "we had a big truck at that time" (TR 42).
20. Pierce testified that said check was actually drawn on the corporation's
account; that the Waste Oil Service checks were used to avoid a mix-up with
Pierce Oil and Refining Company account (TR 42).
21. Pierce testified that he met with Covinpton in August or September, 1976,
"out at the tanks where we loaded and unloaded oil", where he told Covington
"we (have) a bigger truck . . . "; that the tanks would not be used and they
were his (Coving ton's) and that Covington said "Okay" (TR 43) in ncknowledping
the tender of said tanks by Pierce. One of Pierce's drivers, Paul S.iiler, was
present at the meeting (TR 43). At said time, there was oil in the tanks (TR 55).
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22. Paul Sailer testified he worked for Pierce for about eight or nine months -
less than a year - picking up oil, and then until October 1977 as a semi-driver
(TR 123); that he was present, and participated In conversation, at the meeting
between Covington and Pierce about August 1976 - "standing right there" (TR
116); that he was (there) to clean out the (four) tanks (TR 118); that Covington
was heard by him to say he would accept the tanks in exchange for the terra of
the lease (TR 121).
23. Pierce had gone to Mexico "to make sure (Sailer) pumped all the oil out"
and he pumped over the top. "The valves stuck up a little bit and you don't get
it out that way, so we had to fill your hose Inside and pump It out." "Over
the top" means going in the manhole over the top, clear to the bottom of the
tank and "that is the way Sailer pumped (the) oil out" of all four tanks (TR 56).
Sailer testified that a gear-type positive-displacement pump (on the same
tractor) was used with two-inch suction hoses (TR 118).
24. Pierce testified (TR-57) that all the oil was pumped from the tanks and
they were turned over to Covington (TR 57).
25. Pierce looked inside the tanks after Sailer pumped out the oil and "there
was just a kind of film on the bottom of the tanks" (TR 59). Sailer testified
(TR 119) that after he pumped out the oil, only the normal oil residue remained.
26. Pierce testified that the tank which Covinpton allegedly was interested in
was the southern-most tank, a vertical tank of approximately 10,000 pallon
capacity; .on the east side was a 1,000-gallon tank; a 700-gallon tank was in
the west-central location; another tank at the north end was 15,000 to 17,000
gallon capacity (TR 61).
"27. Pierce testified that "after we decided to pull out of there ... I agreed
to give (Covington) all of (the tanks) for three years' rent" (TR 6H.
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-12-
28. Pierce Waste Oil Service (PWO) was started in 1952 and Jack Pierce and his
brother, Perry Pierce, ran it as a partnership until its incorporation in 1964
(TR 63).
29. Perry Pierce, in 1952, owned Springfield Refined Oil Company which he sold
around 1970 (TR 65).
30. Besides from garages and service stations, oil was picked up from a factory
in Shelbina, Missouri, and Eugene Affloter picked up oil at the Mid-Mo Electric
Company in Sedalia, Missouri (TR 81).
31. No special instructions were given to drivers except they were to bring the
oil in and dump it in the tanks (TR 82).
32. In 1976, Covington came by his premises late at night and discovered some-
one stealing oil from said tanks; Covington called Pierce who came to Mexico
and signed a complaint at the Prosecutor's office, charging J. Edward Covert
with attempted stealing of oil in excess of $50 from Pierce Waste Oil Service,
Inc. (R-M EX 8; TR 84).
33. Pierce testified that he doubted whether the alleged trade of the tanks to
Covington (for three years' land rent) was recorded in the corporate minutes
(because) it was such a small deal (TR 91).
34. No tax returns were produced by Pierce to show whether or not said tanks
were depreciated or whether a sale of said tanks was reported (TR 92).
35. Either Jack Pierce or his son, Martin Pierce, sent Rod Waller, their driver,
to Mexico Feed & Seed in 1978 to pump oil from subject tanks (TR 94-96) and
haul it back to Springfield, Illinois. Jack Pierce testified that Mexico Feed &
Seed was not paid anything for the oil (TR 101).
36. The first formal action by the Board of Directors of PWO, Inc., to dissolve
the corporation was taken (without a meeting) March 4, 1983 (TR 105), and a
Certificate of Dissolution of said corporation by the Stnte of Delaware is dated
February 29, 1984 (R-P EX 3; TR 104).
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-13- *
37. Rod Waller testified that he went to Mexico in 1978 and emptied the tanks
except for some residue (TR 155); he pumped out two tanks and checked the screen
on the truck tank (TR 157) and that he did not see any sludge when he looked in
the tanks (TR 160) during daylight hours (TR 157); that there might have been a
little sludge in the bottom of the tanks; and that he cannot remember if sludge
clogged the "screen" TR 156, 157).
38. Martin Pierce testified he is the son of Jack Pierce; that PWO was a
corporation in good standing from 1964 to 1983 (TR 164) and that for a time he
was Vice President of PWO; that PWO "pulled out of operation in Mexico, Missouri"
in August, 1976 (TR 165); that he dispatched Paul Sailer to Mexico (in 1976)
"for a final pump-out of the site"; that Jack Pierce, his father, went over to
make sure all the tanks were cleaned out; that his father rgave the tanks to
some guy on a deal" of which he did not know the particulars until (recently)
(TR 167)"; that Paul Sailer returned from the site and reported that the tanks
were drained dry (TR 168), and that he remembers getting a call, and then a
second call, from Mexico Feed and Seed in early 1978, asking that oil be picked
up at subject site (TR 169).
39. Five years or more after PWO was incorporated (about 1969), Jack Pierce
and his wife owned all of the stock of PWO, buying out Perry Pierce, Jack's
brother (TR 187).
•
40. Of the four Pierce family companies, two were incorporated in Delaware and '
two in Illinois (TR 188).
41. George Nelson, a filling station operator in Mexico, Missouri, sold waste
oil to Pierce (or PWO) from 1971 until he sold his business in 1979. He has
knouTi Covington for 35 years, knew Pierce was storing oil on the Mexico Feed
premises and never learned directly or indirectly of Covington's going into the
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-14-
waste oil business and has never known Covington to have any interest in the
waste disposal business (TR 191-192).
42. William B. Robnette testified he became associated with Mexico Feed & Seed
Co. in August, 1979, and became a shareholder in Mexico Feed & Seed Co., Inc.
when it was incorporated in December, 1979 (TR 213).
43. Robnette testified further that he recalls when trucks from Pierce Oil came
to subject site after Covington called Pierce and told them a tank was leaking;
that the time would have been in 1980 or 1981, as it was in the spring and sub-
sequent to the time he came to Mexico in 1979 (TR 214); that he and Covington
thought the "leaking tank" probably froze and started leaking when it thawed
with warmer weather (TR 215); that Waller, the driver, hooked up to the valve
at .the bottom of the upright tank; that Waller was there about one and one-half
hours, left and then returned in 30 minutes or an hour and told him he took
some of the "stuff" out and spread it on the road to have room for more of it
(TR 216-217); that Waller hooked up a second time and then left in 30 to 40
minutes (TR 217).
44. Robnette further testified that, when talking to Covington about the incor-
poration, Covington stated that the subject oil tanks belonged to Jack Pierce
(TR 217) and that Pierce had not paid rent for several years (TR 218); that
Robnette wanted to get rid of the tanks but Covington said they were Pierce's
and that Covington wanted Pierce to move them (TR 218-219).
45. Robnette further testified that he noted the leaking tank and Covington
acted to get hold of Pierce nnd have him do something about it (TR 225);
that the leak was discovered in Spring, 1980, or later (TR 225).
46. James Covington testified that, in 1976, when he called Pierce and told
him he caught someone ste.Tlinfi from his tanks, Pierce replied, they would "come
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-15-
over and file charges" (TR 246); that, in February, 1980, he called Pierce
telling him that one tank was leaking and that it might run down the road into
the creek and cause trouble and a man was sent (by Pierce) to fix the leaking
valve on the tank and the following day a truck came to pump out the tank (TR 247).
47. William B. Robnette was first paid for work on August 15, 1979, and had
not worked for Mexico or Covington before August, 1979 (R-M EX 3; TR 248).
Robnette and Covington formed a corporation January 1, 1980, pursuant to an
agreement that Robnette would be brought into the business (TR 251).
48. James Covington testified further that he had no discussion whatever with
Jack Pierce about a deal whereby Covington "could have the tanks in return for
three years' free rent on the property" because he never had any interest in
the tanks and did not indicate he wanted the tank or tanks because lie had no
business with the tanks and has had no use for a big tank such as the 10,000-
gallon vertical tank (TR 250); that the only knowledge he had respecting the
contents of the tanks was what Pierce or Pierce's driver told him, i.e., that
the tanks contained waste oil from service stations (TR 251).
49. Effective January 1, 1980, Covington leased to the corporation the land
and buildings utilized by Mexico Feed, which lease is now and at all pertinent
times has been in effect. Exhibit A, attached to said lease agreement, is a
list of all the assets of Mexico; neither subject tanks or the contents (oil)
was listed by Covington as an asset (R-M EX 5; TR 252).
50. Covington further testified that when he called Pierce to report the leak,
circa February, 1980, he told Pierce he wanted the rent paid and the tnnks
moved and Pierce said he would do so without mention that Covington mi^ht want
to keep the tanks for rent; that Pierce did not pay the rent or move the t.inks
(TR 252-253); 'and that Covington did not know or learn that the tanks contained
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-16-
anything except waste oil from service stations until EPA came and told him
after the oil was sampled and tested by EPA for the presence of PCBs (TR 253).
51. Covington further testified that he had never known of Pierce's claim that
Covington owned the tanks until the testimony heard in the subject hearing;
that he cannot remember ever talking to Pierce under circumstances where one of
Pierce's employees was in the process of loading oil into a truck (TR 254);
that the times Covington remembers talking to Pierce were in Covington's office
(TR 277) and on the telephone (TR 289).
52. Catherine Potts (TR 291) testified that she is, and has been since 1965,
employed by Covington as a bookkeeper; that she was and is responsible for
sending out bills and statements; that she sent bills (hand-written) to Jack
Pierce every year; that her journal shows payment of $150 by Jack Pierce in
May, 1967, but no copies or records were kept of bills so sent out (TR 293);
that statements were sent to Pierce for several years and were unpaid; that she
did not send him any more statements after 1980; that entries in her journal
were made only when payment was received (TR 295); that she has seen Jack Pierce
. . . at the store . . in the office once or twice, but did not talk to him (TR
298); that she remembers the instance, but not the date, when he came to town
(Mexico) when people (were prosecuted for stealing oil) TR 299); that she talked
to Pierce's driver when they came into the office to use the telephone (TR 300);
and that she did not observe the drivers come and go unless they came in
(Covington's) office (TR 301).
53. Gary Snodgrass (TR 6; 304) testified that, on August 6, 1984, he initiated
a "removal or clean-up" pursuant to the Comprehensive Environmental Response
Compensation and Liability Act ("CERCLA") which entailed removal of 2350 gallons
of contaminated oil and 2030 cubic yards of contaminated soil from four tanks
(C EX 2) on the rear or northwest side of premises of the Mexico Feed and Seed
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-17-
Conipany in Mexico, Missouri (TR 7); that oil in a large horizontal tank "north
tank" was removed, first by suction with a vacuum hose out of the top part and,
when the oil would not flow, oil was removed by way of the valve on the left
side of the tank (as seen in Photo 1, C EX 2); that sludge prevented removal of
the oil from the valve in the right side of the tank (TR 9). The oil was above
the outlet spigots on the tank by almost two feet (TR 10) and estimated at 1000
gallons (TR 10).
54. Snodgrass further testified (TR 307) that the "large horizontal tank" was
ten feet in diameter (TR 305) and 30 feet long (TR 306) and that, without a
flashlight, he could not tell, looking down into the tank, if the tank was
empty, so a pole was used to determine if the tank contained fluid; that he and
the technicians with him could pump only 200 gallons from said horizontal tank
with a gear pump (such as that purportedly used by Pierce employee); that a
Weldon diaphragm pump was used to pump sludge, and several drums of sludge were
pumped after which sludge still remained that they could not remove from said
tank (TR 307); that the Pierce tanker had a screen on it "because if they pump
in material that's too thick then they can't pump it back out . . . "; that no
screen was used with said diaphragm pump (TR 308); that 43 drums full of oil
and sludge were pumped from subject tanks; it was thick, black and viscous, not
water but waste oil (TR 309); that most of the liquid and sludge was found in
the south (upright) tank and the large horizontal tank; that sludge had to be
shoveled from said south tank (TR 11); and that he had no knowledge of how said
oil got in the tanks (TR 312).
55. Rod Waller further testified that his purpose in going to Mexico in
February, 1978 (TR 319), was to empty the subject tanks and also to pick up oil
from accounts (TR 320; 321); that he was sent to Mexico by Martin Pierce who
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-18-
said he a got a call from a customer at Mexico Feed "and we want you to go pump
out the contents of the tanks" (TR 322); that Waller had a short conversation
with somebody at Mexico Feed, whose identity is unknown, concerning a leaking
valve (TR 324); that no record exists of the liquid obtained from the Mexico
tanks because it was "mostly water" (TR 325); that, to see what is coming from
the tank, the hose is connected to the top of the tank and then pumped into the
tanker (TR 327); that it is not hard to tell water (which is clear) from oil; that
if the liquid were taken from the bottora of the tank "you wouldn't know what
you're getting and you'd be paying for a lot of water" (TR 326); that the water
removed was dumped on back roads (TR 328); that the upright tank was drained
through a valve on the bottom (TR 329), which procedure is consistent to that
observed by Robnette (TR 330; Finding A3, supra).
56. Respondent Pierce placed in evidence the articles of incorporation, minutes,
by-laws and certificate of incorporation along with a certificate of authority
for said Pierce Delaware corporation (Pierce Waste Oil Service, Inc.) to do
business in Illinois (TR 336). A similar certificate to do business in Missouri
was not placed in evidence, however, Jack Pierce was sure such certificate
exists (TR 336). Along with its post hearing Reply Brief, Respondent Mexico
Feed supplied a certificate, dated September 5, 1985, from the Missouri Secretary
of State, Corporate Division, certifying that there are no records there on file
«
which show that Pierce Waste Oil Service, Inc., and/or Pierce Waste Oil Company,
Inc., is now or ever has been registered as a Foreign or Domestic corporation
or under the Fictitious Name Act.
57. James R. Gipson worked for Jack Pierce picking up waste oil for about two
months beginning in late 1973. He testified that he picked up oil at service
stations and from a plant in Shelbina, Missouri, that makes conduit pipe; that
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-19-
he was told by his predecessor, McGulre, to put any oil from the Shelbina plant
In a separate tank; pursuant to such Instructions he put the "heavy" oil from the
Shelbina conduit pipe plant in the upright tank located at Mexico Feed and Seed
(TR 198199). He was given no Instructions about washing out the tank in between
loads and said tank was not "washed out" (TR 199). Glpson also testified that
he worked for (Respondent) Mexico Feed as a laborer at different times Including
the 1979 to 1983 time period during which time he was supervised by Bill Rbbnette;
that he saw Rod Waller at some time during this period drive his truck up along-
side and hook up the hose from the truck to the "upright tank's" lower faucet
valve (TR 201); that this observation was occasioned by Gipson's duties at
Mexico Feed which required him to pass by the subject tanks in going back and
forth between the seed house and feed store (TR 201). Gipson further testified
that he observed, prior to seeing the Pierce truck at the tank, that the lower
valve had either frozen up or broken (and) was "leaking water out on the ground"
(TR 204); and that, during the time he worked for Covington, he did not see any-
body other than the Pierce company use subject tanks (TR 208).
58. James F. Covington, who testified as a witness concerning the conduct,
transactions and occurences set forth in subject Complaints (TR 236 et seq.),
was advised by EPA when they secured a sample of subject waste oil in 1983 and,
in 1984, after a test had been made of said sample showing that said waste oil
contained PCBs (TR 253). He participated In the defense of Mexico Feed and Seed
Co., Inc. (which, In 1980, succeeded a sole proprietorship, owned by Covington)
and hired and conferred with counsel employed by him to represent said corporation
(TR 259; 284). Covington was present during the entire two-dav hearing held here-
"in (TR 256) and testified concerning the Issues which the hearing addressed.
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-20-
CONCLUS10NS OF LAW
The Conclusions of Law reached herein are set forth and discussed hereln-
below.
COMPLAINANT'S MOTION TO ADD JAMES F. COVINGTON AS A PARTY RESPONDENT
At the close of the evidence, Complainant moved (TR 342) that
Jaroes F. Covington, individually, be made a party Respondent herein. The
Counsel for Mexico objected to the Motion on the ground that the granting of
said Motion would deny Covington "due process", as he would be entitled to
Notice and to his own Counsel, as there might be a conflict between him and
Mexico Feed and Seed, Inc. The granting of subject Motion is clearly within
the contemplation of the Federal Rules of Civil Procedure (FRCP), Rule 15. On
this record, it was James F. Covington who actively defended the Complaint. He
hired Counsel (TR 259; 284), received notice of the alleged violation from EPA
and notice of the institution of the action against Respondent Mexico Feed (TR 253),
was present during meetings with witnesses (TR 259), was in attendance during
the two-day hearing (TR 256), and testified as a witness (TR 236-286) concerning
the transactions constituting the violations alleged in subject Complaint. It
has been stated that Rule 15 of FRCP codified the law as declared by the Courts
(see matter of J.V. Peters and Co., Inc., RCRA Docket V-W-81-R-75, 1985, EPA
Region V, I.e. 36-37, citing Ocean Accident and Guarantee, Ltd., et al .
m
v. Felgemaker et al., 47 FS 661, 663(5); 143 F.2d 950, 952 [CCA, 6th Cir. 1944])
where it was held that, while no jurisdiction W.TS obtained by service of process,
a person, not technically a party, was so directly connected with the case by
his interest in the result of the litlgntlon and by his active participation cis
to be bound by the judgment. The Court pointed out that it is frequently held,
citing cases, that a judgment may be rendered directly against one who, although
not a formal party . . . has assumed or participated in the defense (I.e. 952 (2 J).
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On the basis of the foregoing, I find that Complainant's Motion to make
James F. Covington a party should be and it is hereby granted. On this record,
no service of the Complaint or formal amendment of the pleadings is necessary, as
Covington entered his appearance herein by actively preparing the defense,
providing counsel and by testifying concerning the facts in issue.
THERE WAS NO CONTRACT TO SELL SAID TANKS TO COVINGTON.
The law clearly requires that for a sale to occur or for a contract t'o be
made, there must be a meeting of the minds of the contracting parties (Irvin v.
Brown Paper Mills Co., 52 F.S. 43, 146 [F.2d] 232 [1943]); and such contract
does not exist so long as any essential element (such as time, place, identity
or amount) is open to negotiation (Harbot v.'Penn. R. Co., 44 F.S. 319, 320[2]
[DCWDNY, 1942]) and that here the burden is on Pierce to prove every fact
essential to establish that the sale of or contract for the tanks was made
(Bell v. Ralston Purina Co., 257 F.2d 31 [CA OK. 1958]).
James F. Covington (Finding 48) unequivocably denies having any discussion
respecting an agreement whereby Covington would become the owner of the tanks.
He further states that he was not interested in owning a tank of the size of
the 10,000-gallon tank because he had no use for a tank of that volume (TR
250). The only knowledge that Covington had respecting the contents of the
tanks was what he was told. He stated, "They (the driver and Mr. Pierce) told
me it was waste oil from service stations" (TR 251). Further, Covington's
testimony states that the only business he had.ever been in was the feed and
seed business (for 36 years) and farming (50 years) and that he has never been
in the waste oil business (TR 236).
I have further considered that Covington would not place any value on the
oil but, like service station operators, would view it as a commodity that he
would be glad to dispose of. Whether the last-mentioned pick-up of oil by
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-22-
Pierce was in 1978 or 1980, it is undisputed that Pierce obtained the oil from
the tanks and Covington was not paid anything for the oil (Findings 35, A3 and
45).
To enter the waste oil business, it is apparent one would need more than
the tanks. Either he would be required to purchase oil tanker trucks and
construct facilites to "refine" the waste oil, or find a willing buyer (such as
Pierce) who would willingly buy, haul and refine the oil.
Even if the testimony of Jack Pierce is believed, it is clear that no
contract was made at the alleged meeting "in 1973 or 1974." During that meeting,
it is claimed that Covington "asked Pierce what he would take for the 10,000-
gallon tank". Pierce testified that he did not give Covington an answer (TR 37).
Pierce's further testimony was that later he asked Covington If he (Covington)
would give up three years' rent for all (four) of the tanks and that Covington
"was agreeable" (TR 38); that the time when the deal was made was somewhere in
1973 or 1974 and that Pierce anticipated free rent for 1975, 1976 and 1977 and
his "pull out", although apparently not then contemplated, was In August or
September 1976, "some time in there", and that after the alleged agreement with
Covington, he continued his operation, using the tanks, for "a couple of years,
probably ... a little longer, maybe" (TR 39).
On this record, I find that, in 1976, when advised that persons stealing
*
oil from subject tanks had been apprehended, Jack Pierce came to Mexico and
personally filed charges representing that the oil was the property of Pierce
Waste Oil Service, Inc. (TR 246). I further find that in February, 1980,
Pierce was advised that one tank was leaking and that it might pollute the
creek, whereupon Pierce sent a man to fix the leaking valve on the tank and n
truck to pump out the contents of the tank (TR 247). These instances are
inconsistent with Pierce's claim that the tanks were not then his property.
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-23-
The instant record also indicates that Pierce's contention is that Covlngton
was "interested" in one of the tanks, and not the contents - the oil. Even
under Pierce's testimony, it must be implied that the tank, when "delivered" to
Covington, would be empty. Pierce at all tiroes claimed ownership of the oil
and made an effort to secure the oil from the tanks (Findings 23, 24, 25 and 46)
Covington was aware that the leaking oil, discovered by him and Robnette in 1980
"might run down the road into the creek and cause trouble". In 1984, EPA
employees removed 2350 gallons of contaminated oil from the tanks and over 2000
cubic yards of contaminated soil from the site (TR 7; Finding 53).
From the foregoing, I find that there was no meeting of the minds as to
the subject of the "sale" claimed by Pierce. There was no agreement as to the
condition of the tanks, which was a concern of both the alleged contracting
parties; there was no agreement as to the time of delivery. The essential
elements of the alleged attempted sale were left to be negotiated and, until
agreed upon, no sale or exchange resulted (Cases cited, supra.)
INDIVIDUAL LIABILITY
I find that Pierce Waste Oil Service, Inc., is a Delaware Corporation and
one of four "Pierce family companies" (TR 181). Said Corporation was, until
its dissolution in February, 1984, authorized to do business in Illinois but
was not authorized to do business in the State of Missouri (see certificate
from Missouri Secretary of State, dated September 5, 1985, which is attached to
Respondent Mexico's Brief).
Delaware law provides that all corporations "shall continue for a period
of three years after dissolution or for such longer period . . . necessary to
resolve all claims against It." Where others are not appointed trustees, the
directors of the dissolved corporation become Its trustees and civil action
proceeds against them and It is the duty of such trustees of the dissolved
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-24-
corporatlon to pay all claims to the extent that funds of the Corporation are
"in their hands" (8 DCA Section 279).
Illinois law provides that a foreign corporation authorized to do business
in Illinois must file its notice of Intent to dissolve such corporation and
where said notice is not given, the directors of the corporation are liable for
any unsatisfied claims against the corporation (see 32 I.A.S., Section 8.65[a]
and 32 I.A.S., Section 12.80).
In Missouri, where Jack Pierce conducted business giving rise to the
subject Complaint without authority being obtained by said Corporation to
conduct business in Missouri, the directors and trustees are liable for the
claims of the Corporation "to the extent of its property and effects that shall
have come into their hands" (see MO R.S. Section 351.525).
On this record, the assets of the corporation were sold by Jack Pierce,
its chief officer and stockholder (EX A to R-P EX 2; TR 54). As the assets of
the corporation, Pierce Waste Oil Service, Inc., have been sold and the proceeds
of the sale are in the hands of Jack Pierce, an individual, it would be a futile
exercise to bring suit against the corporation (as urged by Pierce), as Its
assets have been liquidated. The object and intent of the laws of Delaware,
Illinois and Missouri are the same, that is, to follow the corporate assets and
to place liability on the person into whose hands the assets, or their proceeds,
«
have fallen. The better view, and that which is adopted under the facts in this
record, is that Jack Pierce, by carrying on business for a purported corporation
which at no time hail authority to do business in Missouri, is personally liable
for the corporation's obligations and liabilities to the extent of the property,
or proceeds thereof, that have come into his hands (Rowden v. Danloll, 132 SVC 23,
I.e. 27{8], [1910]; Borbein Young and Co. v. Cirese, 401 SW 2d 9-0 (KC App.,
1966]).
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-25-
In Rowden it is stated, I.e. 27:
"When the plaintiff showed that (defendant) was engaged
with others as the (WZ) Company . . . previous to the
organization of the corporation by that name in Michigan,
and that mining was carried on in said name . . . , and
during said time (defendant) was furnishing money and was
one of the managers of the business, he could not be
released of his personal liability ... by simply show-
ing the organization of the corporation in Michigan, when
it further appeared that the corporation wholly failed to
comply with the laws of (Missouri) and had no right to
make any contract or transact any business in (Missouri)."
I find that the civil penalty in the sum of $29,000 should be and is here-
inbelow assessed against Respondent Jack Pierce, an individual.'
I further find that the Act (TSCA) does not contemplate the assessment of
a civil penalty against a non-participatory and non-negligent lessor and, therefore,
is no logical or legal basis for holding Respondent J.F. Covington responsible
for violations committed by the lessee under the theory of vicarious liability
(see ARRCOM, Inc., Drexler Enterprises, Inc. et al. (Oct. 1985), Docket Nos.
X-83-04-01 and 02-3008, citing Amoco Oil Co. v. EPA. 543 F.2d. 270 [1976]).
ARRCOM further held, and correctly so, that "there is ... nothing to prevent
the Agency from causing the facility to be cleaned up and then attempting to
obtain contribution from . . . landowners under CERCLA."
Upon consideration of the record, the submissions and stipulations of the
parties and the conclusions reached herein, in accordance with the criteria set
forth in the Act and pertinent regulations, I propose the following:
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-26-
FINAL ORDER 2j
1. Pursuant to Section 16 of the Toxic Substances Control Act (TSCA),
15 U.S.C.A. 2615, and the stipulations of the parties herein, a civil penalty
in the total sum of $29,000 is hereby assessed against Respondent Jack Pierce,
an ind ivid ual .
2. Payment of the full amount of the civil penalty assessed shall be made,
within 60 days of the Service of the Final Order upon Respondent, by forwarding
to EPA - Region 7
(Regional Hearing Clerk)
P.O. Box 360748M
Pittsburgh, PA 15251.
3. No penalty is assessed against Mexico Feed and Seed Co., Inc., or
J.F. Covington.
IT IS SO ORDERED.
DATED: October 25, 1985
Marvin E. ones
Administrative Law Judge
2J 40 C.F.R. 22.27(c) provides that this Initial Decision shall become the
Final Order of the Administrator within 45 days after its service upon
upon the parties unless an appeal is taken by one of the parties herein
or the Administrator elects to review the Initial Decision.
Section 22.30(a) provides for appeal herefrom within 20 days.
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CERTIFICATE OF SERVICE
I hereby certify that, in accordance with 40 CFR 22.27(a), I have this
date forwarded to the Regional Hearing Clerk of Region VII, U.S. Environmental
Protection Agency, 726 Minnesota Avenue, Kansas City, Kansas 66101, the original
of the foregoing Initial Decision of Marvin E. Jones, Administrative Law Judge,
and have referred said Regional Hearing Clerk to said section which further
provides that, after preparing and forwarding a copy of said Initial Decision
to all parties, she shall forward the Original, along with the record of the
proceeding, to the Hearing Clerk, EPA Headquarters, Washington, D.C., who shall
forward a copy of said Initial Decision to the Administrator.
DATE: October 25, 1985
Mary Lou Clifton
Secretary to Marvin E. Jones, ADLJ
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55
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
BEFORE THE ADMINISTRATOR
In the Matter of )
)
Lever Brothers Company, Inc., ) Docket No. TSCA-III-113
)
Respondent )
Toxic Substances Control Act - Rules of Practice - PCB Penalty
Policy - Manufacturer's or Cautionary Labels - Where a PCB transformer
was not marked with the PCB label described in 40 CFR 761.45, but was
marked with cautionary labels warning anyone approaching of the presence
of PCBs, Penalty Policy (45 FR 59770 et seq., September 10, 1980) required
that this failure be considered a minor extent marking violation. Bri ggs
& Stratton. TSCA Appeal No. 81-1 (Final Decision, February 4, 1981)
distinguished.
Toxic Substances Control Act - Rules of Practice - PCB Penalty Policy -
Location of Spill or Discharge - Although PCB Penalty Policy does not pro-
vide for mitigation of penalty based on location of spill or discharge of
PCBs, where discharge was miniscule in relation to upper limits of minor
extent category of Penalty Policy and occurred in a closed, protected area,
thus minimizing likelihood of exposure of PCBs to humans or the environment,
25% reduction in gravity-based penalty was determined to be proper.
Toxic Substances Control Act - Rules of Practice - PCB Penalty Policy -
Extent of Potential Damage - Where quantity of PCBs in transformers involved
in record-keeping violations (failure to have available annual documents on
disposition of PCBs and records of quarterly inspections) placed violations
in major extent category of Penalty Policy Matrix, but record supported
finding that annual documents had previously been maintained and transformers
regularly inspected for leaks, extent of potential damage, which is primarily
related to ability to enforce the Act, was determined to be only partially
related to quantities of PCBs involved and violations were placed in
significant extent category of Penalty Matrix.
Toxic Substances Control Act - Rules of Practice - PCB Penalty Policy -
Lack of culpability - Where it appeared that a PCB transformer, although not
marked at time of inspection which was genesis of proceeding, had previously
been marked as required by 40 CFR 761.40, that Respondent had begun visually
inspecting transformers for leaks and documenting results thereof long before
it was required to do so, but PCB records were missing, and that Respondent
acted promptly to correct deficiences noted, a 40% reduction in gravity-based
penalty for good faith (lack of culpability) was determined to be in the
interests of justice and to be consonant with PCB Penalty Policy. Expendi-
tures by Respondent in removing PCB transformers from service, held not to
warrant a further reduction in penalty so determined.
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Appearance for Complainant: Robert J. Smolski, Esq.
Office of Regional Counsel
U.S. EPA, Region III
841 Chestnut Building
Philadelphia, Pennsylvania 19107
Appearance for Respondent: Michael W. Lower, Esq.
Semmes, Bowen & Semtnes
10 Light Street
Baltimore, Maryland 21202
Initial Decision
This proceeding under § 16(a) of the Toxic Substances Control Act
(15 U.S.C. 2615(a)) was commenced on April 17, 1985 by the issuance of a
complaint by the Director, Hazardous Waste Management Division, U.S.
Environmental Protection Agency, Region III, Philadelphia, Pennsylvania.
The complaint, in four counts, charged Respondent, Lever Brothers Com-
pany, Inc. with violations of the Acti/ and regulations (40 CFR Part
761). Specifically, Respondent was charged with failure to mark a PCB
transformer with an M[_ label as required by 40 CFR 761.40, with disposal
of PCBs in violation of 40 CFR 761.60(a), with failure to prepare and
maintain annual records on the disposition of PCBs and PCB items as
required by 40 CFR 761.180(a) and with failure to conduct quarterly visual
inspections of in-service transformers and maintain records of such
y Section 15 entitled "Prohibited Acts" (15 U.S.C. 2614) provides
in pertinent part:
It shall be unlawful for any person to--
(1) fail or refuse to comply with (A) any rule promul-
gated or order issued under section 4, (B) any requirement
prescribed by section 5 or 6, or (C) any rule promulgated or
order issued under section 5 or 6;
* * *
The instant rules were promulgated under § 6(e) of the Act.
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inspections in violation of 40 CFR 761.30(a)(l)(ii ) and (iv). For these
alleged violations it was proposed to assess Respondent a penalty of
$19,000.
Respondent answered, denying the alleged violations and requesting
a hearing.
A hearing on this matter was held in Philadelphia, Pennsylvania on
October 1, 1985.
Findings of Fact
Based on the entire record including the briefs and proposed findings
and conclusions submitted by the parties, I find that the following facts
are established:
1. Lever Brothers Company, Inc. operates a facility for the production
of soaps and detergents at 5300 Holabird Avenue, Baltimore, Maryland.
2. On May 1, 1984, the mentioned facility was inspected by Mr. Stephen
Markowski of the Maryland State Department of Health and Mental
Hygiene (Tr. 6; Inspection Report, Complainant's Exh 1). This inspec-
tion and similar inspections are conducted by the State of Maryland
pursuant to grants issued by EPA to the State.
3. Mr. Markowski met with and was accompanied on the inspection by
Mr. Charles Carroll, Environmental Engineering Manager for Lever
Brothers and Mr. Walter Wiczkowski, Environmental Control Coordinator
for Lever Brothers and the individual responsible for compliance with
environmental matters at the mentioned facility (Tr. 8, 132, 135;
Complainant's Exh 1).
4-. At the time of the inspection, Lever Brothers had on hand two PCB
transformers in service and six PCB transformers which had been taken
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4
out of service (Tr. 10, 132; Complainant's Exh 1). According to
Mr. Carroll, Lever Brothers in 1981 made a decision to remove all PCB
transformers from its plants and the six out-of-service transformers
were designated for disposal on April 30, 1984 (Tr. 144, 155).
5. One of the in-service transformers was manufactured by General Electric
Company and bore Serial No. H8850422. This transformer was located on
the lower roof of Warehouse No. 180, sometimes referred to as the
Liquid Packing Building, and did not have affixed to its exterior
the ML (6" x 6" yellow PCB) label described in 40 CFR 761.45 (Tr.
13, 142; Complainant's Exh 1 at 3).
6. Mr. Markowski testified that Messrs. Carroll and Wiczkowski were
surprised and embarrassed that the PCB label was not on the trans-
former (Tr. 14). He stated that Mr. Carroll and Mr. Wiczkowski
surmised that the label may have deteriorated and come off due to
the weather or may have been ripped off (Tr. 15).
7. At the time of the inspection, the transformer referred to in
finding 5 was labeled in separate locations (one label was beneath
a gauge and near a valve on the upper part of the transformer and
the other label was close to a valve near the floor or deck upon
which the transformer rested) containing the word "CAUTION" in large
letters followed in small print by "The insulating fluid in this
transformer contains Polychlorinated Biphenyls (PCB's). Care should
be taken to prevent entry into the environment. In the case of
malfunction or leaks consult the instruction manual or the Manufacturer.
NP229A3316." (Tr. 142-43; photos, Respondent's Exhs 5, 5-A, 5-B and
5-C).
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8. The second in-service transformer maintained by Respondent was a
Westinghouse, Serial No. 6991991. This transformer was located in
a closed room on a diked, concrete pad in a vaulted area of the south-
west corner of the second floor of the main building at the facility
(Tr. 19; Complainant's Exh 1 at 3). Mr. Markowski observed a stained
area of approximately six to eight inches in diameter on the concrete
pad beneath a valve on this transformer (Tr. 15, 19, 20; photos,
Complainant's Exh 2).
9. Mr. Markowski scraped the stained area referred to in finding 8
with a .razor blade, filling a 2 ml volatile organic analysis bottle
to approximately one-half its capacity with the scrapings, which
included dirt particles. The stained area was dry and dusty and
there was no indication of fluid on, or active leaks from, the
transformer (Tr. 20, 26, 143). To Mr. Markowski's knowledge,
there was no source of PCBs, other than the transformer, in the
area where the transformer was located (Tr. 25).
3. Approximately one week after the inspection, Mr. Markowski delivered
the sample referred to above along with other samples to the
Maryland State Department of Health Laboratory in Baltimore (Tr. 22,
23). Analysis of the sample showed 37% PCB as Aroclor 1260 (Inspec-
tion Sample Analysis, Complainant's Exh 1). This indicates a PCB
concentration of 370,000 ppm (Tr. 24).
1. At the time of the inspection, Lever Brothers did not have available
any records relating to the disposition of PCBs and PCB items (Tr.
27, 137; Complainant's Exh 1 at 4). A search for the records had
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been made prior to the inspection with negative results. Messrs.
Carroll and Wiczkowski informed Mr. Markowski of the belief that
the disappearance of the records was related to the dismissal of
the employee in charge of the records.
12. Mr. Carroll identified the employee mentioned in finding 11 as
Mr. Ronald Tognocchi, Safety Manager, who was responsible at the
time for the handling of PCBs (Tr. 135-36). He testified that
Mr. Tognocchi left the company under unhappy circumstances in
December of 1983, that Mr. Wiczkowski subsequently assumed responsi-
bility for PCBs and that searches for the records were conducted on
or about March 30, 1984, with results previously indicated (Tr. 136-
37, 146). He acknowledged that Lever Brothers did not have any
direct information that Mr. Tognocchi had removed the records
(Tr. 145).
13. Mr. Markowski testified that there were indications Lever Brothers
had made quarterly inspections of in-service transformers, but
other than a record maintained by Mr. Wiczkowski commencing March 30,
1984, there were no records of such inspections available (Tr. 28,
29). Mr. Markowski stated that Mr. Wiczkowski again relied upon the
possibility that all records relating to PCBs had been removed by a
discharged employee as an explanation for the non-availability of the
records.
14. Lever Brothers Baltimore, Maryland facility had previously been
inspected by Mr. Barry Chambers of the Maryland State Department of
Health on April 8, 1983 (Complainant's Exh 1, Attach 6). Mr. Chambers
was identified as an employee of the Maryland State Department of
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7
Health by Mr. Markowski, who testified that Mr. Chambers was his
supervisor on May 1, 1984.1./ Mr. Chambers' report states that the
facility has eight in-service PCB transformers located in locked
limited access areas and includes the following finding: "All trans-
formers were properly labeled and nonleaking." The report does not
identify the transformers by serial number or manufacturer.
15. Regarding record-keeping, Mr. Chambers' report refers to a copy of one
page from the inspection log which is included as Attachment #5 and
states that "The annual report is included as attachment #6." (sic)
16. The report is otherwise silent on record-keeping. Mr. Markowski testi-
fied that if records were missing or if there were record-keeping
violations, that fact should have been noted in the report. The
mentioned page from the inspection log shows inspections of the GE
transformer identified in finding 5.3/ This document reflects that
inspections of the transformer occurred on October 18, 1979, March 3,
and April 1, 1980; April 21, August 14 and November 30, 1981; April 17,
October 4 and December 3, 1982 and January 6, February 7 and March 10,
1983. All findings are "OK" with the exception of the inspection of
April 21, 1981, which indicates that a valve was leaking. The record
shows this valve was repaired on April 22, 1981.
2J Tr. 33. From this testimony, it could be inferred that Mr. Chambers
was available at the time of the hearing. He did not, however, appear as a
witness.
_3/ Although the page does not contain the serial number of the GE
transformer inspected, it does identify the transformer as being located on
llTop of liq. Packing bldg." (sic) The record of transformer inspections
conducted by Mr. Wiczkowski beginning March 30, 1984 (Respondent's Exh 3),
identifies the transformer inspected as "GE H885042" and specifies its
location as "Liquid pack roof of warehouse" or over railwell in Warehouse 180.
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17. The annual report (document) referred to by Mr. Chambers is dated
July 1, 1982, and reflects that it is for the year ending June 30,
1982. Ms. Tan noted that the document did not cover either the
calendar years 1981 or 1982, but indicated that it was otherwise
satisfactory (Tr. 76). The document shows the disposal of one
2000KVA transformer (Serial No. H882379) which was shipped to Chemi-
cal Waste Management, Inc. on February 10, 1982. This document also
reflects eight in-service transformers were on hand, containing a
total of 2194 gallons or 12,948.99 kg of PCB fluid.
18. Lever Brothers.contracted with MET Electrical Testing Company, Inc.
to perform inspection and testing services on electrical equipment
including transformers (Contract No. 1-0562-1 for the period 1981
through 1983 and a contract bearing the same number for the period
1984 through 1986, Respondent's Exhs 1 and 2). While the contracts
require inspection of transformers for leaks, visual inspections
are to be performed on a yearly basis. Reports of inspections and
tests conducted by MET Electrical Testing are in the record (Respon-
dent's Exhs 4-A, 4-B and 4-C). These reports, bearing dates of
August 27, 1982, July 25, 1983 and March 1984, reflect inspections
of the Second Floor Substation where the Westinghouse PCB transformer
(Serial No. 6991991) was located. While the earlier reports list
transformers as among equipment inspected, only the report of March
1984, reflecting an inspection on January 16, 1984 (Exh 4-C), speci-
fically mentions the above transformer and indicates no leaks.
19. Mr. Carroll testified that in consonance with the program to elimi-
nate PCBs from its plants (finding 4), Lever Brothers removed the
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9
last two PCB transformers from active service in July of 1985 (Tr.
133). He estimated the cost of disposing of the transformers and
PCB fluids in accordance with the regulations at $25,000 per trans-
former (Tr. 134).
20. Proposed penalties to be assessed against Lever Brothers for the
violations alleged were calculated by Ms. Patricia Tan, an environ-
mental engineer employed by Complainant, in accordance with the PCB
Penalty Policy, 45 FR 59770 et seq., September 10, 1980 (Tr. 63-65).
Under the Penalty Policy, penalties are determined by use of a matrix
employing extent of potential damage (major, significant and minor)
on a horizontal axis and circumstances (probability of damages), (high,
mid and low ranges) on a vertical axis. Each range is broken into two
levels of penalty amount.
21. Regarding the failure to have one of the transformers in active service
marked with the PCB label, Ms. Tan testified that she regarded this as
a Circumstances Level 3 or major marking violation (actually probabil-
ity of damage in the mid-range) and the extent as significant, resulting
in a penalty of $10,000 for this violation (Tr. 66, 67). The signifi-
cant determination was based on the fact the transformer was reported
to contain 350 gallons of PCBs and Table IV in the Penalty Policy, which
places PCB quantities of 220 to 1100 gallons in the significant cate-
gory. Ms. Tan stated that had she known the transformer had been marked
with manufacturer's labels (finding 7) it would have been regarded as a
minor marking [Level 5] circumstance (Tr. 68). She explained, how-
ever, that the "extent" would have remained in the Significant Category,
resulting in a penalty of $3,000.
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22. Concerning Count II of the complaint for improper disposal, Ms. Tan
determined that the circumstance was Level 1 and the extent minor
resulting in a penalty of $5,000 (Tr. 69). The "extent" was con-
sidered to be minor because of the small amount of material involved
in the spill (Tr. 72, 73). As to the violations for failure to have
an annual document and failure to have records of quarterly inspections,
Ms. Tan determined that the "extent" was major and the circumstances
Level 6, resulting in a penalty of $2,000 for each of these counts
(Tr. 74, 78, 79). The major extent category was selected based on the
fact the eight transformers at the facility contained in excess of
1100 gallons of PCB fluid. Ms. Tan testified that in the absence of
the annual document furnished to Mr. Chambers at the time of the 1983
inspection (the circumstances would have been Level 4 and the penalty
$10,000 (Tr. 75). She maintained that the firm could have been cited
(penalyzed) for five such violations covering the years 1978 through
1982) rather than one (Tr. 75, 76).
23. Although Lever Brothers had started documenting inspections of PCB
transformers before they were required to do so, Ms. Tan pointed out
that the page from the inspection log attached to the Mr. Chambers'
report was deficient in that it did not show inspections for the first
and third quarters of 1982 (Tr. 77, 79). She also testified that
documentation for inspections required to be performed during the
second, third and fourth quarters of 1983 was missing (Tr. 85). This
testimony does not consider the MET Electrical Testing Company report,
dated July 25, 1983, which provides results of an inspection of the
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Lever Brothers facility conducted on June 13, 1983 (MET Electrical
Testing Company letter, dated August 17, 1983, Respondent's Exh 6).
24. Lever Brothers representatives were cooperative in the inspections and
repeatedly indicated that action necessary to fully comply with the
regulations would be taken (Tr. 30, 31, 109). Lever Brothers has not
previously been charged with violations of the Act (Tr. 109, 145).
Mr. Carroll testified that an appropriate PCB label was placed on the
PCB transformer lacking such a label on the day of the inspection
(Tr. 148).
Conclusions
1. At the time of the inspection on May 1, 1984, Lever Brothers was in
violation of the Act and regulations in the following respects:
A. One of two in-service transformers, i.e., GE Transformer, Serial
No. H8850422, was not marked with the ML label described in 40
CFR 761.45 as required by 40 CFR 761.40.
B. The leak or spill of PCBs beneath or adjacent to a valve on the
other transformer in active service, Westinghouse Transformer,
Serial No. 6991991, constituted an improper disposal of PCBs (40
CFR 761.60(d)) in violation of 40 CFR 761.60(a).
C. Failure to have available records and annual documents on the
disposition of PCBs and PCB items constitutes a violation of 40
CFR 761.180(a).
D. Respondent's failure to inspect PCB transformers on a quarterly
basis and maintain records of such inspections is a violation
of 40 CFR 761.30(a).
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2. The inspection conducted by Mr. Barry Chambers of the Maryland State
Department of Health on April 8, 1983, supports the conclusion that
Lever Brothers was then in substantial compliance with the requirements
of 40 CFR Part 761.
3. For the violations referred to in conclusion 1 above, Respondent is
liable for a civil penalty in accordance with § 16(a)(l) and (2)(B)
(15 U.S.C. 2615).
4. An appropriate penalty is the sum of $5,610.
Discussion
Pointing to the cautionary labels on the GE transformer in active
service at the time of the inspection on May 1, 1984 (finding 7), and
to the similarity between the language on these labels and that on the
ML label described in 40 CFR 761.45, Respondent cites the doctrine de
minimis non curat lex (the law does not concern itself with trifles) and
argues that Count I concerning the lack of the EPA specified labels on
the transformer should be dismissed (Proposed Conclusions of Law at 8,
9). Respondent also relies upon Ms. Tan's testimony to the effect that
the purpose of the EPA label was to warn anyone approaching of the presence
of PCBs and that the labels on the transformer would provide such notice
(Tr. 92).
In Briggs & Stratton Corporation, TSCA Appeal No. 81-1 (Final Decision,
February 4, 1981), the Judicial Officer rejected a similar argument, pointing
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out that the EPA specified label includes information to contact EPA for
proper disposal. It might also be noted that the label specified by the
regulation includes a toll-free number of the Coast Guard, which is to be
contacted in case of accident or spill. The Judicial Officer ruled that
the presence of manufacturer's labels indicating the presence of PCBs was
not an adequate substitute for the label required by the regulation and
did not warrant any mitigation of the penalty assessed by the presiding
officer.A/
It will be recalled that Ms. Tan testified that she would have reduced
the proposed penalty for the lack of an EPA label from $10,000 to $3,000
had she known of the cautionary labels on the transformer (finding 21).
The effect of this testimony is to change the marking violation in the
Penalty Policy Matrix (Significant Extent) from Level 3 to Level 5. This
is in accord with the Penalty Policy which defines minor marking violations
as situations where all the requirements of the rule have not been followed,
but there are sufficient indications to notify someone unfamiliar with the
situation of the presence of PCBs and to enable the identification of PCB
items (45 FR at 59780). In Briggs & Stratton, supra, the initial decision
was rendered prior to publication of the PCB Penalty Policy and the Penalty
Policy was held to be inapplicable. Accordingly, Briggs & Stratton does not
control here and gravity-based penalty for the marking violation is deter-
mined to be $3,000.
4_/ Id. at 29. It should be noted, however, that the ALJ reduced the
penalties sought by the Agency for marking violations from $10,000 to
$7,500 in one instance and from $10,000 to $5,000 in another instance.
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Under the Penalty Policy, any improper disposal of PCBs is considered
to be a Level 1 violation. Because of the quantity involved in the spill
was less than 220 gallons and contaminated an area of less than 150 square
feet, the extent was determined to be minor and the proposed penalty for
this violation set at $5,000. Based on the small quantity involved in the
spill or stained area (6" to 8" in diameter), the location of the stained
area (in a closed, locked room in a vaulted, diked area), the fact that
there is no evidence the transformer was leaking and the possibility that
the spill could have been caused by MET Electrical Testing when it drew
samples for testing in August of 1983 and thereafter, Respondent argues
that this count of the complaint should be dismissed (Proposed Conclusions
of Law at 10-11).
The regulation (40 CFR 761.60(d)) provides that spills and other un-
controlled discharges of PCBs in concentrations of 50 ppm or greater consti-
tute disposal of PCBs. Because this is true regardless of the quantity of
PCBs involved in the spill or discharge, and it is clear that the PCB
concentration exceeds the 50 ppm limit, there is no basis for dismissing
this count of the complaint.
The Penalty Policy places all improper disposals of PCBs in Circum-
stances Level 1 and provides for variations in extent of potential damage
(major, significant and minor), the quantity involved here being in the
minor category. Indeed, it is clear that the discharge here is miniscule
in relation to the upper limits (less then 220 gallons or a contaminated
area of less than 150 square feet) of the minor extent classification. Of
course, inherent in any demarcation along quantity lines is the likelihood
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that the upper limits will vary widely from the minimum and thus make a
uniform penalty assessment based on such a demarcation appear inequitable
in a given instance. Accordingly, the fact that the discharge here is
miniscule in relation to the upper limit of the minor extent classification
is not in and of itself a sufficient reason for reducing the penalty other-
wise determined. Nevertheless, the spirit, if not the letter of the Policy^/
provides for adjustments in such situations and it is concluded that the
small quantity of the discharge here involved warrants a 25% reduction in
the gravity-based penalty, reducing that sum to $3,750.JL/ This reduction
is especially warranted in view of the location of the discharge—a closed,
locked room, in a vaulted, diked area—where the likelihood of substantial
exposure of PCBs to humans or the environment is minimal. While the Policy
does not provide for adjustments depending on the location of the discharge,
except that spills into water or contamination of food and feed are always
regarded as major, this reduction is in no sense rewarding a lucky or
fortuitous violator, because a manyfold greater discharge would not have
appreciably increased the risk.
Turning to record-keeping violations, it is clear that annual documents
or other records concerning the disposition of PCBs and the quantity on
5/ The Policy provides at 45 FR 59776:
Significant-minor borderline violations. Occasionally
a violation, while of significant extent, will be so close
to the borderline separating minor and significant viola-
tions that the penalty may seem disproportionately high.
In this situation, additional reduction of up to 25% off the
GBP may be applied before the other adjustment factor are
considered, (sic)
6/ Respondent has not established its contention that the spill was
due to the activities of MET Electrical Testing in drawing samples.
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hand were not available at the time of the inspection on May 1, 1984. It
is equally clear that an annual document for the year ending June 30, 1982,
was available at the time of the inspection on April 8, 1983. Although
this document is not for a calendar year as required by the regulation (40
CFR 761.180(a)), Ms. Tan indicated that the document was otherwise satis-
factory (finding 17). The real question here is whether the record permits
or requires an inference that annual documents other than the one mentioned
were available at the time of the 1983 inspection. Although the inference
would be stronger if the Chambers' inspection report referred to "an annual
report" or "the most recent annual report," it is concluded that the in-
ference is appropriate and should be made. Mr. Chambers' report is silent
as to omissions in or violations of record-keeping requirements and inasmuch
as inspection policy requires that such "omissions or violations be noted
(finding 16), it is concluded that the annual document attached to the report
was not the only such document available at the time. The Chambers' report
refers to and attaches a copy of one page from the inspection log and there
is clearly a sound basis for an inference that other records of inspections
of PCB transformers were available on April 8, 1983.
The gravity-based penalties of $2,000 for each of the record-keeping
violations, were calculated in strict accordance with the Penalty Policy
(major extent because of the quantity of PCBs in the transformers and
Circumstances Level 6 because of the low potential for damage). These
record-keeping violations related primarily to hinderance or obstruction
of EPA's ability to enforce the Act and the extent of that hinderance is
not primarily related to the quantity of PCBs involved. The record
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supports the finding that Respondent prepared and maintained annual docu-
ments on the disposition of PCBs and inspected and maintained records of
such inspections, albeit in neither instance in strict accordance with
the regulations. Under these circumstances, it is concluded that these
record-keeping violations may appropriately be placed in the Significant
Extent category of the penalty matrix.Z/ The "Circumstances" or proba-
bility of damage remains in the low range at Level 6, thereby establishing
the gravity-based penalty for these record-keeping violations at $1,300
each.
This brings us to the "with respect to the violator" language of the
Act^/ under which factors such as the degree of culpability and such other
matters as justice may require are considered. The fact that the GE trans-
former was previously properly labeled, that Respondent had commenced keeping
records of visual inspections of PCB transformers long before it was
TJ In Bell & Howell Co., TSCA-V-C-033, 034 & 035 (Final Decision,
December 2, 1983), the Judicial Officer made it clear that the presiding
officer was not required to assess a penalty identical to one of the
amounts shown in the Penalty Policy Matrix and that where warranted, other
amounts (boxes) may be selected in determining an appropriate penalty.
Bf Section 16(a)(2)(B) of the Act provides:
(B) In determining the amount of a civil penalty, the Admini-
strator shall take into account the nature, circumstances, extent,
and gravity of the violation or violations and, with respect to the
violator, ability to pay, effect on ability to continue to do business,
any history of prior such violations, the degree of culpability, and
such other matters as justice may require.
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required to do so2/ establish Respondent's good faith or otherwise stated
a small or low degree of culpability.i2/ Although the evidence will not
support a finding that the PCB records were removed or destroyed by the
former employee responsible for such matters, it is worthy of note that
Respondent searched for the missing records in March of 1984, sometime
prior to the inspection on May 1 of that year. These facts coupled with
the fact Respondent has no prior history of violations of the Act and
moved promptly to correct deficiencies noted in the inspection warrant
a 40% reduction in the gravity-based penalty, which as computed above
totals $9,350, to $5,610.1i/
Respondent argues that no penalty should be assessed because it is
entitled to a credit for environmentally beneficial expenditures in excess
of $100,000 incurred in removing PCB transformers from service (Proposed
Conclusions of Law at 15, 16). The Penalty Policy does in some circum-
stances provide for credits for sums expended in cleaning up or otherwise
mitigating the harm caused by the violation (45 FR at 59775). The Policy
makes clear, however, that because cleanup costs are considered to be part
_9/ In accordance with the Interim Measures Program (46 FR 16091,
March 10, 1981) the first inspection of transformers, other than those
posing a risk to food or feed, was to be completed by August 10, 1981.
10/ Culpability as used in the Act is given its normal definition
as being synonymous with "blameworthy."
ll/ Although the penalty so determined is considered to be consonant
with the Penalty Policy, it is, of course, clear that I am not bound there-
by (40 CFR 22.27) and have considerable discretion in determining an
appropriate penalty. Electric Service Co., TSCA Appeal No. 82-2 (Final
Decision, January 7, 1985).
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of the cost of the violation, such credits will only be granted in situa-
tions where the penalty plus the costs of cleanup are excessive for the
particular violation. Here, Respondent made a business decision to remove
PCB transformers from its plants and while this decision eliminates the
possibility of future violations of the regulation, the costs of transformer
removal are not related to correcting the violations found. Although there
is no evidence in the records of the costs of cleaning up or remedying the
violations, such costs would not appear to be substantial. Under such cir-
cumstances, the costs of correcting the violations found plus the penalty
may not be considered excessive in relation to the violations and an appro-
priate condition for applying the credit has not been demonstrated.
ORDER
Respondent, Lever Brothers Company, Inc., having violated the Act and
regulations in the particulars hereinbefore recited, is assessed a penalty
of $5,610 in accordance with § 16(a) of the Act. Payment of the penalty
shall be made by mailing a cashiers or certified check in the amount of
$5,610 payable to the Treasurer of the United States to Regional Hearing
Clerk, EPA, Region III, P. 0. Box 360515M, Pittsburgh, Pennsylvania 15251,
within 60 days of the date of this order.il/
Dated this O _ day of December 1985
T. Nissen
Administrative Law Judge
ll/ Unless appealed in accordance with 40 CFR 22.30, or unless the
Administrator elects, sua sponte, to review the same as therein provided,
this decision will become the final order of the Administrator in accord-
ance with 40 CFR 22.27(c).
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
BEFORE THE ADMINISTRATOR
In the Matter of
Jackson Brewery Development Corp.
New Orleans, Louisiana,
and
NOLA Demolishing Corporation
New Orleans, Louisiana,
and
New Orleans Public Service, Inc.
New Cleans, Louisiana,
Respondents
) Docket No. TSCA-VI-83C
1. Toxic Substances Control Act - PCBs - Defense of abandonment of
PCB-contaminated transformers determined by reference to Louisiana
law where transformers were located in Louisiana.
2. Toxic Substances Control Act - PCBs - Proof of abandonment under
Louisiana law requires an act of abandonment coupled with an inten-
tion to abandon.
3. Toxic Substances Control Act - PCBs - The burden of showing abandon-
ment is on the party claiming it.
4. Toxic Substances Control Act - PCBs - Large electrical transformers
are not immovables under Louisiana law, title to which passes by
operation of law to the purchaser of real property.
5. Toxic Substances Control Act - PCBs - Evidence of whether the parties
viewed electrical transformers as immovables considered in determining
whether they were immovables under Louisiana law.
6. Toxic Substances Act - PCBs - Ownership of PCB-contaminated trans-
formers determined by reference to state law where owner did not have
possession of transformers and claimed they had been abandoned prior
to effective date of PCB Ban Rule.
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Toxic Substances Control Act - PCBs - Owner of PCB-contaminated
transformers located in a building which was being demolished
disposed of transformer within meaning of PCB Ban Rule when it let
building owner remove them in demolishing the building.
Toxic Substances Control Act - PCBs - The presumption that oil-filled
electrical transformers are PCB-contamined transformers, 40 C.F.R.
761.3, is not rebutted simply by reliance on the fact that the
transformers are labeled by the manufacturer as oil-filled.
Appearance for Complainant:
Appearance for Respondent
New Orleans Public Service:
Appearance for Respondent
NOLA Demolishing Corp.:
James W. Ingram, Esquire
Office of Regional Counsel
U.S. Environmental Protection Agency
Region VI, 1201 Elm Street
Dallas, TX 75270
Eugene G. Taggart, Esquire
1424 Whitney Bank Building
New Orleans, LA 70130
Thomas L. Giraud, Esquire
Giraud, Cusimano & Verderame
610 Poydras Street, Suite 201
New Orleans, LA 70130
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INITIAL DECISION
This is a proceeding under the Toxic Substances Control Act ("TSCA"),
Section 16(a), 15 U.S.C. 2615(a), for the assessment of civil penalties
for alleged violations of a rule promulgated under Section 6(a) of the
Act, 15 U.S.C. 2605(a), establishing prohibitions and requirements for
the manufacturing, processing, distribution in commerce, the use, disposal, '
storage and marking of polychlorinated biphenyls ("PCB Ban Rule"), 40 C.F.R.
Part 761. _]_/ The amended complaint charged that New Orleans Public Service,
Inc., improperly disposed of PCB-contaminated electrical equipment, and that
New Orleans Public Service, Inc., Jackson Brewery Development Corporation
and NOLA Demolishing Company improperly disposed of PBCs, did not properly
mark PCBs and improperly stored PCBs. A penalty of $42,000 was requested
against New Orleans Public Service, Inc., and $25,000 against Jackson Brewery
Development Corporation and NOLA Demolishing Company jointly.
Respondents answered denying the violations and requested a hearing.
Thereafter the EPA and Jackson Development Corporation entered into a
consent order and Jackson Development Corporation was severed as a party. 2J
The EPA also withdrew all charges against New Orleans Public Service, Inc.
_!_/ Section 16(a) provides in pertinent part as follows: "(1) Any person
who violates a provision of Section 15 shall be liable to the United States
for a civil penalty in an amount not to exceed $25,000 for each such
violation. Each day such violation continues shall, for the purposes of
this subsection, constitute a separate violation of Section 15."
TSCA, Section 15, makes it unlawful among other acts, for any person to
"(1) fail or refuse to comply wi th . . . (c) any rule promulgated . . .
under Section . . . 6."
21 Transcript of proceedings (hereafter "Tr.") Vol. I, p. 67.
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except that of improperly disposing of PCB-contanrinated electrical
equipment. 3f Thus, the issues left to be resolved at the hearing were:
(1) Whether New Orleans Public Service improperly disposed of PCB-contam-
inated electrical transformers; (2) whether NOLA Demolishing Company im-
properly disposed of PCBs by spilling them onto the ground, and failed to
properly mark and store containers holding PCBs; and (3) the penalty to
be assessed for the violations, which the EPA claims should be $17,000
against New Orleans Public Service and $25,000 against NOLA.
A hearing was held in New Orleans on August 13, 14, and 15, 1985.
The parties then filed proposed findings of fact, conclusions of law and
a proposed order with supporting briefs. On consideration of the entire
record and the submissions by the parties, and for the reasons hereafter
given, a penalty of $17,000, is assessed against New Orleans Public Service,
Inc., and a penalty of $1,000 as assessed against Hamilton Singleton, d/b/a
NOLA Demolishing Company. All proposed findings of fact inconsistent with
this decision are rejected.
Findings of Fact
1. Jackson Brewery Development Corporation (hereafter "Jackson Brewery")
is a Louisiana Corporation doing business in New Orleans, LA (Stipulation,
p. 2, Par. 1).
2. At all times pertinent to this proceeding, NOLA Demolishing Company
("NOLA") was a sole proprietorship of Hamilton K. Singleton doing business
in New Orleans, LA (Stipulation, p. 2, Par. 3; Tr. Vol. II, p. 283).
3/ Tr. Vol. I, p. 140. Pursuant to this action of Complainant, the
Violations charged in paragraphs 26, 30 and 33 of the amended complaint
are di smissed wi th prejudice against New Orleans Public Service Co.
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3. New Orleans Public Service, Inc. (hereafter "NOPSI") is a Louisiana
Corporation doing business in New Orleans, LA (Stipulation, p. 2, Par. 2).
4. In May 1955, NOPSI purchased three 1250 KVA transformers, Serial Nos.
C-184440, C-184441 and C-184442, from General Electric Company. The face-
plate on the transformers indicated that they were filled with 10-C oil,
a mineral oil. Stipulation, p. 2, Par. 4; Tr. Vol. I, p. 159.
5. The three transformers were installed in a room in the Jackson
Brewery Building, 620 Rue Decatur, New Orleans, LA, on December 15, 1963,
(hereafter "Brewery Building") as part of the electric service furnished
by NOPSI to that building. Stipulation, p. 3, Pars. 9 and 10; Complainant's
Exh. 54.
6. On June 29, 1979, NOPSI discontinued electric service to the Brewery
Buildiny. The three transformers were left in place, Tr. Vol. Ill, p. 632;
Complainant's Exh. 54. _4/
7. On May 12, 1978, the Brewery Building had been sold to the American
Can Company. This company, in turn, on January 26, 1982, sold the property
to the Jackson Square Investment, Ltd. NOPSI Exhs. 28, 30.
8. On March 16, 1983, Jackson Square Investment, Ltd. on behalf of Jackson
Brewery entered into a written contract with NOLA to demolish and remove
construction materials and equipment from certain parts of the Brewery
Building. The transformers were located in the part of the building which
4_/ NOPSI's .proposed finding that the transformers were "abandoned" on
June 29, 1979, is rejected for the reasons stated below. See infra at
12-14.
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was being demolished. Stipulation, p. 3, Par. 13; NOPSI Exh. 1; Tr.
Vol. I, pp. 214-15, Vol. II, p. 309. _5/
9. At about the time that NOLA began its demolition work in early 1983,
Jim Rehkopf, a field supervisor for Jackson Brewery met with representa-
tives of NOPSI concerning the disposition of the transformers installed by
NOPSI. He testified in pertinent part about this meeting as follows:
I had called NOPSI and asked them — or rather,
told them we had some transformers located in the
brewery that we'd like to get rid of. And I was
under the impression that NOPSI still owned them.
They referred me to John Thomas because he was the
man who controlled that district for NOPSI. He
came out with some other, gentlemen and looked at
the brewery.
Q [Mr. Ingraham] Okay. Do you know approximately
when that was?
A It was early 1983, either late February or early
March of 1983.
Apparently NOPSI's representatives were noncommittal about the disposition
of the transformers except that Rehkopf was left with the impression that
the transformers were NOPSI's. Tr. Vol. I, pp. 234-35.
1U. Following Rehkopf s meeting with NOPSI's representatives, John Blitch
on May 6, 1983, on behalf of Jackson Brewery wrote to NOPSI, attention
5/ NOPSI alleges in its proposed findings of fact, No. 1, that Jackson
Brewery was the general partner of Jackson Square Investment, Ltd. It is not
clear from the record that this was the actual legal relationship between the
two, see NOPSI Exh. 28. The record, however, is clear that the demolition
.and removal was done for the benefit of Jackson Brewery. Memorandum of ex-
planation attached to Jackson Brewery's answer at 3. Since all parties appear
to have assumed that there is no distinction to be drawn between Jackson Brewery
and Jackson Square Investment, Inc., for the purposes of this case, reference
to Jackson Brewery will also include Jackson Square Investment, Ltd. where
appropriate.
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of Thomas, advising NOPSI of NOLA's demolition of the interior and asking
NOPSI whether it intended to salvage the transformers. Blitch stated in
his letter as follows:
We are well underway in demolition of various portions
of the Old Brewhouse, Jax Brewery at 620 Decatur Street.
The demolition consists of exterior non-conforming
structures and interior gutting of mechanical and elec-
trical equipment. Still inside the Brewhouse, there are
three large NOPSI transformers and six or eight small
cylindrical-type transformers. I am sure that these
transformers are the property of NOPSI and, as such, you
may want to recover them. The demolition contractor is
now in the process of cutting out all equipment around
this area and eventually will need to move through the
transformer room to get to other phases of the demolition.
If it is your intention to salvage these transformers,
then I request that you immediately contact me at
581-4002 and advise me as such. If we have not heard
from you regarding same by May 16, then we will assume
that you are not interested in their recovery.
Your early response to this request will be appreciated.
Complainant's Exh. 4.
11. NOPSI did not respond to the letter. Blitch then called Thomas
who after checking with NOPSI's engineering department called back and
told Blitch that "they had indicated that the transformers were of no
value to them and they did not want them." Tr. Vol I, p. 179.
12. Sometime in the month of June 1983, NOLA at the instruction of Jack-
son Brewery undertook the removal of the transformers from the Brewery
Building. There were eight transformers in all. The three 1250 KVA trans-
formers already referred to, and three 200 KVA transformers and two 100
KVA transformers owned apparently by Jackson Brewery. All were located
irv a room on the second floor of the building. Stipulation, p. 3, Par.
12; Tr. Vol. II, pp. 284, 312; Complainant's Exh. 2, p. 6; Respondent's
Exh. 16.
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13. At the time of their removal, the three 1250 KVA transformers con-
tained in excess of 50 ppm PCBs but less than 500 ppm PCBs. Complainant's
Exh. 54.
14. While removing the transformers, a pipe on one of the 1250 KVA trans-
formers broke, spilling approximately 125 gallons of transformer oil. Tr.
Vol. II, p. 287.
15. After removing the transformers, NOLA drained the oil from transformers
and transferred the fluid to twenty-six 55-gallon drums. In the process of
doing so about 25 gallons of transformer fluid spilled on the ground. Stip-
ulation, p. 4.
16. The 26 drums filled with transformer oil were transported from the
Brewery Building site to NOLA's premises at 8200 Old Gentilly Road, New
Orleans, LA. Stipulation, p. 4, Par. 21.
17. The drained transformer bodies were transported by NOLA and sold by
NOLA to Southern Scrap Metal Co., Ltd., 4801 Florida Avenue, New Orleans,
LA. Stipulation, p. 4, Par. 21.
18. On July 5, 1983, following the completion of his demolition work,
Hamilton Singleton, proprietor of NOLA, called Glen Foret of the Louisiana
Department of Natural Resources to find out whether oil from the trans-
formers was hazardous. He had apparently become concerned about this after
watching a television program a few days earlier in which the subject of
electrical transformers containing PCB's was discussed. Tr. Vol. II, pp.
293, 318; Complainant's Exh. 50; Stipulation, p. 5, Par. 25.
19. At the advice of Foret, Singleton took a sample of oil from one of
the drums and had it tested by Shilstone Engineering Testing Laboratory
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Division of Professional Services, Inc. The test disclosed that the
sample contained 140 parts per million (ppm) PCBs. Complainant's Exh. 4;
Stipulation, p. 5, Par. 26.
20. On or about July 8, 1983, NOPSI collected three samples of oil taken
from the bottom of the tanks of the three 1250 KVA transformers and had
the oil analyzed by the Shilstone Engineering Testing Laboratory Division.
The test report dated July 11, 1983, disclosed that one sample contained
89 ppm PCBs, one sample contained 86 ppm PCBs, and one sample contained
78 ppm PCBs. Complainant's Exhs. 54, 61.
21. On July 11, 1983, Jackson Brewery contracted with Analysis Labora-
tories, Inc., to obtain and analyze samples of the fluid contained in the
drums of drained transformer oil at NOLA's premises to determine the
presence and concentration of PCBs in the fluid. Stipulation, p. 5, Par.
31.
22. On July 11, 1983, Tommy Blythe, an employee of Analysis Laboratories,
Inc., collected a sample from each of ten of the twenty-six drums. Analysis
of these samples revealed the following results:
Milligrams per Liter (ppm)
Sample Number PCB as Arochlor 1260
1 142
2 32
3 26
4 60
5 55
6 62
7 60
8 22
9 56
10 101
Stipulation, p. 6, Pars. 32, 33, 34, 35; Complainant's Exh. 44.
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10
23. On September 7, 1983, Tommy W. Homes, an employee of Peterson
Maritime Services, Inc. collected samples of transformer oil from each
of the remaining sixteen drums and submitted them to Analysis Laboratories,
Inc. for analysis. The results of the analyses were as follows:
Milligrams per Liter (ppm)
Sample Number PCB as Arochlor 1260
1 151
2 149
4 153
5 145
6 103
7 42
8 46
9 94
11 102
13 . 131
17 120
20 99
22 108
23 111
24 115
25 117
Stipulation, p. 10, Pars. 62, 63, 64; Complainant's Exh. 44.
24. Of the twenty-six drums of transformer oil, twenty-one were found to
contain PCB's in excess of 50 ppm. Findings 21 and 22.
25. Hamilton Singleton on receiving the laboratory report referred to in
Finding 18 above that the sample from one of the drums of transformer oil
stored on NOLA's premises contained 140 ppm PCBs, notified Foret of the
results of the analysis. Foret, in turn, notified Daryl Mount of EPA
Region VI of the situation. Jackson Exh. 21. 6/
6/ Although Jackson was severed as a party, it was agreed that certain
Exhibits originally identified as "Jackson Exhibits" would be admitted
into evidence. See list of exhibits attached to Stipulation, and Tr.
Vol. I, p. 91.
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11
26. Singleton, apparently on the advice of Foret, roped off the area
where the drums were stored and put up a sign warning of the presence of
dangerous chemicals. Tr. Vol. II, pp. 328, 335.
27. On July 20, 1983, J. David Sullivan, an EPA inspector from Region VI
made an inspection of NOLA's premises. A sample was taken from one of
the 55-gallon drums and assigned EPA Sample No. AG1601. Analysis of the
sample by the EPA's Houston Laboratory showed that it contained PCBs in
concentration of 56 ppm. Stipulation, p. 7, Pars. 42-44; Complainant's
Exh. 33.
28. On July 21, 1983, Sullivan also inspected the transformer bodies re-
moved from the Jackson Brewery Building by NOLA, and located at Southern
Scrap Material Co. Ltd. He collected a sample from one of the 100 KVA
transformer bodies and from one of the 200 KVA transformer bodies. These
samples were assigned EPA Sample Nos. AG1602 and AG1603. On analysis,
Sample No. AG1602, taken from the 100 KVA transformer, was found to con-
tain PCBs in concentration of 72 parts per billion (0.072 ppm), and
Sample No. AG1603, taken from the 200 KVA transformer, was found to contain
PCBs in concentration of 29.3 ppm. Sample No. AG1602, however, was analyzed
as a water sample and was not a measure of the PCB content of the oil that
had been in the transformer. Stipulation, pp. 8-9, Pars. 46-52;
Complainant Exh. 2, p. 6; Complainant's Exhs. 36, 38; Tr. 558-59.
29. The drums of drained transformer oil were eventually removed from the
NOLA site and properly disposed of and the site cleaned up by Jackson
Brewery, which also undertook the cleanup of the PCBs spilled at the
Brewery Building. Jackson Exhs. 17, 21.
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12
Discussion, Conclusions and Penalties
The facts can be briefly summarized as follows: NOPSI installed three
1250 KVA transformers in the Jackson Brewery Building in December 1963,
to provide electric service to the building. In June 1979, NOPSI dis-
continued service to the building but left the transformers in place.
Apparently no one thereafter paid any attention to the transformers until
early 1983, when Jackson Brewery, the new owner of the building wanted
them removed so it could proceed with its demolition of the interior of
that part of the building. NOPSI was told of the demolition and said that
it was not interested in the transformers. Jackson Brewery accordingly
had them removed by NOLA as part of its demolition work. While removing
the transformers, NOLA spilled some of the transformer fluid, and a further
spill occurred when NOLA drained the transformer fluid into 55-gallon drums.
After the transformers were taken out of the building, NOLA then stored the
drums on its premises prior to further disposing of the oil. The three 1250
KVA trans formers were labelled as oil-filled transformers, but on testing,
the transformer fluid was found to contain PCBs in excess of 50 ppm PCBs
but less than 400 ppm PCBs.
NOLA does not contest the violations charged against it of improperly
disposing of PCBs, and failing to properly mark and store them, but only
the appropriateness of the penalty. NOPSI, however, denies the violation
charged against it of improperly disposing of PCB-contaminated transformers.
The Liability of NOPSI
NOPSI's defense to the unauthorized disposal of the three 1250 KVA
transformers in 1983, is that it did not then own the transformers, having
abandoned them when it discontinued electric service to the Brewery Building
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13
on June 29, 1979, which date was prior to the effective date of the PCB
Ban Rule. TJ
All parties agree that what constitutes abandonment is to be
determined by reference to Louisiana law. Under Louisiana law, to
establish the abandonment of personal property it must be shown that
there was an act of abandonment coupled with an intention to abandon.
Powell v. Cox, 92 So. 2d, 739, 742 (La. Ct. App. 1957); New Orleans Bank
& Trust Co. v. City of New Orleans. 147 So. 42, 44-45 (La. S.Ct. 1933).
The intention of the owner is a matter of material importance. Powell
v. Cox, supra, 92 So. 2d 742.
NOPSI is correct that the burden of establishing ownership of the
transformers is on the EPA. Here the EPA met that burden initially by
NOPSI's own admission that it owned the transformers up until the time of
the claimed abandonment. The burden of showing abandonment (by which is
meant the burden of persuasion), on the other hand, is upon the party re-
lying on it. This seems to be clearly the rule when the owner is defend-
ing his property against someone claiming title to it by abandonment.
See Linscomb v. Goodyear Tire & Rubber Co., 199 F.2d 431, 435 (8th Cir.
1952). It should also be the rule when the owner pleads abandonment as a
means of escaping some obligation or liability that attaches to the property
For unless there is unequivocal evidence that the owner actually intended
TJ The PCB Ban Rule regulating the disposal of transformers containing
PCBs in concentrations of 50 ppm or more became effective on July 2, 1979.
4.4 Fed. Reg. 31514 (May 31, 1979). Prior thereto, only the disposal of
transformers containing PCBs in concentration of 500 ppm or greater was
regulated. See PCB Disposal and Marking Rule published February 17, 1978,
43 Fed. Reg. 7157 ("PCB mixture" defined as any mixture containing 500 ppm
or greater PCBs). There is no evidence that the three transformers ever
contained PCBs in concentrations of 500 ppm or greater.
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14
to abandon the property, the inference is unescapable there was no actual
intention to abandon the property at the time but that abandonment is be-
ing asserted as an afterthought to escape the liability or obligation that
the property imposes upon the owner. See Katsaris v. United States, 684
F.2d 758 (llth Cir. 1982).
Here the act claiming to evidence abandonment of the transformers was
NOPSI's not removing the transformers after service was discontinued. That
act, however, is equally susceptible of the interpretation that the trans-
formers were let in place not because NOPSI was abandoning them but because
NOPSI either had no immediate use for them elsewhere, or it wanted them
available in the event that electric service was resumed. It is significant
that the two Jackson Brewery representatives involved in demolishing the
building thought that the transformers belonged to NOPSI. Of While this
does not in itself conclusively establish that the transformers were still
NOPSI's property, it does confirm the conclusion that the bare act of leaving
the transformers at the building does not unequivocally show that what was
intended was "the rel inqui shment of property to which a person is entitled,
with no purpose of again claiming it ... ." Powell v. Cox, supra, 92
So. 2d 741 (quoting 1 C.J.S. Abandonment, § 1, p. 4). Also, the fact that
NOPSI's representative on being questioned about the transformers came down
8/ Finding of Fact Nos. 9 and 10 supra. There is no evidence that the
Jackson Brewery representatives were attempting to place ownership in
NOPSI because they had in mind the possibility that the transformers
might contain PCBs. Their sole concern appears to have been with removing
the transformers so they could proceed with the demolition.
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15
to look at the building before deciding that the transformers were of no use
to NOPSI, is inconsistent with NOPSI's claim that it had abandoned all rights
to the transformers back in 1979.
It is concluded, accordingly, that NOPSI has not sustained its burden
of showing that it had already abandoned the transformers when Jackson
Brewery approached it about removing the transformers from the building
in early 1983.
NOPSI argues that in any event the transformers were component parts
of the building and under Louisiana law title to them passed to Jackson
Brewery when it purchased the building, as there was no recorded vault
agreement or other instrument reserving title in NOPSI, and they were not
included in the property which was reserved under the Act of Sale. In
support of this argument, NOPSI relies upon Articles 466 and 469 of the
Louisiana Civil Code which provide as follows: B/
Art. 466. Component parts of buildings or
other constructions.
Things permanently attached to a building
or other construction, such as plumbing, heat-
ing, cooling, electrical or other installations,
are its component parts.
Things are considered permanently attached
if they cannot be removed without substantial
damage to themselves or to the immovable to which
they are attached.
* * *
Art. 469. Transfer or encumbrance of Immovable.
The transfer or encumbrance of an immovable
includes its component parts.
9/ The part of the Louisiana Civil Code dealing with immovables,
Articles 462-469, is included as NOPSI's Exh. 24.
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16
The second paragraph of Article 466 does not appear to be applicable,
since the evidence indicates that the transformers were removed without
substantial damage to the building or to themselves. It did require re-
moving louvers from a window, but the louvers were not damaged and could
have been reused. While a pipe broke on one of the transformers in the
course of removing it, this occurred because of the way in which the trans-
former was attached to the crane. Once this was corrected the transformer
was taken out without any further damage to it, and the other two transformers
were also removed without any damage to them. 10/
NOPSI argues that facility of removal is not determinative of the
status of the transformers, as the transformers are electrical installa-
tions expressly made immovable by paragraph one of Article 466. 11/ The
construction of Article 466 was recently considered in the case of Equibank
v. United States Internal Revenue Service. 749 F.2d 1176 (5th Cir. 1985).
The question before the court was whether chandeliers in a home were im-
movables and hence subject to a tax lien on the home. The court noted that
the Louisiana legislature did not define or otherwise describe an "electrical
installation" when it enacted Article 466 in 1978. It concluded that the
views of the public may therefore be considered in defining the term, and
that chandeliers are ordinarily looked upon by the public as a component
part of the building. Accordingly, the court held that the chandeliers
should be classified as immovables. Equibank v. United States Internal
Revenue Service, F.2d at 1178-79.
JO/ Tr. 286-87, 372-73.
ny Reply brief at 11.
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17
In this case we do not have evidence of the views of the public.
We do have evidence, however, as to how the parties themselves viewed the
status of the transformers, which would also seem to be relevant in deter-
mining whether these transformers are immovables. The fact that Jackson
Brewery thought that the transformers belonged to NOPSI, and the fact
that NOPSI consented to letting Jackson Brewery remove the transformers
not because it considered them fixtures which already belonged to Jackson
Brewery, but because NOPSI no longer had any use for them, all indicate
that the parties themselves did not regard the transformers as immovables,
title to which by operation of law had passed to the purchaser of the
building.
I find, accordingly, that NOPSI owned the transformers up until the
time it told Jackson Brewery it had no interest in them. 12/
The EPA rests its charge of NOPSI's improper disposal of the trans-
formers upon the claim that when NOPSI expressed no interest in the trans-
formers, it thereby abandoned them. It is unnecessary to have recourse to
the technical law of abandonment to find that NOPSI disposed of the trans-
formers within the meaning of the PCB Ban Rule. Disposal is defined in
pertinent part as meaning "intentionally or accidentally to discard, throw
away, or otherwise complete or terminate the useful life of PCBs and PCB
12/ The EPA argues that federal policy requires that NOPSI be held re-
sponsible for proper disposal of the transformers regardless of whether it
held title to the transformers under state property law (response to post-
hearing briefs at 4-5). The transformers, however, were not in the physical
possession of NOPSI, nor of anyone whose possession could be attributed to
NOPSI because of its relationship to NOPSI. If there is some reasonable
basis for imposing liability upon NOPSI besides its status as owner under
state law, the EPA has not shown what this would be. Nor do I discern that
relying upon state law conflicts with any policy underlying the PCB regula-
tions or the Toxic Substances Control Act.
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18
items .... There is no question but that when NOPSI left the trans-
formers for removal by Jackson Brewery it was thereby discarding them and
terminating their useful life as transformers.
It is also concluded that the 1250 KVA transformers were RGB-contami-
nated transformers, i.e., contained between 50 - 500 ppm PCBs, at the time
of their disposal, and subject to the PCB Ban Rule's requirements for dis-
posal as such. There was considerable discussion at the hearing as to the
admi ssibil i ty and credibility of the analysis made by Shil stone Engineering
Testing Laboratory of the oil samples taken by NOPSI from the transformers,
which showed concentrations of PCBs ranging from 78 ppm to 89 ppm. 13/
NOPSI, however, presumably would not have used Shil stone to do testing for
it, if it were not a reliable laboratory. 14/ It is to be noted that NOPSI
itself never appears to have questioned the results of the test at the time
they were furnished, which, of course, it could have done, if it were con-
cerned that the results differed from other information in its possession. 15/
The underlying papers showing the gas chromatograms, readouts and also the
calibration record were made available to NOPSI. 16/ Apparently these dis-
closed no irregularities in the procedure, since NOPSI has not pointed out any,
13/ See. Tr. Vol. I, pp. 57-62, and testimony of Larry S. McAnarney.
Tr. Vol. II, pp. 381-454.
J4/ See Tr. Vol. II, pp. 448-49.
15/ Shilstone has apparently done other testing for NOPSI besides these
particular tests and continues to do so. See Tr. Vol. II, p. 384.
16/ See Complainant's Exh. 61; Tr. Vol. II, pp. 420, 424.
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19
Accordingly, I find that the Shilstone analytical reports reliably
indicated the PCB concentration of the oil in the three transformers. 17/
In addition to the evidence of the Shilstone tests, the PCB Ban Rule,
40 CFR 761.3, expressly provides that "[o]il filled electrical equipment
other than circuit breakers, reclosers, and cable whose PCB concentration
is unknown must be assumed to be PCB-contaminated Electrical Equipment."
The Rule.thus makes the oil-filled transformers presumptively PCB-contaminated
transformers to the extent at least of requiring NOPSI to come forward with
evidence to show the contrary. As the legislative history of the rule makes
clear, the mere knowledge that the transformers are labeled by the manufac-
turer as oil-filled is not in itself sufficient to rebut that presumption. 18/
Indeed, to construe the requirement otherwise could be to destroy the pre-
sumption and make that provision meaningless. Since NOPSI has not come for-
ward with any evidence to show that the transformer oil contained less than
17/ It is recognized that in contrast to the PCB concentrations of 78 ppm,
86 ppm and 89 ppm reported on the Shilstone tests, the tests done on the
drums of drained oil which contained not only oil taken from the three NOPSI
transformers but also from the other five transformers disclosed concentrations
of over 100 ppm PCBs and as high as 153 ppm in one instance. Findings of Fact
Nos. 22 and 23. Dr. Langley, an expert on PCB analytical testing testified
that this does not necessarily indicate incorrect or erroneous test procedures,
but simply could result from the variability inherent in the procedure itself
and from the possible mixing of the oil of all the transformers. Tr. Vol.
Ill, pp. 582-83. The fact that there can be variable results in the tests,
however, does not destroy the credibility of NOPSI's tests because the fluid in
these tests can be identified as having been taken solely from the 1250 KVA
transformers, while the fluid in the drums cannot be so identified.
_18/ See 47 Fed. Reg. 17426, 17439-440 (April 22, 1982) (explanation to
proposed amendment to the definition of PCB-contaminated Electrical
Equipment). The presumption was specifically incorporated in the PCB
Ban Rule by amendment to the rule published on August 22, 1982, and made
effective September 24, 1982. 47 Fed. Reg. 37342, 37356 (August 25, 1982).
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50 ppm PCBs, other than that the transformers were labeled by their manu-
facturer as "oil-filled", it is also found that the transformers were re-
quired by the PCB Ban Rule to be disposed of as PCB-contaminated transformers
Pursuant to 40C.F.R. 761.60(b) (4), PCB-contaminated transformers must
be disposed of by draining the free flowing liquid from the transformer and
disposing of it in the type of facility specified in the Rule. There are
no special disposal requirements for the drained transformer casing. Since •
NOPSI disposed of the transformers without draining the free flowing liquid,
it has violated that requirement.
The Appropriate Penalty
(a) The Penalty Assessed Against NOPSI
The EPA has proposed a penalty of $17,000 against NOPSI. This is the
correct gravity based penalty under the PCB Penalty Policy. 19/ I find that
no adjustment to the penalty is merited. As a provider of electricity it
is inconceivable that NOPSI would not have known of the requirements of the
PCB Ban Rule. Indeed NOPSI does not make any such claim. In any event,
NOPSI is charged with constructive notice of the Rule. 20/ As already
J9/ See 45 Fed. Reg. 59777 (September 10, 1980). The EPA charges NOPSI
with the disposal of 1,170 gallons of PCBs, based on the fact that each
transformer had a capacity of 390 gallons. See Complainant's Exh. 2, p. 6.
Taking the EPA's assumption that each drum stored at NOLA's premises con-
tained 50 gallons, the volume could be somewhat less but it would still
be sufficient to bring it within the significant category. The remaining
five transformers had a rated volume of 397 gallons. Complainant's Exh.
2, p. 6. Assuming they were filled to capacity, this would leave 903
gallons in the drums which would have had to come from the three 1250 KVA
transformers. Adding to that 903 gallons, the estimated 125 spilled during
removal, brings the total to 1,028 gallons, which reduced 70% still leaves
308 gallons, well within the significant range of 220-1100 gallons. Im-
proper disposal is a level one violation in the penalty matrix. See 45
Fed. Reg. 59777-778.
20/ See 44 U.S.C. 1507; Federal Crop Insurance Corp. v. Merrill, 332 U.S.
380, 384-85 (1947).
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noted, its reliance upon the transformer's label to assume that the trans-
formers did not contain PCB's of 50 ppm or over is directly contrary to
the requirements of the Rule, and, therefore, is not a ground for reducing
the penalty. On the other hand, I do not agree that NOPSI's actions justify
an increase in the penalty as contended by the EPA. 21/ NOPSI's violation
appears to have been inadvertent, the consequence of overlooking the fact
that even through these were oil-filled transformers, the PCB Ban Rule
still applied to their disposal. When the violation did come to light,
Jackson Brewery, who was directly involved in the removal of the transformers,
took responsibility for the clean-up. NOPSI could reasonably assume under
these circumstances that no further action on its part was required, particu-
larly since Jackson Brewery never made any demand on NOPSI to take part in
the corrective or clean-up actions. 22/
Accordingly, I find that the appropriate penalty to be assessed
againist NOPSI is $17,000. There is no claim by NOPSI that such a penalty
is beyond its ability to pay or would affect its ability to continue to do
business.
(b) The Penalty Against NOLA
The EPA initially proposed a penalty against NOLA and Jackson Brewery
of $10,000 for the marking violation, $10,000 for the storage and $5,000
for the disposal violation, or a total of $25,000. On the basis of settling
_21_/ Post-hearing brief at 39.
22J Tr. Vol. I, p. 229.
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with Jackson Brewery for $8,333.00, the EPA proposes that the balance of
the penalty or $16,666.00, be assessed against NOLA. 23/
I find that the gravity based penalty has been properly calculated. 24/
I do not agree, however, with the EPA's claim that no adjustment is merited
in the case of NOLA.
There is no question that Mr. Singleton, the sole owner of NOLA,
lacked sufficient knowledge of the potential hazard created by the trans-
formers. His entire conduct conclusively demonstrates this. He first
learned of the potential hazard when he saw the television program after
having removed the transformers and stored the oil on NOLA's premises. He
then immediately got in touch with the State EPA. Thereafter, he fully
cooperated with both the State and Federal authorities. 25/
Also to be considered is Hamilton Singleton's financial condition.
Mr. Singleton receives a pension from the Veteran's Administration, which
is his only present source of income. 26/ The business apparently has
23/ Complainant's post hearing brief at 32.
24/ Jackson Brewery and NOLA were chared with the improper disposal taking
place when some 25 gallons of fluid were spilled during the course of drain-
ing the transformers. Complainant's Exh. 45. NOPSI suggests that there
is an inconsistency between its being charged with the improper disposal of
transformers and Jackson Brewery not being charged with the same violation.
Reply brief at 2. It is assumed that ownership of the transformers, or at
least responsibility for their proper disposal thereafter, passed to Jackson
Brewery when NOPSI disclaimed any further interest in them and Jackson
Brewery assumed control over them by undertaking to remove them. Unlike
NOPSI's action, however, the transformers were drained of their fluid. Thus,
the facts in the two cases are not the same.
2SJ Tr. Vol. II, pp. 790-92.
26/ NOLA Exh. 3.
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now been turned over to his sons and Hamilton Singleton receives no
financial benefit from it. 27 / NOLA itself appears to have had and still
has very few assets. 28/ Hamilton Singleton still owes money on the loan
secured to pay for insurance required for the Jackson Brewery demolition
work, work for which he has never been fully paid. 29/
It is true as the EPA argues, and the penalty policy so provides, that
lack of actual knowledge of the hazard created by one's conduct is not a
defense to a violation where, as was the case with NOLA, the person has
sufficient control over the situation to avoid committing the violation. 30/
It is also true that Hamilton Singleton operated NOLA on a shoestring. There
is no evidence, however, that Singleton shirked his responsibility to pro-
tect the environment or public health where he knew these dangers to exist.
His handling of the removal of asbestos during the demolition of Jackson
Brewery is proof to the contrary. Complainant argues that reducing the
penalty would encourage marginal businesses who violate the Act to volumtar-
ily go out of business, when faced with penalties under TSCA. There is no
evidence here that the desire to escape TSCA penalties was a motive in
Singleton's discontinuing business. Instead, the decision appears to have
been dictated by Singleton's present poor health. 31/
Taking into account that it was Hamilton Singleton who first brought
this matter to the attention of the regulatory authorities, his cooperative
27/ Tr. Vol. II, p. 345.
28J See Tr. 367-68.
29/ See Tr. Vol. Ill, pp. 680-82. The original loan was for $10,000 but
was refinanced and the balance owed is now $13,000, Id.
_30/ See 45 Fed, Reg. 59773.
31/ See Vol. II, Tr. 344; Vol. Ill; Tr. 679; NOLA Exh. 3.
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attitude thereafter, and his financial condition, I find that the appro-
priate penalty to be assessed against him should be $1,000.
ORDER 32/
Pursuant to Section 16(a) of the Toxic Substances Control Act, 15
U.S.C. 2615(a), and for the reasons stated above, a civil penalty of
$17,000 is hereby assessed against New Orleans Public Service, Inc., and
a civil penalty of $1,000 is hereby assessed against Hamilton Singleton
doing business as NOLA Demolishing Company.
Payment of the full amount of the civil penalty assessed shall be
made within sixty (60) days of the service of the final order by submitting
a certified or cashier's check payable to the United States of America and
ma i 1 ed to:
EPA - Region VI
(Regional Hearing Clerk)
P.O. Box 360582M
Pittsburgh, PA 15251
uerald Harwood
Administrative Law Judge
DATED: December 16, 1985
32/ Unless an appeal is taken pursuant to the Rules of Practice, 40
C.F.R. 22.30, or the Administrator elects to review this decision on
his own motion, the Initial Decision shall become the final order of
the Administrator. See 40 C.F.R. 22.27(c).
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