United States
Environmental Protection
Agency
Office of
Enforcement and
Compliance Assurance
EPA-300-B-96-008
Administrative Hearings
And Trials
INETl
NATIONAI FNPORTEMFNT TRAINING WSTTTUTE
Recycled/Recyclable . Printed with Vegetable Based Inks'on Recycled Paper (20% Postconsumer)
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INDEX
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ADMINISTRATIVE LAW ENFORCEMENT AT EPA [[[ 1
SOME TYPES OF ADMINISTRATIVE HEARINGS
CONDUCTED WITHIN EPA [[[ ..................... 7
40 CFR PART 22 - The CONSOLIDATED RULES OF PRACTICE GOVERNING
THE ADMINISTRATIVE ASSESSMENT OF CIVIL PENALTIES AND THE
REVOCATION OR SUSPENSION OF PERMITS ... [[[ 9
[NOTE: these rules are annotated for Agency use only]
HEARINGS BEFORE AN EPA ADMINISTRATIVE
LAW JUDGE; Hon. Gerald Harwood ............ . ................................................ . .......................... ... 49
HIGH STAKES ON A FAST TRACK;
ADMINISTRATIVE ENFORCEMENT AT EPA; M.J. Walker ................ . .............................. 53
SETTLEMENT CONFERENCES - KEY
OPPORTUNITIES FOR SETTLEMENT [[[ . ....... 59
EXAMPLE: COMPLAINT'S PRE-HEARING EXCHANGE ........................... . ............................ 73
ENVIRONMENTAL AUDITING: REACHING THE BOTTOM LINE IN COMPLIANCE;
NATIONAL ENVIRONMENTAL ENFORCEMENT JOURNAL [[[ 77
A SHORT PRIMER ON MOTIONS FOR
ACCELERATED DECISION; M.J. Walker [[[ 89
EXAMPLE: INITIAL DECISION IN PIC AMERICAS. INC [[[ 93
EXAMPLE: TRANSCRIPT TESTIMONY EXAMPLE
FROM PIC AMERICAS, INC. .......................................... . [[[ 101
EXAMPLE: DEFAULT ORDER IN GUNLOCKE CO., INC. ................... . ............ ... .............. 115
EXAMPLE: ENVIRONMENTAL APPEALS BOARD
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INETI
N«TW«»L gMroncnum THAMMO MSTTTVT
ADMINISTRATIVE LAW ENFORCEMENT AT EPA
EFFICIENCY - VOLUME - COMPLIANCE
Michael J. Walker
Enforcement Counsel
Toxics"Litigation Division
U.S. EPA
1. Administrative lav enforcement is an important tool in federal
environmental compliance efforts* The efficiency and
streamlined aspects of administrative enforcement make it an
attractive option to traditional district court activity.2
[Example: no equivalent in Canada.... yet]
o Constitutional "separation of powers"
Checks i Balances
- Congress - writes the laws
- President - carries out the laws
- Courts - interpret the laws
o regulation of everyday commerce, new technology,
created pressure to faster and more informed
decision making and dispute resolution.
1 In addition to EPA, many federal agencies have
administrative law enforcement authorities. Some of these
include: the Occupational Safety & Health Administration,
(OSHA), Federal Aviation Administration, (FAA), Federal Trade
Commission, (FTC), Food & Drug Administration, (FDA) and
Department of Agriculture, (USDA).
2 See, for example: High Stakes on a Fast Track;
Administrative Enforcement at EPA; Federal Bar Journal.
3 For example, regulation of commercial ferry-boat traffic
and safety in the steam boat industry in the 1800's led to the
development of the United States Coast Guard and Federal Trade
Commission.
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EPA in 1992
- writes regulations & policies
- inspects/files administrative suits
- interprets the lavs: through the
Administrative Law Judges and the
Administrator of EPA
Is It A Fair System? YES
o Administrative Procedure Act creates
safeguards and separations of functions.
o Potential Court oversight to curb abuses
o Offers "specialized" and "knowledgeable"
interpretation of federal programs
- issues are adjudicated by a judge who
understands the program and vocabulary
3. Typical Steps in an Administrative Penalty Action
A. Identify Violation4
o civil only5
o legal tests: preponderance of the evidence: not
beyond a reasonable doubt; more likely than not.
4 EPA has administrative law enforcement authorities in the
majority of federal environmental statutes, including the Clean
Air Act, (CAA), Clean Water Act, (CWA), Resource Conservation
and Recovery Act, (RCRA), Emergency Planning & Community Right-
To-Know Act, (EPCRA), Comprehensive Emergency Response,
Compensation and Liability Act, (CERCLA) , Toxic Substances
Control Act, (TSCA), Asbestos Hazard Emergency Response Act,
(AHERA), and the Federal Insecticide, Fungicide and Rodenticide
Act, (FIFRA).
5 Most actions can only seek civil penalties and a
commitment to achieve and maintain compliance. With the exception
of RCRA, for example, Administrative Law Judges lack the
authority to issue compliance orders in the majority of EPA
environmental statutes.
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B. Issue civil complaint6
o clearly state the violations7
o propose penalty ($1,000 to $15,700,000)
o EPA considers several factors:8
- extent, nature & circumstances of violation
- gravity of harm or potential harm
- size of business
- effect of penalty on business9
o offer opportunity for hearing
- "on the record"
- before an impartial Administrative Law Judge
6 More than 4,000 administrative enforcement actions are
issued annually.
7 Failure to state a violation with specific clarity may be
grounds for dismissal by the Administrative Law Judge
8 Each statute has different, specific factors that must be
considered. To effectively implement an administrative penalty
program in ten regional offices, most EPA enforcement programs
develop statute-specific penalty policies or enforcement response
policies. This guidance is an attempt to endure that civil
penalties for the same or similar violation are the same
throughout the United States.
9 EPA has sought and collected civil penalties from state
and local units of government; school and universities;
hospitals; and non-profit entities. Consideration is given to the
specific financial condition of an individual entity.
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C. Offer to settle10
o The Consolidated Rules of Practice11 encourage
settlement.
o EPA must obtain compliance or an enforceable
schedule to achieve compliance12
o must collect a substantial portion of the proposed
penalty13
D. Opportunity for hearing
o Administrative Procedures Act of 1946
- "on the record"
- impartial Administrative Law Judge
- written decision on merits and law
E. May Appeal To Federal Courts14
10 Historically, more than 96% of all filed cases settle.
This trend may shift as higher fines become more common place.
11 See: 40 CFR Part 22, et sea. Specifically, 40 CFR §
22.18(a), Settlement policy. The Agency encourages settlement of
a proceeding at any tine if the settlement is consistent with the
provisions and objectives of the Act and applicable regulations.
The respondent may confer with the complainant concerning
settlement whether or not the respondent requests a hearing.
(Emphasis added in bold type-face)
12 Generally, administrative civil penalty actions are
quite successful in securing compliance or correcting violations.
In addition, penalty credits for environmental beneficial
projects give the Agency the opportunity to enhance the overall
compliance program at individual facilities and corporations.
13 In fiscal year, $31.9 million was collected in
administrative civil penalties. This represents 44% of all EPA
federal penalty dollars collected.
14 Generally, very few cases are ever appealed to federal
courts, (approximately 6-10 per year).
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A. Rapid deployment of resources and actions
- ability to tailor the right "size" violation to
the appropriate "type" of violation.
- low key actions avoid angry constituents
B. Technical issues are presented to a more "informed*1
judiciary.
C. Very limited opportunities for delay
- abbreviated "discovery"
- expanded use of motion practice
D. Lover transaction costs
- for the government
- for the respondent
E. More flexibility in terms of settlement
F. Ability to effective use press to promote compliance
through deterrence.
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TYPES OF ADMINISTRATIVE HEARINGS CONDUCTED WITHIN EPA
l. Personnel
a. Merit Systems Protection Board (MSPB)
(5 CFR §1201 £t seq.^
b. Equal Employment Opportunity Commission
(EEOC) (29 CFR §1614)
2. Listing or Delisting (40 CFR Part 15)
(Clean Air and Water Quality Acts matters only)
(CA §306, 42 USC §7606) CAA §508, 33 USC §1368).
3. Hearings Conducted Under the Consolidated Rules of Practice
governing the Administrative Assessment of Civil Penalties
and the Revocation or Suspension of Permits. 40 CFR 22.
a. FIFRA Section 14 (a) (7 USC §1361(a)
b. Clean air Act, Section 211 (42 USC §7545)
c. Marine Protection Research and Sanctuaries Act,
Section 105(a) and (f) (33) USC §1415(a))
d. Solid Waste Disposal Act as amended (RCRA),
Section 3008 (42 USC §6928)
e. TSCA, Section 16(a) (15 USC §2615(a)).
4. Debarmeht and Suspension Under EPA Assistance Programs (40
CFR Part 32)
5. Assessment and Collection of Noncompliance Penalties under
the Clean Air Act (Section 120 of CAA, 42 USC §7420; 40 CFR
Part 66 makes 40 CFR Part 22 applicable once a hearing is
granted)
6. Control of Air Pollution from Mobile Sources (40 CFR Part
85, motor vehicles).
7. Spill Prevention Control and Countermeasure (SPCC) Hearings
(40 CFR Part 114) (Under authority of Sections 311(j) and
501(a) of the CWA, 33 USC 1321(j), 1361(a).
8. Procedures for Decision Making Under the Clean Water Act as
amended (Water Quality Act of 1987), RCRA, SDWA (UIC) and
CAA (PSD permits). -
J
a. Public hearings under 40 CFR §124.12, Part of
proceedings to veto state-issued NPD,ES permits.
b. Evidentiary Hearing for EPA-Issued NPDES Permits
(40 CFR §124 subpart E)
c. Non-Adversary Panel Procedures (40 CFR §124 subpart F,
applies to some NPDES permits, draft RCRA, or draft UIC
permits)
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9. Safe Drinking Water Act (SDWA) (42 USC §300F e±
a. Review of State-Issued Variances and Exemptions
(40 CFR §142 Subpart C)
b. Federal Enforcement (40 CFR §142 Subpart D)
c. Variances and Exemptions issued by EPA (40 CFR Subparts
E & F)
d. New Civil Administrative Penalty Authorities
1. Underground Injection Control (UIC)
2. Public Water Supply (PWS)
10. FIFRA - Registration, Classification, Cancellation and Other
Procedures (in HQ)
11. Ocean Dumping Permits (40 CFR 220 et seq.)
12. SARA, Section 109 - no regulations issued as yet.
13. RCRA, Corrective Action Orders for Interim Status
Facilities; 40 CFR Part 24.
14. EPCRA ( Emergency Planning; Community Right to Know Act)
Toxic Chemical Release Inventory Actions; 40 CFR Part 22.
15. Equal Access to Justice Act; Procedures for Adjudication of
Claims for "prevailing parties" in cases where EPA's claim
was not "substantially justified". 40 CFR 17.
8
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PART 22-CONSOUDATED RULES
Of PRACTICE GOVERNING THE
ADMINISTRATIVE ASSESSMENT OF
CIVIL PENALTIES AND THE REV-
OCATION OR SUSPENSION OF
PERMITS
22.01 Scop* of these rules.
22.03 UM of number and fsnder.
22.08 Definitions.
22.04 Powers and duties of the Environ-
mental Appeals Board. the Regional Ad-
ministrator. the Regional Judicial OBI-
car. and the Presiding Officer. dlsquall-
n cation.
22.06 PUlac. Mnrio*. and form of plaadlan
and doctu&atttc*
22.08 Pllinf and Mrriot of rulino, ordtn
22-21 8cn*duilnt th* btartnf •
22.22 Erld*no*.
22JS Objoetiou and offtn of proof.
22^1 Burton of prwrataUon: bord*n of p*r-
•uaalon.
22JS Pillnf th* traMcrtpt.
and
22.07 Corapatation and tzttulon of tin*.
22.08 Kz part* dlscoMlon of procMdlnc .
22.08 Examination of document* U*d.
tUT
SUI Motion to r*opM a
22.10 ApptaranoM.
22.11 Int*rr«ntion.
22.12 Conaolldatlon and MT*ranc*.
Appeal from or r*n*w of Intarlocutoo-
erd*n or rallnfi.
8JO Apptal from or r*n*w of Initial dect-
22.13 iMoano* of complaint.
22.14 Content and amendment of the com*
plaint.
22.15 Answer to the complaint.
22.16 Motion*.
22.17 Default order.
22.18 Informal settlement: consent acre*-
ment and order.
22.19 Prehearlnc conference.
22.20 Accelerated decision; decision to dis-
miss.
Subport Q final Oidtr on Appex*
X2.31 Final order on appeal.
2LS Motion to reooaaider a final order
40 CFR Part 22, et seq. [as published 7-1-93 Edition]
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H~
22.33 Supplemental rules of practice govern-
ing the administrative assessment of
clTll penalties under the Toxic Sub-
staaces Control Act.
22.34 Sapplemental rules of practice govern-
Inr the administrative assessment of
civil penalties under Title n of the Clean
Air Act.
ZL35 Sapplemental rules of practice govern-
lac the administrative assessment of
civil penalties under the Federal Insecti-
cide. Fungicide, and Rodenticlde Act.
&JB Supplemental rules of practice govern-
Inc the administrative aseessment of
civil penalties and the revocation or sus-
pension of permits under the Marine Pro-
tection, Research, and Sanctuaries Act.
BJ7 Supplemental rules of practice govern-
ing the administrative assessment of
civil penalties under the Solid Waste Dis-
posal Act.
22JI Supplemental rules of practice govern-
ing the administrative assessment of
Class n penalties undsr the Clean Water
Act.
Sapplemental rules of practice govern-
the administrative asseaement of ad-
ministrative penalties under section 101
of the Comprehensive Environmental Be-
sponse. Compensation, and Liability Act
of US), as amended.
«-40 Supplemental rules of practice govern-
inr the administrative assessment of ad-
ministrative penalties under section 336
of the Emergency Planning and Comma*
nltj IUcht-To-Know Act of 1«8 (EPCXA).
8.41 Sapplemental rules of practice govern-
lac the administrative assessment of
civil penalties under Title n of the ToUc
Substances Control Act. enacted as sec-
tion 2 of the Asbestos Kasard Emergency
Response Act (AKKRA).
8.42 Sapplemental rules of practice rovsrn-
Iny the administrative assessment of
civil penalties for violations of oompll-
anoe orders issued under Part B of the
Sate DcUUOn* Water Act.
a.tt Sapplemental rules of practice govern-
ing the administrative asseasment of
dvll penalties under section llgdXl) of
the Qean Air Act.
APFSMDR TO PART S— AOORUaiS OT KPA
RlOlONAL OfTICtS
AOTHoarnr: 15 u.s.c ans: 42 u.s.c. 74i»d).
7S3«. 7«i and 7«ma): 7
U.8.C. 138(1) and cm): 33 U.S.C. 131». 1415 and
1411; 42 U.3.C. »12. 6921 and OWKe); 42 U.S.C.
MOB; 42 U.S.C. 11045
SOUKCI: 45 FR 24383. Apr 9. 1MO. unless
otherwise noted.
TSCA
Air
FFRA
Protection
RCRA
Water
CERCLA
EPCRA
AHERA
Safe Drinking
Water
Air
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Subport A-G*ntfd
(a) These rule* of practice govern all
adjudicatory proceedings for
(7) The assessment of any adminis-
trative penalty under faction 109 of the
Comprehensive Environmental Re-
sponse, Compensation, and Liability
Act of I960, as amended (42 U.S.C. 9609):
Bras
(1) The assessment of any civil pen-
alty conducted under section 14(a) of
the Federal Insecticide. Fungicide and
Rodenticide Act as amended (7 U.S.C.
(8) The ssssssmsnt of any adminis-
trative penalty under section 325 of the
Emergency Planning and Community
Right-To-Know Act of 1966 (EPCRA) (42
U.S.C. 11045).
(2) The assessment of any adminis-
trative penalty under sections U3(dXl),
205XO. 211(d) and 21*d) of the Clean Air
Act. as amended (CAA) (42 U.S.C.
7413(dXU 7524(0.7545(d) and 7547(d)).
(9) The assessment of any civil pen-
alty conducted under section
1414(gX3XB) of the Safe Drinking Water
Act as amended (42 U.8.C. 300g~
3(gX3XB)).
limit
Corrective
(3) The assessment of any civil pen-
alty or for the revocation or suspension
of any permit conducted under section
106 (a) and (f) of the Marine Protection,
Research, and Sanctuaries Act as
amended (33 U.S.C. 1415(a));
(4) The Issuance of a compliance
order or the issuance of a corrective ac-
tion order, the suspension or revoca-
tion of authority to operate pursuant
to section 3006(e) of the Solid Waste
Disposal Act, or the assessment of any
civil psnalty under sections 3006. 9006
and 11006 of the Solid Waste Disposal
Act. as amended (42 U.S.C. 6921. 6991(e)
and 6992(d)), except as provided in 40
CFR parts 24 aad 124.
(5) The assessment of any civil pen-
alty conducted under section 16(a) of
the Toxic Substances Control Act (15
U.S.C. 2615(a)):
(6) The assessment of any Class n
penalty under section 309(g) of the
Clean Water Act (33 U.S.C. 1319(g»;
NOTE: SUPPLEMENTAL RULES
(b) The Supplemental rules of prac-
tice sst forth in sflbpart H establish
rules governing those aspects of the
proceeding in question which are not
covered in subparts A through G, and
also specify procedures which super-
sede any conflicting procedures set
forth in those snbparta.
(c) Questions arising at any stage of
the rrnne<*11nf which are not addressed
In theee rules or in the relevant supple-
mentary procedures shall be resolved
at the discretion of the Administrator.
Regional Administrator, or Presiding
Officer, as appropriate.
DISCRETION TO RESOLV
PROCEDURAL DISPUTES
52
7 FR
(45 FR 34383. Apr. t. 1*
FR 30B7S. Aoff. 11. 1SJT.
196S; M FR 13371. Mar. M. iS». M FR
M.y 16, US* 56 FR INI. Jta. ». 19B1: 57
4318, F«b. 4. 19B2]
11
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§ 22.02 Use of number and gender.
As used in these rules of practice,
words in the singular also include the
plural and words in the masculine gen-
der also include the feminine and vice
versa, as the case may require.
§22.03 Definitions.
(a) The following definitions apply to
part 22:
Act means the particular statute au-
thorizing the institution of the pro-
ceeding at issue.
Administrative Law Judge means an
Administrative Law Judge appointed
under 5 U.S.C. 3105 (see also Pub. L. 95-
251, 92 Stat. 183).
Administrator means the Adminis-
trator of the U.S. Environmental Pro-
tection Agency or his delegate.
Agency means the United States En-
vironmental Protection Agency.
- Complainant means any person au-
thorized to issue a complaint on behalf
?« Se, .?ency *° *«ons alleged to be
in violation of the Act. The complain-
ant shall not be a member of the Envi-
ronmental Appeals Board, the Regional
Judicial Officer, or any other person
who will participate or advise in the
decision.
Complaint means a written commu-
nication, alleging one or more viola-
tions, of specific provisions of the Act,
or regulations or a permit promulgated
thereunder, issued by the complainant
to a person under H22.13 and 22.14.
Consent Agrttmtnt means any written
document, signed by the parties, con-
taining stipulations or conclusions of
fact or law and a proposed penalty or
proposed revocation or suspension ac-
ceptable to both complainant and re-
spondent.
Environmental Appeals Board means
the Board within the Agency described
in {1.25 of this title, located at U.S. En-
vironmental Protection Agency, A-110,
401 M St. SW., Washington, DC 20460.
Final Order means (a) an order issued
by the Administrator after an appeal of
an initial decision, accelerated deci-
sion, decision to dismiss, or default
order, disposing of a matter in con-
troversy between the parties, or (b) an
initial decision which becomes a final
order under §22.27(c).
Hearing means a nearing on the
record open to the public and con-
ducted under these rules of practice.
Hearing Clerk means the Hearing
Clerk, A-110, U.S. Environmental Pro-
tection Agency, 401 M St. SW., Wash-
ington, DC 20460.
Initial Decision means the decision is-
sued by the Presiding Officer based
upon the record of the proceedings out
of which it arises.
Party means any person that partici-
pates in a hearing as complainant, re-
spondent, or intervenor.
Permit means a permit issued under
section 102 of the Marine Protection.
Research, and Sanctuaries Act.
Person includes any individual, part-
nership, association, corporation, and
any trustee, assignee, receiver or legal
successor thereof; any organized group
of persons whether incorporated or not:
and any officer, employee, agent, de-
partment, agency or instrumentality of
the Federal Government, of any State
or local unit of government, or of any
foreign government.
12
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Presiding Officer means the Adminis-
trative Law Judge designated by the
Chief Administrative Law Judge to
serve as Presiding Officer, unless other-
wise specified by any supplemental
rules.
Regional Administrator means the Ad-
ministrator of any Regional Office of
the Agency or any officer or employee
thereof to whom his authority is duly
delegated. Where the Regional Admin-
istrator has authorized the Regional
Judicial Officer to act, the term Re-
gional Administrator shall include the
Regional Judicial Officer. In a case
where the complainant is the Assistant
Administrator for Enforcement or his
delegate, the term Regional Adminis-
trator as used in these rules shall mean
the Administrator.
Regional Hearing Clerk means an indi-
vidual duly authorised by the Regional
Administrator to serve as hearing
clerk for a given region. Correspond-
ence may be addressed to the Regional
Hearing Clerk, U.S. Environmental
Protection Agency (address of Regional
Office—see appendix). In a case where
the complainant is the Assistant Ad-
ministrator for Enforcement or his del-
egate, the term Regional Hearing Clerk
as used in these roles shall mean the
Hearing Clerk.
Regional Judicial Officer means a per-
son designated by the Regional Admin-
istrator under |22.(M(b) to serve as a
Regional Judicial Officer.
Respondent mean* any person pro-
ceeded against in the complaint.
(b) Terms defined in the Act and not
defined in these roles of practice are
used consistent with the meanings
given in the Act.
H* PR 24363, Apr. 9, 1980, as amended at 57
Fit 5323. Feb. 13.1992]
13-
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S 22.04 Powers and duties of the Envi-
ronmental Appeals Board, the Re-
gional Administrator, the Regional
Judicial Officer, and the Presiding
Officer; disqualification.
(a) Environmental Appeals Board. The
Administrator delegates authority
Binder the Act to the Environmental
Appeals Board to perform the functions
assigned to it in these rules of practice.
An appeal or motion under this part di-
rected to the Administrator, rather
than to the Environmental Appeals
Board, will not be considered. This del-
egation of authority to the Environ-
mental Appeals Board does not pre-
clude the Environmental Appeals
Board from referring any case or mo-
tion governed by this part to the Ad-
ministrator when the Environmental
Appeals Board, in its direction, deems
it appropriate to do so. When an appeal
or motion is referred to the Adminis-
trator, all parties shall be so notified
and the rules in this part referring to
the Environmental Appeals Board shall
be interpreted as referring to the Ad-
ministrator. If a case or motion is re-
ferred to the Administrator by the En-
vironmental Appeals Board, the Ad-
ministrator may consult with any EPA
employee concerning the matter, pro-
vided such consultation does not vio-
late the ex parte rules set forth in
§22.08.
gional Judicial Officer from referring
any motion or case to the Regional Ad-
ministrator. The Regional Judicial Of-
ficer shall exercise all powers and du-
ties prescribed or delegated under the
Act or these rules of practice.
(2) Qualifications of Regional Judicial
Officer. A Regional Judicial Officer
shall be an attorney who is a perma-
nent or temporary employee of the
Agency or some other Federal agency
and who may perform other duties
within the Agency. A Regional Judicial
Officer shall not be employed by the
Region's Enforcement Division or by
the Regional Division directly associ-
ated with the type of violation at issue
in the proceeding. A Regional Judicial
Officer shall not have performed pros-
ecutorial or investigative functions in
connection with any hearing in which
he serves as a Regional Judicial Officer
or with any factually related hearing.
(b) Regional Administrator. The Re-
gional Administrator shall exercise all
powers and duties as prescribed or dele-
gated under the Act and these rules of
practice.
(1) Delegation to Regional Judicial Offi-
cer. One or more Regional Judicial Offi-
cers may be designated by the Regional
Administrator to perform, within the
region of their designation, the func-
tions described below. The Regional
Administrator may delegate his or her
authority to a Regional Judicial Offi-
cer to act in a given proceeding. This
delegation will not prevent the Re-
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(c) Presiding Officer. The Presiding 01-
ficer shall conduct a fair and impartial
proceeding, assure that the facts are
fully elicited, adjudicate all issues, and
avoid delay. The Presiding Officer shall
have authority to:
DUTIES OF THE PRESiDiNG
• Develop a written record
• Render a written decision
NOT:£ SCOPE OF DEFINITION
(1) Conduct administrative hearings
under these rules of practice;
CONDUCT HEARINGS
(2) Rule upon motions, requests, and
offers of proof, dispose of procedural re-
quests, and issue all necessary orders:
RULEONMOnONS
ISSUE ORDERS
(3) Administer oaths and affirmations
and take affidavits;
ADMINISTER OATHS
(4) Examine witnesses and receive
documentary or other evidence;
(5) For good cause, upon motion or
sua sponte, order a party, or an officer
or agent thereof, to produce testimony,
documents, or other nonprivileged evi-
dence, and failing the production there-
of without good cause being shown,
draw adverse Inferences against that
party;
EXA; r WITNESSES
RECEIVE EVIDENCE
ORDER PRODUCTION
OF TESTIMONY OR DOCUMENTS
(Draw Adverse Inferences)
(6) Admit or exclude evidence;
ADMIT/EXCLUDE EVIDENCE
(7) Hear and decide questions of facts.
law, or discretion;
(8) Require parties to attend con-
ferences for the settlement or sim-
plification of the issues, or the expedi-
tion of the proceedings;
Hear/DECIDE QUESTIONS OF
/FACT / LAW / DISCRETION
REQUIRE ATTENDANCE
(9) Issue subpoenas authorized by the
Act; and
ISSUE SUBPOENAS
(10) Do all other acts and take all
measures necessary for the mainte-
nance of order and for the efficient, fair
and impartial adjudication of issues
arising in proceedings governed by
these rules.
DO "all other acts" NECESSARY
• to maintain order
• to promote efficiency
• to ensure fairness, impartiality
15
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(d) Disqualification; withdrawal. (1)
The Administrator, the Regional Ad-
ministrator, the members of the Envi-
ronmental Appeals Board, the Regional
Judicial Officer, or the Presiding Offi-
cer may not perform functions pro-
vided for in these rules of practice re-
garding any matter in which they (i)
have a financial interest or (ii) have
any relationship with a party or with
the subject matter which would make
it inappropriate for them to act. Any
party may at any time by motion made
to the Regional Administrator request
that the Regional Judicial Officer be
disqualified from the proceeding. Any
party may at any time by motion to
the Administrator request that-the Re-
gional Administrator, a member of the
Environmental Appeals Board, or the
Presiding Officer be disqualified or re-
quest that the Administrator dis-
qualify himself or herself from the pro-
ceeding. The Administrator, the Re-
gional Administrator, a member of the
Environmental Appeals Board, the Re-
gional Judicial Officer, or the Presid-
ing Officer may at any time withdraw
from any proceeding in which they
deem themselves disqualified or unable
to act for any reason.
another region to replace the Adminis-
trator. The Regional Administrator
shall assign a new Presiding Officer if
the original Presiding Officer was not
an Administrative Law Judge. The
Chief Administrative Law Judge shall
assign a new Presiding Officer from
among available Administrative Law
Judges if the original Presiding Officer
was an Administrative Law Judge.
(3) The Chief Administrative Law
Judge, at any stage in the proceeding,
may reassign the case to an Adminis-
trative Law Judge other than the one
originally assigned in the event of the
unavailability of the Administrative
Law Judge or where reassignment will
result in efficiency in the scheduling of
hearings and would not prejudice the
parties.
[45 FR 24363, Apr. 9. 1980, as amended at 57
FR 5324, Feb. 13, 1992; 57 FR 60129, Dec. 18.
1992]
(2) If the Administrator, the Regional
Administrator, the Regional Judicial
Officer, or the Presiding Officer is dis-
qualified or withdraws from the pro-
ceeding, a qualified individual who has
none of the infirmities listed in para-
graph (d)(l) of this section shall be as-
signed to replace him. Assignment of a
replacement for Regional Adminis-
trator or for the Regional Judicial Offi-
cer shall be made by the Administrator
or the Regional Administrator, respec-
tively. The Administrator, should he or
she withdraw or disqualify himself or
herself, shall assign the Regional Ad-
ministrator from the Region where the
case originated to replace him or her.
If that Regional Administrator would
be disqualified, the Administrator shall
assign a Regional Administrator from
16
-8-
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ORIGINAL + 1 copy
Hearing Clerk
ft 22.06 Filing, •ervice, and form of
pleading! and documents.
(a) Filing of pleadings and documents.
(1) Except as otherwise provided, the
original and one copy of the complaint,
and the original of the answer and of
all other documents served in the pro-
ceeding shall be filed with the Regional
Hearing Clerk.
CERTIFICATE OF SERVICE
ALWAYS REQUIRED
(2) A certificate of service shall ac-
company each document filed or
served. Except as otherwise provided, a
party filing documents with the Re-
gional Hearing Clerk, after the filing of
the answer, shall serve copies thereof
upon all other parties and the Presid-
ing Officer. The Presiding Officer shall
maintain a duplicate file during the
course of the proceeding.
(3) When the Presiding Officer cor-
responds directly with the parties, the
original of the correspondence shall be
sent to the Regional Hearing Clerk, a
copy shall be maintained by the Presid-
ing Officer in the duplicate file, and a
copy shall be sent to all parties. Par-
ties who correspond directly with the
Presiding Officer shall in addition to
serving all other parties send a copy of
all such correspondence to the Re-
gional Hearing Clerk. A certificate of
service shall accompany each docu-
ment served under this subsection.
(b) Service of pleadings and docu-
ments—{I) Service of complaint, (i) Serv-
ice of a copy of the signed original of
the complaint, together with a copy of
these rules of practice, may be made
personally or by certified mail, return
receipt requested, on the respondent
(or his representative).
COMPLIANT SERVICE
• personal service
• certified mail
(ii) Service upon a domestic or for-
eign corporation or upon a partnership
or other unincorporated association
which is subject to suit under a com-
mon name shall be made by personal
service or certified mail, as prescribed
by paragraph (b)(l)(i) of this section,
directed to an officer, partner, a man-
aging or general agent, or to any other
person authorized by appointment or
by Federal or State law to receive serv-
ice of process.
FEDERAL AGENCIES
(iii) Service upon an officer or agency
of the United States shall be made by
delivering a copy of the complaint to
the officer or agency, or in any manner
Prescribed for service by applicable
regulations. If the agency is a corpora-
tion, the complaint shall be served as
prescribed in paragraph (bXIXii) of this
section.
STATE or LOCAL AGENCIES
(iv) Service upon a State or local
unit of government, or a State or local
officer, agency, department, corpora-
tion or other instrumentality shall be
made by serving a copy of the com-
plaint in the manner prescribed by the
law of the State for the service of proc-
ess on any such persons, or:
(A) If upon a State or local unit of
government, or a State or local depart-
ment, agency, corporation or other in-
strumentality, by delivering a copy of
the complaint to the chief executive of-
ficer thereof;
(B) If upon a State or local officer by
delivering a copy to such officer.
(v) Proof of service of the complaint
shall be made by affidavit of the person
making personal service, or by prop-
erly executed return receipt. Such
proof of service shall be filed with the
complaint immediately upon comple-
tion of service.
17
-9-
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FIRST CLASS SERVICE
for all other pleadings
(2) Service of documents other than
complaint, rulings, orders, and decisions.
All documents other than the com-
plaint, rulings, orders, and decisions,
may be served personally or by cer-
tified or first class mail.
NOTE: FORM OF PLEADINGS
(c) Form of pleadings and documents.
(1) Except as provided herein, or by
order of the Presiding Officer or of the
Environmental Appeals. Board, there
are no specific requirements as to the
form of documents.
(5) The Environmental Appeals
Board, the Regional Administrator, the
Presiding Officer, or the Regional
Hearing Clerk may refuse to file any
document which does not comply with
this paragraph. Written notice of such
refusal, stating the reasons therefor,
shall be promptly given to the person
submitting the document. Such person
may amend and resubmit any docu-
ment refused for filing upon motion
granted by the Environmental Appeals
Board, the Regional Administrator, or
the Presiding Officer, as appropriate.
[45 PR 24363, Apr. 9. 1980, as amended at 57
PR 5324. Feb. 13, 1992]
(2) The first page of every pleading,
letter, or other document shall contain
a caption identifying the respondent
and the docket number which is exhib-
ited on the complaint.
(3) The original of any pleading, let-
ter or other document (other than ex-
hibits) shall be signed by the party fil-
ing or by his counsel or other rep-
resentative. The signature constitutes
a representation by the signer that he
has read the pleading, letter or other
document, that to the best of his
knowledge, information and belief, the
statements made therein are true, and
that it is not interposed for delay.
(4) The initial document filed by any
person shall contain his name, address
and telephone number. Any changes in
this information shall be commu-
nicated promptly to the Regional Hear-
ing Clerk, Presiding Officer, and all
parties to the proceeding. A party who
fails to furnish such information and
any changes thereto shall be deemed to
have waived his right to notice and
service under these rules.
-10-
18
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§22.06 Filing and service of rulings,
orders, and decisions.
All rulings, orders, decisions, and
other documents issued by the Re-
gional Administrator, Regional Judi-
cial Officer, or Presiding Officer, as ap-
propriate, shall be filed with the Re-
gional Hearing Clerk. All such docu-
ments issued by the Environmental Ap-
peals Board shall be filed with the
Clerk of the Environmental Appeals
Board. Copies of such rulings, orders,
decisions, or other documents shall be
served personally, or by certified mail,
return receipt requested, upon all par-
ties by the Environmental Appeals
Board, the Regional Administrator, the
Regional Judicial Officer, or the Pre-
siding Officer, as appropriate.
[45 PR 24363, Apr. 9, 1980, as amended at 57
FR 5324. Feb. 13, 1992]
motion. Such a motion by a party may
only be made after notice to all other
parties, unless the movant can show
.good cause why serving notice is im-
practicable. The motion 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 extension of
time was the result of excusable ne-
glect.
(c) Service by mail. Service of the com-
plaint is complete when the return re-
ceipt is signed. Service of all other
pleadings and documents is complete
upon mailing. Where a pleading or doc-
ument is served by mail, five (5) days
shall be added to the time allowed by
these rules for the filing of a responsive
pleading or document.
[45 FR 24363, Apr. 9, 1980, as amended at 57
FR 5324, Feb. 13, 1992]
§22.07 Computation and extension of
time.
(a) Computation. In computing any
period of time prescribed or allowed in
these rules of practice, except as other-
wise provided, the day of the event
from which the designated period be-
gins to run shall not be included. Sat-
urdays, Sundays, and Federal legal
holidays shall be included. When a
stated time expires on a Saturday,
Sunday or legal holiday, the stated
time period shall be extended to in-
clude the next business day.
(b) Extension* of time. The Environ-
mental Appeals Board, the Regional
Administrator, or the Presiding Offi-
cer, as appropriate, may grant an ex-
tension of time for the filing of any
pleading, document, or motion (1) upon
timely motion of a party to the pro-
ceeding, for good cause shown, and
after consideration of prejudice to
other parties, or (2) upon its or his own
19
- 11 -
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§ 22.08 Ex parte discussion of proceed-
ing.
At no time after the issuance of the
complaint shall the Administrator, the
members of the Environmental Appeals
Board, the Regional Administrator, the
Regional Judicial Officer, the Presid-
ing Officer, or any other person who is
likely to advise these officials in the
decision on the case, discuss ex parte
the merits of the proceeding with any
interested person outside the Agency,
with any Agency staff member who
performs a prosecutorial or investiga-
tive function in such proceeding or a
factually related proceeding, or with
any representative of such person. Any
ex parte memorandum or other com-
munication addressed to the Adminis-
trator, the Regional Administrator,
the Environmental Appeals Board, the
Regional Judicial Officer, or the Pre-
siding Officer during the pendency of
the proceeding and relating to the mer-
its thereof, by or on behalf of any party
shall be regarded as argument made in
the proceeding and shall be served upon
all other parties. The other parties
shall be given an opportunity to reply
to such memorandum or communica-
tion.
[45 FR 24363, Apr. 9, I960, as amended at 57
PR 5325, Feb. 13, 1992]
PUBLIC INSPECTION OF
OFFICIAL RECORDS
$22.09 Examination of documents
filed.
(a) Subject to the provisions of law
restricting the public disclosure of con-
fidential information, any person may.
during Agency business hours, inspect
and copy any document filed in any
proceeding. Such documents shall be
made available by the Regional Hear-
ing Clerk, the Hearing Clerk, or the
Environmental Appeals Board, as ap-
propriate.
(b) The cost of duplicating documents
filed in any proceeding shall be borne
by the person seeking copies of such
documents. The Agency may waive this
cost in appropriate cases.
[45 PR 24363, Apr. 9, 1980. as amended at 57
PR 5325. Feb. 13. 1992]
20
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Subpart B—Parties and
Appearances
6 22.10 Appearances.
Any party may appear In person or
by counsel or other representative. A
partner may appear on behalf of a part-
nership and an officer may appear on
behalf of a corporation. Persons who
appear as counsel or other representa-
tive must conform to the standards of
conduct and ethics required of practi-
tioners before the courts of the United
States.
NOTE: STANDARD FOR INTERVENTION
fttt.ll Intervention.
(a) Motion. A motion for leave to in-
tervene in any proceeding conducted
under these rules of practice must set
forth the grounds for the proposed
intervention, the position and interest
of the movant and the likely impact
that intervention will have on the ex-
peditious progress of the proceeding.
Any person already a party to the pro-
ceeding may file an answer to a motion
to intervene, making specific reference
to the factors set forth in the foregoing
**ntence and paragraph (c) of this sec-
tion, within ten (10) days after service
of the motion for leave to intervene.
(c) Disposition. Leave to intervene
may be granted only if the movant
demonstrates that (1) his presence in
the proceeding would not unduly pro-
long or otherwise prejudice the adju-
dication of the rights of the original
parties; (2) the movant will be ad-
versely affected by a final order; and (3)
the interests of the movant are not
being adequately represented by the
original parties. The intervenor shall
become a full party to the proceeding
upon the granting.of leave to inter-
vene.
PROVISION FOR AMICUS on motion only
(d) Amicus curiae. The motion shall
identify the interest of the applicant
and shall state the reasons why the
proposed amicus brief is desirable. If
the motion is granted, the Presiding
Officer or Administrator shall issue an
order setting the time for filing such
brief. If the motion is granted, the Pre-
siding Officer or the Environmental
Appeals Board shall issue an order set-
ting the time for filing such brief.
[45 FR 24363, Apr. 9, 1980. as amended at 57
FR 5325, Feb. 13,1992]
(b) When filed. A motion for leave to
intervene in a proceeding must ordi-
narily be filed before the first prehear-
ing conference or, in the absence of a
prehearing conference, before the initi-
ation of correspondence under §22.19(e),
or if there is no such correspondence,
prior to the setting of a time and place
for a hearing. Any motion filed after
that time must include, in addition to
the information set forth in paragraph
(a) of this section, a statement of good
cause for the failure to file in a timely
manner. The intervenor shall be bound
by any agreements, arrangements and
other matters previously made in the
proceeding.
ft 22.12 Consolidation and severance.
(a) Consolidation. The Presiding Offi-
cer may, by motion or sua aponte, con-
solidate any or all matters at issue in
two or more proceedings docketed
under these rules of practice where (1)
there exists common parties or com-
mon questions of fact or law, (2).con-
solidation would expedite and simplify
consideration of the issues, and (3) con-
solidation would not adversely affect
the rights of parties engaged in other-
wise separate proceedings.
(b) Severance. The Presiding Officer
may, by motion or sua sponte, for good
cause shown order any proceedings sev-
ered with respect to any or all parties
or Issues.
- 13-
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Subpart C-Prehearing
Procedures
§ 22.13 Issuance of complaint.
If the complainant has reason to be-
lieve that a person has violated any
provision of the Act. or regulations
promulgated or a permit issued under
the Act, he may institute a proceeding
for the assessment of a civil penalty by
issuing a complaint under the Act and
these rules of practice. If the complain-
ant has reason to believe that
(a) A permittee violated any term or
condition of the permit, or
(b) A permittee misrepresented or in-
accurately described any material fact
in the permit application or failed to
disclose all relevant facts in the permit
application, or
(c) Other good cause exists for such
action, he may institute a proceeding
for the revocation or suspension of a
permit by issuing a complaint under
the Act and these rules of practice A
complaint may be for the suspension or
revocation of a permit in addition to
the assessment of a civil penalty
—*—« of the
(a) Complaint for the assessment of a
civil penalty. Each complaint for the as-
ment of a civll Penalty shall in-
(1) A statement recitine t-h»
section(s) of the Act authorizing is!
suance of the complaint;
(2) Specific reference to each provi-
regu-
to
hA3? ^ Con,?i8e statement of the factual
basis for alleging the violation;
(4) The amount of the civil penalty
which is proposed to be assessed;
(5) A statement explaining the rea-
soning behind the proposed penalty;
(6) Notice of respondent's right to re-
quest a hearing on any material fact
contained in the complaint, or on the
appropriateness of the amount or trie
proposed penalty.
A copy of these rules of practice shall
accompany each complaint served.
NOTE CAREFULLY THE ESSENTIAL
ELEMENTS FOR EVERY COMPLAINT
22
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(b) Complaint for the revocation or sus-
pension of a permit. Each complaint for
the revocation or suspension of a per-
mit shall include:
(1) A statement reciting the
section(s) of the Act, regulations, and/
or permit authorizing the issuance of
the complaint;
(c) Derivation of proposed civil penalty.
The dollar amount of the proposed civil
penalty shall be determined in accord-
ance with any criteria set forth in the
Act relating to the proper amount of a
civil penalty and with any civil penalty
guidelines issued under the Act.
(2) Specific reference to each term or
condition of the permit which the re-
spondent is alleged to have violated, to
each alleged inaccuracy or misrepre-
sentation in respondent's permit appli-
cation, to each fact which the respond-
ent allegedly failed to disclose in his
permit application, or to other reasons
which form the basis for the complaint;
(3) A concise statement of the factual
basis for such allegations;
(4) A request for an order to either
revoke or suspend the permit and a
statement of the terms and conditions
of any proposed partial suspension or
revocation;
(5) A statement indicating the basis
for recommending the revocation, rath-
er than the suspension, of the permit,
or vice versa, as the case may be;
(6) Notice of the respondent s right to
request a hearing on any material fact
contained in the complaint, or on the
appropriateness of the proposed revoca-
tion or suspension.
AMENDMENT ONCE BEFORE ANSWER
(d) Amendment oj tne complaint. The
complainant may amend the complaint
once as a matter of right at any time
before the answer is filed. Otherwise
the complainant may amend the com-
plaint only upon motion granted by the
Presiding Officer or Regional Adminis-
trator, as appropriate. Respondent
shall have twenty (20) additional days
from the date of service of the amended
complaint to file his answer.
WITHDRAWAL OF COMPLAINTS
(e) Withdrawal of the complaint. The
complainant may withdraw the com-
plaint, or any part thereof, without
prejudice one time before the answer
has been filed. After one withdrawal
before the filing of an answer, or after
the filing of an answer, the complain-
ant may withdraw the complaint, or
any part thereof, without prejudice,
only upon motion granted by the Pre-
siding Officer or Regional Adminis-
trator, as appropriate.
A copy of these rules of practice shall
accompany each complaint served.
23
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(22.15 Answer to the complaint.
(a) General. Where respondent (1)
Contests any material fact upon which
the complaint is based; (2) contends
that the amount of the penalty pro-
posed in the complaint or the proposed
revocation or suspension, as the case
may be, is inappropriate; or (3) con-
tends that he is entitled to judgment
as a matter of law, he shall file a writ-
ten answer to the complaint with the
Regional Hearing Clerk. Any such an-
swer to the complaint must be filed
with the Regional Hearing Clerk with-
in twenty (20) days after service of the
complaint.
Contests material facts
Contends fine/revocation is inappropriate
Contends entitlement to judgment
as a matter of law
(b) Contents of the answer. The answer
shall clearly and directly admit, deny
or explain each of the factual allega-
tions contained in the complaint with
regard to which respondent has any
knowledge. Where respondent has no
knowledge of a particular factual alle-
gation and so states, the allegation is
deemed denied. The answer shall also
state (1) the circumstances or argu-
ments which are alleged to constitute
the grounds of defense, (2) the facts
which respondent intends to place at
issue, and (3) whether a hearing is re-
Quested.
CONTENTS OF ANSWER
shall clearly & directly:
• ADMIT, DENY or EXPLAIN
each of the factual allegations
to which respondent has knowledge
• STATE ANY DEFENSES
• STATE FACTS TO BE ARGUED
• WHETHER A HEARING IS
REQUESTED
(c) Request for hearing. A hearing
upon the issues raised by the complaint
and answer shall be held upon request
of respondent in the answer. In addi-
tion, a hearing may be held at the dis-
cretion of the Presiding Officer, sua
sponte, if issues appropriate for adju-
dication are raised in the answer.
(d) Failure to admit, deny, or explain.
Failure of respondent to admit, deny,
or explain any material factual allega-
tion contained in the complaint con-
stitutes an admission of the allegation.
FAILURE TO ADMIT, DENY or EXPLAIN:
CONSTITUTES AN ADMISSION
(e) Amendment of the answer. The re-
spondent may amend the answer to the
complaint upon motion granted by the
Presiding Officer.
- 16-
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$22.16 Motions.
(a) General. All motions, except those
made orally on the record during a
hearing, shall (1) be In writing; (2) state
the grounds therefor with particular-
ity; (3) set forth the relief or order
sought; and (4) be accompanied by any
affidavit, certificate, other evidence, or
legal memorandum relied upon. Such
motions shall be served as provided by
f 22.06(bX2).
• STATE GROUNDS
• SET FORTH RELIEF REQUESTED
INCLUDE SUPPORTING BRIEF/DOCUMENTS
(b) Response to motions. A party's re-
sponse to any written motion must be
filed within ten (10) days after service
of such motion, unless additional time
is allowed for such response. The re-
sponse shall be accompanied by any af-
fidavit, certificate, other evidence, or
legal memorandum relied upon. If no
response is filed within the designated
period, the parties may be deemed to
have waived any objection to the
granting of the motion. The Presiding
Officer, the Regional Administrator, or
the Environmental Appeals Board, as
appropriate, may set a shorter time for
response, or make such orders concern-
ing the disposition of motions as they
deem appropriate.
(c) Decision. Except as provided in
§22.04
-------
§ 22.17 Default order.
(a) Default. A party may be found to
be in default (1) after motion, upon
failure to file a timely answer to the
complaint; (2) after motion or sua
sponte, upon failure to comply with a
prehearing or hearing order of the Pre-
siding Officer; or (3) after motion or
sua sponte, upon failure to appear at a
conference or hearing without good
cause being shown. No finding of de-
fault on the basis of a failure to appear
at a hearing shall be made against the
respondent unless the complainant pre-
sents sufficient evidence to the Presid-
ing Officer to establish a prima facie
case against the respondent. Any mo-
tion for a default order shall include a
proposed default order and shall be
served upon all parties. The alleged de-
faulting party shall have twenty (20)
days from service to reply to the mo-
tion. Default by respondent con-
stitutes, for purposes of the pending ac-
tion only, an admission of all facts al-
leged in the complaint and a waiver of
respondent's right to a hearing on such
factual allegations. If the complaint is
for the assessment of a civil penalty,
the penalty proposed in the complaint
shall become due and payable by re-
spondent without further proceedings
sixty (60) days after a final order issued
upon default. If the complaint is for
the revocation or suspension of a per-
mit, the conditions of revocation or
suspension proposed in the complaint
shall become effective without further
proceedings on the date designated by
the Administrator in his final order is-
sued upon default. Default by the com-
plainant shall result in the dismissal of
the complaint with prejudice.
(b) Procedures upon default. When Re-
gional Administrator or Presiding Offi-
cer finds a default has occurred, he
shall issue a default order against the
defaulting party. This order shall con-
stitute the initial decision, and shall be
filed with the Regional Hearing Clerk.
(c) Contents of a default order. A de-
fault order shall include findings of
fact showing the grounds for the order,
conclusions regarding all material is-
sues of law or discretion, and the pen-
alty which is recommended to be as-
sessed or the terms and conditions of
permit revocation or suspension, as ap-
propriate.
(d) For good cause shown the Re-
gional Administrator or the Presiding
Officer, as appropriate, may set aside a
default order.
26
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§22.18 Informal settlement; consent
agreement and order.
(a) Settlement policy. The Agency en-
courages settlement of a proceeding at
any time if the settlement is consist-
ent with the provisions and objectives
of the Act and applicable regulations.
The respondent may confer with com-
plainant concerning settlement wheth-
er or not the respondent requests a
hearing. Settlement conferences shall
not affect the respondent's obligation
to file a timely answer under §22.16.
(b) Consent agreement. The parties
shall forward a written consent agree-
ment and a proposed consent order to
the Regional Administrator whenever
settlement or compromise is proposed.
The consent agreement shall state
that, for the purpose of this proceed-
ing, respondent (1) admits the jurisdic-
tional allegations of the complaint; (2)
admits the facts stipulated in the con-
sent agreement or neither admits nor
denies specific factual allegations con-
tained in the complaint; and (3) con-
sents to the assessment of a stated
civil penalty or to the stated permit
revocation or suspension, as the case
may be. The consent agreement shall
include any and all terms of the agree-
ment, and shall be signed by all parties
or their counsel or representatives.
CONTENTS OF CACO
L Admit jurisdiction
2. Admit facts or
"neither admit/nor deny"
3. Consent to fine
(c) Consent order. No settlement or
consent agreement shall dispose of any
proceeding under these rules of prac-
tice without a consent order from the
Regional Administrator. In preparing
such an order, the Regional Adminis-
trator may require that the parties to
the settlement appear before him to
answer inquiries relating to the con-
sent agreement or order.
27
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§ 22.19 Prehearing conference.
(a) Purpose of prehearing conference.
Unless a conference appears unneces-
sary, the Presiding Officer, at any time
before the hearing begins, shall direct
the parties and their counsel or other
representatives to appear at a con-
ference before him to consider:
(1) The settlement of the case;
(2) The simplification of issues and
stipulation of facts not in dispute;
(3) The necessity or desirability of
amendments to pleadings;
(4) The exchange of exhibit*, docu-
ments, prepared testimony, and admis-
sions or stipulations of fact which will
avoid unnecessary proof;
(5) The limitation of the number of
expert or other witnesses;
(6) Setting a time and place for the
hearing; and
(7) Any other matters which may ex-
pedite the disposition of the proceed-
ing.
(b) Exchange of witness lists and docu-
ments. Unless otherwise ordered by the
Presiding Officer, each party at the
prehearing conference shall make
available to all other parties (1) The
names of the expert and other wit-
nesses he Intends to call, together with
a brief narrative summary of their ex-
pected testimony, and (2) copies of all
documents and exhibits which each
party intends to introduce into evi-
dence. Documents and exhibits shall be
marked for identification as ordered by
the Presiding Officer. Documents that
have not been exchanged and witnesses
whose names have not been exchanged
shall not be introduced into evidence
or allowed to testify without permis-
sion of the Presiding Officer. The Pre-
siding Officer shall allow the parties
reasonable opportunity to review new
evidence.
(c) Record of the prehearing conference.
No transcript of a prehearing con-
ference relating to settlement shall be
made. With respect to other prehearing
conferences, no transcript of any pre-
hearing conferences shall be made un-
less ordered by the Presiding Officer
upon motion of a party or sua sponte.
The Presiding Officer shall prepare and
file for the record a written summary
of the action taken at the conference.
The summary shall incorporate any
written stipulations or agreements of
the parties and all rulings and appro-
priate orders containing directions to
the parties.
(d) Location of prehearing conference.
The prehearing conference shall be
held in the county where the respond-
ent resides or conducts the business
which the hearing concerns, in the city
in which the relevant Environmental
Protection Agency Regional Office is
located, or in Washington, DC, unless
(1) the Presiding Officer determines
that there is good cause to hold it at
another location in a region or by tele-
phone, or (2) the Supplemental rules of
practice provide otherwise.
(e) Unavailability of a prehearing con-
ference. If a prehearing conference is
unnecessary or impracticable, the Pre-
siding Officer, on motion or sua sponte,
may direct the parties to correspond
with him to accomplish any of the ob-
jectives set forth in this section.
28
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LIMITED ADDITIONAL DISCOVERY PROVISIONS
(beyond the pre-hearing exchange)
(f) Other discovery, (i) taccept as pro-
vided by paragraph (b) of this section,
further discovery, under this section,
shall be permitted only upon deter-
mination by the Presiding: Officer:
NOTE THE STANDARDS
(i) That such discovery will not in
• can not delay proceedings any way unreasonably delay the pro-
ceeding;
• info is not otherwise
obtainable
• info has significant
probative value; no
fishing expeditions
(ii) That the information to be ob-
tained is not otherwise obtainable; and
(iii) That such information has sig-
nificant probative value.
(2) The Presiding Officer shall order
depositions upon oral questions only
upon a showing of good cause and upon
a finding that:
(i) The information sought cannot be
obtained by alternative methods; or
(ii) There is a substantial reason to
believe that relevant and probative evi-
dence may otherwise not be preserved
for presentation by a witness at the
hearing.
(3) Any party to the proceeding desir-
ing an order of discovery shall make a
motion therefor. Such a motion shall
set forth;
(i) The circumstances warranting the
taking of the discovery;
(ii) The nature of the information ex-
pected to be discovered; and
(iii) The proposed time and place
where it will be taken. If the Presiding
Officer determines that the motion
should be granted, he shall issue an
order for the taking of such discovery
together with the conditions and terms
thereof.
(4) When the information sought to
be obtained is within the control of one
of the parties, failure to comply with
an order issued pursuant to this para-
graph may lead to (i) the inference that
the information to be discovered would
be adverse to the party from whom the
information was sought, or (11) the is-
suance of a default order under
$22.17(a).
29
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§22.20 Accelerated decision; decision
to dismiss.
(a) General. The Presiding Officer.
upon motion of any party or sua
sponte, may at any time render an ac-
celerated decision in favor of the com-
plainant or the respondent as to all or
any part of the proceeding, without
further hearing or upon such limited
additional evidence, such as affidavits.
as he may require, if no genuine issue
of material fact exists and a party is "ENTITLED
entitled to judgment as a matter of '
law, as to all or any part of the pro-
ceeding. In addition, the Presiding Offi-
cer, upon motion of the respondent.
may at any time dismiss an action
without further hearing or upon such
limited additional evidence as he re-
quires, on the basis of failure to estab-
lish a prima facie case or other grounds
which show no right to relief on the
part of the complainant.
MATTER OF LAW
no genuine issue of
material fact exists
IN "ALL OR IN PART'
(b) Effect. (1) If an accelerated deci-
sion or a decision to dismiss is issued
as to all the issues and claims in the
proceeding, the decision constitutes an
initial decision of the Presiding Offi-
cer, and shall be filed with the Re-
gional Hearing Clerk.
(2) If an accelerated decision or a de-
cision to dismiss is rendered on less
than all issues or claims in the pro-
ceeding, the Presiding Officer shall de-
termine what material facts exist with-
out substantial controversy and what
material facts remain controverted in
good faith. He shall thereupon issue an
interlocutory order specifying the facts
which appear substantially
uncontroverted, and the issues and
claims upon which the hearing will
proceed.
30
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Subpart D—Hearing Procedure
ft 22.21 Scheduling the hearing.
(a) When an answer is filed, the Re-
gional Hearing Clerk shall forward the
complaint, the answer, and any other
documents filed thus far in the pro-
ceeding to the Chief Administrative
Law Judge who shall assign himself or
another Administrative Law Judge as
Presiding Officer, unless otherwise pro-
vided in the Supplemental rules of
practice. The Presiding Officer shall
then obtain the case file from the Chief
Administrative Law Judge and notify
the parties of his assignment.
(b) Notice of hearing. If the respondent
requests a hearing in his answer, or one
is ordered by the Presiding Officer
under §22.15(c), the Presiding Officer
shall serve upon the parties a notice of
hearing setting forth a time and place
for the hearing. The Presiding Officer
may issue the notice of hearing at any
appropriate time, but not later than
twenty (20) days prior to the date set
for the hearing.
(c) Postponement of hearing. No re-
quest for postponement of a hearing
shall be granted except upon motion
and for good cause shown.
(d) Location of the hearing. The loca-
tion of the hearing shall be determined
in accordance with the method for de-
SrSTtne location of a preheating
conference under J22.19(d).
LOCATION:
• County where respondent
resides or conducts business
• in the relevant EPA regional
office
• In Washington, D.C.
-23-
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ft 22.22 Evidence.
(a) General. The Presiding Officer
shall admit all evidence which is not
irrelevant, immaterial, unduly repeti-
tious, or otherwise unreliable or of lit-
tle probative value, except that evi-
dence relating to settlement which
would be excluded in the federal courts
under Rule 408 of the Federal Rules of
Evidence is not admissible. In the pres-
entation, admission, disposition, and
use of evidence, the Presiding Officer
shall preserve the confidentiality of
trade secrets and other commercial and
financial information. The confidential
or trade secret status of any informa-
tion shall not, however, preclude its
being introduced into evidence. The
Presiding Officer may make such or-
ders as may be necessary to consider
such evidence in camera, including the
preparation of a supplemental initial
decision to address questions of law,
fact, or discretion which arise out of
that portion of the evidence which is
confidential or which includes trade se-
crets.
(b) Examination of witnesses. Wit-
nesses shall be examined orally, under
oath or affirmation, except as other-
wise provided in these rules of practice
or by the Presiding Officer. Parties
shall have the right to cross-examine a
witness who appears at the hearing
provided that such cross-examination
is not unduly repetitious.
VERIFIED STATEMENTS
(c) Verified tiatements. The Presiding
Officer may admit aa insert into the
record as evidence, in lieu of oral testi-
mony, statement* of fact or opinion
prepared by a witness. The admissibil-
Ity of the evidence contained in the
statement shall be subject to the same
rules as if the testimony were produced
under oral examination. Before any
such statement is read or admitted
into evidence, the witness shall deliver
a copy of the statement to the Presid-
ing Officer, the reporter, and opposing
counsel. The witness presenting the
statement shall swear to or affirm the
statement and shall be subject to ap-
propriate oral cross-examination upon
the contents thereof
"SHALL ADMIT ALL EVIDENCE"
WHICH IS NOT:
irrelevant
immaterial
induly repetitious
^therwise unreliable
Exhibits. Where
..
for the record and a copy shall be fur-
-------
} 22.23 Objections and offers of proof.
(a) Objection. Any objection concern-
in? the conduct of the hearing may be
stated orally or in writing during the
hearing. The party raising the objec-
tion must supply a short statement of
its grounds. The ruling by the Presid-
ing Officer on any objection and the
reasons given for it shall be part of the
record. An exception to each objection
overruled shall be automatic and is not
waived by further participation in the
hearing.
(b) Offer of proof. Whenever evidence
is excluded from the record, the party
offering the evidence may make an
offer of proof, which shall be included
in the record. The offer of proof for ex-
cluded oral testimony shall consist of a
brief statement describing the nature
of the evidence excluded. The offer of
proof for excluded documents or exhib-
its shall consist of the insertion in the
record of the documents or exhibits ex-
cluded. Where the Environmental Ap-
peals l?oard decides that the ruling of
the Presiding Officer in excluding the
evidence vas both erroneous and preju-
dicial, the bearing may be reopened to
permit the taking of such evidence.
[46 PR 24363. Aja 9. 1980, «a amended at 57
FR 5326. Feb. 13,19K]
ft 2SJM 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 suspen-
sion, as the case may be, is appro-
priate. Following the establishment of
a prima facie case, respondent shall
have the burden of presenting and of
going forward with any defense to the
allegations set forth in the complaint.
Each matter of controversy shall be de-
termined by the Presiding Officer upon
a preponderance of the evidence.
• BURDEN OF PRESENTATION
• BURDEN OF PERSUASION
-25-
33
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fi 22.25 Filing the transcript
The hearing shall be transcribed ver-
batim. Promptly following: the taking
of the last evidence, the reporter shall
transmit to the Regional Hearing Clerk
the original and as many copies of the
transcript of testimony as are called
for in the reporter's contract with the
Agency, and also shall transmit to the
Presiding Officer a copy of the tran-
script. A certificate of service shall ac-
company each copy of the transcript.
The Regional Hearing Clerk shall no-
tify all parties of the availability of
the transcript and shall furnish the
parties with a copy of the transcript
upon payment of the cost of reproduc-
tion, unless a party can show that the
cost is unduly burdensome. Any person
not a party to the proceeding may re-
ceive a copy of the transcript upon
payment of the reproduction fee, ex-
cept for those parts of the transcript
order to be kept confidential by the
Presiding Officer.
§22.26 Proposed findings, conclusions,
and order.
Within twenty (20) days after the par-
ties are notified of the availability of
the transcript, or within such longer
time as may be fixed by the Presiding
Officer, any party may submit for the
consideration of the Presiding Officer,
proposed findings of fact, conclusions
of law, and a proposed order, together
with briefs in support thereof. The Pre-
siding Officer shall set a time by which
reply briefs must be submitted. All
submissions shall be in writing, shall
be served upon all parties, and shall
contain adequate references to the
record and authorities relied on.
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Subpart E—Initial Decision and
Motion To Reopen a Hearing
§ 22.27 Initial decision.
(a) Filing and contents. The Presiding
Officer shall issue and file with the Re-
gional Hearing Clerk his initial deci-
sion as soon as practicable after the pe-
riod for filing reply briefs under §22.26
has expired. The Presiding Officer shall
retain a copy of the complaint in the
duplicate file. The initial decision shall
contain his findings of fact, conclu-
sions regarding all material issues of
law or discretion, as well as reasons
therefor, a recommended civil penalty
assessment, if appropriate, and a pro-
posed final order. Upon receipt of an
initial decision, the Regional Hearing
Clerk shall forward a copy to all par-
ties, and shall send the original, along
with the record of the proceeding, to
the Hearing Clerk. The Hearing Clerk
shall forward a copy of the initial deci-
sion to the Environmental Appeals
Board.
(b) Amount of civil penalty. If the Pre-
siding Officer determines that a viola-
tion has occurred, the Presiding Officer
shall determine the dollar amount of
the recommended civil penalty to be
assessed in the initial decision in ac-
cordance with any criteria set forth in
the Act relating to the proper amount
of a civil penalty, and must consider
any civil penalty guidelines issued
under the Act. If the Presiding Officer
decides to assess a penalty different in
amount from the penalty recommended
to be assessed in the complaint, the
Presiding Officer shall set forth in the
initial decision the specific reasons for
the increase or decrease. The Presiding
Officer shall not raise a penalty from
that recommended to be assessed in the
complaint if the respondent has de-
faulted.
"shall determine...the penalty...
....in accordance...with any criteria
set forth in the Act" and "must consider
any civil penalty guidelines issued
under the Act."
(c) Effect of initial decision. The initial
decision of the Presiding Officer shall
become the final order of the Environ-
mental Appeals Board within forty-five
(45) days after its service upon the par-
ties and without further proceedings
unless (1) an appeal to the Environ-
mental Appeals Board is taken from it
by a party to the proceedings, or (2) the
Environmental Appeals Board elects,
sua sponte, to review the initial deci-
sion.
[45 PR 24363, Apr. 9, 1980, as amended at 57
PR 5325. Feb. 13, 1992]
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35
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8 22.28 Motion to reopen a hearing.
(a) Filing and content. A motion to re-
open a hearing to take further evidence
must be made no later than twenty (20)
days after service of the initial deci-
sion on the parties and shall (1) state
the specific grounds upon which relief
is sought, (2) state briefly the nature
and purpose of the evidence to be ad-
duced, (3) show that such evidence is
not cumulative, and (4) show good
cause why such evidence was not ad-
duced at the hearing. The motion shall
be made to the Presiding Officer and
filed with the Regional Hearing Clerk.
(b) Disposition of motion to reopen a
hearing. Within ten (10) days following
the service of a motion to reopen a
hearing, any other party to the pro-
ceeding may file with the Regional
Hearing Clerk and serve on all other
parties an answer thereto. The Presid-
ing Officer shall announce his intent to
grant or deny such motion as soon as
practicable thereafter. The conduct of
any proceeding which may be required
as a result of the granting of any mo-
tion allowed in this section shall be
governed by the provisions of the appli-
cable sections of these rules. The filing
of a motion to reopen a hearing shall
automatically stay the running of all
time periods specified under these
Rules until such time as the motion is
denied or the reopened hearing is con-
cluded.
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36
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F—Appeals and
Administrative Review
{ 22J0 Appeal from or review of inter-
locutory orders or rulings.
(a) Request for interlocutory appeal.
Except as provided in this section, ap-
peals to the Environmental Appeals
Board shall obtain as a matter of right
only from a default order, an acceler-
ated decision or decision to dismiss is-
sued under §22.20(b)(l), or an initial de-
cision rendered after an evidentiary
hearing. Appeals from other orders or
rulings shall lie only if the Presiding
Officer or Regional Administrator, as
appropriate, upon motion of a party,
certifies such orders or rulings to the
Environmental Appeals Board on ap-
peal. Requests for such certification
shall be filed in writing within six (6)
days of notice of the ruling or service
of the order, and shall state briefly the
grounds to be relied upon on appeal.
(b) Availability of interlocutory appeal.
The Presiding Officer may certify any
ruling for appeal to the Environmental
Appeals Board when (1) the order or
ruling involves an important question
of law or policy concerning which there
is substantial grounds for difference of
opinion, and (2) either (i) an immediate
appeal from the order or ruling will
materially advance the ultimate termi-
nation of the proceeding, or (ii) review
after the final order is issued will be in-
adequate or ineffective.
(c) Decision. If the Environmental Ap-
peals Board determines that certifi-
cation was improvidently granted, or if
the Environmental Appeals Board
takes no action within thirty (30) days
of the certification, the appeal is dis-
missed. When the Presiding Officer de-
clines to certify an order or ruling to
the Environmental Appeals Board on
interlocutory appeal, it may be re-
viewed by the Environmental Appeals
Board only upon appeal from the ini-
tial decision, except when the Environ-
mental Appeals Board determines,
upon motion of a party and in excep-
tional circumstances, that to delay re-
view would be contrary to the public
interest. Such motion shall be made
within six (6) days of service of an
order of the Presiding Officer refusing
to certify a ruling for interlocutory ap-
Peal to the Environmental Appeals
Board. Ordinarily, the interlocutory
appeal will be decided on the basis of
the submissions made by the Presiding
Officer. The Environmental Appeals
Board may, however, allow further
briefs and oral argument.
(d) Stay of proceedings. The Presiding
Officer may stay the proceedings pend-
ing a decision by the Environmental
Appeals Board upon an order or ruling
certified by the Presiding Officer for an
interlocutory appeal. Proceedings will
not be stayed except in extraordinary
circumstances. Where the Presiding Of-
ficer grants a stay of more than thirty
(30) days, such stay must be separately
approved by the Environmental Ap-
peals Board.
[45 FR 24363, Apr. 9, 1980, as amended at 57
PR 5325, Feb. 13, 1992]
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ft 22.30 Appeal from or review of initial
decision.
(a) Notice of appeal. (1) Any party
may appeal an adverse ruling or order
of the Presiding Officer by filing a no-
tice of appeal and an accompanying ap-
pellate brief with the Environmental
Appeals Board and upon all other par-
ties and amicus curiae within twenty
(20) days after the initial decision is
served upon the parties. The notice of
appeal shall set forth alternative find-
ings of fact, alternative conclusions re-
garding issues of law or discretion, and
a proposed order together with rel-
evant references to the record and the
initial decision. The appellant's brief
shall contain a statement of the issues
presented for review, a statement of
the nature of the case and the facts rel-
evant to the issues presented for re-
view, argument on the issues pre-
sented, and a short conclusion stating
the precise relief sought, together with
appropriate references to the record.
(b) Sua sponte review by the Environ-
mental Appeals Board. Whenever the En-
vironmental Appeals Board determines
sua sponte to review an initial deci-
sion, the Environmental Appeals Board
shall serve notice of such intention on
the parties within forty-five (45) days
after the initial decision is served upon
the parties. The notice shall include a
statement of issues to be briefed by the
parties and a time schedule for the
service and filing of briefs.
(2) Within fifteen (15) days of the
service of notices of appeal and briefs
under paragraph (a)(l) of this section,
any other party or amicus curiae may
file and serve with the Environmental
Appeals Board a reply brief responding
to argument raised by the appellant,
together with references to the rel-
evant portions of the record, initial de-
cision, or opposing brief. Reply briefs
shall be limited to the scope of the ap-
peal brief. Further briefs shall be filed
only with the permission of the Envi-
ronmental Appeals Board.
(c) Scope of appeal or review. If the En-
vironmental Appeals Board determines
that issues raised, but not appealed by
the parties, should be argued, it shall
give counsel for the parties reasonable
written notice of such determination
to permit preparation of adequate ar-
gument. Nothing herein shall prohibit
the Environmental Appeals Board from
remanding the case to the Presiding
Officer for further proceedings.
(d) Argument before the Environmental
Appeals Board. The Environmental Ap-
peals Board may, upon request of a
party or sua sponte, assign a time and
place for oral argument after giving
consideration to the convenience of the
parties.
[45 FR 24363, Apr. 9, 1980, as amended at 57
FR 5325, Feb. 13, 1992]
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38
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Subpart G—Final Order on Appeal
{ 22JU Final order on appeal
(a) Contents of the final order. When
an appeal has been taken or the Envi-
ronmental Appeals Board issues a no-
tice of intent to conduct a review sua
sponte, the Environmental Appeals
Board shall issue a final order as soon
as practicable after the filing of all ap-
pellate briefs or oral argument, which-
ever is later. The Environmental Ap-
peals Board shall adopt, modify, or set
aside the findings and conclusions con-
tained in the decision or order being re-
viewed and shall set forth in the final
order the reasons for its actions. The
Environmental Appeals Board may, in
its discretion, increase or decrease the
assessed penalty from the amount rec-
ommended to be assessed in the deci-
sion or order being reviewed, except
that if the order being reviewed is a de-
fault order, the Environmental Appeals
Board may not increase the amount of
the penalty.
§22.32 Motion to reconsider a final
order.
Motions to reconsider a final order
shall be filed within ten (10) days after
service of the final order. Every such
motion must set forth the matters
claimed to have been erroneously de-
cided and the nature of the alleged er-
rors. Motions for reconsideration under
this provision shall be directed to, and
decided by, the Environmental Appeals
Board. Motions for reconsideration di-
rected to the Administrator, rather
than to the Environmental Appeals
Board, will not be considered, except in
cases that the Environmental Appeals
Board has referred to the Adminis-
trator pursuant to §22.04(a) and in
which the Administrator has issued the
final order. A motion for reconsider-
ation shall not stay the effective date
of the final order unless specifically so
ordered by the Environmental Appeals
Board.
[57 FR 5326. Feb. 13,1992]
(b) Payment of a civil penalty. The re-
spondent shall pay the full amount of
the civil penalty assessed in the final
order within sixty (60) days after re-
ceipt of the final order unless other-
wise agreed by the parties. Payment
shall be made by forwarding to the Re-
gional Hearing Clerk a cashier's check
or certified check in the amount of the
penalty assessed in the final order,
payable to the Treasurer, United
States of America.
[45 FR 24363, Apr. 9, 1980, as amended at 5?
FR 5326. Feb. 13. 1992]
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39
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Clean Air
Subparf H—Supplemental Rules
§22.33 Supplemental rules of practice
governing the administrative as-
sessment of civil penalties under
the Toxic Substances Control Act.
(a) Scope of these Supplemental rules.
These Supplemental rules of practice
shall govern, in conjunction with the
preceding consolidated rules of prac-
tice (40 CFR part 22), all formal adju-
dications for the assessment of any
civil penalty conducted under section
16(a) of the Toxic Substances Control
Act (15 U.S.C. 2615(a)). Where inconsist-
encies exist between these Supple-
mental rules and the Consolidated
rules, (§§22.01 through 22.32), these Sup-
plemental rules shall apply.
(b) Subpoenas. (1) The attendance of
witnesses or the production of docu-
mentary evidence may be required by
subpoena. The Presiding Officer may
grant a request for a subpoena upon a
showing of (i) the grounds and neces-
sity therefor, and (ii) the materiality
and relevancy of the evidence to be ad-
duced. Requests for the production of
documents shall describe the evidence
sought as specifically as practicable.
(2) Subpoenas shall be served in ac-
cordance with §22.06(b)(l) of the Con-
solidated Rules of Practice.
(3) Witnesses summoned before the
Presiding Officer shall be paid the
same fees and mileage that are paid
witnesses in the courts of the United
States. Fees shall be paid by the party
at whose instance the witness appears.
Where a witness appears pursuant to a
request initiated by the Presiding Offi-
cer, fees shall be paid by the agency.
§22.34 Supplemental rules of practice
governing the administrative as-
sessment of civil penalties under
title n of the Clean Air Act
(a) Scope of these Supplemental rules.
These Supplemental rules shall govern,
in conjunction with the preceding Con-
solidated Rules of Practice (40 CFR
part 22), all proceedings to assess a
civil penalty conducted under sections
205(c), 211(d), and 213(d) of the Clean Air
Act, as amended (42 U.S.C. 7524(c),
7545(d), and 7547(d)). Where inconsist-
encies exist between these Supple-
mental rules and the Consolidated
Rules (§§22.01 through 22.32), these Sup-
plemental rules shall apply.
(b) Issuance of notice. (I) Prior to the
issuance of an administrative penalty
order assessing a civil penalty, the per-
son to whom the order is to be issued
shall be given written notice of the
proposed issuance of the order. Such
notice shall be provided by the issu-
ance of a complaint pursuant to §22.13
of the Consolidated Rules of Practice.
(2) Notwithstanding §22.15
-------
§ 22.35 Supplemental rule* of practice
governing the administrative as-
sessment of civil penalties under
the Federal Insecticide, Fungicide,
and Rodenticide Act.
(a) Scope of these Supplemental rules.
These Supplemental rules of practice
shall govern, in conjunction with the
preceding Consolidated Rules of Prac-
tice (40 CFR part 22), all formal adju-
dications for the assessment of any
civil penalty conducted under section
14(a) of the Federal Insecticide, Fun-
gicide, and Rodenticide Act as amend-
ed (7 U.S.C. 1261(a)). Where inconsist-
encies exist between these Supple-
mental rules and the Consolidated
rules, (§§22.01 through 22.32), these Sup-
plemental rules shall apply.
(b) Venue. The prehearing conference
and the hearing shall be held in the
county, parish, or incorporated city of
the residence of the person charged,
unless otherwise agreed in writing by
all parties.
(c) Evaluation of proposed civil penalty.
In determining the dollar amount of
the recommended civil penalty as-
sessed in the initial decision, the Pre-
siding Officer shall consider, in addi-
tion to the criteria listed in section
14(a)(3) of the Act, (1) respondent's his-
tory of compliance with the Act or its
predecessor statute and (2) any evi-
dence of good faith or lack thereof. The
Presiding Officer must also consider
the guidelines for the Assessment of
Civil Penalties published in the FED-
ERAL REGISTER (39 FR 27711), and any
amendments or supplements thereto.
i 22J36 Supplemental rule* of practice
governing the administrative as-
sessment of civil penalties and the
revocation or suspension of permits
under the Marine Protection, Re-
search, and Sanctuaries Act.
(a) Scope of these Supplemental rules.
These Supplemental rules shall govern,
in conjunction with the preceding Con-
solidated Rules of .Practice (40 CFR
part 22), all formal adjudications con-
ducted under section 105(a) or (f) of the
Marine Protection, Research, and
Sanctuaries Act as amended (33 U.S.C.
14l5(a) and (f)). Where inconsistencies
exist between these Supplemental rules
and the Consolidated Rules, (§§22.01
through 22.32), these Supplemental
rules shall apply.
(b) Additional criterion for the issuance
of a complaint for the revocation or sus-
pension of a permit. In addition to the
three criteria listed in 40 CFR 22.13 for
issuing a complaint for the revocation
or suspension of a permit, complaints
may be issued on the basis of a person's
failure to keep records and notify ap-
propriate officials of dumping activi-
ties, as required by 40 CFR 224.1 and
223.2.
FIFRA
Marine Protection
Act
-33-
41
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Supplemental rule* of practice
governing the administrative as-
sessment of civil penalties under
the Solid Waste Disposal Act
(a) Scope of these Supplemental rules.
These Supplemental rules of practice
shall govern, in conjunction with the
preceding Consolidated Rules of Prac-
tice (40 CFR part 22), all proceedings to
assess a civil penalty conducted under
section 3006 of the Solid Waste Disposal
Act (42 U.S.C. 6928) (the "Act"). Where
inconsistencies exist between these
Supplemental rules and the Consoli-
dated Rules, (§$22.01 through 22.32),
these Supplemental rules shall apply.
(b) Issuance of notice. Whenever, on
the basis of any information, the Ad-
ministrator determines that any per-
son is in violation of (1) any require-
ment of subtitle C of the Act, (2) any
regulation promulgated pursuant to
subtitle C of the Act, or (3) a term or
condition of a permit issued pursuant
to subtitle C of the Act, the Adminis-
trator shall issue notice to the alleged
violator of his failure to comply with
such requirement, regulation or per-
mit.
(c) Content of notice. Each notice of
violation shall include:
(1) A specific reference to each provi-
sion of the Act, regulation, or permit
term or condition which the alleged vi-
olator is alleged to have violated; and
(2) A concise statement of the factual
basis for alleging such violation.
(d) Service of notice. Service of notice
shall be made in accordance with
§22.05(b)(2) of the Consolidated Rules of
Practice.
(e) Issuance of the complaint. (1) Ex-
cept as provided in paragraph (e)(3) of
this section, the complainant may
issue a complaint whenever he has rea-
son to believe that any violation ex-
tends beyond the thirtieth day after
service of the notice of violation.
(2) The complaint shall include, in
addition to the elements stated in
$22.14 of the Consolidated Rules, an
order requiring compliance within a
specified time period. The complaint
shall be equivalent to the compliance
order referred to in section 3008 of the
Act.
(3) Whenever a violation is of a non-
continuous or intermittent nature, the
Administrator may issue a complaint,
without any prior notice to the viola-
tor, pursuant to $22.14 of the Consoli-
dated Rules of Practice which may also
require the violator to take any and all
measures necessary to offset all ad-
verse effects to health and the environ-
ment created, directly or indirectly, as
a result of the violation.
(4) Notwithstanding $22.15(a), any an-
swer to the complaint must be filed
with the Regional Hearing Clerk with-
in thirty (30) days after the filing of
the complaint.
(f) Subpoenas. (1) The attendance of
witnesses or the production of docu-
mentary evidence may be required by
subpoena. The Presiding Officer may
grant a request for a subpoena upon a
showing of (i) the grounds and neces-
sity therefor, and (ii) the materiality
and relevancy of the evidence to be ad-
duced. Requests for the production of
documents shall describe with specific-
ity the documents sought.
(2) Subpoenas shall be served in ac-
cordance with $22.05(b)(l) of the Con-
solidated Rules of Practice.
(3) Witnesses summoned before the
Presiding Officer shall be paid the
same fees and mileage that are paid
witnesses in the courts of the United
States. Fees shall be paid by the party
at whose instance the witness appears.
Where a witness appears pursuant to a
request initiated by the Presiding Offi-
cer, fees shall be paid by the Agency.
(42 U.S.C. 6901, et seq.)
EFFECTIVE DATE NOTE: At 45 FR 79808. Dec.
2, 1980, paragraphs (b), (c), (d), (e)(l) and (3) of
§22.37 were suspended until further notice.
effective Dec. 2, 1980.
RCRA
-34-
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§22.38 Supplemental rules of practice
governing the administrative as-
sessment of Class n penalties under
the Clean Water Act
(a) Scope of these supplemental rules.
These supplemental rules of practice
shall govern, in conjunction with the
preceding Consolidated Rules of Prac-
tice (40 CFR part 22), administrative
proceedings for the assessment of any
Class II civil penalty under section
309(g) of the Clean Water Act (33 U.S.C.
(b) Consultation with states. The Ad-
ministrator will consult with the state
in which the alleged violation occurs
before issuing a final order assessing a
Class II civil penalty.
(c) Public notice. Before issuing a final
order assessing a Class II civil penalty,
the Administrator will provide public
notice of the complaint.
(d) Comment by a person who is not a
party. A person not a party to the Class
II proceeding who wishes to comment
upon a complaint must file written
comments with the Regional Hearing
Clerk within 30 days after public notice
of the complaint and serve a copy of
the comments upon each party. For
good cause shown the Administrator,
the Regional Administrator, or the
Presiding Officer, as appropriate, may
accept late comments. The Adminis-
trator will give any person who com-
ments on a complaint notice of any
hearing and notice of the final order
assessing a penalty. Although com-
menters may be heard and present evi-
dence at any hearing held under sec-
tion 309(g) of the Act, commenters
shall not be accorded party status with
right of cross examination unless they
formally move to intervene and are
granted party status under §22.11.
(e) Administrative procedure and judi-
cial review. Action of the Administrator
for which review could have been ob-
tained under section 509(b)(l) of the Act
shall not be subject to review in an ad-
ministrative proceeding for the assess-
ment of Class II civil penalty under
section 309(g).
(f) Petitions to set aside an order and to
provide a hearing. If no hearing on the
complaint is held before issuance of an
order assessing a Class II civil penalty,
any person who commented on the
complaint may petition the Adminis-
trator, within 30 days after issuance of
the order, to set aside the order and to
provide a hearing on the complaint. If
the evidence presented by the peti-
tioner In support of the petition is ma-
terial and was not considered in the is-
suance of the order, the Administrator
will immediately set aside the order
and provide a hearing in accordance
with the Consolidated Rules of Prac-
tice and these supplemental rules of
practice. If the Administrator denies a
hearing under section 309(g)(4)(C) of the
Act, the Administrator will provide to
the petitioner, and publish in the FED-
ERAL REGISTER, notice of and the rea-
sons for the denial.
[55 FR 23840, June 12,1990]
Clean Water Act
-35-
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6 22.39 Supplemental rules of practice
governing the administrative as-
sessment of administrative pen-
alties under section 109 of the Com-
prehensive Environmental Re-
sponse, Compensation, and Liabil-
ity Act of 1980, as amended.
(a) Scope of these Supplemental rules.
These Supplemental rules of practice
shall govern, in conjunction with the
preceding Consolidated Rules of Prac-
tice (40 CFR part 22), administrative
proceedings for the assessment of any
civil penalty under section 109 of the
Comprehensive Environmental Re-
sponse, Compensation, and Liability
Act of 1980, as amended (42 U.S.C. 9609).
Where inconsistencies exist between
these Supplement*! rules and the Con-
solidated Rules (H22.01 through 22.32),
these Supplemental rules shall apply.
(b) Subpoenas. (1) The attendance and
testimony of witnesses or the produc-
tion of relevant papers, books, and doc-
uments may be required by subpoena.
The Presiding Officer may grant a re-
quest for a subpoena upon a showing
of—
(1) The grounds and necessity there-
for, and
(11) The materiality and relevancy of
the evidence to be adduced.
Requests for the production of docu-
ments shall describe the evidence
sought as specifically as practicable.
(2) Subpoenas shall be served in ac-
cordance with |22.05(b)(l) of the Con-
solidated Rules of Practice.
(3) Witnesses summoned before the
Presiding Officer shall be paid the
same fees and mileage that are paid
witnesses in the courts of the United
States. Fees shall be paid by the party
at whose Instance the witness appears.
Where a witness appears pursuant to a
request initiated by the Presiding Offi-
cer, fees shall be paid by the Agency.
(c) Judicial review. Any person who re-
quested a hearing with respect to a
Class n civil penalty under section 109
of CERCLA and who is the recipient of
a final order assessing a civil penalty
may file a petition for judicial review
of such order with the United States
Court of Appeals for the District of Co-
lumbia or for any other circuit in
CERCLA
which such person resides or transacts
business. Any person who requested a
hearing with respect to a Class I civil
penalty under section 109 of CERCLA
and who is the recipient of a final order
assessing the civil penalty may file a
petition for judicial review of such
order with the appropriate district
court of the United States. All peti-
tions must be filed within 30 days of
the date the order making the assess-
ment was issued.
(d) Payment of civil penalty assessed.
Payment of civil penalties finally as-
sessed by the Regional Administrator
shall be made by forwarding a cashier's
check, payable to the ''EPA, Hazardous
Substances Superfund," in the amount
assessed, and noting the case title and
docket number, to the appropriate re-
gional Superfund Lockbox Depository.
Notice of payment must be sent by Re-
spondent to the Hearing Clerk for in-
clusion as part of the administrative
record for the proceeding in which the
civil penalty was assessed. Interest on
overdue payments shall be collected
pursuant to the Debt Collection Act, 37
U.S.C. 3717.
[54 FR 21176, May 16. 1989]
-36-
44
-------
§21.40 Su
tal role* of
the adm
Ov
DOB*
altiec under section 816 of the
Emergency Planning and Commu-
nity Bight-To-Know Act of 1966
(EPCRAJ.
(a) Scope of these Supplemental Rules.
These Supplemental rules of practice
shall govern, in conjunction with the
preceding Consolidated Rules of Prac-
tice (40 CFR part 22), administrative
proceedings for the assessment of any
civil penalty under section 325 for vio-
lations of the Emergency Planning and
Community Right-To-Know Act of 1986
(EPCRA). Where inconsistencies exist
between these Supplemental rules and
the Consolidated Rules, (ff 22.01
through 22.32) these Supplemental
rules shall apply.
(b) Subpoenas. (1) The attendance and
testimony of witnesses or the produc-
tion of relevant papers, books, and doc-
uments may be required by subpoena.
The Presiding Officer may grant a re-
quest for a subpoena upon a showing of
(i) the grounds and necessity therefore,
and (ii) the materiality and relevancy
of the evidence to be adduced. Requests
for the production of documents shall
describe the evidence sought as specifi-
cally as practicable.
(2) Subpoenas shall be served in ac-
cordance with §22.05(b)(l) of the Con-
solidated Rules of Practice.
(3) Witnesses summoned before the
Presiding Officer shall be paid the
same fees and mileage that are paid
witnesses in the courts of the United
States. Fees shall be paid by the party
at whose instance the witness appears.
Where a witness appears pursuant to
request initiated by the Presiding Offi-
cer, fees shall be paid by the Agency.
(c) Judicial review. Any person against
whom a civil penalty is assessed may
seek judicial review in the appropriate
district court of the United States by
filing a notice of appeal and by simul-
taneously sending a copy of such notice
by certified mail to the Administrator.
The notice must be filed within 30 days
EPCRA
of the date the order making such as-
sessment was issued. The Adminis-
trator shall promptly file in such court
a certified copy of the record upon
which such violation was found or such
penalty imposed.
(d) Procedures for collection of civil
penalty. If any person fails to pay an
assessment of a civil penalty after it
has become a final and unappealable
order or after the appropriate court has
entered final judgment in favor of the
United States, the Administrator may
request the Attorney General of the
United States to institute a civil ac-
tion in an appropriate district court of
the United States to collect the pen-
alty, and such court shall have juris-
diction to hear and decide any such ac-
tion. In hearing such action, the court
shall have authority to review the vio-
lation and the assessment of the civil
penalty on the record. Interest on over-
due payments shall be collected pursu-
ant to the Debt Collection Act, 37
U.S.C. 3717.
[54 FR 21176, May 16,1989]
-37-
-------
$22.41 Supplemental rules of practice
governing the administrative as-
sessment of civil penalties under
Title n of the Toxic Substances
Control Act, enacted as section 2 of
the Asbestos Hazard Emergency Re-
sponse Act (AHERA).
(a) Scope of the Supplemental rules.
These Supplemental rules of practice
shall govern, in conjunction with the
preceding Consolidated Rules of Prac-
tice (40 CFR part 22), all proceedings to
assess a civil penalty conducted under
section 207 of the Toxic Substances
Control Act (the "Act") (15 U.S.C.
2647). Where inconsistencies exist be-
tween these Supplemental rules and
the Consolidated rules (§§22.01 through
22-32), these Supplemental rules shall
apply.
(b) Collection of civil penalty. Any
civil penalty collected under section
207 of the Act shall be used by the local
educational agency for purposes of
complying with Title H of the Act. Any
Portion of a civil penalty remaining
uaspent after a local educational agen-
cy achieves compliance shall be depos-
ited into the Asbestos Trust Fund es-
tablished under section 5 of AHERA.
[54 FR 24112, June 5,1989]
AHERA
Safe Drinking
Water Act
§22.42 Supplemental rules of practice
governing the administrative as-
sessment of civil penalties for viola-
tions of compliance orders issued
under Part B of the Safe Drinking
Water Act
(a) Scope of these supplemental, rules.
These supplemental rules of practice
shall govern, in conjunction with the
preceding Consolidated Rules of Prac-
tice (40 CFR part 22), all proceedings to
assess a civil penalty under section
1414(g)(3)(B). Where inconsistencies
exist between these supplemental rules
and the Consolidated rules, these sup-
plemental rules shall apply.
(b) Definition of "person." In addition
to the terms set forth in 40 CFR 22.03(a)
that define person, for purposes of this
section and proceedings under section
1414(g)(3)(B) of the Safe Drinking Water
Act, the term person shall also include
any officer, employee, or agent of any
corporation, company or association.
(c) Issuance of complaint. If the Ad-
ministrator determines that a person
has violated any provision of a compli-
ance order issued under section
1414(g)(D of the Safe Drinking Water
Act, 42 U.S.C. 300g-3(g)(l), he may in-
stitute a proceeding for the assessment
of a civil penalty by issuing a com-
plaint under the Act and this part.
(4) Content of the complaint. A com-
plaint for the assessment of civil pen-
alties under this part shall include spe-
cific reference to:
(1) Each provision of the compliance
order issued under section 1414(g)(l) of
the Act, 42 U.S.C. 300g-3(g)(l), which is
alleged to have violated; and
(2) Each violation of a Safe Drinking
Water Act regulation, schedule, or
other requirement which served as the
basis for the compliance order which is
alleged to have been violated.
(e) Scope of hearing. Action of the Ad-
ministrator with respect to which judi-
cial review could have been obtained
under section 1448 of the Safe Drinking
Water Act, 42 U.S.C. 300J-7, shall not be
subject to review in an administrative
proceeding for the assessment of a civil
penalty under section 1414(g)(3XB) of
the SDWA and this part.
[56 PE 3757, Jan. 30, 1991]
-38-
46
-------
(22.43 Supplemental rule* of practice
governing the administrative a»-
•ewment of civil penalties under
•ection 113(d)U) of the Clean Air
Act.
(a) Scope of these Supplemental rules.
These Supplemental rules shall govern,
in conjunction with the preceding Con-
solidated Rules of Practice (40 CFR
part 22), all proceedings to assess a
civil penalty conducted under section
113(d)(l) of the Clean Air Act (42 U.S.C.
7413(d)(D). Where inconsistencies exist
between these Supplemental rules and
the Consolidated Rules (S§22.01 through
22.32), these Supplemental rules shall
apply.
(b) Issuance of notice. (1) Prior to the
issuance of an administrative penalty
order assessing a civil penalty, the per-
son to whom the order is to be issued
shall be given written notice of the
proposed issuance of the order. Such
notice shall be provided by the issu-
ance of a complaint pursuant to §22.13
of the Consolidated Rules of Practice.
(2) Notwithstanding §22.15(a), any an-
swer to the complaint must be filed
with the Regional Hearing Clerk with-
in thirty (30) days after service of the
complaint.
(c) Subpoenas. (1) The attendance of
witnesses or the production of docu-
mentary evidence may be required by
subpoena. The Presiding Officer may
grant a request for a subpoena upon a
showing of;
(i) The grounds and necessity there-
for, and
(ii) The materiality and relevancy of
the evidence to be adduced.
Requests for the production of docu-
ments shall describe with specificity
the documents sought.
(2) Subpoenas shall be served in ac-
cordance with §22.06(b)(D of the Con-
solidated Rules of Practice.
(3) Witnesses summoned before the
Presiding Officer shall be paid the
same fees and mileage that are paid in
the courts of the United States. Fees
shall be paid by the party at whose in-
stance the witness appears. Where a
witness appears pursuant to a request
initiated by the Presiding Officer, fees
shall be paid by EPA.
[57 FR 4318. Feb. 4,1992]
APPENDIX TO PART 22—ADDRESSES OF
EPA REGIONAL OFFICES
Region I—John F. Kennedy Federal Building.
Boston, MA 02203.
Region H—26 Federal Plaza, New York, NY
10007.
Region m—Curtis Building, 6th and Walnut
Streets. Philadelphia, PA 19106.
Region IV—345 Courtland Street NE., At-
lanta, OA 30308.
Region V—230 South Dearborn Street, Chi-
cago. IL 60604.
Region VI—First International Building 1201
Elm Street. Dallas. TX 75270.
Region YD—1735 Baltimore Street. Kansas
City, MO 64108.
Region vm—1860 Lincoln Street. Denver, CO
80203.
Region IX—215 Fremont Street, San Fran-
cisco, CA 94105.
Region X—1200 6th Avenue. Seattle. WA 98101.
CM
-39-
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11-87
NEWS & ANALYSIS
17 ELR 10441
Hearings Before an EPA Administrative Law Judge
by Judge Gerald Harwood
Editors' Summary: Practice before administrative agencies, especially EPA.
has always been an important part of an environmental lawyer's job. Admin-
istrative practice is becoming increasingly important. Several statutes have
recently been amended to provide for the administrative assessment of civil
penalties by EPA. The first step after EPA proposes to assess a civil penalty
is generally a hearing before an EPA administrative law judge (ALJ). Judge
Harwood, EPA's Chief Administrative Law Judge, describes the role of the
ALJ within EPA and the statutes under which adjudicatory hearings most
frequently arise. Judge Harwood then outlines the procedures followed in hear-
ings before EPA ALJs, from the administrative complaint through the issuance
of an initial decision.
When the Environmental Protection Agency (EPA)
proposes to assess a civil penalty against a party
for violating the law or regulations or to deny, modify,
or revoke a license or permit, due process requires that it
first grant the party a hearing on the matter. In most in-
stances such hearings are held before an administrative law
judge.' The administrative law judge is an employee of
EPA who by statute is made largely independent of super-
vision and control by EPA to ensure the judge's impar-
tiality in presiding over and deciding cases.2
The Office of Administrative Law Judges
EPA's administrative law judges constitute a staff office
under the Administrator. A Chief Administrative Law
Judge has general charge of the office but also presides
over cases like the other judges.1
The Office is authorized to have seven judges, including
the Chief Judge. For reasons that are largely historical,
two of the judges are located outside of Washington, D.C.,
one judge having his office at the Region IV headquarters
in Atlanta, Georgia, and the other judge at the Region VII
Judge Harwood is the Chief Administrative Law Judge for the United
States Environmental Protection Agency. This article was written by the
author in his private capacity. No official report or endorsement by the
United Stales Environmental Protection Agency is intended or should
be inferred.
1. Administrative law judges preside over hearings that are required
by statute "to be determined on the record after opportunity for an
agency hearing." Administrative Procedure Act (APA), 5 U.S.C.
§S54(a), ELR STAT. ADMIN. PROC. 004. The statute may expressly
say that the hearing is to be "on the record," or this may be infer*
red from the nature of the hearing provided. Seacoast Anti-Pollution
League v. Costle, 572 F.2d 872, 8 ELR 20207 (1st Cir. 1978), cert.
denied, 439 U.S. 824 (1978). Administrative law judges may also
preside over other hearings if requested by EPA.
2. The pay of the administrative law judge is prescribed by the Office
of Personnel Management. 5 U.S.C. {5372. The judge can be remov-
ed only for good cause established and determined by the Merit
Systems Protection Board after a hearing, 5 U.S.C. §7521, and the
judge's performance cannot be rated by EPA. 5 U.S.C. §§4302, 4303.
The judge's impartiality is assured by a rigorous "separation of func-
tions" that insulates the judge from any supervision or direction by
agency employees who have participated in the investigation or pro-
secution of the case and that also prohibits any ex pane discussion
by the judge with any person on any fact in issue. APA, 5 U.S.C.
§554(d), ELR STAT. ADMIN. PROC. 004.
3. In addition to the judges, the staff of the Office consists of the hearing
clerk, who has custody of the case files, an assistant to the hearing
clerk, a legal staff assistant to assist the Chief Judge in the administra-
tion of the Office, secretaries, and one attorney advisor.
headquarters in Kansas City, Kansas. The remaining judges
are located at EPA headquarters in Washington, D.C.
Cases are assigned to the judges by the Chief Judge.
Assignments are made in rotation so far as practicable, ex-
cept that when the workload permits, the judges in Wash-
ington, D.C., will be assigned cases that are heard in
Washington, D.C., and the judges in Atlanta and Kansas
City will be assigned cases that will be heard in their respec-
tive cities.
Another factor taken into account in assigning cases is
the availability of the judge because of commitments to
cases already assigned and the relative size of the judge's
workload. Although all judges theoretically start with the
same number of cases, for any number of reasons the per-
centage of cases that actually go to hearing may vary great-
ly between judges, and some cases will require considerably
more work than others. Finally, the Chief Judge may
depart from the rotational order to take a case that is of
unusual difficulty.
Statutes Providing for Hearings
Hearings before an administrative law judge are provided
under numerous statutory provisions. Cases currently arise
most frequently under the following statutes:
Clean Air Act §720*—assessment of a civil penalty
against a stationary source that is not in compliance with
any applicable emission requirement.
Clean Air Act §207(c/—hearing on the recall of motor
vehicles that do not conform to emission standards.
Clean Water Act §402*—hearing on a challenge to a per-
mit regulating the discharge of pollutants into the water.
Resource Conservation and Recovery Act (RCRA)
§3006"—the assessment of a civil penalty and issuance of
a compliance order for failure to comply with requirements
relating to the generation, transportation, treatment,
storage, and disposal of hazardous waste.
Toxic Substances Control Act (TSCA) §16(aj'—the
assessment of a civil penalty for failure to comply with the
requirements relating to toxic substances.
Marine Protection, Research and Sanctuaries Act
4. 42 U.S.C. §7420, ELR STAT. 42226.
5. 42 U.S.C. §754l(c), ELR STAT. 42247.
6. 33 U.S.C. §1342.
7. 42 U.S.C. §6928, ELR STAT. RCRA 019.
8. 15 U.S.C. §2615(a).
49
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17 ELR 10442
ENVIRONMENTAL LAW REPORTER
11-87
§105(a) and (//—the assessment of a civil penalty for viola-
tion of the restrictions on ocean dumping and the revoca-
tion or suspension of a permit for dumping materials into
the ocean.
Federal Insecticide, Fungicide and Rodenticide Act
(FIFRA) §3 (c)f2j(Br—suspension of a registration
because of failure to secure additional data required to
maintain a registration of a pesticide.
FIFRA §6"—hearing on refusal to register a pesticide,
cancellation of a registration, suspension of a registration,
changes in the classification of a pesticide and applications
under FIFRA §§3 and 18 to modify a previous cancellation
or suspension order.
FIFRA §I4(a)n—assessment of a civil penalty for viola-
tions of the Act.
Hearing Procedures
The procedures in a hearing before the administrative law
judge depend upon the statute under which the hearing is
brought. One basic procedure, however, applies in all
cases. All decisions issued by the administrative law judge
are reviewed by the Administrator or his delegate,, the
Judicial Officer." The review can be either discretionary
or mandatory, and this again depends upon the statute
under which the proceeding is brought.
Hearings Governed by Consolidated Rules
The largest number of cases currently being handled by
the administrative law judges are governed by the Consol-
idated Rules of Practice.u These rules apply to proceedings
under FIFRA §14(a), RCRA §3008, TSCA §16(a), and
Marine Protection, Research and Sanctuaries Act §105."
A recent amendment also applies these rules to the assess-
ment of Class II penalties under Clean Water Act §309(g). '•
In addition to general rules applicable to proceedings under
each of these provisions, the consolidated rules contain
supplemental rules specifically addressed to each provi-
sion."
Cases under the consolidated rules are instituted by the
issuance of a complaint setting out the acts and. practices
being questioned." In the case of a complaint under RCRA
§3008, the complaint must also contain a compliance
order." An administrative law judge is not assigned to the
9. 33 U.S.C. §1415(a) and (f), ELR STAT. 41865.
10. 7 U.S.C. §136a, ELR STAT. FIFRA 005.
11.7 U.S.C. §!36d, ELR STAT. FIFRA 012;
12. 7 U.S.C. §136/, ELR STAT. FIFRA 020.
13. Since in most instances review is by the Judicial Officer, reference
to the Judicial Officer hereafter will mean the Administrator when
the Administrator elects to review a case.
14. 40 C.F.R. §22.
15. 40 C.F.R. §22.01. The consolidated rules also state that they apply
to civil penalty cases under Clean Air Act §211. The Judicial Of-
ficer, however, has ruled that §211 does not authorize the imposi-
tion of administrative penalties. See In Re Transportation, Inc.. No
CAA(2ll)-27 (Feb. 25, 1982).
16. 33 U.S.C. §1319(g). See 52 Fed. Reg. 30671 (Aug. 17, 1987). Clau
II penalties may reach $125,000. See Liebesman & Laws, The Water
Quality Act of 1987: A Major Step Ahead in Assuring the Qualm
of the Nation's Waters. 17 ELR 10311, 10317 (Aug. 1987).
17. See, e.g., supplemental rules for civil penalties under RCRA §.iorm
40 C.F.R. §22.37.
18. 40 C.F.R. §§22.13 and 22.14.
19. 40 C.F.R. §22.37(e).
case until an answer is filed. Motions for an extension of
time to answer or for other relief filed prior to the answer
must be made to the Judicial Officer if the complaint is
issued out of Washington, D.C., or to the Regional
Administrator, if the complaint emanated from a Regional
Office.
Once the case has been assigned to an administrative law
judge, the parties are usually directed by the judge to
discuss settlement, if this has not already been done, and
to report on the status of settlement.20 If the case cannot
be settled, the parties will be directed to exchange their evi-
dence by supplying lists of proposed witnesses with a sum-
mary of their expected testimony and copies of documents
they intend to introduce into evidence.2' They may also
be directed to furnish such other information as the judge
considers relevant. This is almost always done by corres-
pondence, or if it cannot be satisfactorily handled by
correspondence, then by a telephone conference. Very rare-
ly do the proceedings under the consolidated rules require
prehearing conferences where the parties are personally
present. The matter is set down for a hearing once it has
been determined that settlement is unlikely. At least twenty
days notice of hearing is required." The parties, of course,
may still continue with their efforts to settle, and can set-
tle any time up to the commencement of the hearing. Hear-
ings must be held either at the place where the respondent
is located or does business, in the city where EPA's
Regional Office is located (if the complaint has been issued
by a. Regional Office), or at EPA headquarters at Wash-
ington, D.C., unless there is some good reason for holding
it elsewhere." The practice has been in most instances to
hold the hearing at the place where the respondent is
located or does business.
One special feature to be noted about practice under the
consolidated rules is that discovery is not as liberal as it
is under the Federal Rules of Civil Procedure where par-
ties are free to engage in discovery and the court gets in-
volved only if a party applies to it for some relief. There
is no discovery under the consolidated rules over and above
that obtained through the prehearing exchange except to
the extent permitted by the judge upon application by a
party. In fact, this is generally true of all hearings before
EPA.24
in proceedings under FIFRA §14(a), there is no authority
to issue subpoenas. While this limits the ability of a party
to obtain information from someone unwilling to furnish
it, it does not leave the party totally without a remedy. In
such cases, if a party refuses to produce information in
its possession or control, the party requesting the infor-
mation can ask the judge to draw the inference that the
information would be adverse to the position of the party
refusing to produce the information." The inference.
however, has to flow logically from the nature of the
evidence being sought. For example, if a party claims that
it lacks the financial resources to pay a penalty but refuses
to produce statements of its financial condition, the in-
ference can be drawn that the party does have the means
to pay the penalty. It is unlikely, however, that any in-
0 40CF.R.
I «CFR.
: « c F R
' 40 ( F R
t «)< F R
§22.18.
§22.19(b).
§22.21(b).
}22.19(d).
§22.19(0-
W 40 C F R. §22.04(c)(5).
50
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11-87
NEWS & ANALYSIS
17 ELR 10443
ference could be drawn from the refusal to produce finan-
cial statements as to who owns the corporation or whether
the stock is held by one individual or several individuals.
Under the consolidated rules, the judge renders an "in-
itial decision." Such a decision becomes the final decision
of the EPA unless an appeal is taken by a party or the
Judicial Officer elects to review the decision sua sponte
within the time allowed in the consolidated rules." The
rules also allow for the granting of an accelerated decision
(really summary judgment) when a party can demonstrate
that there is no dispute as to the material facts and the party
is entitled to judgment as a matter of law."
The consolidated rules allow a party to file a motion to
reopen an initial decision within 20 days after the initial
decision is issued to adduce additional evidence if it is
shown that there is good cause why the evidence could not
be presented at the hearing.21 Outside of this limited ex-
ception.'the administrative law judge has no further juris-
diction over the matter once the initial decision is issued.
Requests for extensions of time to appeal or for other relief
must be made to the Judicial Officer." Regardless of
whether the complaint issued out of the headquarters in
Washington, D.C., or out of a Regional Office, all appeals
are taken to the Judicial Officer. While the agency has no
further appeal to the courts from a final order, the other
party may seek judicial review of an adverse order."
One final thing to be noted is that, in assessing a civil
penalty, the judge must consider any guidelines that the
agency has issued with respect to the assessment of civil
penalties under the Act involved. If the judge decides not
to follow the applicable guideline, the judge must give
reasons for not doing so." This requirement, however,
does not apply to the Judicial Officer."
Hearings Not Governed by the Consolidated Rules
The consolidated rules do not apply to all adjudicative
26. 40 C.F.R. §22.27(c).
27. 40 C.F.R. §22.20.
28. 40 C.F.R. §22.28.
29. 40 C.F.R. §§22.27(c), 22.29(c).
30. It depends upon the statute as to whether judicial review is in the
district court or in the court of appeals. Civil penalties assessed under
TSCA §16 and FIFRA §14 are by statute specifically made renewable
in the court of appeals. SwTSCA §16(a)(3), 15 U.S.C. §261S(a)(3);
FIFRA §16(b), 7 U.S.C. §136n, ELR STAT. FIFRA 022. On the other
hand, RCRA has no comparable statutory provision for judicial
review of penalties assessed or compliance orders issued under RCRA
§3008. Review in such cases has been obtained in the district court.
See Chemical Waste Management v. United States Environmental
Protection Agency, 649 F. Supp. 347,.17 ELR 20521 (D.D.C. 1086).
31. 40 C.F.R. §22.27(b). For FIFRA civil penalty guidelines, see Guide-
lines for the Assessment of Civil Penalties under Section 14(a) of
the Federal Insecticide, Fungicide, and Rodenticide Act, as Amend-
ed, 39 Fed. Reg. 27711 (July 31, 1974); for RCRA guidelines, see
Final RCRA Civil Penalty Policy (May 8, 1984), ELR ADMIN.
MATERIALS 35089; for the TSCA guidelines, see Guidelines for the
Assessment of Civil Penalties under Section 16 of the Toxic Sub-
stances Control Act, 45 Fed. Reg. 59770 (Sept. 10, 1980), for the
general rules that have been supplemented by the following policy
statements: Policy for Violations of the Regulations dealing with Poly-
chlorinated Biphenyls, 45 Fed. Reg. 59776 (Sept. 10, 1980); Record-
keeping and Reporting Rules, TSCA, Sections 8,12 and 13, Enforce-
ment Response Policy, (May 15, 1987); and Revised Enforcement
Response Policy for the Friable Asbsestos-Containing Materials in
Schools: Identification and Notification Regulation (June 22, 1984).
For a recent decision by the Judicial Officer discussing the con-
sideration that the administrative law judge must give to the penalty
guidelines, see A.Y. McDonald Industries, RCRA(3008) Appeal No.
86-2 (July 23, 1987).
32. See A, Y. McDonald Industries, Inc., supra note 31.
hearings conducted by EPA, presumably because the
nature of the hearing provided under some statutes makes
it desirable to have special rules of practice. A common
feature of these proceedings is that they are not instituted
by the usual complaint and answer. Instead, the hearing
is granted only after a party has demonstrated to EPA that
there are factual issues on which the party is entitled to
an evidentiary hearing. Like the consolidated rules, the pro-
cedures provide for prehearing conferences, limited
discovery over and above the prehearing exchange, accel-
erated decisions, motions, and the like. There are, however,
features peculiar to each that will be briefly mentioned.
D Clean Air Act §/20: Proceedings under §120 are
brought against a major stationary source (building, struc-
ture, or installation) that has not complied with the stan-
dards regulating the emission of pollutants into the at-
mosphere." The penalty assessed is the savings realized by
the source in not complying with the standard. The sav-
ings, or economic benefit, is computed according to a com-
plex formula, and EPA has developed a computer program
for its calculation.14
The first step in §120 proceedings is an EPA notice in-
forming the source of the agency's finding of noncompli-
ance. At this point, the source has two options: calculate
the penalty following the agency's model, or petition for
reconsideration on the ground that the finding of noncom-
pliance is wrong or that the source is entitled to one or more
of the exemptions allowed under the statute." The statute
requires that EPA act on the petition and hear and deter-
mine the matter within 90 days."
EPA has provided for a hearing in two stages. If the
source contests the finding of noncompliance or asserts that
it is entitled to an exemption, a hearing is first held to deter-
mine the source's liability for a penalty, which must be
completed and an initial decision issiled within 90 days.17
If found liable, the source must then calculate the penal-
ty. If EPA disagrees with the amount, it recalculates the
penalty. The source, if it objects to the recalculation, is
then given a hearing on its objections, which must also be
completed and decided within 90 days." The 90-day limita-
tion applies only to the decision of the administrative law
judge, and the time can be extended if both parties agree.
In both the hearing on liability and the hearing on the
amount of the penalty an appeal is allowed to the Judicial
Officer, who must decide the appeal within 30 days."
D Clean Air Act §207(c): Another proceeding under the
Clean Air Act where an adjudicative hearing is provided
is where EPA requires an automobile manufacturer to
recall a class or category of motor vehicles when EPA has
found that a substantial number of vehicles do not con-
33. The procedures for hearing cases under Clean Air Act § 120 are found
at 40 C.F.R. §66.
34. See 45 Fed. Reg. 50086 (July 28, 1980), 50 Fed. Reg. 36732 (Sept.
9, 1985). For cases dealing with the assessment of penalties under
§120, see Duquesne Light Co. v. United States Environmental Pro-
tection Agency, 698 F.2d 456, 13 ELR 20251 (D.C. Cir. 1983): Du-
quesne Light Co. v. United States Environmental Protection Agen-
cy, 791 F.2d 959,16 ELR 20790 (D.C. Cir. 1986); American Cyana-
mid Co. v. United States Environmental Protection Agency, 810 F.2d
493, 17 ELR 20642 (5th Cir. 1987).
35. 40 C.F.R. §66.66.11-66.13.
36. Clean Air Act §!20(b)(5), 42 U.S.C. §7420(b)(5), ELR STAT. 42227.
37. 40 C.F.R. §§66.41-66.43 and 66.93.
38. 40 C.F.R. §66.51-66.54.
39. 40 C.F.R. §66.95.
51
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17 ELR 10444
ENVIRONMENTAL LAW REPORTER
11-87
form to the emission standards though properly maintained
or used.10
Again, EPA notifies the party that it has been found
to be in noncompliance, in this case by sending it a notice
of nonconformity and directing it to submit a plan for
remedying the nonconformity within 45 days. It should be
evident that this may require the recall of thousands of
vehicles that have to be corrected in some fashion at the
manufacturer's expense in order to bring them into com-
pliance. If the manufacturer disagrees with the finding of
nonconformity, he may request a hearing on this issue."
This decision is final unless appealed to the Judicial Of-
ficer, or unless the Judicial Officer reviews it sua sponte.42
D FIFRA §6: In addition to proceedings for the assess-
ment of civil penalties under §14(a), FIFRA §6 provides
for adjudicative hearings on the cancellation or suspen-
sion of a registration of a pesticide, on a refusal to register
a pesticide, or on a change in the classification of a
pesticide (e.g., changing the classification from a general
use to restricted use pesticide).4'
There are two kinds of proceedings involving the
cancellation of a pesticide or change in classification. One
is where the Administrator issues a notice of intent to
cancel the pesticide or change the classification. The other
is where the Administrator issues a notice of his intention
to hold a hearing to determine whether to cancel the regis-
tration or change the classification of a pesticide. In both
cases the registrants are sent a copy of the notice and the
notice is also published in the Federal Register. In the case
of a notice of intent to cancel the registration or change
the classification, an affected party must request a hear-
ing within 30 days of the receipt of the notice or the date
of publication, whichever-is later. This 30 day period is
jurisdictional. If the request for hearing is not received by
EPA within the 30 days, the registration is cancelled or
the classification is changed. The time for responding to
the notice of intent to hold a hearing is set by the Ad-
ministrator in the notice.
Cancellation hearings are likely to involve complex issues
and numerous parties. The procedures themselves,
however, are not too dissimilar from those found in the
consolidated rules. One should note that the general prac-
tice has been to require the presentation of direct testimony
in the form of a written verified statement, with the witness
being available for cross-examination. Though EPA is
designated as the Respondent in a proceeding brought on
a notice of intent to cancel, it has the burden of going for-
ward to present sufficient evidence to make a prima facie
case for cancellation. The burden of proof, however, is
upon the party supporting the continued registration.44 The
procedures allow for an accelerated decision to be issued
in favor of EPA, but make no provision for issuing an ac-
celerated decision against EPA.4'
40. The procedures governing hearings under Clean Air Act §207(c) are
found at 40 C.F.R. §85.1807.
41. 40 C.F.R. §85.1807(b).
42. 40 C.F.R. §8S.1807(t).
43. The procedures for hearings under FIFRA §6 are found at 40C.F.R.
§164.
44. See 40 C.F.R. §164.80. For a discussion of EPA's and the Regis-
trant's burden of proof, see Environmental Defense Fund, Inc. v.
United States Environmental Protection Agency, 548 F.2d 998,
1012-18, 7 ELR 20012 (D.C. Cir. 1976), cert, denied. 431 W.S. 925
(1977).
45. See 40 C.F.R. §164.91.
The statute also authorizes EPA to suspend a registra-
tion during the cancellation hearing if necessary to pro-
tect the public against an unreasonable risk of harm.4'' This
proceeding is in the nature of a preliminary injunction and
is held under an expedited schedule, with 10 days being
allowed for the initial decision. An administrative law
judge is not required to preside at these hearings, but in
practice an administrative law judge has presided.
D FIFRA §3(c): A party is also given a hearing if a regis-
tration is suspended under §3(c)(2)(B)(iv) for failure to
supply data to support a registration following a directive
by EPA to furnish such data. Again, EPA notifies the
registrant of its intention to suspend and the registrant must
request a hearing.47 The issues in such a proceeding are
limited to determining whether the registrant has failed to
take the action that served as the basis for the notice of
intent to suspend and whether EPA's determination as to
the disposition of existing stock of the pesticide is consis-
tent with the Act.41 The hearing must be concluded and
the determination made within 75 days after receipt of the
request for a hearing.49
D Clean Water Act §402: An adjudicative hearing is also
provided on the terms of final national pollutant discharge
elimination system (NPDES) permits issued under Clean
Water Act § 402." NPDES permits are issued after the af-
fected party and the public have been heard on the terms
of the permit (usually first issued as a draft permit). After
EPA has issued a final permit, an interested party can re-
quest a hearing on its terms." The grant of a hearing is
discretionary with EPA, and EPA may decide to deny the
hearing if there are no factual issues requiring a hearing.51
If a hearing is granted, a party is usually limited to the
evidence presented and objections made in comments on
the draft permit. The administrative record compiled dur-
ing the comment period must be received and admitted into
evidence, but a party can request that a sponsoring witness
be made available, and if none is, this can be considered
in evaluating the evidence.11
D Other Statutes: Several statutes have been amended
recently to provide for adjudicatory hearings for assess-
ment of civil penalties. These include the assessment of civil
penalties of up to $5,000 against a public water system
under Safe Drinking Water Act §1414(g),14 and the assess-
ment of civil penalties for violations of certain provisions
of the Comprehensive Environmental Response, Compen-
sation, and Liability Act."
46. FIFRA §6(c). 7 U.S.C. §136d(c), ELR STAT. FIFRA 012.
47. FIFRA §3(cX2XBXiv), 7 U.S.C. §136a(cX2XBXiv), ELR STAT. FIFRA
005.
48. Id.
49. Id.
50. The procedures for hearings under Clean Water Act §402 are found
at 40 C.F.R. §124.71-124:91.
51. 40 C.F.R. §124.74.
52. 40 C.F.R. §124.75.
53. 40 C.F.R. §124.85(d)(2).
54. 42 U.S.C. §300g-3(g), ELR STAT. 41105; see Gray, The Safe Drink-
ing Water Act Amendments of1986: Now a Tougher Act to Follow.
16 ELR 10338, 10342 (Nov. 1986).
55. CERCLA §109, 42 U.S.C. §9609, ELR STAT. 44031. See Aikeson
et al., An Annotated History of the Superfund Amendment and
Keauthomation Act of 1986 (SARA), 17 ELR 10360, 10403 (Dec.
1986).
52
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High Stakes on a Fast Track: Administrative
Enforcement at EPA
Administrative enforcement actions
fWu^ collection of civil penaltiet or the
of compliance orden have
been a major component of the Environ*
mental Protection Agency's (EPA) conv
pliance -program for the Toxk Sub-
nance* Control Act (TSCA).1 federal
Inatctiddt, Fungicide ind Rodemkide
Act (FTfRA)* and Resource Conservation
and Recovery Aa (RCRAp violation! for
many yean. It is significant to note that
the Mater of administrative action* it
•Michael J.Walk<
•istamtnfo
, superviM* the levies Litigation D»-
vWoo, Office of Enforcement. U.S. Environ-
ssratal Protection Agency (EPA), in Washing-
ton. D.C A 1973 gradual* of the University
of Wisconsin, he earned his degree in the
Biological Aspects of Conservation. H« |
oassd to 1*77 from the Uoivmicy ofle
College of Law. Mr. Walker atmd as at
ast regional counMl in theEFA Region V
Office for. seven years befow coming to
Washington, D.C, in IMS. As a sMtnber of
d» IPA lastimst Facult* Me, Walker anche*
a survsy courw on adminisintiva law and
practical which has been attended by nora
thaa 900 agency attorneys and profttiionsl
staff CBesabm. The views eapmsed in into
artiest are dw author's and am necessarily
those of dst US. ETA,
By Mtehad J. Wilktf *
npidly mcroaint; alonf with the size^
administrative penalUe* being proposed
and collected, A summary of EPA admin-
istrative actions for the past three fiscal
yean reveals that EPA administrative
actions in all but two areas have in-
creased.4 Increases in administrative en-
forcement of TSCA and the Safe Drink-
ing Water Act have been particularly
In commenting on the increases in
these figures, Thomas L. Adams Jr. EPA'*
assistant administrator for Enforcement
and Compliance Monitoring, said, The
record for 1987 reflects a strong commit-
ment by EPA and (he Department of Jus-
tice (DOJ) to ensure compliance without.
environmental standards. The higher ad-
mlnistrative figure* reflect a commit*'
ment by the agency to use more aggies*
shcly the administrative enforcement
powers Congress has provided under
most ewiroomenul laws." In Fiscal Year
(FY) 87 EPA referred 504 case* to the De-
partment of Justice for initiation of dvtt
.actions in federal district courts. By con-
trast, in the same period, EPA filed or
issued nearly MOO administrative com-
plaints or orden enforcing the same en-
vironmental statutes.
Characteristics of EPA'* enforcement
program include a very low appeal rate
Om than one percent of aU filed admin-
istrative cases are appealed to federal
courtsX short internal processing times
(routine cases can be filed within days of
determining a violation), increased effi-
ciency (more cases, higher penalties, en-
hanced compliance with no appreciable
increase m resources expended) and hi
general, a broad enforcement impact
among the regulated community—both
geographically and economically. Addi-
tionally, large and small businesses are
potentially affected. Penalties range
from the $2.5 million paid by Chemical
Waste Management for TSCA violations
in Viekery, OH, to a $500 fine for failure
to submit an annual pesticides produc-
tion repon undcr-nFRA 17.
Negotiated settlements in the form of
administrative Consent Agreements and
53
Orden may contain a variety of settle-
ment conditions and terms that may be
legally sufficient to demonstrate compli-
ance, create an enforceable schedule to
return a facility to compliance without
the need for federal district court inter-
vention or simply collect a civil penalty
to deter future violations. EPA has dem-
onstrated that it is possible to seek signif-
icant cryil penalties in administrative
actions. These penalties seek to recover
the "economic savings" obtained by vio-
lators who fail to comply with federal
regulatory requirements, while at die
same time deterring further non-compli-
ance. The six largest administrative pen-
alties negotiated by EPA to date have
been:
rnCA/RCRA) $ 2.5 million
Ottmieal Wot* Manogrmtnt
(TSCA/RCRA) $ 11 million
(TSCA) $ 1.291 million
Amtritm IHipAOM ft TtUgnf*
(TSCA) $ 1 millioo
CTSCA) $ 900.000
OTSCA) | 800,00
It should be noted that in. each of
these settlements, total costs associated
;wiih environmental compliance audits
or site remediation activities associated
with these settlements have been esti-
mated to easaai the site of the civil pen-
air*
Despite the potential for Urge penal-
ties, administrative enforcement has the
demonstrated potential for significant
coat savings for the'regulated commu-
ning as well as for EPA. The ability to
identify and resolve compliance disputes
quickly through informal settlement
conference* whh agency personnel can
avoid the need for substantial counsel
fees, drawn-out pleadings practice, nega-
tive publicity and delays associated with
congested federal district court caka>
-------
... the number of administrative actions is
rapidly increasing, along with tiie size of
administrative penalties being proposed and
collected... .Increases in administrative
enforcement of TSCA and the Safe Drinking
Water Act have been particularly dramatic.
Administrative hearing* involving en-
forcement proceedings before EPA ad-
ministrative law judges are provided for
under a number of federal statutory pro-
visions, including:
• TSCA f J6Ya)— assessment of a civil
penalty for failure to comply with
any requirement relating to the man-
ufacture, use, distribution in com-
merce or disposal of toxic sub-
stances?
• Ota* Air Aft (CAA) | 720— assess-
ment of a civil penalty against a sta-
tionary source that is not in compli-
ance with permitted emission
requirements^
• FIFRA | I4(a)— assessment of a civil
penalty for the manufacture, sale,
distribution or use of pesticides in
violation of the act;7
• CAA | 207(c>— recall of motor vehi-
cles that do not conform to federal
emission standards,-*
• dm Water Act (CWA) | 402-chal
Jenge to EPA-issued permits concern-
ing the discharge of pollutants into
the waters of the United States; '
• RCRA | 3008— assessment of civil
penalties and/or the issuance of
compliance orders for failure to
comply with requirements relating
to the generation, transportation,
treatment, storage and disposal of
hazardous waste;10 and
• Mann* Protection, Raton* and Sonet*
aha Act (MPRS) | I0i(a) and (0— as-
sessment of a civil penalty for viola-
tion of restrictions on ocean
dumping or revocation or suspen-
sion of a permit for discharge into
the oceans."
EPA
In accordance with the Administrative
Procedure Act (APA),11 administrative
law judges (ALJs) preside over all EPA
hearings that are required by statute "to
be determined on the record after op-
ponunity for an agency hearing." This is
the case where the applicable statute ex-
pressly states that the adjudicatory hear-
ing is to be "on the record," or when the
requirement for a presiding judge may
be inferred from the type of hearing to
be provided.1* In addition, by custom
and practice. EPA ALJs may also preside
over other types of adjudicatory hearings
if requested by the agency.
EPA, like the other federal agencies
that conduct adjudicative hearings, has
unique and specific rules of practice and
procedure. A major disadvantage to a
non-agency practitioner representing a
respondent in an EPA administrative
proceeding may be the lack of familiarity
with the bask rules of practice or con-
trolling case law.
ALJ Palmer of the US. Department of
Agriculture has noted that there are at
least 280 different sets of evidentiary
rules that apply to adjudicatory proceed-
ings conducted in federal agencies
atone. These rule sets typically are three
types:, they "fully incorporate" the Fed-
eral Rules of Evidence, they "merely
look" to the Federal Rule* as a source of
guidance or they "tolerate or even
openly embrace, trial by ambush."14 EPA
rules of practice generally look to the
Federal Rules for guidance.
In an effort to eliminate confusion
over varying procedural requirements in-
volving EPA enforcement actions—both
by the private practitioner and by the
EPA lawyer—EPA published in 1980 the
ConioUaatfd Rula ofPnctia Governing it*
Admmiitratnx Autument of Civil Ptnaltia
and tilt Revocation and Suspension of Ar
•itt.is The Consolidated Rules were de-
signed to accomplish two purposes. The
first purpose was the development of a
common set of procedural rules for sev-
eral enforcement and adjudicatory pro-
grams that would reduce paperwork, in-
consistency and, ultimately, the burden
on people regulated. The second pur-
pose was the improvement of formal ad-
ministrative adjudicatory procedures
through substantive revisions. The Con-
solidated Rules replaced existing rules of
practice that had been previously
promulgated for FIFRA. CAA, RCRA.
TSCA and the Ocean Dumping Act
Although the majority of EPA enforce-
ment actions follow the Consolidated
Rules, it should not be overlooked that
some EPA administrative proceedings
are not held under the Consolidated
Rules of Practice. For reasons thai are in
pan statutory and in pan historic to the
development of these programs, the
Consolidated Rules are inapplicable to
CAA | 120 and | 207(c) proceedings re-
garding stationary source compliance
and certain automotive emission stand-
ard recalls, suspension of FTFRA registra-
tion under | 3
-------
ferreted to pose. Unsubstantiated at-
tacks oo the penalty nay be countcrpro-
Partidpate fan a Settlement
Coofe
EPA policy, practice and the Consoli-
dated Rules encourage "informal" settle-
ment conferences.** These conferences
are very useful, off-the-record opportunl-
tics to present settlement options to the
government tor consideration and for
the panic* to evaluate the relative
aotngihs and weaknesses of their respec-
cases.
At the settlement meeting, EPA wfl] be
most interested in a demonstration that
the facility or corporation has no history
of prior violations of the applicable stat-
ute (if appropriate) and hi a candid dis-
cussion of the nature and circumstances
of the violation. The failure to demon-
strate that violations have not been ad-
dressed or corrected may serve as a basis
so increase a proposed penalty. Docu-
mented efforts to address compliance
problems, once they are known to the
respondent, goes a long way toward reas-
suring EPA that the respondent is seri-
ous about correcting deficiencies and
that the problems do not reflect an atti-
tude of knowing or willful! disregard for
regulatory requirements. Moreover, in-
ability to pay the penalty or the effect of
the penalty on ability to continue in
business are facton to be raised in favor
of a decreased penalty, bring copies of
signed federal tax returns and support-
ing schedules.
Frequently, counsel for respondents
seek to schedule settlement meetings
prior to the submission of their Answer
and Request for Hearing as a strategy to
(rain possible insight into the govern-
ment's case, so that the respondent's An-
will most accurately address any
weaknesses or defenses. Re-
opondenu seeking to employ such •
(course of action should be aware that m
proceedingi brought under the Consoli-
dated Rules of Practice, the guvcimixm
may as a matter of right amend the origi-
nal complaint once at any time before
the Answer si filed and will invariably do
so bi response to continued violations or
recalcitrance. Recalcitrance at the settle-
ment table may result m an amended
compliant seeking additional penalties
for continuing violations or may reduce
or eliminate further consideration of
downward adjustment of the penalty
amount for "corporate attitude." "coop-
eration shown to the government" or
"other facton as justice may require."
Federal Ear New. at Journal
The TSCA enforcement program hat
been in the forefront of negotiating set
Cements providing for compliance ac-
tivities required by law. For example, set-
dement* have been negotiated in which
environmental compliance audits were
undertaken in exchange for partial pen-
airy mitigation.14 Other TSCA compli-
ance activities beyond those required by
law that have been used to reduce the
total amount of the civil penalty have in-
cluded domestic and international vain-
big programs, early retirement of PCB
equipment (Le, removal of PCB trans-
formers) and additional she remedia-
Both the Applicable Uw end
Rules of Praetke
One of the most frequent impedi-
ments to effective representation of a cli-
ent in an EPA enforcement proceeding is
failure to read and understand the statu-
tory or regulatory provisions that the cli-
ent is charged with violating, as well as
the specific rules of practice that govern
the proceeding. As has been referenced
earlier, although EPA has made signifi-
cant efforts to consolidate h* rules of.
practice into one specific section of the
Code offtdenl Aguloii0ni,u many admin-
istrative enforcement programs have
unique procedural requirement*. The
Consolidated Rules have supplemental
rules for TSCA." F1FRA," Title U of the
CAA» RCRA» and MPRS *
Agency practitioners are at an advan-
tage because they work with the statute
and rules of practice everyday, thus the
infrequent administrative practitioner
needs to be careful about reviewing EPA
filing deadlines, service requirements or
other procedural dements relevant to
Prepare lbur ABBWCT Thoroughly
audio the Same Detail that You
Would for Sate or District Court
The Consolidated Rules require the
Answer to state all arguments which are
alleged to constitute the grounds of de-
fense, including facts which the respon-
dent plans to place at issue. A careless or
inadequately drafted response to what
might be perceived as an "informal" pro-
ceeding might provide the basis for an
Accelerated Decision, including imposi-
tion of the full penalty where "no genu-
ine issue of fact exists and Complainant
Is entitled to Judgment as a matter of
Be Sore Ybor OJeot Appreciaiec the
Serious Nature of the Violation
While the typical or routine EPA ad
ministrative action may involve a rela-
tively modest penalty demand (at least in
terms of the gross daily revenue of your
client), and selection of an administra-
tive rather than district court proceeding
may suggest "mfonnalityT his critical
that your client approach the proceed-
ings with the same care and degree of
concern that one would face if con-
fronted with proceeding* initialed in dis-
trict court by the United States Attorney.
EPA's administrative programs are the
backbone of the agency's enforcement
presence nationwide and refusal to co-
operate in the less formal administrative
proceeding may be grounds to escalate
the matter to the Department of Justice.
Refusal to cooperate or remedy obvious
compliance problems may also serve to
trigger more detailed examinations of
the facility or. perhaps most significant.
create an image to the agency of recalci-
trance, obstinence or deliberate, willful
disregard for regulatory requirements.
Once a facility corporation or even cer-
tain staff develops a poor reputation, h is
difficult to erase it from the Agency's
mental notebook on the company.
Offer Settlement at the Initial
Meeting, But Don't Insult EPA
Given the volume of actions that EPA
is handling these days, EPA will be anx-
ious to pursue seriously settiemem dis-
cussions in detail at the first meeting.
This is good public policy for EPA and
reduces costs incurred by the regulated
community, la addition to a tangible
demonstration of compliance, the
•mount of the tivil penalty will probably
be the major outstanding issue on the
able. The most unproductive approach
to penalty discussions is to offer s very
low "counter-offer" to the EPA penalty.
With few exceptions, the propo**d pen-
alty will have been calculated from a
published or publicly available en U pen
ahy policy and may ahead? rcAtci sub-
stantial mttiption from the statutory per
day violation maximum penahwt Un-
less you have substantial evidence thai
the penalty is grossly miscalculated or
that you have fact* that ma> not b* kno*
to EPA, offering an unreasonably to* set
dement figure might be perceived as bad
faith negotiating Approach EPA •nue-
mem negotiations with a recognition
that the agency is serious sboui the pen
ahy amounts.
55
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Kcarbp Gowned by Consolidated
Enforcement cases filed under the
Consolidated Rules begin with the filing
of a dvU complaint and notice of oppor-
tunity for hearing, which states with par-
ticularity the nature of the violation and
the proposed civil penalty" The original
compUint b filed with the appropriate
hearing clerk and a copy b sent to the
respondent by certified mail, return re-
ceipt requested along with a copy of the
Consolidated Rules of Practice" The re-
cipient of such a complaint has twenty
(20) days from the date of service to file
an Answer and Request for Hearing.1' It
b important to note that under the Con-
solidated Rules, 40 CFR 2115(dX any
matter hot specifically denied may be
deemed to be admitted and used against
Int TYVpOOCWflL
Following receipt of the Answer, the
case b referred by the Hearing Clerk to
the Chief ALJ. The Chief Judge will hear
the ate or assign k to one of the six
adainismtive law judges assigned to
EPA.* The function of ALJs under the
Consolidated Rules b two-fold. First.
they must develop an accurate and com-
plete record of the facts relevant to the
proceeding. Second, they must render
fair and equitable decisions on the mer-
its and record.
By letter or written orde* the ALJ wiO
direct the parties to commence settle-
ment discussions and to report in writ-
ing before a set time at to the success or
failure of such discussions." If k b un-
likely that the parties will achieve a settle-
ment, the parties will be directed to pre-
pare a "prehearing exchange" of their
evidence Thb typically consists of a list
of proposed witnesses with a summary
of their expected testimony and copies
of afl exhibits and documents that will be
mvoduced at trial at evidence11 Since
prencaring meetings between the judge
and panics are rare, document ex-
change, motions and orders substitute
for a conference The use of written pre-
hearing disconry and written or trie*
phone prehearing conferences, saves the
parties lime and money*
One important element of administra-
tive practice under the Consolidated
Rules b that discovery b very limited.
Under the Pederal Rules of CW1 Proce-
dure, discovery through document re-
quests and depositions may continue for
months or years adding considerable de-
lay and cost » the process. By contrast,
UEodcf tffrf GoittolidaUi&d RuJc^ then h
no discovery beyond that obtained
435
through the prehearing exchange unless
further discovery is specifically re-
quested by a party who must obtain an
order from the ALJ.11
As with the Federal Rules of CM] Pro-
cedure, parties may request summary
Judgment through the granting of an
"accelerated decision."*4 Increasing num-
bers of motions for "partial" accelerated
decisions have been filed in cases where
the Answer or portions of the Answer
admit or acknowledge that there are no
genuine disputes at to some or all of the
material facts, leaving only the issue of
civil penalty for hearing.
By this point in the proceedings, the
vast majority of EPA administrative en-
forcement cases cither have been settled
or are dose to settlement. For cases filed
under the Consolidated Rules, settle-
ments take the form of a written "Con-
tent Agreement and Ordetf in which the
respondent (1) admits the jurisdictions!
allegations of the complaint, (2) admits
the facts stipulated in the Consent
Agreement or neither admits nor denies
the factual allegations contained in the
Complaint or (5) consents to the ;
mem of the civil penalty permit
lion, suspension or other terms of settle-
ment.** The Consent Agreement is
signed by the parties or counsel and b
forwarded to the Regional Administrator
or the Chief Judicial Officer as appropri-
ate*
For the 50 to 50 cases each year that
cannot be settled and on which hearings
under the Consolidated Rules of Prac-
tice are held, the ALJs render "recom-
mended" or Initial Decisions. These de-
cisions may be appealed by either the
EPA or the respondent .within twenty
(20) days of their receipt." If neither
party elects to fik an appeal the Initial
Decision becomes a Final Decision of
the Admin isolator as a matter of law, un-
less the adminbOTator elects to review the
decision SMS jpoulf .*•
In assessing a dvil penalty the Judge
"must consider* any guidelines that EPA
hat developed concerning the statute
and violation at issue Guidelines of thb
nature exist for the majority of adminis-
trative programs.* Under Consolidated
Rules. ALJs are bound » impose the
penalty calculated by EPA personnel In-
volved In bringing the action or to pro*
vide specific justification for finding why
the calculation b inappropriate* Ad-
ministrative case law for civil penalties
tinder EPA statutes and the Consolidated
Rules b not well settled at this time, how-
ever, some ALJs hew shown an increas-
ing willingness to apply the agency's pen-
alty calculations,11 Other judges have
imposed penalty amounts different than
the amount sought in the compUint
without letting forth sufficient reasons
for the change These cases represent the
largest category of cases appealed by
EPA to the judicial office*
When an appeal of an initial decision
has been filed by either party or when
the Administrator issues a notice of in-
tent to conduct review JIM tpanti, the ju-
dicial office* on behalf of the Adminis-
tnio* issues a Final Order at soon as
practicable after the filing of appellate
briefs or oral argument. The Final Order
may adopt, modify or set aside the find-
tap and conclusions contained in the
decision or order being reviewed." la
addition, the dvil penalty may be in-
creased or decreased from the amount
recommended in the Initial Decision, ex-
cept that k may not be increased in the
case of default orders.
With the exception of requests for re-
consideration, EPA enforcement offidab
have no further appeal to the courts
from a Final Order. Howeve* depending
oa the applicable statute the respon-
dents may seek judicial review of any ad-
final decision or orde*
Dealing with EPA: Practical
Considerations in Assessing a
Penalty Demand— Review the
Carefully
Practitioners are advised to evaluate
carefully any civil complaint far a num-
ber of key issues;
l.Do the facts in the complaint accu-
rately support the penalty demand in the
complaint?
1 Are you entitled to consideration of
a downward adjustment based oo con-
siderations contained in the complaint
or other factors that might have been un-
known to EPA at the time the compUint
9. Check the mathematics. Do the pro-
posed penalty figures add up correctly?
At the first settlement meeting, EPA
wiQ be prepared to discuss the penalty
demand in detail. If you have evidence
or factors that demonstrate that the pen-
alty was incorrectly calculated, raise it at
the first settlement conference. It is im-
portant « keep in mind, howwct that in
the majority of EPA administrative en-
forcement programs, EPA seldom seeks
the am mini penalty allowed by law, pre-
ferring to use dvil penalty policies that
assess proposed penalties bated on the
degree of harm to the environment or
regulatory scheme that the violations are
Itt&Abtume 95. No. 10
56
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In writing about EPA't administrative
adjudication authentic*, EPA't Chief
Judge Harwood noted The Agency can
only be effective if the public has confi-
dence in the process, a confidence cre-
ated by the conviction that they have
been treated fairly and the outcome is
reasonable, even though they may be un-
happy about the ultimate judgment."*1
That EPA prevail* in 99.9 percent of the
cases it brings with fewer than one per
cent appealed to the Administrator or to
district court is evidence that EPA Tiles
solid cases with clear and obvious viola-
tions.
Thus EPA's administrative enforce-
ment program has been an effective tool
to enforce our nation's environmental
statutes and regulations.
Consistent with the safeguards pro-
vided for in the United States Constitu-
tion and the APA, EPA's administraiive
practice rules provide opportunism for
expedited settlement litigation and ad-
judication.
The challenge to the agency, the regu-
lated community and the private bar is
to maximize opportunities to effectively
use—but not abuse—these expedited
proceedings to reduce delay and the cost
of enforcement actions without impair-
ing the effectiveness of the administra-
tive enforcement program.
FOOTNOTES
MS U.S.C || WO) »(Supp. D 1984).
*7U.S.C.«Mf.
•42 U£.C | 6901-911 (Supp. D. 1984).
'Administrative Orders It Civil Com-
plainu Issued by EPA:
FY85 FY86 FY87
Air—Stationary
Sources 12J 123 191
Water—National
Pollutant Dis-
charge System Per-
mits 1.088 988 1.002
'•S» Harwood. H«
Mr
BCRA
TSCA
nniA
*
327
733
236
0
233
781
337
212
243
1.051
360
2.609 2.626 3.194
Aggregate number* of administrative
cues Hied during prior fitcal yean art: FY
1980. 901; FY 1981. 1.107. FY 1982. 864; FY
1983. 1348; FY 1984. 3.124. US. EPA Office
of Enforcement and Compliance Monitor-
ing. Summary ef Enfartemtnt AteomptukmetUs;
Fatal Nor 1987. April 1988.
•15 U5.C. | 261 Ma) (Supp. 11 1984). By
direct congressional intent, or possibly over-
sight. TSCA does not give EPA the authority
to obtain civil penalties in federal district
courts. 13 U.S.C. 2613UX2XA). Thus, al-
though the agency has referred more than
forty cases to the Department of Justice in-
volving civil violations of the act or orders
issued under the act. since 1978 the vast ma-
jority of enforcement actions brought to ad-
dress TSCA violations totals more than 4.000
administrative actions involving collected
axil penalties in excess of $24 million.
•42 U.S.C. 17420 (Supp. U 1984).
*7 U.S.C. 11361 (Supp. 111984V
•42 U.S.C. | 7541(c) (Supp. U 1964).
•33 U5.C 11342 (Supp. U 1984).
M42 VJ5.C. 16928 (Supp. U 1984).
"JS UJS.C | 1417(a) and (f) (Supp. U
1984).
"3 US.C | 356 (1987).
*'Sfr «{., Landfill Service Corporation.
RCRA Docket Number V11-86-H OOOi. tutted
by Judge Marvin Jones on November 5. 1987,
where the full penalty of $130.560 Jut was
proposed in the complaint for RCRA viola-
tions was assessed by the judge after a hear
ing on the record: and Cyelop) Opwwm.
Docket Number RCRAVW 85-R 002 where
Judge Frank Vanderheyden imposed the full
penally of $98.250.
"40 CJJL | 22JI(a) (1987).
B40 CJJL | 22.18U) (1987).
**Ssr Danzig. Walker and Price. £••*•
mental Audittnf Reotkmf tkr Bottom U*t /•
Compliance, EmoaciMCXT J. (National Aatoo-
ation of Attorneys General. January 1987)
(Describing settlements involving a •men
of types of environmental audiu). S* mm In
rr. Sandoi Chemicals Corporation. TSCA V
C03 (December. 1986) (a typical settlement
of a TSCA Section 3 violation thai was «oiun-
tarily disclosed to EPA. As can be noird from
the settlement. Sandoi received a M percent
reduction of the civil penalty for Ute volun-
tary disclosure of the violations to CPA San-
doi received an additional 25 peneni rvdwc
lion of the proposed penalty in recofiwiion
of its commitment to undertake a detailed
TSCA compliance audit).
•»40CJJLPan22<1987).
«*40 CJJt. 122J3 (1987).
"40 CJ.R. 122JS<1987).
•40 CJJt. 12244(1987).
"40 CJ.R. |22J7(I987).
•40 CJJL I 2246(1987).
"Harwood. New N**uory It <*r A*u*w**
tor ttat/Hfr* 6 W. Nrw EMC. L Rf\ 793
(1984).
December IMS/Volume S3. *o 10
57
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WALKER'S TIME TESTED SETTLEMENT INDUCERS
SETTLEMENT CONFERENCES - KEY OPPORTUNITIES FOR SETTLEMENT
The conduct and timing of an "informal" settlement
conference can have substantial strategic and tactical impact on
the outcome of your case; for it is at the important first
meeting and subsequent discussions, that the Government will
inform your adversary of how serious EPA is about litigating the
case.
Many agency attorneys fail to adequately use the informal
settlement conference for its intended purpose - to settle the
case - and invite additional work and burdens by simply sending
the wrong message - that EPA will negotiate indefinitely.
Given the increasing demands of expanding case loads, it is
critical that the agency attorneys maximize their limited time
and under utilized skills as much as possible. Sending the
"right" signal at the informal settlement conference is the
important first step.
Agency policy on settlements of administrative actions is
set forth in the Consolidated Rules of Practice at 40 CFR §22.18,
which states that: "The Agency encourages settlement of a
proceeding anytime a settlement is consistent with the provision
and objectives of the Act and applicable regulations. The
Respondent may confer with the Complainant whether or not the
Respondent requests a hearing."
Too many Agency practitioners (and outside counsel, too)
fall into the trap of using the informal settlement conference
for the wrong purpose. It is not a "get acquainted" session
before beginning "serious" negotiations. The primary emphasis
should be on determining whether a settlement can be reached
within a specific time period.
STRATEGIC CONSIDERATIONS
1. Always Schedule After Answer is Received
2. Always Have Client or Technical Team Present
3. Set The Proper Tone For The Meeting
4. Be Prepared
5. Avoid Unnecessary Informality
6. Conduct Settlement Conferences Off the Record
7. Discuss The Administrative Process
8. Release of Inspection Report Is Your Option
9. Conduct a Count By Count Examination of the Complaint &
Answer
10. Describe How the Penalty Was Calculated
11. Discuss Penalty Mitigation Factors
12. Be Clear About What EPA Must Have To Settle The Case
13. Discuss Maximum "per day, per violations"
14. Make Them Prove Inability To Pay Claims
15. Use National Penalty Dockets To Distinguish Small
Penalties
16. Explain Why EPA Uses Civil Penalty Actions vs. District
Court
17. Present A Consent Agreement For Signature
18. MAKE IT EASIER TO SETTLE THAN LITIGATE
59
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1. Always Schedule After Answer is Received
Although some attorneys will disagree, it is generally a
good practice to wait until after the Answer has been filed
before scheduling a settlement conference. Many plausible
reasons have been advanced for agreeing to meet before the Answer
is filed, such as a belief that settlement discussions can be
encouraged by a less "adversarial" setting or where the
respondents claim they lack sufficient information to file a
proper Answer.
Keep in mind that since preparing Answers is costly, it
makes settlement more appealing; there is often no good reason to
warrant a departure from this general rule. With the exception
of an extremely unusual Respondent, case or factual setting,
never meet or discuss the specific facts of the case until you
see and analyze the Answer.
Keep in mind that although the Consolidated Rules of
Practice do not prohibit settlement conferences before the
Answers are received, the mere fact that such a conference may be
requested, scheduled or even held before the 20 day time period
has run should not affect Respondent's obligation to file a
timely Answer in conformance 40 CFR 22.18. One can not
underscore too seriously the problems that postponing answer can
create for maintaining the enforcement momentum on the action.
If more time is legitimately required to prepare an Answer, make
the Respondent seek a brief formal extension of time to file the
Answer from the Presiding Officer.
2. Always Have Client or Technical Team Present.
A,second strategic consideration for any settlement
conference is to have the technical or program representative
present for the settlement conference. Close coordination
between the lawyer and his or her technical counterparts can not
be overstated. Not only will you insure that any technical
aspects of identifying compliance problems or achieving
compliance will be addressed, having the program representatives
present serves to underscore the significant technical and
scientific nature of the action and remedy required.
3. Always Set the Proper Tone for Settlement Meeting.
Organization and professionalism are the critical objectives
in planning for a settlement conference. As in preparing for any
meeting with outside counsel, be certain you have an adequate
meeting place so that your conference can proceed without
interference or interruptions. Adequate or even suitable meeting
space is regrettably at a premium in most governmental offices.
Nevertheless, make every effort to obtain a suitable room for the
conference where you will feel comfortable. Although local
60
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-2-
counsel may invite you to meet at his or her office, and there
are no procedural or policy reasons not to, from a strategic
standpoint, it is preferable to only conduct settlement
conferences within government offices. At a minimum be sure the
room is clean. A cluttered, unkempt room will present a
disorganized image of EPA and will detract from a strong
bargaining posture.
4 Be Prepared
You should always prepare for the meeting by thoroughly
re-reading the inspection report, the Complaint, penalty
calculation and the Respondent's Answer. Careful preparation of
yourself (and program counterpart, as necessary) will insure that
you will have the full command of the facts and circumstances of
the cases. This is particularly true where many weeks may have
passed since you originally reviewed the inspector's report or
complaint.
When preparing for the meeting it is a good practice to mark
the Complaint margin with notations of "Admit" or "Deny", to
facilitate your use and understanding of the Respondent's Answer.
5. Avoid Unnecessary Informality
While cordial handshakes and introductions are nice ways to
"break" the ice", keep in mind that your are the representative
of the United States Government in an adversarial proceeding.
Excessive informality demeans our position as a government lawyer
and conveys a message the EPA may not be "really serious" about
the merits of the case, recovery of a substantial penalty or
negotiation of substantial relief.
Always stress the regulatory context of the settlement
conference at the outset, by stressing that agency (or regional
policy) is too encourage the settlement of the action, but that
EPA is prepared to litigate. Stress the fact that this policy is
clearly and directly stated in the Consolidated Rules of Practice
at 40 CFR 22.18, where the "Agency encourages settlement of a
proceeding at any time if the settlement is consistent with the
provisions and objectives of the Act and applicable regulations".
Emphasize that the Agency is interested in hearing about the
Respondent's position, defenses or other claims or information
that may not have been evident when he Complaint was filed.
6. Conduct Settlement Conferences Off the Record
Emphasize at the outset that the discussion will be "off
the record" and that the sole purpose of the conference is to
arrive at a basis for settlement by discussing fully the factual
61
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-3-
allegations of the Complaint. Arguments or lectures on the
"constitutionality" of EPA, the "political process in America" or
legal "war" stories that may be raised by the Respondent should
be restricted or cut off at their outset. Keep the Respondent
and Counsel to the business of the Complaint. It is also useful
to state that the purpose of the conference is to arrive at a
possible basis for settlement, but that cases can not be settled
until the Respondent can stipulate in the CAFO that they are in
full compliance, or are on a schedule to achieve compliance.
When referencing the fact that any information presented
during the conference will be considered "off the record", cite
the basis for this position as 40 CFR 22.22(a), which recites
Rule 408 of the Federal Rules of Evidence.
Rule 408, reprinted here in its entirety states that:
Evidence of (1) furnishing or offering or promising to furnish, or, (2) accepting or offering or promising to
accept, a valuable consideration in compromising or attempting to compromise a claim which was disputed as
to either validity or amount, is not admissible to prove liability for or invalidity of the claim or its amount.
Evidence of conduct or statement made in compromising negotiations is likewise not admissible. This rule
does not require the exclusion of any evidence otherwise discoverable merely because it is presented in the
course of compromise negotiations. This rule also does not require exclusion when the evidence is offered
for another purpose, such as proving bias or prejudice of a witness, negativing a contention of undue delay
or proving an effort to obstruct a criminal investigation.
. 7. Always Discuss the Administrative Process
No informal settlement conference should be complete without
a deliberate and carefully orchestrated discussion of the
administrative process that will be followed if the matter can
not be settled. Most Respondents and many attorneys will be
unfamiliar with the administrative process that EPA follows and
it will be up to you to carefully detail each and every aspect of
the proceeding to them. You may present this information in the
context of providing a "service" or "information" to the
Respondent or counsel - i.e., "I know you may be unfamiliar with
the procedures EPA will follow in processing this complaint, so
let me spend a few minutes describing the procedures that are
followed under the Consolidated Rules of Practice". You then
proceed to give a detailed explanation of the entire
administrative process from assignment of the Administrative Law
Judge to the potential appeals to the U.S. Supreme Court. Give
the explanation in excruciatingly patient detail. Let them know
that you are extremely familiar with the procedures and are
prepared to litigate the matter to the fullest extent necessary.
Repeatedly ask if Counsel or the Respondent has any questions.
A long discussion is particularly useful when the Respondent
or client is present. It is important to let them know that this
matter is not going to go away by itself and that procedurally,
it is very complex.
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A useful part of the repertoire of agency attorneys is the
development of a frank but lengthy discussion palled "The
Lecture". This Lecture should be the exposition of the
administrative process and is designed to be given in such great
detail to perform the twin goals of "education" and
"intimidation". Here is a sample outline of the script that can
be used. It is useful to include this list in the materials that
you take with you to your settlement conference, along with the
Consolidated Rules of Practice, relevant Statute and applicable
Regulations.
Always inform the Respondent that two courses of action may
proceed from the settlement conference. One which can move
quickly toward resolution of the case through entry of a Consent
Agreement and Final Order. The other course is a lengthy,
detailed (costly), and nevertheless direct course of litigation.
TWO COURSES OF ACTION
No Settlement
(1) Assignment of Judge
by the Chief Judge
(2) Issuance of Scheduling
Letter
(3) Required submission of:
Prehearing Exchange
1. Witness List
2. Exhibits
3. Defenses
4. Statement of Testimony
5. Location of Hearing
(4) Response/Replies to Prehearing Exchange
(5) Prehearing Conference with ALJ
Settlement
(1) Stipulation/Achievement
of Compliance
(2) Consent Agreement and
Order
(3) Payment of Penalty
(4) Case Closed
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-5-
(6) Hearing Procedure
(7) Transcript
(8) Proposed Findings of Fact,
Conclusions of Law and Orders
(9) Preparation of Briefs
(10) Preparation of Response Briefs
(11) Initial Decision is rendered
(12) Filing of Appeals (within 45 Days)
(13) Final Decision is rendered
(14) Potential for Appellate Review
NOTE: at each step in the process, emphasis can be made on the
potential for increasing costs of litigation and the potential
for amended complaints for continuing violations).
8. Release of Inspection Report is Your Option
The decision on whether or not to release the Inspection
Report is something that you must approach on a case by case
basis. Certainly, never release the report before the Answer is
received unless you expect the Respondent to tailor his Answer to
the deficiencies and short comings in your inspection report.
Release of the inspection report should be used to improve your
bargaining position, not detract from it.
Since the inspection report must be produced as part of the
prehearing exchange, many practitioners find it useful to present
a copy of the report to the Respondent at the first settlement
conference. By explaining that the Complainant is under no legal
obligation to provide the inspection report until the pre-hearing
exchange but is providing this information "in the spirit of
settlement" and cooperation, you may gain valuable good will on
the part of the Respondent or Counsel. Release of the report may
also stimulate more serious settlement discussions as you use the
Respondent's Answer with the Inspection Report to demonstrate
that the facts are virtually undisputed and the evidence of
violations are simple, direct and very compelling.
Another strategy to consider is to circle or underline
specific items in a copy of the Inspection Report before
photocopying the Inspection Report for release to the Respondent.
Highlighting high levels of PCB concentration or other key
information adds further weight to the government's position.
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Remember to keep the original Inspection Report clean since it
will need to be filed with the Hearing Clerk as part of the pre-
hearing exchange.
It is also critical that the Respondent have initiated some
compliance or corrective action before coming in to meet with
EPA, if at all possible. Certainly preparing records, marking
PCB equipment or servicing leaks from PCB transformers or
hydraulic systems should have been started at the time the
inspection was conducted and certainly by the time the complaint
was received. Do not entertain or allow any substantive
discussions or argument about the rationale or merits of the
regulations in question.
In arranging for a settlement conference, request that
tangible evidence be brought along to demonstrate that "good
faith" compliance with the regulations has been initiated.
Avoid letting the Respondent use the settlement conference
as a free seminar on how to achieve compliance. If he persists
in asking basic or obvious questions that demonstrate that he has
not taken the time to read the subject regulations, inform the
Respondent that EPA will be obligated to add a "tuition" fee to
the penally, a calculation increase that could be added for bad
faith or lack of cooperation, under the penalty policy.
9. Conduct a Count by Count Examination of Complaint and
Answer
Since the Respondent has asked for the settlement
conference, it is useful to ask them how they wish to proceed
sometimes they will prepare
J:he equivalent of "opening statements" that may be time consuming
and irrelevant but serve to give the client or Respondent the
feeling that they are getting their "day in court". Sometimes
the Respondent or counsel will prepare a detailed response to the
factual allegations to the complaint in addition to the general
denials in the Answer. By using the Complaint, with annotations
in the margin based upon your analysis of the Answer, you should
endeavor to steer the discussion to an identification of any
contested and non-contested issues. Limiting what needs to be
considered as part of the discussion will aid immeasurably in
narrowing the focus of your meeting. In trying to keep the
discussion limited to contested issues, indicate that the Agency
is willing to consider revising the size of the penalty. If
adequate and convincing evidence is forthcoming. This
willingness to revise the Complaint (if appropriate) should be
strongly emphasized as a way to gather additional data about
possible weaknesses in your case.
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10. Describe How the Civil Penalty was Calculated.
The proper presentation of the civil penalty calculation is
frequently overlooked at the settlement conference. By merely
indicating that the penalty was calculated in accordance with the
relevant civil penalty policy, you miss an important opportunity
to discuss the merits of the penalty policy. No Respondent is
interested in willingly accepting the logic or effect of a civil
penalty policy, since it is a "policy" and not "law". For
strategic reasons, it is well worth your time to prepare a
detailed description of the civil penalty and how it was
calculated. Always have a copy of the appropriate penalty policy
available to give the Respondent. It is also worthwhile to
prepare a short exhibit showing how the penalty was calculated,
using the circumstances of the violation, probability of damages
and range or nature of the violation. By stressing the fact that
the calculation of the penalty was one "by the book" for purposes
of "national consistency" and was based on the facts known to EPA
at the time of the inspection or violation, you can shift the
burden onto the Respondent to rationalize how a different
application of the same policy could result in a lower penalty
given the same set of facts.
All penalty policies, despite their intent to be objective,
contain numerous subjective factors. It will ultimately be your
job to convince the administrative Law Judge of the
reasonableness of the penalty, so you may as well practice by
"selling" the penalty to the Respondent. Emphasis on the care
with which the penalty was calculated is very important, because
it can aid in demonstrating how reasonable EPA was in filing the
action.
The penalty can be presented by either the attorney or
program representative. Since the penalty will require a
detailed explanation when it is presented at a hearing, try to
use the staff person who will be presenting the testimony to
present the penalty at the settlement conference.
Both TSCA and FIFRA have very detailed penalty policies and
schedules. Both contain substantial information that can be used
at a settlement conference. It .is a good practice to maintain a
personal copy of the relevant penalty policy for use at
settlement conferences. Highlighted specific portions that you
will wish to refer to at the settlement conference, such as the
statements in the introduction to the policies. The TSCA Civil
66
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-8-
Penalty System, for example, states very explicitly that:
The purpose of the general penalty system is to assure that
TSCA civil penalties be assessed in a fair, uniform and
consistent manner, that the penalties are appropriate for the
violation committed; that economic incentives for violating TSCA
are eliminated; and that persons will be deterred from committing
TSCA violations.
Each of the elements of this paragraph provide a basis for a
discussion of the penalty with respect to the specific
Respondent.
11. Discuss Penalty Mitigation Factors
Always keep the issue of penalty mitigation open. Advising
the Respondent of the types of mitigation projects EPA would be
willing to consider will convince the Respondent that EPA will
settle the case if the terms are right. TSCA enforcement
guidance on innovative settlement conditions is contained within
the TSCA Policy Compendium. Other factors that can be stressed
are the use of negotiated credits for compliance activities above
what is required by law, Environmental Management Audits or other
types of compliance or abatement.
In considering the ability to pay issue, insist that the
Respondent submit signed personal or corporate tax returns
including all schedules. You will need to pay close attention to
various costs of doing business, internalized costs and other
items that would create useful information at a hearing. The
TSCA Civil penalty policy allows the recovery of 4% of the gross
sales of the Respondent's operations.
One factor that is often stated is that the facility or
Respondent has never been in any trouble with EPA in the past and
accordingly should be given a mitigated penalty. While this may
be a legitimate issue, the proper response to this remark is to
focus attention on the length that the violations have been
ongoing. Five years without annual PCB records is very serious,
for example.
Some Respondent's will claim that they lack the ability to
pay a civil penalty. This is particularly true of schools,
municipalities or other types of businesses that are under
capitalized. Always insist on being provided with financial
data, either in the form of tax returns or operating budgets, in
the case of schools or no profit entities. A good strategy to
use is to compare the costs of cleanup (or resulting employee or
citizen suits) from some chemical that is improperly will
judgment or a large cleanup project be funded.
67
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-9-
TSCA Section 16 requires EPA to address the Respondent's
ability to continue to do business when faced with the imposition
of a civil penalty. The precise language of 16(a) states that
the administrator "shall take into account" the effect on ability
to continue in business. It doesn't mean that a penalty can't be
a major impact oh the operation. When appropriate, this issue
may be best left to the discretion of the Administrative Law
Judge following the taking of testimony.
12. Be Clear About What EPA Must Have to Settle The Case
At the conference, three critical items must be identified
and addressed; these are:
a. That the Respondent recognize that there is a problem
(even if he won't admit it in the CAFO).
b. That evidence of some corrective action has
already been initiated by Respondent, and
that tangible evidence in the form of
photographs or affidavits be produced to
demonstrate good faith efforts to get into
compliance.
c. That the Respondent demonstrate a commitment
to maintain compliance into the future.
Recognition of violations is the first critical
consideration. Some Respondents will insist that no law or
regulation was "broken" (or that, at a minimum, it was not
"willfully or knowingly" done). Always respond with patience but
with firmness; those are elements of a criminal action that have
no inherent effect on the civil penalty action proceeding. This
is a very critical step in the negotiation process. This is
emphasized throughout the settlement discussion for two important
reasons. First, it will portray the Agency as being extremely
amenable to reducing the penalties, if warranted by the evidence
and it will also aid in developing a view that EPA is not
arbitrary and is willing to give the Respondent "every benefit of
the doubt" - consistent, of course with the quality of the
evidence and existing settlement policies. Secondly, this
approach will help you to discover any unknown flaws or defects
in your case. If the Respondent has 7 transformers and your
inspector mistakenly wrote down 77, you need to know that.
68
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-10-
13. Always Discuss the Maximum "per day, violation"
Section 16 of TSCA provides for civil and criminal penalties
for violations of the Act and regulations of up to $25,000 per
day, per violation. It is certainly no secret that EPA rarely
imposes the maximum fines allowed by the statute on a "per day,
per violation" basis, although it certainly is possible to do so.
Penalties have been proposed on a per day per violation basis in
several cases, as well as on a per month or per year basis, such
as where improper disposal constitutes an ongoing violation or
where the respondent may not have any annual PCB documents. In
those instances, it would be appropriate to assess a penalty for
each month that the illegal activity is taking place.
The TSCA Civil penalty policy does not prohibit the
assessment of penalties on a per day basis, see 45 Fed. Reg.
59776. The section entitled Continuing Violations recognizes
that there is a potential for very large penalties to be assessed
in many situation, stating that large penalties will be
appropriate for continuing violations while for others, such as
late inventory reporting, assessing an additional penalty for
each day or violation could yield a penalty assessment for
greater than the violation merits. The PCB Penalty Policy at 45
ed. Reg. 59782 establishes specific guidelines for per day, per
violation changes by describing the Proportional Penalty
Calculation.
14. Evaluate Inability to Pay Claim
Section 16 of TSCA requires that a number of factors be
considered in assessing a civil penalty, specifically, the nature
circumstances, extent and gravity of the violation or violations
and respect to the violator, the ability to pay effect on ability
to continue to do business, and history of prior such violations,
the degree of capability and such other matters as justice may
require. No Respondent wants to pay a penalty, if it can avoid
it. Some Respondents will pay "part" of a penalty as part of the
cost of doing business, to avoid further publicity or additional
costs of litigation. Nearly all will cite "ability to pay" as a
factor in trying to reduce penalty liability.
69
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-11-
Given the fact that EPA has a very limited ability to obtain and
then interpret financial data, it is necessary to limit our focus
to several easy to use financial analysis systems. These are the
Lexis computer system and personal or Corporate tax returns.
The Lexis system can provide invaluable information,
particularly when used in preparation for a settlement
conference. Check the recent financial activity of your
Respondent by looking in the Lexis-Nexis library marked "all
wires" for any stories or news accounts of corporate financial
activity. Stories concerning mergers, acquisitions or stock
dividends can be printed out and held in reserve in the event the
Respondent starts to paint a financial picture that is too bleak.
The Lexis search may also reveal business or financial
relationships that may not seem obvious at first.
The program person should be knowledgeable about the
appropriate civil penalty and its application to the facts in the
case. Use them for a detailed discussion of the civil penalty.
Where at all possible, use a graphic display of the penalty
calculation worksheet, while the program expert walks the
Respondent through the details of the calculation.
15. Use of the National Penalty Docket; Distinguishing
Small Penalties.
The Respondents may come to a settlement conference with
detailed "statistics" on civil penalties that have been complied
from the National Penalty Docket, which is maintained by the
Compliance Monitoring Staff, Office of Pesticides and Toxic
Substances or from various trade publication, such as the
Environment Reporter. Chemical Regulation Reporter or other trade
publications. In some cases, Respondents may even have copies of
Consent Agreements from cases in your Region or other Regions.
In all cases, the sole goal of these "statistics" will be
to demonstrate that the penalty being sought in their action is
too large by comparison or that they are entitled to a low or
lower settlement penalty similar to those identified in the
statistics. Because the National Docket or other reporters only
state the actual settlement penalty amount, the myriad other
factors that enter into a settlement, such as risk of litigation,
environmental credits, etc. simply do not show up.
When confronted with this type of selective statistical
exhibit, it is critical that you place it to the side of the
negotiating table and to firmly refuse to deal with it. Stress
the fact that their "facts" are a gross over simplification of
the individual factors that go into each individual settlement.
Stress adherence to the civil penalty policy and the factors that
go into its settlement. Do not agree.to evaluate the list or to
obtain copies of each and every settlement agreement for the
70
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-12-
Respondent. It is a waste of your time and the Respondent is
free to seek the material under FOIA, where they will be charged
for search time and photocopying.
16. Explain Why EPA uses Civil Penalty Actions vs. District
Court Action (factors to stress)
In discussing the imposition of the penalty it is useful to
emphasize the fact that an injunction action "could have" been
initiated, which would have cost a great deal more in terms of
legal fees, and so forth. Stressing how this administrative
action is really much cheaper can have a big impact on the
prospect of settlement.
17. Presentation of Draft CAFO
As time permits, it is a good practice to prepare a draft
Consent Agreement for presentation to the Respondent at the time
of the settlement conference. Use of a settlement draft may
substantially aid in facilitating a settlement.
71
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SAMPLE OF ANNOTATED
"COMPLAINANT'S PI
EXCHANGE"
BEFORE THE ADMINISTRATOR
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
Washington, D.C.
IN RE
IMPERIAL, INC.
Shenandoah, .Iowa,
•«—Be formal
Respondent
Docket No: FIFRA-86-H-08
COMPLAIN, ANT'S
PRE-HEARING
EX C RANGE
Promote—»
your
witnesses
Briefly.
Explain
your
Case; *
you have
solid data
to support
the action
Promote—*
By Order of this Court, dated July 23, 1986, the parties
to this action were directed to file certain responses and
rJocuments by September 11, 1986 in the event this matter could
not he settled. This matter has not been settled and accordingly
this is Complainant's response to the Order of the Court.
I. WITNESSES TO BE CALLED
"JOHN J. NEYLAN, III Mr. Nevlan is the Director of the Compliance
Division, Office of Compliance Monitoring, Office of Pesticides and
Toxic Substances, U.S. EPA Washington, D.C. Mr. Neylan will testify
_that EPA. initiated correspondence with the Respondent advising same
'tnat Cannon Laboratories of Reading, PA had declared bankruptcy and
that agency records indicated that a study submitted 'by the Respondent
in support of the registration ot Imperial Ready To Use Rat and Mouse
Killer, EPA Registration Number 407-288 had been prepared by Cannon.
Of specific concern to EPA was that adeguate supporting .documentation
exist in support of registered products. EPA requested that certain
registrants of pesticides relying of Cannon data notify EPA as to
the availability of all underlying raw data for testing conducted
by Cannon, referencing the specific reguireraent of 40 CFR 169.2(K)
__that all underlying raw data for testing conducted .in support of
registration and/or tolerance petitions must be maintained as lonq
as the registration is valid and the producer is in business.
Mr. Neylan will testify that on December 12, 1985, Respondent
notified EPA that the underlying raw .data, interpretations and
evaluations thereof were not available and could not be produced.
This information resulted in the issuance of this enforceaent action.
Finally, Mr. Neylan will testify concerning the significance of
of Respondent's failure to maintain such data, its gravity and impact
on EPA's duty and ability to insure that pesticides are properly
registered, manufactured and used within the United States.
ROSE BURGESS Ms. Burgess is an Environmental Protection Specialist
in the Compliance Division, Office of Compliance Monitoring, Office
73
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- 2 -
Use the
nenaltv
o<= Pesticides and Toxic Substances, vJashington, D.C. Ms. Burgess
will provide testimony that Respondent Is a 'producer' a* defined
by FIFRA and how the penalty was calculated to he assessed in full
contormanc* with EPA's FIFRA civil penalty policy.
Complainant respectfully reserves the right to supplement the
list of witnesses upon adequate notice to Respondent.
II. DOCUMENTS AND EXHIBITS
Respondent has Included various documents with its Answer
Complainant intends to submit a copy of the test titled E_
Irritation Study N.t. Albino Rabbits, which was identified
EPA as MRID No. 68004, as soon as it is received from the Pesticides
Registration Division. Since Respondent apparently has a copy of
this tinal report, no prejudice will attach from this late suhraittal
HPA has no additional documents to submit at this time, however
Cotml^inant respectfully reserves the riaht to suplement the list
of exhibits upon adequate notice to Respondent. ——~
III. PLACE OF HEAPIMG
—Show cooperation where possible
Answer all — >
oftheP-X
raised
hy the Judge
Complainant prefers that the hearti«o be held in Washington,
D.C., as provided for in 40 CFR 22.19^4) and 22.21(d)/In the
alternative, Complainant does not oMeet to ccnducti/fg the hearing
at a suitable location in the county where the Respondent resides
or in Chicago, Illinois wnere the EPA Region V of/ice is located.
IV. CONSOLIDATION OF HEARING
ComnJainant does not oblect to the consolidation of this case
with In the Matter UFA Oil Company, Docket No. FIFKA-86-K-09
since the Respondents appear to have a clear corporate relationship,
the facts of each case appear to arise out of the sane operative
facts in that each action concerns the failure of the respondents
to maintain the underlying raw data for the identi-cal study; Eye
Irritation Study NZ Albino Rabbits, MRID No. 68004, prepared under
contract by Cannon Laboratories.Complainant request* that the
consolidation be effectuated immediately in the interest of judicial
economy.
V. RESPONDENT IS A PRODUCER AS DEFINED BY PIFRA
Complainant disputes Respondent's contention that it is not a
•producer' as defined by FIPRA. Under FIFRA, "producer" means any
person, who produces a pesticide or a device subject to the Act.
Respondent holds a registration number for Imperial Ready To Use
Rat and Mouse Killer, EPA Registration Number 407-2U8 which it
produces, processes, markets and distributes in the commerce of the
-------
VI. RESPONDENT IS NOT ENTITLED TO A DISMISSAL OP THIS COMPLAINAT
The Court has requested Complainant's position as to matters
stated in Respondent's answer, and, in particular, why the
Respondent would not bo entitled to a dismissal of the Complaint if
the facts are as stated in Respondent's answer and attachments
thereto.
There does not appear to be any question that Respondent Is a
registrant of a toxic fumarin pesticide product that is sold and
distributed in commerce in the United States. There does not appear
to be any dispute that Respondent contracted with Cannon Laboratories
to conduct an eye irritation study in support of the registration
of the subject product* Respondent claims the study was done for
the purpose of "re-registration" not registration. The requirements
of 40 CPR 169 et seq. do not create any such distinction.
Finally, Resnondent asserts that it did not "refuse" to
maintain the required data under Section R(a) and that "there is
some question as to the responsibility for retrieval of the data
since Union Carbide was empowered to act on our behalt," presumably
in reference to a "power ot attorney" statement issued by Imperial
to Union Carhide to qo to the Reading Airport to retrieve the
requisite raw data from Cannon. While Respondent may be otfended
by the use of the statutory term "rafuse" as required by the Act,
(intimatinn that it was really Cannon who was negligent, responsible
or culpable for the "refusal") the facts are inescapable that
Respondent was unahle to produce the underlying raw data upon the
lawful request of the Complainant. Accordingly, the action should
not be dismissed.
VII. CALCULATION OF PROPOSED PENALTY
Section 14 of FIFRA authorizes the imposition ot a civil
penalty of up to $5000 for each o££flne«i Based upon the facts
alleged in this Complaint, an^**TrTaccor'1ancev<>*»ith the guidelines
for the assessment of civil punatTties undor flPRA, section 14(a),
39 Fed. Reg. 27711 (July 31, 1974), Complainant proposed a penalty
of 94,200 for failure to maintain books and records required under
Section 8(a) of PIPRA. In the absence of credible evidence to the
contrary, Respondent was placed In Category V which includes
businesses with annual gross sales of greater than $1,000,000.
Respectfully submitted.
«-Use the
Penalty
Policy
Dated:
tfichael J. /fcalker
Counsel fcfr Complainant
Special L'i't>qation Division
75
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CERT IPICATE 0 P SERVICE
I hereby certify that the original document entitled:
COMPLAINANT'S PRE-HEARING EXCHANGE in this matter, Docket No.
PIFRA-86-H-08 was cent by post-paid United State* Nail to the
Hearing Clerk and that true and corect copies were sent by post
paid United States Mail to the Court and Respondent all at the
following addresses:
Ms. Bessie Bammiel ~~~"~
Hearing Clerk (A-110)
U.S. EPA
401 M Street SW
Washington, D.C. 20460
Hon. Gerald Harwood
Chief Administrative Law Judge
U.S. EPA (A-110)
401 M Street SW
Washington, D.C. 20460
Mr. D.E. H«h«?rehl
Executive Vice President
Imperial, Inc.
P. O. Box 98
W. Sixth Avenue
Shenandoah, Iowa 51^0/1-0098
—Be sure
to Certify
Dated:
•*.
76
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National Environmental Enforcement Journal
Vol
No. 1
January 1987
ENVIRONMENTAL AUDITING:
REACHING THE BOTTOM LINE
IN COMPLIANCE
by
Allen J. Danzig,*
Michael J. Walker,**
and Courtney M. Price***
I. Introduction
In developing compliance strategies under the
environmental statutes, the United States
Environmental Protection Agency (EPA) has
found that traditional administrative and judi-
cial enforcement efforts are not always suffi-
cient to achieve a high level of compliance from
all regulated entities, including industry, muni-
cipalities, and federally-owned facilities. This
has become particularly apparent under the
environmental programs that regulate hazar-
dous wastes and toxic substances. To address
this issue, EPA has explored the concept of
environmental auditing as an innovative
approach to promote increased compliance by
the regulated community.
"Environmental auditing is a systematic, docu-
mented, periodic, and objective review by regu-
lated entities of facility operations and practices
related to meeting environmental require-
ments." // Auditing has been more broadly
defined as "an independent appraisal of a
corporation's environmental control systems
and its environmental assets and liabilities to
enable management to make rational decisions
relating to environmental matters." 2f Audits
can be used to "verify compliance with environ-
mental requirements; evaluate the effectiveness
of environmental management systems already
in place; or assess risks from regulated and
unregulated material and practices." 31
Many corporate auditing programs, which
began as checks on compliance status, have
evolved into more comprehensive audits of
environmental management control systems to
assess environmental risks. For example, in
reviewing a corporate management system for
polychlorinated biphenyls (PCBs), an audit may
analyze the system and procedures for han-
dling, storing, marking, cleaning up spills,
inspecting, record keeping, and annual invento-
rying. The audit could also look for risks not yet
identified.
Audits should not be confused with the compli-
ance monitoring activities required by environ-
mental laws, regulations, or permits. Audit pro-
grams do not replace the inspection programs
of regulatory agencies: they evaluate direct
compliance activities, such as obtaining permits,
installing controls, monitoring compliance,
reporting violations, and keeping records.
This article will describe EPA's efforts to
encourage environmental auditing by regulated
entities. First, it discusses the evolution of
government and corporate interest in environ-
mental auditing, including the benefits gained
by firms that have instituted, auditing programs.
The article then discusses EPA's efforts to pro-
mote environmental auditing through policy
statements in this area. Finally, the article
discusses major settlement agreements that con-
tain environmental auditing provisions.
II. Evolution of Corporate Environmental :
Auditing Programs
Environmental auditing programs were
developed for sound business reasons, primarily
to assist regulated entities in evaluating compli-
ance and in managing existing and potential
pollution control problems, rather than merely
reacting to environmental crises. A highly toxic
cloud of methyl isocyanate released from the
Union Carbide plant in Bhopal, India, which
claimed about 2,000 lives, resulted in about
200,000 injuries, and led to damage claims of
billions of dollars, is the most dramatic example
of a situation that has caused some companies
to reassess their environmental and safety prob-
lems. Auditing programs also evolved, in part,
from Securities and Exchange Commission
(SEC) enforcement case settlements that
required environmental auditing. 4\ As a result
of these developments, several hundred major
corporations in the country have voluntarily
developed environmental audit programs.
The benefits of environmental auditing are tan-
gible and significant. First, firms face potential
civil and criminal liability under state environ-
mental laws and environmental statutes admin-
istered by EPA, such as the Clean Air Act, 5/
the Clean Water Act, 6/ the Resource Conser-
vation and Recovery Act (RCRA), 7/ the
Superfund Amendments and Reauthorization
Act of 1986, 81 and the Toxic Substances Con-
trol Act (TSCA). 91 Violators also face potential
environmental liability for violations of certain
77
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National Environmental Enforcement Journal
January 1987
SEC disclosure requirements 10/ as well as
toxic tort liability.
Audits may be needed especially where a com-
pany wants to obtain pollution liability
insurance or to purchase, sell, lease, or modify
facilities. The company must be aware of any
real or potential liabilities associated with a
transaction to ensure that undisclosed liabilities
will not affect future operations. Thus, an
environmental audit provides corporate
management with assurance that potential
problems have been addressed before serious
accidents, government enforcement, or private
lawsuits occur.
Second, firms can save money by assessing
potential environmental violations and risks as
well as by making capital spending decisions to
correct violations, to reduce risks, and to main-
tain proper operation of treatment systems.
Third, an environmental auditing program can
result in an improved relationship between a
firm, regulatory agencies, and the public, par-
ticularly where audit-discovered violations are
identified and corrected within a relatively
short period. In developing an appropriate
enforcement response, EPA may give some con-
sideration to expeditious, good faith efforts to
achieve compliance. 1 //
Finally, regulatory agencies such as EPA obtain
significant benefits from environmental audit-
ing programs. These benefits include better
assurances of compliance from regulated enti-
ties, more efficient use of government inspec-
tion and enforcement resources, improved
cooperation with companies, better compliance
information, and useful information about audit
systems.
Regulated entities have perceived some risks in
developing auditing programs. Audit reports
may generate information on violations of a
pollution control statute that may not be other-
wise discovered by » regulatory agency during
its normal compliance monitoring activities.
Such information could form the basis for an
EPA or state enforcement action or a citizen
suit brought by private citizens. An audit report
can also create potential criminal liability where
the government can establish that corporate
officials knew of violations. Of course, a well-
run audit program should expeditiously correct
identified violations and other potential liabili-
ties.
Audit reports may contain trade secrets about
the company's production process. Thus, firms
may attempt to limit governmental access to
such reports, particularly if they contain infor-
mation not required to be reported under one
of the environmental statutes.
In developing an approach to encourage the
growth of environmental auditing, EPA has
sought to recognize the legitimate concerns of
regulated entities while preserving its enforce-
ment prerogatives.
III. Development of EPA Environmental
Auditing Policy
EPA's interest in environmental auditing
evolved from recognition of mutual gains to be
derived by the regulated community and the
federal government The Agency originally
considered mandatory auditing programs
requiring firms to hire external .auditors to cer-
tify compliance with permits and other require-
ments. However, EPA rejected this concept.
Regulated entities have strongly objected to
using audits as an additional regulatory pro-
gram or requirement. EPA subsequently con-
sidered less structured methods to encourage
achievement of auditing goals. EPA has
encouraged auditing through participation in
numerous auditing conferences, workshops, and
seminars sponsored by EPA, states, localities,
trade associations, and professional organiza-
tions. EPA's policy in this area is contained in
two documents, the Environmental Auditing
Policy Statement and the Policy on the Inclu-
sion of Environmental Auditing Provisions in
Enforcement Settlements (hereinafter the
"Policy on Environmental Auditing in Settle-
ments").
A. The Environmental Auditing Policy
Statement
1. Encouraging environmental auditing
The Environmental Auditing Policy Statement
initially provides that: "it is EPA policy to
encourage the use of environmental auditing
by regulated entities [including federal facilities]
to help achieve and maintain compliance with
environmental laws and regulations, as well as
to help identify and correct unregulated
environmental hazards." 121 While state and
local regulatory agencies have independent jur-
isdiction over regulated entities, EPA
encourages states to adopt the Environmental
-4-
78
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National Environmental Enforcement Journal
January 1987
Auditing Policy Statement and approach audit-
ing in a consistent manner. EPA also
encourages regulated entities to adopt sound
environmental management practices that
improve environmental performance, including
programs that ensure the adequacy of internal
systems to achieve, maintain, and monitor com-
pliance.
The policy further states that EPA will not dic-
tate or interfere with the environmental prac-
tices of private or public organizations and will
not prescribe minimum requirements for audit
programs. Nonetheless, to provide some gui-
dance to regulated entities, the policy outlines
the common elements of effective audits:
(1) explicit management support for
environmental auditing and commit-
ment to follow up on audit findings;
(2) an environmental audit function
independent of audited activities;
(3) adequate team staffing and auditor
training;
(4) explicit audit program objectives,
including scope, resources, and fre-
quency;
(5) a process that collects, analyzes, and
interprets documents and information
on compliance and management effec-
tiveness sufficient to achieve audit
objectives;
(6) specific procedures to promptly
prepare candid, clear, and appropriate
written reports on audit findings,
corrective actions, and schedules for
implementation; and
(7) quality assurance procedures to
assure that the environmental audits are
accurate and thorough.
The policy emphasizes that ultimate responsibil-
ity for the environmental performance of the
facility lies with top management, and that
independent internal or third-party auditors
should conduct the audit. Corporate officials
have agreed that top management support and
responsibility for environmental decisions are
critical to successful auditing programs. 131
2. Agency requests for audit reports
Second, the policy addresses the extent to which
EPA may make requests to obtain audit reports.
In addressing this issue, EPA has attempted to
balance the use of its broad authority to obtain
compliance-related information with the con-
cerns of regulated entities on the extent of
Agency access to and use of audit information.
EPA can obtain audit-generated information in
several ways. The-major environmental statutes
authorize EPA to require extensive monitoring,
record keeping, and reporting schemes relating
to compliance with these laws. 141 Pursuant to
this authority, EPA has promulgated regula-
tions on monitoring, record keeping, and
governmental access. 151 Thus, required report-
ing data, such as a Clean Water Act discharge
monitoring report, must be reported to EPA or
a state agency, although it does not have to be
reported as part of the audit The Agency can
obtain access to information that is relevant to
an authorized enforcement investigation,
including information used to prepare audits
and the audit reports themselves, either admin-
istratively or through discovery in civil litiga-
tion.
Recognizing that routine Agency requests may
have some inhibiting effects on auditing pro-
grams, the policy statement provides that "EPA
will not routinely request environmental audit
reports." 161 At the same time, EPA maintains
its authority to request and receive information
in audit reports under the various environmen-
tal statutes. EPA may request such reports
where consent decrees contain audit provisions
with reporting requirements, where a
company's management practices are raised as
a defense, or where state of mind is a relevant
element of inquiry. Importantly, the policy
recognizes that regulated entities have continu-
ing obligations to monitor, record, or report
information required under environmental sta-
tutes, regulations, or permits, and that EPA has
access to that information.
Industry commentors on the Environmental
Auditing Policy Statement felt that access to
audit reports should be limited to bad faith
efforts to conceal evidence of violations or
criminal investigations. However, such a lim-
ited set of circumstances could appear to offer a
defense to those unwilling to provide required
or requested information and thus limit
79
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National Environmental Enforcement Journal
January 1987
circumstances where EPA would request audit
reports.
Nonetheless, while the Federal Rules of Civil
Procedure would generally favor disclosure of
audit information, 171 a company may attempt
to demonstrate that one of the exceptions to the
discovery rules applies. These include the
attorney-client privilege, the work product doc-
trine, and the privilege for self-evaluative docu-
ments. However, it may not be practical to
bring the entire audit process within one of
these exceptions given the regulated entity's
interest in developing corporate-wide support
and technical expertise for an audit program.
3. EPA enforcement response to
environmental auditing
In addressing the impact of environmental
audit programs on EPA's enforcement
response, EPA examined the extent to which it
could reduce the potential disincentives for
auditing and still maintain a strong enforce-
ment program.
The environmental statutes and case law gen-
erally allow EPA flexibility in developing
enforcement responses to environmental viola-
tions. Several courts have held that the duty to
find a violation is not mandatory. 181 Where
EPA makes a finding that a violation exists,
EPA generally must take some type of formal
enforcement action (i.e., either administrative
or judicial) under the Clean Water Act, 191
under the Clean Air Act, 201 or under RCRA.
21 ( All statutes authorize EPA to choose the
type of formal enforcement response and to
obtain substantial penalties.
The Environmental Auditing Policy Statement
provides that "EPA will not promise to forgo
inspections, reduce enforcement responses, or
offer other such incentives in exchange for
implementation of environmental auditing or
other sound environmental management prac-
tices." 221 While audits may complement
inspections, they do not provide a substitute for
regulatory oversight. However, facilities with a
good compliance history may be subject to
fewer inspections. 231
Similarly, EPA states that it will not reduce its
enforcement responses or offer other incentives
in exchange for auditing. However, the Agency
explains that, in developing a particular
enforcement response to violations, "EPA
policy is to take into account, on a case-by-case
basis, the honest and genuine efforts of regu-
lated entities to avoid and promptly correct
environmental problems." 241 Reasonable
efforts to avoid noncompliance, expeditious
correction of environmental problems
discovered through audits or other means, and
implementation of measures that will prevent
the recurrence of these problems may be con-
sidered by EPA as honest and genuine efforts to
assure compliance.
EPA has also provided additional guidance on
enforcement response in related policy state-
ments and has agreed to use some enforcement
discretion in negotiating consent decrees with
audit provisions.
The Agencywlde Compliance and Enforce-
ment Strategy directs EPA to select enforce-
ment responses on a case-by-case basis after
considering (1) the gravity of the violation in
terms of environmental impact and effect on
EPA's ability to carry out its programs; (2) the
reasons why the violation occurred; and (3) the
nature of the violator, including its compliance
record and the economic benefit it gained as a
result of the violation. 251 Many EPA
program-specific enforcement policies further
set enforcement priorities for certain categories
of violations. 261 Moreover, EPA policy sets
categories of violations for which cash penalties
must be paid.
Although*it does not explicitly address auditing,
EPA's Policy on Civil Penalties also provides
some guidance for calculating penalties in
administrative and judicial enforcement actions
where the violator agrees to perform an
activity, such as an audit, as part of a settlement.
At a minimum, the penalty must remove the
economic benefit for failure to comply and
obtain an additional amount to reflect the seri-
ousness or gravity of the violation. The gravity
component of the penalty can be adjusted to
reflect the following factors: (1) degree of will-
fulness; (2) history of noncompliance; (3) ability
to pay; and (4) degree of cooperation. Statute-
specific penalty policies also discuss these
adjustment factors. 271 Expeditious correction
of past compliance problems may result in some
mitigation.
Thus, a company's willingness to set up an
environmental auditing program as part of a
settlement as well as to expeditiously correct
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new audit-discovered violations, could show
cooperation, potentially allowing partial miti-
gation of the penalty amount.
EPA consent decree guidance also recognizes
that defendants may agree to take certain
actions above and beyond those necessary to
meet statutory requirements in order to offset a
cash penalty as long as this type of agreement is
explicitly noted in the decree. 281 The TSCA
Settlement with Conditions Policy 291 appears
to allow for some type of mitigation if the
remedy includes an audit This policy provides
that EPA may agree to remit a portion of the
proposed civil penalty where the violator agrees
to take extensive and specific remedial actions.
The remedial actions may be related not only to
the violations discovered by the Agency but
also to other current violations that have not yet
been discovered, e.g., through an audit of other
company facilities where similar violations are
suspected.
B. Policy on Audit Provisions as
Remedies in EPA Enforcement Settle-
ments
In addition to encouraging voluntary develop-
ment of auditing programs, EPA has achieved
numerous settlements that require environmen-
tal audits. Audits can be an effective and effi-
cient use of enforcement resources in obtaining
compliance. EPA has broad authority to nego-
tiate an audit provision in a consent decree as
part of its authority to require self-monitoring
as a remedy for violators. 30/ EPA may obtain
remedies not expressly authorized by statute or
required under EPA regulations where the
decree's terms do not violate the statute's
express prohibitions.
Traditional EPA settlement agreements have
required correction of specific violations and
have assessed penalties. Settlements typically
include the following provisions: (1) requiring
compliance with applicable statutes or regula-
tions and committing the defendants to a par-
ticular remedial course of action by a set date;
(2) scheduling a timetable for achieving compli-
ance that requires the greatest degree of reme-
dial action as quickly as possible, including
interim dates to allow for Agency monitoring
of defendant's progress; (3) monitoring, report-
ing, and sampling provisions; (4) requiring site
entry and access and document review; (5)
assessing civil penalties for statutory violations;
and (6) assessing stipulated penalties for violat-
ing the consent decree. 31 / These settlements
may fail to address the lack of a company pol-
icy encouraging continuing compliance with
environmental laws and regulations as well as
the absence of procedures that would effec-
tively implement such a policy. 32/
Under the Environmental Auditing Policy
Statement and the Policy on Environmental
Auditing in Settlements, EPA may propose
auditing provisions in consent decrees and in
other settlement negotiations where
• a pattern of violations can be attributed,
at least in part, to the absence or poor
functioning of an environmental
management system; or
• the type or nature of violations indicates
a likelihood that similar noncompliance
proolems may exist or occur elsewhere
in the facility or at other facilities
operated by the regulated entity. 331
EPA generally has negotiated two types of
audits: compliance audits and management
audits. Compliance audits involve an indepen-
dent assessment of the current status of a
party's compliance with applicable statutory
and regulatory requirements. 341 EPA has
negotiated compliance audits where it finds that
violations discovered at a facility may likely be
found elsewhere in a party's operation. In such
cases, the companies have agreed to review the
compliance status of all corporate facilities to
ensure that similar violations do not exist and to
certify to EPA that all facilities are in compli-
ance. Where a firm does not accurately certify
compliance, and EPA subsequently discovers
violations at the certified facilities, EPA can
proceed with a criminal enforcement action
based on knowing and willful falsification of
reports.
Management audits involve an independent
evaluation of a party's environmental compli-
ance policies, practices, and controls. Such
evaluation may encompass the need for (I) a
formal corporate environmental compliance
policy and procedures for implementation of
that policy; (2) educational and training pro-
grams for employees; (3) equipment purchase,
operation, and maintenance programs; (4)
environmental compliance officer programs (or
other organizational structures relevant to com-
pliance); (S) budgeting and planning systems for
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environmental compliance; (6) monitoring,
record keeping, and reporting systems; (7) in-
plant and community emergency plans; (8)
internal communications and control systems;
and (9) hazard identification and risk assess-
ment. 351
Management audits have been negotiated
where EPA believed that a pattern of violations
resulted in large part from a lack of, or poor
functioning of, corporate environmental
management or operational controls. 361 In
developing such controls, a company may be
required to go beyond a review of facility com-
pliance status and examine its entire environ-
mental management policies, procedures, and
organizational structure and programs affect-
ing all company employees and operations. 371
The Policy on Environmental Auditing in Set-
tlements states that EPA will not dictate the
details of a party's internal management sys-
tem. However, EPA should generally withhold
approval of an audit plan for a defendant with
an extensive history of noncompliance unless
the plan requires the following:
• use of an independent third-party audi-
tor not affiliated with the audited entity;
• adherence to detailed audit protocols;
and
• more extensive Agency role in identify-
ing corrective action. 38f
The policy addresses several other issues that
come up in settlement It directs Agency nego-
tiators to reserve EPA's right to review audit-
related documents. Next, the policy notes that
reductions of penalty amounts cannot go below
those authorized by Agency penalty policy. In
no case will a party's agreement to audit result
in a penalty amount lower than the economic
benefit of noncompliance. However, "stipulated
penalties [should] only apply to those classes of
audit-discovered violations whose surrounding
circumstances may be reasonably anticipated."
391
The policy further states that audit provisions
will not affect Agency inspection plans. Such
plans and liability for violations other than
those contained in the underlying enforcement
actions are unaffected by the settlement.
Finally, regarding audit-generated data
claimed as confidential, EPA will treat such
information as it treats other confidential
business information, /.£., in accordance with 40
CF.R. Part 2.
IV. EPA Use of Auditing in Consent Decrees
EPA has recently negotiated environmental
audit provisions in numerous settlement agree-
ments. Most auditing provisions are contained
in administrative settlement agreements under
TSCA and RCRA.
In TSCA cases, EPA generally has negotiated
environmental audit provisions for polychlori-
nated biphenyl (PCB) violations where EPA
suspected similar violations at other company
facilities that were not the subject of the
immediate enforcement action. Under TSCA,
for facilities with PCBs, the regulated entities
generally have no affirmative duty to obtain
federal use permits, discharge permits, or waste
manifests, so a particular facility in a company
may have little contact with the regulatory
agency. Other company facilities also may not
be familiar with TSCA requirements and may
have TSCA violations. In RCRA cases, EPA has
negotiated audit provisions to address inade-.
quate hazardous waste management practices,
including monitoring, reporting, and record
keeping requirements.
In re Owens-Corning Fiberglas Corp. 401 and
In re Crompton & Knowles Corp. 41 / involved
TSCA administrative enforcement actions for
PCB violations that resulted in settlement
agreements involving compliance audit provi-
sions. In Crompton, EPA alleged that the com-
pany had failed to (1) affix the required PCB
warning label transformers; (2) inspect, record,
and report leaks to EPA; and (3) develop and
maintain records on the disposition of PCB and
PCB items at the facility.
The consent agreement and final order in
Crompton 421 assessed a civil penalty and
required the company to take the following
actions in a compliance audit: (1) certify to
EPA that it had conducted an inventory of
PCBs, PCB items, heat transfer systems, and
hydraulic systems at each of its twenty-eight
facilities; (2) submit a written report for each
facility specifying the location and quantity of
PCBs, PCB items, heat transfer systems, and
hydraulic systems at each of its twenty-eight
facilities; (3) describe the audit at each facility;
and (4) within sixty days of the effective date of
the consent decree, certify by a responsible cor-
porate official that each facility is in
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January 1987
compliance with PCB regulations, including the
basis upon which it would certify compliance.
Owens-Corning involved a similar PCB compli-
ance audit for sixty-three facilities 43/ while the
audit in In re Potlatch Corp. covered forty-
eight company facilities. 44\ The compliance
audits in EPA v. Chem-Security Systems, Inc.
451 were limited to the facility at issue in the
administrative enforcement actions and
required Chem-Sccurity to conduct four quar-
terly TSCA (PCB) and RCRA compliance
audits and to send the audit reports to EPA.
In In re Diamond Shamrock Chemical Corp.,
461 EPA alleged that the company failed to
notify EPA of its intention to manufacture a
chemical substance not on the TSCA inventory
and used for commercial purposes an illegally
manufactured substance. The consent agree-
ment and order required the company to per-
form a TSCA compliance audit of all of its
forty-three facilities, to evaluate the TSCA
compliance status facilities, and to report TSCA
violations discovered at those facilities. 47j In
addition to reviewing PCB compliance, the
audit required Diamond Shamrock to assess
compliance with several other TSCA record
keeping and reporting requirements and to
report all discovered TSCA violations to EPA.
In In re Union Carbide Corp., 48/ EPA alleged
that Union Carbide manufactured and used for
a commercial purpose a chemical substance
without the required premanufacturing notice
and thus was not on the TSCA inventory in vio-
lation of sections 5 and 15 of TSCA. As part of
the settlement agreement, Union Carbide
agreed to prepare over the following year (1)
an educational program designed to reem-
phasize premanufacturing notice compliance
that will be presented to a broad company audi-
ence; and (2) subsequent to the completion of
such education program, implement a program
of not less than five test inputs to monitor
responses for TSCA compliance. 491 Such a
program will allow the corporation to assess the
compliance capability under actual business
conditions by responding to artificially created
violations.
EPA has negotiated management environmen-
tal audits in several administrative settlements
with Chemical Waste Management, Inc.
(CWM). In In re Chemical Waste Management
501 (Kettleman Hills facility), EPA alleged that
CWM committed numerous RCRA violations,
including failure to implement an adequate
groundwater monitoring system, failure to
implement an unsaturated zone "monitoring
program, failure to develop an adequate closure
plan, failure to make substantial modifications
to the facility, as well as violations of section 15
of TSCA. CWM agreed to perform a compli-
ance and management audit covering all
RCRA and TSCA requirements at the facility.
The Kettleman Hills consent agreement and
final order 511 included an audit that provided
for an independent third-party auditor to sub-
mit a proposal for the scope of work to EPA to
audit waste operations and environmental
management systems at the facility and in
CWM's corporate environmental management
department. Within one year after obtaining a
written agreement on the scope of work for the
audit, the auditor was required to submit writ-
ten reports to EPA on RCRA and TSCA com-
pliance. These reports would
(1) identify and describe the facility's exist-
ing waste management operations,
including management systems, policies,
and prevailing practices;
(2) evaluate such operations, systems, prac-
tices and policies, identifying strengths
and weaknesses; and
(3) identify and describe areas of waste
management operations and environ-
mental management systems that could
be significantly improved, including
personnel training, corporate manage-
ment and lines of authority, operations
and maintenance procedures, interim
stabilization, and quality control and
assurance.
Within ninety days after CWM's receipt of
these reports, CWM was required to submit to
EPA the portion of the report containing find-
ings and recommendations of the auditor,
CWM's evaluation of each option, and specific
actions the company would take, as well as a
schedule for implementation.
The administrative consent agreements in In re
Chemical Waste Management 521 (Emelle
facility) and in In re Chemical Waste Manage-
ment 531 (Vickery facility) involved similar
management audit requirements to address
RCRA and TSCA violations. In In re BASF
-9-
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January 1987
Systems Corporation, where it appeared that
the foreign corporate parent of a violator con-
tributed in part to circumstances involving the
violation, EPA has required that auditors
include measures to insure that the foreign
parent is apprised of TSCA import and certifi-
cation requirements and that it implement
measures to ensure that TSCA requirements
are met. 54j
In proposing environmental audit provisions in
consent decrees, EPA has addressed concerns
on EPA access to audit-generated information
and the appropriate EPA response to violations
discovered by an audit. Of course, where an
audit is conducted pursuant to a settlement
agreement, EPA has required greater access to
audit data than under a voluntary audit pro-
gram to ensure compliance with the settlement.
EPA has generally reserved its right to inspect
defendant's facilities to determine the accuracy
of compliance verifications and other submit-
tals. 551 In addition, audits may identify and
document violations that may otherwise have
gone unnoticed by a regulatory agency. In some
settlements, reporting of audit-discovered vio-
lations has been limited to that necessary to
ensure compliance with the terms of the settle-
ment or as otherwise authorized by regulation
or statute. 561 Some audits have required
reporting of all audit-generated violations to
EPA. 571
An audit report may also include information
on matters other than the immediate environ-
mental issues, such as the production process,
that the company would wish to keep confiden-
tial. In some cases, defendants have been per-
mitted to assert a business confidentiality claim
with respect to information submitted in com-
pliance with the settlement. 581 Another settle-
ment specifies that audit-reported information
would be treated as confidential by EPA to the
extent authorized by TSCA and RCRA. 591
EPA has assessed penalties in all audit-related
settlements for past violations or those viola-
tions that were the subject of the original
enforcement action. 601 To encourage environ-
mental auditing in settlement agreements, EPA
has been willing to limit somewhat its use of
audit reports in prospective enforcement
actions. In some settlements, EPA has reserved
all enforcement rights regarding prospective
violations. 61/
Recognizing the significant benefits of con-
tinuous compliance at audited facilities, EPA
has agreed in certain settlements that the results
of an audit would not be used by EPA as direct
evidence of violations; however, EPA is not pre-
cluded from enforcing against violations
discovered independently of the audit. 62/ In In
re Chemical Waste Management (Kettleman
Hills facility) EPA allowed a six-month grace
period after completion of the audit to correct
audit-discovered violations with no stipulated
penalties, while EPA allowed a six-month grace
period after the settlement date to discover and
remedy violations in In re Diamond Shamrock
Chemical Corp. After this time period, EPA
could enforce against such violations. 63/
However, grace periods will probably only be
considered where the government will achieve
significant compliance benefits from the settle-
ment. A grace period does not preclude EPA
from bringing an. enfofcemejit action to
enforce the consent agreement or to seek
injunctive relief to abate a condition that may
present an imminent and substantial endanger-
ment or an imminent hazard under TSCA. 641
For example, in a settlement with BASF Sys-
tems Corporation, EPA and BASF agreed that
BASF would pay the sum of ten thousand dol-
lars as a stipulated maximum penalty for each
chemical discovered as the result of the audit
determined to be in violation of sections 5,8, or
13 of TSCA, on the condition that the chemical
does not represent a substantial risk to health or
to the environment. 65/ For chemicals that
represent a substantial risk, EPA reserved the
right to seek a penalty in accordance with its
published guidelines.
EPA may adjust its enforcement response where
a company provides more compliance informa-
tion on its facilities than the Agency would have
obtained through its compliance monitoring
programs and where subsequent violations are
quickly corrected. This could apply, in particu-
lar, where audit-discovered violations involve
little or no economic benefit or savings to the
violator under agency penalty policy, such as
various TSCA reporting and record keeping
violations. However, where a new violation does
involve economic savings, EPA will seek to
assess a penalty that reflects such savings,
although it may provide some adjustment for
the gravity aspect of the violation. To do other-
wise would not be fair to the numerous
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companies within the same industrial category
who have paid for the costs of pollution control
and would place complying facilities at a com-
petitive disadvantage.
V. Conclusion
Environmental auditing is playing a growing
role in the Nation's efforts to achieve continu-
ous compliance with environmental laws. EPA
has encouraged the use of environmental audit-
ing by regulated entities through its auditing
policies and through the use of audit provisions
in appropriate settlement .agreements. Audit
programs serve regulated entities' interests in
long-term cost savings and improved coopera-
tion with regulatory agencies, while they com-
plement the compliance efforts of regulatory
agencies.
EPA recognizes the legitimate interests of regu-
lated entities in limiting disclosure of certain
audit-generated information and in taking
enforcement responses that recognize defen-
dants' genuine compliance efforts. However,
EPA will continue to seek environmental audit
provisions in consent decrees, particularly
where a pattern of multi-facility compliance
and environmental management problems
exists. Moreover, by maintaining a strong
enforcement program and penalty deterrent,
EPA will encourage new voluntary environ-
mental audit programs
Footnotes
• Attorney, Office of Enforcement and Compli-
ance Monitoring, United States Environmental
Protection Agency.
•• Attorney, Office of Enforcement and Com-
pliance Monitoring, United States Environmen-
tal Protection Agency.
"• Partner - Rivkin, Radler, Dunne, and Bayh,
Washington, D.C. Formerly Assistant Adminis-
trator for Enforcement and Compliance Moni-
toring, US. Environmental Protection Agency.
The views expressed in this article are the per-
sonal views of the authors. No official support
or endorsement by the United States Environ-
mental Protection Agency is intended or
implied. An earlier version of this article
appeared in the Loyola of Los Angeles Law
Review, Vol. 19: 1189 (1986), Environmental
Auditing: Developing a "Preventive
Medicine" Approach to Environmental Com-
pliance by Courtney M. Price and Allen J.
Danzig.
lj
2 1
31
4j
51
61
7/
81
91
101
US. Environmental Protection Agency,
Environmental Auditing Policy State-
ment, 5 1 Fed. Reg. 25004, 25006 (July 9,
1986).
Reed, Environmental Audits and Con-
fidentiality. Can What You Know Hurt
You as Much as What You Don't
Know?, 1 3 Envtl. L. Rep. (Envtl. L. Inst.)
10,303 (Oct. 1983).
Environmental Auditing Policy State-
ment, jupra note I, at 25006.
///
See, e.g.. In re Occidental Petroleum
Corp. [1980 Transfer Binder] Fed. Sec.
L. Rep. (CCH) par. 82,622, 83,356 n.34
(1980).
42 US.C §§ 7401-7642 (1982). For
example, the Clean Air Act § H3(b)
provides up to $25,000 civil penalties
per day of violation. CAA § 1 13(b), 42
US.C§ 7413(b). Section 1 1 3(c) provides
criminal penalties of $25,000 and jail
terms of up to one year for certain
knowing violations. Id. § 113(c), 42
U5.C.§7413(c).
33U5.C§§ I251,13l9(b),(c)(1982).
42 US.C §§ 690 1 , 6928 ( 1 982).
42 US.C§§ 960 1,9606-9607 (1986).
1 5 U.S.C §§ 26 1 5 (a) and (b) ( 1 976).
See Securities and Exchange Act of
1934, 15 US.C §§ 78a-78kk (1982).
SEC regulations require all publicly held
companies to disclose the effects of com-
pliance with, and legal proceedings
under, federal and state law through
public filings to the SEC Regulation S-
K, Item 101(cXO(xii), 17 CF.R. §
229. 1 0 1 (cX 1 XxxiX 1 985); Instruction 5 to
Item 1 03, 1 7 CF.R. § 299.103(1985).
See Environmental Protection Agency,
A Framework for Statute-Specific
85
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National Environmental Enforcement Journal
January 1987
Approaches to Penalty Assessments--
Implementing EPA's Policy on Civil
Penalties 19-20 (1984) [hereinafter cited
as Implementing EPA's Policy on Civil
Penalties].
12j Environmental Auditing Policy State-
ment, supra note 1, at 25004.
131 See, e.g., Freedman, Organizing and
Managing Effective Corporate
Environmental Protection Programs,
Envtl. Forum, May 1984, at 40-41.
141 See, e.g.. CWA § 308, 33 US.C. § 1318
(1982); CAA § 114, 42 US.C. § 7414
(1982).
75/ See, e.g., Clean Water Act-National
Pollutant Discharge Elimination System
(NPDES) regulations, 40 C.F.R. § 122
(1985).
161 Environmental Auditing Policy State-
ment, supra note 1, at 25007.
171 Fed. R. Civ. P. 26(bXO states Parties
may obtain discovery regarding any
matter, not privileged, which is relevant
to the subject matter involved in the
pending action, whether it relates to the
claim or defense of the party... It is not
ground for objection that the informa-
tion sought will be inadmissible at the
trial if the information sought appears
reasonably calculated to lead to the
discovery of admissible evidence.
181 Sierra Club v. Train, 557 F.2d 485 (5th
Cir. 1977); Caldwell v. Gurley Ref. Co,
533 F. Supp. 252 (E.D. Ark. 1982). Con-
tra South Carolina Wildlife Fed'n. v.
Alexander, 457 F. Supp 118 (DS.C
1978).
191 See South Carolina Wildlife Fed'n v.
Alexander, 457 F. Supp. 118, 131 (D.
S.C 1978); People ex rel. Scott v. Hoff-
man, 425 F. Supp. 71,77 (S.D. 111. 1977).
But see Sierra Club v. Train, 557 F.2d
485,490 (5th Cir. 1977).
201 See Council of Commuter Orgs. v.
Metropolitan Transit Auth., 683 F.2d
663 (2d Cir. 1982); Luckie v. Gorsuch,
13 Envtl. L. Rep. (Envtl. L. Inst.) 20,400
(D. Ariz. 1983); Conoco, Inc. v. Gar-
debring, 503 F. Supp. 49, 51 (N.D. 111.
1980). Contra Kentucky ex rel. Han-
cock v. Ruckelshaus, 497 F.2d 1172,
1177 (6th Cir. 1974), aff'd on other
grounds sub nom., Hancock v. Train,
426 US. 167 (1976); New England
Legal Found, v. Costle, 475 F. Supp. 425,
436 (D. Conn. 1979), aff'd in part,
rev'd in part, 632 F.2d 936 (2d Cir.
1980).
211 See Luckie v. Gorsuch, 1 3 Envtl. L. Rep.
(Envtl. L. Inst.) 20,400 (D.Ariz. 1983).
221 Environmental Auditing Policy State-
ment, supra note 1, at 25007.
231 Id.
241 Id.
251 Environmental Protection Agency,
Agencywide Compliance and Enforce-
ment Strategy and Strategy Framework
for EPA Compliance Programs (1984)
at 25.
261 For example, under the RCRA
Enforcement Response Policy, p. 6-14
(1984), a primary enforcement priority
is all Class I groundwater violations.
Class I violations involve a release or
threatened release of hazardous wastes
to the environment, failure to assure
groundwater protection, proper post-
closure care, or delivery of wastes to a
permitted interim status facility. Id. at
271 See, e.g., Environmental Protection
Agency, Final RCRA Civil Penalty Pol-
icy 16-21 (1984).
281 Environmental Protection Agency, Gui-
dance for Drafting Judicial Consent
Decrees 18 (1983).
291 TSCA Settlement with Conditions, in
TSCA Compliance/Enforcement Gui-
dance Manual app. A (1984).
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National Environmental Enforcement Journal
•January 1987
301 See, e.g., CWA § 308, 33 US.C § 1318 451
(1982); CAA § 114, 42 US.C. § 7414
(1982).
461
47f
481
491
31 / Guidance for Drafting Judicial Consent
Decrees, supra note 28, at 10-18,22-24.
321 See Mays, Environmental Audits: A
New Enforcement Tool, EPA Journal,
June 1985.
331 Policy on Environmental Auditing in
Settlements at 2.
341 Id. at 3.
351 Id.
361 Mays, supra note 32, at 27.
37/ Mays, Environmental Audits:
Addressing Root Causes, Chem. Week,
May 29,1985, at 4.
381 Policy on Environmental Auditing in
Settlements, supra note 33, at 5.
391 W.atd.
401 Administrative Complaint, In re
Owens-Corning Fiberglas Corp., No.
TSCA-V-C-101 (EPA Reg. V filed Feb.
14,1983).
41j Administrative Complaint, In re
Crompton & Knowles Corp., No.
TSCA-PCB-82-0108 (EPA Reg. II filed
July 29,1982).
421 In re Crompton & Knowles, No.
TSCA-PCB-82-0108, at app. B (EPA
Reg. II Sept 17,1985) (Consent Agree-
ment and Final Order).
43/ In re Owens-Corning Fiberglas Corp,
No. TSCA-V-C-101, app. at 6-7 (EPA
Reg. V June 8, 1984) (Consent Agree-
ment and Final Order).
441 In re Potlatch Corp., No. TSCA-V-C- 511
137, at 4 (EPA Reg. V. Aug. 3, 1983)
(Consent Agreement and Final Order).
so r
EPA v. Chem-Security Sys, Inc., No.
1085-07-42-2615P at 3-6 (EPA Reg. X
Dec. 26,1985) (Consent Agreement and
Final Order).
Administrative Complaint, In re Dia-
mond Shamrock Chem. Corp, No.
TSCA-85-H-03 (EPA Headquarters
filed Mar. 18,1985).
In re Diamond Shamrock Chem. Corp,
No. TSCA-85-H-03, Audit Agreement
(EPA Headquarters June 28, 1985)
(Consent Agreement and Final Order).
Administrative Complaint, In re Union
Carbide Corp, No. TSCA-85-H-06
(EPA Headquarters filed June 17,1985).
In re Union Carbide Corp, No. TSCA-
85-H-06, at 6-7 (EPA Headquarters Feb.
26, 1986) (Consent Agreement and
Order). Similar TSCA violations formed
the basis for an audit in In re BASF
Wyandotte Corp, No. TSCA-V-C-410
(EPA Reg. V filed Apr. 25, 1986) (Con-
sent Agreement and Final Order). The
audit required BASF to review thirteen
facilities and certify that all chemicals
required to be listed on the TSCA
Chemical Substances Inventory were so
listed. Id. at 2-3.
See In re Chemical Waste Manage-
ment, Inc, No. RCRA-09-84-0037
(EPA Reg. IX July 3, 1984) (Determi-
nation of Violation, Compliance Order,
and Notice of Right to Request Hear-
ing); In re Chemical Waste Manage-
ment, Inc., No. RCRA-09-84-0037, at
5-26 (EPA Reg. IX June 6, 1985)
(Amended Determination of Violation,
Compliance Order, and Notice of Right
to Request a Hearing). In re Chemical
Waste Management, Inc, No. TSCA-
09-84-0009 (EPA Reg. IX filed June 6,
1985) (Administrative Complaint and
Notice of Hearing).
In re Chemical Waste Management,
Inc, Nos. RCRA-09-84-0037, TSCA-
09-84-0009 (EPA Reg. IX Nov. 7,1985)
(Consent Agreement and Final Order)
(Kettleman Hills facility).
87
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National Environmental Enforcement Journal
January 1987
521 In re Chemical Waste Management,
Inc., TSCA-84-H-03, at 16-20 (EPA
Reg. IV Dec. 19, 1984) (Consent Agree-
ment and Final Order).
531 In re Chemical Waste Management,
Inc., Nos. TSCA-V-C-307, RCRA-V-
85R-019, at 5-9 (EPA Reg. V Apr. 5,
1985) (Consent Agreement and Final
Order).
541 In re BASF Systems Corporation, No.
TSCA-85-H-04, at 6 (EPA Headquar-
ters, May 28,1986) (Consent Agreement
and Final Order).
551 See, e.g.. In re Owens-Corning Fiberg-
las Corp, No. TSCA-V-C-101, app. at 6-
7 (EPA Reg. V June 8, 1984) (Consent
Agreement and Final Order).
561 See. e.g., EPA v. Chem-Security Sys,
Inc., No. 1085-07-42-2615P (EPA Reg.
X Dec. 26, 1985) (Consent Agreement
and Final Order); In re Owens-Corning
Fiberglas Corp, No. TSCA-V-C-101
(EPA Reg. V June 8, 1984) (Consent
Agreement and Final Order).
571 See, e.g., In re Diamond Shamrock
Chem. Corp, No. TSCA-85-H-03,
Audit Agreement, at 2-3 (EPA Head-
quarters June 28,1985) (Consent Agree-
ment and Final Order).
581 See, e.g., In re Owens-Corning Fiberg-
las Corp, No. TSCA-V-C-101, at 7 (EPA
Reg. V June 8, 1984) (Consent Agree-
ment and Final Order).
591 In re Chemical Waste Management,
Inc, Nos. RCRA-09-84-0037, TSCA-
09-84-0009 (EPA Reg. IX Nov. 7,1985)
(Consent Agreement and Final Order)
(Kettleman Hills facility).
601 See. e.g.. In re Chem-Security Sys, Inc,
No. 1085-07-42-265IP, at 4 (EPA Reg.
X Dec. 26, 1985) (Consent Agreement
and Final Order).
611 See. e.g.. In re BASF Wyandotte Corp,
No. TSCA-V-C-410, at 2, 4 (EPA Reg.
V filed Apr. 25, 1986) (Consent
Agreement and Final Order); In re
Chem-Security Sys, Inc, No. 1085-07-
42-2615P, at 5-6 (EPA Reg. X Dec. 26,
1985) (Consent Agreement and Final
Order).
621 In re Chemical Waste Management,
Inc, Nos. RCRA-09-84-0037, TSCA-
09-84-0009, at 7 (EPA Reg. IX Nov. 7,
1985) (Consent Agreement and Final
Order).
631 Id. See also In re Diamond Shamrock
Chem. Corp, No. TSCA-85-H-03,
Audit Agreement, at 8 (EPA Headquar-
ters June 28,1985) (Consent Agreement
and Final Order).
641 In re Diamond Shamrock Chem. Corp,
No. TSCA-85-Hr03, Audit Agreement,
at 8 (EPA Headquarters June 28, 1985)
(Consent Agreement and Final Order).
651 In re BASF Systems Corporation, No.
TSCA-85-H-04, at 6 (EPA Headquar-
ters May 28,1986) (Consent Agreement
and Final Order).
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INETi
NATIONAL ENFORCEMENT TNAMMO MSIIIUIt
A SHORT PRIMER ON MOTIONS FOR ACCELERATED DECISION
Michael J. Walker
Enforcement Counsel
o Successful administrative law enforcement involves both
the knowledge of and effective use of the Consolidated Rules of
Practice (40 CFR Part 22, et seq.) and supporting administrative
precedent.1
o Supporting administrative precedent can be obtained
through the Enforcement Document Retrieval System (EDRS) and each
Regional Hearing Clerk.
o Aggressive litigation — through strategic motion
practice — is the key to effective and timely settlements on
terms favorable to the government.
o Motions to strike affirmative defenses can be effective
in keeping the record clear of frivolous issues and send a clear
signal that the agency is serious about litigating.
See: EPA Motion to Strike 52 Affirmative Defenses
Chemical Waste Management, Inc. Kettleman Hills, CA
facility; Docket No. RCRA-09-84-0037.
Judge Marvin Jones granted this motion 12 days after
it was filed, sending a clear signal to CWM that settlement was a
preferred option. This case settled for $2.1 million dollars.
NOTE: Motions to strike are governed by 40 CFR §22.16.
The "tests" for striking affirmative defenses are:
1. insufficiency as a matter of law;
2. immateriality;
3. redundancy or surplusage;
4. lack of jurisdiction
1 Note: the cases and material cited herein is meant to be
illustrative and not exhaustive. Many motions, orders and
accelerated decisions in TSCA, FIFRA, RCRA and EPCRA may be found
in the EDRS system.
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- 2 -
5. frivolous purpose or use for an improper
purpose, such as to delay the resolution
of the proceedings.
See how the CWM motion deals with each "defense" in the
chart on page two of the Memorandum of Authorities.
o Motions opposing discovery can also be effective in
keeping cases moving.
NOTE: Administrative "discovery" is provided for in the
Rules through the pre-hearing exchange, 40 CFR §22.19. Additional
discovery may be obtained only by authorization of the Court,
after informal efforts have been exhausted.' 40 CFR §22.19(f).
Citing Silverman v. Commodity Futures Trading Commission. 549
F.2d 28, 33 (7th Cir. 1977), Judge Vanderheyden held that there
is no "basic constitutional right to pretrial discovery in
administrative hearings." See: Eastman Chemicals Division.
Eastman Kodak Company. Order of Judge Frank Vanderheyden, Docket
No. TSCA-88-H-07.
o Motions for accelerated decisions can be very effective
in moving cases toward settlement.
o The Consolidated Rules of Practice at 40 CFR §22.20
provide that:
The presiding officer
(ALJ or Regional Presiding Officer)
upon motion2 of any party
or sua sponte3 (on their own motion)
2 Generally, 95% of all motions for Accelerated Decision are
filed by the Complainant.
3 Judge Yost has become aggressive about sua sponte
identifying situations appropriate for Accelerated Decisions as a
method to keep his docket moving. In one case, Pasadena Power.
Docket No. TSCA-09-89-0004, Judge Yost ordered Region 9 attorney
David Jones to draft a "written decision, consistent with" the
findings of liability and penalty. Submitting a draft
accelerated decision on diskette could help move more cases.
90
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- 3 -
may at any time4
render an accelerated decision5
in favor of the complainant or respondent
as to all6,7 or any part of the proceeding,
4 Note that "any time" is not liberally construed. Some
motions for accelerated decision brought a few weeks before the
case was set for trial have been rejected where the respondent
did not have sufficient time to file a response as provided for
in the rules. Such motions are rarely, if ever, granted at trial
either.
5 See Rainbow Paint & Coatings attached to this Primer as a
representative example.
6 Many judges have been unwilling to grant accelerated
decisions on both liability and penalty. See Wofford College;
Docket No. TSCA-IV-86-0281, believing that the respondent should
have its day in court on the issue of penalty. Other Judges, such
as Vanderheyden in Rainbow Paints & Coatings. Docket No. EPCRA
VII-89-T-609; and Rohr Industries. Docket No. EPCRA-1089-04-08-
325; Judge Yost in Potomac Chemicals; Docket .No. FIFRA-III-342-
C; John Book; Docket No. IF&R VII-1081C-91P and Centre
Laboratories; Docket No. FIFRA-09-0645-C-89-10 have granted
motions for both liability and penalty. The Rohr case (in EDRS)
is the leading example to be followed, since it relied on
admissions of the Respondent for establishing liability and an
extensive affidavit of the Case Development Officer regarding
penalty.
7 See Hosho Somerset Corporation; Docket No. I.F.& R. III-
345C. Accelerated decision on liability; Judge Greene sent the
parties to the settlement table, despite EPA's stipulation that
it would accept a mitigated penalty based on settlement
information on financial issues.
8 Note the majority of Accelerated Decisions will not deal
with both liability and penalty. See Airtacs Corporation; Docket
No. TSCA-III-472; Milford Academy; Docket No. AHERA-I-89-1104;
Environmental Abatement & Control; Docket No. VII-88-T-556A;
Dixie USA; Docket No. FIFRA 88-H-04; Honig Chemical; Docket No.
EPCRA-II-89-0104; Colonial Processing; Docket No. II EPCRA-89-
0114; Harmak Grain Co. Docket No. IF&R VIII-150C; Wego Chemical;
Docket No. II-TSCA-8(a)-88-0228; Shield Brite Corporation; Docket
No. FIFRA-90-H-02. >
91
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-. 4 -
without further hearing or upon such limited
additional information such as affidavits,9 as
he (or she) may require,
if no genuine issue of material fact exists
10
and a party is entitled to judgment
as a matter of law,11
as to all or part12 of the proceeding
9 See Rohr. Docket No. EPCRA 1089-04-08-325, supra, for the
leading example of an effective affidavit on the issue of
penalty.
10 Note: this is the key; through the statements or
admissions in the Answer or pre-hearing exchange, the movant must
demonstrate that he or she has met the test of "no genuine issue
of law or fact."
11 Because "summary judgement" is a significant
determination, the facts and issues must be carefully and
deliberately pled in a straightforward manner, to avoid any
appearance of over reaching.
12 Knowing that some judges (Nissen, Greene) rarely if ever
will grant a motion as to penalty based on legal and
philosophical reasons, you can save time by not briefing these
issues for such judges. Exceptional facts or circumstances may
warrant a different approach.
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3E
i
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY £fM ^
WASHINGTON, D. C. 20460
r3 " _
^? c/l 5
**-• //| o
CT5 2"
In the Matter of
DIG AMERICAS, INC.
Dfct. No. TSCA'II-8(a)-90-0109
Respondent
Toxic Substances Control Act, 15 U.S.C. S 2601 et geq. Section
6(a), 15 U.S.C. § 2607; section 16, 15 U.S.C. § 2615(a); section
15(3)(B), 15 U.S.C. S 2614(3) fB); 40 C.P.R. § 710.33(a): (1) The
appropriate civil penalty to be assessed in this matter is the
amount proposed by complainant, such proposal being in accord with
authority and no extenuating circumstances appearing. (2) In this
case, because the failure to file reports deprived the inventory
data base of information respecting chemical substance imports, the
appropriate amount of the penalty aust be determined in accordance
with the potential for harm.
APPEARANCES;
Katherine Yagerman. B*
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DECISION AND ORDER
This matter arises under sections 8, 13, and 16 of the Toxic
Substances Control Act ("TSCA," or "the Act"),, 15 U.S.C. §§ 2607,
2615, and 2614, as well as 40 C.F.R. § 710.33(a) of the
implementing regulations. The complaint charged respondent with
five violations of section 15 (MB) of the Act, for failure or
refusal to comply in a timely manner with 40 C.F.R. § 7l0.33(a),
wilich requires that persons who import for commercial purposes
10,000 or more pounds of a chemical substance listed in the "Maeter
inventory File" of chemical substances maintained by the U. S.
Environmental Protection Agenccy {EPA) pursuant to § 8 (b) of the
Act submit a report to EPA.1 The form for this report, the Partial
Updating of the Inventory Data Base Production and Site Report
("Form U") was required to be completed and submitted for each
Chemical substance so imported during the importer's latest
complete fiscal year prior to August 25, 1986, no later than
December 23, 1986. complainant moved for partial "accelerated
decision" as to liability, asserting that no issue of material fact
remained and that complainant was entitled to judgment as a matter
of law. The motion was granted.2
The issue of appropriate penalty for the violations found
could not be resolved, and went to trial. Complainant seeks a
1 See 40 C.F.R. S 710.25.
2 Order Granting Motion for Partial "Accelerated Decision",
January 3, 1993, attached hereto.
94
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3
penalty o£ $85,000 for the violations found in the five counts of
the complaint.3
Complainant: argues forcefully and at length that the. penalty
for failure to file Form tl' a must be severe enough to deter
noncompliance and casual attitudes toward section 8 (a) filing
requirements, stating that anything less undermines both
Congressional intent that chemical substances in commerce should be
regulated, and the ability of BPA to carry out its responsibilities
under the Act. Complainant urges, citing relevant authority, that
the eeriousneae of section 8(a) violations must be determined at
the time the violation occurs, and must not be based upon
fortuitous circumstances in a given instance that no particular
harm may result because the chemicals in question were not
dangerous, or for some other reason. Complainant points out that
the data base which was deprived of information as a result of
respondent's failure to file Form U's is utilized extensively in
risk assessment and other regulatory determinations, is "dispersed
among many agency and governmental bodies, "* and ia also uaed by
state governments, at least one international agency,5 and, in a
different version, by the public. In other words, "(T)he relevant
1 Complainant sought judgment as to the amount of the penalty,
but this motion was denied.
4 Complainant's brief at llj see also TR 64-66, where
complainant's witness testified that about 18 federal government
agencies utilize the data.
5 The Organization for Economic Cooperation and Development,
TR 64.
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.4
inquiry in instances of nonreporting under TSCA IB not.actual harm
but rather the potential for harm caused by the absence of data
'reasonably required by the Administrator'".*
Finally, complainant asserts that EPA guidance documents
^
(Guidance for the Assessment of Civil Penalties tinder Section,16 of
the Toxic Substances Control Act, 45 Federal Register 59770,
September 10, 1980; and Kecordkeeping and Reporting Rules in TSCA
Section 8, 12, and 13 Enforcement Response Policy)
have been followed in calculating the penalty proposed herein,
based upon the nature, circumstances, extent, and gravity of the
violation, after which a variety of "adjustment" factors were
considered. These factors include ability to pay the calculated
amount and to continue to du business, history of prior violations,
vulpability, and "such other factors as justice may require."
Complainant's witness testified that the ability to pay and to
continue in business were not factors in the calculation because
respondent had not raised them and there was no reason to believe
that respondent could not pay the amount proposed. Further, there
was no history of prior violations of the Act, and no reason to
believe that culpability should be considered as a mitigating
factor because any good faith efforts to comply had been offset, in
the witness's opinion, by respondent's failure to comply promptly
with the reporting requirement during the three months following
the issuance of the complaint.7 Accordingly, no further
* Complainant's brief, at 14.
7 TR 181-182.
96
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5
adjustments in the penalty calculation were made by complainant
because no ether factors recognized • by the guidance documents
seemed appropriate for consideration.
Respondent's position, to summarize, is that no actual harm
has been shown to have been caused by respondent's failure to file,
that significant improvements in respondent's compliance system
have been made, and 'that the penalty . is excessive in these
circumstances.
Complainant's evidence and brief are persuasive as to the
importance of calculating the penalty based upon the probability of
harm where, as here, it is really not possible to determine whether
depriving the inventory data base of certain information has caused
harm in a particular instance. What is clear, however, is the
importance, in the statutory scheme here, of maintaining as
complete a data base as possible. Further, formal agency policy as
set forth in the guidance documents appears neither unfair nor
unreasonable in specifying that penalties for such violations
should be based upon the violations being regarded as
"significant." The penalty proposed is appropriate here, where ao
circumstances out of respondent's control have been shown, and
where there was a three-month delay between issuance of the
complaint and compliance by respondent, and where lack of
compliance in the first instance may fairly be attributed to
insufficient vigiience on respondent's employees' part. Respondent
must be commanded for instituting a new recordkeeping arrangement
and demonstrating that its system will now operate in a more
97
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6
efficient manner, but the expense of doing this cannot be set off
*
against the properly calculated penalty. Respondent has ably
presented a sympathetic case, and careful effort has been made to
determine whether any showing [which could form the basis of a
reduction in penalty has been made. However, none appears on the
facts of this case. Accordingly, it ie found that the penalty
proposed by complainant is appropriate and reasonable.
FINDINGS 07 FACT AND CONCLUSIONS OF LAW
1- Complainant correctly applied guidelines set forth in the
Guidlines and Enforcement Response Policy documents, wherein
failures to report of the type found here are to be treated as
"significant" with a high probability of harm resulting from the
violation. This guidance is neither unfair nor unreasonable in
the circumstances of failures to report information that will be
added to the inventory data base, when the result is that the data
base is deprived of information.
2. The penalty proposed conforms to EPA guidance documents,
is fair and reasonable in the circumstances here, and is properly
baaed upon the probability of harm at the time of the issuance of
the complaint where, as here, the actual harm is absence of
complete information from respondent's facility in the inventory
data base.
3. Based upon the violations found previously in this matter,
respondent is liable for a civil penalty in the amount of $85,000.
98
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ORDBR
Respondent ie liable for a civil penalty in the amount of
$85,000, and shall pay such civil penalty in the form of a
cashier's or certified check payable to the United states of
America, within 60 days from the date of thip Order. The payment
shall be mailed to
Regional Hearing Clerk
EPA Region II
c/o Mellon Bank
Post Office Box 360188M
Pittsburgh, Pennsylvania 15251
ilnistrattve Law Judge
December 30, 1993
Washington, D. C.
99
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1
2
. 3
4
5
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7
8
9
10
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FROM PIC AMERICAS. INC. Transcript Testimony
Kover 48
the relationship of a particular chemical
structure, the kind of effects you see in either
test animals usually, and there's -- there can be
some patterns discerned that would allow you to
estimate for chemicals for which you don't have
any testing information because there's a related
structure that has test data on it, and this is,
in particular, used in the New Chemicals Program
under Section 5, which is premanufactured
notification under TSCA.
Q Is TSCA regulatory activity limited to
chemical substances known to be toxic?
A No. We're responsible for trying to
assess possible risks from the entire universe of
chemical substances that are subject to TSCA.
So, for example, with new chemicals, there's no
requirement of test data been developed. They
actually only have to provide information that
they have available to them. So we're looking at
new chemicals, and we don't know if -they're
toxic, but we can review them and use, for
example, the structural activity relationship
estimates to guide further action under Section 5
on new chemicals.
101
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i ; Kover 49
2 i. Also, when we have inadequate -- when
ii • •
3 • there's inadequate data to assess risk, we can
i
4 try to collect it under Section 8, if it's
*-
5 j available, or we can use Section 4 to have it
6 developed in testing manner.
7 Q What concerns might EPA have then with
8 chemical substances not known to be toxic?
9 A We're responsible for -- under
10 Section 8(b) to establish an inventory and
11 maintain it of what the chemicals in commerce
12 are, so the inventory under Section 8(b) is not a
13 list of toxic chemicals. It is a list of the
14 chemicals that are in commerce, and so it's our
15 responsibility to maintain an awareness of what
16 those chemicals are and maintain a vigilance
17 about available information to assess the hazard
18 and exposure, because new information can be
19 obtained that would change assessment, and we're
20 constantly re-reviewing and reassessing chemicals
21 all the time based on new information that we
22 receive.
23 Q Could you explain what the master
24 inventory file is, and approximately how many
25 chemical substances would be included in that
u V a _.•-.-, 1 Co^-o^a--- T , ~ •, ~ , C C C _ C 1 •< ^
102
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1 Kover 60
2 in order to invite them to stakeholders
3 dialogues, we called them, to get their input to
4 our formulation of risk reduction strategies for
5 their chemicals.
6 Q Does the use of the IUR data within your
7 office always lead to formal rule-making
8 decisions?
9 A No, it does not. It allows us to make
10 decisions on other -- other than regulatory
11 activities, as well.
12 Q Could you explain again -- I think you
13 maybe touched on this previously -- what some of
14 those nonregulatory decisions might be?
15 A Kinds of nonregulatory decisions would
16 be to -- would be in the pollution prevention
17 arena, to either contact the company to discuss
\
18 our concerns or alert them to our concerns about
19 particular risks or pollution prevention
20 initiatives that we've become aware of that might
21 be successful with their particular chemicals.
22 Q Is the IUR data as to any one chemical
23 typically reviewed one time by your office,
24 several times, how often?
25 A We constantly reassess chemicals when we
103
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j Kover 61
2 obtain new information, either of hazard-type or
3 something that would change the characterization
4 of the exposure to the chemical. Also, I'm aware
5 that other offices that have an interest and use
6 the IUR information might also carry out
7 assessment for their own programmatic needs.
8 Q Could you explain the reason for a
9 10,000-pound reporting threshold under the
10 Inventory Update Rule?
11 A Basically, the threshold was created
12 mostly from a standpoint of balancing the
13 information reporting burden with the need for
14 the information and some consideration of the
15 amount of loss -- information loss that we were
16 getting at that level.
17 Q If a company reports 10,001 pounds of a
18 chemical, is that report meaningful?
19 A It certainly can be meaningful. Both
20 the nature of the chemical and its use and
21 applications can be significant at small scale.
22 For example, if a compound persists or
23 bioaccumulates --, by a persistence I mean within
24 the environment so that it is not rapidly decayed
25 or destroyed within the environment, small
104
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1 Kover 64
2 and they are usually quite interested in the
3 profile kind of documents that we do prepare.
4 Q Does anyone within EPA but outside of
-•t,
5 tn-e TSCA program offices have direct access to
6 the data?
7 A Anyone in the Federal Government can
8 attain access to the complete IUR data that would
9 include the confidential portions of it.
10 Q Is there any use of the IUR data within
11 an international context?
12 A Yes. .
13 The Organization for Economic
14 Cooperation and Development, OECD, has developed
15 a program which is aimed at high production
16 volume chemicals worldwide to identify those
17 which have the most significant data gaps on
18 them, to develop a program to share the cost and
19 burden of doing testing worldwide, and in
20 establishing that grouping of high production
21 volume chemicals, the U.S., in its participation
22 in that particular activity, used the inventory
23 update information to input to that, and the
24 program is called the Screening Information Data
25 Set Programs, SIDS, and this has been a pretty
The
' " 105
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3
4
5
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8
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20
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23
24
25
Kovei
A I'm 'aware that states have asked and
received information to help them in initiating
or implementing their own environmental programs
Q Does the public have access to this
information?
A Are there -- there is a sanitized
version that is without the confidential business
information in it. That is available to the
public.
Q Does your office have a policy with
respect to public availability?
A The Toxic Substance Control Act is a
pretty broad and powerful information gathering
authority. It's always been a policy in the
implementation of TSCA to make information AS
widely available as possible.
Q Are there other information systems like
CDS that can be relied on in its place?
A For the chemicals that we're looking at,
generally, the answer is no. This -- the IUR
information is generally regarded in the Federal
regulatory community that has to deal with
chemical risks as the most reliable and
authoritative source of this kind of information.
Mechanical Secretarv. Inc. f212^ 695-6110
106
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•fr
as I %
Direct - Walker 105
Testing Committee is?
A Yes. The Interagency Testing Committee
is a committee created by Congress in 1976 under
Sertion 4(e) of the Toxic Substance Control Act.
««i
Q What federal agencies are named as
statutory members of ITC?
A There are several statutory members on
ITC. These include the Department of Commerce,
President's Counsel on Environmental Quality, U.S.
Environmental Protection Agency, National Cancer
Institute, National Institute for Environmental Health
Sciences, and National Institute for Occupational
Safety and Health, and National Science Foundation and
Occupation Safety and Health Administration.
Q Are there other federal agencies that are
presently --
A Yes. Before the committee had its
first meeting, February 5th, 1977, they recognized
there were other federal agencies that had expertise
in chemical testing, and before their first meeting,
they invited the Consumer Product Safety Commission,
the Food and Drug Administration, Department of
Defense and Department of Interior, to participate in
the first meeting, and '79 and '80, they invited the
10?
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1 Direct - Walker 107
2 ITC?
3 A The statutory functions of the ITC
4 include, first of all, to control the priorty testing
5 list under Section 43 of the Toxic Substances Control
6 Act. This is basically a list of chemicals that the
7 Committee considers, and then recommends for testing
8 to the Administrator of the Environmental Protection
9 Agency.
10 The second function is a rather cost-
11 effective function, to facilitate coordination of
12 chemical testing among the U.S. Government
13 organizations represented on the Committee, and to
14 enhance information exchange to promote cost-effective
15 use of the U.S. Government's chemical testing
16 resources.
17 Q What are the statutory factors the ITC
18 must use to select chemicals for the list?
19 A When Congress created the ITC, they
20 listed eight statutory factors the Committee must
21 consigns. The first factor is the quantities of the
22 chemical that's manufactured. The other factors
23 include the numbers of individuals exposed, duration
24 of exposure, extent of human exposure/ the structural
2.5 relationship of the chemical to a known toxin, the
108
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1 Direct - Walker 111
2 Environmental Protection Agency, which is directed by
3 Congress to implement the testing recommendations of
4 the Interagency Testing Committee.
5 Q How are the data which are developed as a
6 result of ITC recommendations used?
7 A They have several uses. One of the most
8 important uses is by industry, in revising their
9 material testing data sheets, that are data sheets
10 sent to customers and users, processors, distributors,
11 to advise them of the health effects of the particular •
12 chemical or the adverse ecological effects, or any
13 warnings that users and workers should be aware of
14 when handling the chemical. And this is one important
15 use of the data.
16 The other uses of the data are made by
17 the individual agencies that are participating on the
18 Committee, and these include regular current uses of
19 the data, for example, EPA using the data in their
20 water programs when they develop national pollutant
21 discharge elimination system permits. ^^^^
22 Q Does the IUR or the CUS data base provide
23 < any information necessary to satisfy any of the
24 statutory criteria? ^""^••••«
*5 A Yes, it provides information to satisfy
109
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Direct - Walker 112
I the first criteria that Congress listed, that is,
2 quantities of chemicals manufacturered.
4 Q Are any of the chemicals reviewed by ITC
5 on other large well-known lists of trhemicals?
-c A Yes, ar.c they are on there because --
they are on several large lists. These include
& the Clean Air Act Amendments that were enacted in
9 1990, Agency for Toxic Substances and Disease
1C Registry List of Chemicals in Hazardous Waste Sites,
11 and Toxic Release Inventory, which is in Section 313
12 of the Emergency Planning, Community Right-To-Know
13 Act.
14 Just to give you some idea of the number
15 of chemicals that are on those lists that have been
16 reviewed or recommended by the ITC, approximately 75
17 percent of the chemicals on the Clean Air Act have
18 been reviewed or recommended by ITC; approximately
19 70 percent of the chemicals on the DSDR list have
20 been recommended or reviewed by ITC; and approximately
21 73 percent of the chemicals on the Toxic Release have
22 been reviewed or recommended by ITC. «^^
23 Q You stated that you have testified before
24 congress. Has Congress ever shown any interest in the
25 production-volume data, specifically?
110
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1 Direct - Walker 113
2 A Yes, they have. In fact, one of the
3 questions we were repeatedly asked -- and I was
4 repeatedly asked by Congress during testimony -- was
5 , related to the development of the I\JR, and the fact
6 that the original inventory was developed in 1977 and
7 it was made publicly available after that. The
6 Interagency Testing Committee had to rely on that
9 inventory for a number of years, and as the
10 Committee -- as time progressed and the Committee
11 relied on that information, it became more and more
12 obvious that that information was outdated and there
13 was a need to develop a more recent source of
14 production data.
15 This is one of the factors, I believe,
16 that influenced the EPA to revise the inventory
17 update, to develop the Inventory Update Rule, to
18 revise the information.
IS Q Do any other U.S. government agencies
20 other than the ITC use production-volume data?
21 A Yes. I would like to illustrate, giving
22 you a few examples of some of the agencies on the
23 Committee and how they use the information.
24 The National Toxicology Program believes
:- that the information in the Inventory Update Rule
111
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1 . Direct - Walker 117
2 production information on mixtures of chemicals,
3 polymers, different groups of chemicals that might be
4 excluded from the Inventory Update Rule report arid the
: Interagency Testing Committee not o"hly looks at
6 discrete chemicals reported in the Inventory Update
Rule, but also reacting mixtures and other groups of
6 chemicals for which the International Trade Commission
9 has information.
10 And if there is ever a question of
II validity of the information that's contained in the
12 U.S. International Trade Commission, the information
13 that is in the Inventory Update Rule is always used as
14 the standard.
15 Q How often is the information in the
16 Inventory Update Rule revised?
17 A Information is revised every four years,
18 . currently, unless that changes.
19 Q And are there any other sources you could
20 use to get that information that's provided by the
21 IUR? ;
22 A Not for discrete organic chemicals,
23 because that's the only reliable source of not only
24 production information, but plant-site information, as
25 well. • •
112
\
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1 Direct - Walker 120
2 Q Could you explain how often the ITC or
3 individual members of the ITC might have reason to
4 look at the data on testing of chemical substances?
5 A I can tell you, from personal experience,
6 I look at the data base established by the Inventory
7 Update Rule two or three times a week, and many times
S this is in response to a question from agencies that
9 are on the ITC; oftentimes it's in response to
10 examining chemical groups and determining whether the
11 groups are commercially significant.
12 Q If a particular company did not submit a
13 Form U report as to Chemical A, and the ITC did some
14 . screening and/or review of that chemical and had some
15 decision-making activity, would the ITC have any
16 interest, after that point of decision-making, in that
17 data that was not reported?
18 A' Yes, in general, they would, and I think
19 it is important to understand the processes that the
20 Committee uses, in order to answer that particular
21 question. When chemicals are screened for ITC
22 consideration, we basically look at about 36,000
23 discrete organic chemicals produced in the United
24 States. This excludes polymers and reaction mixtures
*3 • and oiher chemical groups more difficult to
113
lat I
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1 Direct - Walker 121
2 characterize and to test.
3 When we screen these chemicals, the
4 primary factor we use is production volume. Then,
5 , for those chemicals that are passing that initial
6 screening, they are reviewed. The information that's
7 used there from the Inventory Update Rule is
8 plant-site information, numbers of plant sites, and
9 locations of plant sites. If the Committee then
10 decides that there is data needed for those particular
11 chemicals that are reviewed, they are then considered
12 further and programs recommended to the Administrator
13 of the U. S. Environmental Protection Agency for
14 chemical testing.
15 So, that's, in essence, how we use the
16 information, and yes, information would be important.
17 Q In general, then, could you summarize
18 nature of the use of the IOR data by the ITC?
19 A Yes, I could. The Inventory Update Rule
20 data that is used by the ITC to provide a significant
21 source of production data, it is the only recent and
22 reliable source of production data that the
23 Interagency Testing Committee has available to it, and
24 it is, as Congress intended, one of the key, if not
25 the key factor used by the Interagency Testing
mt.
» the I
114
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UNITED STATES
ENVIRONMENTAL PROTECTION AGENCY
BEFORE THE ADMINISTRATOR
In the Matter of
OUHLOCn CO., IMC. (THE),
Respondent
Docket Ho. ZZ T8C*-PCB-t2-022S
Toxic Substances Control Act. Where respondent failed to
comply with tvo orders of the Administrative Lav Judge requiring
respondent to (1) show cause why it had not provided complainant
with a counter offer and with information regarding proposed
supplemental environmental projects as alleged in the status report
and to (2) shov cause why an order on default should not be taken
against it for failure to respond to the first order, respondent
was found to be in default pursuant to 40 C.F.R. f 22.17 to have
admitted the violations charged, and assessed the full amount of
penalty proposed in the complaint.
OBDKB OH D
By: Prank w. Vanderheyden
Administrative Lav Judge
Dated: February 3, 1994
For Complainant:
Richard J. tfeisberg, Esquire
Assistant Regional Counsel
U.S. Environmental Protection
Agency, Region II
26 Federal Plaza
New York, New York 10278
For Respondent:
NET!
Lynne A. Monaco, Esquire
Nixon, Hargrave, Devans & Doyle
Clinton Square
P.O. Box 1051
Rochester, New York 14603
115
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2
INTRODUCTION
This proceeding was initiated under section 16 (a) of the Toxic
Substances Control Act (TSCA), 15 U.S.C. § 2615(a), by issuance of
a complaint on December 20, 1991, charging respondent, The Gunlocke
Company, Inc. (respondent) , with violations of TSCA and regulations
promulgated thereunder. An answer to the, complaint was served on
February 7, 1992. The answer, in paragraph 24, included a
purported motion to dismiss Count 2 of the complaint. The motion
to dismiss Count 2 was denied on March 19, 1992. Complainant and
respondent each served a prehearing exchange on August 3, 1992.
Respondent's answer and prehearing exchange contested the
amount of penalty sought and requested a hearing. The answer
admitted in paragraph 12 that respondent had transformers at its
facility during 1978-1988 that may have contained PCBs. The answer
also admitted in paragraph 15 that respondent cannot locate records
of inspection for its transformers for the time period of April
1983 through September 1984. The answer otherwise specifically
denied many of the allegations in the complaint.
Count 1 of the complaint charged respondent with failure to
maintain records of quarterly inspections and maintenance history
for two PCS transformers, in violation of 40 C.F.R.
§ 761.30(a)(1)(xii). Count 2 of the complaint charged respondent
with failure to compile and maintain annual documents on the
disposition of its PCBs and PCB Items, in violation of 40 C.F.R.
§ 761.180(a). A civil penalty in the amount of $54,600 was sought
by complainant.
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3
FINDINGS OP FACT
Respondent owns and operates a facility located at One
Gunlocke Drive, Wayland, Mew York 14572. Respondent is a "person"
as that term is defined in 40 C.F.R. § 761.3.
Following the issuance of the complaint, the natter was
assigned to the below Administrative Law Judge (ALT) on March 11,
1992. By order dated March 19, 1992, the parties, failing
settlement, were directed to exchange certain prehearing
information consisting of witness lists, documentary evidence and
arguments supporting their respective cases no later than May 19,
1992. By oral motion, complainant sought and received from the ALJ
extension of the prehearing exchange deadline until August 3, 1992.
Complainant and respondent then filed their prehearing exchanges on
August 3, 1992.
Settlement negotiations ensued. According to complainant's
status report of November 3, 1992, respondent agreed during the
settlement discussion to soon provide complainant with a counter
offer and with additional detailed information, including
summaries, of proposed supplemental environmental projects, which
information was not forthcoming. On November 27, 1992, respondent
was ordered to show cause why it had not provided complainant with
the promised counter offer and information regarding proposed
supplemental environmental projects. Respondent never replied to
the order. On January 11, 1993, respondent was ordered to show
cause why an order on default should not be issued against it for
failure to respond to the order served on November 27, 1992. This
117
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4
was sent by certified mail, with a return receipt shown in the
file. Respondent failed to respond to the order of January 11,
1993. On March 4, 1993, an order was issued directing complainant
to submit, within 35 days, a draft of a proposed order on default
against respondent for review, possible revision and signature by
the ALJ. A copy of this order was sent to, respondent by certified
mail, with a return receipt shown in the file.
On April 27, 1993, complainant notified the ALJ and respondent
that the Environmental Protection Agency (EPA) was reviewing this
matter to determine where there have been lapses or other problems
in certain information collection request approvals granted by the
Office of Management and Budget under the Paperwork Reduction Act
(PRA). In a status report dated August 19, 1993, EPA determined
that the violations alleged in the complaint were not impacted by
the PRA.
CONCLUSIONS OF LAW
Pursuant to section 16(a) of the Toxic Substances Control Act
(TSCA), 15 U.S.C. § 2615(a), complainant has the authority to
institute enforcement proceedings concerning violations of
regulations promulgated pursuant to section 6(e) of TSCA, 15 U.S.C.
§ 2605(e), and set forth at 40 C.F.R. Part 761. Respondent's
answer to the complaint does not raise any questions which could
support a decision that complainant has failed to establish a prima
facie case, or justify the dismissal of the complaint.
An examination of the prehearing exchange documents submitted
by complainant buttresses the allegations in the complaint that
118
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5
respondent (1) failed to maintain records of quarterly inspections
and maintenance history for two PCB transformers and (2) failed to
compile and maintain annual documents on the disposition of its
PCBs and PCB Items. Complainant has established a prima facie case
to support the allegations in the complaint that respondent has
violated 40 C.F.R. § 761.30(a)(1)(xii) and 40 C.F.R. § 761.180(a).
Respondent's failure to comply with the order of November 27, 1992
and its failure to show good cause amounts to a default and
constitutes an admission of all facts alleged in the complaint and
a waiver of a hearing on the factual allegations. 40 C.F.R. §
22.17(a).
ULTIMATE CONCLUSION
TSCA specifies that in assessing a penalty the Administrator
shall take into account the nature, circumstances, extent and
gravity of the 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. Section 16(a)(2)(B) of
TSCA, 15 U.S.C. § 2615(a)(2)(B). Respondent by its default,
however, has waived the right to contest the penalty which shall
become due and payable without further proceedings.
The penalty proposed in the complaint is $54,600, comprising
$52,000 for Count 1 and $2,600 for Count 2. This penalty amount is
consistent with the provisions of 15 U.S. C. § 2615(a) and the
Polychlorinated Biphenyls (PCB) Penalty Policy of April 9, 1990.
119
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The gravity of the alleged violations of TSCA, including the
actual or potential harm to humans and the environment resulting
from respondent's purported illegal conduct, is incorporated within
the scope of the terms "extent" and "circumstances" as used below.
As stated in the Guidelines for the Penalty Policy (guidelines):
'Circumstances' is used in the penalty policy
to reflect on the probability of the assigned
level of 'extent' of harm actually occurring.
In other words, a variety of facts surrounding
the violations as it occurred are examined to
determine whether the circumstances of the
violation are such that there is a high.
medium, or low probability that damage will
occur ....
Guidelines for the Assessment of Civil Penalties Under Section 16
of the Toxic Substances Control Act; PCB penalty Policy, 45 Fed.
Reg. 59,770, 59,772 (1980) (original emphasis). The guidelines
further specify that:
•Gravity1 refers to the overall seriousness of
the violation. As used in this penalty
system, 'gravity' is a dependent variable,
i.e., the evaluation of 'nature,' 'extent,'
and 'circumstances' will yield a dollar figure
on the matrix that determines the gravity
based penalty.
Id. at 59,773.
The Guidelines also provide the following means of determining
the gravity of illegal conduct:
The probability of harm, as assessed in
evaluating circumstances, will always be based
on the risk inherent in the violation as it
was committed. In other words, a violation
which presented a high probability of causing
harm when it was committed (and/or was allowed
to exist) must be classified as a 'high
probability' violation and penalized as such,
120
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even if through some fortuity no actual harm
resulted in that particular case. Otherwise
some who commit dangerous violations would be
absolved. Similarly, when harm has actually
resulted from a violation, the 'circumstances'
of the violation should be investigated to
calculate what the probabilities were for harm
occurring at the time of the violation. The
theory is that violators should be penalized
for the violative conduct, and the 'good1 or
'bad' luck of whether or not the proscribed
conduct actually caused harm should not be an
overriding factor in penalty assessment.
Id. at 59,772 (original emphasis).
Count 1 of the complaint alleges that respondent violated
40 C.F.R. § 76l.30(a)(1)(xii) by failing to maintain records of
quarterly visual inspections and maintenance history for two PCB
transformers, serial numbers 42782 and 42783, for the following
time periods.
October 1982 - December 1982
January 1983 - March 1983
April 1983 -.June 1983
July 1983 - September 1983
October 1983 - December 1983
January 1984 - March 1984
April 1984 - June 1984
July 1984 - September 1984
October 1984 - December 1984
Each time period enumerated above for which there is no record
of quarterly visual inspections and maintenance history constitutes
a separate violation. Under the limits on multiple violations
imposed by the penalty policy, however, complainant assessed
penalties based on only four violations under Count 1.
The penalty policy provides that the extent of a non-disposal
violation is "significant" where the amount of PCBs involved is at
121
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8
least 220 gallons but not more than 1,100 gallons. Respondent's
two PCB transformers contained a total of about 851 gallons of
PCBs.
The penalty policy also provides that the circumstance level
of a major use violation is 2. A major use violation is defined in
the penalty policy as N[f]ailure to inspect PCB Transformers or to
keep records of such inspections."
The circumstance 2 matrix level is based on the probability
that respondent's alleged illegal conduct is likely to cause
damage. This matrix level also reflects alleged violations which
the EPA considers to be the most likely to result in improper
disposal. Furthermore, the circumstance 2 matrix level reflects
that respondent's alleged violations seriously impair the EPA's
ability to monitor (data-gathering) or evaluate chemicals (hazard
assessment).
Under the gravity-based penalty matrix, the penalty amount for
a violation that is circumstance level.2 and of significant extent
is $13,000. The total assessed penalty for the four violations
cited under Count 1 is therefore $52,000.
Count 2 of the complaint alleges that respondent violated
40 C.F.R. § 761.180(a) by failing to develop and maintain annual
documents on the disposition of respondent's PCBs and PCB Items for
\
the period July 2, 1978 through December 31, 1978 and for the years
1979 through 1988.
Each time period enumerated above for which annual documents
were not developed and maintained constitutes a separate violation.
122
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9
Under the limits on multiple violations imposed by the penalty
policy, however, complainant assessed penalties based on only two
violations under Count 2. These violations are for (1) 1988 and
(2) the years 1987 and earlier.
The penalty policy provides that the extent of a non-disposal
violation is "significant" where the amount of PCBs involved is at
least 220 gallons but not more than 1,100 gallons.
The penalty policy also provides that the circumstance level
of a minor recordkeeping and manifesting violation is 6. A minor
recordkeeping and manifesting violation is defined in the penalty
policy as "the occasional omission of minor data due to clerical
error, or partially missing records where the person responsible
can substantiate the correct records upon request." Complainant
assessed the alleged violations under Count 2 as circumstance level
6, based on respondent having provided complainant with
reconstructed annual document logs for the pertinent time periods
prior to issuance of the complaint.
The circumstance 6 matrix level is based on the probability
that there is a small likelihood that damage will result from
respondent's alleged illegal conduct. This matrix level also
reflects alleged violations in which the EPA considers the risk to
the environment and human health to be minimal. Furthermore, the
circumstance 6 matrix level reflects that respondent's alleged
violations impair the EPA's ability to monitor (data-gathering) or
evaluate chemicals (hazard assessment) in a less than important
way.
123
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10
Under the gravity-based penalty matrix, the penalty amount for
a violation that is circumstance level 6 and of significant extent
is $1,300. The total assessed penalty for the two violations under
Count 2 is therefore $2,600.
ORDER
IT ia ORDERED, pursuant to section 16(a) of TSCA, 15 U.s.c.
§ 2615(a), that respondent, The Gunlocke Company, Inc., be assessed
a civil penalty of $54,600.^
Payment of the full amount of the penalty assessed shall be
made by forwarding a cashier's or certified check, payable to the
treasurer of the United States, to the following address within
sixty (60) days after the final order is issued. 40 C.F.R.
§ 22.17(a).
EPA - Region II
Regional Hearing Clerk
P.O. Box 360188M
Pittsburgh, PA 15251
Pursuant to 40 C.F.R. § 22.17(b), this order constitutes the
initial decision in this matter. Unless an appeal is taken
pursuant to 40 C.F.R. §22.30, or the Administrator elects to
review this decision on her own motion, this decision shall become
the final order of the Administrator. 40 C.F.R. S 22.27(c).
pQ^ V ^^\&^^>*^*9^^^^^+
Frank W. Vanderheydenf
Administrative Law Judge
r^i^^^ «i K*atA
Dated:
124
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INETI
NATIONAL CNFORCCMCNT TWAMMQ *S' 11 UTg
(Sup OpuuOttj
NOTKEi 1hfc opinion to wbjeci » formal rental before
puMtadon, tadcn m raquened IB notify tb* Emtronmeanl
Appok Boird, U4. EnviroaiBeoal Proceoiaa Aftnqr, VtabJngHO,
O.C 30440, of «f typoptpbioa c» other formal crron, la enter dm
> OMJT be made before pub&adoa.
BEFORE THE ENVIRONMENTAL APPEALS BOARD
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C
In re: )
)
Burlington Northern Railroad ) CAA Appeal No. 93-3
Company )
)
Docket No. CAA vm-92-12 )
[Decided February 15, 1994]
FINAL DECISION AND ORDER
via/ App»al9jti4gf* Na*ty B,
L McCattttm, and Edward E. Jtefcfc.
125
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BURLINGTON NORTHERN RAILROAD COMPANY
CAA Appeal No. 93-3
FINAL DECISION AND ORDER
Decided February 15, 1994
Syllabus
broufhc under Section 113(4) of tte Ooa Ak ACL Ibt fefatai
i »123,000 penalty, th« manor? motem. far • ata«k vtotetion ol &•
nflrad do. The Ofllcc of XaJbroHMBt objocB to the praridtnc aAocr'i
the OOM dm wauU h»c bcm iaeuntd had tfat dcs tan toftiBr dbpoMd o£
of the pcnahjr tnoMd itace the taaitoqr ap to eanaoling in tar ****•
)• modlned to
CNOR tOt laB CQBO Of OpGA DUffUO^ inB BOVO
QB UB ^CiynU HIl^H^^ VUC& * ••MMHIM^HHMI •
B^/brv Environmental ApptaJ»Ju4gt» Nancy B.
Ronald L. McCaOum, and Ed ward E.
Opinion oftb* Board byjudgt Rrtcb,
U3. EPA Office of Enforcement (OE) hu appealed the Initial
Dedatan of the periling officer, Chief AdoUnistiadve Law Judge Genld
Hanvood. te tbJa Ckaa Air Act enforcement action. Thto appeal is
punuaatto 40 CJTJL | 2230(a) and was dmerf filed on December 16,
1993. l
L BACKGROUND
The enforcement action gMng rise to dm appeal was brought
by UA EPA Region vm against Burlington Northern Railroad Company
(BNID under Section Il3(d) of the Qean Air Act, 42 U^.C f 7413(d).
In to complaint, die Region sought a penalty of $65,530 for alleged
violations of die Montana State Implementation Plan, arising from the
open burning of creosote-treated railroad ties. A bearing on the alleged
, SuribiftOA Northern Railroad CompHqr. fifed * nodee of
HKiiil on Ptnrtrtirr yt. im. "^lirti —u 1iiiriTTJ ir —!—Y
1994).
127
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2 BURLINGTON NORTHERN RAILROAD COMPANY
violations was hdd in Helena, Montana, on June 15-16, 1993, and an
Initial Decision issued on November 24, 1993. In his Initial Decision,
Judge Harwood found Respondent liable for the violations but reduced
die penalty assessed to 125,000.
In arriving at this penalty amount. Judge Harwood calculated
that me "preliminary deterrence amount1 would be 125384 and diat no
upward adjustments would be appropriate. Initial Decision at 25-26.
However, based on his determination that there was only one violation
lasting one day, * he reduced this amount to die statutory maximum
of 123,000 per violation per day as provided in § 113(d)(l), 42 U.S.C.
| 7413(d)(l). U
At part of his calculation of the preliminary deterrence amount,
Judge Harwood calculated what he fete was the economic benefit to
BNRR of Us noncompliance. He stated as follows:
The EPA computed 12,212, as die economic benefit
realized by BNR from me violation. This is based on
an estimated cost of 111.08, a tie to haul die ties to an
Industrial furnace for incineration. The study from
which dito cost was derived also estimated a cost of
12.60, per He for open-burning; or a tool of $520 for
die 200 logs. The economic benefit would appear to
be die difference between die com. Consecjuendy,
dito component of die penalty is reduced to $1,692.
Id. at 23-24 (footnotes omitted). This calculation of economic benefit
is die sole Issue raised by EPA on appeal.
More spedflcally, die Office of Enforcement argues diat Judge
Harwood should not have subtracted die $520 from the $2,212 in
MtmMlrg dtt economic benefit because no credteshould be given for
illegal expenditures (here, the illegal open burning of die des). Brief
in Support of die Environmental Protection Agency's Notice of Appeal
that tince BMU burned ten
hm. the bunting of dw MI pto
Otditaa at 22-25. tb« IcatM did not appal «hto
128
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BURLINGTON NORTHERN RAILROAD COMPANY 3
of Initial Decision (OE Brief) at 5-8. OE thus argues diat die economic
benefit component of die penalty should be recalculated as 12,212.
BNRR opposes this recalculation. BNRR Brief in Opposition to EPA's
Notice of Appeal of Initial Decision (BNRR Brief) at 2. Both parties
acknowledge diat resolution of this appeal can have no effect on die
amount of die penalty since die statutory maximum will be controlling
In any event OE Brief at 1 n.l; BNRR Brief at 1 n.l.
n. Dtscussrotf
The Initial question logically presented by dito appeal to why OE
would want to appeal an Initial Decision If die appeal can have no
effect on die outcome of the proceeding, 4*. die amount of die penalty
assessed. OB explains diat it hat filed dito appeal "because die ALJ*s
Interpretation of die statute has ramifications m every case in which an
economic benefit of noncompllance to assessed." OE Brief at ln.1. OB
further asserts diat dw ALJTs holding, if upheld, could force EPA to
chans^toairrentpc4icysadmedic«iologyfbrcdcuhttirigdieecc«omlc
benefit component of penalties. Id. at 1. OS's apparent concern to tint
tf die Initial Decision had not been appealed, It would become a final
order of dito Board under 40 CFJL | 22J7(c), assuming die Board did
not elect sua sponte, to review die decision. ' As a final order of die
Board, the Initial Decision might be dted as Board precedent in. future
Ik to not necessary, however, so address this concern direcdy or
to delve mto die exact precedential effect of an unappealed initial
decision. It to sufficient to note here diat die derision has been
appealed and nestber party has questioned whedm Judge Harwood*s
rationale respecting open burning vO4U to appcilaMe under 40 CXJL
f 22JOfB} flajny party may appeal an adverse ruling or order of die
40 CM. | 2U7(4 ptortdc*
«• wsv
efite
SMtf««« (45) dtyi after to Mtvlec upon tte pwda «*d
129
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4 BURLINGTON NORTHERN RAILROAD COMPANY
Presiding Officer •*•."). Rather, our concern Is chat the Board does
not want to be drawn routinely into parsing the language of an Initial
decision assessing a penalty when neither party has appealed the
amount of the penalty assessment. As explained below we think"tfaat
the burdens engendered by such an exercise can be avoided in this
instance without prejudice to either party, but while also eliminating
die concerns diat apparently prompted OE's appeal.
Turning to die substance of die appeal, OE argues that Judge
Harwood did not fully consider EPA penalty guidelines (including die
BEN Utfr-t Manual * and BEN Utfr't GttUU) and did not provide
specific reasons for not assessing die penalty recommended In dx
complaint. OE Brief at 3.' BNBR replies due Judge Harwood
adequately explained his penalty determination and property exercised
his discretion in calculating me penalty. BNRK Brief at 2-3. BNRS
further states that die guidelines relied upon by EPA have not been
adopted as regulations and therefore do not have die force of law, and
that neither the BEN Ustr's Manual nor the BEN Uttr't Guidt were
mentioned at die hearing or in any of die pleadings or briefs filed by
EPA. Id.v.4.
A review of die Initial Decision shows no indication diat Judge
Harwood intended to depart from die EPA's Clean Air Act Stationary
Source Civil Penalty Policy (Policy), dated October 25,1991. While he
indicated diat he was only required to consider die Policy, not follow
it, die memodology be applied clearly purported to follow die Policy.
SM Initial Decision at 22-26. More specifically, his discussion of die
economic benefit component rrplnipf how he adjusted EPA's
computation but does not indicate dm he was intending to depart from
die Policy itself. (The Policy contains no discussion of die "credit" Issue
involved In dito appeal although it does reference die BEN Uur't
Manual as establishing die memodology for calculating economic
•UN* to the mow of the computer model EPA'* cnfafcencm offidali we far
Itete 40 CJJLI 2U7(b). a pcesUteg oeter IWM coraUer uqr dvtt paulqr
ndtrtteAo. If the Pi«Uta« OOev daddct to WMH a penabr
la aaount froathe powlqr recomoMMbd to b* MNMcd In the ebmpWnt the
130
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BURLINGTON NORTHERN RAILROAD COMPANY 5
benefit.) Therefore, we conclude that Judge Harwood was intending
to apply the Policy when be calculated economic benefit.
OE contends that Judge Harwood misapplied tbe Policy and
associated guidance. BNRR does not discuss die proper interpretation
of the Policy except by noting that the EPA guidelines should not be
grren die force of law and have been widely criticized. BNRR Brief at
4.
We do not believe that dais appeal presents a particularly good
vehicle tot resolving the Issue of whether credit should be given for
nf n<1h*iirt In calculating die y^i°****c benefit component of
a penalty. Tbe posture of this case does not lend itself to having die
issue tolly briefed on both sides. Although BNtt filed a brief in
opposition, it had no monetary stake in die outcome of die appeal and
mus only a limited incentive to research and address die issue. We
believe It would be more appropriate to decide dtis issue when it is
presented in a truly adversarial context.
That said, we are still sensitive to die OFs underlying concern
about die potentially precedential nature of Judge Harwood's Initial
Decision. Therefore, we are modifying the Initial Decision to eliminate
die language providing for a credit for die costs of open burning, as
follows.
Tbe paragraph beginning at die bottom of page 23 and carrying
over to the top. of page 24 Is revised to read:
The EPA computed 12,212 as die economic benefit
realized by BNR from die violation. This is based on
an estimated cost of 111.08 a tie to haul die ties to an
industrial furnace for incineration. * Tbe study from
which this cost was derived also estimated a cost of
12.60 per tie for open-burning, or a total of 1520 for
the 200 logs. * It is not necessary to decide whether
EPA should have credited the 1520 against die 12,212
or property declined to do so since, as will be seen,
the size of the penalty will ultimately be determined by
the sanatory maximum and die penalty will thus be the
: In any event.
131
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6 BURLINGTON NORTHERN RAILROAD COMPANY
In addition, the last full sentence in the text on page 25 and the
sentence following it are revised to read:
If the same procedure is followed here, die penalty for
die size of die violator would be reduced to reflect the
adjustments previously discussed. However, this
adjusted figure, when added to die amount calculated
for economic benefit, importance to die regulatory
scheme, and lengm of time would result in a penalty
in excess of die 125,000 maximum, and mus die
preliminary deterrence amount is assessed at 125,000.
Since the changes to me Initial Decision do not affect die amount of
die penalty assessed, a 125,000 penalty is still appropriate.
m. CONCLUSION
Pursuant to die Section 113(d) of die Clean Air Act, 42 U.S.C.
7413(d), a cMl penalty of 125,000 is assessed against Burlington
Northern Railroad Co. The full amount of die penalty shall be paid
within stay (60) days of me date of service of diis decision. Payment
shall be made in full by forwarding a cashier's check or a certified check
m die full amount payable to die Treasurer, United Sates of America,
at die following address:
EPA • Region vm
Regional Hearing Clerk
P.O. Box 360859M
Pittsburgh, PA 15251
So ordered*
132
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GENERIC WITNESS TIPS
1. What's Done Is Done (you can't change the past)
2. A Witness Is Forever (you can run but you can't hide)
3. Don't Take It Personally ( even if it is )
4. Tell The Truth ("and you don't have to remember anything")
5. Listen, Pause, and Answer (i£ possible)
6. Do Not Volunteer, Do Not Volunteer (do not volunteer)
7. Be Simple (the attorney/upper management test)
8. You Are The Boss (for once)
9. Do Not Argue The Theory Of The Case (lawyer will)
10. The Record Is Cold (uh, and like, sometimes, uh, cruel)
11. Experts: Build A Pyramid (strong foundation)
133
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GENERIC WITNESS TIPS
.1. What's Done Is Done (you can't change the past)
2. A Witness Is Forever (you can run-but you can't hide)
3. Don't Take It Personally ( even if it is )
4. Tell The Truth ("and you don't have to remember anything")
5. Listen, Pause, and Answer (if possible)
6. Dp Not Volunteer, Do Not Volunteer (do not volunteer)
7. Be Simple (the attorney/upper management test)
8. You Are The Boss -(for once)
9. Do Not Argue The Theory Of The Case (lawyer will)
10. The Record Is Cold (uh, and like, sometimes, uh, cruel)
11. Experts: Build A Pyramid (strong foundation)
135
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The Environmental Corporate Counsel Report - August, 1994
Attitude Can Make A Difference
Dealing with the EPA's Enforcement Office: Some
Practical Considerations
BY MICHAEL J. WALKER
U.S. EPA, with the combined as-
sistance of the Department of Justice,
U.S. Attorney's Offices. State lead
agencies and the Federal Bureau of
Investigation, will initiate more than
5,000.separate enforcement actions
this year. These actions can .range
from indictments by grand juries for
environmental data fraud to $10.000
administrative civil complaints seek-
ing penalties for one-time instances
of non-compliance.
While the agency stands ready to
litigate and invests a great deal of
time and effort into serious prepara-
tion for litigation, the vast majority
of cases — well over 97 percent —
will settle through the negotiation of
a judicial consent decree or adminis-
trative consent order. EPA actively
encourages settlement of enforce-
ment actions, since they can effec-
tively resolve disputes over non-com-
pliance and lower transaction costs
for both EPA and the regulated com-
munitv.
Settling an enforcement
action can offer you the
opportunity — perhaps
Initially an unplanned and
unwelcome opportunity —
to develop an Improved
relationship with regula-
tory officials.
While paying a negotiated civil
penalty to the U.S. Treasury might
not seem like a good business deci-
sion at first, settling ah enforcement
action can offer you the opportunity
— perhaps initially an unplanned
and unwelcome opportunity — to
develop an improved relationship
with regulatory officials. These are
likely to be the same individuals you
will need to work with in the future.
Demonstrating a willingness to be
open with the regulators and to ac-
tively resolve non-compliance issues
in a manner that is rational, profes-
sional and solution-oriented, will
engender the good will and respect
of these same regulatory officials,
making settlement a sensible invest-
ment that can help your company.
Rather than viewing each enforce-
ment action as an unwarranted in-
trusion into your daily operations, an
environmental enforcement action
should be viewed as a critical oppor-
tunity for you to put your best foot
forward with EPA. It can be an in-
valuable opportunity for you to come
in, uninterrupted, to sell the positive
elements of your environmental
compliance program. Good will with
EPA is good for business.
In approaching settlement discus-
sions with EPA, here are practical
points to consider:
• Figure out in advance what the issues
are.
Most EPA enforcement actions are
about two things: compliance and
money. EPA, through its ten regional
offices, initiates cases when compli-
ance with federal statutes or regula-
tions is alleged to be nonexistent or
severely wanting. In the majority of
cases, the evidence clearly reveals
facts that go beyond mere allegations.
EPA will rarely bring a weak or mar-
ginal case. Frequently, EPA has evi-
dence that it is "beyond a reasonable
doubt."
If EPA has strong evidence of a vio-
lation, think twice about exaggerated
defenses that will cause the regula-
tors to question your motives, sanity
or business sense. If you have ac-
cepted the fact that you had a com-
pliance problem and have corrected
it, bring the pictures, video or pur-
chase orders to the settlement table.
EPA will appreciate your acknow-
ledgement of the problem and com-
mitment to environmental remedies.
Your actions will show good faith and
satisfy a major point on EPA's check-
list: compliance.
• Take the violation seriously, even
though the forum is administrative and
the penalty may be light.
The typical EPA administrative ac-
tion may involve a relatively modest
penalty demand (in terms of the
gross daily revenue of the facility),
and selection of an administrative
rather than district court proceeding
may suggest "informality." But it is
critical that the regulated community
approach the proceeding with the
same care and degree of concern that
it would present at formal proceed-
ings initiated by the United States
Attorney in U.S. District Court.
EPA's administrative enforcement
programs are the backbone of the
agency's'enforcement presence na-
tionwide, and refusal to cooperate in
the less formal administrative pro-
ceeding may be grounds to escalate
the matter to the Department of Jus-
tice.
Refusal to cooperate or to remedy
obvious environmental problems
may trigger more detailed examina-
tions of the facility. More important.
it can create an image: that the com-
About the Author
Michael J. Walker serves as the senior
enforcement counsel for administrative
litigation, and regional liaison in the Of-
fice of Enforcement. U.S. EPA. Previously
he served for four years as enlorcemem
counsel for toxics and pesticides, where
he supervised attorneys in the toxics liti-
gation division and ten regional offices
in the enforcement of TSCA. K1FRA.
EPCRA. and other federal statutes. The
views in this article are the author's and
not necessarilv those of the EPA.
137
-------
pany is recalcitrant and deliberately
and willfully disregards regulatory
requirements. Once a facility, a cor-
poration or key employees in a com-
pany develop a poor reputation, it
is difficult to erase that image from
the Agency's collective mental note-
book.
Enlisting the help of an
elected official to write a
letter in your favor is a bad
idea almost certain to
backfire. It signals a weak
case and can limit what-
ever discretion the agency
might have been willing to
utilize.
• Leave politics out of it.
One of the strongest signals to EPA
law enforcement staff that they have
an excellent case is that the respon-
dent or defendant has enlisted the
help of an elected official, such as a
congressman or senator, to send a
letter to the EPA administrator, ask-
ing if the matter "could be evalu-
ated." EPA. with rare exception, files
cases only when there is evidence
that is clear, convincing, obvious and
nearly irrefutable.
When a congressional inquiry is
received, the matter is marked and
highlighted for a two-week special
investigation and response. The in-
quiry will be routed to the case at-
torney and technical staff most fa-
miliar with the underlying facts for
preparation of the response letter.
Rarely is there new information that
might suggest a drastically different
outcome. But because of the addi-
tional congressional scrutiny,
coupled with historic incidents of
questionable congressional interfer-
ence. EPA is careful to handle such
cases strictly by the book. Raising
congressional concerns simply sends
a signal that the case is strong and
the respondent is seeking an unlevel
playing field.
Furthermore, congressional in-
quiries can limit whatever discretion
the agency might have been willing
to utilize in the settlement of the
Report
case. The best approach is to pursue
settlement discussions on the merits
of the individual case.
• Avoid excessive informality.
EPA personnel are public servants
and to some extent bureaucrats, iso-
lated from the world of business.
However, derogatory remarks about
the stereotypical mindless bureaucrat
are incorrect, improper and defi-
nitely counterproductive. Most EPA
staff at settlement meetings will be
lawyers, engineers, or scientists.
These college-educated technical
. professionals are committed to the
mission of protecting public heath
and the environment. Many EPA
employees are anxious to work with
Avoid These Company Disasters
Company A was charged with
manufacturing a pesticide that
failed to work as the label prom-
ised. Testing evidence was solid
and done by another agency un-
der contract to EPA. When pre-
sented with the test data, the com-
pany insisted the product worked,
and it contested each and every as-
pect of the test protocol, including
the motives and academic qualifi-
cations of the individuals who ana-
lyzed, verified and even collected
the samples. Eventually the com-
pany conceded that the product
was a failure and it had to come off
the market.
Like the motorist who gets
stopped by the sheriff with radar,
you may not wish to challenge the
calibration of the instrument if in
fact your speed is far in excess of
the posted limit. When you bring
unsupported and unsubstantiated
confrontational arguments into the
debate, you make it difficult for law
enforcement officials to trust your
word on related issues. If you are
speeding outside your home state,
the chance of meeting that same
sheriff again maybe remote. How-
ever, in the "small town" of envi-
ronmental regulation, with a lim-
ited number of EPA or state regu-
lators, why run the risk of bad feel-
ings in the future, especially where
the evidence of violation is over-
whelming?
Company B was charged with
violating PCB disposal and record-
keeping regulations. A civil penalty
was proposed and a setdement was
discussed, though it was highly con-
tested and rejected. Later, at trial,
all the violations were proved and
accepted by the judge, who
awarded a large penalty to EPA.
The company repeatedly exercised
its right to appeal and lost at every
level. The violations here were
clear cut. What point was this com-
pany trying to make? Should EPA
trust diis company in die future?
Company C was charged with
improperly disposing of hazardous
wastes. The matter was widely re-
ported in several national newspa-
pers. Prior to issuing the civil com-
plaint, EPA offered the company
an opportunity to pre-settle the
case for a negotiated sum. Starting
low, the company only meagerly
raised its settlement offer over a
two week period. It refused to raise
its settlement amount by an addi-
tional 10 percent, which EPA said
would be sufficient to setde the case
in accordance with the established
penalty policy. When pre-filing
settlement negotiations broke
down, EPA filed suit and later ne-
gotiated a settlement for nearly
three times die original proposed
settlement sum.
In setdement negotiations with
company D, EPA agreed to re-
ductions in emissions of more than
12 chemicals identified as priority
pollutants by the administrator, in
exchange for a reduced penalty.
An EPA-originated check with the
applicable state regulatory agency-
revealed dial state law already re-
quired the reductions for the same
chemicals. This episode suggested
an unfortunate departure from ve-
racity and full disclosure at the
settlement table. EPA had to won-
der if this was typical, of the
company's dealings with EPA.
M.J.W.
138
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8
The Environmental Corporate Counsel Report - August, 1994
the regulated community to get their _
facilities into compliance. Staff may
be willing to "bend the rules" if the
modification to EPA policy may ac-
tually result in accelerated compli-
ance or technical improvements that
bring about environmental benefits.
The company that comes to an en-
forcement session hostile to the
agency's mission is likely to find an
immutable bureaucrat, and as a re-
sult will lose the opportunity for a
more creative and personalized
settlement process.
• To assess the penalty demand, review
the complaint carefully.
Most cases involve paying money
as well as getting into compliance,
and the money collected for environ-
mental violations is on the increase.
Money penalties accomplish a num-
ber of important goals. They remove
the economic benefit from acts of
non-compliance. They help to level
the playing field in the business com-
munity by canceling the economic
benefit previously enjoyed by the vio-
lating company. And monetary pen-
alties, which are not tax deductible,
must be dealt with by the entity's cor-
porate structure and may require
disclosure to the SEC. Finally, pub-
licity surrounding the imposition of
monetary penalties may help deter
violations at similarly-situated facilities.
When evaluating any civil com-
plaint, be alert to the key issues: Do
the facts in the complaint accurately
support the penalty demand in the
complaint? Check the mathematics.
Do the proposed penalty figures add
up correctly?
If you have evidence of
factors that demonstrate
the penalty was incorrectly
calculated, raise it at the
first settlement conference.
But keep in mind that in the
majority of administrative
actions, EPA doesn't seek
the maximum penalty
provided for by statutes.
At the first settlement meeting,
EPA will be prepared to discuss the
penalty demand in detail. If you have
evidence or factors that demonstrate
the penalty was incorrectly calcu-
lated, raise it then. But keep in mind
that in the majority of administrative
penalty enforcement programs, EPA
does not seek the maximum penalty-
provided for by statutes. Instead,
EPA uses civil penalty policies that
propose penalties based upon the
degree of harm to the environment
or degree of deviation from the regu-
latory scheme. Unsubstantiated at-
tacks on the penalty or low ball settle-
ment counteroffers should be
avoided. .
• Actively participate in settlement con-
ferences.
EPA policy and the consolidated
rules of practice encourage informal
settlement discussions. These confer-
ences are useful, off-the record op-
portunities to present setdement op-
tions for the government's consider-
ation and so that the parties can
evaluate the relative strengths and
weaknesses of their respective cases.
At the setdement meeting, EPA will
be particularly interested in (1) a
demonstration that the facility or cor-
poration has no history of prior vio-
lations of the applicable statutes, and
(2) a candid discussion of the nature
and circumstances of the violation.
It is important to show that viola-
tions have been corrected. The fail-
ure to demonstrate that problems
have been addressed may serve as the
basis to increase a proposed penalty.
Documented efforts to address com-
pliance problems go a long way to-
ward reassuring the EPA that man-
agement is serious about correcting
deficiencies and that the problems do
not reflect hostility to the regulatory
requirements or, worse, a knowing
.disregard for the law.
Evidence that the company cannot
pay the penalty, or that paying it will
severely impair its ability to continue
its business, may persuade EPA to
decrease a penalty. Companies must
provide copies of signed federal tax
re,turns and supporting schedules in
order to bring this issue before EPA
staff.
Frequently, companies seek to
schedule settlement meetings prior
to the submission of their answer and
request for hearing. This may gain
them insight into the government's
case; so the respondent's answer will
more accurately address any per-
ceived weakness or defenses. Those
seeking to employ this course of ac-
tion should be aware that under
EPA's consolidated rules of practice
governing administrative cases, the
government as a matter of right may
amend the complaint, once, at any
time before the answer is filed. The
EPA inevitably will amend the com-
plaint in response to continued vio-
lations or recalcitrance. The
amended complaint may seek addi-
tional penalties for continuing viola-
tions, or it may reduce or eliminate
altogether the possibility of any
downward adjustment in the penalty
for "cooperation shown the govern-
ment" or "other factors as justice may
require."
One of the most frequent
impediments to effective
representation of a client
is simple failure to read
and understand the
applicable statutory or
regulatory provisions.
». Know both the applicable law and the
rules of practice.
One of the most frequent impedi-
ments to effective representation of
a client in an EPA proceeding is fail-
ure to read and understand the ap-
plicable statutory or regulatory pro-
visions, as well as the specific rules of
practice that govern the proceeding.
As has been referenced earlier, al-
though EPA has made significant ef-
forts to consolidate the rules of prac-
tice into one specific section of the
Code of Federal Regulations (40 CFR
Part 22 ei seq.). many administrative
enforcement programs have unique
procedural requirements. Agency
practitioners are at an advantage be-
cause they work with the statutes and
rules every day. Thus the infrequent
administrative practitioner needs to
be careful about reviewing EPA fil-
ing deadlines, service requirements
or other procedural rules relevant to
139
-------
these proceedings.
Arguments based upon unique
state law precedents or that a given
statute or regulation is clearly "un-
constitutional" rarely, if ever, have
merit.
• Prepare your answer thoroughly and
in the same detail that you would for
state nr district court.
The consolidated rules of practice
require that the answer state all ar-
guments which are alleged
to constitute the grounds of ,
defense, including facts
which the respondent plans
to place at issue. A careless
or inadequately drafted re-
sponse to what might be
perceived as an "Informal"
proceeding might provide
the basis for an accelerated
decision, including the im- ——«
position of the full penalty
\\he.re "no genuine issue of fact ex-
ists and the Complainant is entitled
to judgment as a matter of law."
• Offer a settlement at the initial meet-
ing — but don'/ insult the agency.
Given the volume of actions EPA
is handling these days, EPA will be
anxious to pursue settlement discus-
sions seriously and in detail at the
first settlement meeting. This is good
public policy for EPA and helps to
reduce the potential transaction costs
incurred by both the government
and the regulated community.
In addition to a tangible and veri-
fiable demonstration of compliance,
the amount of the civil penally will
probably be the major outstanding
issue on the table. The most unpro-
ductive approach to settlement dis-
cussions is to offer an unreasonably
low counter offer to the EPA penalty.
With few exceptions, where the statu-
tory maximums may be sought for
strategic reasons, civil penalties
sought by EPA will have been calcu-
lated from a published or publicly
available civil penalty policy and may
already reflect substantial mitigation
from statutory per-vit^ation per-day
maximums. L'nless y'ou have evi-
dence that the penalty is grossly mis-
calculated or vou have facts that mav
not be known to EPA. offering an
unrealistically low settlement figure
might be perceived as bad faith ne-
gotiating. Approach EPA settlement
negotiations with a recognition that
the Agency is serious about the pen-
alty amounts.
• Have the right people available to
make decisions.
In order for there to be effective
negotiation, the right parties must
meet at the negotiation table. At EPA,
Don't insult the agency with an unrealistic
counter offer. With few exceptions, civil
penalties sought by EPA will have been
calculated from a published or publicly
available civil penalty policy and may
already reflect substantial mitigation from
statutory per-violatlon per-day maximums.
compliance will leave only the issue
of money for discussion: To ensure
that compliance or technical issues
are adequately dispensed with, it will
be necessary to have reliable, cred-
ible technical professionals and evi-
dence, photographs, videos or affi-
davits on hand to verify compliance.
In writing about EPA's administra-
tive adjudication authorities, Gerald
Harwood. EPA's former chief admin-
istrative law judge, has noted: "The
Agency can only be effective if the
public has confidence in
___,_ the process, a confidence
created by the conviction
that they have been
treated fairly and that the
outcome is reasonable,
even though they may be
unhappy about the ulti-
mate judgment."
while staff attorneys and technical
professionals have some latitude and
authority to bind the agency, their
authority is limited to representing
what the division or office director
will agree to do. Except for unusu-
ally large or unique cases, it is not
realistic to expect that the agency hi-
erarchy will be able or willing to par-
ticipate in detailed settlement nego-
tiations. EPA staff are limited by the
parameter of individual penalty poli-
cies and accordingly must negotiate
within those parameters.
Defendants or respondents
to EPA enforcement pro-
ceedings are advised to
bring appropriate-level
personnel to the settlement
table In an effort to ascer-
tain early what it will take to
settle the case.
Defendants or respondents to EPA
enforcement proceedings are ad-
vised to bring appropriate-level per-
sonnel to the settlement table in an
effort to ascertain early what it will
take to settle the case. Where com-
pliance and monev are frequently the
conditions at issue, establishing that
the company is in compliance or on
a schedule to achieve and maintain
^^__^_ Fairness and an open
mind is something we all
expect from our judicial system.
Treating companies and individuals
fairly and with respect is an impor-
tant goal for the administrator and.
for managers of EPA's law enforce-
ment program. EPA staff, in rare oc-
currences, must be reminded to re-
spect the concerns and interests of
the regulated community. At the
same time, however, it is critically
important that the regulated com-
munity approach EPA personnel
with a level of respect for the tough
job and frequently competing de-
mands and priorities that face agency
personnel.
Corporate officers or managers
who signal subordinates to fight and
challenge every aspect of even the
most straightforward case are ad-
vised to rethink this philosophv. Ap-
proaching EPA enforcement officials
with a problem-solving and coopera-
tive attitude can. build a strong rela-
tionship with the Agency. Respect
garners respect, just as trust fan build
trust.
An enforcement proceeding.
though potentially an unexpected
and unpleasant interruption of your
normal course of business, can serve
to give you the opportunity to
present your best case and your best
eco-image to EPA.
140
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ENVIRONMENTAL JUSTICE
Challenges & Opportunities
WHAT IS ENVIRONMENTAL JUSTICE?
WHAT IS ENVIRONMENTAL INJUSTICE?
ENVIRONMENTAL JUSTICE IS A NATIONAL & AGENCY PRIORITY
ACHIEVING ENVIRONMENTAL JUSTICE THROUGH
LAW ENFORCEMENT IS BOTH A GOAL and RESPONSIBILITY
A. Introduction
All people, regardless of economic status, race or ethnic origin are exposed to a
variety of environmental contaminants and pollution as the result of life in a complex,
technological society. Statistically, minority groups, particularly those living in
economically depressed areas tend to get a disproportionately larger share of negative
environmental impacts. This is a well documented problem. EPA is committed to
providing special attention to identifying and resolving these environmental problems
in areas of significant concern. All EPA employees can play an important part in
identifying and resolving environmental justice issues.
B. The Problems Are Real
Several national studies1 have documented that people of color and low income
1 See for example: United Church of Christ Commission for Racial Justice and Public
Data Access, Inc. "Toxic Wastes and Race in the United States: A National Report on the
Racial and Socioeconomic Characteristics of Communities with Hazardous Waste Sites"
(New York, NY: United Church of Christ Commission for Racial Justice, 1987); Goldman,
Benjamin and Fitton, Laura. "Toxic Wastes and Race Revisited;" Center for Policy Alternatives;
National Association for the Advancement of Colored People and the United Church of Christ
Commission for Racial Justice, 1994.
141
-------
are more likely to live in communities with environmental problems that affect their
health and welfare. African-American males had a 33% higher death rate from cancer
than Caucasian males; African-American females had a 16% higher death rate from
cancer than Caucasian females.2 Among urban children five-years old and younger,
the percentage of African-Americans who had excessive levels of lead in their blood far
exceeded the percentage of Caucasians at all income levels. For families with incomes
of less than $6,000, 68% of African-American children and 36% of Caucasian children
had unsafe blood lead levels. In families earning more than $15,000, 38% of African-
American children and 12% of Caucasian children had lead poisoning.3
The location of industrial facilities and hazardous waste sites appears to have a
direct correlation to a variety of health problems found in minority and low-income
groups. See Attachment A.4 The decision to open or operate a facility in areas
occupied by low income or minority populations appears to reflect a number of
economic considerations that range from lower land values to a perception that there
will be lower community resistance and a lack of financial resources of low income
communities, which can lessen the potential for litigation or permit challenges.
Finally, there is evidence that wealthier or more educated communities may have
better access to informal decision making networks in state government.5
Additional, complicating factors that have been identified suggest that lower
income people appear to be generally less well informed about environmental health
issues; may (often) lack adequate health care; may have inadequate or substandard diets
or nutrition and may be more likely to have stressful and healthy lifestyles,6 making
these people, particularly children, more vulnerable to the adverse effects of
2 Collin, Robert W., "Environmental Equity: A La\v and Planning Approach to
Environmental Racism." 11 Virginia Environmental Law Review. 501 (1992).
3 Id. At 501-502.
4 "Zip Codes With Commercial Hazardous Waste Facilities and Above Average Percent of
People of Color." Figure 2, "Toxic Wastes and Race Revisited" Center for Policy Alternatives;
NAACP and the United Church of Christ Commission for Racial Justice, 1994. Map and data
prepared by Claritas, Inc.
*Id At 512.
6 Sexton, Kenneth, "What's Known. What's Not. Cause for Concern." Vol. 18, No. 1
EPA Journal, March/April, 1992).
142
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environmental contaminants.
C. The Quest for "Equality" May Cause "Inequality"
While our Declaration of Independence and Constitution clearly support
"Equal Protection Under the Law"7 and "All Men8 Are Created Equal" we know from
history that these principles have not always had full implementation throughout all
levels of society. EPA9, though striving to protect all people10 (including, but not
limited to plants, birds, mammals, insects, scenic vistas", endangered species, etc.)
equally12 from the harmful and negative effects of pollution and environmental
contamination has engaged in some practices that may have lead - inadvertently - to a
failure to adequately address problems in environmental justice communities. One
example is the "neutral inspection scheme" employed by some programs to identify
candidates for inspection. While we should take pride in out efforts to protest all
people equally -we can not allow our desire for "equal protection under the law," to
ignore the harsh reality that there are clearly unequal impacts and unequal effects on
human populations within our jurisdiction. We must put a special and deliberate
emphasis on the adverse impacts on people impacted by pollution.
In February 1994, President Clinton issued an Executive Order on
Environmental Justice13. This directive, to all federal departments and agencies,
7 Carved in stone above the Supreme Court.
8 Broadly construed over time, through enlightenment and court orders to include women
and minority groups. .
9 From time to time it is worth acknowledging that EPA stands for "environmental
protection agency".
10 Without regard to race, age, religion, national origin, gender, sexual orientation, marital
status, political persuasion; citizen or non-citizen, etc.
11 Note, for example, the positions taken by EPA under the Clean Air Act and NEPA to
protect the Grand Canyon arced from the harmful effects of air pollution on scenic vistas in the
national park.
" Recognizing, of course, limitations established by the budget*
13 See Executive Order 12898; February 11, 1994, "Federal Actions To Address
Environmental Justice in Minority Populations and Low-Income Populations"
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mandates "to the greatest extent practicable", that EPA and other federal agencies
achieve environmental justice as part of our mission. EPA was directed by the
President to serve as an example for the rest of the government. At EPA we do this by
identifying and addressing the disproportionately high and adverse human health and
environmental effects on minority and low income populations and develop programs
and strategies to promote environmental justice.
The Office of Enforcement and Compliance Assurance has adopted an action
plan14 designed to:
• Promote increased compliance rates in minority and low-income communities;
• Ensure that all federal agencies consider environmental justice in the NEPA
process;
• Target efforts to achieve pollution prevention at facilities that have
environmental justice concerns;
• Target enforcement actions in communities disproportionately exposed to
environmental stresses;
• Increase the use of innovative settlements in minority and low income
communities
• Use appropriate enforcement mechanisms to assure timely and effective
cleanups that incorporate minority and low-income community concerns;
• Vigorously enforce laws controlling export of wastes and hazardous substances
to developing countries;
D. What Role Can You Play? What Can You Do?
The reality must meet the rhetoric. As environmental protection attorneys and
technical professionals it is critical that we be responsive to the public; their
expectations; and that we look for ways to promote "justice" throughout our
activities.
FIRST: LISTEN & LEARN: What are affected populations concerned about?
Affected minority populations have a variety of concerns. Although it is
14 See, for example, Section 13 of Environmental Justice Training for Enforcement
Personnel: National Enforcement Training Institute; December, 1996.
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simplistic and even unfair to try to generalize,ls past experience demonstrates some
geographic, cultural, economic and sociological patterns and EPA staff should look
for potential impacts in these areas:
African-Americans, particularly in urban areas, have faced high potential lead
exposure and debilitating ill effects from air and water pollutants, particularly in urban
areas with antiquated water treatment and distribution systems. Toxic pest control
misuse in Cleveland- area apartments resulted in a CERCLA response action to protect
the health and welfare of the affected citizens.
Hispanics, especially the large population of 500,000 involved in manual farm
labor, have face high levels of pesticide exposure and potential toxic effects from
untreated drinking water.
Native Americans have faced a variety of problems from improperly managed
radioactive wastes on federal lands and reservations;; contamination of water resources,
and degradation of hunting and fishing areas used for subsistence wildlife
consumption.
Asian-Pacific Americans have faced a variety of impacts from water and air
pollution. Immigrant laborers from the Phillippines were involved in PCB and
asbestos cleanup activates without any protective equipment.
All minority and low income groups face potential occupational exposure.
SECOND: ACT RESPONSIBLY, but ACT
To ensure that EPA (and you) is doing its part to fulfill the Executive Order
and Agency commitment, it is essential that we carefully assess opportunities that
address disproportionate impacts on minority and low income populations.
1. When the phone rings - answer it! If it is a citizen calling with a question or
concern about a potential problem, listen carefully and actively. Citizen callers may
not know the technical "EPA-speake" cost-benefit analysis considerations or even have
a fax machine or Internet mail box. They may be raising concerns of life and death
15 Note: in no way are these meant to be exclusive impacts on any particular minority or
low income population; they are offered as examples of potential or typical exposure patterns.
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importance. Be patient. Take the time to give them some "compliance assistance."
2. When looking for targets for inspection, be sure to use IDEA, EPCRA TRI16 and
U.S. Census Data base information to identify facilities in low income or minority
neighborhoods. Make sure these facilities are incompliance; on a schedule to get into
compliance. If they can't or won't get into compliance, get the key to the front door.
3. Look for opportunities to meet with citizen groups and community leaders. A
number of Regions have developed excellent programs that do this. Some problems
that may be identified in meetings with community leaders like jobs, drugs and
homelessness are beyond the statutory mandate of EPA. These discussions, however,
can lead to a greater understanding of the problems confronted in low income and
minority communities.
4. Actively use the EPA's Policy on Supplemental Environmental Projects; Policy of
Incentives for Self-Auditing; Small Business Policy and related guidance to advance
and enhance settlement negotiations. Remember, most EPA statues and agency
guidance require EPA to consider "other factors as justice may require" in assessing
civil penalties. Use impacts on affected communities as a factor in settlement
negotiations. Work conscientiously to develop settlements that:
(a) achieve compliance; (b) recover economic benefit;
(c) cleanup pollution; (d) address permanent pollution prevention solutions
(e) return something to the community that has endured the non-compliance.
5. Be a patron, but don't patronize. Many citizens have become cynical by a
perception that "the government" is not responsive. Your plate may be full, but their
plate may be empty and they may be fearing for their health and safety. Listen
conscientiously. Tell the truth. Not every complaint or situation will result in an
enforcement action - but your ability to listen and explain what is or is not possible
will go a long way toward creating a fair dialogue with the public.
6. Take personal and ethical pride in your work.
7. Follow up. If you promise to call or look into a complaint; do it.
16 See for example: The Federal Toxics Release Inventory: An Important Tool in
Identifying Neighborhood Risks From Chemicals: Walker & Mohtadi, 1997.
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Figure 2
ZIP codes with commercial hazardous waste facilities
and above average percent people of color
New York. NY
Philadelphia. PA
Washington O.C.
* ZIP Codes w/commercial hazardous
waste lacililies and above-average percent people
ol color (national average lor all ZIP Codes is 14.4%)
0 ZIP Codes w/commercial hazardous
waste facilities
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