Sample of Briefs EAvironmental Appeals Board ------- August ii, 1998 Hi Alan and Leif Enclosed you will find (1) “Procedures for Coordination OE-OGC-Regions before the EAB”, (2) Region 7’s Brief and Proposed Fmdings of Fact and Conclusions of Law in Williams Pipeline Company and L & C Services, (3) Region 5’s Supplemental Brief in Hoosier Spline Broach, and (4) Region Viii’s Notice of Appeal and Bnefin H E L P E R, Inc There is no official HQ boiler plate on EAB brief wnting The briefs I have enclosed are just three examples The briefs were “reviewed” by individuals in accordance with the Coordination policy As you will see, the briefs vary in style If I can be of any further help, just let me know (202) 564-2627 ------- PROCEDURES FOR COORDINATION OE-OGC-REGIONS ENVIRONMENTAL APPEALS BOARD ------- f _IJNITED STATES ENVIRONMENTAL PROTECTION AGENCY _____ WASHINGTON DC 20460 JAN25 1993 MEMORANDUM SUBJECT: Procedures to Improve coordination before the Environmental Appeals Board FROM: Ray LudwisZeV8kCi 2 Acting General Co nS Office of General.LCOU 5el (LE— 130) Herbert H. Tate, Jr. Assistant Administrator Office of Enforcement (LE—133) TO: Regional Counsels Associate General Counsels Enforcement Counsels Attached to this memorandum are procedures which we are adopting to improve coordination among the Office of General Counsel (OGC), Office of Enforcement (OE) and the Offices of Regional Counsel (ORC) on positions taken by each of our offices before the Environmental Appeals Board (EAB). As you will recall, the EAB requested that we work together to develop these procedures. The procedures adopted reflect discussions held at the OGC/ORC management retreat in October 1992 and incorporate OE’S existing policy in this area. In addition, these procedures reflect comments received from many of you and comments received from Ed Reich Ofl behalf of the EAB. ------- These procedures will, be effective immediately. Under the procedures, each of you responsible for matters which go before the is requested to designate at least one person to serve as a contact person to aide in the coordination process established by the procedures. The option of whether to designate one or more persona to fulfill all these functions is up to you. By February 12 1993 , please identify the person(s) you are designating to coordinate matters related to permit appeals to Susan Lepow (FAX 202—260—7702) and the person(s) you are designating-to coordinate matters related to enforcement appeals to Fred Stiehl (FAX 202—260-4201). They will compile a complete list of these contacts and distribute them to you. We believe that these procedures will go a long way toward improving coordination among our offices on positions taken before the EAB. We appreciate the commitment each of you is making to improve the Agency’s administrative litigation practice. These procedures commit our offices to evaluate our success in implementing these procedures and accomplishing our objectives in approximately six months. We encourage you and your staff to actively participate in this process. Attachment cc: Environmental Appeals Board Judges Firestone, McCallum and Reich Regional Administrators Assistant Administrator for Water Assistant Administrator for Air and Radiation Assistant Administrator for Solid Waste and Emergency Response Assistant Administrator for Prevention, Pesticides and Toxic Substances ------- ,. I s _ I D I7’l, — UNITED STATES ENVIRONMENTAL PROTECTION AGENCY WASHINGTON D C 20460 FROM: TO: before the Environmental Appeals Judges Nancy B. Firestone, Ronald L. McCallua and Edward E. Reich MEMORANDUM SUBJECT: Procedures to Improve Environmental Appeals Ray Ludvisaevski Acting General Counsel Office of General Coun el (LE—130) Herbert H. Tate, Jr. Assistant Administrator Office o Enforcement ( 12-133) Attached to this memorandum are procedures which we are adopting to improve coordination among the office of General counsel (OGC), Office of Enforcement (OE) and the offices of Regional Counsel (ORC) on positions taken by each of these offices before the Environmental Appeals Board (EAB). These procedures were developed directly in response to a request from the EAB and incorporate comments made by Ed Reich Ofl behalf of the EAB. Thee. procedures will be effective immediately. We are requesting that the EAB continue its practice of sending copies of all of its final decisions to the Regional Counsels, the Associate General Counsels and the Enforcement Counsels. In addition, we are requesting that, in addition to sending copies of notices to appeal permit decisions to the affected Regional counsel, the EAB send copies of these notices to the affected Associate General Counsel and Enforcement Counsel. ------- We believe that these procedures will go a long way toward improving coordination among our offices on positions taken before the EAB. These procedures commit our off ices to evaluate our success in implementing these procedures and accomplishing our objectives in approximately six months. We welcome your active participation in this process and hope that together we can improve the Agency’s administrative litigation practice. Attachment cc: RegiQnal Counsels AssoCiate General Counsels Enforcement Counsels ------- OFFICE OF GENERAL COUNSEL, OFFICE OF ENFORCEMENT AND OFFICE OF REGIONAL COUNSEL COORDINATION ON MATTERS BEFORE TilE ENVIRONMENTAL APPEALS BOARD Under the environmental statutes administered by the Environmental Protection Agency, the Administrator has delegated authority to decide appeals of permit decisions made by the Agency’s Regional Administrator’s and administrative penalty decisions made by the Agency’s Administrative Law Judges to an Environmental Appeals Board (EAB). The specific matters delegated:to the EAR are detailed in a final rule published in the Federal Register on February 13, 1992, 57 Fed. Req . 5320. At the request of the EAB, the Office of General Counsel (OGC), the Office of Enforcement (OE) and the Offices of Regional Counsel (ORC) have identified ways to improve coordination on positions taken by each of these offices before the EABS The Office of General Counsel and the Offices of Regional Counsel discussed this issue at the OGC-ORC Management Retreat held in October 1992. The Office of Enforcement has had an existing policy in this area. Unless and until modified, this memorandum outlines the policies and procedures which will be followed to coordinate positions taken with respect to permit appeals and appeals of enforcement cases (including significant interlocutory appeals) before the EAB. Each Regional Counsel, Associate General Counsel and Enforcement Counsel responsible for matters which go before the EAB will designate at least one individual to serve as a contact person to aide in the coordination process established in this memorandum. A. Permit ADDeals The EAB sends notice to the Regional Counsel when a notice of appeal of a permit is filed; the Region has 45 days to file a response with the EAB. We will request the EAB to send a copy of this notice to the affected Associate General Counsel and Enforcement Counsel, a. well. After the notice of appeal is received by ORC/OGC, staff in ORC will consult with OGC staff about each case. The discussions will focus on any important issues raised by the case. Each case will be handled in one of three ways: (1) OGC will sign the response as co-counsel and will have written or participated in writing the response; (2) OGC will appear as “of counsel” on the response and OGC will have reviewed the response; or (3) OGC will not be on the response and though ORC will have coordinated with 0CC, OGC will not necessarily review the response. OGC and ORC will both need to consent to the appropriate level of handling for each case. Staff in each office will consult with their supervisors, as appropriate. Any disagreements between the Regional counsels and the Associate ------- General Counsels will be elevated to the appropriate Deputy General Counsel. It is important to coordinate positions taken in one case with other Regions and with the Headquarters program office. Significant enforcement issues may also be raised in the context of certain permit appeals. In appropriate cases 0CC and ORC staff need to coordinate with OE, other Regions and their respective program offices before a response is filed. Upon receipt of a notice of appeal, the Enforcement Counsel or OE Branch Chief will identify any enforcement issues that should be addressed in the appeal. In most cases it may be adequate for OE and other Regions to be informed of positions taken before the EAB through the monthly OGC/OE/ORC branch chief conference calls. This will be a standing agenda item for the monthly calls; the ORC branch chief will generally be responsible for leading this discussion. It is important for the Regions to coordinate as early as possible with all Headquarters offices on the issues raised in permit appeals and requests for evidentiary hearings so that EPA will be advancing consistent positions. Some of this coordination needs to be initiated by the program offices and some by ORC. B. Enforcement ADDea1S There is less time for the Agency to decide its position on appeals of enforcement cases. Pursuant to 40 CFR section 22.29(a), enforcement appeals typically obtain as a matter of right, and the Agency must file its notice of appeal and an accompanying brief within 20 days after service of the’ initial decision or order of the Presiding Officer. See 40 CFR section 22.30(a). ‘ In a May 3, 1989 memorandum from then Acting Assistant Administrator Edward Reich, a process was established to provide for review of adverse decisions of AU’s as well as favorable decisions that are appealed by the respondent. (See attached memorandum.) That process is still an appropriate method to provide an efficient way to identify and address important issues in a case that should be raised to the EAB. It should be noted that important legal and policy issues warranting an appeal may be raised in cases even though the Agency prevailed in the relief sought. This memorandum reaffirms the procedures of the earlier memorandum with the following modifications. 1 In appropriate circumstances, agency counsel, however, may seek leave from the EAB for extensions of time in which to file such appeals or briefs, if they can satisfy the requirements of 40 CFR section 22.07(b). Depending on the circumstances, it may be advisable to seek an extension only for the filing of the brief, rather than the notice of appeal. ------- The ORC attorneys will consult directly with the Regional Counsel (or Deputy Regional Counsel if so directed by the Regional Counsel) to discuss their recommendation as to whether EPA should appeal each enforcement case. This view should be included in the summary of the decision forwarded to the CE Branch chief, the OGC Branch Chief, and the ORC contacts. The Regional Counsels will report on decisions to appeal enforcement cases in their weekly report to Headquarters. Decisions in Headquarters cases will be reported in OE’s Weekly Highlights. As with permit appeals, each case where a decision is made to proceed with an appeal will be handled in one of three ways: (1) OE will sign the brief as co-counsel and will have written or participated in writing the brief; (2) OE will appear as “of counsel” on the brief and OE will have reviewed the brief; or (3) OE will not be on the brief and though ORC will have coordinated with OE, OE will not necessarily review the brief. The Regional Counsels and Enforcement Counsels will take personal responsibility to decide what kind of coordination is necessary with OGC before a decision is made to seek, or forego, an appeal of an enforcement case. OGC agrees to identify any generic areas where it needs to be consulted on a routine basis before a decision to appeal or not to appeal is made. C. Headauarters Assistance to EAB Subject to the prohibition on oarte communications, nothinq in this memorandum is intended to derogate the ability of OGC or CE to provide technical assistance to the EAB when the EAB deems it appropriate. As part of their participation in the review of appeals, OGC and OE should assure that any relevant policies or new regulations are brought to the attention of the Board, since Headquarters offices will often be more aware of such matters than Regional offices. D. Oral Arauments The attorney beet able to present the Agency’s position should present oral argument to the EAB. This will be decided on a case by case basis. The Board has a strong preference in favor of having a single attorney present the Agency’s argument. Nevertheless, the Board has allowed more than one attorney to divide the argument where the Agency deemed it essential for the effective presentation of its case. Accordingly, there should be an opportunity for Regional and Headquarters attorneys to argue before the Board in appropriate cases. Any disagreements between the Regional Counsel and the Associate General Counsel or Enforcement Counsel regarding who should present the oral argument to the EAB will be elevated to the appropriate Deputy General Counsel or Director of Civil Enforcement. ------- The Agency attorney(s) presenting oral argument should be able to represent to the fullest extent possible that the positions taken in argument have been coordinated with, and approved by, CRC, 0CC and OE, as appropriate. E. Decisions The EAB sends copies of all final decisions to the Regional Counsels, the- Associate General Counsels and the Enforcement Counsels. - F. Follow-uD Our success in implementing these procedures and accomplishing our objectives will be evaluated in an ORC/OGC/OE conference call in approximately six months. Attachment ------- i €d BEFORE THE ENVIRONMENTAL APPEALS BOARD UNITED STATE ENVIRONMENTAL PROTECTION AGENCY WASHINGTON, D.C. IntheMatterof ) ) WILLIAMS PIPE LINE COMPANY ) CAA APPEAL No. 97-3 ) and - ) Docket No. VII-93-CAA-112 ) L & C SERVICES, INC. ) ) Respondents ) APPELLANT’S BRIEF In support of its Amended Notice of Appeal of the Initial Decision of Mn,inctrative Law Judge Carl C. Charneski, Complainant/Appellant United States Environmental Protection Agency (hereinafter UEPA ) submits the followings. INTRODUCTION This case arose under Sections 112 and 113 of the Clean Air Act (CAA), 42 U.S.C. 7412 and 7413, when EPA Region VII filed a Complaint against the Respondents Williams Pipe Line Company and L & C Services, Inc. for violations of the CAA National Emission Standards for Hazardous Air Pollutants (NESHAP) regulations for asbestos demolition and renovation, promulgated at 40 C.F.R. 61.140 et. seq. The six count Complaint alleged that in conducting a demolition project at a refinery, Williams Pipe Line Company and L & C ------- Services, Inc. violated the work practice standard set forth at 40 C.F.R. § 61.145(c) (6) (I) that requires persons engaged in asbestos removal in a renovation or demolition project subject to the NESHAP regulations keep the removed asbestos material wet until collected for disposal. Respondent Williams Pipe Line Company entered into a Consent Agreement and Consent Order with EPA Region VII settling its liability under the Complaint and thus was not a party to the hearing or the Initial Decision in this matter. SUMMARY OF BASIS FOR APPEAL As the basis for its appeal, EPA Region VII alleges that the Administrative Law Judge erred in finding that, without the introduction of sampling data, EPA did not sustain its burden of proof as to Counts 1,11,111, and VI of the Complaint in that L & C Services, Inc. was required to adhere to the NIESHAP work practice standards for materials removed as part of the demolition project. Further, the Administrative Law Judge erred in finding that EPA did not establish friability of sanipled materials and thus did not sustain its burden of proof as to Counts IV and V of the Complaint in that such finding was against the weight of the evidence and in that L& C was required to adhere to the NESHAP work practice standard for all materials removed as part of the demolition project. REQUESTED RELIEF As a result, EPA respectfully requests the Environmental Appeals Board (EAB) 2 ------- reverse the findings set forth in the Initial Decision that EPA failed to establish that L & C Services, Inc violated the asbestos NESHAP regulations as alleged in each of the six counts of the Complaint and assess an appropriate penalty for these violations. ARGUMENT ON APPEAL I. The Administrative Law Judge erred in finding that without the introduction of sampling data EPA did not sustain its burden of proof as to Counts 1,11,111 and VI of the Compliant in that L & C Services, Inc. was required to adhere to the NESHAP work practice standard for all material removed as part of the demolition project . Section 61.145(a) of the asbestos NESHAP provides that if a demolition or renovation project includes at least 260 linear feet of regulated asbestos containing material (“RACM”) on pipes or at least 160 square feet of RACM on other facility components, the owner/operator of the project is subject to the notification requirements set forth in subsection (b) and the work practice requirements set forth at subsection (c) of that section. In applying the asbestos demolitionlrenovation standard, the Court in United States of America v. Ben’s Truck and Equipment, Inc. and P & M Cedar Products, Inc. , 25 ERC 1295, 1298-1299 (E.D. Calf. 1986) stated: This Court holds that the Act and the asbestos NESHAP provide strict liability for civil violations of their provisions. This reading is supported by the laaguage of the Act, the legislative history of the Act and cases construing the Act and emission standards promulgated thereunder. ** Strict liability is essential to meet the purpose of the Act to protect and improve the quality of the nation’s air.... Therefore, to prove the defendant is liable under the Act, Plaintiff must establish only that the minimal threshold requirements of the asbestos NESHAP have been met (e.g., defendant is the owner or operator of a stationary source; and the demolition includes 3 ------- asbestos cont2ining material on pipes or components) and that the specific criteria in the NESHAP have not been met. Defendant also concedes, as it must, that since the demolition involved asbestos containing material, it was within the regulatory scope of the asbestos NF.SHAP Furthermore, this Court finds that there is no genuine dispute that the demolition at P & M induded at least 260 linear feet of asbestos on pipes. As a consequence, this Court also finds that all of the substantive requirements of the asbestos NESHAP at issue in this action were applicable to the demolition conducted by the defendant at P & M. In United States of America v. Hugo Key and Son, Inc. , 731 F. Supp. 1135, 1141 (DR.I. 1989), a case that, like Ben’s Truck , also included violation of the requirement to keep wet until collected for disposal, the Court stated: The asbestos NESHAP requires each owner or operator of a demolition operation to comply with the work practices set forth in 40 C.F.R. 61.147, where the amount of friable asbestos materials in the facility being demolished is at least 260 linear feet on pipes or at least 160 square feet on other facility components. 40 C.F.R. 5 61.145(a). It is undisputed that the amount of friable asbestos in the buildings being demolished was at least 420 linear feet on pipes. This amount of friable asbestos was dearly in excess of the threshold quantity of 260 linear feet on pipes, thereby requiring compliance by Hugo Key with the asbestos NESHAP work practice standards. Therefore, this Court finds that all substantive requirements of the asbestos NESHAP at issue in this action were applicable to the demolition operation conducted by Hugo Key. And, in United States of America v. MPM Contractors, Inc. , 767 F. Supp. 231, 232 (D. Kan. 1990), the Court stated: In order to show liability under the NESHAP, the United States must make a mere 4 ------- two-fold showing. First, plaintiff must show that the minimal threshold requirements of NESHAP have been met. United States v. Sealtite Corp. , 739 F. Supp. 464, 468 (E.D. Ark. 1990). The minimal requirements applicable in this action are contained in 40 C.F.R. 61.145(d). Second, the government must establish that the work practice requirements of the NESHAP have not been satisfied. Sealtite, 739 F. Supp. at 468. In the instant case, the parties agree and stipulate that the three MPM projects were of sufficient magnitude to becovered by 40 C.F.R. 61.145(d) . Thus, the minimal threshold requirements of the NESHAP have been met as to these operations. The only remaining question is whether MPM satisfied the work practices requirements of the NESHAP (emphasis added). In the Initial Decision in the instant case, the Administrative Law Judge found that because sampling evidence had been introduced in each of these cases but for Ben’s Truck , that the cases “actually support L & C’s position that PLM analysis is a necessary prerequisite to establishing the presence of regulated asbestos-containing material.” Initial Decision, at 9. As to Ben’s Truck , the Administrative Law Judge found that because the Court in that case “did not mention sampling one way or the other,” that the case lends “little, if any” support to EPA’s position in the instant case. Initial Decision, at 9. The Administrative Law Judge erred in reaching such condusion. The Court in Ben’s Truck did not address the issue of whether there was sampling evidence introduced in that action. The Court found that because the demolition in that case included at least 260 linear feet of asbestos on pipes, “ (a)s a consequence. . . all of the substantive requirements of the asbestos NESHAP. . . were applicable to the 5 ------- demolition....” Ben’s Truck , supra, at 1299 (emphasis added). The Court made no distinction as to whether sampling data was introduced to trigger the substantive requirements for the regulation — the mere presence of the jurisdictional amount of asbestos was sufficient to trigger the NESHAP requirements for the demolition project . Such treatment of the project as a whole is consistent with the principles set forth in United States v. Tzavah Urban Renewal Corp. , 696 F. Supp. 1013, 1019 (D.N.J. 1988), where the Court states that the “NESHAP regulations are activated when demolition or renovation begins and remain in effect until the facility has been rid of the dangers posed by asbestos dust....” The significance of the existence of sampling data in the other cases cited by EPA both here and in its trial brief has been misconstrued by the Adrninictrative Law Judge in the Initial Decision. While the presence of such data certainly lends additional support to the position that the NFSHAP regulations, including the work practice requirements, apply to all deniolitionirenovation projects that have at least the jurisdictional amount of asbestos present, as illustrated by the Court in Ben’s Truck , supra, the substantive requirements of the regulation are triggered for the demolitionlrenovation project upon proof of the presence of at least the jurisdictional amount of RACM . 6 ------- The asbestos removal project that is the subject of this action dearly meets and substantially exceeds the threshold quantity of 260 linear feet and 160 square feet of friable asbestos material to be removed. In the notification of the planned demolition project that L & C submitted pursuant to Section 61.145(b), L & C stated that it was going to remove 128,000 linear feet of friable asbestos from pipe surfaces”, 10,000 linear feet of friable asbestos ” was to be left in place on pipe removed by dismantling and 40,000 square feet of friable asbestos ” was to be removed from vessels. Comp. Ex 1, Resp. Ex. 3,4, 5 and 6 (emphasis added). In this case, EPA’s burden of proof was two-fold. The EPA must establish the asbestos removal project met the threshold levels required by 40 C.F.R. 61.145 and that L & C violated a required work practice. Both of these burdens were met. Nowhere in L & C’s Notice and operating plan (Complainant’s Exhibit 1) did L & C indicate that it would be employing two methods of operation in the demolition project, one for RACM, and one for non-asbestos containing material. L & C did not present any evidence it knew, by location, which pipe wrap and vessel wrap was RACM and which was non-asbestos containing material. L & C presented no sampling or laboratory analysis L & C had conducted to establish the dry insulation material observed by KDHE inspector on each of the days in question was non-asbestos containing material. 7 ------- When confronted by the KDHE inspector with dry insulation residue on pipe dadding or surfaces, L & C representatives never disputed the applicability of the work practice standard to the material. In fact, when confronted on May 6, 1992, with the same dry residue on the same pipe dadding in the same location as observed on April 22, 1992, the L & C representative told the KDHE inspector the reason the residue was still there was because Mr. Bowers, President of L & C had not decided whether to dean the pipe cladding to sell for scrap, or to dispose of the pipe dadding with the residue intact (Transcript p. 133, 491-494 line 1-19 especially lines 17-19, 511). This L & C response amounted to an affirmation by L & C that the dry residue in question was regulated asbestos containng material. It was well established L & C was engaged in a very large, long term asbestos removal project. L & C was hired to remove asbestos. L & C’s notice stated it was going to be removing friable asbestos. The KDHE inspector observed dry residue on pipe cladding removed by L & C. On two of the days of violation set forth in the Complaint, the inspector sampled, and subsequent analysis showed significant percentages of asbestos content. The EPA met its burden of proof. The EPA established the project was subject to 40 C.F.R. § 61.145 and established a violation of the work practices (failure to keep wet until 8 ------- collected for disposal). The AU erred in not applying the principles of law of the cases cited by EPA to the instant case, and by failing to find EPA had met this two-step burden of proof. II. The Adniini trative Law Judge erred in finding that EPA did not establish friability of sampled materials and thus did not sustain its burden of proof as to Counts IV and V of the Complaint in that such finding was against the weight of the evidence and in that L& C was required to adhere to the NESHAP work practice standard for all materials removed as part of the demolition project . The AU next discusses the two Counts where samples were taken. He disregards all but the first sample taken on June 25 and August 28, 1992, based on testimony presented by Respondent concerning cross-contamination. The AU ignored the fact the possibility of cross-contamination was based solely on totally speculative testimony that it could occur only if the laboratory technician fortuitously happened to take a tweezer sample from the very part of the inspector’s gross sample that may have picked up fibers from the inspection’s knife blade. The AU does not discuss the fact that non-asbestos material could not be raised on analysis to 40- 60 percent asbestos by this process, especially since the analyzed sample is homogenized first, a fact fully supported on the record by the testimony. Transcript, pages 454-455, 470, 471. 9 ------- The AU then discusses the first samples taken on June 25 and August 28 which would not be subject to cross-cont2mination as even acknowledged by Respondent’s own witness. Transcript p. 470, 471, 453, 454, and 455). For these first samples, the AU turns to the issue of friability and condudes EPA did not prove the two samples were friable. This despite that on page 14 of the Decision, second full paragraph, the AU quotes testimony of the KDHE inspector who stated the sample gave no indication of containing moisture, that he couldn’t squeeze any water out of it and that it didn’t stick together . See also transcript page 165-167. If the sample didn’t stick together the sample was obviously friable because the inspector was handling the sample and exerting hand pressure. He “couldn’t squeeze any water out of it.” If the sample was not friable then, when the inspector handled the sample, it would “stick together.” (See also transcript pages 165 lines 15to21,andl66lines lto9). It is inconsistent to both reference the inspector’s testimony that the sample was squeezed and didn’t stick together and to also hold the inspector did not determine if the sample could be crumbled, pulverized or reduced to powder by hand pressure. If the sample was dry,”.. . it didn’t stick together,” and the inspector “couldn’t squeeze any water out of it,” then the sample was crumbled by hand pressure (it didn’t stick 10 ------- together). Therefore, this sample was friable. The KDHE inspector described how he collected the sample (transc ipt page 154 to 157, 160, 163 to 167, 170 to 172), that is, that he picked it up (1ranscript page 165 and 166) and it was dry, had no moisture, didn’t stick together and he couldn’t squeeze any water Out of it. The Administrative Law Judge erred in finding that EPA did not establish friability of the samples, as such finding was against the weight of the evidence. PRIMA FACIE CASE ESTABLISHED The EPA had the bu itlen of establishing a prima faoe case that the violations occurred. A prima fatie case is established when sufficient evidence is set forth to prevail until contradicted and overcome by other evidence. In the Matter of Louisiana-Pacific Corporation 2 E.A.D. 800; Black’s Law Dictionary (1979), 29 Am. Jur. 2d Evidence § 157, In the Matter of Empire Ace Insulation Mfg. Corp. , Docket No. TSCA - ASB-8a-85-0216. The EPA established a prima facie case by a preponderance of the evidence. “Preponderance of the evidence” means that the existence of the fact sought to be proved is more probable than its nonexistence. 33 Words and Phrases “Preponderance of the evidence.” See also Norma J . 11 ------- Echevarria and Frank J. Echevarria cl/b/a Echeco Environmental Services , 5 E.A.D. 626 at 637. In International Harvester Co. v EPA , 478 F. 2d 615, 642 (D.C. Cir. 1973) the Court stated There is no reason to assume in administrative proceediiigs that the proponent of any fact must establish that fact by ‘conclusive’ evidence any more than the litigant is so required in any other type of proceeding.” Furthermore, it has been held that the government can prove, by a preponderance of the evidence, the presence of asbestos based on circumstantial evidence . In U.S. v. Midwest Suspension and Brake , 824 F. Supp. 713, at 728 (E.D. Mich. 1993), the Court stated: While a positive test result for asbestos in the dust dumped into this compactor chute would prove beyond a reasonable doubt that the dust contained asbestos, a negative test result does not mean that the government, based on circumstantial evidence, cannot prove, by a preponderance of the evidence , that the dust contained asbestos. L & C presented no evidence it knew when and where it was removing asbestos- containing material and when. and where it was removing nonasbestos-containing material. 12 ------- L&C presented no evidence that it had ever done sampling and analysis of the material it was paid to remove at the refinery. L & C was paid to do an asbestos removal project . In the instant case, EPA clearly established its prima facie case by a preponderance of the evidence. Despite the introduction of numerous exhibits and the presentation of testimony of three witnesses, L & C presented no evidence to overcome the prima fade case established by EPA. “For a party to meet its burden of proof, more is required than merely creating a doubt which cannot be resolved on. . . [ the] recordr Robert G. Naumann at 6 (emphasis added). Bauer v Clark 161 F. 2d 397, at 400 (C.CA 2d 1947). Also see: In re NPDES Permits for 170 Alaska Placer Mines, More or Less , NPDES Appeal No. 79-1; Perez - Alvarez v I.N.S. , 857 F. 2d 23 at 25 (1st cir. 1988); and In the Matter of: Wego Chemical & Mineral Corporation , TSCA Appeal No. 92-4, pages 525, 526. CONCLUSION AND RELIEF SOUGHT Based on the foregoing, EPA respectfully submits that the Initial Decision of Administrative Law Judge Carl C. Charneski, issued in this matter on January 29, 1987, be 13 ------- reversed and that the EAB assess an appropriate penalty for the violations alleged in the Complaint. Of Counsel: Michael J. Walker Office of Enforcement & Compliance Assurance 14 ------- Certificate of Service I hereby certify that the original of this Appellate Brief in Support of it’s Notice of Appeal, Proposed Findings of Fact, Conclusions of Law and Proposed Order were hand- delivered to the Environmental Appeals Board, USEPA Weststory Building, 607 14th Street, N.W., 5th Floor, Washington, D.C. 20005, and that a true and correct copy of the above was mailed by first-class mail to the Regional Hearing Clerk, Region VII , and that true and correct copies of the above were sent by certified mail, return receipt requested, to the following Honorable Carl C. Charneski Acminstrative Law Judge U.S. Environmental Protection Agency Office of Administrative Law Judges (1900) 401 M Street, S.W. Washington, D.C. 20460 and D.K. Wright, Jr., Esq. Hintz and Wright Two Union Square 601 Union Street, Suite 3930 Seattle, Washington 98101 all on this day of February, 1997. 15 ------- BEFORE THE ENVIRONMENTAL APPEAL BOARD UNITED STATES ENVIRONMENTAL PROTECTION AGENCY WASHINGTON, D.C. In the Matter of ) ) WILLIAMS PIPE LINE COMPANY ) CAA APPEAL NO. 97-3 ) and ) CAA Docket No. VII-93 -CAA-112 ) L & C SERVICES, INC. ) ) Respondents ) COMPLAINANT’S ALTERNATIVE PROPOSED FINDINGS OF FACT, CONCLUSIONS OF LAW AND ORDER Preliminary Statement This case was initiated pursuant to the Clean Air Act (CAA), with the issuance of a Complaint on April 8, 1993, alleging violation of the CAA, specifically that Respondents failed to comply with CAA regulations at 40 C.F.R. 61.145(c)(6)(I) in that Respondents removed regulated asbestos containing material (RACM) from piping and vessels and failed to keep the RACM adequately wet until collected for disposal. c / 6( e c 9I/ ------- Respondent L & C Services, Inc. (L & C) filed a Motion To Require More Definite Statement on April 20, 1993. An Order denying L & C’s Motion above was issued on May 10, 1993. L & C filed an Answer on May 10, 1993. Williams Pipe Line Company (WPL) filed an Answer on May 11, 1993. Complainant and WPL reached a settlement agreement and a Consent Agreement and Consent Order was entered on September 14, 1993, after which WPL was no longer an active participant in this matter. On August 23, 1993 L & C filed a Motion for SnmmaryJudgement and Dismissal, which was treated as a Motion for Accelerated Decision. An Order denying L & C’s motion above was issued on October 6, 1995. On July 15, 1993, Complainant filed a Motion to Amend its Complaint. An Order granting Complainant’s motion above was issued on November 6, 1995. The Order also stated L & C shall file an amended Answer as provided in 40 C.F.R. 22.14(d). The Amended Complaint was filed on November 13, 1995. L & C never filed an Amended Answer. Proposed Findings of Fact 1. Section 112 of the Act, 42 U.S.C. 7412, grants the Administrator the authority to regulate hazardous air pollutants. —2— ------- 2. The Administrator established emission standards, codified at 40 C.F.R. Part 61, Subpart M, for asbestos which is a hazardous air pollutant regulated pursuant to Section 112 of the Act. These standards for asbestos and other hazardous air pollutants are called the National Emission Standards for Hazardous Air Pollutants (NESI-IAP). 3. Section 112(f)(4) of the Act, 42 U.S.C. 7412(0(4) provides that no air pollutant subject to the NESHAP may be emitted from any stationary source in violation of such standard. Section 112(d)(2) states that any design, equipment, work practice, or operational standard, or any combination thereof, shall be treated as an emission standard. 4. Section 113(d) of the Act, 42 U.S.C. 7413(d), states that the Administrator may issue an administrative order against any person assessing a civil administrative penalty of up to $25,000 per day of violation whenever, on the basis of any available information, the Administrator finds that such person has violated or is violating any requirement or prohibition of the Act referenced therein, including Section 112. 5. On March 29, 1992, the Kansas Department of Health and Environment (KDHE), Asbestos Control Section, received from L & C, a notification of an asbestos removal project to be conducted at the WPL facility in Augusta, Kansas. 6. The above notice stated 128,000 lineal feet of friable asbestos was to be removed from pipe surfaces, 10,000 lineal feet of pipe with friable asbestos left in place was to be dismantled, 40,000 square feet of friable asbestos was to be removed from vessel surfaces, —3— ------- and heaters and towers contpining 5,000 square feet of friable asbestos were to be dismantled with the friable asbestos left in place. 7. The pipe contpining friable asbestos insulation was wrapped with an outer metal jacketing which had to be removed to reveal and allow removal of said friable asbestos insulation from the pipe surfaces. 8. L & C removed said metal pipe jacketing from said pipes. 9. During the subject asbestos removal project, demolition activities took place. 10. During the subject asbestos removal project, employees of WPL were on site at the facility. 11. On or about April 9, 1992, April 14, 1992, April 22, 1992, May 6, 1992, June 25, 1992, August 28, 1992 and August 31, 1992, authorized representatives of EPA (David Branscum and Russ Brichacek, KDHE) conducted inspections of the subject asbestos removal project being conducted at the WPL facility at 215 Oak Street, Augusta, Kansas. 12. On or about April 9, 1992, David Branscum, KDHE, conducted an inspection of the L & C worksite at the Augusta facility and observed residue which he determined was dry, on metal pipe jacketing which had been removed by L & C, and was laying on the ground. 13. On or about April 14, 1992. Mr. Branscum, at the subject site, observed residue which he determined was dry, on metal pipe jacketing which had been removed by L & C, and was laying on the ground. —4— ------- 14. On or about April 22, 1992, Mr. Branscum and Mr. Brichacek, at the subject site, observed residue which they determined was dry, on metal pipe jacketing which had been removed by L & C and was laying on the ground. 15. On or about May 6, 1992, Mr. Branscum, at the subject site, observed residue which he determined was dry, on metal pipe jacketing which had been removed by L & C and was laying on the ground. Mr. Branscum determined this was the same metal pipe jacketing with dry residue that he observed on April 22, 1992. 16. On or about June 25, 1992, Mr. Branscum, at the subject site, observed residue which he determined was dry, on metal pipe jacketing which had been removed by L & C, and was laying on the ground. 17. On or about August 28, 1992, Mr. Branscum, at the subject site, observed residue which he determined was dry, on metal pipe jacketing, which had been removed by L & C, and was laying on the ground and in the boiler house, observed residue which he determined was dry, on piping from which insulation had been removed by L & C. 18. On or about August 31, 1992, Mr. Branscum, at the subject site, observed residue which he determined was dry, on metal pipe jacketing which had been removed by L & C, and was laying on the ground. 19. On each of these occasions Mr. Branscum, and on April 22, 1992, also Mr. Brichacek, brought these problems to the attention of representatives of L & C and advised them of the need to address these problems. —5— ------- 20. During the above inspections on June 25 and August 28, 1992, the EPA representatives made observations at the facility, collected insulation residue samples, took photographs, and discussed their observations with appropriate representatives of L & C and WPL. 21. Analysis of the above referenced insulation samples established the insulation contained 60% to 75% chrysotile, and also amosite asbestos, and crocidolite asbestos. 22. The pipes and vessels referenced in Findings of Fact 6, 7 and 8 are facility components as defined at 40 C.F.R. 61.141. 23. At the time of the inspections referenced in Proposed Findings of Fact 11 above, the insulation removed was dry and capable of being crumbled, pulverized or reduced to powder by hand pressure. 24. The insulation referred to above, including in Proposed Findings of Fact 23, was “friable asbestos material” as defined at 40 C.F.R. 5 6 1.141. 25. At the time of the activities referenced above, including at the time of the inspections referenced in Proposed Findings of Fact 11, Respondents L & C and WPL were each the “owner or operator of a demolition or renovation activity” as defined at 40 C.F.R. 5 61. 141. 26. 40 C.F.R. 5 61.145(c)(6)(1) states for all RACM, including material that has been removed or stripped: (1) adequately wet the material and ensure that it remains wet —6— ------- until collected and contained or treated in preparation for disposal in accordance with 40 C.F.R. 61.150. 27. On or about April 9, 1992, L & C failed to keep RACM removed from piping adequately wet until collected for disposal. 28. On or about April 14, 1992, L & C failed to keep B_ACM removed from piping adequately wet until collected for disposal. 29. On or about April 22, 1992, to May 6, 1992, L & C failed to keep RACM removed from piping adequately wet until collected for disposal. 30. On or about June 25, 1992, L & C failed to keep RACM removed from piping adequately wet until collected for disposal. 31. On or about August 28, 1992, L & C failed to keep RACM removed from piping and RACM removed from vessels in the boiler house, induding valves, adequately wet until collected for disposal. 32. On or about August 31, 1992, L & C failed to keep RACM removed from piping adequately wet until collected for disposal. 33. Respondent L & C is a “person” within the meaning of Section 302(e) of the CAA, 42 U.S.C. 7602(e). 34. The WPL refinery at Augusta, Kansas, is a “facility” as defined at 40 C.F.R. 5 61. 141. —7— ------- 35. The piping, boiler house valves and vessels are “facility, components” as defined at 40 C.F.R. 5 61.141. 36. The proposed penalty set forth in the Complaint in this matter was calculated pursuant to the statutory requirements and considerations set forth in Section 113(e) of the CAA, 42 U.S.C. 5 74 13(e) and the appropriate Agency Penalty Policy for violations of the NESI-IAP asbestos demolition and renovation requirements. 37. Latex paint is water-based paint. 38. “Collected for disposal” means when placed in leak-tight containers. 39. “Leak-tight” means the contents are sealed adequately to prevent any asbestos or asbestos Containing material, including contaminated water from escaping; solids or liquids cannot escape or spill out; dust-tight. 40. L & C conducted debris and ground cleanup before beginning the removal from pipes of ACM insulation surrounded by metal jacketing. 41. L & C conducted debris cleanup in the boiler house prior to removal of insulation from pipes in the boiler house. 42. DETI conducted a survey of the subject facility to determine the presence of asbestos prior to the initiation of asbestos removed by L & C. 43. The DETI survey established the presence of asbestos in, among others, zones 18, 31, 34 and 35. 44. The DETI survey found crocidolite asbestos in zones 18, 31, 24 and 35. —8— ------- 45. More than 260 lineal feet and more than 160 square feet of ACM was removed from the subject facility by L & C during the asbestos removal demolition project. 46. Encapsulation of removed asbestos residue is not “treated in preparation for disposal”. 47. Encapsulation does not “ensure that it (RACM, induding material that has been removed or stripped) remains wet u .ntil collected and contained. . .“ 48. L & C was aware of the CAA asbestos NESHAP demolition-renovation regulations prior to initiation of the subject removal project. 49. The samples collected by Mr. Branscum at the subject site were homogenized prior to analysis. 50. Zone 18 abuts zone 31. 51. The sample bottles used by Mr. Branscum on June 25 and August 28, 1992, were uncontaminated prior to use. 52. Alice Law correctly calculated the proposed penalty in accordance with all the statutory requirements in conjunction with the applicable Agency penalty policy based on information available to her at the time of calculation. 53. From April 9 to August 31, 1992, there is no credible evidence L & C ever achieved compliance with 40 C.F.R. 61.145(c)(6)(1). —9— ------- 54. The requirements of 40 C.F.R. 61.145(c)(6)(I) applied to the subject asbestos removal demolition project conducted by L & C at the subject WPL facility. Alternative Conclusions of Law 1. The CAA and the asbestos NESHAP provide strict liability for civil violations of their provisions. 2. The Complainant, because of the above strict liability, must establish only a mere two-fold showing - that the ziiinimal threshold requirements of the asbestos NESHAP have been met, and that the specific criteria of the NESHAP have not been met. 3. The requirements of 40 C.F.R. § 61.145(c)(6)(I) applied to the subject asbestos removal demolition project conducted by L & C at the subject WPL facility. 4. Based on Findings of Fact numbers 1 through 12, 19, 22 through 27, 33 through 35, 37 through 40, 42 through 48, 53 and 54, it is concluded that on or about April 9, 1992, Respondent L & C failed to comply with the requirements of 40 C.F.R. S 61.145(c)(6)(J) by failing to keep RACM removed from piping adequately wet until collected for disposal. 5. Respondent L & C’s failure to comply with 40 C.F.R. —10— ------- 5 61.145(c)(6)(1) on or about April 9, 1992, is a violation of Section 112 of the CAA, 42 U.S.C. 5 7412, rendering Respondent L & C liable for civil penalties pursuant to Section 113(d) of the CAA, 42 U.S.C. 7413(d). 6. Based on Findings of Fact numbers 1 through 11, 13, 19, 22 through 26, 28, 33 through 35, 37 through 40, 42 through 48, 53 and 54, it is conduded that on or about April 14, 1992, Respondent L & C failed to comply with the requirements of 40 C.F.R. 5 61.45(c)(6)(l) by failing to keep RACM removed from piping adequately wet until collected for disposal. 7. Respondent L & C’s failure to comply with 40 C.F.R. 5 61.145(c)(6)(1) on or about April 14, 1992, is a violation of Section 112 of the CAA, 42 U.S.C. 5 7412, rendering Respondent L & C liable for civil penalties pursuant to Section 113(d) of the CAA, 42 U.S.C. 5 7413(d). 8. Based on Findings of Fact numbers I through 11, 14, 15, 19, 22 through 26, 29, 33 through 35, 37 through 40, 42 through 48, 53 and 54, it is concluded that on or about April 22, 1992 through May 6, 1992, Respondent L & C failed to comply with the requirements of 40 C.F.R. 5 61.145(c)(6)(1) by failing to keep RACM removed from piping adequately wet until collected for disposal. 9. Respondent L & C’s failure to comply with 40 C.F.R. —11— ------- 5 6 1.145(c)(6)(I) on or about April 22, 1992 through May 6, 1992, is a violation of Section 112 of the CAA, 42 U.S.C. 5 7412, rendering Respondent L & C liable for civil penalties pursuant to Section 113(d) of the CAA, 42 U.S.C. 5 7413(d). 10. Based on Findings of Fact numbers 1 through 11, 16, 19 through 26, 30, 33 through 35, 37 through 40,42 through 51, 53 and 54, it is concluded that on or about June 25, 1992, Respondent L & C failed to comply with the requirements of 40 C.F.R. 5 61.145(c)(6)(1) by failing to keep RACM removed from piping adequately wet until collected for disposal. 11 Respondent L & C’s failure to comply with 40 C.F.R. 5 61.145(c)(6)(I) on or about June 25, 1992, renders Respondent L & C liable for civil penalties pursuant to Section 113(d) of the CAA, 42 U.S.C. 5 74 13(d). 12. Based on Findings of Fact numbers 1 through 11, 17, 19 through 26, 31, 33 through 35, 37 through 51, 53 and 54, it is conduded that on or about August 28, 1992, Respondent L & C faiiedto comply with the requirements of 40 C.F.R. 5 61.145(c)(6)(1) by failing to keep RACM removed from piping and from vessels in the boiler house adequately wet until collected for disposal. 13. Respondent L & C’s failure to comply with 40 C.F.R. 5 61.145(c)(6)(l) on or about August 28, 1992, renders Respondent L & C liable for civil penalties pursuant to Section 113(d) of the CAA, 42 U.S.C. 5 7413(d). -12— ------- 14. Based on Findings of Fact numbers 1 through 11, 18, 19,22 through 26,32 through 35, 37 through 40, 42 through 48, 53 and 54, it is conduded that on or about August 31, 1992, Respondent L & C failed to comply with the requirements of 40 C.F.R. 61.145(c)(6)(l) by failing to keep RACM removed from piping adequately wet until collected for disposal. 15. Respondent L & C’s failure to comply with 40 C.F.R. 61.145(c)(6)(l) on or about August 31, 1992, renders Respondent L & C liable for civil penalties pursuant to Section 113(d) of the CAA, 42 U.S.C. 7413(d). —13— ------- BEFORE THE ENVIRONMENTAL APPEALS BOARD UNITED STATES ENVIRONMENTAL PROTECTION AGENCY WASHINGTON, D.C. In the Matter of ) - ) Williams Pipe Line Company ) CAA Appeal No. 97-3 ) and ) CAA Docket No. VII-93-CAA-112 ) L & C Services, Inc. ) ) Respondents. ) PROPOSED ORDER NOW THEREFORE, pursuant to the Consolidated Rules of Practice, Rule 22.31,40 C.F.R. 22.31, the Initial Decision of Administrative Law Judge Carl C. Charneski, issued on January 29, 1997 is hereby REVERSED . The Alternative Findings and Fact and Alternative Condusions of Law set Out in Complainant’s Notice of Appeal are incorporated herein by reference and adopted into this Order. Respondent L & C Services, Inc. is ordered to pay a civil penalty of One Hundred Twenty-five Thousand Eight Hundred Dollars ($125,800). —14-- ------- Payment of the civil penalty shall be made within sixty (60) days of the date of this Order by forwarding a cashier’s or certified check made payable to the U.S. Treasury to: In the Matter of: Williams Pipe Line Company and L & C Services, Inc. CAA Appeal No. 97-3 CAA Docket No. VII-93-CAA-112 EPA - Region VII Regional Hearing Clerk P.O. Box 360748M Pittsburgh, Pennsylvania 15251 Environmental Appeals Board Date ______________ —15— ------- Certificate of Service I hereby certify that the original of this Appellate Brief in Support of it’s Notice of Appeal, Proposed Findings of Fact, Conclusions of Law and Proposed Order were hand- delivered to the Environmental Appeais Board, USEPA Weststory Building, 607 14th Street, N.W., 5th Floor, Washington, D.C. 20005; that a copy was mailed to the Regional Hearing Clerk, Region VII and that a true and correct copy of the above was mailed by first-dass mail to the following: Honorable Carl C. Chameski Administrative Law Judge U.S. Environmental Protection Agency Office of Administrative Law Judges (1900) 401 M Street, S.W. Washington, D.C. 20460 and D.K. Wright, Jr., Esq. Hintz and Wright Two Union Square 601 Union Street, Suite 3930 Seattle, Washington 98101 all on this ______ day of February, 1997. Norris 16 ------- UNITED STATES ENVIRONMENTAL PROTECHON AGENCY ENVIRO1 ’ MENTAL APPEALS BOARD No. 96-2 - In the Matter of Hoosier Spline Broach Corporation Kokomo, Indiana Appeal from a Recommended Decision and Supplemental Recommended Decision by Senior Admimstrative Law Judge Gerald Harwood Dated June 18, 1997 Supplemental Brief of Appellant United States Environmental Protection Agency Appellant United States Environmental Protection Agency (EPA), by counsel, submits this supplemental brief pursuant to 40 C.F.R. 22.3 0(a) and 40 C.F.R. 17.27, as directed by Environmental App eals Board Judge Stein in the May 16, 1997 Order Scheduling Oral Argument in In the Matter of Hoosier Spline Broach Corporation , Docket No. V-W- 16-93, EAJA Appeal 96-2. L INTRODUCTION On June 30, 1993, EPA filed a Complaint against Hoosier Spline Broach Corporation (HSB) as part of the “Non-Notifiers Initiative” seeking a total of $825,509 in penalties for six violations of Section 3008 of RCRA and authorized state regulations: failure to make a hazardous waste determination. (40 CFR 262.11); failure to submit a notification of hazardous waste activity (section 3010 of RCRA); storage and disposal of hazardous waste without an EPA ------- identification number (40 CFR 265.11 and 262.12); f ilure to obtain a permit (40 CFR 270.10); failure to meet operating standards for treatment, storage and disposal facIlities (40 CFR Part 265); and failure to meet the operating standards for waste piles (40 CFR 265.251 and 265.253). The entire Complaint relates to HSB’s failure to properly identll y, manage and dispose of the hawdous waste it allowed to accumulate — uncontained and uncontrolled — at its facility for at least two years. 1 On September 29, 1995, the Administrative Law Judge (AU) approved a Consent Agreement and Final Order (CAFO) resolving this matter. The CAFO requires HSB to pay a $3,000 penalty for failure to make a timely hazardous waste determination of its grinding sludge and to provide a current hazardous waste determination for its grinding sludge to EPA. As part of the settlement, EPA dismissed all other counts of the Complaint. By bringing the Complaint -- and by resolving the matter via settlement -- EPA achieved its objectives of(l) requiring HSB to properly dispose of any of its waste found to be hazardous and (2) forcing HSB -- since it had failed to do so prior to IDEM ’s inspection -- to properly manage its waste in the lhture. HSB then filed its Petition for Fees under the Equal Access to Justice Act (EAJA). On November 13, 1996, the Presiding Officer issued his Supplemental Recommended Decision in which he awarded attorney’s fees to HSB only for the time period after September 1994, the date when IDEM issued HSB a special permit allowing HSB to dispose of waste generated fl om that period forward as non-hazardous waste. [ The next 2 paragraphs are argument rather than history. It also assumes that the pile was haz waste; a fact disputed by Hoosier and not determined conclusively by a trier of fact.] In making his determination, the Presiding Officer improperly focused on the fact that waste generated subsequent to the hazardous waste pile that was the subject of the Complaint tested as non-hazardous. The fact that waste subsequently generated was found to be non-hazardous is irrelevant to the fact that the waste pile HSB let sit at its ficility for at least two ------- years was hazardous — and was not properly managed until the authorities (IDEM and EPA) stepped in. It is likely the ha rardous waste pile would still be accumulathig at HSB’s facility had IDEM and EPA not taken action and required HSB to properly dispose of its hrnrdous waste and to manage waste generated in the future in accordance with the law. For this reason alone, EPA was substantially justified both in bringing the Complaint and in settling the matter as it did. EPA filed an appeal of the Recoimnended Decision because, not only did the Presiding Officer incorrectly perceive subsequent test resulis of subsequent waste as somehow affecting the waste that was found to be hazardous and was the subject of the Complaint, he also considered inadmissable evidence — looking beyond the record and making assumptions not grounded in fact. IL ARGUMENT A. What evidence or information relating to settlement may a presiding officer properly consider in determining whether to make an award of fees under 5 U.S.C. §504? Answer: Any evidence a presiding officer considers must pass the threshold of admissibility under 40 C.F.R. §22.22(a) and, as a general rule, the evidence considered must already be part of the record of the underlying proceeding . 40 C.F.R. §22.22(a) governs the admissibility of evidence pertaining to settlement in administrative proceedings and states, in part: The Presiding Officer shall admit all evidence which is not irrelevant, immaterial, unduly repetitious, or otherwise unreliable or of little probative value, except that evidence relating to settlement which would be excluded in the federal courts under Rule 408 of the Federal Rules of Evidence is not admissible. Id (emphasis added). ------- Consequently, any evidence a presiding officer considers concerning settlement must first be relevant, material, not unduly repetitious and otheiwise reliable and probative. Thus, even if evidence is found admissible under FRE 408 (discussed below), it must also be found admissible pursuant to 40 C.F.R. §22.22(a). 1. What effect do the provisions on the admission and use of ‘evidence relating to settlements contained in 40 C.F.R. §22.22(a) have on the evidence relating to settlement a presiding officer is allowed to consider? Answer: 40 C.F.L §22.22(a) admits evidence relating to settlement if(l) it is otherwise discoverable or (2) offered for a purpose other than proving liability and ( 3) is otherwise admissible under 22.22(a): courts and presiding officers limit their review of evidence to that already contained in the record from the underlying proceeding and exnmine the totality of circumstances surrounding a settlement when making a substantial justification determination under EAJA . The evidentiary standard governing administrative actions, 40 C.F.R. §22.22(a), incorporates by reference FRE 408, which in turn states: Evidence of(l) fiuiiisbing 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 statements made in compromise negotiations is likewise not admissible. This nile does not require the exclusion of any evidence otherwise discoverable merely because it is presented in the course of compromise negotiations. This nile also does not require exclusion when the evidence is offered for another pulpose, such as proving bias or prejudice of a witness, negativing a contention of undue delay, or proving an effort to obstruct a criminal investigation or prosecution. In other words, evidence relating to settlement is admissible if(l) it is otherwise ------- discoverable or (2) offered for a purpose other than proving liability. Administrative Law Judge Harwood was correct, therefore, when stating in his Recommended Decision that it “is not necessary to examine what actually took place during the settlement discussions. Indeed, it would be inappropriate to do so since settlement discussions are privileged.” Recommended Decision at 13 (citing 40 C.F.R. §22.22(a)). Administrative Law Judge Harwood was not correct, however, in drawing impermissible inferences and assumptions relating to the settlement unsupported by the record. In addition to the limitation on admissibility in section 22.22(a), EAJA and EPA’s implementing regulations place limits on the presiding officer’s ability to supplement the record with new evidence. The general rule is that the decision on the fee application is to be based on evidence — including evidence relating to a settlement — already in the record of the underlying proceeding. In the Matter of Biddle Sawyer Corporation . TSCA Appeal No. 91-5,4 EAD. 912, 935 (November 17, 1993) (although not considering a settlement, this panel the Board held, “Whether the agency’s position was substantially justified is ‘determined on the basis of the administrative record, as a whole, which is made in the adversary adjudication for which fees and other expenses are sought’”) (quoting Green v. Bowen , 877 F.2d 204, 207 (2d Cir. 1989); In the Matter of C.F.Industries. Inc. . Docket No. FIFRA-09-0465-C-86-5, 1987 FIFRA Lexis 13 *9 (May 12, 1987) (“When the case is settled the adjudicative officer will look to the record, including the pleadings, affidavits and other supporthg documents fled by the parties in both the application for fees and expenses and the case on the merits”). As pointed out in Doughertyv. Lehman, 711 F.2d 555, 561 (3d Cir. 1983), Nothing in the Act or its legislative history requires that independent or separate evidence — distinct from the record of proceedings on the merits - - is required in order to satisfy the government’s burden ofproof Indeed it might be difficult to dehe what manner of independent proof; apart from the record as developed in the course of the litigation would be required to support the government’s ------- statutory burden of ‘substantial justification.’” In denying fees the court in Dougherty determined that “to the extent the district court’s reference in its June 9, 1982 opinion to ‘evidence’ may be construed as requiring separate, distinct, or independent ‘evidence’ of ‘substantial justification,’ we reject such a requirement....it is sufficient if the record developed in the merits proceedings reveals that the government’s position had a ‘reasonable basis in both law and fact.’” 4. at 562. This is because both EAJA itself and the EPA regulations governing the procedures for EAJA applications require that a presiding officer’s EAJA determination be made based on the record developed in the underlying action. Specifically, 5 U.S.C. §504(aXl) provides: Whether or not the position of the agency was substantially justified shall be determined on the basis of the administrative record, as a whole, which is made in the adversaiy adjudication for which fees and other expenses are sought (emphasis added). Further, 40 C.F.R.. §17.25(b) states: Ordinarily, the determination of an award will be made on the basis of the written record of the underlying proceeding and the filings required or permitted by the foregoing sections of these rules (emphasis added). In fact, EPNs implementing regulations require a party to file a motion showing why going beyond the record is necessary to the EAJA determination if it wishes to supplement the record.2 Thus although the EAJA application regulations do contain provisions allowing parties to supplement the record f necessary, the EAJA and the regulations governing EAJA in EPA administrative proceedings affirmatively discourage supplementation and, in fact, not a single ------- EAJA case involving a settlement before the EAB has been decided on a supplemented record. At the extremes, supplementation may be warranted if there is absolutely no relevant evidence in the record of the underlying proceeding, but this extreme should rarely occur. In fact, research revealed only one case (a non-environmental case) in which a court that supplemented the record in order to make an EAJA determination. Kuhns v. Board of Governors of the Federal Reserve System . 930 F.2d 39 (D.C. Cir. 1991). Admitting that whether an applicant could supplement the record for EAJA purposes was “not free from doubt”, the Kuhns court reviewed the adminiatrative record as a whole plus supplemental material (affidavits and documents) relating to the settlement because in that case, the record was devoid of evidence which would assist the court in making an EAJA determination. In denying attorney fees, the court noted that “ [ cjhanges in agency policies or priorities, lack of resources, or developments outside the agency’s control, rather than the absence of evidence or legal support, may cause the government to drop a proceeding it reasonably expected to win.” 14. at 43. Notably, in the one environmental case involving a settlement in which an applicant filed a motion to supplement the record, the presiding officer rejected the applicant’s request, stating “The Application and Response filed herein...present the position of each party and it is unlikely that further argument will add anything of value to the record on the issues here considered and there is, therefore, no reason to prolong this proceeding to permit argument not expressly contemplated by the Rules of Practice (40 C.F.R. 17.22).” $ç In the Matter of Edward Pivirotto and Josephine Pivirotto DIB/A E & J Used Tool Co. , TSCA Docket No. Vll-87-T-649 (June 28, 1988), affirmed 3 EAD. 96, TSCA Appeal No. 88-1 (Februaiy 15, 1990). In sum, evidence relating to settlement submitted in an EAJA hearing must (1) be admissible under 40 C.F.R. §22.22, meaning the evidence must be relevant, material, not unduly repetitious and otherwise reliable and probative; (2) be admissible under FRE 408, or in other words be otherwise discoverable or be offered for a purpose other than proving liability; and (3) ------- should already be contained within the record developed in the underlying proceeding unless the parties have succe sfiilly moved to supplement the record pursuant to 40 C.F.R. § 17.25(b). In the case at bar, the presiding officer impermissibly strayed from the record before him-- drawing assumptions about the factors EPA considered when deciding whether to settle the case and the terms on which EPA would settle. Recommended Decision at 13. Specifically, the presiding officer inferred “that from the beginnmg of the settlement discussions the EPA had all the test data and other information bearing upon the TCLP chromium content of the waste which were included in Respondent’s prehearing exchange” and assumed “that Respondent at all times was willing to settle on the terms that were finally agreed to but unwilling to settle on any other terms.” Recommended Decision at 13. The record simply does not support these inferences and assumptions but, more importantly, it is incorrect to draw inferences and assumption not contained in the record. What the record does show is that (1) HSB allowed a waste pile to accumulate and sit at its site for at least two years;(2) the waste pile was hazardous — as evidenced by the test results and IDEM’s refhsal to grant HSB a special permit to dispose of the waste as non-hazardous; (3) HSB was not properly managing or disposing of its hazardous waste and was not prompted to do so until the authorities (IDEM and EPA) took action; (4) EPA achieved its objectives of bringing HSB into was in compliance without unduly penalizing HSB by bringing the Complaint and ultimately settling the matter. Had the presiding officer in this case limited his review to the record -- rather than drawing unsupported suppositions -- he would have found EPA substantially justified for the above-stated reasons. 2. May a presiding officer permissibly infer from the duration of settlement negotiations and from the terms of the final settlement that the agency’s position was not substantially justified under 5 U.s.c. §504(a)(1)? Answer: No. a presiding officer must look at totality of circumstances, not ------- simply the terms and duration of settlement. when malcing an EAJA determination . First, as described above, only the record developed in the underlying proceeding should be reviewed for EAJA purposes. Accordingly, whether evidence concerning the terms and duration of negotiations and resulting settlement can be considered by a presiding officer depends on whether that evidence is already a part of the record. Second, the United States Supreme Court instructs that “.. .EAJA — like other fee-shifting statutes — favors heating a case as an inclusive whole, rather than as atomized line items.” Commissionery. Jean , 496 U.S. 154, 110 S.Ct. 2316 (1990). As such, courts and presiding officers have made EAJA determinations simply by looking “to the ‘totality of circumstances’ in determining whether the government’s position is substantially justified....”. Miller v. Hotel & Restaurant Employees and Bartenders Union , 806 F.2d 1371, 1372(9th Cir. 1986); see also Jacksony. Chater . 94 F.3d 274, 278 (7th Cir. 1996) (denying fees because the government can be incorrect yet substantially justified: “In examining the government’s position, we are to look at both its prelitigation conduct and its litigation position. Yet the [ EAJA] statute does not allow for discrete findings as to each of these temporally distinct elements, and we must therefore arrive at one conclusion that simultaneously encompasses and accommodates the entire civil action”); Pullen v. Bowen , 820 F.2d 105 (4th Cir. 1987) (court exs mined difficulty government may have in weighing close facts thus even though government lost on the merits, fees were denied because the government was substantially justified); In the Matter of Reabe Spraying Service. Inc. , 2 EAD. 54, FIFRA Appeal No. 83-4 (May 28, 1985) (evidence of violations was based on conflicting evidence so even though five of the six charges EPA brought were dismissed and a penalty of only $600 was assessed, EAB determined that EPA was substantially justified); Williamsv. Bowen , 966 F.2d 1259 (9th Cir. 1991) (upheld denial of EAJA award even though disability case was remanded due to agency’s failure to properly considered all the evidence; court ------- determined that agency had to weigh conflicting evidence and make crediliility Thiding thus was substantially justified in how it preceded with case). Reabe Spraying Service. Inc. . is Illustrative of presiding officers considering all the evidence available in the record in order to determine whether the EPA was substantially justified under EAJA. In that case, the ALT dismissed most of EPA’s charges related to Reabe’s aerial - application of ceitain pesticides in a field adjacent to a day care center and reduced the requested amount ofpennhies to $600. The AU also, however, denied Reabe’s application for an EAJA award. In affirming the AU’s holding, the Chief Judicial Officer reviewed the facts in EPA’s possession at the time of the civil penalties proceeding and the conflicting evidence offered by Reabe. EPA relied in part on testimony from witnesses present at the day care center adjacent to the field where the pesticides were sprayed; in rebuttal, Reabe submitted test data purporting to show that the pesticides had not drifted from the adjacent field to the day care center. The Chief Judicial Officer determined that “the Region, in light of the questions surrounding the test data’s reliability, had good reason to reject the test data in favor of many consistent statements of those present during spraying indicating the likelihood that drift had occurred.” I4 at 57-58. As such, the EPA was substantially justified and the AU’s order denying an EAJA award was affirmed -- even though most of the charges that EPA brought had been dropped. In the Matter of Edward Pivirotto and Josephine Pivirotto DIB/A E & J Used Tool Co. . TSCA Docket No. Vll-87-T-649 (June 28, 1988), affirmed 3 E.A.D. 96, TSCA Appeal No. 88-1 (February 15, 1990) is especially instructive because the facts are nearly idcntioal similsir to the case at bar. [ Pivirotto admitted the violations from the beginning, the case was decided on the prevailing party issue, and the discussion of substantial justification is dicta. Therefore I think “identical” is too strong] In Pivirotto , EPA argued that the Pivirottos failed to comply with inspection, reporting and marking requirements for transformers they were handling and requested $16,500 in penalties. Ultimately EPA settled with the Pivirottos for $2000 and an ------- acknowledgment by the Pivirottos that they intended to dispose of the transformers as soon as it was economically feasible to do so. Following the signing of the consent decree, the Pivirottos applied for attorney fees under EAJA. The AU in Pivirotto determined that in order to show it had a reasonable basis in both law and fact or was, in other words, substantially justified, the EPA had to - First, show that there is a reasonable basis in tnith for the facts alleged in the pleadings.... Second, the government must show that there exists a reasonable basis in law for the theory which it propound&...Finally, the government must show that the facts alleged will reasonably support the legal theory advanced. j4 at 6-7 (quoting Natural Resources Defense Council v. EPA . 703 F.2d 700, 706 (3d Cir. 1983)). Based on that standard and an examination of the “totality of circumstances” the AL! in Pivirotto held that the EPA had a reasonable basis for bringing a complaint and ultimately settling the matter - - regardless of the fact that most of the counts had been dropped and the Pivirottos had achieved a seemingly favorable settlement. The AU emphasized that a couple of factors : (1) the fact that the penalty proposed in the Complaint was significantly higher than the amount settled for does not mean the EPA was not substantially justified because EPA is statutorily constrained in proposing a penalty3; (2) the EPA achieved its objectives even though it settled the case4 In denying the EAJA award, the presiding officer in Pivirotto stated, “the standard to be adhered to should not be read to raise a presumption that the government position was not substantially justified simply because it lost the case; nor does it require it to establish that its decision to litigate was based on a substantial probability of prevailing.” Pivirotto at 7, affirmed 3 E.A.D. 96. See also Pierce v. Underwood , 487 U.S. 552, 565 flu 2 (1988) (“a position can be justified even though it is not correct, and we believe it can be substantially (ie., for the most part) justified if a reasonable person could think it correct, that is, if it has a reasonable basis in ------- .nw........ 4 at at - - - Reabo and Pivirotto and the totality of 1 • C.. rATA • fl rna rr_ b0nb0 L cireumstaneoa warrant a denial of Hoosier’s anniiear Complaint against HSB fbr improperly managing waste that was proven to be hsnrdous and as a result of EPA ’s and IDEM’s actions including bringing the Complaint and settling the matter— HSB not only cleaned up the hnnrdous waste pile that had aeennmlated at its site for at least two years, it instituted new manAgement practices to handle waste generated in the Ibture (at ‘v thiek point in time IDEM &anted HSB a special waste permit). The foet that there may have been conflicting evidence initially (witieh was ultimately resolved to show that the waste generated by HSB ‘ teh was the subject of the Conmlaint “ hazardausi does not nullify EPA’s substantial a — — —F justification in pursuing the action against HSB, anymore than it did in Reabe . As in Reabe and Pivorotto . the totality of the circumstances warrant a denial of Hoosier’s application for an EAJA award. The EPA’s initial complaint was based on clear evidence that HSB’s waste pile was a hazardous wage. As a result of EPA and IDEM taking action, HSB bcgian managing its waste as hazardous until the time it could show to the satisfaction of JLDEM that it was no longer hazardous. The subsequent settlement achieved the goeveniment’s goals of assuring that HSB properly tested and managed its waste stream and was penalized for failing to do so. The fact that the existence of hazardous waste was disputed by HSB does not nullilS ’ EPA’s substantial justification in pursuing the action against HSB, anymore than it did in Reabe . [ add sectien discussing goed and bad cases that have considered duration and terms ef settlement] -‘. r awara. tu e t n t Drounlit In sum, courts and presiding officers review the totality of circumstances and make a fact specific inquiry in each case but do not consider evidence beyond what is in the record developed in the underlying proceeding. In the case at bar, a review of the record warrants the conclusion that the EPA was substantially justified in bringing the Complaint and in settling the mattet law and fact”). Tha f nt - Hopsic . -w ------- 3. If the duration of settlement negotiations and the terms of final settlement may be used to determine whether an agency’s position was substantially justified, what if any, policy ramifications may this practice have on the settlement of administrative enforcement actions? Answer: A presiding officer should not consider the duration and terms of settlement only when mfiking an EAJA deterrnin tion: to do so would negatively affect agency enforcement actions as described below . The court in Kulms v. Board of Governors of the Federal Reserve System . 930 F.2d 39, 43 (D.C. Cir. 1991) aptly summarized some of the most perthent concerns, reRli?ing that the government should be able to shift resources and settle a case the it could win but no longer wishes, can or should spend time and resources on: Changes in agency policies or priorities, lack of resources, or developments outside the agency’s control, rather than the absence of evidence or legal support, may cause the government to drop a proceeding it reasonably expected to win. These discretionary functions should not be hamstrung by strict parameters on the duration of settlement negotiations or the terms of settlement. Other policy rpmifications include: • A narrow focus on time and duration of settlement may rush bad settlements, encouraging the EPA to unduly compromise positions of the United States because of time constraints. • Exnming evidence that is not a part of the record and infringing on privileged settlement discussions by focusing on time and duration will likely inhibit the free flow of settlement talks -- which is precisely what FRE 408 was designed to protect. • Looking at the duration and terms of settlement alone will not satisfy the admissibility criteria of 40 CFR §22.22; evidence must still be relevant, material, not unduly repetitious and otherwise reliable and probative. Accordingly, a preset rule of admissibility (such as always admitting evidence relating to the duration of settlement negotiations and the terms of the settlement) not only avoids the applicable rules of evidence, it is likely to be a little utility if it ------- leads to the admission of irrelevant, immiiterial, repetitious or otherwise unreliable and non-probative evidence. Moreover, there is not — and should not be — a set the time within which a case should have to settle. EPA is compromising the position of the United States when settling claims — in contrast with a private litigant’s settling of a private interest. It is important that EPA make sure that it furthers the interest of the U.S. which involves many considerations: policy, monetary, punitiveldeterrent effects, and so fork • Tiinelduration parameters would not develop use.fiul precedent for the government or private parties to rely on because settlement outcomes are fact specific and involve intangible variables, such as, policy initiatives that inspired the action and the players involved (L . whether the respondent is repeat violator, a mnB business or another type of entity that warrants special consideration). In other words, while the government endeavors to maintain a consistent approach to enforcement and settlement of actions, there is no cookbook for settlement -- so a cookbook approach to evidentiaiy mies would not be very useful. B. In considering an EAJA petition under 5 U.S.C. §504, may the presiding officer properly award fees covering only a portion of the action? Answer: It is appropriate -- and not inconsistent with either EAJA or Jean -- to award a party only those fees relating to the portion of the action in which they prevailed and the government was not substantially justified . A Presiding Officer may award attorney fees under the EAJA covering only a portion of an action in certain limited circumstances, not inchiding the case at bar. This analysis involves two separate steps: the threshold question is whether the prevailing party petitioner is eligible for attorney fees, j , whether the agency’s position is substantially justified. Milieu determining ------- whether a petitioner is eligible, the presiding officer is to look to the record as a whole. Commissionerv. Jean . 496 U.S. 154, 110 S.Ct. 2316 (1990). [ elaborate — discuss other casesi Once a court has determined that an exnmin tion of the record as a whole leads to the conclusion that the government is not substantially justified, the court must then additionally determine The second question concerns the amount of the fee award. As stated in Cinciarelli v . Reagan.729 F.2d 801, 804-805 (DC. Cir. 1984), “ [ p]artial awards are contemplated within EAJA’s statutoiy scheme; if some but not all of the government’s defenses are substantially justified the prevailing party should be compensated for combating those that are nOt” (remanding the case for calculation of partial fee award). Hypothetically, therefore, a determination that a party only partially prevailed -- and can recover a portion of the fees requested —is neither inconsistent with 5 U.S.C. §504(aXl) nor does it offend the holding in L . [ elaborate Cinciarelli facts and other analogous casesi [ Isn’t this done later in the brief?] 1. If the presiding officer determines that the agency’s position is substantially justified up to a point but not thereafter, is this determination consistent with the as a whole” requirement of 5 U.S.C. §504(a)(1)? Answer: Yes, it is consistent with EAJA to apportion the award of fees in certain cases . As discussed above, section 504(aXl) requires that the record as a whole be reviewed in order to determine whether the government was substantially justified in bringing and continuing an action. Reviewing the record as a whole, however, the Presiding Officer may determine that some but not all of the government’s positions are substantially justified.5 [ I think the previous sentence is confusing. Using the word upositionsn contradicts all the case law discusion about the single “position” of the US. Fuither, I still think we need to emphasis that even though the position is not substantially justified, awarding fees only for conduct after the gov. is clearly in the ------- wrong is appropiiate and supported by the law] For example, a presiding officer could find that an agency’s position was inithily substantially justified but at some point in the proceedings is no longer su antiallyjustifled. [ CITE - discuss cases showing this is consistent with EAJA] [ I believe this was done in my last draft citing to Quality and cases cited therein; ie., Cinciarellh] If a lack of substantial justification is found, the Presiding Officer may then consider the fees to be awarded based on the period of time in which the government’s conduct was not substantially justified. In the case at bar, the presiding officer opined that agency’s position was initially substantially justified, but at some a point in the proceedings (following JDEM’s issuance of a special waste permit) was no longer substantially justified. [ discuss why this was incorrect — because although facts can change that such that govt is no longer substantially justified, the facts in this case didn’t change: the waste that was found to be hazardous and improperly handled stayed hazardous and had accumulated for at least two years...Fact that waste was generated subsequent to that which was the subject of the complaint was found to be non-hazardous is irrelevant. JOHN, IS ThERE ANYTHING IN THE RECORD SHOWING THAT HSB’S WASTE STREAM CHANGED DEFENDING ON THE METALS USED?]] [ The MSDS submitted by HSB showed that the steel they were grinding contained varying percentages of Cr and other metals , but there is nothing to show conclusively that the results obtained from the TCLP test would vaiy depending on the Cr content of the steel, though the Region suspects this is so] 2. If the presiding officer determines that the agency’s position is substantially justified up to a point but not thereafter, is this determination consistent with the U.S. Supreme Court’s analysis in Commissioner v. Jean , 496 U.S. 154, 110 S.Ct. 2316 (1990)? Answer; Yes, it is consistent with the holding in Jean to annortion the ------- award of fees in certain cases . As a preliniiwuy matter, is should be noted that the court in Jean dealt with the question of whether in the EAJA litigation - after a party had shown the government was not substantially justified in the underlying action — a party must show, again, that the government is not substantially justified in order to recover costs and fees incurred in the EAJA phase of litigation. The Jean court held that a party that prevailed in the underlying action where the government was not substantially justified did not have to re-litigate those same issues in order to recover fees expended in the EAJA action following the underlying proceeding. See also Oualltv CA.T.V.. Inc. v. NLRB , 969 F.2d 541, 547(7th Cir. 1992) (“Although the General Counsel argues it was substantially justified in resisting Quality’s EAJA application, substantial justification plays no role in determining the availability of an award to cover EAJA fee litigation itself; which is treated as a component part of an integrated case; hence, a prevailing party is presumptively entitled to an award that includes costs associated with the fee litigation”; citing i ). Thus although the court in J was correct in finding that a case should be analyzed as a whole and that a litigant does not have to prove its case all over again in the EAJA phase of litigation, that question is distinct from the issue of whether a litigant should be awarded less because the government is predominantly -- but not totally-- justified. See e.g.. Roanoke River Basin Association v. Hudson , 991 F.2d 132, 138 (4th Cir. 1993) (“The holding in Jean, however, did not squarely resolve how to determine whether the government’s position in the action was substantially justified when it loses on only one issue”). Accordingly, the requirement that courts review the record as a whole when mnking an EAJA determination, does not bar a partial award of fees. Secondly, the Supreme Court in was concerned that the policy behind the EAJA would be frustrated if; during the EAJA phase of litigation, the government is allowed to claim that although it took an initially unjustified position, some of its subsequent conduct was justified, ------- and therefore there should be a separate eligibility determination for that phase. $ Jean at 142, footnote 7 (quoting from HR Rep No. 98-992, “...the Congressional intent is to provide for attorney fees when an unjustifiable agency action forces litigation, and the agency then tries to avoid liability by reasonable behavior during the litigation”); see also Thompson v. Sullivan , 980 F.2d 280(4th Cir. 1992) (a position that is not initially justified cannot later become justified). Again, this is distinct from a case where the government is found to be initially justified but subsequently - because of a change in operative facts or situation - unjustified. In the latter scenario, it is appropriate to award only those fees relating to the time when the government was not justified, thus balancing the interests of awarding fees for unjustified actions yet not penalizing the government for initiating and pursuing an action that was originally justified. For example, in Quality CA.T.V.. Inc. v. NLRB , 969 F.2d 541 (7th Cit. 1992), the court found that the government was initially justified in raising and arguing certain theories but was not justified in persisting with those theories once a hearing on the matter revealed that the theories were insupportable. Accordingly, the court remanded “the case for calculation of attorney’s fees in accordance with this opinion; specifically, attorney’s fees will lie only for that period commencing after the close of the hearing before the AU. ” j 4 at 547. Notably, the court, although apportioning fees, concurred with and cited on the issue of whether a prevailing party had to, in the EAJA phase of litigation, again show they were entitled to fees in. order to recover costs associated with the fee application (finding that this issue did not have to be re-litigated). Again, in [ insert other illustrative case] This is not to say that fees should be apportioned in eveiy action where a court or presiding officer determines that the government is partially, but perhaps not 100%, justified [ discuss Roanoke River Basin , supra, and Ute Ute (3waitu Paiute Tribe v. Department of Interior , ------- 773 F. Supp. 1383 (E.D. CaL 1991) to make one threshold determnation regarding the government’s position based on the record as a whole. i.e., must make case by case determination and in some cases, the government will be predominantly justified and fees will be denied or only slightly justified and fees will be awarded or the facts present convenient divisions allowing an award to be apportioned either along time lines/relevant to a specific event or on a claim by claim analysis] In Ute Ute Gwaitu Paiute Tribe v. Department of Interior , 773 F. Supp. 1383 (ED. CaL 1991), for example, the court found that the government was justified in relation to two issues being litigated but was not justified with respect to a third issue. Nonetheless, the court held that the government’s position as a whole was substantially justified and denied the award of fees. In so finding, the court opined that [ w]here the government’s position in the course of litigation and at the agency level below is substantially justified as a whole, the lack of substantial justification on one procedural issue raised during the course of litigation may not provide a basis for apportioning an award of fees under the EAJA for the time spent defending that one procedural issue. It thus appears that although Congress sought to remove many of the deterrents to challenging government action, it also sought to give the government modest breathing space in conducting otherwise substantially justified litigation. jj at 1388. The court in Ute Ute , then, carved a balance between reviewing a case as a whole and dissecting it to the point of frustrating the purpose of the EAJA. Although it did not address the scenario where “at some point along a continuum, the government’s assertion of various substantially unjustified claims or defenses may render an otherwise justified litigation posture substantially unjustified” because those issues were not before the court, it did acknowledge that such a scenario could exist. The court in Roanoke River Basin Association v. Hudson , 991 F.2d 132, 139 (4th Cir. ------- 1993) summarized the issues most succinctly: While we do not construe the [ j g J Court’s statement to meant that we may look only at the government’s macrocosmic position before or during litigation to determine whether it is substantially justified, we do rely on Jean as directing a more broadly focused analysis that would reject the view that any unreasonable position taken by the government in the course of litigation automatically opens the door to an EAJA fee award. Accordingly, we conclude that when determining whether the government’s position in a case is substantially justified, we look beyond the issue on which the petitioner prevailed to determine, from the totality of circumstances, whether the government acted reasonably in causing the litigation or in taking a stance during the litigation. In doing so, it is appropriate to consider the reasonable overall objectives of the government and the extent to which the alleged governmental misconduct departed from them. Thus a more egregious example of misconduct might, even if confined to a narrow but important issue, taint the government’s “position” in the entire case as unreasonable, whereas a totally insupportable and clearly unreasonable position by the government on an inconsequential aspect of the litigation might not. Similarly, a broader government position that, considered in a vacuum, would not be clearly egregious might still, in. the overall context of the case, constitute an unreasonable position because of its impact. Although an unreasonable stance taken on a single issue may thus undermine the substantial justification of the government’s position, that question can be answered only by looking to the stance’s effect on the entire civil action.. The court’s discussion reflects the flexibility necessary when analyzing the government’s position in making an EAJA award determination -- the totality of circumstances should be exiimmed and in some instances will warrant a denial of fees while in others an award -- partial or full -- of fees. To allow otherwise may lead to results which would frustrate some of the policies and purposes behind the EAJA: to encourage private parties to persevere or resist unjust positions of the government, and to discourage the government from using its superior powers unreasonably ( ------- Battles Farm Co. v. Pierce , 806 F.2d 1098, 1101, (D.C. Cir. 1986), cert denied , U.S., 107 S.Ct. 2176, 95 LEd. 2d 832 (1987)) while at the same time giving the government the breathing space to conduct litigation that is predominantly, though perhaps not 100%, justified . Congress did not wish to inhibit legitimate efforts to enforce the law, nor to impose the high costs on the government which would result if the EAJA were a statute which automatically shifted fees to the prevailing party, akin to 42 U.S.C. § 1988. Ashburn v. United States . 740 F.2d 843, 849 (11th Cir. 1984). In sum, the EAJA operates to “pen i1ize unreasonable behavior on the part of the government without impairing the vigor and flexibility of its litigating position.” Crawford v. Sullivan , 935 F.2d 655, 659 (4th Cir. 1991), quoting United States v. B & M Used C s . 860 F.2d 121 (4th Cir. 1988). These policy considerations would likely be frustrated if 100% of costs are awarded in cases where the government is predominantly justified but the private litigant deserves an award for a portion of the action that was not justified. Awarding fees to a prevailing party only for work in defending against that portion of the government’s conduct which is found not substantially justified is consistent with J ’s admonitions to determine what fee is reasonable, to use its discretion to be “flexible” in determining the amount of fees, at 161, and “to adjust the amount of fees for various portions of the litigation, guided by reason and statutory criteria.” at 165, 166 Iadd section applying the discussion to our facts, arguing why Hoosier should be denied fees — no apportionment]. However, courts must be especially careful to construe the EAJA waiver of the government’s immunity from attorney’s fees “strictly in favor of the sovereign”, Ruckeishaus v. Sierra Club , 463 US 680,685, 103 S.Ct. 3274, 77 L. Ed. 2d 938, 944 (1983), when, as in this case, the Presiding Officer examines conduct leading to a settlement. Allowing, as in this case, the ------- presiding Officer’s determination that the accretion of one piece of additional evidence made the government’s conduct unjustified from that point forward, would cause the type of fishing expedition and in depth inquiry into the considerations which went into the government’s settlement offer and its timing which j specifically disapproved. See , supra, at 143, footnote 8, quoting the House Report on the amendment to EAJA that “when the case is settled after only some Iiligntive procedures...no additional discovery of the government’s position will be necessary, fbi EAJA petition purposes.” See also Sisk at 7-8, explaining that Congress, in amending the EAJA in 1985 to adopt a broad view of the meaning of “position of the United States” furthered the objective of protecting small non-government parties, while at the same time, by restricting the evaluation of that “position” to the record, furthered the objective of protecting the government from discovery into the motivation and collateral activities of government decision makers. “While the EAJA redresses governmental abuse, it was never intended to chill the government’s right to litigate or to subject the public fisc to added risk of loss when the government chooses to litigate reasonably substantiated positions, whether or not the position later turns out to be wrong.” Roanoke River Basin , supra, at 139. As the court in ! iL Ute Tribe , supra, at 1388, states, the government ought to be afforded “breathing space” in conducting substantially justified litigation. As in that case, here the facts, based on the record as a whole, do not show that the government has asserted various unjustified claims along a continuum which would render an otherwise justified litigation posture substantially unjustified. ------- NOTICE OF APPEAL AND APPELLATE BRIEF IN SUPPORT THEREOF IN 114 TILE MAT11R OF: H.E.L.P.E.R., INC. Docket No. EPCRA-Vffl-95-06 Submitted By, Brenda Morris and Dana Stotsky Counsel for Appellant U.S. EPA, Region V I I I 999 18th Street, Suite 500 Denver, CO 80202-2466 Tel: (303) 312-6891 Fax: (303) 312-6953 TABLE OF CONTENTS ------- Notice of Appeal . 3 Alternative Proposed Findings of Fact 4 Alternative Conclusions of Law or Discretion 10 Appellate Brief In Support Thereof 1 4 I. Introduction . 14 II. Statement of the Proceedings 16 III. Argunient 1 8 A. PURPOSE AND STRUCTURE OF THE EMERGENCY PLANNING AND COMMUNITY RIGHT-TO-KNOW ACT 18 13. THE HAZARD COMM1JNICATION STANDARD, OS1IA 1910.1200, REQUIRED H.E.L.P.E.R. TO PROVIDE INFORMATION TO EMPLOYEES ABOUT THE HAZARDS OF THE CHEMICAL MINERAL OIL THEY MAY BE EXPOSED TO WHILE WORKING 19 1. H. E . L. P . E . R. WAS REQUIRED TO PREPARE OR MAKE AVAILABLE A MATERIAL DATA SAFETY SHEET (MSDS) FOR THE HAZARDOUS CHEMICAL MINERAL OIL 20 2. THE AU ERRED IN FINDING THAT MINERAL OIL MIST DID NOT OCCUR AT HELPER’S FACILITY AND THAT AS A CONSEQUENCE, HELPER DID NOT HAVE A DUTY TO PREPARE A MSDS FOR THE HAZARDOUS CHEMICAL MINERAL OIL FOR ITS WORKERS 21 3. THE 10,000 POUND THRESHOLD DOES NOT APPLY IN CIRCUMSTANCES OF FORESEEABLE SPILLS OF MINERAL OIL 23 4 THE D.C. CIRCUIT SUPPORTS APPELLANT EPA’S CONTENTION THAT INTERPRETATIONS OF THE OSHA PROGRAM SHOULD FAVOR WORKER PROTECTIONS 24 C. CONCLUSION: HELPER WAS OBLIGATED TO PREPARE OR MAKE AVAILABLE A MSDS FOR THE HAZARDOUS CHEMICAL MINERAL OIL AND TO FILE A TIER II REPORT, AS REQUIRED BY SECTION 312 OF EPCRA 25 D. ALTERNATIVELY, THE AL] ERRED IN FINDING THAT MINERAL OIL IS NOT A HAZARDOUS CHEMICAL IN ITS LIQUID STATE 27 1. MINERAL OIL ISA PHYSICAL HAZARD 27 ------- 2. OSHA’s EXEMPTION FOR SEALED CONTAINERS DOES NOT APPLY TO HELPER 29 BEFORE THE ENVIRONMENTAL APPEALS BOARD UNITED STATES ENVIRONMENTAL PROTECTION AGENCY Docket No. EPCRA-VIII-95-06 IN THE MATTER OF: ) HELPER, Inc. ) NOTICE OF APPEAL ) Respondent. ) The United States Environmental Protection Agency, Region VIII (EPA or Appellant) hereby files its Notice of Appeal pursuant to 40 CFR §22.30 together with its alternative findings of fact, alternative conclusions regarding issues of law or discretion, and Appellant’s Brief in Support Thereof, together with the relevant references to the record and the initial decsion. Respectfully Submitted this 1 5th day of April, 1998. Brenda L. Morris Counsel for Appellant U.S. EPA, Region VIII 999 1 8th Street, Suite 500 Denver, Colorado 80202-2466 Telephone: 303-312-6891 Telefax: 303-312-6953 ------- UNiTED STATES ENVIRONMENTAL PROTECTION AGENCY REGION Vifi Docket No.: EPCRA-VHI-95-06 IN TILE MAUIIER OF: ) ) H.E.L.P.E.R Inc. Airport Industrial Park ) APPELLANT’S PROPOSED ALTERNATIVE Old Highway 34 ) FINDINGS OF FACT AND CONCLUSIONS P 0. Box 505 ) OF LAW OR DISCRETION Madison, SD 57042 ) ) Appellee. ) Appellant, United States Environmental Protection Agency (EPA), Region VIII, by its attorney, hereby offers the following proposed alternative findings of fact and conclusions of law or discretion, as allowed by 40 CFR Section 22.30(a)( 1), for the consideration by the Environmental Appeals Board (EAB) 1. ALTERNATIVE PROPOSED FINDINGS OF FACT 1. H.E.L.P.E.R., Inc. (hereinafter referred to as HELPER or Appellee) owns and operates a transformer salvage and reclamation commercial PCB2 storage facility (Ex.9 at G-1;R-Ex-I6B) that receives drums of PCB-contaminated Iiquids3 (Ex.9 at G-9; R-Ex-16J); brokers, or holds on its premises for transport, capacitors with PCB-contaminated liquids whose PCB concentration is greater than 499 ppm(T-1 16 and Ex.9 at Drawing No. 2; 1-1 16); and stores and processes transformers that contain PCB-contaminated liquids whose PCB concentrations are between 50 ppm and 499 ppm (Ex. 9 at G-1; R-Ex-16B). 2. At the HELPER facility, to “process” a transformer means to open the cap, attach a hose, and pump out the mineral oil dielectric fluid (MODEF) from the transformer carcass (if not received drained)(Ex. 11, REx- 1 5H, sections 6 and 7)4 and drain residual oil; to pull out the cores5 of the transformers and place them on metal ------- rollers to drain and collect the MODEF (1-254 and 255); to transfer the drained MODEF to a storage tank; to burn the cores in the facility’s furnaceó; and to crush the transformer carcasses for salvage (Ex.9 at G-1; R-Ex-16B). 3. HELPER’s facility consists of uthree adjoining metal structures... the Main Warehouse.., the Thermal Destruction building ...and storage building.”(Ex. 9 at G- 1 and Appendix G- 1, ‘Pacility Photos”; R-Ex- 1 6B). “The Main Warehouse is where the company stores all chemicals and waste and performs all related processing, handling, moving, loading, and unloading.” ( Id.) 4. 2077 tons per year of copper, steel, and brass are recovered and/or recycled (Ex.1 1, R-Ex-1 5D) and 28.5 tons per year of PCB ash residue are transported to and disposed of at a PCB landfill. (Ex. 11, section II. I, R-Ex-1 5E) 5. The main warehouse is divided into an unregulated 7 transformer salvage area and a PCB area with three separate curbed areas: the 49-drum container capacitor storage area; the tank area, where the two 4030 gallon tanks are kept; and the process/storage area where PCB containers and PCB-contaminated electrical equipment are stored.(Ex. 6, Drawing Nos. 1, 2, and 4.) 6. “Facility Photos” of the main warehouse show that the only direct exit to the outdoors is on the south side where the entrance and loading doors are located (Ex. 9, Appendix G- 1, Facility Photos, Nos. 1, 2, 5, and 6; Ex. 9, Drawing No. 7, Emergency Evacuation Routes, R-Ex- 1 6V) and there do not appear to be any windows for ventilation8 in the main warehouse (Ex. 9, Appendix G- 1, Facility Photos Nos. 1, 2, 5, and 6). 7. Section 10 of Ex. 12, the Texaco MSDS, indicates that if mineral oil is subject to heat or combustion, toxic levels of carbon monoxide, carbon dioxide, irritating aldehydes and ketones may evolve. 8. HELPER has not done any testing to determine the airborne concentrations of mineral mist, vapors, or dust that may be released as a result of its everyday operations ------- because HELPER assumes there is none since they cannot be seen with the naked eye (1-253), despite the fact that mineral oil has a detectable smell9(T-95). 9. The flash point for transformer oil is 295 degrees Fahrenheit(Ex. 12, section 5) and both the Hazardous Material Identification System (HMIS) and the National Fire Protection Association (NFPA)rate MODEF as flammable 10 and thus MODEF1 1 Is considered a physical hazard and a hazardous chemical by OSHA. (52 FR 163, 31879) 10. HELPER employeesl2 do open the transformers to reclaim the mineral oil dielectric fluid and perform a multitude of other duties regarding the processing operations that expose them to mineral oil mist, vapors, or dust 1 3 (See Paragraphs 1-1 1, supra ; and Ex.2). 11. HELPER recognizes that there will be spills at Its facility despite precautions and prepared the Spill Prevention Control and Countermeasure (SPCC) portion of its closure plan in accordance with 40 CFR 112.7 (Ex. 9, G-1; R-Ex-16B). In the SPCC Plan, the Emergency Coordinator(EC)is to look at the MSDSs which are kept at the facility to determine what action to take after a spill(Ex.9,G-3 and G-5; R-Ex- 1 6D and 16F). 12. HELPER did not have a MSDS for mineral oil on hand for its employees, or the public that tours its facilities, until October 30, 1996, and did not perform background studies for inhalation or dermal exposure routes 1 4 at HELPER(Ex.9 and T-1 56). 1 3. HELPER chooses to rely upon the MSDS from Texaco which, based upon Texaco’s own internal criteria, 1 5 determined that MODEF would be considered hazardous. 1 4. Mike Yocum, HELPER’s Environmental Manager had no personal knowledge of the hazards of MODEF presented in the MSDS from Texaco (T- 1 49 and 1 56), did not do a hazardous determination (1-1 51-1 53), and did not answer any questions on any of the tours through its facility regarding the physical or health hazards associated with ------- MODEF or PCB-contaminated liquids (T- 163). 1 5. HELPER did not receive its transformer oil from Texaco, but from several different sources and in several different containers.(T-1 42; see also, EL 1.) 16. The HELPER facility is located in the City of Madison, South Dakota, approximately 75 feet from Old Highway 34, 500-1000 feet from the nearest occupied dwelling, and within a one mile radius of the nearest single-family dwelling and Lake Madison. (Ex. 11, R-Ex-15G.) 1 7. HELPER did not file its Tier II emergency and hazardous chemical inventory for PCBs 16 present at the facility in 1992 and 1993, until October 1 8, 1994, and to date, has not filed a Tier I or Tier II inventory for MODEF. 1 8. The findings of fact submitted in Appellant’s post hearing briefs are hereby incorporated by reference. ALTERNATWE PROPOSED CONCLUSIONS OF LAW OR DISCRETION I Section 312 of EPCRA, 42 U.S.C. 11021, and the regulations found at 40 CFR Part 370, require the owner or operator of a facility which is required to prepare or have available a material safety data sheet (MSDS) for a hazardous chemical under the Occupational Safety and Health Act of 1970, 29 U.S.C. sectIons 651 et q., (“OSHA”), to prepare and submit an emergency and hazardous chemical inventory form to the Local Emergency Planning Committee (LEPC), the State Emergency Response Commission (SERC), and the fire department with jurisdiction over the facility. 2. Section 31 2(a)(2) of EPCRA requires that the inventory form containing tier I or tier II information (as described in subsection (d)( 1) and (2)) be submitted on or before March 1, 1988, and annually thereafter on March 1, and contain data with respect to the preceding calendar year. Section 31 2(a)(3) allows an owner or operator to meet the requirements of section 31 2 with respect to a hazardous chemical which is a mixture, the option of providing information on the inventory form on each element or compound in the mixture which is a hazardous chemical or on the mixture itself. ------- 3. Section 3 12(b) of EPCRA states that a hazardous chemical subject to the requirements of section 31 2 is any hazardous chemical for which a MSDS or a listing is required under section 311 of EPCRA. 4. Section 311(e) of EPCRA, 42 U.S.C. 11021(e), states, “...the term ‘hazardous chemical’ has the meaning given such term by section 1910.1200(c) of the title 29 of the Code of Federal Regulations...”. 5. 29 CFR 1910.1200(c) defines a “hazardous chemical” as any chemical which is a physical hazard or a health hazard. 6. “Physical Hazard” is defined as ua chemical for which there Is scientifically valid evidence that it is ...flammable.” (29 CFR 1910.1200(c)) 7. “Flammable’ means ...‘Liquid Flammable’ means ... any mixture having components with flashpolnts of 100 degrees F (37.8 degrees C) or higher, the total of which make up 99 percent or more of the total volume of the mixture.” Id. 8. “Flashpoint’ means the minimum temperature at which a liquid gives off a vapor in sufficient concentration to Ignite when tested.”(ld.) 9. The MSDS for MODEF submitted by HELPER 17 (Ex. 12, R-Ex-1 7C) shows that MODEF has a flashpolnt greater than 100 degrees Fahrenheit, meeting the OSHA definitions of a flammable liquid, a uphysical hazard” and therefore a “hazardous chemical” for purposes of EPCRA sections 311 and 3 1 2. (29 CFR 1910.1200(c); 52 FR 163, 31 879; see also, Appendix A, first sentence(ld. at 31 883).) 10. Since MODEF is a physical hazard and a hazardous chemical that makes up more than 99% of the mixture referred to in the complaint as “PCB-contaminated liquids,” and all parties agree that approximately 57,000 pounds of it was present at HELPER in 1992, as a matter of law, HELPER was required to submit either a Tier I or Tier II inventory form by March 1, 1993, in accordance with EPCRA sections 311 and 312. 11. 29 CFR 1910.1200(d)(1) places the burden on HELPER to evaluate ------- chemicals at the facility workplace to determine if they are hazardous by either relying upon the evaluations made by their suppliers, or evaluating the chemicals themselves. 12. HELPER did not rely on a MSDS for MODEF, nor did it perform a hazard determination and evaluate the MODEF. 1 3. In evaluating chemicals, the chemical manufacturer, in this case, Texaco, or the employer, HELPER, is required to treat the following as sources establishing that chemicals listed in them are hazardous: (1) 29 CFR 1910, Subpart Z; or (2) Threshold Limit Values for Chemical Substances and Physical Agents in the Work Environment, American Conference of Governmental Industrial Hygienists (ACGIH) (latest edition). (Section 1910.1200(d)(3).) 1 4. “Foreseeable emergency’ means any potential occurrence such as, but not limited to, equipment failure, rupture of containers, or failure of control equipment which could result in an uncontrolled release of a hazardous chemical Into the workplace.” (Id. at Section 1910.1200(c)) 1 5. The conclusions of law submitted in the post hearing briefs are hereby incorporated. ------- UNITED STATES ENVIRONMENTAL PROTECTION AGENCY REGION VIII Docket No.: EPCRA-Vlll-95-06 IN THE MATIEROF: ) ) H.E.L.P.E.R. Inc. ) Airport Industrial Park ) APPELLANT’S BRIEF IN Old HIghway 34 ) SUPPORT OF APPELLANT’s P.O. Box 505 ) PROPOSED ALTERNATIVE Madison, SD 57042 ) FINDINGS OF FACT AND ) CONCLUSIONS OF LAW OR ) DISCRETION Appellee. ) I. INTRODUCTION The United States Environmental Protection Agency, Region VIII (EPA) requests that the Environmental Appeals Board (EAB) conduct a de novo review of the record before the Presiding Officer in In The Matter Of: H.E.L.P.E.R., Inc. , Docket No. EPCRA-VllI-95-06 (February 20, 1998) (Decision). This appeal is filed pursuant to 40 CFR §22.30(a) and the EAB’s March 12, 1998 Order Granting Extension of Time. The issue on appeal is complex and the implications are far reaching for the public and all employees of utilities, commercial PCB facilities, and others engaged in work related to PCB-contaminated liquids. The Administrative Law Judge (AL]) erred as a matter of law in finding that “the quantity of hazardous chemicals at Helper’s facility did not meet the minimum threshold for reporting or for being considered a hazardous chemical” (D-5) for purposes of complying with § 3 11 and 312 of the Emergency Planning and Community Right-To-Know Act, 42 U.S.C. § 1 1021 and 11022. Further, the AL) erred in finding that the “conditions of mineral oil storage at the Helper ------- facility [ do not generate mist]” because U the mineral oil or transformer oil remains in liquid form in enclosed tanks or containers at all times” (D-8) If the AL)’s conclusions are affirmed by the Board, the public will be stripped of Its legal right to know when a facility In its neighborhood or community stores or processes more than 50,000 pounds of PCB-contaminated liquids. By deviating from the definition of hazardous chemical adopted by EPA in EPCRA § 311 and 312, as articulated and published by the United States Department of Labor, Occupational Safety and Health Administration (OS HA) (29 CFR 1910.1 200(c); 52 FR 163, 31879), the AL] erred by ignoring the physical hazards of mineral oil and requiring a “continued exposure” standard (D-8) that exempted HELPER from compliance despite EPCR.A’s broader purpose to protect the community from emergencies that might occur at the facility. He further erred by performing a de facto hazardous determination for HELPER without regard to the complete factual record of mineral oil use, its potential exposure at the HELPER facility and the fact that HELPER did not present one study it had conducted at its facility to show that no mist, vapors, or dust exceed the TLV. The AL] gave little, if any, weight to Agency interpretation by either OSHA or EPA, and failed to assure the public and the employees at HELPER that they would be able to know the hazards they faced as a result of HELPER’s use and storage of MODEF at its facility. For these reasons, Appellant, EPA, requests this Board to take official notice (40 CFR 22.22(f)) of the experience and knowledge of EPA with regard to PCB transformer salvage and reclamation facilities basic operations and processes; to review the factual and legal bases for the Presiding Officer’s erroneous findings that mineral oil is not a hazardous chemical, that all PCB-contaminated liquids were kept in sealed containers, that no mist is present at the HELPER facility, and that the Region did not meet its burden under section 31 2 of EPCRA; and to find Appellee liable for violating section 312 of EPCRA and assess a penalty. ------- II. STATEMENT OF THE PROCEEDINGS The Complaint in this matter was filed on May 25, 1995, and alleged that H ELPER. violated EPCRA sections 311 and 312, 42 U.S.C. 11021 and 11022, by failing to submit an MSDS and an inventory form to the (LEPC), the (SERC), and the fire department by March 1, 1993 for PCB-contaminated liquids 1 8. Although the Presiding Officer stated that under a narrow reading of the complaint, the charges would be dismissed because the Region did not specifically plead that mineral oil or MODEF was a hazardous chemical (D-6), such a reading is not consistent with the allegations contained in the complaint nor the understanding of the parties. While It Is true that the Region did not plead specifically that MODEF was a hazardous chemical, in each of the counts, the Region specified that it was looking at each hazardous chemical at the facility that was a component of PCB-contaminated liquids, which includes MODEF. The Region stated that HELPER had exceeded the threshold reporting quantity for PCB-contaminated liquids of 10,000 pounds. HELPER filed its answer on June 20, 1995, and admitted the general allegations as well as its exceedences of the threshold reporting quantity for PCB-contaminated liquids. HELPER subsequently filed an amended answer one and one half years later denying those allegations and claiming that they had made a typographical error when they had admitted them previously. Prior to these negotiations, HELPER elected to report on the PCB-contaminated mixture as a mixture and subsequent to the negotiations HELPER elected to report on the mixture on a component by component basis. In changing its method of reporting, the burden of exclusion fell on HELPER to show that neither of the components of PCB-contaminated liquids (MODEF and PCBs) was a hazardous chemical which exceeded the threshold amount 19. Prehearing exchanges occurred on August 30, 1996. Both parties submitted additional prehearing exchanges prior to the hearing on January 27, 1997. Neither party filed any rebuttal motions concerning the material submitted during prehearing exchange, ------- yet objections at hearing were made on the record. HELPER had both actual and constructive notice of the charges in the complaint, submitted evidence at the hearing regarding PCBs and MODEF as not being hazardous under their theory, and presented an expert to testify to the same. III. ARGUMENT A. PURPOSE AND STRUCTURE OF THE EMERGENCY PLANNING AND COMMUNITY RIGHT-TO-KNOW ACT (“EPCRA”) Analysis of the Emergency Planning and Community Right-To-Know Act2O (IIEPCRAM) reveals that Its purpose is two-fold. First, “the ‘Right-to-Know’ component, aims to compile accurate, reliable information on the presence and release of toxic chemicals and to make that information available at a reasonably localized level.” Citizens for a Better Environment v. The Steel Co. , 90 F.3d 1237, 1239 (7th Cir. 1996), cert. granted, 11 7 S. Ct. 1079 (Feb. 24, 1997). The second “primary purpose of the Act, the ‘Emergency Planning’ component, is to use the reported information to formulate emergency response plans, again at the local level, in order to limit damage resulting from the accidental release of toxic chemicals.” Id. The purpose of EPCRA is to provide communities with information on potential chemical hazards within their boundaries and to foster state and local emergency planning efforts to control any accidental releases. See H.R. REP. NO. 253, 99th Cong., 2d Sess., Pt. 1 at 60; Emergency Planning and Community Right to Know Programs, Interim Final Rule, 51 Fed. Reg. 41,570, 41,570 (1986) (hereinafter Interim Rule). To achieve this end, EPCRA imposed a system of notification requirements on industrial and commercial facilities and mandated that state emergency response commissions and local emergency planning committees be created. The local emergency planning committees were charged with developing emergency response plans based on the information provided by facilities. See 42 U.S.C. § 1 1001-1 1003. B. THE HAZARD CO ft3NICATION STANDARD, OSHA 29 CFR 1910.1200, ------- REQUIRED H.E.L.P.E.R. TO PROVIDE INFORMATION TO EMPLOYEES ABOUT THE HAZARDS OF THE CHEMICAL MINERAL OIL THEY MAY BE EXPOSED TO WHILE WORKING The Hazard Communication Standard (“HCS”) is designed to provide information to employees about the hazards of the chemicals they may be exposed to while working. The definitions of the hazards covered under the rule are intentionally broad to ensure that employees receive all relevant information about the chemical involved. OSHA has determined that lack of information regarding a chemical’s hazards and appropriate protective measures constitutes a significant risk to exposed workers. The HCS is designed to address that risk by providing such information. The statutory scheme of EPCRA § 311 and 312 relies on the HCS under the Occupational Safety and Health Act of 1970 and regulations promulgated thereunder. Specifically, Section 312(a) provides that “the owner or operator of any facility [ which] is required to prepare or have available a material safety data sheet (“MSDS”) for a hazardous chemical under the Occupational Safety and Health Act of 1970 (29 U.S.C.A. §651 et Accordingly, the OSI-IA definition of “hazardous chemical” must be used to determine whether EPCRA Section 312 confers a duty on H.E.L.P.E.R. to inform designated State and local agencies of the hazards and presence of hazardous chemicals stored at a facility. 1. H.E.L.P.E.R. WAS REQUIRED TO PREPARE A MATERIAL DATA SAFETY SHEET (MSDS) FOR THE HAZARDOUS CHEMICAL MINERAL OIL ------- The requirement to prepare a MSDS is found in OSHA’s implementing regulations, at 29 C.F.R. §1900.1200. This regulation is also called the Hazard Communication Standard. This standard states that employers evaluating chemicals shall treat the following sources as establishing that the chemicals in them are hazardous: (i) 29 C.F.R. § 1910, subpart Z (in this subpart, there is a listing for “oil mist, mineral”) and (ii) ACGIH publication of TLVs (in this publication, there is a listing for “oil mist, mineral.” The acronym “ACGIH” refers to the American Conference of Governmental Industrial Hygienists. The acronym “TLV” refers to Threshold Limit Values. Thus, mineral oil, in at least the mist form, is a hazardous chemical. The logical extension of the worker protection focus of the OSHA21 leads to the conclusion that workers who handle mineral oil in any form must be provided information regarding mineral oil if it is reasonably foreseeable that a spill could occur that would change the liquid mineral oil to mist, thereby exposing workers to the hazardous chemical, mineral oil mist. The trial record established that it is a routine practice at HELPER to pump and drain mineral oil from transformer cores onto metal rollers, all in direct proximity to HELPER’s workers. (T-254 and 255.) The AU also found that HELPER opened the transformers and tested the PCB content and pumped the MODEF into tanks and trucks. (D-3, FF#7) 2. THE AU ERRED IN FINDING, THAT BECAUSE MINERAL OIL MIST DID NOT OCCUR AT H.E.L.P.E.R.’S FACILITY, AS A CONSEQUENCE, H.E.L.P.E.R. DID NOT HAVE A DUTY TO ------- PREPARE A MSDS FOR THE HAZARDOUS CHEMICAL MINERAL OIL FOR ITS WORKERS OSHA’s view is that the employer evaluating chemicals shall treat these sources as establishing that the chemicals in them are hazardous. (See Complainant’s Exhibit 2, Letter dated January 23, 1997 from Dr. Gerald Ryan, OSHP to Cheryl Turcotte). OSHA’s regulatory scheme is expansive. Regardless of the actual exposures that may occur in the workplace, the employer must consider potential (accidental or possible) exposure to include exposure that could result in the event of a foreseeable emergency. (See 29 CFR 1910.1200(c)) HELPER succeeded at the hearing in misdirecting the application of the regulation. HELPER argued that mineral oil mist was not present during normal operations at the facility. The AU agreed with this argument and prematurely concluded his examination of the regulatory duty placed on HELPER. Although appellant contends that mineral oil mist did occur at HELPER’s facility22 as part of normal operations (and that this too would confer a regulatory duty on HELPER to prepare or make available a MSDS for the hazardous chemical mineral oil), the AU should have continued his examination and considered whether it was reasonably foreseeable that workers could have been exposed to mineral oil mist as a result of an accidental spill or release. The AU erred by not doing this. Proper OSHA application of the regulation rejects the need to find actual mineral oil mist at the facility as a condition precedent for the employer to prepare an MSDS for mineral oil ------- because of the OSH1½ presumption that all containers are subject to leakage and spillage (with exceptions which do not apply here.23) In fact, HELPER’s process of pulling transformer cores and draining them on metal rollers (T-255)created potential exposure of HELPER employees to mineral oil mist. 3. THE 10,000 POUND THRESHOLD DOES NOT APPLY IN CIRCUMSTANCES OF FORESEEABLE SPILLS OF MINERAL OIL The regulations require that facility owners or operators submit an MSDS and inventory form for hazardous chemicals present at the facility at any one time in amounts equal to or greater than 10,000 pounds. 40 C.F.R. §370.20(b) (1,2). The record shows that HELPER stored 57,000 pounds of mineral oil contaminated with PCBs on or around October 15, 1992. (D-5) Assuming arguendo that the appropriate standard (or interpretation of the regulation) is that a facility owner or operator must submit an inventory form for mineral oil when it is a reasonably foreseeable possibility that workers may be exposed to the mist form during a spill, the standard cannot require that 10,000 pounds of mineral oil mist must be present for the standard to apply. Since the regulatory scheme favors worker protection, it is nonsensical that in the context of mineral oil mist, five tons of liquid mineral oil would have to be atomized before the standard applied. Such an event (atomization of five tons of mineral oil) is not a reasonably foreseeable event in any industrial scenario. It simply is not consistent or true to congressional intent ------- and implementation of OSHA to establish mineral oil mist as a hazardous chemical, and then erect a threshold planning quantity of 10,000 pounds as the minimum amount of mist which would have to be released in a reasonably foreseeable spill before obligating submission of an inventory form. It is more consistent to find that a facility which exceeds storing or handling 10,000 pounds of mineral oil must supply an inventory form if it is reasonably foreseeable that workers would be exposed to mineral oil mist during routine operations or an accident or spill. There is no threshold amount of a hazardous chemical which must be met before the duty to inform employees attaches to an employer. That is, it does not matter if there is a lot or a little of mineral oil at the HELPER facility: the potential for the presence of mineral oil confers the duty on HELPER to inform its employees. 4. THE D.C. CIRCUIT SUPPORTS APPELLANT EPA’S CONTENTION THAT INTERPRETATIONS OF THE OSHA PROGRJ\M SHOULD FAVOR WORKER PROTECTIONS This interpretation is established by the D.C. Circuit Court of Appeals in its decision General Carbon Company, A Division Of St. Mary’s Carbon Company, A Corporation, Petitioner V. Occupational Safety & Health Review Commission, And Secretary Of Labor , 860 F.2d 479 (D.C.Cir. 1988). Here, the court concluded that the standard requires labeling based on the intrinsic properties of hazardous chemicals, not on predictions about the level of risk experienced by particular employees. “ [ U]nder the definition in the Hazard Communication Standard (‘HCS”), an identification of a substance as a hazardous chemical does not depend upon the product’s ------- anticipated use at any particular worksite. A substance ... either is or is not a hazardous chemical; the HCS definition cannot be read to indicate that a substance could be a hazardous chemical in some concentrations but not others. Id. at 481. This is meaningful here: presence of mineral oil, a hazardous chemical, in any concentration at the HELPER facility, requires notice to employees. - This conclusion is supported by the court in General Carbon . The court also ruled that (1) because they release more than a ufew molecules” of [ copper], the [ brushes] were not “articles” exempt from coverage, and (2) the violation could not be characterized as de minimis, because such a characterization would be inconsistent with the premise of the standard, that “as a general matter, providing workers with comprehensive information regarding possible workplace dangers bears a direct and immediate relationship to health.” Id at 482. The court concluded that the standard requires labeling based on the intrinsic properties of hazardous chemicals, not on predictions about the level of risk experienced by particular employees. MODEF, by virtue of the intrinsic property of flammability, is a hazardous chemical under OSHA and EPCRA and therefore subjects HELPER to EPCRA regulation. C. CONCLUSION: HELPER WAS OBLIGATED TO PREPARE A MSDS FOR THE HAZARDOUS CHEMICAL MINERAL OIL ? ‘ ND TO FILE A TIER II REPORT, AS REQUIRED BY SECTION 312 OF EPCRA HELPER had an obligation to file a Tier II hazardous chemical reporting form for mineral oil, dielectric fluid (‘MODEF”) because a mist form occurred as part of HELPER’s ------- unormal operating conditions” or as a reasonably foreseeable consequence of an accidental spill. The AL) found that no mineral oil mist occurred at Helper during normal operating conditions. Crucially, the AL] did not determine to see whether mineral oil mist in any amount could present exposure to workers during normal operations or in a reasonably foreseeable spill. Because the standard was not fully applied, the AU’s inquiry failed to consider the reasonably foreseeable possibility that mineral oil mist, in any concentration, could have been present at the facility during routine operations or in an accident or spill. This is an integral requirement of §31224,25. A determination of a chemical’s hazard requires consideration of multiple circumstances associated with a particular workplace situation and especially consideration of potential (accidental or foreseeable) exposure to workers. The standard which must be applied Is whether it Is possible or foreseeable, due to an accident or malfunction, that workers could be exposed to oil mist. D. ALTERNATIVELY, THE AU ERRED IN FINDING THAT MINERAL OIL IS NOT A HAZARDOUS CHEMICAL IN ITS LIQUID STATE 1. MINERAL OIL ISA PHYSICAL HAZARD To determine whether HELPER is subject to the requirements of EPCRA, it is first necessary to ascertain if the PCB-contaminated liquids produced, used, or stored at its facility are considered a hazardous chemical. PCB-contaminated liquids are comprised of two components, PCBs and mineral oil, otherwise known as mineral oil dielectric fluid (MODEF) or transformer oil. (1-222; Ex.2 and Ex. 1 5.) The AL) found, and the parties agree, that it is not the PCBs within the mixture that triggers the EPCRA reporting requirements, but rather the MODEF component if it is determined to be a hazardous ------- chemical. (D-7 and 1-241.) For MODEF to be considered a hazardous chemical, It must be either a physical or a health hazard. (52 FR 163, 31879.) A “physical hazard” is defined as a chemical for which there Is scientifically valid evidence that It Is flammable. (Id.) To be considered a “liquid flammable,” the MODEF must constitute 99 percent of the mixture and have a flashpoint greater than 100 degrees Fahrenheit. (Id.) The AL) specifically acknowledged that the PCBs in the PCB-contaminated liquids present at HELPER comprised .05 percent of the mixture leaving the remaining 99.95 percent attributed to the MODEF component. (1245.) Thus, If there exists in the record, scientifically valid evidence showing that mineral oil has a flashpoint greater than 100 degrees, one must conclude that MODEF is in fact and in law, a “physical hazard” and therefore a hazardous chemical. The flashpoint, or minimum temperature at which MODEF will give off vapor in a sufficient quantity to ignite, is 295 degrees2o. The Hazardous Material Identification System (HMIS) and the National Fire Protection Association (NFPA) consider MODEF to be flammable. (Ex. 12.) Since there is scientifically valid evidence In the record (Ex. 12, the Texaco MSDS) that the mineral oil component of the PCB-contamlnated liquids meets the OSHA definition for a physical hazard, then by definition, it must also be considered a hazardous chemical in its liquid state. Pursuant to EPCRA sections 3 11 and 31 2, a facility that produces, uses, or stores a hazardous chemical that exceeds the threshold reporting quantity must file an MSDS and an inventory form with the LEPC, the SERC, and the local fire department. The threshold reporting quantity for non-extremely hazardous substances (nonEHS) is 10,000 pounds. (40 CFR 370.20(b)(1 ).) HELPER produces, uses, or stores more than 50,000 pounds of PCB-contaminated liquids on a daily basis. (Ex. 1; Ex. 6; 1-12, 1 3, 1 5, 1 7, 89-90, and 251.) Thus, HELPER was required to submit a MSDS and an ------- inventory form for the PCB-contaminated liquids or MODEF. 2. OSHA’s EXEMPTION FOR SEALED CONTAINERS DOES NOT APPLY AT HELPER The Presiding Officer found that the only hazard of MODEF stems from the MODEF in its airborne, or mist state (D-7). In holding that MODEF was not hazardous In its liquid state (D-8), he relied exclusively on the Inaccurate assumption that the MODEF was always in enclosed tanks or containers at the HELPER facility (D-8), yet he also found that after receiving the used transformers, HELPER tests the MODEF, pumps It into two 4000 gallon tanks, and ultimately pumps it Into trucks for disposal (D-3, FF #7). Clearly, the MODEF containers cannot be considered enclosed at all times when they are opened for purposes of pumping the MODEF Into the tanks and for subsequently disposal. The AL) may have erroneously relied upon an exemption that exists under OSHA for sealed containers to find that the MODEF either lost its status as a hazardous chemical or became exempt under OSHA.(See Ex. 2, Answer to no.4) Once a chemical is determined to be a hazardous chemical under OSHA, that chemical is always a hazardous chemical. (52 FR 163, 31867.) In certain limited situations, OSHA allows for limited coverage or a relaxed standard under the Hazard Communication Standard (HCS). Limited coverage exists for those hazardous chemicals that are sealed in containers and not opened during the normal conditions of use.( 4 . By the very nature of a transformer salvage and reclamation business, HELPER’s containers are meant to be opened, and indeed must be opened during their normal conditions of use in order to drain the mineral oil and reclaim the metals.(See Ex. 11; T-255; and alternative facts 1 and 2.) However, ignoring the multitude of processes that take place ------- at HELPER and reviewing only what the Judge found, pumping the MODEF into tanks or trucks, it is clear that the MODEF did not stay in sealed containers and was in fact opened during the normal conditions of use. Thus, any exemption allowed by OSHA with regard to its own regulations would not apply to the situation at HELPER. Regardless of whether or not HELPER’s daily operations involved enclosed or open containers, the exemption offered by OSHA is not applicable to assessing compliance with EPCR.A. The reasoning behind OSHA’s relaxed standard is that employees handling these hazardous chemicals In sealed containers would have little potential for measurable exposures, however, EPCRA also looks to potential emergencies that might affect the community near the facility. While OSHA’s focus is worker protection standards27, EPCRA’s broader perspective28 is intended to ensure the public’s health and safety by designing the concept of the emergency response plan formulated and administered in the case of a hazardous chemical release. (Id., 1986 U.S. Code Cong. & Admin. News at 2896.) Given that the aspect which makes mineral oil a physical hazard is based on its flammable nature, it has a much greater potential for measurable exposures that would arise in an emergency situations. To the extent that HELPER fails to provide an inventory form for MODEF to the local agencies, the emergency response plans are based on incomplete or inaccurate information that could impact the safety of the community if a fire or an explosion were to occur igniting this flammable liquid. Thus, such emergencies are foreseeable and the public has a right to know when a facility in its community stores more than 50,000 pounds of PCB-contaminated liquids. In conclusion, the MODEF at HELPER is not enclosed in sealed containers at all times and not even arguably exempt under OS HA. CONCLUSION Thus, the AL) erred in not considering the physical hazards associated with MODEF, in applying a standard that deviates from OSHA, in erroneously concluding that ------- mineral oil or MODEF is not a hazardous chemical, and in finding that the MODEF at HELPER is enclosed at all times. Thus, the Appellant respectfully requests that the EAB find that the PCB-contamlnated liquids or MODEF are hazardous chemicals; that HELPER must report under EPCRA; that HELPER Is liable under sections 311 and 312 of EPCRA; that the penalty alleged In the complaint for violation of Count I and Count II should be assessed; and grant any and all other relief. Respectfully submitted this 1 5th day of April, 1998. ------- |