Attorney Work Product: Volume 1, LM-1 Thru LM-27d


ATTORNEY
WORK IN
PROGRESS
by
CATALOG
NUMBER

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ATTORNEY WORK PRODUCT BY CATALOG NUMBER
REVISED 7/13/2001
Catalog Number
KF 3775 .Z9 L5 LM-1
Catalog Number
KF 3775 .Z9 L5 LM-2
Title	Date
Memorandum of Understanding between (Name of	1994-Mar-14
Mill) and the U.S. Environmental Protection
Agency
Title	Date
United States v. Cordova Chcm. Co. of Michigan	1997-May-13
Catalog Number
KF 3775 .Z9 L5 LM-3
Catalog Number
KF 3775 .Z9 L5 LM-4
Catalog Number
KF 3775 .Z9 L5 LM-5
Title	Date
Boiler and Industrial Furnace Regulations (BIF), 1991-Nov-12
(40 C.F.R. Part 266, Subpart H)
Title
Current Issues Concerning Compliance Schedules
for WQBELS
Title	Date
Boiler and Industrial Furnace (BIF)	1991-Dcc-18
Prccertification Issues
Catalog Number
KF 3775 .Z9 L5 LM-6
Title
Medical Waste Tracking Act of 1988
Date
1998-Dec-l
Catalog Number
KF 3775 .Z9 L5 LM-7
ENFORCEMENT
CONFIDENTIAL - DO
NOT RELEASE
Catalog Number
KF 3775 .Z9 L5 LM-8
Title
Regulatory Enforcement Programs Concerning
"How to Respond to Legal Arguments Challenging
EPA'a Ability to Enforce Violations that Already
Have Been Resolved by a State"
Title
Retention of Funds Under CERCLA 122(b)(3)
Date
1999 - Jan-27
Date
1999-Mar-24
Catalog Number
KF 3775 .Z9 L5 LM-9
Title	Date
Defining "Matters Addressed" in CERCLA	1997-Mar-14
Statements
Catalog Number
KF 3775 .Z9 L5 LM-10
Catalog Number
KF 3775 .Z9 L5 LM-tl
Catalog Number
KF 3775 ,Z9 L5 LM-12
ENFORCEMENT
CONFIDENTIAL - DO
NOT RELEASE
Title	Date
Denial of Motion for Preliminary Injunction	1992-Jun- 30
Requiring Public Attendance at the Governors'
Fonim on Environmental Management [(NRDC)
806 F. Supp. 275J
Title	Date
Restrictions on the Acceptance of Gifts by Executive 1999-April- 21
Branch Employees
Title	Date
Spitzcr Great Lakes Ltd., Company v. US EPA 1999-Apr-14
(173 F3d 412)
Catalog Number
KF 3775 .Z9 L5 LM-13
Catalog Number
KF 3775 .Z9 L5 LM-14
ENFORCEMENT
Title
Paperwork Reduction Act
Title
Transmittal of Olin Model Brief
Date
1981- April 1
Date
1996-Sept- 20
07/13/2001
1

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ATTORNEY WORK PRODUCT BY CATALOG NUMBER
REVISED 7/13/2001
CONFIDENTIAL - DO
NOT RELEASE
Catalog Number
KF 3775 .Z9 L5 LM-15
ENFORCEMENT
CONFIDENTIAL - DO
NOT RELEASE
Catalog Number
KF 3775 ,Z9 L5 LM-15a
ENFORCEMENT
CONFIDENTIAL-DO
NOT RELEASE
Title	Date
Briefing paper: Briefing Paper for State of North 1993-Nov-8
Carolina's Groundwater Reclassification
Amendment and the New Hanover County Airport
Burn Pit Superfund Site November 8,1993
Title
Explanations of Significant Difference (ESDs)
Catalog Number
KF 3775 .Z9 L5 LM-15b
ENFORCEMENT
CONFIDENTIAL - DO
NOT RELEASE
Title
FOIA Request 4-RIN-00832-94
Date
1994-Mar-21
Catalog Number
KF 3775 .Z9 L5 LM-15c
Catalog Number
KF 3775 .Z9 L5 LM-16A
ENFORCEMENT
CONFIDENTIAL - DO
NOT RELEASE
Title
Procedures for Obtaining Concurrence from DOJ
Title	Date
Distribution of Case Memorandums for Economic 1992-Sep-l
Benefit of Noncompliance and Ability to Pay
Catalog Number
KF 3775 .Z9 L5 LM-16B
ENFORCEMENT
CONFIDENTIAL-DO
NOT RELEASE
Title	Date
Economic Benefit from Noncompliance: An	1992-Sep-l
Analysis of Judicial and Administrative
Interpretation
Catalog Number
KF 3775 .Z9 L5 LM-17
Title	Date
Environmental Permitting and NEPA Compliance 1997-Oct-28
Catalog Number
KF 3775 .Z9 L5 LM-18
Catalog Number
KF 3775 .Z9 L5 LM-19
Catalog Number
KF 3775..Z9 L5 LM-20
Catalog Number
KF 3775 .Z9 L5 LM-21
Title	Date
Request for OGC Comments on Program for Use of 1993-Feb-22
Federal Claims Collection Act for Superfund Cost
Recovery
Title	Date
Disclosure of Penalty Calculations Under the	1988-Nov-4
Freedom of Information Act (FOIA)
Title	Date
Adverse Water Quality Standards Decision — Idaho 1997-Feb-26
Conservation League v. Browner, W. D. Wash. (968
F. Supp. 546)
Title	Date
EPA's Enforcement Action Concerning Sewage 1992-Dec-18
Pollution of the Miami River, Biscaync Bay and the
Atlantic Ocean
Catalog Number
KF 3775 .Z9 L5 LM-22
Title
Application of Katzson Brothers v. EPA and EPC
07/13/2001
2

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ATTORNEY WORK PRODUCT BY CATALOG NUMBER
REVISED 7/13/2001
Catalog Number
KF 3775 .Z9 L5 LM-23
(Environmental Protection Corporation) v. Thomas
Decisions to Administrative Penalty Enforcement
Title	Date
New FACA Case	1998-Oct-19
Catalog Number
KF 3775 .Z9 L5 LM-24
Title
Advisory on Part 28 Discovery Process
Date
1993-Jan-27
Catalog Number
KF 3775 .73 L5 LM-25
Title	Date
Civil Penalty Assessment for Clean Water Act 1992-Mar-31
Wastewater Discharge Violations: A Review of the
Law
Catalog Number
KF 3775 .73 L5 LM-26
Catalog Number
KF 3775 .73 L5 LM-27
Title	Date
Research Request: Legal Effect of a Federal	1993-Jan-29
Agency's Failure to Comply with Its Own
Regulations, Policies, and Guidance
Title	Date
Favorable Ovcrfiling Decision by ALJ for Harmon 1998-Oct-19
Industries
Catalog Number
KF 3775.73 L5 LM-27a
Title	Date
Useful Overfiling Materials & Harmon Case	1998-Oct-23
Catalog Number
KF 3775 .73 L5 LM-27b
Catalog Number
KF 3775 .73 L5 LM-27c
Catalog Number
KF 3775 .73 L5 LM-27d
Title
EPA's Combined Suggestions in Support of Motion
for Summary Judgment and Opposition to
Plaintiffs Motion for Summary Judgement
Title
EPA's Supplemental Brief in Support of its Motion
for Summary Judgment
Title
Initial Decision
Date
1997-Mar-24
Date
1997-Mar-27
Date
1998-Oct-8
Catalog Number
KF 3775.73 L5 LM-28
ENFORCEMENT
CONFIDENTIAL - DO
NOT RELEASE
Title	Date
Very Unfavorable Court Decision re Overfiling 1998-Aug-31
Authority for Harmon Industries
Catalog Number
KF 3775.73 L5 LM-29
Catalog Number
KF 3775.73 L5 LM-30
Catalog Number
KF 3775 .73 L5 LM-31
Title	Date
Responding to Harmon Industries Adverse	1998- Sept- 29
Overfiling Decision
Title	Date
Trinity American Corporation v. EPA, 4th Cir. No. 1998-Aug-13
95-20627 (August 4,1998) (150 F3d 389)
Title	Date
Research Request: Legal Effect of a Federal	1993-Jan-29
Agency's Failure to Comply with Its Own
Regulations, Policies, and Guidance
07/13/2001
3

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ATTORNEY WORK PRODUCT BY CATALOG NUMBER
REVISED 7/13/2001
Catalog Number
KF 3775 .Z9 L5 LM-32
Catalog Number
KF 3775 .Z9 L5 LM-33
Catalog Number
KF 3775 .Z9 L5 LM-34
Catalog Number
KF 3775 .Z9 L5 LM-35
Catalog Number
KF 3775 ,Z9 L5 LM-36
Title	Date
Release of cc:mail messages pursuant to a discovery	1993-Nov-24
request
Title	Date
Summary of Current Information on the Issue of	1993-May-4
Confidentiality of Electronic Files
Title	Date
Whether a lender is responsible for contamination	1989-Sep-22
of property acquired through foreclosure
Title	Date
TSCA Administrative Search Warrant Authority	1988-Oct-7
Upheld in Boliden Metech, Inc. v. United States (695
F. Supp. 77)
Title	Date
Water Quality Standards Case Summaries	1989-Dec-21
Catalog Number
KF 3775 .Z9 L5 LM-37
Title
Overview of the NCP (40 CFR 300)
Date
1993-Mar-30
Catalog Number
KF 3775 .Z9 L5 LM-38
Title	Date
National Association of Metal Finishers, et, al. v. 1993-May-14
EPA (No. 93-0965 D.D.C.) - Legal Challenge to the
National Toxics Rule
Catalog Number
KF 3775 .Z9 L5 LM-39
Catalog Number
KF 3775 .Z9 L5 LM-40
Title	Date
Legal Challenge to the National Toxics Rule - (57	1993-Apr-21
Fed. Reg. 60,848 et seq.)
Title	Date
U.S. District Court Decision - Federal Advisory	1996-Mar-13
Committee Act
Catalog Number
KF 3775 .Z9 L5 LM-41
Catalog Number
KF 3775 ,Z9 L5 LM-42
Catalog Number
KF 3775 .Z9 L5 LM-43
Catalog Number
KF 3775 .Z9 L5 LM-44
Catalog Number
KF 3775 .Z9 L5 LM-45
Title	Date
Court Decision Holding that Certain Provisions of 1996-May-8
the Lead Contamination Control Act are
Unconstitutional (42 U.S.C.§§300-j-21 et seq.)
Title	Date
Favorable Opinion in Puerto Rico Aqueduct and 1994-Sept-19
Sewer Authority v. Browner No. 93-2340 (August
31,1994,1st Cir.) (35 F3d 600)
Title	Date
Summary of Recent Decisions Regarding Recovery 1996-Mar-26
of Oversight Costs Under CERCLA
Title	Date
Litigation Raising Section 402(k) of the CWA and 1993-Oct-7
1974 Associate General Counsel Opinion
Title	Date
GAO Agrees Judgment Fund is available to pay 1993-Dec
settlements resolving contribution liability of
Federal PRPs for Superfund response costs
07/13/2001
4

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ATTORNEY WORK PRODUCT BY CATALOG NUMBER
REVISED 7/13/2001
Catalog Number
KF 3775 .Z9 L5 LM-46
Catalog Number
KF 3775 .Z9 L5 LM-47
Catalog Number
KF 3775 .Z9 L5 LM-48
Title	Date
Analysis of the Shaffer decision and other ethical	1993-Apr-8
obligations relevant of the ICR issue
Title	Date
Decision and Order In Re: Evcrwood Treatment	1996-Oct-30
Company, Inc. and Cary W. Thigpen, RCRA (3008)
Appeal No. 95-1 (September 27,1996)
Title	Date
Management of Remediation Waste Under RCRA	1998-Octl4
Catalog Number
KF 3775 .Z9 L5 LM-49
Title	Date
EAB Decision Regarding Co-mingling of Agency 1995-June-29
Functions
Catalog Number
KF 3775 .Z9 L5 LM-50
Catalog Number
KF 3775 .Z9 L5 LM-51
Title	Date
Notice of Commencement Violation in	1990-Mar-16
Circumstances Where Notice is Given but no
Manufacturing Occurs - 40 CFR §720.102
Title	Date
Decision Dismissing Suit on "Everglades Forever 1995-Aug-4
Act"
Catalog Number
KF 3775 .Z9 L5 LM-52
Catalog Number
KF 3775 .Z9 L5 LM-53
Catalog Number
KF 3775 .Z9 L5 LM-54
Catalog Number
KF 3775 ,Z9 L5 LM-55
Catalog Number
KF 3775 ,Z9 L5 LM-56
Catalog Number
KF 3775 .Z9 L5 LM-57
Catalog Number
KF 3775 .Z9 L5 LM-58
Title	Date
Supreme Court Opinion in Seminole Tribe v.	1996-Apr-5
Florida (517 U.S. 44) (116 S. Ct 1114)
Title	Date
Favorable Decision in Commonwealth of Virginia v. 1996-Apr-l
Browner (Virginia II), (4th Cir.) No. 95-1052 (80
F3d 869)
Title	Date
Favorable Ruling in U.S. v. Bell Petroleum Services, 1996-Mar-26
Inc., Odessa Chromium I Site, Odessa, Texas (64
F3d 202)
Title	Date
Supreme Court Decision on Citizens' Ability under 1996-Mar-21
RCRA §7002 to Recover Past Cleanup Costs for
Waste Contamination (516 U.S. 479, (116 S. Ct.
1251)
Title	Date
Adverse Decision in Georgia CWA § 303(d) Total 1996-Mar-28
Maximum Daily Load (TMDL) Case — Sierra Club,
et al. v. Hankinson (939 F. Supp. 865)
Title	Date
U.S. Court of Appeals Decision Holds that EPA has 1995-Dec-ll
Never Articulated Whether Ferric Ferrocvanide is
a CERCLA Hazardous Substance and Refers
Question to Agency - Commonwealth of
Massachusetts v. Blackstone Valley Electric Co.,
No. 94-2286 (1st Cir. Oct 6.1995) (67 F3d 981)
Title	Date
Environmental Defense Fund, ct al. v. EPA, et al. 1996-May-10
07/13/2001
5

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ATTORNEY WORK PRODUCT BY CATALOG NUMBER
REVISED 7/13/2001
(82 F3d 451)
Catalog Number
KF 3775 .Z9 L5 LM-59
Title	Date
The Fertilizer Institute v. EPA (938 F. Supp. 52) 1996-Oct-8
Catalog Number
KF 3775 .Z9 L5 LM-60
Title
Favorable Decision Upholding the Listing of the
Tulalip Indian Reservation Landfill on the
CERCLA National Priorities List (NPL) of
Hazardous Waste Sites
Date
1996-Jul-3
Catalog Number
KF 3775.73 L5 LM-61
Catalog Number
KF 3775 ,Z9 L5 LM-62
Catalog Number
KF 3775 .Z9 L5 LM-63
Catalog Number
KF 3775 .Z9 L5 LM-64
Catalog Number
KF 3775 .Z9 L5 LM-65
Catalog Number
KF 3775 ,Z9 L5 LM-66
Catalog Number
KF 3775 .Z9 L5 LM-67
Catalog Number
KF 3775 .Z9 L5 LM-68
Catalog Number
KF 3775 .Z9 L5 LM-69
Catalog Number
KF 3775 .Z9 L5 LM-70
Title	Date
United States v. Keystone Sanitation Co., ct al., No. 1996-Sept-30
l:CV-93-1482 (M.D. PA. August 27,1996)
Title	Date
Denial of Summary Judgment on Divisibility of 1996-May-16
Harm in United States v. State of Washington and
PACCAR, Inc., No. 94-1395 (W. D. Wash. Mar. 7,
1996)
Title	Date
Fifth Circuit's Favorable Ruling in United States & 1996-May 17
State of Louisiana v. Marine Shale Processors, Inc.
ct al. (81 F3d 1361)
Title	Date
Favorable Decision in Missouri v. United States, (E. 1996-Fcb-14
D. Mo., No. 94-1288)
Title	Date
Favorable Decision in Commonwealth of Virginia v. 1996-Feb-21
United States of America (VirginiaO, (4th Cir.) No.
95-2229 (74 F3d 517)
Title	Date
Chemical Waste Management, Inc. et al. v. United 1995-Jul-12
States Environmental Protection Agency (Civil No.
93-1860) (56 F3d 1434)
Title	Date
Sierra Club, Lone Star Chapter v. American	1995-Jul-18
Exploration Company, D.C. No. H-92-3489 (S. Tex),
July 3,1995
Title	Date
United States v. Iron Mountain Mines, ct al., No. 1995-Apr-28
CIV-S-91-768 DFL (E. D. Cal. March 31,1995) (881
F. Supp 1432)
Title	Date
Dioxin/Organochlorine Center, ct at. v. Clarke, Nos. 1995-Jun-30
93-35973,93-36000 (9th Cir.) (57 F3d 1517)
Title	Date
United States v. TIC Investment Corporation, No. 1996-Mar-25
95-1035 (8th Circuit) (October 16,1995) (68 F3d
1082)
07/13/2001
6

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ATTORNEY WORK PRODUCT BY CATALOG NUMBER
REVISED 7/13/2001
Catalog Number
KF 3775 .Z9 L5 LM-71
Catalog Number
KF 3775 .Z9 L5 LM-72
Catalog Number
KF 3775 .Z9 L5 LM-73
Catalog Number
KF 3775 .Z9 L5 LM-74
Catalog Number
KF 3775 .Z9 L5 LM-75
Title	Date
United States v. Keystone Sanitation Co., et al., No.	1996-Jun-7
l:CV-93-1482 (M.D. PA. April 30,1996)
Title	Date
Amerada Hess Pipeline Corp. v. FERC, No. 95-1305	1997-Aug-26
(D.C. Cir. July 8,1997)
Title	Date
American Paper Institute, Inc. et al. v. EPA No. 89-	1993-Jun-25
1499 (D.C. Cir) (996 F2d 346)
Title	Date
The Raymond Proffitt Foundation v. EPA (930 F.	1996-Apr-26
Supp 1088)
Title
Liability of Private Operators of POTWs
Date
1988-May-13
Catalog Number
KF 3775 .Z9 L5 LM-76
Catalog Number
KF 3775 .Z9 L5 LM-77
ENFORCEMENT
CONFIDENTIAL - DO
NOT RELEASE
Title
CERCLA Liability of Individual Corporate
Officers, Directors or Employees and Parent
Corporations — Secondarily Liable Parties
Title
Removal Actions-Administrative Records and
Liability Files
Date
1990-May-16
Catalog Number
KF 3775 .Z9 L5 LM-78
Catalog Number
KF 3775 .Z9 L5 LM-79
Catalog Number
KF 3775 .Z9 L5 LM-80
Catalog Number
KF 3775 .Z9 L5 LM-81
Catalog Number
KF 3775 .Z9 L5 LM-82
Catalog Number
KF 3775 .Z9 L5 LM-83
ENFORCEMENT
CONFIDENTIAL - DO
NOT RELEASE
Title	Date
Information Subject to CERCLA §104(e) and 1991-May-20
RCRA §3007(b)
Title
Passive Disposal
Title	Date
Liability under §107 of CERCLA; Whether	1989-Aug-2
leaching/leaking constitutes "disposal."
Title	Date
Administrative Assessment of Civil Penalties	1997-July -16
Against Federal Agencies Under the Clean Air Act
Title	Date
History of Presidential Invocations of Executive 1982-Dcc-14
Privilege Vis-a- Vis Congress
Title	Date
Lender Liability: Kcllev v. EPA, No. 92-1312 (D. C. 1994-Feb-7
Cir., Feb. 4,1994)(15 F3d 1100)
Catalog Number
KF 3775.Z9 L5 LM-84
Title	Date
CERCLA Settlements Lead Region Work Group's 1989-Jun-20
Comments on Draft Municipal Settlement Policy
07/13/2001
7

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ATTORNEY WORK PRODUCT BY CATALOG NUMBER
REVISED 7/13/2001
Catalog Number
KF 3775 .Z9 L5 LM-85
Title	Date
Summary of Current Information on the Issue of 1993-May-4
Confidentiality of Electronic Files
Catalog Number
KF 3775 .Z9 L5 LM-86
ENFORCEMENT
CONFIDENTIAL-DO
NOT RELEASE
Catalog Number
KF 3775 .Z9 L5 LM-87
Title	Date
EPA's Independent Enforcement Authority in 1993-Aug-18
Superfund Cases Involving Federal PRPs
Title	Date
Notice of Commencement of Manufacture with 1990-Feb-l
Regard to Research and Development New
Chemical Substances
Catalog Number
KF 3775 .Z9 L5 LM-88
Catalog Number
KF 3775 .Z9 L5 LM-89
Title	Date
Legal Environmental Assistance Foundation	1989- Oct 27
("LEAF") v. Bay County: Effective Date of EPA
Issued NPDES Permits and the Effect of
Evidentiary Hearing Requests to Stay Permit
Conditions — No. 88-50142-RV (N.D. Fla. Oct. 27,
1989)
Title	Date
State Enforcement of Clean Water Act Against 1991-Fcb-6
Federal Facilities
Catalog Number
KF 3775 .Z9 L5 LM-90
Title	Date
Information Collection Request ("ICR") Materials 1993-Apr-15
Catalog Number
KF 3775 .Z9 L5 LM-91
Title	Date
Including an Order to Pay a Penalty in Complaints 1991-Aug-26
and Compliance Orders Under Section 3008(a) of
RCRA
Catalog Number
KF 3775 .Z9 L5 LM-92
Title	Date
Water Quality Standards Actions Affecting Florida 1989-Jul-05
Catalog Number
KF 3775 .Z9 L5 LM-93
Title
Brief Supporting Civil Penalty Assessment
Date
1991-Jan-31
Catalog Number
KF 3775 .Z9 L5 LM-94
ENFORCEMENT
CONFIDENTIAL - DO
NOT RELEASE
Title	Date
Final ORC opinion regarding Public Comment 1993-Scp-15
Periods for Explanations of Significant Difference
(ESDs)
Catalog Number
KF 3775 .Z9 L5 LM-95
Catalog Number
KF 3775 .Z9 L5 LM-96
Title	Date
Consent Decree Boilerplate Language Concerning	1990-Aug-8
When Stipulated Penalties Attach
Title	Date
FIFRA Section 7 Combination Document	1990-Jul-25
Catalog Number
KF 3775 .73 L5 LM-97
Title	Date
Can EPA collect both stipulated penalties, agreed to 1990-Sept-14
by both parties in an Administrative Order, and
penalties authorized by a statute for violation of an
Administrative Order?
07/13/2001
8

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ATTORNEY WORK PRODUCT BY CATALOG NUMBER
REVISED 7/13/2001
Catalog Number
KF 3775 ,Z9 L5 LM-98
ENFORCEMENT
CONFIDENTIAL - DO
NOT RELEASE
Title	Date
Research and Recommendation Regarding	1991-Oct-28
Government Entity Liability Under CERCLA
Catalog Number
KF 3775 ,Z9 L5 LM-99
Title
Provision of Stipulated Penalties through
Administrative Consent Orders
Date
1985-Apr-26
Catalog Number
KF 3775 .Z9 L5 LM-100
Catalog Number
KF 3775 .Z9 L5 LM-101
Catalog Number
KF 3775 .Z9 L5 LM-102
Title	Date
Administrative Orders on Consent Under Contract	1985-Apr-4
Theory
Title	Date
Are stipulated penalties in a consent decree subject	1989-Mar-8
to interest if not paid in a timely manner?
Title	Date
Contract Theory in Enforcement Cases	1988-Nov-l
Catalog Number
KF 3775 .Z9 L5 LM-103
ENFORCEMENT
CONFIDENTIAL-DO
NOT RELEASE
Title
Review of Florida Rules
Date
1992-Oct-15
Catalog Number
KF 3775 .Z9 L5 LM-103a
ENFORCEMENT
CONFIDENTIAL - DO
NOT RELEASE
Title
Review of Florida Rules
Date
1992-Oct-16
Catalog Number
KF 3775 .Z9 L5 LM-103b
ENFORCEMENT
CONFIDENTIAL - DO
NOT RELEASE
Title
Florida Underground Injection Rules
Date
1993-Feb-5
Catalog Number Title
KF 3775 .Z9 L5 LM-103b-l Briefing Memorandum for Florida's Underground
Injection Rules
Catalog Number
KF 3775 .Z9 L5 LM-104
Catalog Number
KF 3775 .Z9 L5 LM-105
Catalog Number
KF 3775 ,Z9 L5 LM-106
Title
Presenting and Challenging Expert Witnesses in
Environmental Litigation
Title	Date
Favorable EAB Ruling Concerning Overfiling 1997-Apr-8
Authority, Continuing Violations, and Audit Policy:
In re: Harmon Electronics, Inc. Docket No. RCRA-
Vn-91-H-0037, RCRA (3008) Appeal No. 94-4
Title	Date
Listing of the RSR Corporation Lead Smelter Site 1997-Jan-21
on the CERCLA National Priorities List (NPL) of
Hazardous Waste Sites - RSR Corporation v. EPA
(No. 95-1559)(Jan. 3,1997) (102 F3d 1266)
07/13/2001
9

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ATTORNEY WORK PRODUCT BY CATALOG NUMBER
REVISED 7/13/2001
Catalog Number
KF 3775 .Z9 L5 LM-107
Catalog Number
KF 3775.73 L5 LM-108
Title	Date
Montana v. EPA, CV-95-56-M-CCL (D. Mont.) (941 1996-Apr-9
F. Supp. 945)
Title	Date
Administrative Penalty Orders Under the Clean 1988-Aug 19
Water Act
Catalog Number
KF 3775.Z9 L5 LM-109
Title	Date
Atlanta Carbon Monoxide Redesignation Issue 1991-Feb-12
Catalog Number
KF 3775 .Z9L5LM-110
Title	Date
Clarification of EPA NESHAP Policy - Nonfriable 1990-Feb-23
ACM
Catalog Number
KF3775.Z9L5 LM-111
Catalog Number
KF 3775 .Z9L5 LM-112
Catalog Number
KF3775.Z9L5 LM-113
Catalog Number
KF3775.Z9L5 LM-114
Title	Date
Applicability of EPA NESHAP Policy on Nonfriable 1990-Jun-15
Asbestos (February 23,1990) to the Princeton
Enterprises, Inc. Referral
Title
Sovereign Immunity Under RCRA §9007
Title	Date
Putting the 1990 Clean Air Act Amendments in 1970
Perspective
Title	Date
Interpretation of "hazardous substance" under 1989-Aug-21
CERCLA
Catalog Number
KF 3775 .Z9 L5 LM-115
Catalog Number
KF 3775 .Z9L5LM-116
Catalog Number
KF 3775 .Z9L5LM-117
Catalog Number
KF 3775 .Z9 L5 LM-118
Title	Date
Maritime Industry Legal Analysis on the	1986- Sep-3
Application of the Resource Conservation and
Recovery Act (RCRA) regulations to vessel wastes.
Title	Date
General of Aids to Navigation (ATON) - Batteries 1987-Jul-30
and RCRA Requirements
Title	Date
RCRA Regulations and Generation of Aids to 1988-Feb-25
Navigation (ATON) batteries
Title	Date
Clarify the Applicability of EPA's Regulations 1986-Feb-5
Under the Resource Conservation and Recovery Act
(RCRA) to Operational Wastes from Ships
Catalog Number
KF 3775 .Z9L5LM-119
Catalog Number
KF 3775 .Z9L5LM-120
Title	Date
Whether the Navy may require contractors to	1988-Oct-l 1
assume the responsibilities of a hazardous waste
generator
Title	Date
Regulation of Bilge Water under RCRA	1990-Jul-20
Catalog Number
KF 3775 .Z9 L5 LM-121
Title
Date
Definition of Owner or Operator in CERCLA, as 1988-Jun-7
07/13/2001
10

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ATTORNEY WORK PRODUCT BY CATALOG NUMBER
REVISED 7/13/2001
amended by SARA
Catalog Number
KF 3775 .Z9 L5 LM-122
Title	Date
Procedures for the Assessment and Compromise of 1992-May-22
Stipulated Penalties under CERCLA
Administrative Consent Orders
Catalog Number
KF 3775 .Z9 L5 LM-123
Title	Date
Hazardous Waste in Real Estate Transactions 1990-Nov-8
Catalog Number
KF 3775 .Z9 L5 LM-124
Title	Date
Release of Contractor's Invoice Information	1993-Jul-26
Catalog Number
KF 3775 .Z9 L5 LM-125
ENFORCEMENT
CONFIDENTIAL - DO
NOT RELEASE
Title
Draft Removal/Remedial
Date
1997-Jun-27
Catalog Number
KF 3775 .Z9 L5 LM-126
Catalog Number
KF 3775 .Z9 L5 LM-127
ENFORCEMENT
CONFIDENTIAL - DO
NOT RELEASE
Title	Date
Application of RCRA Section 6001 Waiver of	1996-Jan-19
Sovereign Immunity to Fees Required Under
Georgia's Hazardous Site Response Act (HSRA)
Title	Date
Signatories to NPDES Permits at Savannah River 1990-Jul-13
Plant (SRP) and Oak Ridge National Laboratorv
(ORNL)
Catalog Number
KF 3775 .Z9 L5 LM-128
Title	Date
Consolidated Rules of Practice, 40 CFR Part 22 1995-June-19
Catalog Number
KF 3775 .Z9 L5 LM-129
Catalog Number
KF 3775 .Z9 L5 LM-130
Catalog Number
KF 3775 .Z9 L5 LM-131
Catalog Number
KF 3775.73 L5 LM-132
Catalog Number
KF 3775 ,Z9 L5 LM-133
Title	Date
Decision Upholding EPA's Authority Under CWA 2000-Apr-18
Section 303(d) to Identify and Establish Total
Maximum Daily Loads (TMDLs) for Waters
Impaired by Nonpoint Sources
Title	Date
U. S. Supreme Court Decision Strongly Affirming 2000-Jan-31
the Right of Citizens to Sue to Correct Clean Water
Act Violations: Friends of the Earth v. Laidlaw
Environmental Services (TOC), Inc. (Jan. 12,2000)
(528 U.S. 167)
Title	Date
Maximum Containment Level Goal (MCLG) for 2000-May-2
Chloroform - Chlorine Chemistry Council v. EPA
(206 F3d 1286)
Title
Tribal Case - Arizona Public Service Co. v. EPA,
Nos. 98-1196,98-1203,98-1207,98-1208 (D.C. Cir.
May 5,2000) (211 F3d 1280)
Title
RCRA Enforcement in Authorized States
Date
2000-May-17
Date
1986-Aug-28
07/13/2001
11

-------
ATTORNEY WORK PRODUCT BY CATALOG NUMBER
REVISED 7/13/2001
Catalog Number
KF 3775 .Z9 L5 LM-134
ENFORCEMENT
CONFIDENTIAL-DO
NOT RELEASE
Title	Date
Effect of the Expiration of the Medical Waste 1991-Jun-S
Tracking Act of 1988 on Enforcement Actions
Catalog Number
KF 3775 Z9 L5 LM 135
ENFORCEMENT
CONFIDENTIAL -DO
NOT RELEASE
Catalog Number
KF 3775 .Z9 L5 LM-136
Catalog Number
KF 3775 .Z9 L5 LM-137
Title	Date
Revised Strategy for Managing Pending and	1992-Apr-21
Planned Enforcement Actions Potentially Affected
by Shell Oil v. EPA, 950 F3d 741 (D. C. Cir. 1991
Title	Date
Guidance on 40 CFR §260.109A)(20); Definition of 1981-Mar-17
Existing Hazardous Waste Management (HWM)
Facility
Title	Date
Courts Interpretation of Continuing 'Imminent and 1989-Jan-17
Substantial Endangcrment' language in CERCLA §
106
Catalog Number
KF 3775 .Z9 L5 LM-138
ENFORCEMENT
CONFIDENTIAL-DO
NOT RELEASE
Catalog Number
KF 3775 .Z9 L5 LM-139
Catalog Number
KF 3775 .Z9 L5 LM-140
Catalog Number
KF 3775 .Z9 L5 LM-141
Catalog Number
KF 3775 .Z9 L5 LM-142
Catalog Number
KF 3775 .Z9 L5 LM-143
Catalog Number
KF 3775 .Z9 L5 LM-144
Catalog Number
KF 3775 .Z9 L5 LM-145
Catalog Number
KF 3775 .Z9 L5 LM-146
Title	Date
EPA's Definition of Multi-Media "Enforcement" 1991-Mar-01
Title
Section 113 Orders Extending Times for
Compliance with NSPS
Date
1975-July 29
Title	Date
ALJ Role in Safe Drinking Water Act Enforcement 1986-Jul-7
Amendments
Title	Date
Access to Confidential Business Information by 1992-Nov-18
Persons Working Under the Senior Environmental
Employment (SEE) Program
Title	Date
Access to Confidential Business Information by 1992-Sept-21
Persons Working Under the Senior Environmental
Employment (SEE) Program
Title	Date
Legal Opinion - EPA Liability for Contractor	1985-Jun-l 1
Laboratory Activities
Title	Date
Proposed Lender Liability Rule	1991-Jun-17
Title
Deal-Makers Beware: Supcrfund Liability of
Parent Corporations and Asset Purchasers
Title	Date
Principles of Trust and Trustee Liability Under 1994-Jan-7
CERCLA
07/13/2001
12

-------
ATTORNEY WORK PRODUCT BY CATALOG NUMBER
REVISED 7/13/2001
Catalog Number
KF 3775 ,Z9 L5 LM-147
Title
Parent Corporation Liability
Date
1989-Feb-15
Catalog Number
KF 3775 .Z9 L5 LM-148
Catalog Number
KF 3775 .Z9 L5 LM-149
ENFORCEMENT
CONFIDENTIAL-DO
NOT RELEASE
Title	Date
Recent Decision and Ruling in United States v. Fleet 1993-Mar-8
Factors, ct al., No. CV687-070 (S.D. Ga.): Trial
Court Accepts and Applies CERCLA Lender
Liability Rule, Holds Secured Creditor Liable for
Costs of Response
Title
Revised CERCLA Lender Liability Rule
Date
1991-Feb-5
Catalog Number
KF 3775 .Z9 L5 LM-150
Title
Lender Liability Under CERCLA
Date
1991-Jun-10
Catalog Number
KF 3775 .Z9 L5 LM-151
Catalog Number
KF 3775 ,Z9 L5 LM-152
ENFORCEMENT
CONFIDENTIAL - DO
NOT RELEASE
Title	Date
Resolution of Disputes Between the States and the	1991-Jul-3
United States Environmental Protection Agency
under Supcrfund Three Party Consent Decrees
Title	Date
Scope of CERCLA Contribution Protection	1992-Nov-16
Catalog Number
KF 3775 .Z9 L5 LM-153
Title
Judgment Funds
Date
1993-Mar-12
Catalog Number
KF 3775 .Z9 L5 LM-154
ENFORCEMENT
CONFIDENTIAL - DO
NOT RELEASE
Title	Date
Case Management Goals/Guidance for Resolving 1991-Nov-7
Federal CERCLA Liability at Privately Owned
CERCLA Sites
Catalog Number
KF 3775 .Z9 L5 LM-155
Catalog Number
KF 3775 .Z9 L5 LM-156
Title	Date
State Jurisdiction over Federal Facilities and Indian 1976-Dec-8
Tribes under Part B of the Safe Drinking Water Act
Title	Date
Facilitating Property Transfers at Federal Facilities 1992-Nov-13
Catalog Number
KF 3775 .Z9 L5 LM-157
ENFORCEMENT
CONFIDENTIAL - DO
NOT RELEASE
Catalog Number
KF 3775 .Z9 L5 LM-158
Title	Date
Virginia Supreme Court Ruling Precluding State 2001-Mar-2
Water Enforcement Action on Res Judicata
Grounds: State Water Control Board, ct aL v.
Smithficld Foods (March 2,2001)
Title
EPA's Contractor Listing Program
Date
1992-Apr-2
Catalog Number
KF 3775 .Z9 L5 LM-159
Title
Overv iew of Wetland Regulation
07/13/2001
13

-------
ATTORNEY WORK PRODUCT BY CATALOG NUMBER
REVISED 7/13/2001
Catalog Number
KF 3775 .Z9 L5 LM-160
Title
Clean Water Act Amendments
Date
1986-Oct-16
Catalog Number
KF 3775.73 L5 LM-161
Catalog Number
KF 3775 .Z9 L5 LM-162
ENFORCEMENT
CONFIDENTIAL - DO
NOT RELEASE
Title	Date
Negotiation of Environmental Auditing Provisions	1986-Mar-19
in Consent Decrees and Agreements
Title	Date
Negotiation of Environmental Auditing Provisions	1986-Jan-22
in Consent Decrees and Agreements
Catalog Number
KF 3775 .Z9 L5 LM-163
Title	Date
Participation Procedures for PRP's Identified Late 1990-Jun-13
in the CERCLA Remedial Process
Catalog Number
KF 3775 .Z9 L5 LM-164
Title	Date
Getting the Word Out: How Your Company can 1993-May-01
Become a Potentially Responsible Party Under
CERCLA
Catalog Number
KF 3775 .Z9 L5 LM-165
Title	Date
Multiday Penalties for "Continuing" LDR Disposal 1990-Dec-ll
Violations
Catalog Number
KF 3775 .Z9 L5 LM-166
Title	Date
Illustrative Civil and Administrative Penalty	1992-Oct-5
Decisions
Catalog Number
KF 3775 .Z9 L5 LM-167
Catalog Number
KF 3775 .Z9 L5 LM-168
Catalog Number
KF 3775 .Z9 L5 LM-169
Catalog Number
KF 3775 .Z9 L5 LM-170
Catalog Number
KF 3775 .Z9 L5 LM-171
Catalog Number
KF 3775 .Z9 L5 LM-172
Title	Date
Establishment of Escrow Account to Hold Penalty 1991-Sep-ll
Monies Pending Payment to U.S. Treasury
Title
Claim Splitting and Superfund
Title	Date
Citizens for a Better Environment v. EPA, No. 91- 1991-Sept-3
70056, and Boise Cascade Corp., et al. v. EPA Nos.
89-70428,	et al. (9th Cir. Aug. 23,1991) (942 F2d
1427)
Title	Date
District Court Opinion Regarding Review of Region 1989-Dec-22
IV Guidance on Dioxin Discharges from Paper
Mills (726 F.Supp 1256)
Title	Date
Western Nebraska Resources Council v. EPA, No. 1991-Scpt-19
90-2158	(8th Cir. Sept 3,1991) - Challenge to
Approval of UIC Aquifer Exemption (943 F2d 867)
Title	Date
CSX Transportation, Inc., CWA-IV-89-506	1989-Feb-9
Catalog Number
KF 3775 .Z9 L5 LM-173
Title	Date
United States v. ITT Rayonicr, 627 F.2d 996 (9th 1981-Apr-30
Cir. 1980)
07/13/2001
14

-------
ATTORNEY WORK PRODUCT BY CATALOG NUMBER
REVISED 7/13/2001
Catalog Number
KF 3775 .Z9 L5 LM-174
Title
Partial Remand of OCPSF Guidlinc
Date
1989-Oct-18
Catalog Number
KF 3775 .Z9 L5 LM-175
Catalog Number
KF 3775.Z9 L5 LM-176
Catalog Number
KF 3775 .Z9 L5 LM-177
Catalog Number
KF 3775 .Z9 L5 LM-178
Title	Date
Revised Seventh Circuit Opinion Regarding Review 1989-Dec-6
of EPA Objections to State-Issued Permits
Title	Date
Regulation of Wastewater Treatment Effluent from 1984-Jul-25
Processes that Generate K001 and F006
Wastewater Treatment Sludge
Title	Date
Applicability of the "Mixture" and "Derived	1985-Aug-23
From" Rules toPctrolcum Refinery Wastewater
Systems
Title	Date
Stipulated Penalties in Federal Permits	1993-Mar-6
Catalog Number
KF 3775 .Z9 L5 LM-179
Catalog Number
KF 3775 .Z9 L5 LM-180
Catalog Number
KF 3775 -Z9 L5 LM-181
ENFORCEMENT
CONFIDENTIAL - DO
NOT RELEASE
Title	Date
Adverse Decision in Safe Drinking Water Act Case	1993-Sept-22
Title	Date
Summary Judgment in United States v. City of	1991-Aug-19
North Adams 777 F. Supp 61
Title	Date
Revised Draft of Model Summary Judgment Motion	1993-Dec-20
on Liability and Penalties for CERCLA Section 104
(e)(2) Violations
07/13/2001
15

-------
ATTORNEY
WORK IN
PROGRESS
by
DATE

-------
ATTORNEY WORK PRODUCT BY DATE
REVISED 7/13/2001
Title
Application of Katzson Brothers v. EPA and EPC
(Environmental Protection Corporation) v.
Thomas Decisions to Administrative Penalty
Enforcement
Catalog Number
KF 3775 .Z9 L5 LM-22
Title
Briefing Memorandum for Florida's Underground
Injection Rules
Title
CERCLA Liability of Individual Corporate
Officers, Directors or Employees and Parent
Corporations — Secondarily Liable Parties
Title
Claim Splitting and Supcrfund
Catalog Number
KF 3775 .Z9 L5 LM-103b-l
Catalog Number
KF 3775 .Z9 L5 LM-76
Catalog Number
KF 3775 .Z9 L5 LM-168
Title
Current Issues Concerning Compliance Schedules
for WQBELS
Title
Deal-Makers Beware: Supcrfund Liability of
Parent Corporations and Asset Purchasers
Title
Explanations of Significant Difference (ESDs)
Catalog Number
KF 3775 ,Z9 L5 LM-4
Catalog Number
KF 3775.Z9 L5 LM-145
Catalog Number
KF 3775 .Z9 L5 LM-15a
ENFORCEMENT
CONFIDENTIAL-DO
NOT RELEASE
Date
1970
Date
1975-July 29
Date
1976-Dec-8
Title
Overview of Wetland Regulation
Title
Passive Disposal
Title
Presenting and Challenging Expert Witnesses in
Environmental Litigation
Title
Procedures for Obtaining Concurrence from DOJ
Title
Sovereign Immunity Under RCRA §9007
Title
Putting the 1990 Clean Air Act Amendments in
Perspective
Title
Section 113 Orders Extending Times for
Compliance with NSPS
Title
State Jurisdiction over Federal Facilities and
Indian Tribes under Part B of the Safe Drinking
Catalog Number
KF 3775 .Z9 L5 LM-159
Catalog Number
KF 3775 .Z9 L5 LM-79
Catalog Number
KF 3775.13 L5 LM-104
Catalog Number
KF 3775 ,Z9 L5 LM-15c
Catalog Number
KF 3775 .Z9 L5 LM-112
Catalog Number
KF 3775 .Z9 L5 LM-113
Catalog Number
KF 3775 .Z9 L5 LM-139
Catalog Number
KF 3775 .13 L5 LM-155
07/13/2001
1

-------
ATTORNEY WORK PRODUCT BY DATE
REVISED 7/13/2001
Water Act
Date
1981-Mar-17
Date
1981- April 1
Title
Guidance on 40 CFR §260.109A)(20); Definition of
Existing Hazardous Waste Management (HWM)
Facility
Title
Paperwork Reduction Act
Catalog Number
KF 3775 ,Z9 L5 LM-136
Catalog Number
KF 3775 ,Z9 L5 LM-13
Date	Title
1981-Apr-30	United States v. ITT Rayonier, 627 F.2d 996 (9th
Cir. 1980)
Date	Title
1982-Dec-14	History of Presidential Invocations of Executive
Privilege Vis-a- Vis Congress
Date	Title
1984-Jul-25	Regulation of Wastewater Treatment Effluent
from Processes that Generate K001 and F006
Wastewater Treatment Sludge
Date	Title
1985-Apr-4	Administrative Orders on Consent Under Contract
Theory
Date	Title
1985-Apr-26 Provision of Stipulated Penalties through
Administrative Consent Orders
Catalog Number
KF 3775 ,Z9 L5 LM-173
Catalog Number
KF 3775 ,Z9 L5 LM-82
Catalog Number
KF 3775 .Z9 L5 LM-176
Catalog Number
KF 3775 .Z9 L5 LM-100
Catalog Number
KF 3775 .Z9 L5 LM-99
Date	Title
1985-Jun-ll Legal Opinion - EPA Liability for Contractor
Laboratory Activities
Date	Title
1985-Aug-23	Applicability of the "Mixture" and "Derived
From" Rules toPetroleum Refinery Wastewater
Systems
Date	Title
1986-Jan-22	Negotiation of Environmental Auditing Provisions
in Consent Decrees and Agreements
Catalog Number
KF 3775 .Z9 L5 LM-143
Catalog Number
KF 3775 .73 L5 LM-177
Catalog Number
KF 3775 .Z9 L5 LM-162
ENFORCEMENT
CONFIDENTIAL - DO
NOT RELEASE
Date	Title
1986-Fcb-5	Clarify the Applicability of EPA's Regulations
Under the Resource Conservation and Recovery
Act (RCRA) to Operational Wastes from Ships
Date	Title
1986-Mar-19 Negotiation of Environmental Auditing Provisions
in Consent Decrees and Agreements
Date	Title
1986-Jul-7	ALJ Role in Safe Drinking Water Act Enforcement
Amendments
Catalog Number
KF 3775 .Z9L5 LM-118
Catalog Number
KF 3775 .Z9 L5 LM-161
Catalog Number
KF 3775 .Z9 L5 LM-140
07/13/2001
2

-------
ATTORNEY WORK PRODUCT BY DATE
REVISED 7/13/2001
Date	Title
1986-Aug-28 RCRA Enforcement in Authorized States
Date
1986- Sep-3
Date
1986-Oct-16
Title
Maritime Industry Legal Analysis on the
Application of the Resource Conservation and
Recovery Act (RCRA) regulations to vessel wastes.
Title
Clean Water Act Amendments
Catalog Number
KF 3775 .Z9 L5 LM-133
Catalog Number
KF 3775 .Z9L5LM-115
Catalog Number
KF 3775 .Z9 L5 LM-160
Date	Title
1987-Jul-30	General of Aids to Navigation (ATON) - Batteries
and RCRA Requirements
Date	Title
1988-Fcb-25	RCRA Regulations and Generation of Aids to
Navigation (ATON) batteries
Date	Title
1988-May-13 Liability of Private Operators of POTWs
Date	Title
1988-Jun-7	Definition of Owner or Operator in CERCLA, as
amended by SARA
Date	Title
1988-Aug 19 Administrative Penalty Orders Under the Clean
Water Act
Catalog Number
KF 3775 .Z9 L5 LM-116
Catalog Number
KF 3775 .Z9 L5 LM-117
Catalog Number
KF 3775 .Z9 L5 LM-75
Catalog Number
KF 3775 .Z9 L5 LM-121
Catalog Number
KF 3775 .Z9 L5 LM-108
Date	Title
1988-Oct-7	TSCA Administrative Search Warrant Authority
Upheld in Boliden Metcch, Inc. v. United States
(695 F. Supp. 77)
Date	Title
1988-Oct-ll	Whether the Navy may require contractors to
assume the responsibilities of a hazardous waste
generator
Date	Title
1988-Nov-l	Contract Theory in Enforcement Cases
Catalog Number
KF 3775 ,Z9 L5 LM-35
Catalog Number
KF 3775 .Z9L5 LM-119
Catalog Number
KF 3775 .Z9 L5 LM-102
Date	Title
1988-Nov-4	Disclosure of Penalty Calculations Under the
Freedom of Information Act (FOIA)
Date	Title
1989-Jan-17	Courts Interpretation of Continuing 'Imminent
and Substantial Endangerment' language in
CERCLA §106
Date	Title
1989-Feb-9	CSX Transportation, Inc., CWA-IV-89-506
Catalog Number
KF 3775 .Z9 L5 LM-19
Catalog Number
KF 3775 .Z9 L5 LM-137
Catalog Number
KF 3775 .Z9 L5 LM-172
Date	Title
1989-Feb-15 Parent Corporation Liability
Catalog Number
KF 3775 .Z9 L5 LM-147
07/13/2001
3

-------
ATTORNEY WORK PRODUCT BY DATE
REVISED 7/13/2001
Date	Title
1989-Mar-8	Are stipulated penalties in a consent decree subject
to interest if not paid in a timely manner?
Date	Title
1989-Jun-20 CERCLA Settlements Lead Region Work Group's
Comments on Draft Municipal Settlement Policy
Date	Title
1989-Jul-0S	Water Quality Standards Actions Affecting Florida
Catalog Number
KF 3775 .Z9 L5 LM-101
Catalog Number
KF 3775 .Z9 L5 LM-84
Catalog Number
KF 3775 .73 L5 LM-92
Date	Title
1989-Aug-2	Liability under §107 of CERCLA; Whether
leaching/leaking constitutes "disposal."
Date	Title
1989-Aug-21 Interpretation of "hazardous substance" under
CERCLA
Catalog Number
KF 3775 .Z9 L5 LM-80
Catalog Number
KF 3775 ,Z9 L5 LM-114
Date
1989-Scp-22
Date
1989-Oct-18
Title
Whether a lender is responsible for contamination
of property acquired through foreclosure
Title
Partial Remand of OCPSF Guidlinc
Catalog Number
KF 3775 ,Z9 L5 LM-34
Catalog Number
KF 3775 .Z9 L5 LM-174
Date	Title
1989- Oct 27 Legal Environmental Assistance Foundation
("LEAF") v. Bay County: Effective Date of EPA
Issued NPDES Permits and the Effect of
Evidentiary Hearing Requests to Stay Permit
Conditions - No. 88-50142-RV (N.D. Fla. Oct 27,
1989)
Date	Title
1989-Dcc-6	Revised Seventh Circuit Opinion Regarding
Review of EPA Objections to State-Issued Permits
Date	Title
1989-Dec-21 Water Quality Standards Case Summaries
Catalog Number
KF 3775 ,Z9 L5 LM-88
Catalog Number
KF 3775 .Z9 L5 LM-175
Catalog Number
KF 3775 .Z9 L5 LM-36
Date	Title
1989-Dec-22	District Court Opinion Regarding Review of
Region IV Guidance on Dioxin Discharges from
Paper Mills (726 F.Supp 1256)
Date	Title
1990-Feb-l	Notice of Commencement of Manufacture with
Regard to Research and Development New
Chemical Substances
Catalog Number
KF 3775 .Z9 L5 LM-170
Catalog Number
KF 3775 .Z9 L5 LM-87
Date	Title
1990-Fcb-23 Clarification of EPA NESHAP Policy - Nonfriablc
ACM
Catalog Number
KF 3775 .Z9 L5 LM-110
Date	Title
1990-Mar-16 Notice of Commencement Violation in
Circumstances Where Notice is Given but no
Manufacturing Occurs - 40 CFR §720.102
Catalog Number
KF 3775 .Z9 L5 LM-50
07/13/2001
4

-------
ATTORNEY WORK PRODUCT BY DATE
REVISED 7/13/2001
Date
1990-May-16
Date
1990-Jun-13
Date
1990-Jun-15
Date
1990-Jul-13
Date
1990-Jul-20
Date
1990-Jul-25
Date
1990-Aug-8
Date
1990-Sept-14
Date
1990-Nov-8
Date
1990-Dec-l 1
Date
1991-Jan-31
Date
1991-Feb-5
Date
1991-Fcb-6
Title
Removal Actions-Administrative Records and
Liability Files
Catalog Number
KF 3775 .Z9 L5 LM-77
ENFORCEMENT
CONFIDENTIAL-DO
NOT RELEASE
Title
Participation Procedures for PRP's Identified Late
in the CERCLA Remedial Process
Catalog Number
KF 3775.Z9 L5 LM-163
Title
Applicability of EPA NESHAP Policy on
Nonfriable Asbestos (February 23,1990) to the
Princeton Enterprises, Inc. Referral
Title
Signatories to NPDES Permits at Savannah River
Plant (SRP) and Oak Ridge National Laboratory
(ORNL)
Catalog Number
KF 3775 .Z9L5 LM-111
Catalog Number
KF3775.Z9L5LM-127
ENFORCEMENT
CONFIDENTIAL-DO
NOT RELEASE
Title
Regulation of Bilge Water under RCRA
Catalog Number
KF 3775 .Z9 L5 LM-120
Title
FIFRA Section 7 Combination Document
Catalog Number
KF 3775 .Z9 L5 LM-96
Title
Consent Decree Boilerplate Language Concerning
When Stipulated Penalties Attach
Title
Can EPA collect both stipulated penalties, agreed
to by both parties in an Administrative Order, and
penalties authorized by a statute for violation of an
Administrative Order?
Catalog Number
KF 3775 .Z9 L5 LM-95
Catalog Number
KF 3775 .Z9 L5 LM-97
Title
Hazardous Waste in Real Estate Transactions
Catalog Number
KF 3775 .Z9 L5 LM-123
Title	Catalog Number
Multiday Penalties for "Continuing" LDR Disposal KF 3775 .Z9 L5 LM-165
Violations
Title
Brief Supporting Civil Penalty Assessment
Catalog Number
KF 3775 .Z9 L5 LM-93
Title
Revised CERCLA Lender Liability Rule
Catalog Number
KF 3775 .Z9 L5 LM-149
ENFORCEMENT
CONFIDENTIAL-DO
NOT RELEASE
Title
State Enforcement of Clean Water Act Against
Federal Facilities
Catalog Number
KF 3775 ,Z9 L5 LM-89
07/13/2001
5

-------
ATTORNEY WORK PRODUCT BY DATE
REVISED 7/13/2001
Date	Title
1991-Fcb-12 Atlanta Carbon Monoxide Rcdesignation Issue
Catalog Number
KF 3775 .Z9 L5 LM-109
Date	Title
1991-Mar-01 EPA's Definition of Multi-Media "Enforcement"
Catalog Number
KF 3775 .Z9 L5 LM-138
ENFORCEMENT
CONFIDENTIAL-DO
NOT RELEASE
Date	Title
1991-May-20 Information Subject to CERCLA §104(c) and
RCRA §3007(b)
Date	Title
1991-Jun-5	Effect of the Expiration of the Medical Waste
Tracking Act of 1988 on Enforcement Actions
Date	Title
1991-Jun-10	Lender Liability Under CERCLA
Catalog Number
KF 3775 .Z9 L5 LM-78
Catalog Number
KF 3775 .Z9 L5 LM-134
ENFORCEMENT
CONFIDENTIAL - DO
NOT RELEASE
Catalog Number
KF 3775 .Z9 L5 LM-150
Date	Title
1991-Jun-17 Proposed Lender Liability Rule
Catalog Number
KF 3775 .Z9 L5 LM-144
Date	Title
1991-Jul-3	Resolution of Disputes Between the States and the
United States Environmental Protection Agency
under Supcrfund Three Party Consent Decrees
Date	Title
1991-Aug-19 Summary Judgment in United States v. City of
North Adams 777 F. Supp 61
Date	Title
1991-Aug-26 Including an Order to Pay a Penalty in Complaints
and Compliance Orders Under Section 3008(a) of
RCRA
Catalog Number
KF 3775 .Z9 L5 LM-151
Catalog Number
KF 3775 .Z9 L5 LM-180
Catalog Number
KF 3775 .Z9 L5 LM-91
Date	Title
1991-Scpt-3	Citizens for a Better Environment v. EPA, No. 91-
70056, and Boise Cascade Corp., et aL v. EPA Nos.
89-70428,	et al. (9th Cir. Aug. 23,1991) (942 F2d
1427)
Date	Title
1991-Scp-ll	Establishment of Escrow Account to Hold Penalty
Monies Pending Payment to U.S. Treasury
Date	Title
1991-Sept-19 Western Nebraska Resources Council v. EPA, No.
90-2158	(8th Cir. Sept 3,1991) - Challenge to
Approval of UIC Aquifer Exemption (943 F2d 867)
Date	Title
1991-Oct-28 Research and Recommendation Regarding
Government Entity Liability Under CERCLA
Catalog Number
KF 3775 ,Z9 L5 LM-169
Catalog Number
KF 3775 .Z9 L5 LM-167
Catalog Number
KF 3775 .Z9 L5 LM-171
Catalog Number
KF 3775 .Z9 L5 LM-98
ENFORCEMENT
CONFIDENTIAL - DO
NOT RELEASE
07/13/2001
6

-------
ATTORNEY WORK PRODUCT BY DATE
REVISED 7/13/2001
Date	Title
1991-Nov-7	Case Management Goals/Guidance for Resolving
Federal CERCLA Liability at Privately Owned
CERCLA Sites
Catalog Number
KF 3775 .Z9 L5 LM-154
ENFORCEMENT
CONFIDENTIAL -DO
NOT RELEASE
Date	Title
1991-Nov-12 Boiler and Industrial Furnace Regulations (B1F),
(40 C.F.R. Part 266, Subpart H)
Catalog Number
KF 3775 .Z9 L5 LM-3
Date	Title
1991-Dec-18 Boiler and Industrial Furnace (BIF)
Precertification Issues
Catalog Number
KF 3775 .Z9 L5 LM-5
Date	Title
1992-Mar-31 Civil Penalty Assessment for Clean Water Act
Wastewater Discharge Violations: A Review of the
Law
Catalog Number
KF 3775 .Z9 L5 LM-25
Date	Title
1992-Apr-2	EPA's Contractor Listing Program
Catalog Number
KF 3775 ,Z9 L5 LM-158
Date	Title
1992-Apr-21 Revised Strategy for Managing Pending and
Planned Enforcement Actions Potentially Affected
by Shell Oil v. EPA, 950 F3d 741 (D. C. Cir. 1991
Catalog Number
KF 3775 Z9 L5 LM 135
ENFORCEMENT
CONFIDENTIAL-DO
NOT RELEASE
Date	Title	Catalog Number
1992-May-22 Procedures for the Assessment and Compromise of KF3775.Z9L5 LM-122
Stipulated Penalties under CERCLA
Administrative Consent Orders
Date	Title
1992-Jun- 30 Denial of Motion for Preliminary Injunction
Requiring Public Attendance at the Governors'
Forum on Environmental Management [(NRDC)
806 F. Supp. 275)
Catalog Number
KF 3775 .Z9 L5 LM-10
Date	Title
1992-Scp-l	Distribution of Case Memorandums for Economic
Benefit of Noncompliance and Ability to Pay
Catalog Number
KF 3775 .Z9 L5 LM-16A
ENFORCEMENT
CONFIDENTIAL-DO
NOT RELEASE
Date	Title
1992-Scp-l	Economic Benefit from Noncompliance: An
Analysis of Judicial and Administrative
Interpretation
Catalog Number
KF 3775 ,Z9 L5 LM-16B
ENFORCEMENT
CONFIDENTIAL-DO
NOT RELEASE
Date	Title
1992-Sept-21 Access to Confidential Business Information by
Persons Working Under the Senior Environmental
Employment (SEE) Program
Date	Title
1992-Oct-5	Illustrative Civil and Administrative Penalty
Decisions
Catalog Number
KF 3775 .Z9 L5 LM-142
Catalog Number
KF 3775 .Z9 L5 LM-166
07/13/2001
7

-------
ATTORNEY WORK PRODUCT BY DATE
REVISED 7/13/2001
Date
1992-Oct-15
Title
Review of Florida Rules
Catalog Number
KF 3775 .Z9 L5 LM-103
ENFORCEMENT
CONFIDENTIAL-DO
NOT RELEASE
Date
1992-Oct-16
Title
Review of Florida Rules
Catalog Number
KF 3775 .Z9 L5 LM-103a
ENFORCEMENT
CONFIDENTIAL - DO
NOT RELEASE
Date	Title
1992-Nov-13 Facilitating Property Transfers at Federal
Facilities
Catalog Number
KF 3775 ,Z9 L5 LM-156
Date
1992-Nov-16
Date
1992-Nov-18
Date
1992-Dec-18
Title
Scope of CERCLA Contribution Protection
Title
Access to Confidential Business Information by
Persons Working Under the Senior Environmental
Employment (SEE) Program
Catalog Number
KF 3775 .Z9 L5 LM-152
ENFORCEMENT
CONFIDENTIAL-DO
NOT RELEASE
Catalog Number
KF 3775 .Z9 L5 LM-141
Title	Catalog Number
EPA's Enforcement Action Concerning Sewage KF 3775 .Z9 L5 LM-21
Pollution of the Miami River, Biscaync Bay and the
Atlantic Ocean
Date	Title
1993-Jan-27	Advisory on Part 28 Discovery Process
Catalog Number
KF 3775 .Z9 L5 LM-24
Date	Title
1993-Jan-29 Research Request: Legal Effect of a Federal
Agency's Failure to Comply with Its Own
Regulations, Policies, and Guidance
Date	Title
1993-Jan-29 Research Request: Legal Effect of a Federal
Agency's Failure to Comply with Its Own
Regulations, Policies, and Guidance
Date	Title
1993-Feb-5	Florida Underground Injection Rules
Catalog Number
KF 3775 .Z9 L5 LM-26
Catalog Number
KF 3775 .Z9 L5 LM-31
Catalog Number
KF 3775 .Z9 L5 LM-103b
ENFORCEMENT
CONFIDENTIAL-DO
NOT RELEASE
Date	Title
1993-Feb-22 Request for OGC Comments on Program for Use
of Federal Claims Collection Act for Superfund
Cost Recovery
Date	Title
1993-Mar-6 Stipulated Penalties in Federal Permits
Catalog Number
KF 3775 .Z9 L5 LM-18
Catalog Number
KF 3775 .Z9 L5 LM-178
07/13/2001
8

-------
ATTORNEY WORK PRODUCT BY DATE
REVISED 7/13/2001
Date	Title
1993-Mar-8	Recent Decision and Ruling in United States v.
Fleet Factors, et al., No. CV687-070 (S.D. Ga.):
Trial Court Accepts and Applies CERCLA Lender
Liability Rule, Holds Secured Creditor Liable for
Costs of Response
Date
1993-Mar-12
Title
Judgment Funds
Catalog Number
KF 3775 ,Z9 L5 LM-148
Catalog Number
KF 3775 .Z9 L5 LM-153
Date	Title
1993-Mar-30 Overview of the NCP (40 CFR 300)
Catalog Number
KF 3775 .Z9 L5 LM-37
Date	Title
1993-Apr-8	Analysis of the Shaffer decision and other ethical
obligations relevant of the ICR issue
Date	Title
1993-Apr-15 Information Collection Request ("ICR") Materials
Catalog Number
KF 3775 .Z9 L5 LM-46
Catalog Number
KF 3775 .Z9 L5 LM-90
Date	Title
1993-Apr-21 Legal Challenge to the National Toxics Rule - (57
Fed. Reg. 60,848 ct seq.)
Date	Title
1993-May-01 Getting the Word Out: How Your Company can
Become a Potentially Responsible Party Under
CERCLA
Catalog Number
KF 3775 .Z9 L5 LM-39
Catalog Number
KF 3775 .Z9 L5 LM-164
Date	Title
1993-May-4 Summary of Current Information on the Issue of
Confidentiality of Electronic Files
Date	Title
1993-May-4 Summary of Current Information on the Issue of
Confidentiality of Electronic Files
Catalog Number
KF 3775 .Z9 L5 LM-33
Catalog Number
KF 3775 .Z9 L5 LM-85
Date	Title
1993-May-14 National Association of Metal Finishers, et, al. v.
EPA (No. 93-0965 D.D.C.) - Legal Challenge to the
National Toxics Rule
Catalog Number
KF 3775 .Z9 L5 LM-38
Date	Title
1993-Jun-25 American Paper Institute, Inc. et al. v. EPA No. 89-
1499 (D.C. Cir) (996 F2d 346)
Catalog Number
KF 3775 .Z9 L5 LM-73
Date	Title
1993-Jul-26	Release of Contractor's Invoice Information
Catalog Number
KF 3775 ,Z9 L5 LM-124
Date	Title
1993-Aug-18 EPA's Independent Enforcement Authority in
Superfund Cases Involving Federal PRPs
Catalog Number
KF 3775 .Z9 L5 LM-86
ENFORCEMENT
CONFIDENTIAL-DO
NOT RELEASE
Date	Title
1993-Sep-15 Final ORC opinion regarding Public Comment
Periods for Explanations of Significant Difference
(ESDs)
Catalog Number
KF 3775 .Z9 L5 LM-94
ENFORCEMENT
CONFIDENTIAL - DO
07/13/2001
9

-------
ATTORNEY WORK PRODUCT BY DATE
REVISED 7/13/2001
NOT RELEASE
Date	Title
1993-Sept-22 Adverse Decision in Safe Drinking Water Act Case
Catalog Number
KF 3775 .Z9 L5 LM-179
Date	Title
1993-Oct-7	Litigation Raising Section 402(k) of the CWA and
1974 Associate General Counsel Opinion
Date	Title
1993-Nov-8	Briefing paper: Briefing Paper for State of North
Carolina's Groundwater Reclassification
Amendment and the New Hanover County Airport
Burn Pit Superfund Site November 8,1993
Date	Title
1993-Nov-24 Release of cc:mail messages pursuant to a
discovery request
Date	Title
1993-Dcc	GAO Agrees Judgment Fund is available to pay
settlements resolving contribution liability of
Federal PRPs for Superfund response costs
Date	Title
1993-Dec-20	Revised Draft of Model Summary Judgment
Motion on Liability and Penalties for CERCLA
Section 104(e)(2) Violations
Date	Title
1994-Jan-7	Principles of Trust and Trustee Liability Under
CERCLA
Catalog Number
KF 3775 .Z9 L5 LM-44
Catalog Number
KF 3775 .Z9 L5 LM-15
ENFORCEMENT
CONFIDENTIAL - DO
NOT RELEASE
Catalog Number
KF 3775 ,Z9 L5 LM-32
Catalog Number
KF 3775 .Z9 L5 LM-45
Catalog Number
KF 3775 .Z9 L5 LM-181
ENFORCEMENT
CONFIDENTIAL-DO
NOT RELEASE
Catalog Number
KF 3775 .Z9 L5 LM-146
Date	Title
1994-Feb-7	Lender Liability: Kelley v. EPA, No. 92-1312 (D.
C. Cir., Feb. 4,1994)(15 F3d 1100)
Catalog Number
KF 3775 .Z9 L5 LM-83
ENFORCEMENT
CONFIDENTIAL - DO
NOT RELEASE
Date
1994-Mar-14
Date
1994-Mar-21
Title	Catalog Number
Memorandum of Understanding between (Name of KF 3775 .Z9 L5 LM-1
Mill) and the U.S. Environmental Protection
Agency
Title
FOIA Request 4-RIN-00832-94
Catalog Number
KF 3775 .Z9 L5 LM-15b
ENFORCEMENT
CONFIDENTIAL - DO
NOT RELEASE
Date	Title
1994-Sept-19	Favorable Opinion in Puerto Rico Aqueduct and
Sewer Authority v. Browner No. 93-2340 (August
31,1994,1st Cir.) (35 F3d 600)
Date	Title
1995-Apr-28	United States v. Iron Mountain Mines, et al., No.
CIV-S-91-768 DFL (E. D. Cal. March 31,1995)
(881 F. Supp 1432)
Catalog Number
KF 3775 .Z9 L5 LM-42
Catalog Number
KF 3775 .Z9 L5 LM-68
07/13/2001
10

-------
ATTORNEY WORK PRODUCT BY DATE
REVISED 7/13/2001
Date	Title
1995-June-19 Consolidated Rules of Practice, 40 CFR Part 22
Catalog Number
KF 3775 13 L5 LM-128
Date	Title
1995-June-29 EAB Decision Regarding Co-mingling of Agency
Functions
Date	Title
1995-Jun-30 Dioxin/Organochlorine Center, ct at v. Clarke,
Nos. 93-35973,93-36000 (9th Cir.) (57 F3d 1517)
Date	Title
1995-Jul-12	Chemical Waste Management, Inc. et al. v. United
States Environmental Protection Agency (Civil No.
93-1860) (56 F3d 1434)
Date	Title
1995-Jul-18	Sierra Club, Lone Star Chapter v. American
Exploration Company, D.C. No. H-92-3489 (S.
Tex), July 3,1995
Date	Title
1995-Aug-4	Decision Dismissing Suit on "Everglades Forever
Act"
Date	Title
1995-Dec-l	1 U.S. Court of Appeals Decision Holds that EPA has
Never Articulated Whether Ferric Ferrocyanide is
a CERCLA Hazardous Substance and Refers
Question to Agency — Commonwealth of
Massachusetts v. Blackstone Valley Electric Co.,
No. 94-2286 (1st Cir. Oct 6.1995) (67 F3d 981)
Date	Title
1996-Jan-19	Application of RCRA Section 6001 Waiver of
Sovereign Immunity to Fees Required Under
Georgia's Hazardous Site Response Act (HSRA)
Date	Title
1996-Feb-14 Favorable Decision in Missouri v. United States,
(E. D. Mo., No. 94-1288)
Date	Title
1996-Feb-21 Favorable Decision in Commonwealth of Virginia
v. United States of America (VirginiaO, (4th Cir.)
No. 95-2229(74 F3d 517)
Date	Title
1996-Mar-13 U.S. District Court Decision - Federal Advisory
Committee Act
Catalog Number
KF 3775 .Z9 L5 LM-49
Catalog Number
KF 3775 .73 L5 LM-69
Catalog Number
KF 3775.73 L5 LM-66
Catalog Number
KF 3775 ,Z9 L5 LM-67
Catalog Number
KF 3775 .Z9 L5 LM-51
Catalog Number
KF 3775.73 L5 LM-57
Catalog Number
KF 3775.73 L5 LM-126
Catalog Number
KF 3775 .Z9 L5 LM-64
Catalog Number
KF 3775 .Z9 L5 LM-65
Catalog Number
KF 3775 .Z9 L5 LM-40
Date	Title
1996-Mar-21 Supreme Court Decision on Citizens' Ability under
RCRA §7002 to Recover Past Cleanup Costs for
Waste Contamination (516 U.S. 479, (116 S. Ct.
1251)
Catalog Number
KF 3775 .Z9 L5 LM-55
07/13/2001
11

-------
ATTORNEY WORK PRODUCT BY DATE
REVISED 7/13/2001
Date	Title	Catalog Number
1996-Mar-25 United States v. TIC Investment Corporation, No. KF 3775 .Z9 L5 LIM-70
95-1035 (8th Circuit) (October 16,1995) (68 F3d
1082)
Date	Title	Catalog Number
1996-Mar-26 Favorable Ruling in U.S. v. Bell Petroleum	KF 3775 .Z9 L5 LM-54
Services, Inc., Odessa Chromium I Site, Odessa,
Texas (64 F3d 202)
Date	Title	Catalog Number
1996-Mar-26 Summary of Recent Decisions Regarding Recovery KF 3775 .Z9 L5 LM-43
of Oversight Costs Under CERCLA
Date	Title	Catalog Number
1996-Mar-28 Adverse Decision in Georgia CWA § 303(d) Total KF 3775 .Z9 L5 LM-56
Maximum Daily Load (TMDL) Case — Sierra
Club, ct al. v. Hankinson (939 F. Supp. 865)
Date	Title	Catalog Number
1996-Apr-l	Favorable Decision in Commonwealth of Virginia KF 3775 .Z9 L5 LM-53
v. Browner (Virginia II), (4th Cir.) No. 95-1052 (80
F3d 869)
Date	Title	Catalog Number
1996-Apr-5	Supreme Court Opinion in Seminole Tribe v.	KF 3775 .Z9 L5 LM-52
Florida (517 U.S. 44) (116 S. Ct 1114)
Date	Title	Catalog Number
1996-Apr-9	Montana v. EPA, CV-95-56-M-CCL (D. Mont.)	KF 3775 .Z9 L5 LM-107
(941 F. Supp. 945)
Date	Title	Catalog Number
1996-Apr-26 The Raymond Proffitt Foundation v. EPA (930 F. KF 3775 .Z9 L5 LM-74
Supp 1088)
Date	Title	Catalog Number
1996-May-8 Court Decision Holding that Certain Provisions of KF 3775 .Z9 L5 LM-41
the Lead Contamination Control Act are
Unconstitutional (42 U.S.C.§§300-j-21 ct seq.)
Date	Title	Catalog Number
1996-May-10 Environmental Defense Fund, ct al. v. EPA, ct al. KF 3775 .Z9 L5 LM-58
(82 F3d 451)
Date	Title	Catalog Number
1996-May-16 Denial of Summary Judgment on Divisibility of KF 3775 .Z9 L5 LM-62
Harm in United States v. State of Washington and
PACCAR, Inc., No. 94-1395 (W. D. Wash. Mar. 7,
1996)
Date	Title	Catalog Number
1996-May 17 Fifth Circuit's Favorable Ruling in United States & KF 3775 .Z9 L5 LM-63
State of Louisiana v. Marine Shale Processors, Inc.
ct al. (81 F3d 1361)
Date	Title	Catalog Number
1996-Jun-7	United States v. Keystone Sanitation Co., et al., No. KF 3775 .Z9 L5 LM-71
l:CV-93-1482 (M.D. PA. April 30,1996)
07/13/2001
12

-------
ATTORNEY WORK PRODUCT BY DATE
REVISED 7/13/2001
Date	Title
1996-Jul-3	Favorable Decision U pholding the Listing of the
Tulalip Indian Reservation Landfill on the
CERCLA National Priorities List (NPL) of
Hazardous Waste Sites
Date	Title
1996-Sept- 20 Transmittal of Olin Model Brief
Catalog Number
KF 3775 .Z9 L5 LM-60
Catalog Number
KF 3775 .Z9 L5 LM-14
ENFORCEMENT
CONFIDENTIAL - DO
NOT RELEASE
Date	Title
1996-Sept-30 United States v. Keystone Sanitation Co., et al., No.
l:CV-93-1482 (M.D. PA. August 27,1996)
Date	Title
1996-Oct-8	The Fertilizer Institute v. EPA (938 F. Supp. 52)
Catalog Number
KF 3775 .Z9 L5 LM-61
Catalog Number
KF 3775 .Z9 L5 LM-59
Date	Title
1996-Oet-30	Decision and Order In Re: Everwood Treatment
Company, Inc. and Cary W. Thigpen, RCRA
(3008) Appeal No. 95-1 (September 27,1996)
Date	Title
1997-Jan-21	Listing of the RSR Corporation Lead Smelter Site
on the CERCLA National Priorities List (NPL) of
Hazardous Waste Sites - RSR Corporation v. EPA
(No. 95-1559)(Jan. 3,1997) (102 F3d 1266)
Date	Title
1997-Feb-26 Adverse Water Quality Standards Decision —
Idaho Conservation League v. Browner, W. D.
Wash. (968 F. Supp. 546)
Date	Title
1997-Mar-14 Defining "Matters Addressed" in CERCLA
Statements
Catalog Number
KF 3775 .Z9 L5 LM-47
Catalog Number
KF 3775 .Z9 L5 LM-106
Catalog Number
KF 3775 .Z9 L5 LM-20
Catalog Number
KF 3775 .Z9 L5 LM-9
Date	Title
1997-Mar-24 EPA's Combined Suggestions in Support of Motion
for Summary Judgment and Opposition to
Plaintiffs Motion for Summary Judgement
Date	Title
1997-Mar-27 EPA's Supplemental Brief in Support of its Motion
for Summary Judgment
Date	Title
1997-Apr-8	Favorable EAB Ruling Concerning Overfiling
Authority, Continuing Violations, and Audit
Policy: In re: Harmon Electronics, Inc. Docket No.
RCRA-VU-91-H-0037, RCRA (3008) Appeal No.
94-4
Catalog Number
KF 3775 ,Z9 L5 LM-27b
Catalog Number
KF 3775 .Z9 L5 LM-27c
Catalog Number
KF 3775 .Z9 L5 LM-105
Date	Title
1997-May-13 United States v. Cordova Chem. Co. of Michigan
Catalog Number
KF 3775 .Z9 L5 LM-2
07/13/2001
13

-------
ATTORNEY WORK PRODUCT BY DATE
REVISED 7/13/2001
Date	Title
1997-Jun-27 Draft Removal/Remedial
Date	Title
1997-July -16 Administrative Assessment of Civil Penalties
Against Federal Agencies Under the Clean Air Act
Date	Title
1997-Aug-26 Amerada Hess Pipeline Corp. v. FERC, No. 95-
1305 (D.C. Cir. July 8,1997)
Date	Title
1997-Oct-28 Environmental Permitting and NEPA Compliance
Catalog Number
KF 3775 .Z9 L5 LM-125
ENFORCEMENT
CONFIDENTIAL-DO
NOT RELEASE
Catalog Number
KF 3775 .Z9 L5 LM-81
Catalog Number
KF 3775 .Z9 L5 LM-72
Catalog Number
KF 3775 .Z9 L5 LM-17
Date	Title
1998-Aug-13 Trinity American Corporation v. EPA , 4th Cir.
No. 95-20627 (August 4,1998) (150 F3d 389)
Date	Title
1998-Aug-31 Very Unfavorable Court Decision re Ovcrfiling
Authority for Harmon Industries
Date	Title
1998- Sept- 29 Responding to Harmon Industries Adverse
Ovcrfiling Decision
Date	Title
1998-Oct-8	Initial Decision
Catalog Number
KF 3775 .Z9 L5 LM-30
Catalog Number
KF 3775 .Z9 L5 LM-28
ENFORCEMENT
CONFIDENTIAL-DO
NOT RELEASE
Catalog Number
KF 3775 .Z9 L5 LM-29
Catalog Number
KF 3775 .Z9 L5 LM-27d
Date	Title
1998-Octl4	Management of Remediation Waste Under RCRA
Catalog Number
KF 3775 .Z9 L5 LM-48
Date	Title
1998-Oct-19 Favorable Ovcrfiling Decision by ALJ for Harmon
Industries
Catalog Number
KF 3775 ,Z9 L5 LM-27
Date
1998-Oct-19
Title
New FACA Case
Catalog Number
KF 3775 ,Z9 L5 LM-23
Date	Title
1998-Oct-23 Useful Overfiling Materials & Harmon Case
Catalog Number
KF 3775 .Z9 L5 LM-27a
Date	Title
1998-Dec-l	Medical Waste Tracking Act of 1988
Catalog Number
KF 3775 .Z9 L5 LM-6
Date	Title
1999 - Jan-27 Regulatory Enforcement Programs Concerning
"How to Respond to Legal Arguments Challenging
EPA'a Ability to Enforce Violations that Already
Have Been Resolved by a State"
Catalog Number
KF 3775 .Z9 L5 LM-7
ENFORCEMENT
CONFIDENTIAL-DO
NOT RELEASE
07/13/2001
14

-------
ATTORNEY WORK PRODUCT BY DATE
REVISED 7/13/2001
Date	Title
1999-Mar-24 Retention of Funds Under CERCLA 122(b)(3)
Catalog Number
KF 3775 .Z9 L5 LM-8
Date	Title
1999-Apr-14 Spitzcr Great Lakes Ltd., Company v. US EPA
(173 F3d 412)
Catalog Number
KF 3775 ,Z9 L5 LM-12
ENFORCEMENT
CONFIDENTIAL - DO
NOT RELEASE
Date	Title
1999-April-	21 Restrictions on the Acceptance of Gifts by
Executive Branch Employees
Date	Title
2000-Jan-31	U. S. Supreme Court Decision Strongly Affirming
the Right of Citizens to Sue to Correct Clean
Water Act Violations: Friends of the Earth v.
Laidlaw Environmental Services (TOC), Inc. (Jan.
12,2000) (528 U.S. 167)
Date	Title
2000-Apr-18 Decision Upholding EPA's Authority Under CWA
Section 303(d) to Identify and Establish Total
Maximum Daily Loads (TMDLs) for Waters
Impaired by Nonpoint Sources
Date	Title
2000-May-2 Maximum Containment Level Goal (MCLG) for
Chloroform — Chlorine Chemistry Council v. EPA
(206 F3d 1286)
Date	Title
2000-May-17	Tribal Case — Arizona Public Service Co. v. EPA,
Nos. 98-1196,98-1203,98-1207,98-1208 (D.C. Cir.
May 5,2000) (211 F3d 1280)
Date	Title
2001-Mar-2	Virginia Supreme Court Ruling Precluding State
Water Enforcement Action on Res Judicata
Grounds: State Water Control Board, et al. v.
Smithfield Foods (March 2,2001)
Catalog Number
KF 3775 .Z9 L5 LM-11
Catalog Number
KF 3775 ,Z9 L5 LM-130
Catalog Number
KF 3775 .Z9 L5 LM-129
Catalog Number
KF 3775 .Z9 L5 LM-131
Catalog Number
KF 3775 ,Z9 L5 LM-132
Catalog Number
KF 3775 .Z9 L5 LM-157
ENFORCEMENT
CONFIDENTIAL-DO
NOT RELEASE
07/13/2001
15

-------
ATTORNEY
WORK IN
PROGRESS
by
TITLE

-------
ATTORNEY WORK PRODUCT BY lilLE
REVISED 7/13/2001
Title
Access to Confidential Business Information by Persons
Working Under the Senior Environmental Employment (SEE)
Program
Title
Access to Confidential Business Information by Persons
Working Under the Senior Environmental Employment (SEE)
Program
Title
Administrative Assessment of Civil Penalties Against Federal
Agencies Under the Clean Air Act
Title
Administrative Orders on Consent Under Contract Theory
Title
Administrative Penalty Orders Under the Clean Water Act
Catalog Number
KF 3775 .Z9 L5 LM-141
Catalog Number
KF 3775 ,Z9 L5 LM-142
Catalog Number
KF 3775 ,Z9 L5 LM-81
Catalog Number
KF 3775 .Z9 L5 LM-100
Catalog Number
KF 3775 .Z9 L5 LM-108
Date
1992-Nov-18
Date
1992-Sept-21
Date
1997-July -16
Date
1985-Apr-4
Date
1988-Aug 19
Title
Adverse Decision in Georgia CWA § 303(d) Total Maximum
Daily Load (TMDL) Case — Sierra Club, ct al. v. Hankinson
(939 F. Supp. 865)
Title
Adverse Decision in Safe Drinking Water Act Case
Title
Adverse Water Quality Standards Decision — Idaho
Conservation League v. Browner, W. D. Wash. (968 F. Supp.
546)
Title
Advisory on Part 28 Discovery Process
Catalog Number
KF 3775 .Z9 L5 LM-56
Catalog Number
KF 3775 .Z9 L5 LM-179
Catalog Number
KF 3775 .Z9 L5 LM-20
Catalog Number
KF 3775 ,Z9 L5 LM-24
Date
1996-Mar-28
Date
1993-Sept-22
Date
1997-Feb-26
Date
1993-Jan-27
Title
AU Role in Safe Drinking Water Act Enforcement
Amendments
Title
Amerada Hess Pipeline Corp. v. FERC, No. 95-1305 (D.C. Cir.
July 8,1997)
Title
American Paper Institute, Inc. et al. v. EPA No. 89-1499 (D.C.
Cir) (996 F2d 346)
Title
Analysis of the Shaffer decision and other ethical obligations
relevant of the ICR issue
Catalog Number
KF 3775 ,Z9 L5 LM-140
Catalog Number
KF 3775 .Z9 L5 LM-72
Catalog Number
KF 3775 .Z9 L5 LM-73
Catalog Number
KF 3775 .Z9 L5 LM-46
Date
1986-Jul-7
Date
1997-Aug-26
Date
1993-Jun-25
Date
1993-Apr-8
Title
Applicability of EPA NESHAP Policy on Nonfriable Asbestos
(February 23,1990) to the Princeton Enterprises, Inc. Referral
Title
Applicability of the "Mixture" and "Derived From" Rules
Catalog Number
KF 3775 .Z9L5LM-111
Catalog Number
KF 3775 .Z9L5LM-177
Date
1990-Jun-15
Date
1985-Aug-23

-------
ATTORNEY WORK PRODUCT BY TITLE
REVISED 7/13/2001
toPetroleum Refinery Wastewater Systems
Title
Application of Katzson Brothers v. EPA and EPC
(Environmental Protection Corporation) v. Thomas Decisions
to Administrative Penalty Enforcement
Catalog Number
KF 3775 .Z9 L5 LM-22
Title
Application of RCRA Section 6001 Waiver of Sovereign
Immunity to Fees Required Under Georgia's Hazardous Site
Response Act (HSRA)
Catalog Number
KF 3775 .Z9 L5 LM-126
Catalog Number
Title
Are stipulated penalties in a consent decree subject to interest if KF 3775 .Z9 L5 LM-101
not paid in a timely manner?
Date
1996-Jan-19
Date
1989-Mar-8
Title
Atlanta Carbon Monoxide Redesignation Issue
Catalog Number
KF 3775 .Z9 L5 LM-109
Date
1991-Feb-12
Title
Boiler and Industrial Furnace (BIF) Precertification Issues
Catalog Number
KF 3775 .Z9 L5 LM-5
Date
1991-Dec-18
Title
Boiler and Industrial Furnace Regulations (BIF), (40 C.F.R.
Part 266, Subpart H)
Catalog Number
KF 3775 .Z9 L5 LM-3
Date
1991-Nov-12
Title
Brief Supporting Civil Penalty Assessment
Catalog Number
KF 3775 .Z9 L5 LM-93
Date
1991-Jan-31
Title
Briefing Memorandum for Florida's Underground Injection
Rules
Catalog Number
KF 3775 .Z9 L5 LM-103b-l
Title	Catalog Number
Briefing paper: Briefing Paper for State of North Carolina's KF 3775 .Z9 L5 LM-15
Groundwater Reclassification Amendment and the New	ENFORCEMENT
Hanover County Airport Bum Pit Superfund Site November 8, CONFIDENTIAL - DO NOT
1993	RELEASE
Date
1993-Nov-8
Title	Catalog Number	Date
Can EPA collect both stipulated penalties, agreed to by both KF 3775 .Z9 L5 LM-97	1990-Scpt-14
parties in an Administrative Order, and penalties authorized by
a statute for violation of an Administrative Order?
Title
Case Management Goals/Guidance for Resolving Federal
CERCLA Liability at Privately Owned CERCLA Sites
Catalog Number
KF 3775 .Z9 L5 LM-154
ENFORCEMENT
CONFIDENTIAL - DO NOT
RELEASE
Date
1991-Nov-7
Catalog Number
Title
CERCLA Liability of Individual Corporate Officers, Directors KF 3775 .Z9 L5 LM-76
or Employees and Parent Corporations — Secondarily Liable
Parties
Title	Catalog Number	Date
CERCLA Settlements Lead Region Work Group's Comments KF 3775 .Z9 L5 LM-84	1989-Jun-20
' on Draft Municipal Settlement Policy

-------
ATTORNEY WORK PRODUCT BY TITLE
REVISED 7/13/2001
Title	Catalog Number
Chemical Waste Management, Inc. et al. v. United States	KF 3775 .Z9 L5 LM-66
Environmental Protection Agency (Civil No. 93-1860) (56 F3d
1434)
Title	Catalog Number
Citizens for a Better Environment v. EPA, No. 91-70056, and KF 3775 .Z9 L5 LM-169
Boise Cascade Corp., et al. v. EPA Nos. 89-70428, et al. (9th
Cir. Aug. 23,1991) (942 F2d 1427)
Title
Civil Penalty Assessment for Clean Water Act Wastewater
Discharge Violations: A Review of the Law
Title
Claim Splitting and Superfund
Title
Clarification of EPA NESHAP Policy - Nonfriable ACM
Catalog Number
KF 3775 .Z9 L5 LM-25
Catalog Number
KF 3775 .Z9 L5 LM-168
Catalog Number
KF 3775 .Z9L5LM-110
Title
Clarify the Applicability of EPA's Regulations Under the
Resource Conservation and Recovery Act (RCRA) to
Operational Wastes from Ships
Title
Clean Water Act Amendments
Catalog Number
KF 3775 .Z9L5 LM-118
Catalog Number
KF 3775 .Z9 L5 LM-160
Title
Consent Decree Boilerplate Language Concerning When
Stipulated Penalties Attach
Title
Consolidated Rules of Practice, 40 CFR Part 22
Catalog Number
KF 3775 .Z9 L5 LM-95
Catalog Number
KF 3775 .Z9 L5 LM-128
Title
Contract Theory in Enforcement Cases
Catalog Number
KF 3775 .Z9 L5 LM-102
Title
Court Decision Holding that Certain Provisions of the Lead
Contamination Control Act are Unconstitutional (42 U.S.C.§§
300-j-21 et seq.)
Title
Courts Interpretation of Continuing 'Imminent and Substantial
Endangerment' language in CERCLA §106
Title
CSX Transportation, Inc., CWA-IV-89-506
Catalog Number
KF 3775 .Z9 L5 LM-41
Catalog Number
KF 3775 .Z9 L5 LM-137
Catalog Number
KF 3775 .Z9 L5 LM-172
Title
Current Issues Concerning Compliance Schedules for
WQBELS
Title
Deal-Makers Beware: Superfund Liability of Parent
Corporations and Asset Purchasers
Catalog Number
KF 3775 .Z9 L5 LM-4
Catalog Number
KF 3775 .Z9 L5 LM-145
Date
1995-Jul-12
Date
1991-Sept-3
Date
1992-Mar-31
Date
1990-Feb-23
Date
1986-Feb-5
Date
1986-Oct-16
Date
1990-Aug-8
Date
1995-June-19
Date
1988-Nov-l
Date
1996-May-8
Date
1989-Jan-17
Date
1989-Feb-9

-------
ATTORNEY WORK PRODUCT BY TITLE
REVISED 7/13/2001
Title	Catalog Number
Decision and Order In Re: Evenvood Treatment Company, Inc. KF 3775.Z9 L5 LM-47
and Cary W. Thigpen, RCRA (3008) Appeal No. 95-1
(September 27,1996)
Title
Decision Dismissing Suit on "Everglades Forever Act"
Catalog Number
KF 3775 .Z9 L5 LM-51
Date
1996-Oct-30
Date
1995-Aug-4
Title	Catalog Number
Decision Upholding EPA's Authority Under CWA Section 303 KF 3775 .Z9 L5 LM-129
(d) to Identify and Establish Total Maximum Daily Loads
(TMDLs) for Waters Impaired by Nonpoint Sources
Title
Defining "Matters Addressed" in CERCLA Statements
Catalog Number
KF 3775 .Z9 L5 LM-9
Date
2000-Apr-18
Date
1997-Mar-14
Title	Catalog Number	Date
Definition of Owner or Operator in CERCLA, as amended by KF 3775 .Z9 L5 LM-121 1988-Jun-7
SARA
Title	Catalog Number
Denial of Motion for Preliminary Injunction Requiring Public KF 3775 .Z9 L5 LM-10
Attendance at the Governors' Forum on Environmental
Management [(NRDC) 806 F. Supp. 275]
Title	Catalog Number
Denial of Summary Judgment on Divisibility of Harm in United KF 3775 .Z9 L5 LM-62
States v. State of Washington and PACCAR, Inc., No. 94-1395
(W. D. Wash. Mar. 7,1996)
Title	Catalog Number
Diosin/Organochlorine Center, et at v. Clarke, Nos. 93-35973, KF 3775 .Z9 L5 LM-69
93-36000 (9th Cir.) (57 F3d 1517)
Catalog Number
KF 3775 .Z9 L5 LM-19
Title
Disclosure of Penalty Calculations Under the Freedom of
Information Act (FOIA)
Title
Distribution of Case Memorandums for Economic Benefit of KF 3775 .Z9 L5 LM-16A
Catalog Number
Noncompliance and Ability to Pay
ENFORCEMENT
CONFIDENTIAL - DO NOT
RELEASE
Date
1992-Jun- 30
Date
1996-May-16
Date
1995-Jun-30
Date
1988-Nov-4
Date
1992-Sep-l
Title
District Court Opinion Regarding Review of Region IV
Guidance on Dioxin Discharges from Paper Mills (726 F.Supp
1256)
Catalog Number
KF 3775 .Z9 L5 LM-170
Date
1989-Dec-22
Title
Draft Removal/Remedial
Catalog Number
KF 3775 .Z9 L5 LM-125
ENFORCEMENT
CONFIDENTIAL - DO NOT
RELEASE
Date
1997-Jun-27
Title	Catalog Number	Date
EAB Decision Regarding Co-mingling of Agency Functions KF 3775 ,Z9 L5 LM-49	1995-June-29

-------
ATTORNEY WORK PRODUCT BY TITLE
REVISED 7/13/2001
Title
Economic Benefit from Noncompliance: An Analysis of
Judicial and Administrative Interpretation
Catalog Number
KF 3775 .Z9 L5 LM-16B
ENFORCEMENT
CONFIDENTIAL - DO NOT
RELEASE
Date
1992-Sep-l
Title
Catalog Number
Effect of the Expiration of the Medical Waste Tracking Act of KF 3775 .Z9 L5 LM-134
1988 on Enforcement Actions
Date
1991-Jun-5
ENFORCEMENT
CONFIDENTIAL - DO NOT
RELEASE
Title
Catalog Number
Environmental Defense Fund, et aL v. EPA, ct al. (82 F3d 451) KF 3775 .Z9 L5 LM-58
Date
1996-Mav-10
Title
Environmental Permitting and NEPA Compliance
Catalog Number
KF 3775 .Z9 L5 LM-17
Date
1997-Oct-28
Title
EPA's Combined Suggestions in Support of Motion for
Summary Judgment and Opposition to Plaintiffs Motion for
Summary Judgement
Title
EPA's Contractor Listing Program
Catalog Number
KF 3775 ,Z9 L5 LM-27b
Catalog Number
KF 3775 ,Z9 L5 LM-158
Date
1997-Mar-24
Date
1992-Apr-2
Title
EPA's Definition of Multi-Media "Enforcement"
Catalog Number
KF 3775 .Z9 L5 LM-138
ENFORCEMENT
CONFIDENTIAL - DO NOT
RELEASE
Date
1991-Mar-01
Title	Catalog Number	Date
EPA's Enforcement Action Concerning Sewage Pollution of the KF 3775 .Z9 L5 LM-21	1992-Dec-18
Miami River, Biscayne Bay and the Atlantic Ocean
Title	Catalog Number	Date
EPA's Independent Enforcement Authority in Supcrfund Cases KF 3775 .Z9 L5 LM-86	1993-Aug-18
Involving Federal PRPs	ENFORCEMENT
CONFIDENTIAL - DO NOT
RELEASE
Title
EPA's Supplemental Brief in Support of its Motion for
Summary Judgment
Title
Establishment of Escrow Account to Hold Penalty Monies
Pending Payment to U.S. Treasury
Title
Explanations of Significant Difference (ESDs)
Catalog Number
KF 3775 .Z9 L5 LM-27c
Catalog Number
KF 3775 .Z9 L5 LM-167
Catalog Number
KF 3775 .Z9 L5 LM-15a
ENFORCEMENT
CONFIDENTIAL - DO NOT
RELEASE
Date
1997-Mar-27
Date
1991-Sep-ll
Title
Facilitating Property Transfers at Federal Facilities
Catalog Number
KF 3775 .Z9L5 LM-156
Date
1992-Nov-13

-------
ATTORNEY WORK PRODUCT BY TITLE
REVISED 7/13/2001
Title	Catalog Number	Date
Favorable Decision in Commonwealth of Virginia v. Browner	KF 3775 .Z9 L5 LM-53	1996-Apr-l
(Virginia II), (4th Cir.) No. 95-1052 (80 F3d 869)
Title	Catalog Number	Date
Favorable Decision in Commonwealth of Virginia v. United	KF 3775 .Z9 L5 LM-65	1996-Feb-21
States of America (VirginiaO, (4th Cir.) No. 95-2229 (74 F3d
517)
Title	Catalog Number	Date
Favorable Decision in Missouri v. United States, (E. D. Mo., No. KF 3775 .Z9 L5 LM-64	1996-Feb-14
94-1288)
Title	Catalog Number	Date
Favorable Decision Upholding the Listing of the Tulalip Indian	KF 3775 .Z9 L5 LM-60	1996-Jul-3
Reservation Landfill on the CERCLA National Priorities List
(NPL) of Hazardous Waste Sites
Title	Catalog Number	Date
Favorable EAB Ruling Concerning Overfiling Authority,	KF 3775 .Z9 L5 LM-105 1997-Apr-8
Continuing Violations, and Audit Policy: In rc: Harmon
Electronics, Inc. Docket No. RCRA-VII-91-H-0037, RCRA
(3008) Appeal No. 94-4
Title	Catalog Number	Date
Favorable Opinion in Puerto Rico Aqueduct and Sewer	KF 3775 .Z9 L5 LM-42	1994-Sept-19
Authority v. Browner No. 93-2340 (August 31,1994,1st Cir.)
(35 F3d 600)
Title	Catalog Number	Date
Favorable Overfiling Decision by ALJ for Harmon Industries	KF 3775 .Z9 L5 LM-27	1998-Oct-19
Title	Catalog Number	Date
Favorable Ruling in U.S. v. Bell Petroleum Services, Inc.,	KF 3775 .Z9 L5 LM-54	1996-Mar-26
Odessa Chromium I Site, Odessa, Texas (64 F3d 202)
Title	Catalog Number	Date
The Fertilizer Institute v. EPA (938 F. Supp. 52)	KF 3775 .Z9 L5 LM-59	1996-Oct-8
Title	Catalog Number	Date
FIFRA Section 7 Combination Document	KF 3775 .Z9 L5 LM-96	1990-Jul-25
Title	Catalog Number	Date
Fifth Circuit's Favorable Ruling in United States & State of	KF 3775 .Z9 L5 LM-63	1996-May 17
Louisiana v. Marine Shale Processors, Inc. et al. (81 F3d 1361)
Title	Catalog Number	Date
Final ORC opinion regarding Public Comment Periods for	KF 3775 .Z9 L5 LM-94	1993-Sep-15
Explanations of Significant Difference (ESDs)	ENFORCEMENT
CONFIDENTIAL - DO NOT
RELEASE
Title	Catalog Number	Date
Florida Underground Injection Rules	KF 3775 .Z9 L5 LM-103b 1993-Feb-5
ENFORCEMENT
CONFIDENTIAL - DO NOT
RELEASE

-------
ATTORNEY WORK PRODUCT BY TITLE
REVISED 7/13/2001
Title	Catalog Number Date
FOIA Request 4-R1N-00832-94	KF 3775 .Z9 L5 LM-15b 1994-Mar-21
ENFORCEMENT
CONFIDENTIAL - DO NOT
RELEASE
Title	Catalog Number	Date
GAO Agrees Judgment Fund is available to pay settlements	KF 3775 .Z9 L5 LM-45	1993-Dec
resolving contribution liability of Federal PRPs for Superfund
response costs
Title	Catalog Number	Date
General of Aids to Navigation (ATON) - Batteries and RCRA	KF 3775 .Z9 L5 LM-116 1987-Jul-30
Requirements
Title	Catalog Number	Date
Getting the Word Out: How Your Company can Become a	KF 3775 .Z9 L5 LM-164 1993-May-01
Potentially Responsible Party Under CERCLA
Title	Catalog Number	Date
Guidance on 40 CFR §260.109A)(20); Definition of Existing	KF 3775 .Z9 L5 LM-136 1981-Mar-17
Hazardous Waste Management (HVVM) Facility
Title	Catalog Number	Date
Hazardous Waste in Real Estate Transactions	KF 3775 ,Z9 L5 LM-123 1990-Nov-8
Title
History of Presidential Invocations of Executive Privilege Vis-a-
Vis Congress
Title
Illustrative Civil and Administrative Penalty Decisions
Title
Including an Order to Pay a Penalty in Complaints and
Compliance Orders Under Section 3008(a) of RCRA
Title
Information Collection Request ("ICR") Materials
Title
Information Subject to CERCLA §104(c) and RCRA §3007(b)
Title
Initial Decision
Title
Interpretation of "hazardous substance" under CERCLA
Title
Judgment Funds
Catalog Number
Date
KF 3775 .Z9 L5 LM-82
1982-Dec-14
Catalog Number
Date
KF 3775 .Z9 L5 LM-166
1992-Oct-5
Catalog Number
Date
KF 3775 .Z9 L5 LM-91
1991-Aug-26
Catalog Number
Date
KF 3775 .Z9 L5 LM-90
1993-Apr-15
Catalog Number
Date
KF 3775 .Z9 L5 LM-78
1991-May-20
Catalog Number
Date
KF 3775 .Z9L5LM-27d
1998-Oct-8
Catalog Number
Date
KF 3775 .Z9 L5 LM-114
1989-Aug-21
Catalog Number
Date
KF 3775 .Z9 L5 LM-153
1993-Mar-12
Title
Legal Challenge to the National Toxics Rule - (57 Fed. Reg.
60,848 et seq.)
Catalog Number	Date
KF 3775 .Z9 L5 LM-39	1993-Apr-21

-------
ATTORNEY WORK PROD LCI BY TITLE
REVISED 7/13/2001
Title
Legal Environmental Assistance Foundation ("LEAF") v. Bay
County: Effective Date of EPA Issued NPDES Permits and the
Effect of Evidentiary Hearing Requests to Stay Permit
Conditions - No. 88-50142-RV (N.D. Fla. Oct 27,1989)
Title
Legal Opinion - EPA Liability for Contractor Laboratory
Activities
Catalog Number
KF 3775 .Z9 L5 LM-88
Catalog Number
KF 3775 .Z9 L5 LM-143
Date
1989- Oct 27
Date
1985-Jun-ll
Title
Lender Liability: Kelley v. EPA, No. 92-1312 (D. C. Cir., Feb.
4,1994)(15 F3d 1100)
Catalog Number
KF 3775 .Z9 L5 LM-83
ENFORCEMENT
CONFIDENTIAL - DO NOT
RELEASE
Date
1994-Fcb-7
Title
Lender Liability Under CERCLA
Catalog Number
KF 3775 ,Z9 L5 LM-150
Date
1991-Jun-10
Title
Liability of Private Operators of POTWs
Catalog Number
KF 3775 .Z9 L5 LM-75
Date
1988-Mav-13
Title
Liability under §107 of CERCLA; Whether leaching/leaking
constitutes "disposal."
Title
Listing of the RSR Corporation Lead Smelter Site on the
CERCLA National Priorities List (NPL) of Hazardous Waste
Sites - RSR Corporation v. EPA (No. 95-1559)(Jan. 3,1997)
(102 F3d 1266)
Title
Litigation Raising Section 402(k) of the CWA and 1974
Associate General Counsel Opinion
Title
Management of Remediation Waste Under RCRA
Catalog Number
KF 3775 ,Z9 L5 LM-80
Catalog Number
KF 3775 .Z9 L5 LM-106
Catalog Number
KF 3775 .Z9 L5 LM-44
Catalog Number
KF 3775 .Z9 L5 LM-48
Date
1989-Aug-2
Date
1997-Jan-21
Date
1993-Oct-7
Date
1998-Octl4
Title
Maritime Industry Legal Analysis on the Application of the
Resource Conservation and Recovery Act (RCRA) regulations
to vessel wastes.
Catalog Number
KF 3775 .Z9L5 LM-115
Date
1986- Sep-3
Title
Maximum Containment Level Goal (MCLG) for Chloroform
Chlorine Chemistry Council v. EPA (206 F3d 1286)
Title
Medical Waste Tracking Act of 1988
Catalog Number
KF 3775 .Z9 L5 LM-131
Catalog Number
KF 3775 .Z9 L5 LM-6
Date
2000-May-2
Date
1998-Dec-l
Title
Memorandum of Understanding between (Name of Mill) and
the U.S. Environmental Protection Agency
Title
Montana v. EPA, CV-95-56-M-CCL (D. Mont.) (941 F. Supp.
945)
Catalog Number
KF 3775 ,Z9 L5 LM-1
Catalog Number
KF 3775 ,Z9 L5 LM-107
Date
1994-Mar-14
Date
1996-Apr-9

-------
ATTORNEY WORK PRODUCT BY TITLE
REVISED 7/13/2001
Title
Catalog Number
Multiday Penalties for "Continuing" LDR Disposal Violations	KF 3775 .Z9 L5 LM-165
Title	Catalog Number
National Association of Metal Finishers, ct, al. v. EPA (No. 93-	KF 3775 .Z9 L5 LM-38
0965 D.D.C.) - Legal Challenge to the National Toxics Rule
Title	Catalog Number
Negotiation of Environmental Auditing Provisions in Consent	KF 3775 .Z9 L5 LM-161
Decrees and Agreements
Title
Catalog Number
Negotiation of Environmental Auditing Provisions in Consent KF 3775 .Z9 L5 LM-162
Decrees and Agreements
Date
1990-Dcc-ll
Date
1993-May-14
Date
1986-Mar-19
Date
1986-Jan-22
ENFORCEMENT
CONFIDENTIAL - DO NOT
RELEASE
Title
New FACA Case
Catalog Number
KF 3775 .Z9 L5 LM-23
Date
1998-Oct-19
Title
Notice of Commencement of Manufacture with Regard to
Research and Development New Chemical Substances
Title
Notice of Commencement Violation in Circumstances Where
Notice is Given but no Manufacturing Occurs - 40 CFR §
720.102
Catalog Number
KF 3775 .Z9 L5 LM-87
Catalog Number
KF 3775 .Z9 L5 LM-50
Date
1990-Feb-l
Date
1990-Mar-16
Title
Overview of the NCP (40 CFR 300)
Catalog Number
KF 3775 .Z9 L5 LM-37
Date
1993-Mar-30
Title
Overview of Wetland Regulation
Title
Paperwork Reduction Act
Title
Parent Corporation Liability
Catalog Number
KF 3775 .Z9 L5 LM-159
Catalog Number
KF 3775 .Z9 L5 LM-13
Catalog Number
KF 3775 .Z9 L5 LM-147
Date
1981-April 1
Date
1989-Feb-15
Title
Partial Remand of OCPSF Guidliiie
Catalog Number
KF 3775 .Z9 L5 LM-174
Date
1989-Oct-18
Title
Participation Procedures for PRP's Identified Late in the
CERCLA Remedial Process
Catalog Number
KF 3775 .Z9 L5 LM-163
Date
1990-Jun-13
Title	Catalog Number
Passive Disposal	KF 3775 .Z9 L5 LM-79
Title	Catalog Number
Presenting and Challenging Expert Witnesses in Environmental KF 3775 .Z9 L5 LM-104
Litigation
Title
Principles of Trust and Trustee Liability Under CERCLA
Catalog Number	Date
KF 3775 .Z9 L5 LM-146 1994-Jan-7

-------
ATTORNEY WORK PRODUCT BY TITLE
REVISED 7/13/2001
Title
Procedures for Obtaining Concurrence from DOJ
Catalog Number
KF 3775 .Z9 L5 LM-15c
Title	Catalog Number	Date
Procedures for the Assessment and Compromise of Stipulated KF 3775 .Z9 L5 LM-122 1992-May-22
Penalties under CERCLA Administrative Consent Orders
Title
Proposed Lender Liability Rule
Catalog Number
KF 3775 .Z9 L5 LM-144
Date
1991-Jun-17
Title
Provision of Stipulated Penalties through Administrative
Consent Orders
Catalog Number
KF 3775 ,Z9 L5 LM-99
Date
1985-Apr-26
Catalog Number	Date
KF 3775 .Z9 L5 LM-113	1970
Catalog Number	Date
The Raymond Proffitt Foundation v. EPA (930 F. Supp 1088) KF 3775 .Z9 L5 LM-74	1996-Apr-26
Title
Putting the 1990 Clean Air Act Amendments in Perspective
Title
Title
RCRA Enforcement in Authorized States
Catalog Number
KF 3775 ,Z9 L5 LM-133
Date
1986-Aug-28
Title	Catalog Number
RCRA Regulations and Generation of Aids to Navigation	KF 3775 .Z9 L5 LM-117
(ATON) batteries
Title	Catalog Number
Recent Decision and Ruling in United States v. Fleet Factors, et KF 3775 .Z9 L5 LM-148
al., No. CV687-070 (S.D. Ga.): Trial Court Accepts and Applies
CERCLA Lender Liability Rule, Holds Secured Creditor
Liable for Costs of Response
Date
1988-Feb-25
Date
1993-Mar-8
Title
Regulation of Bilge Water under RCRA
Catalog Number
KF 3775 .Z9 L5 LM-120
Date
1990-Jul-20
Title	Catalog Number	Date
Regulation of Wastewater Treatment Effluent from Processes KF 3775 .Z9 L5 LM-176 1984-Jul-25
that Generate K001 and F006 Wastewater Treatment Sludge
Title
Regulatory Enforcement Programs Concerning "How to
Respond to Legal Arguments Challenging EPA'a Ability to
Enforce Violations that Already Have Been Resolved by a
State"
Catalog Number
KF 3775 .Z9 L5 LM-7
ENFORCEMENT
CONFIDENTIAL - DO NOT
RELEASE
Date
1999 - Jan-27
Title
Release of cc:mail messages pursuant to a discovery request
Catalog Number
KF 3775 .Z9 L5 LM-32
Date
1993-Nov-24
Title
Release of Contractor's Invoice Information
Catalog Number,
KF 3775 .Z9 L5 LM-124
Date
1993-Jul-26
Title
Removal Actions-Administrative Records and Liabilitv Files
Catalog Number
KF 3775 .Z9 L5 LM-77
ENFORCEMENT
CONFIDENTIAL - DO NOT
RELEASE
Date
1990-Mav-16

-------
ATTORNEY WORK PRODUCT BY TITLE
REVISED 7/13/2001
Catalog Number
KF 3775.73 L5 LM-18
Title
Request for OGC Comments on Program for Use of Federal
Claims Collection Act for Superfund Cost Recovery
Title
Research and Recommendation Regarding Government Entity KF 3775 .Z9 L5 LM-98
Catalog Number
Liability Under CERCLA
ENFORCEMENT
CONFIDENTIAL - DO NOT
RELEASE
Date
1993-Feb-22
Date
1991-Oct-28
Title
Catalog Number	Date
Research Request: Legal Effect of a Federal Agency's Failure KF 3775 .Z9 L5 LM-26	1993-Jan-29
to Comply with Its Own Regulations, Policies, and Guidance
Title	Catalog Number	Date
Research Request: Legal Effect of a Federal Agency's Failure KF 3775.Z9 L5 LM-31	1993-Jan-29
to Comply with Its Own Regulations, Policies, and Guidance
Title	Catalog Number	Date
Resolution of Disputes Between the States and the United States KF 3775 .Z9 L5 LM-151	1991-Jul-3
Environmental Protection Agency under Superfund Three
Party Consent Decrees
Title	Catalog Number	Date
Responding to Harmon Industries Adverse Ovcrfiling Decision KF 3775 .Z9 L5 LM-29	1998- Sept- 29
Title
Restrictions on the Acceptance of Gifts by Executive Branch
Employees
Title
Retention of Funds Under CERCLA 122(b)(3)
Catalog Number
KF 3775 .Z9L5 LM-11
Catalog Number
KF 3775 .Z9 L5 LM-8
Date
1999-April- 21
Date
1999-Mar-24
Title
Review of Florida Rules
Catalog Number
KF 3775 .Z9 L5 LM-103
ENFORCEMENT
CONFIDENTIAL - DO NOT
RELEASE
Date
1992-Oct-15
Title
Review of Florida Rules
Catalog Number
KF 3775 .Z9 L5 LM-103a
ENFORCEMENT
CONFIDENTIAL - DO NOT
RELEASE
Date
1992-Oct-16
Title
Revised CERCLA Lender Liability Rule
Catalog Number
KF 3775 .Z9 L5 LM-149
ENFORCEMENT
CONFIDENTIAL - DO NOT
RELEASE
Date
1991-Feb-5
Title
Revised Draft of Model Summary Judgment Motion on
Liability and Penalties for CERCLA Section 104(e)(2)
Violations
Catalog Number
KF 3775 .Z9 L5 LM-181
ENFORCEMENT
CONFIDENTIAL - DO NOT
RELEASE
Date
1993-Dec-20
Title	Catalog Number	Date
Revised Seventh Circuit Opinion Regarding Review of EPA KF 3775 .Z9 L5 LM-175 1989-Dcc-6

-------
ATTORNEY WORK PRODUCT BY TITLE
REVISED 7/13/2001
Objections to State-Issued Permits
Title
Revised Strategy for Managing Pending and Planned
Enforcement Actions Potentially Affected by Shell Oil v. EPA,
950 F3d 741 (D. C. Cir. 1991
Catalog Number
KF 3775 Z9 L5 LM 135
ENFORCEMENT
CONFIDENTIAL - DO NOT
RELEASE
Date
1992-Apr-21
Title
Scope of CERCLA Contribution Protection
Catalog Number
KF 3775 .Z9 L5 LM-152
ENFORCEMENT
CONFIDENTIAL - DO NOT
RELEASE
Date
1992-Nov-16
Title
Section 113 Orders Extending Times for Compliance with
NSPS
Title
Sierra Club, Lone Star Chapter v. American Exploration
Company, D.C. No. H-92-3489 (S. Tex), July 3,1995
Title
Signatories to NPDES Permits at Savannah River Plant (SRP)
and Oak Ridge National Laboratory (ORNL)
Catalog Number Date
KF 3775 ,Z9 L5 LM-139 1975-July 29
Catalog Number	Date
KF 3775 .Z9 L5 LM-67	1995-Jul-18
Catalog Number	Date
KF 3775 .Z9 L5 LM-127 1990-Jul-13
ENFORCEMENT
CONFIDENTIAL - DO NOT
RELEASE
Title
Sovereign Immunity Under RCRA §9007
Title
Spitzer Great Lakes Ltd., Company v. US EPA (173 F3d 412)
Catalog Number
KF 3775 .Z9L5 LM-112
Catalog Number
KF 3775 .Z9 L5 LM-12
ENFORCEMENT
CONFIDENTIAL - DO NOT
RELEASE
Date
1999-Apr-14
Title
State Enforcement of Clean Water Act Against Federal
Facilities
Catalog Number
KF 3775 .Z9 L5 LM-89
Date
1991-Feb-6
Title
State Jurisdiction over Federal Facilities and Indian Tribes
under Part B of the Safe Drinking Water Act
Title
Stipulated Penalties in Federal Permits
Catalog Number
KF 3775 .Z9 L5 LM-155
Catalog Number
KF 3775 ,Z9 L5 LM-178
Date
1976-Dec-8
Date
1993-Mar-6
Title
Summary Judgment in United States v. City of North Adams
777 F. Supp 61
Title
Summary of Current Information on the Issue of
Confidentialitv of Electronic Files
Catalog Number
KF 3775 .Z9 L5 LM-180
Catalog Number
KF 3775 .Z9 L5 LM-33
Date
1991-Aug-19
Date
1993-May-4
Title
Summary of Current Information on the Issue of
Confidentiality of Electronic Files
Catalog Number
KF 3775 .Z9 L5 LM-85
Date
1993-May-4

-------
lATTORNEY WORK PRODUCT BY TITLE
REVISED 7/13/2001
Title	Catalog Number	Date
Summary of Recent Decisions Regarding Recovery of Oversight KF 3775 ,Z9 L5 LM-43	1996-Mar-26
Costs Under CERCLA
Title	Catalog Number	Date
Supreme Court Decision on Citizens' Ability under RCRA § KF 3775 .Z9 L5 LM-55	1996-Mar-21
7002 to Recover Past Cleanup Costs for Waste Contamination
(516 U.S. 479, (116 S. Ct. 1251)
Title	Catalog Number	Date
Supreme Court Opinion in Seminole Tribe v. Florida (517 U.S. KF 3775 .Z9 L5 LM-52	1996-Apr-5
44) (116 S. Ct. 1114)
Title	Catalog Number	Date
Transmittal of Olin Model Brief	KF 3775 .Z9 L5 LM-14	1996-Sept- 20
ENFORCEMENT
CONFIDENTIAL - DO NOT
RELEASE
Title	Catalog Number	Date
Tribal Case — Arizona Public Service Co. v. EPA, Nos. 98-1196, KF 3775 .Z9 L5 LM-132 2000-May-17
98-1203,98-1207,98-1208 (D.C. Cir. May 5,2000) (211 F3d
1280)
Title	Catalog Number	Date
Trinity American Corporation v. EPA , 4th Cir. No. 95-20627	KF 3775 .Z9 L5 LM-30	1998-Aug-13
(August 4,1998) (150 F3d 389)
Title	Catalog Number	Date
TSCA Administrative Search Warrant Authority Upheld in	KF 3775 .Z9 L5 LM-35	1988-Oct-7
Boliden Metech, Inc. v. United States (695 F. Supp. 77)
Title	Catalog Number	Date
U.S. Court of Appeals Decision Holds that EPA has Never KF 3775 .Z9 L5 LM-57	1995-Dec-ll
Articulated Whether Ferric Ferrocyanide is a CERCLA
Hazardous Substance and Refers Question to Agency -
Commonwealth of Massachusetts v. Blackstone Valley Electric
Co., No. 94-2286 (1st Cir. Oct 6.1995) (67 F3d 981)
Title	Catalog Number	Date
U.S. District Court Decision - Federal Advisory Committee Act KF 3775 .Z9 L5 LM-40	1996-Mar-13
Title	Catalog Number	Date
U. S. Supreme Court Decision Strongly Affirming the Right of KF 3775.Z9 L5 LM-130 2000-Jan-31
Citizens to Sue to Correct Clean Water Act Violations: Friends
of the Earth v. Laid law Environmental Services (TOC), Inc.
(Jan. 12,2000) (528 U.S. 167)
Title	Catalog Number	Date
United States v. Cordova Chem. Co. of Michigan	KF 3775 .Z9 L5 LM-2	1997-May-13
Title	Catalog Number	Date
United States v. Iron Mountain Mines, et. al., No. CIV-S-91-768 KF 3775 .Z9 L5 LM-68	1995-Apr-28
DFL (E. D. Cal. March 31,1995) (881 F. Supp 1432)
Title	Catalog Number	Date
United States v. ITT Rayonier, 627 F.2d 996 (9th Cir. 1980) KF 3775 ,Z9 L5 LM-173 1981-Apr-30

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ATTORNEY WORK PRODUCT BY TITLE
REVISED 7/13/2001
Title
United States v. Keystone Sanitation Co., et al., No. l:CV-93-
1482 (M.D. PA. April 30,1996)
Title
United States v. Keystone Sanitation Co., et al., No. l:CV-93-
1482 (M.D. PA. August 27,1996)
Title
United States v. TIC Investment Corporation, No. 95-1035 (8th
Circuit) (October 16,1995) (68 F3d 1082)
Title
Useful Overfiling Materials & Harmon Case
Catalog Number
KF 3775 ,Z9 L5 LM-71
Catalog Number
KF 3775 .73 L5 LM-61
Catalog Number
KF 3775 .Z9 L5 LM-70
Catalog Number
KF 3775 .Z9 L5 LM-27a
Date
1996-Jun-7
Date
1996-Sept-30
Date
1996-Mar-25
Date
1998-Oct-23
Title
Very Unfavorable Court Decision re Overfiling Authority for
Harmon Industries
Catalog Number
KF 3775 .Z9 L5 LM-28
ENFORCEMENT
CONFIDENTIAL - DO NOT
RELEASE
Date
1998-Aug-31
Title
Virginia Supreme Court Ruling Precluding State Water
Enforcement Action on Res Judicata Grounds: State Water
Control Board, et al. v. Smithfield Foods (March 2,2001)
Catalog Number
KF 3775 ,Z9 L5 LM-157
ENFORCEMENT
CONFIDENTIAL - DO NOT
RELEASE
Date
2001-Mar-2
Title
Water Quality Standards Actions Affecting Florida
Catalog Number
KF 3775 ,Z9 L5 LM-92
Date
1989-Jul-05
Title
Water Quality Standards Case Summaries
Catalog Number
KF 3775 .Z9 L5 LM-36
Date
1989-Dec-21
Title
Western Nebraska Resources Council v. EPA, No. 90-2158 (8th
Cir. Sept 3,1991) — Challenge to Approval of UIC Aquifer
Exemption (943 F2d 867)
Title
Whether a lender is responsible for contamination of property
acquired through foreclosure
Catalog Number
KF3775.Z9L5 LM-171
Catalog Number
KF 3775 .Z9 L5 LM-34
Date
1991-Sept-19
Date
1989-Sep-22
Title	Catalog Number	Date
Whether the Navy may require contractors to assume the	KF 3775 .Z9 L5 LM-119	1988-Oct-ll
responsibilities of a hazardous waste generator

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MEMORANDUM OF UNDERSTANDING
between
(Name of Mill)
and the
U.S. Environmental Protection Agency
Regarding the
Land Application of Pulp and Paper Mill Materials
AFP A/EPA Fmal 3/14/94

-------
Memorandum of Understanding
Regarding the
Land Application of Pulp and Paper Mill Materials
I. Background
On May 10 1991, in fulfillment of a consent decree in EPF v. Thomas, the
Environmental Protection Agency (EPA) published a proposed rule under Section 6 of
the Toxic Substances Control Act (TSCA) to regulate the use of sludge produced from
the treatment of wastewater effluent of Kraft pulp and paper mills using chlorine and
chlorine-derivative bleaching processes (56 Fed. Reg, 21802; Docket OPTS-62100). The
proposed regulation sought to establish a final maximum dioxin/furan soil
concentration of 10 parts per trillion (ppt) toxic equivalency ([TEQ] see Section III.I.)
and site management practices for the land application of bleached Kraft sludge.
In November 1992, the American Forest and Paper Association (AF&PA) and EPA
agreed to develop a voluntary program aimed at reducing exposure to dioxins and
furans in the practice of land applying pulp and paper mill sludge.
In December 1992, EPA informed the plaintiffs in EPF v. Thomas that EPA would
defer its decision on the promulgation of the proposed sludge land application rule
pending promulgation in 1995 of the integrated rulemaking for effluent guidelines
and Maximum Achievable Control Technology (MACT) standards for the pulp and
paper industry under the Clean Water Act (33 U.S.C. 1251 et seq.) and the Clean Air
Act (42 U.S.C. 7401 et seq.). The EPA Offices of Water and Air & Radiation proposed
such guidelines on October 29, 1993.
EPA believes that the pending integrated effluent guidelines and MACT standards
could have a significant impact on reducing dioxin contamination levels in sludge.
Available data on the impact of process changes on dioxin/furan levels indicate that
TSCA rulemaking to control sludge land application may not be necessary.
Nevertheless, EPA believes that the impact of the Best Available Technology (BAT)
effluent limitation on sludge quality should be fully evaluated before EPA makes a
final decision on the need for TSCA regulation of sludge land application. In order to
address any interim Agency concerns for land application of pulp and paper mill
sludge before the integrated rules are promulgated and implemented, however, EPA
decided to enter into negotiations with AF&PA to develop an industry environmental
stewardship program for the practice of sludge land application. Each paper mill
participating in this program will sign a Memorandum of Understanding
("Memorandum") establishing standards and land management practices for its land
application of sludge and sludge-derived materials.
EPA has met with representatives of the AF&PA to discuss the terms of the
Memorandum. This Memorandum contains dioxin/furan concentration limits which
the industry may achieve using reasonable practices, provisions for site management,
and monitoring and recordkeeping practices."
AFPA/EPA Final 3/14/94	1 .	. ' .jI

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The voluntary stewardship program does not apply to mills land applying or
distributing and marketing sludge and sludge-derived products in the states of
Wisconsin, Ohio, and Maine because these states have established regulations or
guidelines which specifically address land application of pulp and paper mil] sludge,
and contain numerical standards for dioxin(s) and furan(s), site management practices,
and reporting and record keeping requirements.
II.	Purpose and Scope of Memorandum of Understanding
A.	(Name of Mill) ("the Mill") and the U.S. Environmental Protection Agency
("EPA") enter into this Memorandum of Understanding ("Memorandum") in
order to establish (technology-based) TCDD/TCDF concentration limits,
application site management practices, and monitoring, record keeping, and
reporting requirements for materials that are produced by the treatment of
wastewater effluent from Kraft and sulfite pulp and paper mills using chlorine
and chlorine-derivative bleaching processes and are subsequently either land
applied or distributed and marketed.
B.	Except as provided below, this Memorandum applies to the land application
and distribution and marketing of materials with a TCDD/TCDF concentration
equal to or greater than 10 ppt TEQ. Materials with TCDD/TCDF
concentrations of less than 10 ppt TEQ are excluded from this Memorandum,
except for the monitoring, testing, distribution and marketing, and reporting
requirements set out in Sections IV.B.1.-6., IV.B.8., IV.C., IV.D.l.h., IV.E.2., and
IV.F.3. The Memorandum also does not apply to (i) materials or materials
incorporated into products registered under the Federal Insecticide, Fungicide,
and Rodenticide Act, 7 U.S.C. §§ 136-136y ("FIFRA"), (ii) the land application
of materials in Wisconsin, Ohio, Maine, (iii) materials stored or disposed of in
piles, lagoons, settling ponds, or landfills, unless these materials are removed
from such facilities for the purpose of land application, and (iv) materials used
as landfill cover where the landfills are regulated by federal, state or local
approvals that include evaluation of landfill cover materials, unless these
materials are removed from such facilities for the purpose of land application.
III.	Definitions
A.	Distribution and marketing - the give-away or sale of materials by the Mill to
persons not party to this Memorandum.
B.	Intermittent stream - a channel between defined banks created by the action of
surface water and characterized by the lack of terrestrial vegetation or by the
presence of a bed, devoid of topsoil, containing waterborne soil deposits,
exposed soil parent material, or bedrock.
C.	Land application or land applied - procedure in which materials are spread
onto or incorporated into the land at appropriate agronomic rates to condition
soil, retain soil moisture, or provide nutrients to increase vegetative biomass.
These terms do not include storage or disposal of materials in lagoons, settling
ponds, or landfills or use of materials for landfill cover, nor do they include
AFPA/EPA Final 3/14/94
2

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use of materials or materials incorporated into products registered under
FIFRA in accordance with their labels.
D.	Material - sludge or a sludge-derived product, which is land applied.
E.	Significant process change - the addition of a new manufacturing process or
product resulting in a change in the character of the resulting waste or a
significant change in the method of waste treatment resulting in a material
change in the character, location or volume of a discharge to waters of the
United States.
F.	Sludge - solid materials removed from wastewater treatment systems, which
are generated by Kraft and sulfite pulp mills or Kraft and sulfite integrated
pulp and paper mills, using chlorine or chlorine-derivative bleaching processes.
G.	Sludge-derived product - a product composed, in whole or in part, of sludge.
H.	Statistically significant increase - increase in TCDD/TCDF levels over baseline
levels determined by using either the control chart procedure adopted by
EPA's Office of Solid Waste ("Statistical Analysis of Ground-Water Monitoring
Data at RCRA Facilities," EPA/530-SW-89-026, February 1989 and Draft
Addendum, July, 1992), or another statistical test method submitted by the Mill
and approved by EPA or state regulatory officials.
I.	TEQ - the toxicity of individual CDD/CDF or of mixtures of CDD/CDF as an
equivalent concentration of 2,3,7,8- tetrachlorodibenzo-p-dioxin ("TCDD"). For
purposes of this Memorandum, the TEQ is limited to the sum of the
concentration of the measured 2,3,7,8-TCDD plus one-tenth the measured
2,3,7,8-TCDF.
TV. Stewardship Principles
A. Dioxin/Furan Concentration Limits and Related Provisions
1. Dioxin/Furan TEQ Limits
The Mill shall avoid land application of materials, which exceed the
following concentrations of TCDD and TCDF TEQ by testing the
materials in accordance with Section IV.B.
a. Maximum TCDD/TCDF Concentration:
A maximum TCDD/TCDF concentration limit of 50 parts per
trillion (ppt) TEQ shall be established for materials applied to
land. If the TCDD/TCDF concentration of the material is above
50 ppt, the Mill shall follow the provisions set forth in Section
IV.B.7.
AFP A/EPA Final 3/14/94
3

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b. Maximum TCDD/TCDF Soil Concentration:
Except as specified in Section IV.D.l.h., the Mill shall establish a
maximum TCDD/TCDF soil concentration of less than 10 ppt
TEQ after the land application of materials. The Mill shall be
considered out of compliance if the soil concentration is greater
than or equal to 10 ppt
2.	Calculation of Soil Concentration
a.	Except as specified in Section IV.D.l.h., the formula set out in
Attachment B will be used to calculate TCDD/TCDF soil
concentrations.
b.	For purposes of this Memorandum, background levels of
TCDD/TCDF in the soil will be excluded from calculations of
the TCDD/TCDF soil concentration.
c.	Where there is no soil incorporation, it will be assumed that the
TCDD/TCDF soil concentration is equal to that of the sludge.
However, for silviculture operations where there is no
incorporation, the calculation will be based on an assumption of
incorporation of 1 cm.
3.	Depth of Incorporation
Sludge may be incorporated in soil to a depth of up to 15 cm, unless a
program or guideline of the state in which sludge is to be applied
provides that it is appropriate to incorporate to greater depths.
4.	Application Rate
Materials may be applied to land only in amounts that are consistent
with good agronomic practices under local site conditions. The Mill
will follow applicable USDA Extension Service, state, and county
application rate requirements and guidelines and comply with the
following restrictions.
a.	For silviculture operations where no incorporation occurs,
sludge may be applied once during a growing cycle at a rate of
no greater than 45 dry metric tons per hectare.
b.	For surface mine reclamation where no incorporation occurs,
sludge may be applied one time to any one site at a rate of no
greater than 224 dry metric tons per hectare.
c.	For agricultural practices, sludge may be applied at a rate of up
to 68 dry metric tons per hectare, unless a program or guideline
AFP A/EPA Final 3/14/94
4

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of the state in which material is to be applied provides that it is
appropriate to apply at greater rates.
B. Testing Requirements
1.	Frequency
Unless more frequent testing is required by Sections IV.B.7. or IV.B.8. of
this Memorandum, the Mill shall test its material for the purpose of
measuring TCDD/TCDF concentration for four (4) consecutive quarters
after signing this Memorandum. Tests conducted in 1993 may be
substituted for this required testing, provided that the sampling was
done in accordance with all applicable provisions of this Memorandum.
a.	If all quarterly test results show TCDD/TCDF concentrations
less than or equal to 50 ppt, but any one quarter's test results
show TCDD/TCDF concentrations greater than 25 ppt, the Mill
will continue to test its material on a quarterly basis. Once tests
from 4 consecutive quarters show TCDD/TCDF concentrations
less than or equal to 25 ppt or less than 10 ppt, the Mill may
reduce the frequency of testing its material in accordance with
Sub-sections b. or c. below.
b.	If all quarterly test results show TCDD/TCDF concentrations
less than or equal to 25 ppt but one or more are greater than or
equal to 10 ppt, the Mill shall, thereafter, test its material on a
semi-annual basis. The first semi-annual test will occur no later
than six months after the last qualifying quarterly results are
obtained.
c.	Once two consecutive subsequent semi-annual tests show
TCDD/TCDF concentrations less than 10 ppt, the Mill may
begin annual testing of its material.
d.	If all test results show TCDD/TCDF concentrations less than 10
ppt, the Mill shall thereafter test its material on an annual basis.
The first annual test will occur no later than six months after the
last qualifying quarterly results are obtained.
2.	17 Congeners
Within three months after execution of this Memorandum, the Mill will
test for each of the 17 dioxin and furan congeners specified in
Attachment A. All subsequent testing will be limited to TCDD and
TCDF, unless the Mill makes a significant process change.
3.	Analytical Methodologies
AFPA/EPA Final 3/14/94
5

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The Mill will use (i) NCAS1 Method 551 for initial quarterly arid
subsequent monitoring of materials, as required by Section IV.B.l., and
(ii) EPA Method 1613A for 17 congener testing as required by Section
IV.B.2. Non-detects will be reported as "N.D. at [detection limit]," but
will be assigned a value equal to one-half the detection limit for
statistical purposes and that value will be used for all calculations
required by this Memorandum.
4.	Sampling Protocols
The Mill shall collect samples of material in such a way as to ensure
that dioxin/furan concentrations are representative of the process or
area being sampled.
a.	Samples will be composited and shall consist of subsamples
collected either from the process (e.g., clarifier underflow line or
output from de-watering device) using a temporal sampling
scheme, or from a storage area or final production area using a
spatial grid for sample selection.
b.	Composite samples shall consist of no fewer than fifteen (15)
subsamples, and shall include at least one sample produced on
each of five (5) different days.
5.	Spatial and Temporal Sampling
The Mill may use either temporal or spatial sampling procedures, with
choice of procedure determined by the Mill based on the process being
sampled or on the physical characteristics of the location in which the
samples are collected.
a.	Temporal sampling shall be conducted in accordance with
procedures for such sampling set forth in the 1992 Industry-
wide Dioxin Profile (June 1993) compiled by NCASI.
b.	Spatial Sampling: shall be conducted using one of the following
procedures:
-	ASTM standard D-140-70 (extremely viscous liquid);
-	ASTM standard D-420-69 (soil or rock-like material);
-	ASTM standard D-1452-65 (soil-like material);
-	ASTM D-l587-83, Standard Practice for Thin-Walled Tube
Sampling of Soils;
-	ASTM D-4700-91 Standard Guide for Soil Sampling from the
Vadose Zone;
-	EPA SW-846, Test Methods for Evaluating Solid Waste,
Sampling Grid Layout Techniques.
AFPA/EPA Final 3/14/94
6

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6. Testing Responsibility
a.	The Mill shall be responsible for monitoring and testing its
materials. The Mill will use third party laboratories that
participate in EPA's Contract Laboratory Program. The Mill will
supply to EPA all applicable QA/QC certifications, when
requested.
b.	EPA personnel may observe mill personnel sampling the Mill's
materials. EPA (where applicable) and mill personnel will sign
chain of custody forms before the samples are sent to the
laboratory for analysis. The Mill will request the laboratory to
submit analytical results to EPA at the same time it sends them
to the Mill. When EPA wishes to observe mill sampling, EPA
will contact the Mill to make appropriate arrangements.
7. Variability Relative to 50 ppt TEQ Cap
a.	If the Mill's quarterly or subsequent monitoring results show
TCDD/TCDF TEQ concentrations greater them 75 ppt TEQ, all
land application of materials must be discontinued until such
time that the Mill can demonstrate a TCDD/TCDF concentration
equal to or less than 50 ppt TEQ during each of three (3)
consecutive months, using the following procedures:
1.	The Mill shall collect and analyze three (3) composite
samples during the next three (3) months. Each
composite sample will be taken in a separate month and
will consist of fifteen (15) subsamples. If after sampling
three (3) months no composite sample exceeds 50 ppt
TEQ, then the Mill may begin to land apply materials
again and return to quarterly or regular sampling.
2.	If the results from any one of the three composite
samples described in Section IV.B.7.a.l. exceeds 50 ppt
TEQ, then the Mill must continue to take monthly
composite samples for the next three (3) consecutive
months.
3.	If the results of each of the three composite samples
described in Section IV.B.7.a.2. do not exceed 50 ppt
TEQ, the Mill may resume land application activities and
return to regular sampling .
b.	If the Mill's quarterly or subsequent monitoring of materials
results in a TCDD/TCDF TEQ concentration greater than 50 ppt
TEQ, but less than 75 ppt TEQ land application can continue
provided the following testing program is followed.
AFP A/EPA Final 3/14/94
7

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1.	The Mill shall collect and analyze three (3) composite
samples during the next three (3) months. Each
composite sample will be taken in a separate month and
will consist of fifteen (15) subsamples. If after sampling
three (3) months no sample exceeds 50 ppt TEQ then the
Mill may return to quarterly or regular sampling and
continue to land apply materials.
2.	If the results from any one of the three composite
samples described in Section IV.B.7.b.l., exceeds 50 ppt
TEQ, then the Mill must continue monthly composite
sampling for the next two consecutive months. The Mill
may continue to land apply for the additional two
months in which it is conducting sampling so long as the
results from each of the three composite samples
described in Section IV.B.7.b.l. are less than 75 ppt TEQ.
After completion of the two-month period, the Mill shall
compute the mean (average) and the standard deviation
of these six results (i.e., the result greater than 50 ppt
TEQ but less than 75 ppt TEQ and the subsequent five
months samples). If the average is not statistically
significantly above 50 ppt TEQ, then the Mill may
continue to land apply and return to regular sampling.
3.	If the mean (average) of the six results is statistically
significantly above 50 ppt TEQ, then the Mill must
suspend all land application practices until it can
demonstrate that it meets the TCDD/TCDF concentration
limits set forth in the Memorandum, using the
procedures described in Sections IV.B.7.b.l. and 2.
8. Variability Relative to 10 ppt TEQ Exclusion Level
If the Mill's quarterly or subsequent sampling of materials has shown
that the materials are excluded from this Memorandum pursuant to
Section II.B, but subsequent test results show a TCDD/TCDF
concentration greater than or equal to 10 ppt, the Mill's materials
remain exempt from this Memorandum provided the Mill re tests its
materials, within two weeks of receipt of lab analyses, in accordance
with Sections IV.B.3. through IV.B.6.
a.	If the results of the retest show a TCDD/TCDF concentration
less than 10 ppt, the Mill's materials remain exempt
b.	If the results of the retest show a TCDD/TCDF concentration
greater than 15 ppt, the Mill shall report its results to EPA and
begin to manage its materials in accordance with this
Memorandum.
AFP A/EPA Final 3/14/94
8

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c. If the results of the retest show a TCDD/TCDF concentration
greater than or equal to 10 ppt but less than or equal to 15 ppt,
the Mill must test its materials for the next three consecutive
months. If at the end of this period, all results show
TCDD/TCDF concentrations less than 10 ppt, the Mill's
materials remain exempt from this Memorandum. If any of the
test results show TCDD/TCDF concentrations greater than or
equal to 10 ppt, then the Mill's materials are no longer exempt
from this Memorandum, as described in Section 11.6., and
immediately become subject to all applicable provisions of this
Memorandum and the Mill must report such findings to EPA.
C. Distribution and Marketing
Mills may distribute and market only materials with a TCDD/TCDF
concentration of less than 10 ppt Mills which distribute and market such
materials will implement labeling and responsible distribution programs as
follows:
1.	Labeling: Each unit of material distributed or marketed will have a
label affixed to the product packaging or will be accompanied by a
leaflet which sets out the following:
a.	appropriate and inappropriate uses
b.	application methods and rates
c.	site management practices
d.	a statement that the material is composed of pulp and paper
mill wastes.
e.	No such label or leaflet shall state or indicate that the product
bearing the label has been EPA approved.
2.	Responsible Distribution: The Mill will not distribute or market
material to any third party which the Responsible Corporate Official (as
designated in Section VIII) of the Mill knows or should reasonably
know is not following the label or leaflet procedures for use of the
material. This provision shall not impose on the Mill a duty to
investigate or gather information about its customers, distributors, or
the distributor's customers. All mills engaged in distribution and
marketing will train employees engaged in these activities to familiarize
them with the distribution and marketing provisions of this
Memorandum. This training will include instruction on the immediate
reporting to Mill management of any use of distributed or marketed
materials by Mill customers in a mariner not in conformance with this
Memorandum. EPA personnel may review the Mill's Responsible
Distribution Employee Training Program during any visit to the Mill.
AFP A/EPA Final 3/14/94
9

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3. Registration: Materials produced for use as soil conditioners will be
registered as such in states where they are distributed or marketed if
those states have registration programs.
D. Site Management Practices
1. Except as noted in Section IV.D.2., the land application of materials by
the Mill shall comply with each of the following site management
practices:
a.	Erosion Control: The Mill shall provide storm water controls
where they are necessary to prevent escape of land applied
materials to surface water. Examples of such controls are
diversions, terraces, waterways, or other landscaping structures
described in the U.S. Department of Agriculture (USDA), Soil
Conservation Service (5CS) Engineering Field Manual or
equivalent state soil control practices.
b.	Vegetative Cover: For the purpose of reducing erosion, the Mill
shall establish vegetative cover on bare or partially denuded
land to which sludge has been applied in accordance with
Section IV.D.l.c. USDA/SCS Practice Standard 342, Critical
Area Planting; SCS Practice Standard 408, Forest Land Erosion
Controls System; or equivalent state soil control practices will be
used as guidelines.
c.	Time Restrictions for Establishing Vegetation: No area to which
sludge has been applied shall remain uncovered or otherwise
unprotected from erosion for more that six months, unless local
weather conditions, acts of God, or other site conditions (e.g.
drought) prevent revegetation or installation of erosion controls.
d.	Site Maintenance: The Mill shall perform periodic follow-up
inspections and maintenance for one year after materials are
land applied (unless, in the case of agricultural land, the crop is
sooner harvested) to ensure that an adequate stand of vegetation
is established and that any rill and gully erosion is corrected in
a timely manner.
e.	Frozen. Snow-covered, or Flooded Land: The Mill shall not
apply sludge to land that is frozen, snow covered, or flooded
unless it can be determined that the land application of sludge
will not cause a discharge of pollutants in violation of the Clean
Water Act
f.	Flood Plains: The Mill shall not land apply sludge in areas
where the practice will permanently restrict the flow of a base
flood or reduce temporary storage capacity of the flood plain.
AFPA/EPA Final 3/14/94
10

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g.	Set Back: The Mill shall not land apply sludge within 10 meters
of intermittent streams or perennial surface waters.
h.	Pasture land:
1.	The Mill may apply material to land used for grazing
domestic animals for human consumption of meat and dairy
products ("Pasture Land") only if the resultant soil concentration
of TCDD/TCDF is 1 ppt TEQ or less. Soil concentration shall be
determined using the formula set out in Attachment B.
2.	Before land to which the Mill has spread material is
converted to Pasture Land use, the Mill shall demonstrate that
the soil concentration of TCDD/TCDF is 1 ppt TEQ or less by
either:
(a)	Calculating the soil concentration using records
about TCDD/TCDF concentrations in the material
applied, the application rate, and the depth of
incorporation, using the formula in Attachment B, or;
(b)	Testing the land area to be converted to Pasture
Land. Soil testing must be conducted in accordance with
the sampling protocols in Section IV.B.4. and 5. and must
be representative of the top five (5) cm of the area to be
converted.
2. If any site management practices listed in Section IV.D.l. are addressed
in state regulations or guidelines of the state in which the material is
being land applied, the Mill shall follow the state requirements instead
of those listed in Section IV.D.l.
E. Recordkeeping
1. Except as provided in Section IV.E.2., Mills that land apply materials
shall keep the following records and data on site for three years from
the date of application.
a. Quarterly and Annual Monitoring Data:
1.	name of the Mill;
2.	location of the Mill;
3.	the TCDD/TCDF concentration of the material based on
quarterly or subsequent sampling frequency;
4.	the maximum/minimum/average and standard
deviation of TCDD/TCDF concentration in materials;
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5.	the total number of acres to which materials have been
land applied;
6.	the total amount of materials by weight applied to the
site;
7.	the location of each site owned or managed by the Mill
or its parent company at which materials produced by
the Mill have been land applied by either street address
or other means of identification customarily used in a
given locality. At EPA's request, the Mill shall provide
directions to any such land application sites.
8.	the approximate location within the site of areas to which
materials have been applied (e.g., the northwest four-
hectare portion of the XYZ parcel);
9.	the date(s) on which materials were applied.
10.	approximate dates of vegetative seeding or other site
stabilization practices.
b. 17 Congener Scan Data:
1.	name of the Mill;
2.	location of the Mill;
3.	type of significant process change and date of change (if
any); and
4.	the concentrations of all 17 congeners in the material.
2. Mills that land apply or distribute and market materials with a
TCDD/TCDF concentration of less than 10 ppt TEQ shall keep the
following records and data on site for three years:
a.	Quarterly or Annual Monitoring Data:
1.	name of the Mill;
2.	location of the Mill; and
3.	the TCDD/TCDF concentration in the material.
b.	17 Congener Scan Data:
1. name of the Mill;
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2.	location of the Mill;
3.	type of significant process change and date of change (if
any); and
4.	the concentrations of all 17 congeners in the material.
F. Reporting
Except as provided below in Section IV.F.3., the Mill shall comply with the
following reporting requirements:
1.	Quarterly or Annual Monitoring Data
a.	If the information required by Section IV.E.l.a. is requested by a
state agency in the state where the material is being applied or
distributed or marketed, the Mill shall send such information
directly to that agency within three weeks from the date the
request is received by the Mill.
b.	Upon request, the Mill shall forward the information described
in Section IV.E.l.a. directly to the appropriate EPA Regional
Office within three weeks from receipt of the request by the
Mill.
c.	The Mill shall send the quarterly or annual monitoring data
described in Section IV.E.l.a. within forty-five days after the
conclusion of each sampling year to the AF&PA for compilation
in the Annual Materials Monitoring Report
2.	17 Congener Scan Data
The Mill shall send the initial 17 congener test data described in Section
IV.B.2. to EPA within four months after the date on which this
Memorandum becomes effective. The Mill shall send any subsequent
17 congener test data to EPA within forty-five days after it is received
by the Mill.
3.	For materials that are to be land applied or distributed or marketed
with a TCDD/TCDF concentration of less than 10 ppt TEQ:
a.	The Mill shall send its quarterly or annual monitoring data as
described in IV.E.2.a. on an annual basis to the American Forest
and Paper Association for compilation in the Annual Material
Monitoring Report
b.	17 Congener Scan Data:
The Mill shall forward the initial 17 congener test data required
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by IV.B.2.b. to EPA within four months after the date on which
this Memorandum .becomes effective. The Mil] shall send any
subsequent 17 congener test data to EPA within forty-five days
after it is received by the Mill.
4. Additional Reporting
a.	The Mill shall notify EPA of (i) any statistically significant
increases in TCDD/TCDF levels and (ii) any significant process
changes at the same time the Mill is required to notify state
water permitting authorities of such under applicable National
Pollutant Discharge Elimination System (NPDES) permits.
b.	The Mill shall also notify EPA whenever the Mill receives
monitoring information that indicates its material is above 50
ppt TEQ TCDD/TCDF.
c.	Upon the written request of EPA, the Mill shall submit records
kept in accordance with this Memorandum. All such records
and/or data submitted to EPA shall be placed in the public
administrative record established for the Environmental
Stewardship Program for Pulp and Paper Sludge Land
Application (OPPTS-62126; FRL-4637-2).
V.	EPA Findings and Actions
A.	Based on current information, EPA believes that land application and
distribution and marketing of materials by the Mill in accordance with this
Memorandum is consistent with Section 6 of the Toxic Substances Control Act,
15 U.S.C §§ 2601 et seg. ("TSCA*).
B.	EPA believes that the integrated rulemaking covering both effluent guidelines
and air emission standards for the pulp and paper industry could have a
significant effect on dioxin/furan levels in materials and, according to available
data on the effect of process changes on such levels, could render unnecessary
separate regulation of land application or distribution and marketing of
materials. Consequently, EPA will defer its decision on whether or not to
adopt the sludge land application rules proposed at 56 Fed. Reg. 21802 (Docket
OPTS-62100) until EPA finalizes the integrated rulemaking. EPA also agrees
that pending completion of the integrated rulemaking, it will not initiate a
rulemaking covering the manufacture, land application, or distribution and
marketing of materials under TSCA § 4 (Testing of chemical substances and
mixtures) or § 6 (Regulation of hazardous substances and mixtures).
VI.	Unforeseen Circumstances
The parties recognize that this Memorandum addresses matters that may be affected
by evolving technologies and manufacturing processes, the results of which may not
have been foreseen or addressed when this Memorandum was executed. In that
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event, the parties agree to consider, in good faith, modifications to this Memorandum
pursuant to the procedures in Section X.*
VII.	Resolution of Disputes
In the event of a dispute about facts or interpretation regarding compliance with this
Memorandum, the parties will comply with the Dispute Resolution procedures found
in Attachment C of this Memorandum.
VIII.	Responsible Officials
(Name of Mill Official), (Title), or his/her successor will be responsible for complying
with this Memorandum for (Name of Mill) as the Responsible ^Corporate Official, and
Mark A. Greenwood, Director, Office of Pollution Prevention and Toxics, or his
successor will be responsible for complying with this memorandum for the U.S.
Environmental Protection Agency.
IX.	Notices
All notices, reports or submissions required by this agreement shall be sent to the
following persons, unless otherwise specified herein:
For EPA:
For the Mill:
X. Effective Date, Modification, and Term of Agreement
This Memorandum is effective when executed by both EPA and the Mill and may be
modified only by written agreement between them. This Memorandum may be
terminated by either party upon thirty days prior written notice to the other and will
terminate automatically (unless the parties otherwise agree in writing) upon (i)
promulgation by EPA of final rules addressing any matter covered by the
Memorandum, or (ii) a final decision by EPA that the so-called cluster rule (recently
issued in proposed form at 58 Fed. Ree. 66078 et seq, (December 17,1993)) resolves
EPA's concerns about the land application and distribution and marketing of
materials.
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IN WITNESS WHEREOF, the parties have executed this Memorandum as of the later of the
dates set forth below.
For (Name of Mill):
Signature	Date
Typed Name and Title
For the U.S. Environmental Protection Agency:
Mark A. Greenwood, Director	Date
Office of Pollution Prevention and Toxics
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Attachment A
17 Congeners
Congener	Toxicity Equivalency Factor fTEF11!
2,3,7,8- tetra TCDD	1
2,3,7,8- tetra TCDF	0.1
1,2,3,7,8- penta PeCDD	0.5
1,2,3,7,8- penta PeCDF	0.05
2,3,4,7,8- penta PeCDF	0.5
1,2,3,4,7,8- hexa HxCDD	0.1
1.2.3.6.7.8-	hexa HxCDD	0.1
1.2.3.7.8.9-	hexa HxCDD	0.1
1,2,3,4,7,8- hexa HxCDF	0.1
1.2.3.6.7.8-	hexa HxCDF	0.1
1.2.3.7.8.9-	hexa HxCDF	0.1
2,3,4,6,7,8- hexa HxCDF	0.1
1,2,3,4,6,7,8- hepta HpCDD 0.01
1.2.3.4.6.7.8-	hepta HpCDF	0.01
1.2.3.4.7.8.9-	hepta HpCDF	0.01
1,2,3,4,6,7,8,9- ©eta OCDD	0.001
1,2,3,4,6,7,8,9- octa OCDF	0.001
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Attachment B
Calculation of Soil Concentration1
[SLC*FS*t*UWSL]
SDC =		
[(D-t) *UWS] + [FS*t*UWSL]
Where:
SDC=	Equivalent in-soil concentration of't' cm of materials placed upon or blended
with '(D - t)' cm of existing soil - ppt
D5 =	Depth to which materials are incorporated or 15 cm, whichever is greater - cm
UWS =	Unit weight of soil (1.8E+05 kg/ha-cm = 1800 kg/m" 3)
SLC =	TCDD/F concentration in dry material solids - ppt
FS =	Weight fraction of solids in material - unitless
UWSL =	Unit weight of wet material - kg/ha-cm (see below)
t=	thickness of material layer applied to soil - cm
and
UWSL =	1.8E+05 * FS + 1.0E+05 * (1-FS)
where	FS is as defined above and 1.0E+05 is the unit weight of water in kg/ha-cm
(= 1000 kg/m" 3)
1	Existing soil concentrations of TCDD or TCDF at the land application site are
assumed to be equal to zero (0) for this Memorandum of Understanding.
2	For Silviculture operations where no incorporation takes place D=1 cm.
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Appendix C
(Name of the Mill)
and the
United States Environmental Protection Agency
DISPUTE RESOLUTION PROCEDURES
A.	General Provisions
1.	Purpose
2.	Definitions
3.	Pre-Negotiation Activities
4.	Referral of Disputes
B.	Guidelines for Conduct of Neutral Panel
1.	Scope and Applicability
2.	Jurisdiction of Neutral Panel
3.	Selection of Neutral Panel
4.	Disclosure and Challenge Procedures
5.	Qualifications of Neutral Panel
6.	Information Regarding Dispute
7.	Recommendation of Neutral Panel
8.	Confidentiality
9.	Ex parte Communications
10.	Administrative Fees, Expenses, and Neutral Panel's Fee
11.	Miscellaneous Provisions
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A.
GENERAL PROVISIONS
1.	Purpose
As specified in the Memorandum of Understanding Regarding the Land Application
of Pulp and Paper Sludge ("Memorandum of Understanding") between the Mill and
the U.S. Environmental Protection Agency ("EPA"), this Appendix C contains the
procedures to be followed by the parties to resolve disputes about issues of fact or of
interpretation between EPA or the Mill regarding compliance with the Memorandum
of Understanding. The parties establish these Dispute Resolution (DR) procedures for
the sole purpose of resolving such disputes.
2.	Definitions
Terms not defined in this section have the meaning given by Section 3 of the Toxic
Substances Control Act, 15 U.S.C. §2602. All time deadlines in these DR procedures
are specified in calendar days. Except when otherwise specified:
(a)	"The Mill" means the pulp and paper mill that has signed the Memorandum of
Understanding.
(b)	"Act" and "TSCA" mean the Toxic Substances Control Act, 15 U.S.C. §2601 et
seq.
(c)	"Neutral Panel" means the persons selected in accordance with and governed
by the provisions of the DR procedures.
(d)	"Dispute" means a disagreement about a fact or interpretation made by either
party concerning the Memorandum of Understanding.
(e)	"Ex parte communication" means any communication, written or oral, relating
to the merits of the dispute before the Neutral Panel, made unilaterally by a
party.
(f)	"Party" means EPA or the Mill.
(g)	"Non-binding" means that the recommendation of the Neutral Panel is for use
of the parties to assist in the settlement negotiations. The recommendation
does not in any way bind the parties or otherwise determine the outcome.
3.	Pre-Negotiation Activities
(a) If either party believes that the other has not complied with the Memorandum
of Understanding, that party shall so notify the other in writing. If the notified
party disputes such determination, it shall have ten days from the date of
receipt of the notice to notify the other party regarding the dispute. Any such
dispute shall be handled in accordance with these DR procedures.
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(b) The parties agree that, should a dispute arise concerning the Memorandum of
Understanding, the parties will attempt first to resolve the dispute through
negotiations. The parties agree to make all good faith efforts to resolve the
dispute through negotiations within thirty days from the date that notice of the
dispute is received.
4. Referral of Disputes
If the parties are unable to resolve the dispute through negotiations within thirty
days, the parties agree to jointly refer the dispute to a Neutral Panel pursuant to the
provisions of these DR procedures.
B. GUIDELINES FOR CONDUCT OF NEUTRAL PANEL
1.	Scope and Applicability
The procedures established by this DR document may be used only to resolve
disputes raised pursuant to Section A.3., above.
2.	lurisdiction of Neutral Panel
In accordance with these DR procedures, the Neutral Panel is authorized to issue a
recommendation regarding the resolution of the disputes referred by the parties
pursuant to Section A.4., above.
3.	Selection of the Neutral Panel
The Neutral Panel will be chosen in the following manner.
(a)	Should a dispute arise which cannot be resolved through negotiations
pursuant to Section A.3., above, each party shall choose one neutral who meets
the qualifications specified in Section B.5., below. These two neutrals shall be
named within fifteen days after the end of the thirty-day negotiation period
described in A.3.b., above. Within fifteen days after being selected, the two
neutrals shall select a third individual who also meets the qualifications
specified in Section B.5., below. These three (3) individuals shall constitute the
Neutral Panel.
(b)	If any Neutral Panel member should resign, die, withdraw, refuse, be
disqualified, or be unable to perform the duties of the office, a replacement
shall be selected in accordance with the applicable provisions of this section
and the dispute resolution process shall start over unless the parties agree
otherwise.
4.	Disclosure
(a) A person selected or nominated as a Neutral Panel member pursuant to
Section B.3. above, shall, within five days of receipt of his or her notice of
nomination, disclose to both parties any circumstances likely to affect his or
her impartiality, including any bias or any financial or personal interest in the
result of the Panel's recommendation, or any past or present relationship with
the parties or their counsel.
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(b)	Within five days of naming the Neutral Panel, the parties agree to make a
diligent effort to ascertain all prior contact between themselves and the
nominated Neutral Panel and to notify all parties of any such contact
(c)	Upon receipt of such information from a nominated Neutral Panel member, or
other source, the affected party shall promptly communicate such information
to the other party and to the Neutral Panel.
(d)	Within receipt of such information, either party may veto a member of the
Neutral Panel by sending written notice to the non-opposing party within ten
days of naming the individual(s). A replacement shall be selected in
accordance with the applicable provisions of this section within ten days.
5.	Qualifications of Neutral Panel Members
Any individual named by the parties as a Neutral Panel member shall meet the
following qualifications:
(a)	He/She shall not currently be employed by either party, as an employee,
contractor or otherwise.
(b)	He/She shall have either relevant experience or an advanced degree(s) in a
field of study appropriate to making recommendations pursuant to these DR
procedures.
(c)	He/She shall have no financial or equitable interest in the Mill, or any
business entity having a financial or equitable interest in the Mill.
(d)	He/She shall have no close personal relationship with any employee or
representative of the parties involved in the dispute.
(e)	He/She shall agree to conduct dispute resolution activities in accordance with
these DR procedures.
(f)	His/Her other business and personal obligations should be such to allow for
devotion of the time and attention necessary for a prompt and efficient
resolution of the dispute.
(g)	He/She shall agree to enter into a confidentiality agreement with the Mill.
6.	Information Reeardine Dispute
(a) Within ten days of the selection of the Neutral Panel, material will be
submitted to the Neutral Panel by each of the parties. Such material shall
include the Memorandum of Understanding.
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(b)	Upon the referral of a dispute pursuant to Section A.4., above, the parties shall
each submit to the Neutral Panel -all information upon which the dispute is
based. The information shall include, but not be limited to a statement by
each party of the matter in dispute and the issue to be resolved as specified in
Section A.3., above.
(c)	The Neutral Panel may require the parties to submit such additional
information as it may deem necessary to an understanding of the disputed
issue, including witness statements, documents, and the stipulation of
uncontested facts. The Neutral Panel shall be the judge of the relevancy and
materiality of information offered, and conformity to legal rules of evidence
shall not be necessary.
(d)	The Neutral Panel shall specify a period of time, not to exceed fifteen (15)
days, for the submission of requested information.
(e)	All information submitted to the Neutral Panel pursuant to this section shall
be simultaneously submitted to all parties.
(f)	The Neutral Panel may request and consider the statements of witnesses by
affidavit, interrogatory, deposition, or personal testimony, but shall give the
information only such weight as the Neutral Panel deems appropriate after
consideration of any objections made to its relevancy or materiality. The
Neutral Panel may request that representatives from either party or witnesses
appear in person to provide testimony or statements.
(g)	Either party may request to appear in person in front of the Neutral Panel in
order to present its summation of the party's case, and the Neutral Panel may
exercise its discretion in responding to such requests. If the Neutral Panel
agrees to hear the summation of one party, however, it must hear the
summation of both parties.
7. Recommendation of Neutral Panel
(a)	Upon the receipt of all information submitted or requested pursuant to Section
B.6., above, the Neutral Panel shall declare the investigative period closed and
so notify the parties.
(b)	The Neutral Panel shall render a recommendation within ten days after the
investigative period is declared closed pursuant to Section B.7.(a), above,
unless:
(1)	Both parties agree in writing to an extension; or
(2)	The Neutral Panel determines that an extension of the time limit is
necessary.
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(c)	The recommendation of the Neutral Panel shall be signed and in writing. It
shall contain a full statement of the basis and rationale for the Neutral Panel's
recommendation.
(d)	Within ten days of receiving the Neutral Panel's recommendation, the parties
shall again meet and attempt to settle the dispute. If the parties are unable to
reach an agreement within thirty (30) days from receiving the Neutral Panel's
recommendation, then either party may exercise the option of terminating the
Memorandum of Understanding in accordance with such Memorandum of
Understanding.
(e)	If the parties settle their dispute prior to receiving the recommendation of the
Neutral Panel, the Panel shall cease all further activities in regard to the
dispute upon receipt of joint notice of such settlement from the parties.
(f)	The parties shall accept as legal delivery of the recommendation the placing of
a true copy of the recommendation in the first class United States mail,
postage prepaid, by the Neutral Panel, addressed to the individual designated
in Section IX. (Notices) of the Memorandum of Understanding or their
attorneys, or the receipt of a true copy of the recommendation by personal
delivery service.
(g)	After the Neutral Panel forwards its recommendation to the parties, it shall
return all dispute-specific information provided by the parties (including tiny
copies) and destroy all notes, memoranda, and any other records concerning
the dispute.
8.	Confidentiality
(a)	The Neutral Panel shall treat the subject matter of all submitted information as
confidential and shall not disclose any trade secret or confidential business
information designated as such by the parties. The Mill shall allow the
Neutral Panel to receive and review information designated by the Mill as
confidential business information (CBI), under EPA rules.
(b)	The recommendation of the Neutral Panel shall not be admissible as evidence
in any proceeding brought under any provision of TSCA or any other
provision of law.
(c)	The members of the Neutral Panel shall not be compelled to testify or
otherwise provide evidence or information regarding the Neutral Panel
proceedings or in any proceedings regarding the subject matter of the dispute.
9.	Ex Parte Communications
(a) Neither party, nor anyone acting on behalf of either party, shall engage in ex
parte communication with the Neutral Panel concerning matters being handled
under these DR procedures.
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(b)	Any communication with, or submission of information to, the Neutral Panel
in violation of these rules will seriously jeopardize the ability of the Neutral
Panel to function pursuant to these DR procedures; and to the extent that such
a violation is found to have occurred, the opposing party shall have the
discretion to terminate these DR procedures.
(c)	Notwithstanding the provisions of Section 11, below, any such violation of
Subsection 9(a), of these DR procedures by either party, which results in
termination of these DR procedures, shall entitle the opposing party to full
compensation for its share of the Neutral Panel's fees and expenses.
10.	Administrative Fees. Expenses, and Neutral Panel's Fee
(a)	EPA has the discretion to decide whether to enter into DR proceedings based
on available funding.
(b)	Each party shall pay the fees and expenses of the Neutral Panel member
chosen by that party. The fees and expenses of the Neutral Panel member
chosen by the parties' representatives shall be borne equally by the parties, and
arrangements for compensation of the third neutral shall be made
independently by each party.
(c)	Expenses of providing information to the Neutral Panel shall be borne by the
party producing such information.
(d)	The hourly rates and expenses, and the anticipated budget for the Neutral
Panel shall be agreed upon by the parties prior to the commencement of any
activities by the Neutral Panel.
11.	Miscellaneous Provisions
(a)	All papers connected with the recommendation of the Neutral Panel shall be
served on the opposing party either by personal service or United States mail,
First Class, addressed as specified in the Memorandum of Understanding.
(b)	Neutral Panel members shall be disqualified from acting on behalf of either
party during the operation of the Memorandum of Understanding, except that
the parties may agree to select a prior Neutral Panel member as a Neutral
Panel member in future dispute resolution proceedings pursuant to the
Memorandum of Understanding.
(c)	Any notification or communication between the parties, or with and by the
Neutral Panel, shall be in writing, and shall be confidential and entitled to the
same privileges that apply generally to settlement negotiations.
END OF DOCUMENT
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May 21,1997
MEMORANDUM
SUBJECT: United States, eta!., v. Cordova Chem. Co. of Michigan, etai, Nos. 92-
2288/2326 (6th Cir., May 13, 1997)(eA? banc) - Information Memorandum
FROM: Joseph Freedman
Attorney
TO:	Steven A. Herman
Assistant Administrator for Enforcement
THRU: Lisa K. Friedman
Associate General Counsel
Solid Waste & Emergency Response Division
SUMMARY:
Adopting a narrow view of CERCLA liability, a seven to five mafJ
Court of Appeals for the Sixth Circuit reversed the lower court's determination that a
parent corporation was directly liable for pollution that occurred on a site owned by its
wholly-owned subsidiary. The court also narrowly construed the "contractual
relationship" exception to the "third-party" defense to owner liability under CERCLA.
Finally, the court held that state, rather than federal, law standards should be applied i
determining whether to "pierce the corporate veil" in CERCLA actions, and that
Michigan law did not allow such piercing under the facts of the case. We will be
discussing the decision with your staff and the Department of Justice in order to
determine whether to seek Supreme Court review of this decision. A more detailed
summary of the case follows.
1. Corporate Parent "Operator" Liability
The above-captioned case involved contamination at a chemical manufacturing site.
Releases of hazardous substances occurred while the Ott Chemical Co. (Ott II), a

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wholly-owned subsidiary of CPC International (CPC), owned and operated the site.
The district court held that CPC could be liable for the contamination that occurred
during its subsidiary's tenure on two possible theories: (1) direct liability as an operator;
and (2) ownership through piercing of the corporate veil. The district court found it
unnecessary to address the corporate veil theory, finding that CPC was directly liable
as an operator because it "actively participated in an exerted significant control over Ott
ll's business and decision making." Among the factors relied upon by the district court
were:
CPC's 100% ownership of Ott II;
CPC's participation in Ott ll's board of directors;
cross-pollination of officers involved in decision-making and daily operations;
active participation by CPC officials in environmental matters of Ott II; and
financial control of Ott II through approval of budgets and capital expenditures.
Acknowledging that the district court's theory of direct liability enfJ
large ma '1
this theory of direct liability. It held that a parent corporation can be liable under
CERCLAfor the acts of its subsidiary only by: (i) actually operating the facility, either
independently of the subsidiary or as an actual co-operator with the subsidiary; or (ii)
conduct sufficient toriJ
theriJ
piercing CPC's corporate veil.
2. The Third Party Defense and the Contractual Relationship Exception
Section 107(b)(3) of CERCLA provides a defense to liability for releases caused "solely
by ... an act or omission of a third party other than . . . one whose act or omission
occurs in connection with a contractual relationship, existing directly or indirectly, with
the defendant... if the defendant establishes . . . that (a) he exercised due care with
respect to the hazardous substance concerned . . . and (b) he took precautions against
foreseeable acts or omissions of any such third party
The district court held that, by its terms, the defense is not available to a defendant
who had a direct or indirect contractual relationship with the parties responsible for
contaminating the site, and that the term "contractual relationship" includes deeds
transferring title of the land. The court of appeals reversed, noting that in order to be
ineligible for the third party defense, the act or omission must occur in connection with
the contractual relationship. Although the issue is remanded for the district court to
"revisit", it seems clear that the appellate court does not consider a deed of sale,
standing alone, to defeat the third-party defense, even without regard to the "innocent
landowner" provision in CERCLA §101 (35).2 The court did not even refer to that
statutory provision, which defines "contractual relationship" specifically to include
deeds unless the acquiring landowner did not know and had no reason to know of the

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release of hazardous substances on the property. It is unclear how the detailed
provisions of §101(35), which allow the use of the "innocent landowner" defense only in
limited circumstances, can be squared with the court's theory that the defense can be
invoked unless the release of hazardous substances took place "in connection" with the
deed.
3. Piercing the Corporate Veil
The Court of Appeals also concluded that, with respect to another defendant-parent
corporation, AeroiJ
corporate veil under Michigan law to make AeroiJ
wholly-owned subsidiary. According to the court, in order to pierce the corporate veil
under Michigan law, it is necessary to show an intent to "subvertr,J
fraudulently, or otherwise seek to distort the legitimate purposes of the corporate form."
Fivem
interpretation of Michigan law; the other concluded that corporate parent liability and
veil-piercing are matters of federal common law, not state law.
Next Steps:
The Cordova decision departs from established precedent in most other circuits on the
issue of parent corporation liability and on the general concept of strict liability under
CERCLA. Given the wealth of contrary authority and the split in the circuits, the parent
corporation liability issue may be a good candidate for a petition of certiorari to the
Supreme Court. The court's interpretation of the third-party defense is also a
derogation of strict liability, and in our view is clearly erroneous. However, there is no
appellate decision to the contrary.3 The issue also may not be ripe for Supreme Court
review, as the district court now must decide whether the "due care" provisions of
§107(b)(3) were satisfied. Finally, we believe that the court misapplied Michigan law
on piercing the corporate veil, although this is not an issue that the Supreme Court
would likely agree to consider. We will confer with your staff and the Department of
Justice over the next few weeks to help determine whether a cert, petition is warranted.
A copy of the court's opinion is attached for your convenience. Joe Freedman
(260-7627) will be pleased to discuss this case further.
Attachment
cc: Jon Cannon
Bob Dreher
Tim Fields
Regional Counsels
ORC Superfund Branch Chiefs
Clarence Featherson

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^'3
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
REGION IV


345 COURTLAND STREET. N E
ATLANTA. GEORGIA 30365
Memorandum
DATE:
November 12, 1991
SUBJECT: The new Boiler and Industrial Furnance regulations,
40 C.F.R. Part 266, Subpart H.
The purpose of this memo is to provide ORC attorneys a brief look
at the new Boiler and Industrial Furnace (BIF) regulations which
became effective on August 21, 1991. The BIF regulations are
significant because, prior to this rule, boilers and industrial
furnaces that burned hazardous waste for energy or material
recovery were exempt from RCRA regulations. The new BIF
regulations establish protective emissions limits, operating
conditions and interim and final permit requirements that BIF
facilities must meet. BIF facilities must submit detailed permit
applications to EPA, perform test burns to certify compliance
with the emissions standards, and ultimately, must obtain a RCRA
permit or stop burning hazardous waste in BIF units.
This memorandum is not intended to encompass all aspects of the
regulations but rather to highlight the areas of the regulations
that are likely to be the focus of cases assigned to ORC
attorneys in the near future.
The BIF regulations, 40 C.F.R. Part 266 Subpart H, are
promulgated predominantly under the authority of RCRA Section
3004(q). The BIF final rule was posted in the Federal Register
on February 21, 1991, with additional technical appendices being
posted on July 17, 1991, and final amendments to the rule being
posted on August 27, 1991. The BIF regulations became effective
on August 21, 1991.
The preamble to the final rule ( FR Vol. 56. No. 35, pg. 7134/
Thursday, Feb. 21, 1991) provides an excellent overview of the
BIF regulations and is helpful for grasping the "big picture" of
how the rule works and how it fits with other parts of RCRA.
Attached is an "easy to read" version outline of the preamble.
Also attached is a detailed outline of the BIF regulations
themselves.
FROM:	Richard Leahy
Assistant Regional Counsel
Office of Regional Counsel, EPA Region IV
TO:
Office of Regional Counsel, EPA Region IV

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2
Generally, Part 266 Subpart H, governs the burning of hazardous
waste in BIF units. BIF units are boilers, kilns and industrial
furnaces which substitute hazardous waste for fuel or raw
materials (See 260.10 as revised). Under the regulations, strict
emissions standards are set for BIF units (see 266.104-107). BIF
units also must meet operating standards under Parts 264 or 265,
as well as specific permiting requirements detailed in Parts
266.102 and 266.103.
As is the case in other areas of RCRA, under the BIF regulations
newly regulated facilities that meet certain requirements are
allowed to operate under interim status until a final permit
decision is reached by EPA. Most of the cases that ORC is likely
to handle in the immediate future will deal with the issue of
whether a facility qualifies to meet interim status.
Currently, 39 facilities in Region IV have a indicated an intent
to burn hazardous v/aste in BIF units under the interim status
provisions of the BIF rule. Pursuant to RCRA, EPA does not grant
or deny interim status to facilities. Interim status
automatically applies to facilities provided they meet the
eligibility criteria set forth in BIF regulations. EPA's role is
to scutinize the information sent by the facility to determine if
it meets the regulatory requirements. If EPA determines that any
BIF facility burning hazardous waste does not meet the interim
status criteria, the burning of hazardous waste by the facility
constitutes an enforceable violation of the regulations.
Basically, a BIF facility has interim status if it meets three
criteria (see Part 266.103): (1) by May 22, 1991, the facility
must have filed a notification form to EPA (Form 8700-12) (2) by
August 21, 1991 submitted a Part A permit application (3) by
August 21, 1991 meet the regulatory definition of "in existence".
The definition of "in existence" (see 266.103(a)(1)(ii)) involves
a case specific, factual analysis of whether a facility burned or
intended to burn hazardous waste in BIF units prior to August 21,
1991.
In addition to the above three criteria, a facility must have
submitted to EPA by August 21, 1991, a "Certification of
Precompliance" (see 266.103(b). The certificate must indicate,
.that based on best engineering estimates, hazardous waste burned
in the BIF unit will meet the pertinent emissions standards for
BIF units (see 266.102(c)). Based on the estimates contained in
the Certificate of Precompliance, the facility must set operating
parameters and standards for the BIF units so that emissions
limitations for interim status units will not be exceeded.
As I mentioned above, this memo is intended only as a brief
overview of some specific areas of the new BIF regulations that I
think ORC will be becoming involved in in the near future. I
have compiled policy memos and summaries of the rule and there

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3
are program people who are expert in the details and intricacies
of the technical portions of the regulations. If you are in need
of further information, I have compiled policy memoranda and
summaries of the rule and there are program people who are expert
in the details and intricacies of the technical portions of the
regulations. If you have any questions, comments or further
information that I should be aware of, please let me know.
cc: Jim Kutzman w/attachments
John Dickerson w/attachments

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Page numbers refer to FPA
BIF Workshop Manual not the
Federal Pegister pages.
PREAMBLE OUTLINE
PART ONE: BACKGROUND
I.	Legal Authority 		6
II.	Overview of the Final Rule 		6
A.	Controls for Emissions of Organic Compounds		6
B.	Controls for Emissions of Toxic Metals		6
C.	Controls for Emissions of Hydrogen Chloride and
Chlorine Gas 			7
D.	Emission Standard for Particulate Matter 		7
E.	Permitting Procedures		7
F.	Controls During Interim Status		7
G.	Units Exempt From Air Emissions Standards 		8
H.	Pollution Prevention Impacts 		8
III.	Relationship to Other Rules		9
A Regulations to be Promulgated Under the New
Clean Air Act		9
B.	April 27, 1990 Proposed Incinerator Amendments		10
C.	July 18, 1990 Proposed Amendment to Definition of
Wastewater Treatment Unit to Exempt Sludge Dryers		10
D.	Land Disposal Restriction Standards	 10
PART TWO: DEVICES SUBJECT TO REGULATION
I.	Boilers				11
II.	Industrial Furnaces		11
A Cement Kilns		12
B.	Light-Weight Aggregate Kilns		13
C.	Halogen Acid Furnaces 		13
1.	Current Practices 		14
2.	Designation of HAFs as Industrial Furnaces 		15
D.	Smelting, Melting, and Refining Furnaces Burning
Hazardous Waste to Recover Metals		20
PART THREE: STANDARDS FOR BOILERS AND INDUSTRIAL FURNACES
BURNING HAZARDOUS WASTE
I. Emission Standard for Particulate Matter		23
A. Basis for Final Rule		25
1.	Alternatives Considered 		25
2.	Basis for Standard	25
1

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B.	Interim Status Compliance Procedures 	 26
C.	Implementation 	 26
II. Controls for Emissions of Toxic Organic Compounds 	 27
A.	I DRE Standard	27
1.	Selection of POHCs for DRE Testing	 28
2.	Use of POHC Surrogates 	29
3.	Waiver of DRE Trial Burn for Boilers Operating
Under the Special Operating Requirements	 30
B.	PIC Controls 	 34
1.	Use of a CO Limit to Control PICs	 34
2.	Tier I PIC Controls: 100 ppmv CO limit	 35
3.	Tier n PIC Controls: limits on CO and HC 	 40
4.	Special Requirements for Furnaces	45
5.	Special Considerations for Cement Kilns	52
C.	Automatic Waste Feed Cutoff Requirements	54
D.	CEM Requirements for PIC Controls	57
E.	Control of Dioxin and Furan Emissions	60
HI. Risk Assessment Procedures	62
A.	Health Effects Data	63
1.	Carcinogens 	63
2.	Noncarcinogens 	66
B.	Air Dispersion Modeling	 69
1.	Option for Site-Specific Modeling	69
2.	Terrain-Adjusted Effective Stack Height	70
3.	Conservatism in Screening Limits 	70
4.	GEP Stack Height 	70
5.	Plume Rise Table	71
6.	Compliance by Manipulating Effective Stack Height 	72
7.	Effect of HQ Emissions on Acid Rain 	72
8.	Bvulding Wake Effects 	72
C.	Consideration of Indirect Exposure and Environmental
Impacts 	72
1.	Indirect Exposure	72
2.	Non-human Health Related Environmental Impacts 	73
D.	Acceptable Risk Level for Carcinogens	73
E.	Use of MEI/Consideration of Aggregate Risk	74
F.	Risk Assessment Assumptions	75
IV. Controls for Emissions of Toxic Metals	77
A. Background Information	78
1.	Metals Standards under Other Statutes	78
2.	1987 Proposed Rule	
3.	1989 Supplement to Proposed Rule		 • * ;
2

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B.	How the Standards Work		81
1.	Tier HI Standards		81
2.	Tier II Standards 		83
3.	Tier I Standards		84
C.	Implementation 		85
1.	Tier I Implementation	85
2.	Tier II Implementation	86
3.	Tier DI Implementation 	87
4.	Special Requirements for Furnaces that Recycle
Collected Particulate Matter		87
5.	Trial Bums	92
6.	Monitoring and Analysis Requirements	92
D.	Interim Status Compliance Requirements	93
V.	Controls for Emissions of Hydrogen Chloride and Chlorine Gas	93
A.	Background Information	93
B.	Response to Comments 	94
1.	Short-Term HQ RAC	94
2.	Need for Cl2 Controls	94
3.	HC1 Emission Test Procedures 	95
4.	Technology-Based HQ Controls 		95
C.	Implementation 		95
1.	Emissions Testing	95
2.	Waste Analysis	96
3.	Interim Status Compliance Requirements 	 96
VI.	Nontechnical Requirements 	96
VII.	Interim Status Standards	96
A.	Certification Schedule	97
1.	Certification of Precompliance 	97
2.	Certification of Compliance 	98
3.	Recertification 	98
4.	Failure to Comply with the Certification Schedule	99
5.	Development of the Certification Schedule 	99
B.	Limits on Operating Parameters	 100
C.	Automatic Waste Feed Cutoff	 101
D.	Sham Recycling Policy	 101
E.	Submittal of Part B Applications	 103
F.	DRE Testing 	 103
G.	Chlorinated Dioxins and Furans	 103
H.	Special Requirements for Furnaces	 103
L Special Metals Controls for Furnaces that Recycle
Collected Particulate Matter			 106
J. Recordkeeping	;	 106
3

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Vin. Implementation of Today's Rule		107
A.	Newly Regulated Facilities		107
1.	Definition of "In Existence"		107
2.	Section 3010 Notification 			107
3.	Part A Permit Application 		107
B.	Interim Status Facilities 		108
C.	Permitted Facilities		109
1.	Amendment to §270.42(g)		109
2.	Procedures to Modify Permits		110
D.	Addition of Storage Units at Direct Transfer Facilities that Obtain
Interim Status		Ill
1.	Unauthorized States		Ill
2.	Authorized States		Ill
E.	Compliance with the BIF versus Incinerator Rules 		112
IX.	Permit Procedures	 112
A.	Part B Information	 112
B.	Special Forms of Permits 	 113
1.	Permits for New Boilers and Industrial Furnaces	 113
2.	Permit Procedures for Interim Status Facilities 	 114
X.	Exemption of Small Quantity Burners	 114 i
A.	Response to Comments 	 115
B.	Basis for Today's Rule		 116
1.	Composition of Hazardous Waste Stream		117
2.	Toxicity of Hazardous Constituents		117
3.	Destruction Efficiency		118
4.	Assumptions Regarding Metals and Chlorine in
Waste Fuels	 118
C.	How the Exemption is Implemented	 118
1.	Use of Terrain Adjusted Effective Stack Height 		118
2.	Multiple Stacks		118
D.	Wastes Ineligible for Exemption		119
E.	Exemption of Associated Storage 		119
F.	Notification and Recordkeeping Requirements		120
XI.	Exemption of Low Risk Waste from DRE Standard and
Particulate Matter Emissions Standard	 120
A.	Exemption from Compliance with the DRE Standard	 121
B.	Exemption from Compliance with the Particulate
Standard		121
C Eligibility Requirements		121
D. How the Low-Risk Waste Exemption Works		122
1.	Constituents of Concern			122
2.	Estimation of Worst-Case Emissions		122
4

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3.	Dispersion Modeling	 123
4.	Acceptable Ambient Levels	 123
5.	Constituents with Inadequate Health Effects Data	 123
XII. Storage Standards 	 124
A.	Permit Standards for Storage 		 124
B.	Consideration of Requirement for Liquid Waste
Fuel Blending Tanks	 124
C.	Standards for Direct Transfer Operations 	 125
1.	General Operating Requirements		126
2.	Inspections and Recordkeeping		126
3.	Equipment Integrity 		126
4.	Containment and Detection of Releases 		127
5.	Response to Leaks and Spills 		127
6.	Design and Installation of New Equipment		127
7.	Closure		127
Xm. Applicability of the Bevill Exclusion to Combustion Residues When Burning
Hazardous Waste	 127
A.	Basis for Applying the Bevill Exclusion to
Derived-From Residue	 128
B.	Evolution of Interpretations 	 130
C.	Case-by-Case Determinations 	 130
1.	Eligible Devices 		131
2.	Two-Part Test		131
D.	Recordkeeping		133
E.	Other Considerations 		133
1.	Generic Determinations 	 133
2.	Burning for Destruction 	 134
PART FOUR: MISCELLANEOUS PROVISIONS
I. Regulation of Carbon Regeneration Units 	 134
A.	Basis for Regulating Carbon Regenerating Units as
Thermal Treatment Units	 134
B.	Definition of Carbon Regeneration Unit and
Revised Definition of Incinerator 	 135
C.	Units in Existence on the Effective Date are
Eligible for Interim Status	 136
n. Sludge Dryers 	 136
A.	July 1990 Proposal	 138
B.	Summary of Public Comments 		 138
5

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HI. Classification of Coke and By-Product Coal Tar		140
A.	AISI Petition 		140
B.	Process Description 		140
C.	Basis for Approval of the AISI Petition		141
IV.	Regulation of I andfill Gas	 142
V.	Definitions of Infrared and Plasma Arc Incinerators	 142
PART FIVE: ADMINISTRATIVE, ECONOMIC, AND ENVIRONMENTAL
IMPACTS, AND LIST OF SUBJECTS
I. State Authority	 143
A,	Applicability of Rules in Authorized States	 143
B.	Effect on State Authorizations 	 143
n. Regulatory Impacts 	 144
A.	Cost Analysis	 144
1.	Background 			144
2.	Revised Cost Analysis		145
B.	Regulatory Flexibility Act		148
C.	Paperwork Reduction Act		148
ID. List of Subjects 			 148
6

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Page number refer to EPA BIF
Workshop Manual not the
Federal Register pages.
OUTLINE OF THE RULE
PART 260 - HAZARDOUS WASTE MANAGEMENT SYSTEM: GENERAL
1.	The authority citation for Part 260 continues to read	1
2.	Section 260.10 is amended by: (1) revising the introductory 	 1
260.10	Definitions
(1)	Uses controlled flame combustion and neither meets the .... 1
(2)	Meets the definition of infrared incinerator or plasma arc . . 1
(12) Halogen acid furnaces (HAFs) for the production of acid .... 1
3.	Paragraph (a) of Section 260.11 is ammended by adding to	1
(a) * * *
260.11	Referemces
PART 261 - IDENTIFICATION AND LISTING OF HAZARDOUS WASTE
1.	The authority citation for Part 261 continues to read	3
2.	Section 261.2 is amended by redesignating paragraph (d)(2) as	3
261.2	Definition of solid waste
(d) * * *
(2) Secondary materials fed to a halogen acid furnace 	 3
3.	Section 261.4 is amended by adding paragraph (a)(10) 	 3
261.4	Exclusions
(a)	* * *
(10) When used as a fuel, coke and coal tar from the iron	3
(b)	* * *
(4) Fly ash waste, bottom ash waste, slag waste, and flue gas ... 3
(7)	Solid waste from the extraction, beneficiation 	 3
(8)	Cement kiln dust waste, except as provided by §266.112 .... 4
PART 264 - STANDARDS FOR OWNERS AND OPERATORS OF HAZARDOUS WASTE TREATMENT,
STORAGE, AND DISPOSAL FACILITIES
1.	The authority citation for PArt 264 continues to read	4
2.	Section 264.112 is amended by revising paragraph (d)(1)	4
264.112 Closure of plan; amendment of plan
(d) Notification of partial closure and final closure 	 4
3.	Section 264.340 is amended by revising paragraph (a)	4
264.340 Applicability
1

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(a) The regulations of this subpart apply to owners and operators of . .	4
FART 265 - INTERIM STATUS STANDARDS FOR OWNERS AND OPERATORS OF HAZARDOUS VASTE
TREATMENT, STORAGE, AND DISPOSAL FACILITIES
1.	The authority citation for Part 265 continues to read	5
2.	Section 265.112 is amended by revising paragraphs (a), (d)(1), ....	5
265.112	Closure plan; amendment of plan
(a) Written plan	4
(d) Notifcation of partial closure and final closure 		5
(1)	The owner or operator must submit the closure plan to the ...	5
(2)	Except for boilers and industrial furnaces that operate ....	5
3.	Section 265.113 is amended by revising paragraphs (a)		6
265.113	Closure; time allowed for closure
(a)	Within 90 days after receiving the final volume of hazardous ....	6
(b)	The owner or operator must complete partial and final closure ....	6
3. Section 265.113 is amended by revising paragraph (a) 		6
265.340 APPLICABILITY
(a) The regulations of this subpart apply to owners and operators of ... 6
PART 266 - STANDARDS FOR THE MANAGEMENT OF SPECIFIC HAZARDOUS WASTES AND
SPECIFIC TYPES OF HAZARDOUS VASTE MANAGEMENT FACILITIES
1.	The authority citation for Part 266 continues to read as	6
2.	Subpart D is hereby removed and reserved and Subpart H	6
Subpart H - Hazardous Waste Burned in Boilers and Industrial Furances
266.100 Applicability
(a)	The regulations of this subpart apply to hazardous waste burned ...	7
(b)	The following hazardous wastes and facilities are not subject ....	7
(1)	Used oil burned for energy recovery that is also	7
(2)	Gas recovered from hazardous or solid waste landfills	7
(3)	Hazardous wastes that are exempt from regulation 	 7
(4)	Coke ovens, if the only hazardous waste burned is EPA	7
(c) Owners and operators of smelting, melting, and refining furnaces . .	8
(1) To be exempt from §§266.102 through 266.111 		8
(i) Provide a one-time written notice to the Director ....	8
(A)	The owner or operator claims exemption under ...	8
(B)	The hazardous waste is burned solely for metal . .	8
(C)	The hazardous waste contains recoverable 		8
(D)	The owner or operator will comply with	8
(ii) Sample and analyze the hazardous waste and other .... 8
2

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(iii) Maintain at the facility for at least three years ....	8
(2) A hazardous waste meeting either of the following criteria . .	8
(i)	The hazardous waste has a total concentration of ....	8
(ii)	The hazardous waste has a heating value of 5,000 Btu/lb .	8
(d)	The standards for direct transfer operations under §266.11 apply . .	8
(e)	The management standards for residues under §266.112 apply to ... .	8
266.101	Management prior to burning
(a)	Generators	8
(b)	Transporters 		9
(c)	Storage facilities 		9
(1)	Owners and operators of facilities that store hazardous	9
(2)	Owners and operators of facilities that burn, in an on-site . .	9
266.102	Permit standards for burners
(a)	Applicability 		9
(1)	General	9
(2)	Applicability of Part 264 standards	9
(i)	In Subpart A (General)	9
(ii)	In Subpart B (General facility standards)	9
(iii)	In Subpart C (Preparedness and prevention) 		9
(iv)	In Subpart D (Contingency plan and emergency procedures)	9
(v)	In Subpart E (Manifest system, recordkeeping, reporting)	9
(vi)	In Subpart F (Corrective action) 		9
(vii)	In Subpart G (Closure and post-closure) 		9
(viii)	In Subpart H (Financial requirements) 		9
(ix)	Subpart BB (Air emission standards for equipment leaks). .	9
(b)	Hazardous waste analysis 		10
(1)	The owner or operator must provide an analysis of	10
(2)	Throughout normal operation, the owner or operator must . . . .	L0
(c)	Emissions standards	10
(d)	Permits	10
(1)	The owner or operator may burn only hazardous wastes	10
(2)	Hazardous wastes not specified in the permit may not be ....	10
(3)	Boilers and industrial furnaces operating under the interim . .	10
(4)	A permit for a new boiler or industrial furnace	10
(i)	For the period beginning with initial introduction of . .	10
(ii)	For the duration of the trial burn, the operating ....	1
(iii)	For the period immediately following completion of ...	1
(D) For the remaining duration of the permit	1
(e)	Operating requirements 		1
(1)	General	1
(2)	Requirements to ensure compliance with the organic emissions .	1
(i) DRE standard	1
(A)	Feed rate of hazardous waste and other fuels ...	1
(B)	Minimum and maximum device production rate ....	1
(C)	Appropriate controls of the hazardous waste ....	1
(D)	Allowable variation in boiler and industrial ...	1
(E)	Minimum combustion gas tenperature measured at . .	1
3

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(F)	An appropriate indicator of combustion gas .... 12
(G)	Such other operating requirements as are	12
(ii)	Carbon monoxide and hydrocarbon standards 	 12
(A)	When complying with the CO standard of §266.104 . . 12
(B)	When complying with the alternative CO standard . . 12
(C)	When complying with the alternative HC limit ... 12
(iii)	Start-up and shut-down	12
(3)	Requirements to ensure conformance with the particulate .... 12
(i)	Except as provided in paragraphs (e)(3)(ii) and (iii) . . 12
(A)	Total ash feed rate to the device from	12
(B)	Maximum device production rate when producing ... 12
(C)	Appropriate controls on operation and maintenance . 12
(D)	Allowable variation in boiler and industrial ... 12
(E)	Such other operating requirements 	12
(ii)	Permit conditions to ensure conformance with 	 13
(iii)	For cement kilns and light-weight aggregate kilns .... 13
(4)	Requirements to ensure conformance with the metals emissions . 13
(i)	For conformance with the Tier I (or adjusted Tier I) . . 13
(A)	Total feed rate of each metal in hazardous waste . 13
(B)	Total feed rate of hazardous waste measured .... 13
(C)	A sampling and metals analysis program	13
(ii)	For conformance with the Tier II metals emission rate . . 13
(A)	Maximum emission rate for each metal specified . . 13
(B)	Feed rate of total hazardous waste and pumpable . 13
(C)	Feed rate of each metal in the following . . .13
(1)	Total feed streams	13
(2)	Total hazardous waste feed	13
(3)	Total pumpable hazardous waste feed	13
(D)	Total feed rate of chlorine and chloride in ... 13
(E)	Maximum combustion gas temperature measured at . . 13
(F)	Maximum flue gas temperature at the inlet to ... 13
(G)	Maximum device production rate when producing ... 14
(H)	Appropriate controls on operation and maintenance . 14
(I)	Allowable variation in boiler and industrial ... 14
(J) Such other operating requirements 	 14
(iii)	For conformance with an alternative implementation ... 14
(A)	Maximum emission rate for each metal specified as . 14
(B)	Feed rate of total hazardous waste and pumpable . . 14
(C)	Feed rate of each metal in the following	14
(1)	Total hazardous waste feed; and	14
(2)	Total pumpable hazardous waste feed;	14
(D)	Total feed rate of chlorine and chloride in total . 14
(E)	Maximum combustion gas temperature measured .... 14
(F)	Maximum flue gas temperature at the inlet to ... 14
(G)	Maximum device production rate when producing ... 14
(H)	Appropriate controls on operation and maintenance . 14
(I)	Allowable variation in boiler and industrial ... 14
(J) Such other operating requirements as are	14
(5)	Requirements to ensure conformance with the hydrogen chloride . 14
(i) For conformance with the Tier I total chlorine	15
(A) Feed rate of total chloride and chlorine in ... 15
4

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(B)	Feed rate of total hazardous waste measured .... 15
(C)	A sampling and analysis program for total chloride 15
(ii)	For conformance with the Tier II HCl and Cl2 emission . . 15
(A)	Maximum emission rate for HCI and for Cl2	15
(B)	Feed rate of total hazardous waste measured .... 15
(C)	Total feed rate of chlorine and chloride in total . 15
(D)	Maximum device production rate when producing ... 15
(E)	Appropriate controls on operation and maintenance . 15
(F)	Allowable variation in boiler and industrial ... 15
(G)	Such other operating requirements as are	15
(6)	Measuring parameters and establishing limits based on trial . . 15
(i) General requirements 	15
(A)	Instantaneous limits 	 15
(B)	Hourly rolling average 	 15
(1)	The limit for a parameter may be established 15
(i)	A continuous monitor is one which . . 16
(ii)	An hourly rolling average is the ... 16
(2)	The permit limit for the parameter	16
(ii) Rolling average limits for 	 16
(A)	The feed rate of each metal shall be limited ... 16
(B)	The continuous monitor shall meet the following . . 16
(1)	A continuous monitor is one which 	16
(2)	The rolling average for the selected .... 16
(C)	The permit limlit for the feed rate of each metal . 16
(iii)	Feed rate limits for metals, total chloride and chlorine 16
(iv)	Conduct of trial burn testing	16
(A)	If compliance with all applicable emissions .... 16
(B)	Prior to obtaining test data for purposes of ... 16
(C)	Trial burn data on the level of an operating ... 17
(7)	General requirements		17
(i)	Fugitive emissions	17
(A)	Keeping the combustion zone totally sealed .... 17
(B)	Maintaining the combustion zone pressure lower . . 17
(C)	An alternate means of control demonstrated .... 17
(ii)	Automatic waste feed cutoff	17
(A)	The permit limit for (the indicator of) minimum . . 17
(B)	Exhaust gases must be ducted to the air 	17
(C)	Operating parameters for which permit limits ... 17
(iii)	Changes	•	17
(8)	Monitoring and Inspections	17
(i)	The owner or operator must monitor and record 	17
(A)	If specified by the permit, feed rates	17
(B)	If specified by the permit, carbon monoxide .... 17
(C)	Upon the request of the Director, sampling .... 18
(ii)	All monitors shall record data in units corresponding . . 13
(iii)	The boiler or industrial furnace and associated .... 18
(iv)	The automatic hazardous waste feed cutoff system .... 18
(v)	These monitoring and inspection data must be recorded . . 18
(9)	Direct transfer to the burner	18
(10)	Recordkeeping	18
(11)	Closure	18
5

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266.103 Interim status standards for burners.	18
(a)	Purpose, scope, applicability 	 18
(1)	General	18
(i)	The purpose of this section is to establish minimum. . . .18
(ii)	Existing or in existence means a boiler or industrial. . .18
(A)	A continuous on-site, physical construction	19
(B)	The owner or operator has entered in to contractual.19
(iii)	If a boiler or furnace is located	19
(2)	Exemptions	19
(3)	Prohibition on burning dioxin-listed wastes	19
(4)	Applicability of Part 265 standards	19
(i)	In Subpart A	(General)	19
(ii)	In Subpart B	(General Facility Standards)	19
(iii)	In Subpart C	(Preparedness and Prevention)	19
(iv)	In Subpart D	(Contingency plan and emergency procedures. .19
(v)	In Subpart E	(Manifest systems)	19
(vi)	In Subpart G	(Closure and post-closure)	19
(vii)	In Subpart H	(Financial Requirements)	19
(viii)In	Subpart BB (Air emission standards for equipment leaks)19
(5)	Special requirements for furnaces	19
(i)	Controls	20
(A)	The hazardous waste shall be fed at a location . . .20
(B)	The owner or operator must determine that	20
(C)	For cement kiln systems, the hazardous waste . . . .20
(D)	The hydrocarbon controls of Section 266.104	20
(ii)	Burning hazardous waste solely as an ingredient	20
(A)	The hazardous waste has a total concentration. . . .20
(B)	The hazardous waste has a heating value	20
(6)	Restrictions on burning hazardous waste that is not a fuel . . .20
(7)	Direct transfer to the burner	20
(b)	Certification of precompliance 	 20
(1)	General	20
(2)	Information required 	 20
(i)	General facility information	21
(A)	EPA facility ID number	21
(B)	Facility name	20
(C)	Description of boilers and	21
(D)	A scaled plot plan	21
(E)	A description of the air pollution	21
(ii)	Except for facilities complying with Tier I	21
(A)	The feed rate of ash, chlorine,	21
(B)	The estimated partitioning factor 		21
(C)	For industrial furnaces that recycle	21
(D)	If best engineering judgement	21
(iii)	For facilities complying with Tier I	21
(iv)	For	facilities complying with Tier II or Tier III .... 22
(A)	The estimated air pollution 	22
(B)	To estimate APCS removal	22
(C)	If best engineering judgement is used	22
(v)	Determination of allowable emissions rates for HC1 ...	22
(A) For all facilities	22
6

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(1)	Physical stack height 	 22
(2)	Good engineering practice stack 	 22
(3)	Maximum flue gas flow rate	22
(4)	Maximum flue gas temperature	-22
(5)	Attach a US Geological Service topographic . 22
(6)	Identify terrain type	22
(7)	Identify land use: urban or rural	22
(B) For owners and operators using Tier III site ... 22
(1)	Dispersion model and version used	22
(2)	Source of meteorological data	22
(3)	The dilution factor in micrograms per ... 22
(4)	Indicate the MEI location on the map .... 22
(vi)	For facilities complying with the Tier II or III ... 23
(vii)	For facilities complying with the Tier I 	23
(viii)	For industrial furnaces that feed hazardous waste ... 23
(ix)	For industrial furnaces that recycle 	23
(A)	The applicable particulate matter 	 23
(B)	The precompliance limit on the concentration ... 23
(3)	Limits on operating conditions	23
(i)	Feed rate of total hazardous waste	23
(ii)	Feed rate of each metal in the following feed 	23
(A)	Total feed streams	23
(B)	Total hazardous waste feed	23
(C)	Total pumpable hazardous waste feed 	 23
(iii)	Total feed rate of chlorine and chloride in 	23
(iv)	Total feed rate of ash in total feed streams	23
(v)	Maximum production rate of the device in	24
(4)	Operating requirements for furnaces that recycle PM	24
(5)	Measurements of feed rates and production rate	24
(A)	Instantaneous limits 	 24
(B)	Hourly rolling average limits 	 24
(1)	A continuous monitor is one which	24
(2)	An hourly rolling average is the	24
(ii)	Rolling average limits for carcinogenic metals 	 24
(A)	The feed rate of each metal shall be limited ... 24
(B)	The continuous monitor shall meet the	24
(1)	A continuous monitor is one which 	24
(2)	The rolling average for the selected .... 24
(iii)	Feed rate Units for metals, total chloride and .... 24
(6)	Public notice requirements at precompliance 	25
(i)	Name and address of the owner and operator	25
(ii)	Date that the certification of precompliance is .... 25
(iii)	Brief description of the regulatory process 	25
(iv)	Types and quantities of hazardous waste burned 	 25
(v)	Type of device(s) in which the hazardous waste is ... 25
(vi)	Types and quantities of other fuels	25
(vii)	Brief description of the basis for this	25
(viii)Locations	where the operating record for the facility. . .25
(A) The Agency office where the supporting	25
(B) The facility site where the device is located . . 25
(ix)	Notification of the establishment of a facility .... 25
(x)	Location (mailing address) of the applicable EPA .... 25
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(7)	Monitoring other operating parameters 		25
(8)	Revised certification of precompliance 		26
(i)	The public notice requirements of	26
(ii)	The owner and operator must operate 	26
(9)	Certification of precompliance statement 		26
(c) Certification of compliance 		26
(1)	Limits on operating conditions 		26
(i)	Feed rate of total hazardous waste	27
(ii)	Feed rate of each metal in the following	27
(A)	Total feedstreams 	27
(B)	Total hazardous waste feed	27
(C)	Total pumpable hazardous waste feed 		27
(iii)	Total feed rate of chlorine and chloride 	27
(iv)	Total feed rate of ash in total feed streams	27
(v)	Carbon monoxide concentration 		27
(vi)	Maximum production rate of the device	27
(vii)	Maximum combustion chamber temperature 		27
(viii)	Maximum flue gas temperature entering a particulate . .	27
(ix)	For systems using wet scrubbers	27
(A)	Minimum liquid to flue gas ratio	27
(B)	Minimum scrubber blowdown from the system ....	27
(C)	Minimum pH level of the scrubber water	27
(x)	For systems using venturi scrubbers, the minimum ...	27
(xi)	For systems using dry scrubbers (unless complying) ...	28
(A)	Minimum caustic feed rate	28
(B)	Minimum flue gas flow rate	28
(xii)	For systems using wet ionizing scrubbers or	28
(A)	Minimum electrical power in kilovolt	28
(B)	Maximum flue gas flow rate	28
(xiii)	For systems using fabric filters (baghouses) 		28
(2)	Prior notice of compliance testing 		28
(i)	General facility information 		28
(A)	EPA facility ID number	28
(B)	Facility name, contact person, telephone 		28
(C)	Person responsible for conducting a compliance . .	28
(D)	Planned date of the compliance test	28
(ii)	Specific information on each device	28
(A)	Description of boiler or industrial furnace .... 28
(B)	A scaled plot plan showing the entire facility . . 28
(C)	A description of the air pollution control ....	28
(D)	Identification of the continuous emission ....	28
(1)	Carbon monoxide monitor 		28
(2)	Oxygen monitor	29
(3)	Hydrocarbon monitor	29
(E)	Indication of whether the stack is shared ....	29
(F)	Other information useful to an understanding ...	29
(iii) Information on the testing planned	29
(A)	Purpose of the test 	29
(B)	Planned operating conditions	29
(3) Compliance testing	29
(i)	General	29
(ii)	Special requirements for industrial furnaces 	 29
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(A)	The special testing requirements prescribed ... 29
(B)	Stack emissions testing for a minimum of 6 hours . 29
(1)	Feed rate of total hazardous waste	29
(2)	Total feed rate of chlorine and chloride . . 29
(3)	Total feed rate of ash in total feed .... 29
(4)	Carbon monoxide concentration 	 30
(5)	Maximum production rate of the device ... 30
(C)	Conduct compliance testing to determine 	 30
(iii) Conduct of compliance testing 	 30
(A)	If compliabnce with all applicable emission	30
(B)	Prior to obtaining test data	30
(C)	Compliance test data on the level of	30
(4) Certification of compliance 	 30
(i)	General facility and testing information 	 30
(A)	EPA facility ID number	30
(B)	Facility name, contact person 	 30
(C)	Person responsible for conducting compliance ... 30
(D)	Date(s) of each compliance test 	30
(E)	Description of boiler or industrial furnace ... 30
(F)	Person responsible for quality assurance 	 30
(G)	Description of any changes in the unit	31
(H)	Description of any changes in the planned test . . 31
(I)	The complete report on results of emissions ... 31
(ii)	Specific information on each test 		31
(A)	Purpose(s) of test	31
(B)	Summary of test results for each run	31
(1)	Date of run	31
(2)	Duration of run	31
(3)	Time-weighted average and highest hourly . . 31
(4)	Highest hourly rolling average HC level ... 31
(5)	If dioxin and furan testing is required ... 31
(6)	Time-weighted average particulate matter . . 31
(7)	Time-weighted average HC1 and Cl2	31
(8)	Time-weighted average emissions 	 31
(9)	QA/QC results	31
(iii)	Comparison of the actual emissions during each test . . 31
(iv)	Determination of operating limits 	32
(A)	Instantaneous limits	32
(B)	Hourly rolling average basis 	 32
(1) The limit for a parameter may be established .32
(i)	A continuous monitor is one 	32
(ii)	An hourly rolling average 	 32
(2) The operating limit for the parameter ...	32
(C) Rolling average limits for carcinogenic metals . .	32
(1)	The feed rate of each metal shall be ....	32
(2)	The continuous monitor shall meet the ...	32
(i) A continuous monitor is one 	32
(ii) The rolling average for the 	32
(3) The operating limit for the feed rate ...	32
(D) Feed rate limits for metals, total chloride ...	32
(v) Certification of compliance statement 		33
(5) Special requirements for HC monitoring systems	33
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(6)	Special operating requirements for industrial furnaces ...	33
• (i) When complying with the requirements of paragraph ....	33
(ii) When complying with the requirements of paragraph ...	33
(7)	Extensions of time	33
(i)	If the owner or operator does not submit	33
(A)	Stop burning hazardous waste and begin closure . .	33
(B)	Limit hazardous waste burning to a total period .	33
(C)	Obtain a case-by-case extension of time	33
(ii)	The owner or operator may request a case-by-case ....	34
(A)	In granting an extension, the Director may ....	34
(B)	When an owner and operator request an extension .	34
(1)	The Director shall, in considering	34
(i)	Determine whether the owner 	34
(ii)	Consider whether the owner or operator	.34
(2)	If an extension is granted	34
(8)	Revised certification of compliance 		34
(i)	Prior to submittal of a revised certification 		34
(ii)	At least 30 days prior to first burning hazardous ...	34
(A)	EPA facility ID number, and facility name	34
(B)	Operating conditions that the owner or operator . .	34
(C)	A determination that when operating under	34
(D)	Complete emissions testing protocol for any ....	35
(iii)	Conduct a compliance test under the revised operating .	35
(iv)	Submit a revised certification of compliance under ...	35
(d)	Periodic recertifications 		35
(e)	Noncompliance with certification schedule 		35
(f)	Start-up and shut-down	35
(g)	Automatic waste feed cutoff	35
(1)	To minimize emissions or organic compounds, the minimum ....	35
(i)	If compliance with the combustion chamber temperature . .	35
(ii)	If compliance with the combustion chamber temperature . .	36
(2)	Operating parameters limited by the certification 		36
(h)	Fugitive emissions	36
(1)	Keeping the combustion zone totally sealed 		36
(2)	Maintaining the combustion zone pressure lower 		36
(3)	An alternate means of control that the owner or operator ...	36
(i)	Changes	36
(j) Monitoring and inspections	36
(1)	The owner or operator must monitor and record the following . .	36
(i)	Feed rates and composition of hazardous waste	36
(ii)	Carbon monoxide (CO), oxygen 		36
(iii)	Upon the request of the Director, sampling	36
(2)	The boiler or industrial furnace	36
(3)	The automatic hazardous waste feed cutoff system	37
(4)	These monitoring and inspection data must be 	 37
(k) Recordkeeping	37
(1) Closure	37
266.104 Standards to control organic emissions.
(a) DRE standard	 37
(1) General	 37
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(2)	Designation of POHCs		37
(3)	Dioxin-listed waste 		38
(4)	Automatic waiver of DRE trial burn		38
(5)	Low risk waste		38
(b)	Carbon monoxide standard .... 		38
(1)	Except as provided in paragraph (c) of this section		38
(2)	CO and oxygen shall be continuously monitored		38
(3)	Compliance with the 100 ppmv CO limit 		38
(c)	Alternative carbon monoxide standard 		38
(1)	The stack gas concentration of carbon monoxide (CO)	38
(2)	HC limits must be established		38
(3)	HC shall be continuously monitored 		38
(4)	The alternative CO standard is established		39
(d)	Special requirements for furnaces		39
(e)	Controls for dioxins and furans		39
(1)	During the trial burn 			39
(2)	Estimate the 2,3,7,8-TCDD toxicity 		39
(3)	Conduct dispersion modeling using methods 		39
(4)	The ratio of the predicted maximum annual		39
(f)	Alternative HC limit for furnaces with organic		39
(1)	The owner or operator must demonstrate		40
(2)	The owner or operator must develop an		40
(3)	The owner of operator must conduct		40
(i)	Determine the baseline HC (and CO) level; 	-40
(ii)	Demonstrate that, when hazardous waste is burned ...	40
(iii)	Identify the types and concentrations of organic ...	40
(A)	Sampling and analysis of organic emissions ...	40
(B)	Dispersion modeling shall be conducted 		40
(iv)	Demonstrate that maximum annual average ground level	40
(A)	For the noncarcinogenic compounds listed in . . .	40
(B)	For the carcinogenic compounds listed in ... .	40
(C)	For compounds not listed in Appendix IV		40
(4)	All hydrocarbon levels specified under 		41
(g)	Monitoring CO an HC in the by-pass duct		41
(1)	Hazardous waste is fired only into		41
(2)	The by-pass duct diverts a minimum of 10% 		41
(h)	Use of emissions test data to demonstrate 		41
(i)	Enforcement		41
266.106 Standards to control particulate matter
(a)	A boiler or industrial furnace burning 	 41
(b)	An owner or operator meeting the	41
(c)	For the purposes of permit enforcement	41
266.106 Standards to control metals emissions.
(a)	General	41
(b)	Tier I feed rate screening limits	 	42
(1) Noncarcinogenic metals	42
(i) The feed rate screening limits for antimony, barium . . .	42
(A) An hourly rolling average as defined	42
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(B) An instantaneous limit not to be exceeded	42
(ii) The feed rate screening limit for lead is based on ... 42
(A)	An hourly rolling average as defined 	 42
(B)	An averaging period of 2 to 24 hours	42
(C)	An instantaneous limit not to be exceeded	42
(2)	Carcinogenic metals 	 42
(i)	The feed rates of arsenic, cadmium, barium	42
(ii)	The feed rate screening limits for the carcinogenic . . 42
(A)	An hourly rolling average 	 42
(B)	An averaging period of 2 to 24 hours	42
(3)	TESH	43
(i)	The terrain-adjusted effective stack height 	 43
(ii)	The stack height (Ha) may not exceed	43
(iii)	If the TESH for a particular facility	43
(4)	Terrain type	43
(5)	Land use	43
(6)	Multiple stacks	43
(7)	Criteria for facilities not eligible for screening limits ... 43
(i)	The device is located in a narrow valley	44
(ii)	The device has a stack taller than 20 meters	44
(iii)	The device has a stack taller than 20 meters	44
(iv)	The physical stack height of any stack is less than ... 44
(v)	The Director determines that standards based on	44
(8)	Implementation	44
(c)	Tier II emission rate screening limits	44
(1)	Noncarcinogenic metals 	 44
(2)	Carcinogenic metals 	 44
(3)	Implementation. The emission rate limits must	44
(4)	Definitions and limitations	45
(5)	Multiple stacks	45
(i)	Owners and operators of facilities	45
(ii)	The worst-case stack is determined by	45
(iii)	For each metal, the total emissions of the metal	45
(d)	Tier III site-specific risk assessment	45
(1)	General	45
(2)	Acceptable ambient levels 	 45
(3)	Carcinogenic metals 	 45
(4)	Noncarcinogenic metals 	 	45
(5)	Multiple stacks	45
(6)	Implementation	46
(e)	Adjusted Tier I feed rate screening 	46
(f)	Alternative implementation approaches 	 46
(1)	The Director may approve	46
(2)	The emission limits provided by 	46
(i)	For each noncarcinognic metal	46
(ii)	For each carcinogenic metal	46
(A)	Back-calculating form the RSD 	46
(B)	If more than one carcinogenic metal	46
(g)	Emissions testing 	 ^6
(1)	General	^
(2)	Hexavalent chromium 	 ^
(h)	Dispersion modeling 	 ^
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(i) Enforcement		47
266.107	Standards to control hydrogen chloride (HC1) and Chlorine
(Cl2) emissions.
(a)	General	47
(b)	Screening limits 		47
(1)	Tier I feed rate screening limits	47
(2)	Tier II emission rate screening limits	47
(3)	Definitions and limitations		47
(4)	Multiple stacks	47
(i)	The worst-case stack is determined by procedures ....	47
(ii)	Under Tier I, the total feed rate of chlorine and ...	47
(iii)	Under Tier II, the total emissions of HC1 and Cl2 ...	48
(c)	Tier III site-specific risk assessment	48
(1)	General	48
(2)	Acceptable ambient levels 		48
(3)	Multiple stacks		48
(d)	Averaging periods. The HC1 and Cl2 controls	48
(i)	An hourly rolling average as defined in §266.102(e)(6) .	48
(ii)	An instantaneous basis not to be exceeded at any time . .	48
(e)	Adjusted Tier I feed rate screening limits	48
(f)	Emissions testing 		48
(g)	Dispersion modeling 				48
(h)	Enforcement	49
266.108	Small quantity on-site burner exemption
(a)	Exempt quantities 	 49
(1)	The quantity of hazardous waste	49
TABLE: EXEMPT QUANTITIES FOR SMALL QUANTITY BURNER EXEMPTION ... 50
(2)	The maximum hazardous waste firing 	 51
(3)	The hazardous waste has a minimum	51
(4)	The hazardous waste fuel	51
(b)	Mixing with nonhazardous fuels	51
(c)	Multiple stacks	51
(d)	Notification Requirements 	 51
(1)	The combustion unit is operating as	51
(2)	The owner and operator are in 	51
(3)	The maximum quantity of hazardous 	51
(e)	Recordkeeping requirements 	 51
266.109	Lov risk waste exemption
(a) Waiver of DRE standard	52
(1)	The device shall be operated as follows . . . 	52
(i)	A minimum of 50 percent of fuel fired 	52
(ii)	Primary fuels and hazardous waste fuels 	 52
(iii)	The hazardous waste is fired directly	52
(iv)	The device operates in conformance with	52
(2)	Procedures to demonstrate that the hazardous	52
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(i)	Identify and quantify those nonmetal		52
(ii)	Calculate reasonable, worst case emission 		52
(iii)	For each constituent identified 	52
(A)	Dispersion modeling shall be 		52
(B)	Owners and operators of facilities	52
(iv)	Ground level concentrations of 		53
(A)	For the noncarcinogenic compounds	53
(B)	For the carcinogenic compounds	53
(C)	For constituents not listed 	53
(b) Waiver of particulate matter standard 		53
(1)	The DRE standard is waived	53
(2)	The owner or operator complies with the Tier I	53
266.110	Waiver of DRE trial burn for boilers
(a)	A minimum of 50 percent of fuel fired to the boiler	53
(b)	Boiler load shall not be less than 40 percent	53
(c)	Primary fuels and hazardous waste fuels shall have 		53
(d)	The device shall operate in conformance with	53
(e)	The boiler must be a watertube type boiler	53
(f)	The hazardous waste shall be fired directly into 		54
(1)	Viscosity	54
(2)	Particle size	54
(3)	Mechanical atomization systems 		54
(4)	Rotary cup atomization systems	54
266.111	Standards for direct transfer
(a)	Applicability	54
(b)	Definitions	54
(1)	When used in this section	54
(2)	This section references several requirements 		54
(c)	General operating requirements 		54
(1)	No direct transfer of a pumpable hazardous waste 		54
(2)	Direct transfer equipment used for pumpable 		54
(3)	The direct transfer of hazardous waste 		55
(i)	Generate extreme heat or pressure	55
(ii)	Produce uncontrolled toxic mists, fumes 		55
(iii)	Produce uncontrolled flammable fumes or 		55
(iv)	Damage the structural integrity of	55
(v)	Adversely affect the capability of	55
(vi)	Threaten human health or the environment	55
(4)	Hazardous waste shall not be placed in direct	55
(5)	The owner or operator of the facility shall use	55
(i)	Spill prevention controls 		55
(ii)	Automatic waste feed cutoff	55
(d)	Areas where direct transfer vehicles (containers) are 		55
(1)	The containment requirements of §264.175 		55
(2)	The use and management requirements of Subpart I	55
(3)	The closure requirements of §264.178 	 55
(e)	Direct transfer equipment 	 55
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(1)	Secondary containment	55
(i)	For all new direct transfer equipment	55
(ii)	For existing direct transfer equipment 	 56
(2)	Requirements prior to meeting secondary 	 56
(i)	For existing direct transfer equipment 	 56
(ii)	This assessment shall determine whether 	 56
(A)	Design standard(s) 	 56
(B)	Hazardous characteristics 	 56
(C)	Existing corrosion protection 	 56
(D)	Documented age of the equipment	56
(E)	Results of a leak test	56
(iii)	If, as a result of the assessment	56
(3)	Inspections and recordkeeping 	 56
(i)	The owner or operator must inspect	56
(A)	Overfill/spill control equipment 	 56
(B)	The above ground portions 	56
(C)	Data gathered from monitoring 	56
(ii)	The owner or operator must inspect	56
(iii)	Records of inspections	57
(4)	Design and installation of new ancillary	57
(5)	Response to leaks or spills	57
(6)	Closure	57
266.112 Regulation of residues
(a)	The device meets the following criteria 		57
(1)	Boilers	57
(2)	Ore or mineral furnaces	57
(3)	Cement kilns	57
(b)	The owner or operator demonstrates that the hazardous	57
(1)	Comparison of waste-derived residue 		57
(i)	Normal residue 		57
(ii)	Waste-derived residue	58
(2)	Comparison of waste-derived residue 	58
(i)	Nonmetal constituents 		58
(ii)	Metal constituents	58
(c)	Records sufficient to document compliance 		58
(1)	Levels of constituents in Appendix VIII	58
(2)	If the waste-derived residue is compared	58
(i)	The levels of constituents	58
(ii)	Data and information	58
FART 270 EPA ADMINISTERED PERMIT PROGRAMS: THE HAZARDOUS WASTE PERMIT PROGRAM
1.	the authority citation for Part 270 continues to read	59
2.	Part 270 is amended by adding Section 270.22 	59
270.22 Specific Part B information requirements for boilers and industrial
furnaces burning hazardous vast*
(a) Trial burns 	59
(1) General	59
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(i)	A trial burn to demonstrate conformance	59
(ii)	The owner or operator may submit data 	59
(2)	Waiver of trial burn for DRE	59
(i)	Boilers operated under special operating 	 59
(ii)	Boilers and industrial furnaces burning 	 59
(A)	Documentation that the device is	59
(B)	Results of analyses of each waste	60
(C)	Documentation of hazardous waste 	 60
(D)	Results of emissions dispersion 	 60
(E)	Documentation that the maximum	60
(3)	Waiver of trial burn for metals	60
(i)	Documentation of the feed rate	60
(ii)	Documentation of the concentration	60
(iii)	Documentation of how the applicant will 	60
(iv)	Documentation to support the determination 	 60
(v)	Documentation of compliance with	60
(vi)	Documentation that the facility does not fail	60
(vii)	Proposed sampling and metals analysis plan 	 61
(4)	Waiver of trial burn for particulate matter	61
(5)	Waiver of trial bum for HC1 and Cl2 	61
(i)	Documentation of the feed rate of hazardous waste .... 61
(ii)	Documentation of the levels of total chloride 	61
(iii)	Documentation of how the applicant will ensure 	 61
(iv)	Documentation to support the determination of the ... 61
(v)	Documentation of compliace wich	61
(vi)	Documentation that the facility does not fail 	61
(vii)	Proposed sampling and analysis plan for total chloride . 61
(6)	Data in lieu of a trial bum	62
(i)	For a waiver from any trial bum: 	62
(A)	A description and analysis	62
(B)	The design and operating conditions 	62
(C)	Such supplemental information as the Director ... 62
(ii)	For a waiver of the DRE trial bum	62
(b)	Alternative HC limit for industrial furnaces with organic matter . . 62
(1)	Documentation that the furnace is designed and operated .... 62
(2)	Documentation of the proposed baseline flue gas HC (and CO) . . 62
(3)	Test bum protocol to confirm the baseline HC (and CO) .... 62
(4)	Trial burn	62
(i)	Demonstrate that flue gas HC (and CO) concentrations . . 62
(ii)	Identify the types and concentrations of organic .... 62
(5)	Implementation plan to monitor over time changes	62
(6)	Such other information as the Director finds necessary .... 63
(c)	Alternative metals implementation approach	63
(d)	Automatic waste feed cutoff system 	 63
(e)	Direct transfer		 63
(f)	Residues	63
3. In Section 270.42, paragraph (gO is revised to read	63
270.42 Permit modifications at the request of the permittee
(g)	Newly regulated wastes and units	63
(1) The permittee is authorized to continue to manage wastes ... 63
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(i)	The unic was in existence as a hazardous waste	63
(ii)	The permittee submits a Class 1 modification request . .63
(iii)	The permittee is in compliance with the applicable ... 63
(iv)	In the case of Classes 2 and 3 modifications	63
(v)	In the case of land disposal units, the permittee ... 63
(2) New wastes or units added to a facility's permit	64
4. In Section 270.42, Appendix I is amended by revising Title L	64
APPENDIX I TO SECTION 270.42 - CLASSIFICATION OF PERMIT MODIFICATIONS
270.66 Permits for boilers and industrial furnaces burning hazardous vaste
(a)	General	66
(b)	Permit operating periods for new boilers and industrial furnaces . . 66
(1)	Pretrial burn period	66
(i)	Applicants must submit a statement	66
(ii)	The Director will review this statement and any other . . 66
(2)	Trial burn period	.66
(3)	Post-trial burn period	66
(i)	For the period immediately following completion 		66
(ii)	Applicants must submit a statement	66
(iii)	The Director will review this statement and any other . .	67
(4)	Final permit period 		67
(c)	Requirements for trial burn plans	67
(1)	An analysis of each feed stream, including hazardous waste . . 67
(i)	Heating value, levels of antimony, arsenic, barium ... 67
(ii)	Viscosity or description of the physical form 	67
(2)	An analysis of each hazardous waste, as fired, including ... 67
(i)	An identification of any hazardous organic constituents . 67
(ii)	An approximate quantification of the hazardous 	 67
(iii)	A description of blending procedures, if applicable . . . 67
(3)	A detailed engineering description of the boiler 	 67
(i)	Manufacturer's name and model number of the boiler ...	67
(ii)	Type of boiler or industrial furnace; 	68
(iii)	Maximum design capacity	68
(iv)	Description of the feed system for the hazardous waste .	68
(v)	Capacity of hazardous waste feed system; 		68
(vi)	Description of automatic hazardous waste feed cutoff . .	68
(vii)	Description of any air pollution control system; and . .	68
(viii)	Description of stack gas monitoring and any pollution .	68
(4)	A detailed description of sampling and monitoring 		68
(5)	A detailed test schedule for each hazardous waste	68
(6)	A detailed test protocol, including, for each hazardous waste .	68
(7)	A description of, and planned operating conditions for, any . .	68
(8)	Procedures for rapidly stopping the hazardous waste feed ...	68
(9)	Such other information as the Director reasonably finds ...	68
(d)	Trial burn procedures	68
(1)	A trial burn must be conducted to demonstrate conformance . . 68
(2)	The Director shall approve a trial burn plan if 	68
(i)	The trial burn is likely to determine whether the boiler 68
(ii)	The trial burn itself will not present an imminent hazard 68
(iii)	The trial bum will help the Director to determine ... 69
17

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(iv) The information sought in the trial burn cannot ....	69
(3)	The applicant must submit to the Director a certification ...	69
(4)	All data collected during any trial burn must be submitted9 . .	69
(5)	All submissions required by this paragraph must be certified .	69
(e)	Special procedures for DRE trial bums	69
(f)	Determinations based on trial bum	69
(1)	A quantitative analysis of the levels of antimony, arsenic . .	69
(2)	When a DRE trial bum is required under §266.104(a)	69
(i)	A quantitative analysis of the trial POHCs 		69
(ii)	A quantitative analysis of the stack gas for the ....	69
(iii)	A computation of destruction and removal efficiency (DRE)	69
(3)	When a trial bum for chlorinated dioxins and furans is ....	69
(4)	When a trial bum for particulate matter, metals, or HC1/C12 .	70
(5)	When a trial bum for DRE, metals, or HC1/C12 is required ...	70
(6)	An identification of sources of fugitive emissions 		70
(7)	A continuous measurement of carbon monoxide (CO), oxygen ...	70
(8)	Such other information as the Director may specify	70
(g)	Interim status boilers and industrial furnaces 		70
6. Section 270.72 is amended by adding paragraphs ..."	70
270.72	Changes during interim status
(a)	* * *
(6)	Addition of newly regulated units for the treatment, storage . 70
(b)	* * *
(7)	Addition of newly regulated units under paragraph (a)(6) ... 70
7. Section 270.73 is amended by rvising paragraphs	71
270.73	Termination of interim status
(f)	For owners and operators of each incinerator facility which has ... 71
(g)	For owners or operators of any facility (other than a land disposal . 71
FART 271 - REQUIREMENTS FOR AUTHORIZATION OF STATE HAZARDOUS WASTE PROGRAMS
1.	The authority citation for part 271 continues to read as follows . . 71
2.	Section 271.l(j) is amended by adding the following entry to .... 71
271.1 Purpose and scope
TABLE 1. - REGULATIONS IMPLEMENTING THE HAZARDOUS AND SOLID WASTE AMENDMENTS
OF 1984 	 71
18

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Current Issues Concerning Compliance Schedules for WQBELS
Background—The CJO and EAB orders in the Starkist-Caribe case
ruled that compliance schedules cannot be established for
effluent limitations based on water quality standards adopted
before July 1, 1977, and that they are allowed for standards
adopted after that date only if the state has clearly indicated
in its water quality standards or implementing regulations (which
include NPDES regulations) that it intends to allow them. If the
state is silent, we cannot assume that it intended to allow them.
In addition, EPA's NPDES regs (40 CFR 122.47) provide that
compliance schedules must be "reasonable"; that is, they must
require compliance as soon as possible.
Current Issues/Status of Current Advice
1.	where must the expression of state intent appear?
Per our recent responses to John Hall, such intent may be
set forth in a state's water quality standards directly, in a
state's regulation governing water quality standards, or in a
state's NPDES regulations. Language in Basin Plans or other
state documents may be the basis for compliance schedules where
such documents have the force of law, are adopted ^pursuant to
notice and comment prcocedures, and have the legal effect of
water quality standards. [See Feb. 10 letter from Pendergast to
Hall.]
How explicit must the state expression of intent be? For
example, is it sufficient that the state's regulations ^provide
.generally that schedules of compliance may be included in
permits, or must the state regulation specifically state that
schedules of compliance may be provided for WQBELS?
It is somewhat hard to generalize here, as each state
law/regulation must be read in its entirety to ensure a fair
reading. If a state regulation is ambiguous, an appropriate
approach is to ask the state how it interprets its regulation and
for the state to provide supporting documentation if the state
interprets its reg as authorizing compliance schedules for
WQBELs. Appropriate feedback would involve an attorney general
opinion, preamble language or the like; EAB cautioned against
"word-of-mouth" views which could change as the person speaking
changed. A general statement in the state's regs that the state
is incorporating EPA's NPDES regs would not, by itself, meet this
burden. In the absence of a supportable position from the state,
we should not resolve ambiguity in favor of compliance schedules.
2.	What is the permissible length of a compliance schedule?
Note: This issue and the next one comes up in three
contexts; first, when we are approving a state WQS or other
regulations which set out particular durations; second, when
we are issuing an NPDES permit; and third, when we are

-------
reviewing a proposed state NPDES permit. In the first
instance, we have more say-so in judging reasonableness; in
the second and third, we are interpreting state provisions
which presumably were approved by EPA and are more concerned
with whether the schedule in the permit meets the
requirements of the state regulation.
As a general mile, a compliance schedule should require
compliance within the term of the permit. However, EPA has
approved under section 303 a California provision which provided
a longer time for a particular newly adopted criterion where the
state made a credible showing that the types of sources likely to
be subject to this particular criterion would need the longer
time to come into compliance.
In addition, the GLI final rule provides that schedules of
compliance for effluent limitations based on new GLI requirements
may be up to three years, even when that extends beyond the term
of the permit; that is, if a permit is modified to contain a more
stringent limitation less than three years from the end of the
term, there may still be up to a three year schedule of
compliance. The rationale for this is that sources whose
effluent limitations are revised mid-term (e.g., based on studies
exploring revisions of Tier II values) are just as much in need
of time to come into compliance as sources whose permits were
initially written based on a new GLI requirement. The final GLI
rule provides that where a schedule extends belong the term of
the permit, an interim permit limit effective upon the expiration
raate shall be included in the permit and reflected in the fact
sheet/statement of basis, and the administrative record shall
reflect the final limit and its compliance date.
3. Under what circumstances is it reasonable to have a
compliance schedule?
At a minimum, the state must include some language limiting
compliance schedules for new WQS to circumstances where they are
reasonable and to require compliance as soon as possible. The
issue is how to apply this abstraction to the real world. For
example, should eligibility for schedules of compliance be
restricted to permits written within a certain number of years
(e.g., five years) after adoption of a new WQS or should it
extend to the first time a source's permit is revised to include
an effluent limitation based on the WQS in question, even if more
than five years have passed. On the one hand, after a certain
period of time, one could argue that sources were on notice as to
the WQS and should be prepared to comply with it immediately
(subject to normal shake-down provisions); on the other hand, if
a source did not realize that it would be subject to the WQS
(e.g, because prior more primitive monitoring had not detected
the pollutant) , it could be in the same position, equitably, as
if the standard had just been adopted.
2
ORCCATHY

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BIF PRECERTIFICATION ISSUES
12/18/91
BACKGROUND
0 BIF regulations require facilities to submit precompliance
certifications by 8/21/91 in order to keep operating (39
Region IV facilities).
0 Via these certifications, facilities provide information to
support their own self-imposed operating conditions.
° Region IV has reviewed the 39 certifications. Almost all
are incomplete or inaccurate to varying degrees.
° Other Regions have not reviewed certifications yet. ,
ISSUE
° The BIF regulations at §266.103(b) and (e) require
facilities to stop burning hazardous waste and close if
they do not submit complete and accurate certifications
(see attached pages). Facilities can only begin operation
again if they get a RCRA permit.
° Strict application of the BIF regulation will result in
closure of 60-100% of the Region IV facilities. This could
have significant implications on capacity with little
environmental benefit.
0 Headquarters did not intend this regulatory consequence.
OPTIONS
° Region IV strictly enforces the rule and requires
facilities to close (facilities in other Regions have an
advantage if other Regions never make completeness
determinations).
° Headquarters makes a regulatory amendment (time consuming).
° Headquarters issues a regulatory interpretation on what is
"complete and accurate" based on Region IV approach (see
attached proposal).
0 Regional IV independently interprets "complete and
accurate" absent Headquarters guidance (same attached
proposal).
° Headquarters issues their own regulatory interpretation
that "incomplete" facilities must close but "inaccurate"
facilities may continue operations.

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^ggjster / Vol. 56, No. 35 / Thursday. February 21. 1991 / Rules and Regulations 7219
iry cannot meet the HC
i<74(c) of this chapter.
irectoT shall, in considering
-tg grant the extension:
- (ermine whether the owner and
have submitted in a timely
^^ncr a complete Part B permit
Application that includes Information
required under | 270.22(b) of this
chapter and
(//) Consider whether the owner and
operator have made a good faith effort
to certify compliance with all other
emission controls, including the controls
on dioxins and furans of 5 266.104(e)
and the controls on PM, metals, and
HC1/C!,.
(2) If an extension is granted, the
Director shall, as a condition of the
extension, require the facility to operate
under flue gas concentration limits on
CO and HC that, based on available
information, including information in the
part B permit application, are baseline
CO and HC levels as defined by
5 266.104(0(1).
(8) Revised certification of
compliance. The owner or operator may
submit at any time a revised
certification of compliance
(recertifies tion of compliance) under the
following procedures:
(i)	Prior to submittal of a revised
certification of compliance, hazardous
aste may not be burned for more than
otal of 720 hours under operating
nditions that exceed those established
under a current certification of
compliance, and such burning may be
conducted only for purposes of
determining whether the facility can
operate under revised conditions and
continue to meet the applicable
emissions standards of |{ 266.104,
230.105, 266.106, and 266.107;
(ii)	At least 30 days prior to first
burning hazardous waste under
operating conditions that exceed those
established under a current certification
of compliance, the owner or operator
shall notify the Director and submit the .
following information:	fa
(A)	ETA facility ID number, and
facility name, contact person, telephone
number, and address;
(B)	Operating conditions that the
owner or operator is seeking to revise
and description of the changes in facility
design or operation that prompted the
need to seek to revise the operating
conditions;
(C)	A determination that when
operating under the revised operating
conditions, the applicable emissions
standards of }§ 286.104. 296.105, 266.108,
and 209.107 are not likely to be
exceeded. To document this
'^termination, the owner or operator
nail submit the applicable information
required under paragraph (b)(2) of this
section; and
fD) Complete emissions testing
protocol for any pretesting and for a
new compliance test to determine
compliance with the applicable
emissions standards of 55 266.104,
266.105, 266.106, and 206.107 when
operating under revised operating
conditions. The protocol shall Include a
schedule of pre-testing and compliance
testing. If the owner and operator
revises the scheduled date for the
compliance test, he/she shall notify the
Director in writing at least 30 days prior
to the revised date of the compliance
test;
(iii)	Conduct a compliance test under
the revised operating conditions and the
protocol submitted to the Director to
determine compliance with the
applicable emissions standards of
5§ 266.104, 266.105, 266.106, and 266.107;
and
(iv)	Submit a revised certification of
compliance under paragraph (c)(4) of
this section.
(d)	Periodic Recertifications. The
owner or operator must conduct
compliance testing and submit to the
Director a recertification of compliance
under provisions of paragraph (c) of this
section within three years from
submitting the previous certification or
recertification. If the owner or operator
seeks to recertify compliance under-new
operating conditions, he/she must
comply with the requirements of
paragraph (c)(6) of this section.
(e)	Noncompliance with certification
schedule. If the owner or operator does
not comply with the Interim status
compliance schedule provided by
paragraphs (b), (c), and (d) of this
section, hazardous waste burning must
terminate on the date that the deadline
is missed, closure activities must begin
under paragraph (1) of this section, and
hazardous waste burning may not
resume except under an operating
I permit Issued under { 270.66 of this
* chapter.
(f)	Start-up and shirt-down. Hazardous
waste (except waste fed solely as an
Ingredient under the Tier I (or adjusted
Tier I) feed rate screening limits for
metals and chloride/chlorine) must not
be fed Into the device during start-up
and shut-down of the boiler or industrial
furnace, unless the device Is operating
within the condition* of operation
specified in the certification of
compliance.
(g)	Automatic waste feed cutoff.
During the compliance test required by
paragraph (c)(3) of this section, and
upon certification of compliance under
paragraph (c) of this section, a boiler or
industrial furnace must be operated with
a functioning system that automatically
cuts off the hazardous waste feed when
the applicable operating conditions
specified In paragraphs (c)(1) (I) and (v
through xiii) of this section deviate from
those established in the certification of
compliance. In addition: n
(1) To minimize emissions «r organic
compounds, the minimum combustion
chamber temperature (or the indicator of
combustion chamber temperature) that
occurred during the compliance test
must be maintained while hazardous
waste or hazardous waste residues
remain In the combustion chamber, with
the minimum temperature during the
compliance test defined as either
(1)	If compliance with the combustion
chamber temperature limit is based on a
hourly rolling average, the minimum
temperature during the compliance test
is considered to be the average over all
runs of the lowest hourly rolling average
for each run; or
^iil If compliance with the combustion
chamber temperature limil is baaed oYi
an instantaneous temperature
^measurement, the minimum temperature
ouring the compliance test is considered
to be the time-weighted average
temperature during all runs of the test;
and
(2)	Operating parameters limited by
the certification of compliance must
continue to be monitored during the
cutoff, and the hazardous waste fe^i
shall not be restarted until the leva's of
those parameters comply with the hsiiis
established in the certification of
compliance.
(h)	Fugitive emissions. Fugitive
emissions must be controlled by:
(1)	Keeping the combustion zone
totally sealed against fugitive emissions;
or
(2)	Maintaining the combustion zone
pressure lower than atmospheric
pressure; or
(3)	An alternate means of control that
the owner or operator can demonstrate
provide fugitive emissions control
equivalent to maintenance of
combustion zone pressure lower than
atmospheric pressure. Support for such
demonstration shall be included in the
operating record.
(i)	Changes. A boiler or industrial
furnace must cease burning hazardous
waste when changes In combustion
properties, or feed rates of the
hazardous waste, other fuels, or
industrial furnace feedstocks, or
changes In the boiler or Industrial
furnace design or operating conditions
deviate from the limits specified in the
certification of compliance.
(0 Monitoring and Inspections. (1) The
owner or operator must monitor and

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/ Vol. 56, No. 35 / Thorsday, February 21. 1991 / Rales and Regnlatfong 7213

.-¦J)1
ggcment of hazardous
JtiU period of Interim
standards of this section
f(0 owners and operators of
^	facilities until either a permit is
iisued under f 206.102(d) or until closure
responsibilities identified in this section
are fulfilled.
(if) Existing or in existence means a
boiler or industrial furnace that on or
before August 21,1991 is either in
operation burning or processing
hazardous waste or for which
construction (including the andLlary
facilities to buri^fo process the
hazardous waste) has commenced. A
facility has commenced construction if
the owner or operator has obtained the
Federal, State, and local approvals or
permits necessary to begin physical
construction; and either
(A)	A continuous oD-eite, physical
construction program has begun: or
(B)	The owner or operator has entered
into contractual obligations—which
cannot be canceled or modified without
substantial loss—for physical
construction of the facility to be
completed within a reasonable time.
(iii)	If a boiler or industrial furnace is
located at a facility that already has a
permit or interim status, then the facility
must comply with Ihe applicable
regulations dealing with permit
modifications in $ 270.42 or changes in
terim status in 5 270.72 of this chapter.
(2)	Exemptions. The requirements of
is section do not apply to hazardous
waste and facilities exempt under
55 266.100(b). or 2B8.10a
(3)	Prohibition or burning dioxin-
J;Led wastes. Hazardous waste listed
r dioxin or derived from any of the
Mowing dicxin-listed wastes may not
be burned in a boiler or industrial
furnace operating under interim status:
EPA Hazardous Waste Numbers F020,
F021, F022, F023, F026, or F027.
(4)	Applicability of part 265
standards. Owners and operators of
boilers and Industrial furnaces that burn
hazardous waste and are operating
under interim status are subject to the
following provisions of part 285 of this^
chapter, except as provided otherwise '
by this section:
(i)	In subpart A (General). S 285.4;
(ii)	In subpart B [General facility
standards), 55 265.11-265.17;
(Hi) In subpart C (Preparedness and
prevention), 55 265.31-255.37;
(iv)	In subpart D (Contingency plan
and emergency procedures). 5 5 265.51-
265.50;
(v)	In subpart E (Manifest system,
recordkeeping, and reporting), Pi/v
15 285.71-265.77, except that 55 265.71,
265.72, and 2ft5.?6 do not apply to
pwners and operators of on-site
facilities that do not receive any
hazardous watte from off-site source*;
(vi)	In subpart C (Closure and post-
closure), 55 265.111-265.115;
(vii)	In subpart H (Financial
requirements). 55 265.141, 285.142,
285.143, and 265.147-265.151, except that
States and the Federal government are
exempt from the requirements of
subpart H; and
(viif) Subpart BB (Air emission
standards for equipment leaks), except
5 265.1050(a).
(5)	Special requirements for furnaces.
The following controls apply during
Interim status to Industrial fumaoes
(e.g., kilns, cupolas) that feed hazardous
waste for a purpose other than solely as
an ingredient (see paragraph (a)(5)(il) of
this section) at any location other than
the hot end where products are normally
discharged and where fuels are
normally fired:
(i)	Controls. (A)The hazardous waste
shall be fed at a location where
combustion gas temperatures are at
least 1800 *F;
(B)	The owner or operator must
determine that adequate oxygen is
present in combustion gases to combust
organic constituents in the waste and
retain documentation of such
determination in the facility record;
(C)	For cement kiln systems, the
hazardous waste shall be fed into the
kiln: end
(D)	The hydrocarbon controls of
5 266.104(c) or paragraph (c)(7)(ti) of this
section apply upon certification of
compliance under paragraph (c) of this
section irrespective of the CO level
achieved during the compliance test
(ii)	Burning hazardous waste solely as
an ingredient. A hazardous waste is
burned for a purpose other than solely
as an Ingredient if it meets either of
these criteria:	.
I (A) The hazardous waste nas a total
| concentration ofnonmetal compounds
l\!isted in part 281, appendix VIII, of this
¦^chapter exceeding 500 ppm by weight
( as-generated (and. so. is considered to
I be burned for destruction): or
! (B) The hazardous waste has a
heating value of 5,000 Bhi/lb or more,
as-generated or as-fired (and, so, is
^considered to be burned ss fuel).
(6)	Restrictions on burning hazardous
waste that is not a fuel. Prior to
certification of compliance under
paragraph (c) of this section, owners
and operators shall not feed hazardous
waste (other than hazardous waste
l4 burned solely as an ingredient) in a
boiler or industrial furnace that has a
heating value less than 5.000 Btu/lb, as-
generated, except for purposes of
Compliance testing (or testing prior to
compliance testing) far a total period of
time not to exceed 720 hours.
(7) Direct transfer to the burner. If
hazardous waste Is directly transferred
from a transport vehicle to a boiler or
industrial furnace without the use of a
storage unit, the owner and operator
must comply with | 288.111.
(b) Certification of precompliance—
(1) General. The owner or operator must
provide complete and accurate
Information specified in paragraph (b)(2)
of this section to the Director on or
before August 21,1991, and must
establish limits for the operating
parameters specified in paragraph (b)(3)
of this section. Such information is
termed a "certification of
precompliance" and constitutes a
certification that the owner or operator
has determined that, when the facility Is
operated within the limits specified In
paragraph (b)(3) of this section, the
owner or operator believes that using
best engineering judgment, emissions of
particulate matter, metals, and HCT And
CI* are not likely to exceed the limits
provided by 5 5 286.105, 266.106, and
£69.107. The facility may bum hazardous
waste only under the operating
conditions that the owner or operator
establishes under paragraph (b)(3) of
this section until the owner or operator
submits a revised certification of
precompliance under paragraph (b)(8) of
this section or a certification of
compliance under paragraph (c) of this
section, or until a permit is issued.
(2) information required. The
following information must be submitted
with the certification of precompliance
to support the determination that the
limits established for the operating
parameters identified in paragraph (b)(3)
of this section are not likely to result in
an exceedance of the allowable
emission rates for particulate matter,
metals, and HQ and Ch:
(i)	General facility information:
(A)	EPA facility ID number:
(B)	Facility name, contact person,
telephone number, and address:
(C)	Description of boilers and
industrial furnaces burning hazardous
waste, including type and capacity of
device;
(D)	A scaled plot plan showing the
entire facility and location of the boilers
and industrial furnaces burning
hazardous waste; and
(E)	A description of the air pollution
control system on each device burning
hazardous waste, including the
temperature of the flue gas at the inlet to
the particulate matter control system.
(ii)	Except for facilities complying
with the Tier I feed rate screening limits
for metals or total chlorine and chloride

-------
No. 35 / Thursday, February 21, 1991 / Rules and
7182 Federal Register / Vol. 56,
In addition, we note that a case-by-
case extension may be requested and
granted for any interim status
certification deadline under { 266.103 (c)
or (d). A case-by-case extension may be
granted after an owner/operator has
elected to take the 12-month automatic
extension, an extension may be granted
if the owner/operator cannot comply
with the recertification schedule (see
discussion below), and an existing
extension may be extended.
3.	Recertification
Owners and operators must
periodically conduct compliance testing
and recertify compliance with the
standards for individual metals, HC1 and
Clj particulates, and CO, and, where
applicable, HC and dioxins/furans
within three years of the previous
certification while they remain in
interim status (i.e., until an operating
permit is issued under § 270.66). See
§ 266.103(d). EPA is requiring
recertifications primarily to ensure that
air pollution control systems do not
deteriorate over time.
4.	Failure to Comply with the
Certification Schedule
If the owner or operator does not
comply with the certification schedule,
all hazardous waste burning must cease
as of the date of the missed deadline,
and closure must commence. See
§ 266.103(e). Any burning of hazardous
waste by such a device after failure to
comply with the certification schedule
must be under a RCRA operating perm\t.
See 5 270.66.,
To comply with the certification
schedule, complete and accurate
certifications of precompliance and
compliance must be submitted by the
applicable deadlines. (Although the
deadline for certification of compliance
may be extended (see 5 266.103(c)(7)),
the deadline for certification of
precompliance may not be extended.) In
addition to terminating interim status if
the owner and operator do not comply
with the certification schedule, EPA will
also take appropriate enforcement
action.
When closing a BIF. all hazardous
waste and hazardous waste residues,
including, but not limited to, ash,
scrubber water, and scrubber sludges,
must be removed from the affected BIF.
In addition, the owner/operator must
comply with the general interim status
closure requirements of §5 265.111—
265.115, as amended. These
requirements, which are incorporated by
reference into today's rule, specify
closure performance standards;
submission of and compliance with a
written closure plan; disposal or
decontamination of equipment,
structures, and soils; and certification
procedures for closure.
We note that under amended
§ 265.112(d)(2), for an owner or operator
who fails to submit a complete
certification of compliance by the
applicable compliance deadline
(including the automatic 12-month
extension or the case-by-case extension
under § 266.103[c)(7)(i), the date that he
"expects to begin closure" is within 30
days after the applicable deadline.
Therefore, for example, for an owner
who takes the automatic 12-month
extension, the closure notification
requirements of { 265.112(d)(1) or the
closure activity requirements of
§ 265.113 would not be triggered unless
and until the owner fails to submit a
complete certification of compliance by
the 12-mon\h extended deadline and a
case-by-case extension beyond the 12-
month extension was not obtained.
For any other BIF owner or operator
closing during interim status operation
(i.e., one who closes between the
effective date of the rule but before the
interim status compliance deadline of 18
months after promulgation of the rule, or
one who submits a complete
certification of compliance by the
applicable 18-month compliance
deadline, the 12-month automatic
extension, or case-by-case extension,
and closes during interim status), the
date when he "expects to begin closure"
under § 265.112(d)(2) will remain either
within 30 days after the date on which
any hazardous waste management unit
receives the known final volume of
^hazardous waste, or if there is a
reasonable possibility that the unit will
receive additional hazardous waste, no
later than one year after the date on
which the unit received the most recent
volume of hazardous waste.
5. Development of the Certification
Schedule
In the 1989 supplemental notice, the
Agency requested comment on
alternative schedules for requiring
compliance with the emissions
standards during interim status. The
Agency selected a certification deadline
of 16 months (with provision for
extensions) because we believe that
most facilities will be able to install the
necessary monitoring equipment,
conduct any precompliance testing that
may be necessary, and conduct
compliance testing within that time
period. Although 18 months fiLm the
date of promulgation is a fairly short
period of time, we note that Agency
staff have made numerous public
presentations and have had numerous
discussions 14 wi^
community, including
development of intend
compliance procedures' ^
owners/operators have^]
advance indication of the «
regulatory approach takentJJ
rule.
The Agency received a con^v
the air emission standards for cji
kilns should be instituted more
than the schedule proposed. The
commenter believed that accelerate
the schedule will not place an excess!^
burden on these facilities because the
regulations were proposed far enough in
advance for cement kilhs to come into
compliance. The Agency has considered
this comment and; (1) Sees no
compelling reason to single out cement
kilns from other BIFs for an accelerated
schedule: and (2) continues to believe
that an 18-month compliance period is
representative of the time required to
implement necessary plant design or
process modifications, install monitoring
and compliance equipment, conduct
facility compliance testing, and submit a
certification of compliance testing that
documents key operating limits during
the remainder of the interim status
period. In fact, the Agency is concerned
that in some situations, where, for
example, the air pollution control
system may need to be modified, an 18-
month deadline may not provide enough
time to complete modifications, "shake-
down" the system, conduct pre-
testing 7S, conduct compliance testing,
and analyze test data and submit a
certification of compliance. Thus, the
final rule includes provisions for time
extensions to all certification deadlines
except for certification of precompliance
under § 260.103(b).
B. Limits on Operating Parameters
Limits on operating parameters during
interim status are established at
certification of precompliance and at
certification of compliance following
emissions testing 18 months (unless
extended) after promulgation of the rule.
The operating conditions can be revised
prior to certification of compliance by
submitting a revised certification of
precompliance. The operating conditions
can be revised after certification of
M See the public docket for this rulemaking for
summaries of meetings held with groups including
Cement Kiln Recycling Coalition. Chemical
Manufacturers Association. National Solid Waste
Management Association, Council of Industrial
Boder Operators, and Hazardous Waste treatment
Council
74 Although pretesting is not required. EPA
believes that most facilities will conduct pretesting
before conducting the formal compliance testing
with all its attendant QA/QC requirements.

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Regulatory Interpretation:
"Complete and Accurate"
1^ Distinguish Between "Good" and "Bad" Submittals
A) "Good" Submittals
° Minor completeness/accuracy issues that, based on
Region's judgement, have insignificant environmental
impact (good faith effort).
° Need information over and above regulation,
regardless of potential environmental impact.
"Bad" Submittals
° Major completeness/accuracy issues and/or errors
that, based on Region's judgement, could have
significant environmental impact.
2) Approach for "Good" Submittals
° Send a §3007 information request to obtain enough
information so that a completeness determination can be
made.
3) Approach for "Bad" Submittals
° Send an NOV citing problem and require the facility to
immediately come in for a show cause meeting. NOV will
state that, based on Regional review, §266.103(e) applies
and will continue to apply until we can determine
otherwise.
° Based on results of the meeting, a variety of
enforcement options can be applied:
A)	Closure and a §3008(a) action with substantial penalty
for facilities that submitted particularly poor
certifications and operated outside of protective
emission standards.
B)	Closure and a §3008(a) action with smaller penalty for
facilities that submitted particularly poor
certifications but did not operate outside of
protective standards.
C)	Send a §3007 request similar to the "good" submittals
if, based on results of show cause, certification was
not as bad as we originally thought.
D)	Criminal sanctions for knowing false certifications.

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('J0:¦/)/)(fj/C o f	^
Federal Register / Vol. 56, No.-35 / Thursday, February z\, 1991 /. Rule
r /03 b / 
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No. 35 / Thursday, February 21, 1991 / Rules and Regulations
7214 Federal Register 41 Vol. 56,
nrovided by § J ,286.106 (b) i* lejltad
¦07 (b)(1) or (e) respectively, ]|he
lated uncontrolled (at tKgjjjSet to
-ir pollution control system)
emissions of particulate matter, each
metal controlled by $ 266.106, and
hydrogen chloride and chlorine, and the
following information to support such
determination: .
(A)	The feed rate (lb/hr) of ash,
chlorine, antimony, arsenic, barium,
beryllium, cadmium, chromium, lead,
mercury, silver, thallium in each
feedstream (hazardous waste, other
fuels, industrial furnace feedstocks);
(B)	The estimated partitioning factor
to the combustion gas for the materials
identified in paragraph (b)(ii)(A) of this
section and the basis for the estimate
and an estimate of the partitioning to
HC1 and Cl2 of total chloride and
chlorine in feed materials. To estimate
the partitioning factor, the owner or
operator must use either best
engineering judgment or the procedures
specified in appendix IX of this part.
(C)	For industrial furnaces that
recycle collected particulate matter (PM)
back into the furnace and that will
certify compliance with the metals
emissions standards under paragraph
(c)(3)(ii)[A), the estimated enrichment
factor for each metal. To estimate the
enrichment factor, the owner or operator
se either best engineering
:nt or the procedures specified in
	.lative Methodology for
Implementing Metals Controls" in
appendix IX of this part.
(D)	If best engineering judgment is
used to estimate partitioning factors or
enrichment factors under paragraphs
(b)(ii)(B) or (b)(ii)(C) respectively, the
basis for the judgment. When best
engineering judgment iB used to develop
or evaluate data or information and
make determinations under this section,
the determinations must be made by a
qualified, registered professional
engineer and a certification of his/her
determinations in accordance with
5 270.11(d) of this chapter must be
provided in the certification of
precompliance.
(iii)	For facilities complying with the
Tier I feed rate screening limits for
metals or total chlorine and chloride
provided by §5 208.106 (b) or (e) and
266.107 (b)(1) or (e), the feed rate (lb/hr)
of total chloride and chlorine, antimony,
arsenic, barium, beryllium, cadmium,
chromium, lead, mercury, silver, and
thallium in each feedstream (hazardous
waste, other fuels, industrial furnace
feedstocks).
(iv)	For facilities complying with the
Tipton — Tier in emission limits for
HG and CI* (under 8§ 266.106
or 266.107(b)(2) or (c)), the
estimated controlled (outlet of the air
pollution control system) emissions
rates of paticulate matter, each metal
controlled by 5 266.108, and HCl and Cli,
and the following information to support
such determinations:
(A)	The estimated air pollution control
system (APCS) removal efficiency for
particulate matter, HCl, Ck, antimony,
arsenic, barium, beryllium, cadmium,
chromium, lead, mercury, silver, and
thallium.
(B)	To estimate APCS removal
efficiency, the owner or operator must
use either best engineering judgment or
the procedures prescribed in appendix
IX of this part.
(C)	If best engineering judgment is
used to estimate APCS removal
efficiency, the basis for the judgment
Use of best engineering judgment must
be in conformance with provisions of
paragraph (b)(2)(ii)(D) of this section.
(v)	Determination of allowable
emissions rates for HCl, Cla, antimony,
arsenic, barium, beryllium, cadmium,
chromium, lead, mercury, silver, find
thallium, and the following information
to support such determinations:
(A)	For all facilities:
U) Physical stack height:
(2)	Good engineering practice stack
height as defined by 40 CFR Sl.lOO(ii);
(3)	Maximum flue gas flow rate;
(4)	Maximum flue gas temperature:
(5)	Attach a US Geological Service
topographic map (or eqivalent) showing
the facility location and surrounding
land within 5 km of the facility.
(6)	Identify terrain type: complex or
noncomplex; and
(7)	Identify land use: urban or rural.
(B)	For owners and operators using
Tier III site specific dispersion modeling
to determine allowable levels under
5 266.106(d) or $ 266.107(c), or adjusted
Tier I feed rate screening limits under
§§ 266.106(e) or 266.107(e):
(X) Dispersion model and version
used;
(2)	Source of meterological data;
(3)	The dilution factor in micrograms
per cubic meter per gram per second of
emissions for the maximum annual
average off-site (unless on-site is
required) ground level concentration
(MEI location); and
(4)	Indicate the MEI location on the
map required under paragraph
(b)(2)(v)(A)(5);
(vi)	For facilities complying with the
Tier II or III emissions rate controls for
metals or HCl and Cla, a comparison of
the estimated controlled emissions rates
determined under paragraph (b)(2)(iv)
with the allowable emission rates
determined under paragraph (b)(2)(v);
(vii)	For facilities complying with the
Tier I (or adjusted Tier I) feed rate
screening limits for metals or total
chloride and chlorine, a comparison of
actual feed rates of each metal and total
chlorine and chloride determined under
paragraph (b)(2)(iii) of this section to the
Tier I allowable feed rates; and
(viii)	For industrial furnaces that feed
hazardous waste for any purpose other
than solely as an ingredient (as defined
by paragraph (a)(5)(ii) of this section) at
any location other than the product
discharge end of the device,
documentation of compliance with the
requirements of paragraphs (a)(5)(i) (A),
(B), and (C) of this section.
(ix)	For industrial furnaces that
recycle collected particulate matter (PM)
back into the furnace and that will
certify compliance with the metals
emissions standards under paragraph
(c)(3)(ii) (A) of this section:
(A)	TTie applicable particulate matter
standard in lb/hr; and
(B)	The precompliance limit on the
concentration of each metal in collected
PM.
(3) Limits on operating conditions.
The owner and operator shall establish
limits on the following parameters
consistent with the determinations made
under paragraph (b)(2) of this section
and certify (under provisions of
paragraph (b)(9) of this section) to the
Director that die facility will operate
within the limits during interim status
when there is hazardous waste in the
unit until revised certification of
precompliance under paragraph (b)(8) of
this section or certification of
compliance under paragraph (c) of this
section:
(i)	Feed rate of total hazardous waste
and (unless complying with the Tier 1 or
adjusted Tier I metals feed rate
screening limits under § 266.106(b) or
(e)) pumpable hazardous waste;
(ii)	Feed rate of each metal in the
following feed streams;
(A)	Total feed streams, except that
industrial furnaces that comply with the
alternative metals implementation
approach under paragraph (b)(4) of this
section must specify limits on the
concentration of each metal in collected
particulate matter in lieu of feed rate
limits for total feedstreams;
(B)	Total hazardous waste feed; and
(C)	Total pumpable hazardous waste
feed, unless complying with the Tier I or
adjusted Tier I metals feed rate
screening limits under § 266.106 (b) or
(e);
(iii)	Total feed rate of chlorine and
chloride in total feed streams;
(iv)	Total feed rate of ash in total feed
streams, except that the ash feed rate
for cement kilns and light-weight
aggregate kilns is not limited; and
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Federal Register / Vol. 56, No. 35 / Thursday, February 21, 1991^/ R^les and Regulations 7215
(v) Maximum production rate of the
•device in appropriate units when
¦producing normal product
(4) Operating requirements for
furnaces that recycle PM. Owners and
operators of furnaces that recycle
collected particulate matter (PM) back
into the furnace and that will certify
compliance with the metals emissions
controls under paragraph (c)(3J(ii}(A) of
this section must, comply with the
special operating requirements provided
in "Alternative Methodology for.
Implementing Metals Controls" in
appendix IX of this part
' (5] Measurement of feed rates and
production rate—(i) General
requirements. Limits on each of the
parameters specified in paragraph (b)(3)
of this section (except for limits on
metals concentrations in collected
particulate matter (PM) for industrial
furnaces that recycle collected PM) shall
be established and continuously
monitored under either of the following
methods:
(A)	Instantaneous limits. A limit for a
parameter may be established and
continuously monitored on an
instantaneous basis (i.e., the value that
occurs at any time) not to be exceeded
at any time; or
(B)	Hourly rolling a verage limits. A
limit for a parameter may be established
and continuously monitored on an
hourly rolling average basis defined as
follows:
(1)	A continuous monitor is one which
continuously samples the regulated
parameter without interruption, and
evaluates the detector response at least
once each 15 seconds, and computes
and records the average value at leas!
every 60 seconds.
(2)	An hourly rolling average is the
arithmetic mean of the 60 most recent 1-
minute average values recorded by the
continuous monitoring system.
(ii) Rolling average limits for
carcinogenic metals and lead. Feed rate
limits for the carcinogenic metals
(arsenic, beryllium, cadmium, and
chromium) and lead may be established
either on an hourly rolling average basis
as prescribed by paragraph (b)(5)(i)(B)
or on (up to) a 24 hour rolling average
basis. If the owner or operator elects to
use an averaging period from 2 to 24
hours:
(A)	The feed rate of each metal shall
be limited at any time to ten times the
feed rate that would be allowed on a
hourly rolling average basis;
(B)	The continuous monitor shall meat
the following specifications:
(1) A continuous monitor iB one which
continuously samples the regulated
parameter without interruption, and
evaluates the detector response at least
once each IS seconds, and computes
and records the average value at least
every 60 seconds.
(2) The rolling average for the selected"
¦ averaging period is defined as the
arithmetic mean of the most recent one
hour block averages for the averaging
period. A one hour block average is the
arithmetic mean of the one minute
averages recorded during the 60-mimite
period beginning at one minute after the
beginning of preceding clock hour.
(iii) Feed rate limits for metals, total
chloride and chlorine, and ash. Feed
rate limits for metals, total chlorine and
chloride, and ash are established and
monitored by knowing the concentration
of the Bubstance (i.e., metals, chloride/
chlorine, and ash) in each feedstream
and the flow rate of the feedstream. To
monitor the feed rate of these
substances, the flow rate of each
feedstream must be monitored under the
continuous monitoring requirements of
paragraphs (b)(5) (i) and (ii) of this
section.
(6) Public notice requirements at
precompliance. On or before [the
effective date of this rule] the owner or
operator must submit a notice with the
following information for publication in
a major local newspaper of general
circulation and send a copy of the notice
to the appropriate units of State and
local government. The owner and
operator must provide to the Director
with the certification of precompliance
evidence of submitting the notice for
publication. The notice, which shall be
entitled "Notice of Certification of
Precompliance with Hazardous Waste
Burning Requirements of 40 CFR
266.103(b)", must include:
(i)	Name and address of the owner
and operator of the facility as well as
the location of the device burning
hazardous waste;
(ii)	Date that the certification of
precompliance is submitted to the
Director;
(iii)	Brief description of the regulatory
process required to comply with the
interim status requirements of this
section including required emissions
testing to demonstrate conformance
with emissions standards for organic
compounds, particulate matter, metals,
and HC1 and CU;
(iv)	Types and quantities of hazardous
waste burned including, but not limited
to, source, whether solids or liquids, as
well as an appropriate description of the
waste:
(v)	Type of device(s) in which the
hazardous waste is burned including a
physical description and maximum
production rate of each device;
i) Types and quantities of other
s and industrial furnace feedstocks
to each unit;
(vii)	Brief description of the basis for
this certification of precompliance as
specified in paragraph (b)(2) of this
section;
(viii)	Locations where the operating
record for the facility can be viewed and
copied by interested parties. These
locations shall at a minimum include:
(A)	The Agency office where the
supporting documentation was
submitted or another location
designated by the Director; and
(B)	The facility site where the device
is located;
(ix)	Notification of the establishment
of a facility mailing list whereby
interested parties shall notify the
Agency that they wish to be placed on
the mailing list to receive future
information and notices about this
facility; and
(x)	Location (mailing address) of the
applicable EPA Regional Office,
Hazardous Waste Division, where
further information can be obtained on
EPA regulation of hazardous waste
burning.
(7) Monitoring other operating
parameters. When the monitoring
systems for the operating parameters
listed in paragraphs (c)(l)(v through xiii)
of this section are installed and
operating in conformance with vendor
specifications or (for CO, HC, and
oxygen) specifications provided by
appendix IX of this part, as appropriate,
the parameters shall be continuously
monitored and records shall be
maintained in the operating record.
(6) Revised certification of
precompliance. The owner or operator
may revise at any time the information
and operating conditions documented
under paragraphs (b)(2) and (b)(3) of this
section in the certification of
precompliance by submitting a revised
certification of precompliance under
procedures provided by those
paragraphs.
(i)	The public notice requirements of
paragraph (b)(6) of this section do not
apply to recertifications.
(ii)	The owner and operator must,
operate the facility within the limits
established for the operating parameters
under paragraph (b)(3) of this section
until a revised certification is submitted
under this paragraph or a certification of
compliance is submitted under
paragraph (c) of this section.
(9) Certification of precompliance
statement. The owner or operator must
include the following signed statement
with the certification of precompliance
submitted to the Director.
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/03f&) floYicorrphar\c2~ iurfhl I ^
Federal Register f -Vol. 50 Na 35 /- Thursday;- Februa/^. ffl, 1991/¦.'Rules and Regulations
7219
because the facility cannot meet the HC
limit of 5 266.104(c) of this chaplen-
(jf) The Director shall, in considering
whether to grant the extension- "
5 (/) Determine whether the owner and
operator have submitted in a timely
manner a complete Part B permit
application that includes information
required under I 270.22(b) of. this
chapter, and
("3 Consider- wh'etner the owner and
operatofhavemade a good faith effort
to certify compliancy with all other
emission controls,, inducing,the controls
on dioxips.aiid furans of 5-266.1p4(e)
and the,controls on PM. metals, and
HCl/Clj
(2) If an extension"i? granted, tlie
Director shall, aS acondition of the
extension, require the facility to operate
under flue'gas concentration limits on
CO and HG that, based on available:
information, including information in the
part B permit application, are baseline
CO and HC levels as defined by
$ 266.104(f)(1).
(8) Revised certification of
dompIiance.The owner or operator may
submit at a'ny time a'revised
certification of compliance
(recertification of compliance) under the
following procedures: -
(i)	Prior to submittal of a revised
certification of compliance.-hazardous
waste may not be burned for more than-
a total of 720 hours under operating
conditions that exceed those established
under a Gurrent certification of
compliance, and such burning may be
conducted only for purposes of
determining whether the facility can
operate under revised conditions and
continue to meet the applicable
emissions standards of §$ 266.104,
266.105, 266.106, and 266.107;
(ii)	At least 30 days prior to first
burning hazardous waste under
operating conditions that exceed those
established, under a current certification
of compliance, the owner or operator
shall notify the Director and submit the
following information:
(A)	EPA facility ID number, .and
facility name, contact person, telephone
number, and address;
(B)	Operating conditions that the
owner or operator is seeking to revise
and description of the changes in facility
design or operation that prompted the
needto seek to revise the operating
conditions;
_ (C) A determination that when
operating under the revised operating
conditions, the applicable emissions
standards of $| 268.104, 266.105,: 266.106.
and 2^6.107 are not likely to be
exceeded. To document this
determination, the owner or operator
shall Bubmit the applicable information
reguired tinder paragraph (b)(2),of this
section; and
fD): Complete emissions' testing
protocol'forariy pretesting and for a
- new-compliance test to" determine
-compliance vyith-the applicable
emissions standards of j§ 266.104,
266.105, 266.108, and 26&107-vvhen
operating under revised-operating r
conditions. The protocol shall include a
schedule of "pre-testing ind compliance
testing. If toe owner" and operator,
revises'the scheduled'date for the
compliance test he/she shajl notify the
Directorial wtiting'af least 30 days' prior,
to the revised date of the compliance"
test.
'(iii) Conduct a'pompli&hce.test under,
the reyised'opera'tirtg conditions and the
protocol slibiliitted to the'Director to
determine compliance'with the
applicable emissions standards of
§| 266.104, 266.105,'266.108; and 268.107
and
(iv) Submit a revised certification of
compliance under paragraph (c)(4) of
thissection.
(d)	Periodic Recertifications. The
owner or operator must conduct
compliance testing and submit to the
Director a recertification of compliance
under provisions of paragraph'(c) of this
section within three years from'
submitting'the previous certification or
recertification: If the owner or operator
seeks to recertify compliance under new
operating conditions, he/she must
comply with the requirements of
paragraph (c)(8) of this section.
(e)	Noncompliance with'certificatidn
schedule. -If the owner or operator does
not comply with the interim 'status
compliance schedule-provided by
paragraphs (b), (c), and (d)of this
section, hazardous .waste-burning must
terminate, on the date thatthe'deadline
is missed, closure activities must begin
under paragraph (1) of this section, and
hazardous waste burning may not
resume except under an operating
pSrmit Issued under § 270.66 of this
chapter.
(f)	Start-up and shut-down. Hazardous
waste (except waste fed Bolely as an .
ingredient under the Tier I (or adjusted
Tier I) feed rate screening limits for
mstals and chloride/chlorine) must not
be fed into the device during start-up
and shut-down of the boiler or industrial
furnace, unless the device is operating
within the conditions of operation
specified in. the certification of
compliance.
(g)	Automatic waste feed cutoff.
During the compliance test required by
paragraph (c)(3) of this section, and
upon certification of compliance under
paragraph (c) of this section, a boiler or.
industrial furnace must be operated with
a functioning system-th&tautoma tically-
cuts off the'hazardous waste feed when
the applicable operating conditions
specified in paragraphs (c)(1) (i) and (v
through xiii) of this section deviate from
those established in the certification of
compliance. In addition;
(l)-To minimize emissionsor organic
compounds, the minimum combustion
chamber temperature (or the; indicator of
combustion'chamber temperature) that
occurred during.the compliance test
musl'be maintained while hazardous
waste or hazardous waste residues
remain in thk combustion chamber, with
the minimum temperature during the
compliance" test defined as either.
(1)	If compliance with the combustion ¦
chamber temperature limit is based oh a
hourly rolling average, this minimum
Temperature during the compliance test
is considered to be the average over all
runs of the lowest hourly rolling average
for each run; or.
(ii) If compliance with the combustion
chamber temperature limit is based on
an instantaneous temperature
measurement, the minimum temperature
during the compliance test is considered
to be the time-weighted average
temperature during all runs of the test;
and
(2)	Operating parameters limited by
the certification of compliance must
continue to be monitored during the
cutoff, and the hazardous waste feed
shall not be restarted until, the levels of
those.parameters.comp!y with the limits
established in the certification of.
compliance.
(H)	Fugitive emissions. Fugitive
emissions must be controlled by:
(I)	Keeping the combustion zone
totally sealed against fugitive emissions;
or
,(2) Maintaining the combustion zone
pressure lower than atmospheric
pressure; or
(3) An alternate means of control that
the owner or operator can demonstrate
provide fugitive emissions control
equivalent to maintenance of
combustion-zone pressure lower than
atmospheric pressure. Support for such
demonstration shall be included in the
operating record.
¦ (i) Changes. A boiler or industrial
furnace must cease burning hazardous
waste when changes in combustion
properties, or feed rates of the
hazardous waste, other fuels, or-
industrial furnace feedstocks, or
changes in the'boiler or industrial
furnace design or operating conditions
deviate from the limits specified in the
certification of compliance.
(j) Monitoring and Inspections. (1) The
owner or operator must monitor and
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7182 Federal Register /'Vol. m, No. 35 / Thursday, February 21, 1991 / Rules and Regulations
In addition, we note that a casewv/
case extension may be requested ana
granted for any interim status
certification deadline under § 266.103 [c]
or (d). A case-by-case extension may be
granted after an owner/operator has
elected to take the lZ-month automatic
extension, an extension may be granted
if the owner/operator cannot comply
with the recertification schedule (see
discussion below), and an existing
extension may be extended.
3. Recertification
Owners and operators must
periodically conduct compliance testing
and recertify compliance with the
standards for individual metals, HC1 and
Cl2 particulates, and CO, and, where
applicable, HC and dioxins/furans
within three years of the previous
certification while they remain in
interim status (i.e., until an operating
permit is issued under § 270.66). See
§ 266.103(d). EPA is requiring
recertifications primarily to ensure that
air pollution control systems do not
deteriorate over time.
t4. Failure to CompljTwith-the
'-Certification Schedule
If tHe owner or operator does not
comply with the certification schedule,
all-hazardous waste Burning must cease
as of the date of-the missed deadline,
L"ahd closure mustxommenceT See
;§ 266.103(e). Any;burning of hazardous
waste by such a device after failure.to
comply with the certification schedule
rmust be under a:RCRA operating.permit.
CSee § 270.66;
To comply with the certification
schedule, complete and accurate
certifications of precompliance and
^compliance must be submitted by the
capplicable deadlines. (Although the
deadline for certification of compliance
may be extended (see § 266.103(c)(7)),
the deadline for certification'of _
[precompjiance may not be extended.) In
C addition tojerminating interim statusjf
[the owner and operator do'not comply
with the certification schedule, EPA will
also take appropriate enforcement
Caction?
When closing a BIF, all hazardous
waste and hazardous waste residues,
including, but not limited to, ash,
scrubber water, and scrubber sludges,
must be removed from the affected BIF.
In addition, the owner/operator must
comply with the general interim status
closure requirements of §§ 265.111-
265.115, as amended. These
requirements, which are incorporated by
reference into today's rule, specify
closure performance standards;
submission of and compliance with a
written closure plan; disposal or
decontamination of equipment,
structures, and soils; and certification
procedures for closure.
We note that under amended
§ 265.112(d)(2), for an owner or operator
who fails to submit a complete
certification of compliance by the
applicable compliance deadline
(including the automatic 12-month
extension or the case-by-case extension
under § 266.103(c)(7)(i), the date that he
"expects to begin closure" is within 30
days after the applicable deadline.
Therefore, for example, for an owner
who takes the automatic 12-month
extension, the closure notification
requirements of § 265.112(d)(1) or the
closure activity requirements of
§ 265.113 would not be triggered unless
and until the owner fails to submit a
complete certification of compliance by
the 12-month extended deadline and a
case-by-case extension beyond the 12-
month extension was not obtained.
For any other BIF owner or operator
closing during interim status operation
(i.e., one who closes between the
effective date of the rule but before the
interim status compliance deadline of 18
months after promulgation of the rule, or
one who submits a complete
certification of compliance by the
applicable 18-month compliance
deadline, the 12-month automatic
extension, or case-by-case extension,
and closes during interim status), the
date when he "expects to begin closure"
under § 265.112(d)(2) will remain either
within 30 days after the date on which
any hazardous waste management unit
receives the known final volume of
hazardous waste, or if there is a
reasonable possibility that the unit will
receive additional hazardous waste, no
later than one year after the date on
which the unit received the most recent
volume of hazardous waste.
5. Development of the Certification
Schedule
In the 1989 supplemental notice, the
Agency requested comment on
alternative schedules for requiring
compliance with the emissions
standards during interim status. The
Agency selected a certification deadline
of 18 months (with provision for
extensions) because we believe that
most facilities will be able to install the
necessary monitoring equipment,
conduct any precompliance testing that
may be necessary, and conduct
compliance testing within that time
period. Although 18 months from the
date of promulgation is a fairly short
period of time, we note that Agency
staff have made numerous public
presentations and have had numerous
discussions 74 with the regulated
community, including, in particular, the
development of interim status
compliance procedures. Thus, facility
owners/operators have had some
advance indication of the general
regulatory approach taken in the final
rule.
The Agency received a comment that
the air emission standards for cement
kilns should be instituted more quickly
than the schedule proposed. The
commenter believed that accelerating
the schedule will not place an excessive
burden on these facilities because the
regulations were proposed far enough in
advance for cement kilns to come into
compliance. The Agency has considered
this comment and: (1) Sees no
compelling reason to single out cement
kilns from other BIFs for an accelerated
schedule; and (2) continues to believe
that an 18-month compliance period is
representative of the time required to
implement necessary plant design or
process modifications, install monitoring
and compliance equipment, conduct
facility compliance testing, and submit a
certification of compliance testing that
documents key operating limits during
the remainder of the interim status
period. In fact, the Agency is concerned
that in some situations, where, for
example, the air pollution control
system may need to be modified, an 18-
month deadline may not provide enough
time to complete modifications, "shake-
down" the system, conduct pre-
testing 75, conduct compliance testing,
and analyze test data and submit a
certification of compliance. Thus, the
final rule includes provisions for time
extensions to all certification deadlines
except for certification of precompliance
under § 266.103(b).
B. Limits on Operating Parameters
Limits on operating parameters during
interim status are established at
certification of precompliance and at
certification of compliance following
emissions testing 18 months (unless
extended) after promulgation of the rule.
The operating conditions can be revised
prior to certification of compliance by
submitting a revised certification of
precompliance. The operating conditions
can be revised after certification of
74	See the public docket for (his rulemaking for
summaries of meetings held wilh groups including
Cement Kiln Recycling Coalition, Chemical
Manufacturers Association, National Solid Waste
Management Association, Council of Industrial
Boiler Operators, and Hazardous Waste treatment
Council
75	Although pretesting is not required, EPA
believes that most facilities will conduct pretesting
before conducting the formal compliance testing
with all its attendant QA/QC requirements.
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V-
^to sr„
S 	 %
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mbu gUfMMtUblAltb fciM vmutNivicm I ml rnu i cu i v im	i /
."*«£*•/	WASHINGTON. D.C. 20460
DEC I
- 'V
'• »T ..'iC
' •¦OWTOif.C
MEMORANDUM
Medical Waste Tracking Act of 1988
Glenn L. Unterberger
Associate Enforcement Counsel for Waste
Thomas L. Adams, Jr.
Assistant Administrator
Edward E. Reichrt
Deputy Assistant Administrator
for Civil Enforcement
On November 2, 1988, the President signed the Medical Waste
Tracking Act of 1988. The Act requires that the Agency establish
a demonstration tracking system, including reporting require-
ments, for medical wastes, and promulgate regulations listing the
types of medical waste to be tracked under the demonstration
program. The regulations, which are required to be promulgated
within 6 months of the date of enactment, also will require
segregation of wastes at the point of generation, placement of
wastes in appropriate containers, and appropriate label^~g.
The Act anticipates that the program will be conducted in 10
states - New York, New Jersey, Connecticut, and the ssvar. Great
Lakes states (Regions I, II, III and V) . The Act allcvs each cf
these states to "opt out" of the program, and it also allows the
remaining 40 states to participate in it. States that are
contiguous to the Atlantic Ocean may opt out of the program, if
EPA determines that they have implemented a tracking program
which is no less stringent than the Federal program. The
demonstration program is intended to run for 2 years and will
expire on the date 24 months after the effective date of the
Agency's regulations.
The Act provides significant new enforcement authority over
medical waste for EPA and the states. Section 11005 of the Act,
which is substantially similar to Section 3008 of RCRA, provides
for administrative and judicial enforcement of violations of the
Act and for penalties up to $25,000 per day of noncompliance.
Section 11005(e) requires that penalties assessed by the United
SUBJECT:
FROM:
TO:
THRU:
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c
States and the states "be assessed in accordance with the
Administrator's RCRA Civil Penally Policy." Section 11005 also
provides fo^priminal penalties for knowing violations and
knowing endarigerment. Section 11007 authorizes a state to
conduct inspections or take enforcement actions against any
person "to the same extent as the Administrator."
A copy of the Act is attached for your information. I also
have attached a summary of tr.e Act prepared by Joe Schive, the
staff attorney assigned to this project. If you have any
questions about this material, please call me at 382-3050, Anne
Allen at 382-3071, or Joe at 332-3068.
Attachments
cc: Susan Bromm, Acting Director, RCRA Enforcement Division,
Office of Waste Programs Enforcement
David T. Buente, Chief, Environmental Enforcement Section,
Department of Justice
Hazardous Waste Branch Chiefs, Office of Regional Counsel,
Regions I-X
Paul Thomson, Deputy Assistant Administrator - Criminal
Gerald A. Bryan, Director, OCAPO
Thomas P. Gallagher, Director, NEIC
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SUMMARY OF THE MEDICAL WASTE TRACKING ACT OF 1983
The MssTi/pal Waste Tracking Act of 1988 is an amendment to
the Solid Waste Disposal Act. It adds Subtitle J to the SWDA.
The following is a summary of the provisions of the Act.
Sectlcn 11001. Scope of Demonstration Tracking Program
Ihe States covered by the program include: New York, New
Jersey, Connecticut, and the States contiguous to the Great
Lakes. Additionally, any States that petition to be included may
participate in the demonstration program.
The "Opt Out" provision allows States the opportunity to
elect not to participate in the demonstration program.
The demonstration program expires 2 years after the
effective date of EPA regulations.
Section 11002. Listing of Medical Wastes
Not later than 6 months after.the enactment of Subtitle J,
the Administrator shall promulgate regulations listing the types
of medical waste to be tracked. A list of materials that should
be included, at a minimum, in the definition of medical waste is
contained in this section of the statute.
Section 11003. Tracking of Medical Waste
The demonstration program shall (1) provide for the tracking
cf medical waste from the generator to the disposal facility,
except that waste that is incinerated need not be tracked after
incineration, (2) include a system for providing the generator
with assurance of receipt by disposal facility, (3) use a uniform
form for tracking, and (4) include requirements for segregation,
¦placement in appropriate containers, ar.d appropriate labeling.
A small quantity generator exemption may be established by
the Administrator for persons or facilities that generate less
than 50 pounds per calendar month.
Section 11004. Inspections
Any. person who generates, stores, treats, transports,
disposes of, or otherwise handles or has handled medical waste
must, upon reasonable request, furnish information, conduct
monitoring or testing, and at all reasonable times, provide
access to EPA representatives, duly designated by the
Administrator.
EPA also is authorized to inspect, at reasonable times, and
to conduct monitoring or testing and inspect and obtain samples
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2
from any person of any such wastes and samples of any containers
or labeling from such wastes.
Section liyD^. Enforcement
EPA may issue an order assessing a civil penalty for any
past or current violation; reguire compliance immediately or
within a specified time period; or may commence a civil action in
U.S. District Court.
EPA may assess penalties of a maximum of $25,000/aay of
noncompliance per violation. EPA also may assess penalties up to
$25,000/day for noncompliance with such order.
Any person named in an order may reguest a public hearing
within 30 days after issuance of the order.
Any person who (1) knowingly violates the reguirements of
the Act or the regulations; (2) knowingly omits material
information or makes false material representations; (3)
knowingly. generates, stores, treats, disposes or transports
medical waste shall be subject to $50,000 fine or imprisonment
not to exceed two years.
Any person who knowingly violates any provision of
subsection (b) of this section and thereby places another person
in imminent danger of death or serious bodily injury, shall be
subject to fine of no more than $250,000 or imprisonment for not
more than 15 years, or both.
Civil penalties assessed by the U.S. or States shall be
assessed in accordance with the RCRA Civil Penalty Policy, as
such pclicy is amended from time to time.
Section 11006. Federal Facilities
Federal facilities are subject to and shall comply with all
Federal, Sta~e, interstate, and local requirements, both
substantive and procedural (including requirements for permits or
reporting or any provisions for injunctive relief and such
sanctions as may be imposed by a court to enforce such relief).
in the same manner and to the same extent, as any person is
subject to such requirement. Since the term "person" includes
each department, agency, and instrumentality of the United
States, this section appears to be a broad waiver of sovereign
immunity.
Section 11007. Relationship to State Law
States ir.ay conduct inspections and take enforcement actions
against any person to the same extent as the Administrator of
EPA.
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3
Section lia08'« Report to Congress
Not later than 3 months after the expiration of the
demonstration program, the Administrator shall report to Congress
on various topics related to medical waste as-cciated with the
program.
Section 11009. Health Impacts Report
Within 24 months after the enactment of Subtitle J, the
Administrator of the Agency for Toxic Substances and Disease
Registry shall prepare a report to Congress on the health effects
of medical waste.
Section 11010. General Provisions
In promulgating regulations, the Administrator shall consult
with the affected States and the International Joint Commission.
The Administrator may promulgate regulations required by
Subtitle J as "interim final" regulations, but the Administrator
shall provide an opportunity for public comment on the interim
final rule.
Nothing in Subtitle J shall affect the Administrator's
authority to regulate medical waste under Subtitle C of RCRA.
Section 11011. Effective Date
Regulations shall take effect within 90 days after
promulgation, except that, the Administrator may provide for a
shorter period, if he finds the regulated community dees not need
90 days to come into compliance.
Section 11012. Authorization of Appropriations
Appropriations are authorized as may be necessary for each
of the fiscal years 1989 through 1991 for purposes of carrying
out activities under the Act.
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;0-'lS'-eS
H. R 3515
ftnndrdth Congress of ttit United gtaas of amtrica
AT THE SECOND SESSION
HtgUix srui 'xmid mt tA* City of	rm Monday, (A« ti*er\ty-J\fLh dor mf /oAnirr,
c/w theuamnd run* hundred mnd tL§hfy+ifhl
3n act
Tc taccd U» Sojd Waca DlfponJ -Scs u> rvquur ttlf Arf~r r *irrtcr of 3«t ^innn-
¦will. Prouftam Agine* to promoigot* Mfiuam oc :b» m»u(*3Mai ct mfac-
U3U* *IM
3« it rnacitd by t/ie Senate and Bo use of Reprttentattvo of iht
Cmtri States of America in Cbip-ea oMtmbiad.
stcnoNi shout mxx.
This Act may be atad as th» "Medical Waate Tracking Act of
198?"
SEC. J. TUCKING or KEDIC.U. WASTE.
;ai AM^s-TjsrtKT or Soud Wa*ti Disposal Act—The Solid Wtm
Dwpoaai Act is amended by adding the following new subtitle at the
ena:
"Subtitia J—Demonstration Medical Waate Tracking Program
"SEC it Ml STOPS or DKMONSTkATION PROGRAM FOk MEDICAL WAVTC.
"(a) Covius Stat**.—'The State* within the datnonitratian pro-
gnun established under this subtitle for tracking medical onf -mpietsertioK the d«(nor»trsiuor. program under this
guDti'Je
"\ci PirrrroN Ix —"Hit Govern or of any 9tat« may petition the
Administrator to b* inclutiad ir. the domonatraiion program and the
Aanuniftrctor siay, in hu discret^n, include such 9tau Such
petition m&y not be made latar than HO days ift&i pronulgaUas of
—ration? •rstabiishing *h« demonamtion program under tha sub-
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H.R 3515—2
title aid tha Administrator I hall deterrniEe whoitrr to include tha
Sute wuhin 30 day* tflrr receipt of the StlK'l petition.
-"d' Extiration or DruofcrrfiATJOH Pmoc&A* —Tst demoaitr*-
Uua proerarc ikflil expire on the data 24 months ii\ar the effective
data of the reyilauana under this tubotie.
-BBC. I10« L1BTTNC or VimiCAL WA9TI5.
"la'1 List —Not later than 6 month* after the enactment of this
•ubtitle. the Admmmti-Stor shall jr-omulgau .-epuiancu luting the
types of medical wmra to bs tracked under tfat demonstration
progrsjr. Except aa pranded m subsection (b>. such lift thAll in-
clude. but need not be limited to. aech of the following type* of solid
waste.
"ill Cultures and vtocka of infectious agaota and ossociaiad
biulo^icals. including cultural from medirai and pathological
laboratories. cultures and cocb of infectious agents from re-
search and industrial laboralonss. ® aires from the production
of biological*, discarded livs and attemiatod vaonnes. and cul-
ture dishes ud dmcea uaad to transfer, maculate, and mix
cultures
"i21 Pathologic} was tec, including tissues. organ*, aad body
puns that are removed during surgery or autopsy.
"(3) Wctitt human blood and products of blood. Including
aartim, plasma, and other blood components.
~i) Sharp* that have be«n used in pacant ear* or is mcdicaiL
research, or industrial laboratories, mchidLog hypodermic nee-
dles. syringes, pastaur pipettaa. broken glass. and scalpel hlartra
"{U> Contaminated animal esrc&aaea. body pert*, and bedding
of animals that wire exposed to icfecnous scent* during re-
search, production of biologicala, or testing of pharmaceuticals.
"(6i Wane* from rarRery or autopav that ware in aontact with
infecc^xis attest*, inducing soiled dressings, spooled. drapes,
lavaga tubes, drmiaags sets, underpadx. anc surgical gloves.
"(?) Laboratory wa£» from msriicsi pathological. pharma-
ceutical. or other research, mn-tnul or lndu/erial laboro-
tor.es that were in oootac*. with Infectious amenta, indudmg
slides and cover slips, disposable glares. laljoratory coats, ana
aproM.
u;8) Diflli"su. vMta that were in contact with the blood of
patients undergoing hamoeJiaiyiis. including coo lacuna ted
diiparable equipment and supplies rich aa tubing, Gltrra,
disposable aheoo. tow»ls. jl^n, aprons. and laboratory eoets.
"(9; Discarded medical equipment and perti that wan in
contact with lnfecDoaa agecta.
"tlO) BiolofKai vasse and iiacarded mntarials eontamlnatad
with blood, excretioc. sxeudfltea or ncmoi from human being*
or animsls who are isolated to protect others from commu-
nicable rt'iwasn
"Till Such other waste material that results from the
administration of mad its I care to a patient by a health care
provider and is (bund by the Administrator to pose a threat to
human health or the environment
Excuusovs FftOti Lvt —The Administrator may rxclude
from '.he list under this section my categories or items described in
paragraphs (6) through (10! of subjection (a! which he determines do
not poec a tubftasitial present or potential haisrd to human >w>al>h
-------
H. R. 3515^3
or che environrwnt when improperly treated, stored. transported,
dirpcsed of, or otherwise annagoc-
"SEC 11OU TRACKING or WED1C.U. waste.
"'CO DEXONdnmncM PhogRajk.—Not late- than 6 moalha aftar
the >Tin —man'- of this gubatle. the Administrator iKall promulgate
regulations «tabh*h:nc a program for th» tracking of {he madirjl
nuv listed lb. section 11002 «nich is generated :n a State subjoct to
tha demonstration program The program (hail ;l> pronde for track-
ing of the transportation of the waste from the generator to tha
disposal facility, cicapt that waste that is incinarated Deed no*, ba
troclcwd after incineration. (Z) include a system for providing the
aeaerator of tha *uh with ossuranca that the waste ia >aiei»ed
dy the disposo: Jaoiitr, (3j use 3 uniform forrr for trucking in
ooch of the demonstration States, and 14) indude the following
requirements:
"fA) A requirement for sefrecation of the waste at the point
of jre Deration where praccr&bla.
(B) A requirement for placement of the waste us oonLainers
that will protect wast* handlers and tha public from expos ur».
"(C) A requirement for appropriate Labeling of containers of
the waste.
"(b) Small QuAirrrncs.—In the program under subsection fa), the
Administrator may establish an exemption for generators of smull
cu&natias of medial waata listed under aactiuo 11002, except that
die Administrator may not exempt from tha program any person
who, or tacilify that, generates 50 pounds or more of such wast* in
an? calendar month.
(cJ Om-Sitx ImctvuaXOM—Concurrently with the promulgation
of regulations under subsection («), the Administrator shall promul-
gate a recordkacping and reporting requirement far any generator
in a demonstration state of medical waste Lifted in section 11002
that (1) incinerates medical waste lis lad in section 11002 on site and
(2) doss not track such waste under tha regulations uromuigated
under subsection :«i Such requirement shall require tb» generator
to report to the Ad-ninistrator on tha volume and types of ¦^'^l
wast* listed Tn section 11002 that the generator incinerated on srU
during the 6 months following the affsenve date of lha requirements
of this subsection.
"ri or Mtdicjo. Waftt akb Ty*m or GawnuTOii.—For
each of tha requirements of the section, tha raeulafcons may *a*7
for different typaa of medical waste and for different types of
madira! wane generator*.
TXC 11004. INSPECTIONS.
"(a) SxQViasKSNTs rat AoceaB.—For purpoe* of developing or
assisting in the development of any resmotion or report irmW"±it
subtitle or enforcing any provision 
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K.P. 2515—I
"ti; enter at r»ajon«b,e l:ca am w.ab:i*Karni or 5thar
placa where medicaJ w«wi are or have bee" i»oaratec. stored,
trrawci. disposed of. ar tranrpor^ed from;
"\2\ oonduct momioritis err ¦*srjng, and
"(3 • inspect and obtain *rr.p:es from any person of my such
Mtxg and samples of icy coctainen or labeling for *uch.
VMM.
'Yb) FhtDcmLrnxs—Each inrpecnon under thli taction (kaJ) be
OOmrr>TOC*d and completed wnV. rr&sonable promptaeea If tbe orFi-
Oar, err.pioyec. or representac-re obtains uny sample*, prior to leav-
ing the premise* he •hail pv» ta the owoar, operator, or agent is
chargs a receipt describing the (ample obtained and, if ra^ueBtec. a
portion of each such lampie «qual in volume or wnant to trte
portion retained if airing tuch an equal portion if feasible. If any
aiLaiyci is mod* of men samples. a copy of tbe raeulta of such
an&iyaii shall be ftintished promptly to tha owner, operator, or
agent in charge of the premise* eonoerned
"(cl AvAXLiaruTr to Pltkjc —Tbe provisions of ¦action 3007(b) of
this Act shall apply to records, reporu. and information obuinad
trader thu section in the na< manner and to the same extent as
Much provision* apply to record*, reports, and information obtained
under section 3007.
-sbc next emncixxm.
"(a) Coktuamcs OlSBKS-—
"(1) VioukTitwa.—Whenever on the basis of any information
the Administrator datarrrunes that any penoc has rjoLatad, or
is in violation of, any requirement or prohibition In affect unier
thif subtitle (including any requirement or prohibition in affect
under regit! arinnf under this subtitle) (AJ the Administrator
may iaane an order fi) imemmg a civil penalty for any past or
current violation, Cil) requiring oompli&nce immediately or
within a ipecified time period. or (iii) both, or (Bl the Adtmnia-
trntor may commaDce a civil acson in tha United Statee district
court in tha district in wrjch the violation ooc-.m-oc for appro-
priate relief. Including a temporary or permanent injunction.
Any order issued pursuant to this robs action ihall Mate with
reasonable specificity the	of the violation.
"(2) Oum xansaiNC	Any peoaltv iniuwd in
an order under this *ub«ecjc- »hail not aicewi $2S.OOO per
of nonsMnpliaase far esc- -.-^Liuon of a r*qu_-raen: or prohibi-
tion in effect andar tha	In emu unnc tuch a penalty,
tbe Administrator shaU -jh --to account -Se senous&ee* of tbe
violation and any food afona to oomply with applicable
reouirementa.
(3; Pubuc riajunc.^Any order Issued under this subjection
ahal! become final unless, not later than SO dayi aftar jwuanoe
of tha order, tha person* oa=:ed therein request I public hear*
inf. Upon »uch request :h» Aiimmistrator ihal! promptly con-
duct a pub Ik htanng. Lc. aonr^ctUB with any praceading uixier
thif section, tha Aaraiimrtttar may issue *ibpoenaf for tha
production of relevant papers, books, and documents, and may
promulgate rules for discovery procedures.
"(4) Violation or comt-uajtci oacExs—In the ease of ao
order ondar this subsection requiring compliance with any
requirement of or rtftiiaaoc under th!i subtitle. if a violator
fails to take oarreetive acsoc within the time specified In an
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1r :c
H.R.3SIS—6
order. the Administrator may mim ¦ evil penalty c* not more
than 425.000 for each day on" continued noncympiianre with the
order
"(b) Cemin al Ptn ait:zs — Any person who—
'TJ Kioarnciy violates the requirements of or regulations
uader furutl*.
"(23 knowingly omiti material information or make* any false
materiAi statement or r» presents lion in any label. r»ocn-d,
report, ar other document filed, maintained, or used for pur-
poses oi comphanne with this subtitle or regulations thereunder,
or
"(3; knowingly generates, stores. treats. transports, dispone*
of, or otaanmw handles any medical waste (whether such activ-
ity took place before or takes place after lh« date of the enact-
ment or'tiia paragraph) sod who knowingly destroys. ilten.
conceals. or fails to fill any record, report, or other document
required to be ruiintamed or filed for purposes of oompliance
with this subtitle or regulations thereunder
(hall, upon conviction. be subject to a fine of not mure than S50.000
for each day ot violation, or imprisonment not to exceed 2 yvars (.5
years in th« case of a violation of paragraph ill) If the conviction is
for a violation oommitted after a firs; oooviction of ncfa person
under this paragraph, the maximum pvinishtaefit under the respec-
tive paragraph shall be doubled with respect to both fine and
imprisonment.
'Vci Kmowtvg ENDA>ftrERMr\T—Any penon who knowingly rio-
latas any provision of subsection fb) who knows at that tine toat he
thereby places another person in imminent danger of death or
¦erious bodily injury, shall apart conviction be sublet to a fine ot not
mare that 1250,(XX) or iBipnaunment tor not more than 15 years, or
both. A defendant that J an organization shall, upon convicfcon
under thin subsection, be subject to a fine of doi more than
$1,000.1)00. The terms of this paragraph shall be interpreted in
accordance with the rules provided under section 3008(f) ot this Act.
";dl Crvii. Penaittm.—Any person who violates any requirement
of or regulation under tbx subtitle shall be liable to the United
Stacet for a c:\-.l penalty in an unonnt not to exceed J25.00G for seen
such violation. Each day of such violation shall, for purposes of this
section. consCEiM a separate violation	r
";«i Civil Pwalct Pouct —Civil penalties assessed by the United	*¦	w 5
States or by the States una*?- this lubtiUu shaft be mi rum1 is	/? 1 P.... Hn
acjordance with the Administrator's HCRA Cvil Faulty Policy', as -Voll^vj (-jy* _	.—(
such polics siav be amended rrvm nmo to tune.	-
-w.c :ios«.rtDitwLFAcarmx.
"(a) Ix Geonuu.—Each dapar-men!. agency, and rnstrumemalny
of the executive. legislative. and iudiciai brar.chss of the Federal
Government in a demonstration dutte (1! having Jurisdiction ever
any solid '*aate management facility or dispose. site at which
medical waste is disposed of or otherwise handled, or (Z; engaged in
any activity resulting, ar wnich may result, in the disposal, manage-
ment. or handling of ne**";' ^ute shall be subject to. and comply
•nth, all Federal. State, istamatr, and local requirement*. both
substantive and procedural '.including any requirement for permits
or reporting or any provisions for injunctive relief and sucn sanc-
tions as may be imposed by a co-jrt to enforce such relief), respecting
oontrol and abatement of mecical waste disposal and management
-1
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H.R.3515—6
in '.h* miti! manner, and to the same extent, a* any pmon a
subject to *ucH rrquirenrcntl. including the payment of rvaeanabie
n^ii» charee* The Federal. Stale, interstate, and local substantive
and procedural requirement! referred to in this subsection include,
bu: are riot limited to, all adfiuaiecrativ® order*. cmi, criminal, and
administrative penalties, and other aanctiono. including injunctive
relief. En an. ana imprisonment. Nwitber the United State*. nor any
agent, employee, rtr officer tnerttof, thai] be immune or eserapt £rom
any procflsa or vinctioc of any Stau or Federal court *nth respect to
the enforcement of any such order, penalty, or other sanction For
purpotaa of enforcing any such subsuntjve or procedural require-
ment including, but not limited to, any injunctive relief, adminis-
trative order, or civil, criminal, adrrinwtratrre penalty, or othor
sanction;. ajj&inat any such department, agency, or marnioeataJiiy.
the Umtad Stares hereby expressly waivee any immunity other»»o
applicable to the United State*. The President may exempt any
department. agency, or instrumentality in the encuave brancn
frott compliance with such a requirement if he determines it to be
is tie paramount interest of the United States to do to. No such
exemption shall be granted due to lock of appropriation unless tha
Preaidant ehaJl hove specifically requeetad tuch appropriation a* a
part of the budgetary process and the Congress thai aave failed to
make available such requested appropriation Any exemption shall
be for a ponud not in excess of one yeoi. but additional exemptions
may be granted for periods not to exceed on* year upon the rreai-
ctat's miking a rt#w determination Tba President shall report each
Jaruary to the Congress all ctooptiooe from the requirements of
this section grnnzod dunag tha preceding calendar year, together
with his reason for granting each euch euxoption
"(b) Definition n» Ptxscn—For parpoaaa of this Act. the t*rm
'person' Shall be treated w including each department, agency, and
instrumentality of the United States.
-SEC. HOST. RSLaTIO!«SKIPTO *TATT IJIW.
"ta; Statx Lncktionb awd ExroacixrNT. — A State may rrmduff
iniD«ctioiU under 11004 nd '-sue enforcement actioca under section
11005 agaiar any person, including any person whe ho* imported
medical waste into a State in violation of the requiramenta sC or
regulations under, this eubtitle. to the same extent as tha Adminis-
trator. At the ume a Stata initiates an enforcem rrr action nnrisr
section 11005 against any parson, the State shall notify tha AdmUus-
traBir in writing.
"fb) RnnmoN or 9tat« Au-moamr.—Nothing in this subtitle
shall—
"(11 preempt any State or local law; or
"(21 except as provided in subsection (c), otherwise affect any
Stale or local law or the authority of oaj State or local govern-
ment to adopt or enforcr any State or local law.
1c) 9tan Foem.—Any State or local lew which requires eub*ni>-
sion of a trading form from any person subject to thii aibtiUe shall
require that tha form be identical in content and format to the (ami
required under srctlnn 11003, except that a State may requiiw tha
submission of other tracking information which is supplemental to
ths information required on tha form required under section 11003
through additional sheets or such other meant as the State deems
appropriate.
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10''l9/3r
13: 56
Gf"lE -r.
'•C.

H.R. 3515-7
-8E(.. M«6» BEPORTTOCONr.SKSB
"rai Pinal Rikist —Net Later than 2 months after thf expiratam
of the demonstration prot^nrc. the Administrator aha!'. report to
Congress on the following topics:
"(1) The typea. number, and lis* of generators of ww^h^-i
watte (including small quantity cm(ratoni in the United
Scare*, thv r>7*i and imouutt of medics] waste lenersted, and
the on-site ana off-site method* currently u»ed to handle. Kara,
trampon. treat, and dispone of the medical waste, including the
extent to which each wute is disposed of in hw The preeent and potential rasa (A) to local economies,
persona, and tbe environment from the improper handling,
storage. transportation. treatment or divpoul of medical waata
and (B) to generators, transporters. and treatment, storage, and
rfiTprf1 Earil'tiea from regulations establishing requirements
for tracking. handling, storage, transportation, treatment, and
disposal of medical waste
*V4XA/ The success of the demonstration program established
under this subtitle in tracking medical wane.
'YB; changes in incineration and storage practices attrib-
utable to tha deoocJt ration program, and
•1C) othar available and potentially available methods for
tracking tnadical waata ana their advantages and cfcaadvaD-
tagea, mcludinj the advamagea and disadvantages of mending
tracking requirements to (i) rural areas and (ii) small quantity
generator*.
"Ifi) Available and potentially available methods for hanging,
storing, transporting, and disposing of medical waste and thalr
advantages and disadvantages.
"(61 Available and potentially available methods for treating
medical waste, including the methods of incineration, starilia-
tion, chemical treatment, and gnnrtlr.g. and their advantages,
including their ability to render medical waste noninfectious or
laas iniecaous. and anrecogmable and otherwise protect
human health and the ecvironmant, aod diaadvantagea
"XT) factor* affecting the effectiveness of the treatment meth-
ods identified in subaectioc (aX5), mrhiriing quaiitv oon&ol and
quality Muranss prwxdurae, maintenance procedure*, aad op-
erator training.
"(8) Existing Seat* and local controls on the handling, storage,
transportation, treatment, and diapoaal of medical waste,
including the enforcement and regMlaa»ry supervision thereof.
"OiTne appropriateaeae of ueing any mriston* State require-
ments or tha requirements oootaioed in subdue C a* nation-
wide requirements to monitor and aontrol medical wasta.
"(10) The appropriateness of the penalties provided in section
11006 for insuring oomphanoe with the requirements of this
subtitle. Including a review of tha level of penalties imposed
Under this subtitle.
"(11XA) The effect of excluding households and small quantity
generator* from any regulations governing tha handling, stor-
age, transportation, treatment, aad disposal of meriiral waata,
and
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ace
H. EL 3515—8
"3' potential guldsiine* for the handlir; »tor*g*., treatment,
and iif.pcvL oi axiical vasts by bouaehvia* and small quinary
gsneratori
"(12; Available and potentially available ooathodi for the
reuse or raduccion of the Toluma of mwii:a.l «utt generated.
"(b) Lvrxazx iRtroirs —The Administrator thai! submit two m-
cer-ir: raporu to Congress on ths topics listaa in subsection (el The
interim report! icall contain Lha information on *Jje topica available
to the AjdimUcrator at th* time of submission Oca interim report
ahall be dua 9 nxmths aftar enactment of thi* (ubutii and om shall
be due 12 monthi after the effective date oi regulations under this
•ub&tle
"tcl CoNn.iTA.TiON —In preparing the rapora under Uis section,
tha Adminiirator ahall ooosuh with appropriate State and Vocal
aganciea.
-Sic lltei HSALTH IMPACTS RKPOKT.
''Within 24 month# after tha enactmant of thii section, the
Admiraztrator of the Agency for Toxic Subscasses and Disease
Ragutry thrill pre part for Congreaa a raport or the haallh effects af
martiral wasta, including aach of the fallowing—
'11) A description of the potential for infection or injur? from
tha segregation, handling, storage, treatment, or disposal of
medical wastes.
"(2) An aatunata of the number of peopla injured or iaforiari
annually b* (harpa, and tha nature and esricuaness af thaee
iAjunaa or infertiona.
"(3) An estimate of the number of people infected annually by
other mean* related to wasee segregation. handling, storage,
treatment, or disposal, and tha nature and aariousneaa of those
infections.
"(4) For ri'Vaa— possibly spread by medica2 waste. inducing
Acquired Irrnune Deficiency Syndrome and hepatitis B, an
estimate of what percentage of the total number orcaaaa nation-
ally may be traceable to medical wastes.
-wc iitia Gr-Tnui. provisions.
"(al CoNBirLTATOTf.—(1) In promulgating regr;! trims under this
suhcitle, th® AxiT-iuLLirrator snail consult with tj» affected 3utas
and ma? consul: with other interested parties.
"(2) The Admi^mratar shall also conruit with the International
Joint Cofrmiwac to determine how to monitor tfae dlspr—I of
m—timi wsaie acjmacing from Canada.
"(b) Pltbuc Commbkt.—Iri the caae of the regalations imtuired by
Una subtitle to be promulgated within 9 moo thi after the enactment
of thu subtitle, ths Administrator may promulgate each regulations
in mterim final fan withou: prior opportunity for public oonuscnt,
but tb» Administrator thail providi an opportunity for public com-
ment on the interna final Tula. Tha promulgation of such regula-
tions shall not bs subject to tha Paperwork Redaction Act of 1980
"to RcLA-noNsai* to Susutli C—Nothing in this subtitle shall
aflact the authority of the Administrator to regulate merttcel waste.
Including cadical waste listac under section 11008, undar ajbtrtle C
of tins Act.
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one i-r'L'

H R. 3515-9
"SEC 11011 SrrSCTTTt I)ATT.
"The regulntiona promulgated under thi* aub'J'.l* shall tiiWa affirct
wr.hia 90 dayi nftcr promulgation. aoepr ttat. at the Cum of
promulgation, the Admmi>trau>r may prorida for • shorter period
prior to the cfToctive date if ha finds the regulated community does
no: nead 90 dayi to come into compliance.
"SEC 11HI. AUTnOKZATIOPHir AFPItOPRlATlONB.
"Thara are authorised to be appropriated to tha Administrator
ruih auma u may bo nacosary for each of the 0*c*J yean 1868
through 1991 for purpoaoa of carrying out acuvitiei undar thk
aubtitle.".
(b) Txai.t or Cowtikt* —The table of contend for th* Solid Waste
Disposal Act ia amended by inserting iha following after the items
r»iaang to aubtitle I.
"Suteltlt J—HcTOMtmioa U«*aal Wara Tr*cba( Prouam
"Sac llfiOL 
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rpRIVILEGED/CONFIDENTIAL/DO NOT RELEASE
As a followup to the conversation that we had during the January 27 Enforcement Lawyers call, please
read the entire message below. It contains new and important advice for all regulatory enforcement
programs concerning how to respond to legal arguments challenging EPA*s ability to enforce violations
that already have been resolved by a State.
Background: As you may recall, on August 25,1998, the U.S. District Court for the Western District of
Missouri issued an unfavorable ruling in Harmon Industries v. EPA, 19 F.Supp. 2d 988, concerning
EPA*s ability.to maintain a.RCRA enforcement actioo.that.had resultedjn a.$586,000.penalty by the
Environmental Appeals Board. In its Harmon Industries ruling, the court held that RCRA, its legislative
history, and the common law principle of res judicata preclude EPA from enforcing RCRA requirements
in an authorized State where a State judicial authority had approved a no-penalty settlement involving
the same violations that the State entered into 18 months after EPA had filed its complaint. Moreover,
the court stated that the only remedy EPA has in the case of a deficient State enforcement response is to
withdraw the State's RCRA authorization. On December 28,1998, the United States filed its appeal
brief in the U.S. Court of Appeals for the Eighth Circuit. The advice that we provide in this message ar
ises as a result of new legal arguments included in the Eighth Circuit brief that DOJ filed on EPA*s
behalf.
ORE*s Previous Advice: On October 23, 1998, I sent to you by electronic mail a copy of the final
versions of the district court briefs that DOJ filed in the Harmon Industries case. Even though EPA*s
position was not upheld by the district court, my October 23 message urged you, in the interest of helping
to ensure that our positions on these issues are consistent, to look in the first instance to our Harmon
district court briefs in determining what our position is and how to react when these issues arise under
any statutory program. At the same time, I noted our longstanding view that there inevitably are case-
specific considerations that will be necessary to consider (e.g., the law concerning res judicata and
collateral estoppel varies amongst the States), and we asked that you continue to consult with Christine
McCulloch of ORE'S RCRA Enforcement Division (202-564-4008) and myself (202-564-4002) as soon as
these arguments are raised in enforcement matters under any statute, to allow us to work in close
consultation with OGC on coordinating a consistent and effective national response to these arguments.
We appreciate your bringing these issues to our attention, and ask that you continue to do so.
ORE*s Revised Advice: The attached Eighth Circuit brief contains many of the same basic arguments
that we made below (i.e., the statute allows federal enforcement where a State has acted, State
authorization alone does not create privity, and res judicata does not bar EPA*s action under the tacts of
this case). Although these arguments remain valid (and strong in our view), the Eighth Circuit brief adds
an important new argument to our arsenal. In light of this new argument (which is summarized below),
the primary purpose of this message is to urge that you not use the Harmon Industries district court briefs
that we previously sent to you, when responding to arguments that res judicata bars EPA*s ability to
enforce violations resolved by a State. Instead, we urge you to look to the attached brief filed by DOJ on
December 28,1998, in the U.S. Court of Appeals for the Eighth Circuit, when facing such arguments.
(Note: the statute of limitations and continuing violations issues are not addressed in DOJ*s
12/28/98 Eighth Circuit brief, thus making our district court briefs on those issues still relevant and
useful.) Summarized below are the new legal arguments that form the basis for our revised advice:
(1) The most significant new argument in the Eighth Circuit brief is that the district court's holding, that a
State court judgment was binding against the United States, violates principles of sovereign immunity.
The argument begins with a discussion of the federal Full Faith and Credit Act (FFCA), 28 U.S.C. §
1738, which provides that the judicial proceedings of any court of any State: 'shall have the same full
faith and credit in every court within the United States and its Territories and Possessions as they have
by law or usage in the courts of such State, Territory or Possession from which they are taken.* The
brief argues that the FFCA does not require federal courts to apply state common law concerning
preclusion (res judicata here, perhaps collateral estoppel in other cases) when determining whether the
federal government is bound by a State*s concluded enforcement action.
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Although the attached Eighth Circuit brief acknowledges (at page 42) that the principles embodied in the
FFCA control the preclusive effect of a State court judgment as between Harmon and the State, the brief
argues that the FFCA does not mandate the preclusive effect of a State court judgment as between
Harmon and the federal government. In support of this argument, the brief states that the FFCA *does
not somehow enlarge a state court's jurisdiction and permit a state court to enter judgments against the
United States when it is immune to suit in a state forum.* (See p. 42.) The brief then goes on to assert
that the full faith and credit requirements *do not apply where the rendering forum lacks jurisdiction over
either the subject matter or the parties.* (See page 43.)
The brief then expands upon why that the State has no such jurisdiction in cases such as this. Here, the
United States was not a party to the State court proceeding in which Missouri and Harmon entered into a
consent decree. Moreover, the United States could not have been made a party to the State court
proceeding, and thus a State court cannot exercise its jurisdiction to bind the federal government, in the
absence of a clear waiver of sovereign immunity. Because the federal government did not waive
sovereign immunity in this case, the brief argues that there is no basis upon which to depart from the
well-established rule that the United States cannot be bound by a judgment to which it was not a party.
To better understand this sovereign immunity argument, note the following quoted passage from page 44
of the attached brief filed by DOJ on 12/28/98:
*lf the state court would have no jurisdiction to bind the federal government to a judgment in a suit that
actually names the federal government as a party, the court cannot a fortiori, acquire jurisdiction to bind
the government in a suit where the government is not a party, and where there has been no waiver of
sovereign immunity. Put another way, the state court cannot do indirectly what it cannot do directly.*
[Emphasis added.]
Note also that despite our not having raised this argument in the district court, our Eighth Circuit brief
asserts that this argument was not waived because it goes to the subject matter jurisdiction of the courts,
and is not a matter of personal jurisdiction over the parties (which can be waived if not timely raised).
Although the net result of these new arguments may be to suggest that you need not do an analysis of
State law concerning res judicata or collateral estoppel in cases raising similar issues, we urge you to
continue to do that analysis as part of an alternative, or backup, legal argument. As in the attached
Eighth Circuit brief, you should argue that even if such an analysis of State law were to apply, it does not
bar EPA*s action for x reason (e.g., a lack of privity where the State*s and EPA*s interests are
divergent). Once this case is resolved, we will have a better handle on whether such backup arguments
are still needed, but note that this could be quite awhile given the need to complete briefing, get a ruling
in the Eighth Circuit, and await the conclusion of any followup litigation. Given that the significant
federalism concerns raised by this case appear to extend beyond environmental law practice, this case
ultimately may end up in the U.S. Supreme Court.
(2) Because the district court*s decision explicitly referenced the State/EPA MOU in support of its
finding that EPA and the State were in privity, we worked with OGC and DOJ on drafting the Eighth
Circuit brief so as to describe very precisely the nature of the federal/State relationship under RCRA. In
particular, we refrained from describing or characterizing the relationship as one of 'delegation* because
that may imply, or at least open the door to an argument or misconception, that the State can act on
EPA*s behalf (which, of course, could present problems where a State*s enforcement response is
inadequate). Instead, we wanted the brief to reflect that a State acts under its own legal authority, and
that if we take an independent federal enforcement action, we act pursuant to our own enforcement
authority (i.e., we are dual sovereigns), even if the substantive regulatory requirements that we cite to
may be contained in State regulations or codes that have become part of the federally authorized prog
ram. The advice from us here is that you should use whatever statutory terms-of-art that are appropriate
in your cases ('authorization* under RCRA, and *approval* or *primacy* as applicable under the other
statutes) and be careful not to casually throw around the term *delegation* where it is not accurate and
appropriate.
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Please contact me at 202-564-4002 if you have any questions or comments, and stay tuned for further
developments, if any. (E.g., Harmon's brief in response was filed yesterday and we may forward our
reply brief to you if it raises any new arguments of significance.) Thanks.
Attachment (12/28/98 brief filed by DOJ in Eighth Circuit)
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enforcement
No. 98-3775 CONFIDENTIAL
IN THE UNITED STATES COURT OF APPEALS
FOR THE EIGHTH CIRCUIT
HARMON INDUSTRIES, INC.
Plaintiff-Appellee
v.
CAROL M: BROWNER, Administrator of the U.S. Environmental Protection
Agency,
UNITED STATES OF AMERICA, and UNITED STATES ENVIRONMENTAL
PROTECTION AGENCY,
Defendants-Appellants.
ON APPEAL FROM THE UNITED STATES
DISTRICT COURT FOR THE WESTERN DISTRICT OF MISSOURI
BRIEF FOR FEDERAL APPELLANTS
LOIS J. SCHIFFER
Assistant Attorney General
Environment & Natural Resources Div.
OF COUNSEL:
BELINDA L. HOLMES	ERIC G. HOSTETLER
Senior Assistant Regional Counsel DAVID SHILTON
U.S. Environmental Protection ROBERT H. OAKLEY
Agency ~ Region VII
726 Minnesota Avenue	Attorneys, U.S. Department of Justice
Kansas City, Kansas 66101	P.O. Box 23795, Washington, D.C. 20026
(202)514-4081
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SUMMARY OF THE CASE AND
REQUEST FOR ORAL ARGUMENT
Section 3006 of the Resource Conservation and Recovery Act ("RCRA"), 42
U.S.C. § 6926, permits EPA to authorize a State to assume responsibility for
implementation of a state hazardous waste program in lieu of the federal hazardous
waste program. EPA has granted such authority to Missouri. Section 3008 of
RCRA, however, preserves EPA's authority to bring an enforcement action against
a violator of such authorized requirements. In this case, EPA brought an
administrative action against Harmon Industries, Inc. ("Harmon") for violations of
RCRA requirements. Specifically, Harmon disposed of spent solvents, which are
classified as hazardous wastes under RCRA, by dumping them on the ground.
Eighteen months later, Missouri filed its own action in State court against Harmon
for these violations, and on the same day entered a consent decree that did not
provide for any civil penalty. EPA continued its administrative action to ensure that
Harmon would pay an appropriate civil penalty for allowing the violations to
continue through 1987, and to deter Harmon and other potential violators from
taking a lax attitude towards compliance with RCRA. EPA's action resulted in the
assessment of a civil penalty of $586,716.00.
Harmon filed this lawsuit on June 6, 1997, seeking judicial review under the
Administrative Procedure Act of the March 24, 1997, final order of the
Environmental Appeals Board of the United States Environmental Protection
Agency assessing the civil penalty.
The district court entered summary judgment for Harmon, holding that RCRA
prohibited EPA from maintaining its administrative enforcement action after Harmon
settled with Missouri. Additionally, the court agreed with Harmon that its
settlement with Missouri was res judicata as to any claims EPA had against
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Harmon. The federal defendants have appealed from the judgment.
The federal defendants-appellants believe that oral argument would assist the
Court in the resolution of this appeal, and request thirty minutes.
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IN THE UNITED STATES COURT OF APPEALS
FOR THE EIGHTH CIRCUIT
No. 98-3775
HARMON INDUSTRIES, INC.
Appellee,
v.
CAROL M. BROWNER, et al.,
Appellants.
BRIEF FOR APPELLANTS
PRELIMINARY STATEMENT
The memorandum opinion of the district court (Honorable Ortrie D. Smith)
granting Harmon summaiy judgment on its complaint to overturn the assessment of
an administrative civil penalty by EPA is reported at 19 F. Supp. 2d 988 (W.D. Mo.
1998) and is attached hereto in the Addendum. The decision of the Environmental
Protection Agency's Environmental Appeals Board appears at Volume 1, pages
48-120 of the Joint Appendix ("JA"). The decision of the Administrative Law Judge
appears at pages Vol. 1, pages 121-90 of the JA.
The jurisdiction of the district court rested on 28 U.S.C. § 1331. Final
Judgment was entered on August 25, 1998. JA. Vol. 6, 1450. The judgment
disposed of all claims with respect to all parties. The notice of appeal (JA Vol 6,
1451) was filed on October 22, 1998, and is thus timely under Fed. R. App. Pr.
4(a)(1). This Court's jurisdiction is based on 28 U.S.C. § 1291.
STATEMENT OF THE ISSUES
Section 3008(a)(2) of RCRA, 42 U.S.C. § 6928(a)(2), provides that EPA,
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after notifying an authorized state such as Missouri, may bring an administrative
enforcement action for civil penalties and injunctive relief against a violator of
RCRA requirements in an authorized State. The issues raised in this case are:
1.	Whether the State could disable EPA from maintaining an action under
Section 3008(a)(2) by subsequently filing its own action regarding the same conduct
and entering into a consent decree that provides limited, and in EPA's view,
inadequate, relief?
Most apposite cases and statutes: 42 U.S.C. § 6928; Chevron U.S.A.. Inc. v.
Natural Resources Defense Council. Inc.. 467 U.S. 837 (1984); Champion v.
Shalala. 33 F.3d 963, 966 (8th Cir. 1994); In Re Graven. 936 F.2d 378, 385-386 (8th
Cir. 1991); and United States v. Jones. 811 F.2d444, 447 (8th Cir. 1987).
2.	Whether EPA's administrative enforcement action against Harmon became
barred by res judicata as a result of the entry of state court settlement between
Harmon and Missouri, where the United States was not a party to that proceeding,
where there has been no waiver of sovereign immunity that would have allowed the
United States to become a party, and where the interests of the United States were
divergent from those of Missouri?
Most apposite cases: United States v. United States Fidelity & Guaranty Co..
309 U.S. 506 (1940); Aminoil U.S.A. v. California State Water Resources Control
Board. 674 F.2d 1227, 1237 (9th Cir. 1982); Seibert v. Citv of Columbia. 461
S.W.2d 808 (Mo. en banc 1971); and Drainage District No. 1 Reformed v.
Matthews. 234 S.W.2d 567, 574 (Mo. 1950).
STATEMENT OF THE CASE
A. Statutory Background. ~ Congress enacted RCRA in 1976 to address
increasingly serious environmental and health dangers arising from the generation,
management, and disposal of waste. Congress's overriding concern was "the effect
on the population and the environment of the disposal of discarded hazardous wastes
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— those which by virtue of their composition or longevity are harmful, toxic, or
lethal" and "present a clear danger to the health and safety of the population and to
the quality of the environment." H.R. Rep. No. 94-1491 at 3, 11 (1976), reprinted in
1976 U.S.C.C.A.N. 6238, 6241. Subtitle C of RCRA, 42 U.S.C. §§ 6921-3939e,
provides nationwide protection against the dangers of improper hazardous waste
disposal and establishes a '"cradle to grave' regulatory structure overseeing the safe
treatment, storage and disposal of hazardous waste." United Technologies Corp. v.
EPA. 821 F.2d 714, 716 (D.C. Cir. 1987).
To meet this goal, RCRA directed EPA to establish a comprehensive national
regulatory program for hazardous waste management. Some of the key
programmatic elements of this national program are as follows. First, EPA is
required to identify hazardous wastes under Section 3001 of RCRA, 42 U.S.C. §
6921 (see 40 C.F.R. Part 261), which in turn triggers notification requirements for
facilities engaged in hazardous waste activity, RCRA §3010, 42 U.S.C.§6930.
Next, generators are obligated to comply with management standards promulgated
by EPA pursuant to Section 3002 of RCRA, 42 U.S.C. § 6922 (see 40 C.F.R. Part
262). Owners and operators of hazardous waste treatment, storage, and disposal
facilities ("TSD facilities") must comply with standards promulgated by EPA
pursuant to Section 3004 of RCRA, 42 U.S.C. § 6924 (see 40 C.F.R. Parts
264-265), and obtain permits pursuant to Section 3005 of RCRA, 42 U.S.C. § 6925
(see 40 C.F.R. Part 270 and §§ 271.13 and 274.14). Among other requirements,
owners and operators of TSD facilities must (1) operate a monitoring system capable
of determining any impact on groundwater quality (see 40 C.F.R. Part 265, Subpart
F), (2) establish and maintain a financial assurance mechanism to ensure that the
funds needed to implement safe closure are available (see 40 C.F.R. Part 265
Subpart H), and (3) obtain liability insurance for coverage for claims arising out of
hazardous waste management operations (see 40 C.F.R. Part 265, Subpart H).
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RCRA further provides that EPA may authorize a state to implement a
hazardous waste program to operate "in lieu of' the federal regulatory program
outlined above. Section 3006(b) of RCRA, 42 U.S.C. § 6926(b). To receive
authorization, a state regulatory program must be equivalent to and consistent with
the federal program, and must provide for adequate enforcement of RCRA
requirements. Id- and 40 C.F.R. Part 271. When a State is authorized to administer
a hazardous waste program, State regulations become the body of regulations with
which a facility must comply.
In authorizing a state regulatory program under Section 3006(b) of RCRA,
EPA authorizes state regulations, which are promulgated and enforceable under state
law prior to authorization. Although States are free to adopt regulations more
stringent than those of the Federal Government, States often adopt the federal
regulations in their entirety, as did Missouri for the violations at issue. EPA's
authorization of these programs accomplishes two principal goals: (1) the authorized
state regulations replace the analogous federal regulations within the state, so that
regulated entities need no longer comply with both the state and the federal
requirements (see RCRA Section 3006(b), providing that authorized state program
operates "in lieu of' the federal program); and (2) the state's authorized regulations
become federally enforceable (see RCRA Section 3008(a)(2), providing that
violations of state authorized programs requirements are enforceable as violations of
RCRA subtitle C). EPA, in authorizing a state program, does not create the program
requirements or delegate authority to the state to implement the federal regulations in
the state. Accordingly, an authorized state implements its own regulatory program,
and is thus not a delegatee or agent of EPA or the United States.
It has long been a Federal goal and EPA policy to encourage and support State
administration of the RCRA hazardous waste management program. See RCRA §
1003(a)(7), 42 U.S.C. § 6902(a)(7). At the same time, RCRA directs EPA to ensure
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that hazardous wastes are managed nationally in a responsible manner. See RCRA §
1003(b), 42 U.S.C. § 6902(b). Recognizing both the state interest in program
administration and the national interest in consistent and effective implementation of
the RCRA program, RCRA provides for independent state and federal authority in
authorized states. Thus, while States are encouraged to assume program
administration responsibility under RCRA, EPA has oversight responsibilities
concerning the activities regulated under State programs.1/ EPA also has
independent authority to take direct enforcement action against a violator of RCRA
requirements in a State with an authorized hazardous waste program ("authorized
State"), so long as it informs the State before taking action. Section 3008 of RCRA,
42 U.S.C. § 6928. In accordance with section 3008, EPA may bring an enforcement
action when an authorized State fails to obtain adequate injunctive relief or penalties.
See 40 C.F.R. § 271.16(c) (note).
Pursuant to subsection 3006(b) of RCRA, 42 U.S.C. § 6926(b), EPA granted
the State of Missouri final authorization in 1985 to administer and enforce a
hazardous waste program in that State. In authorizing Missouri's hazardous waste
program, EPA reiterated that it has independent enforcement authority under RCRA
section 3008. See 40 C.F.R. § 272.1300(c) ("EPA retains the authority to exercise
its enforcement authorities under sectio[n] * * * 3008 of RCRA"). Further, in 1988,
the State and EPA executed an agreement governing coordination of the RCRA
program in Missouri that expressly affirmed EPA's authority to take enforcement
¦V For example, EPA has authority under subsections 3005(d) and 3008(a)(3),
42 U.S.C. §§ 6925(d) and 6928(a)(3) to revoke a State-issued permit if the permittee
fails to comply with RCRA standards, and EPA has authority under subsection
3006(c), 42 U.S.C. § 6926 to withdraw State program authorization if the State is not
administering its program in accordance with RCRA.
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action notwithstanding action by Missouri:
EPA retains its responsibility to ensure full and faithful execution of the
requirements of RCRA, including direct implementation of the HSWA [the
Hazardous and Solid Waste Amendments to RCRA] and of the full RCRA
program in the event the state is unable to act as a result of not having
adequate enforcement capability or authorization status or in the event EPA
exercises its enforcement authority to override state action.
Memorandum of Agreement between the State of Missouri and the United States
Environmental Protection Agency, Region VII at §11, HI (emphasis added), JA Vol.
5, p. 1229 .
B. Factual background. ~ Harmon Industries, Inc., successor in interest to
Harmon Electronics, Inc. ("Harmon"), assembles and manufactures electronic
equipment for the railroad industry at its Grain Valley, Missouri facility. JA Vol. 1,
p. 6 . From the time Harmon began operations at its Grain Valley facility in 1973
until the end of 1987, its employees used several types of solvents, including
1,1,1-trichloroethane (TCA), freon, trichloroethylene (TCE), toluene, xylene and
methylene chloride, to clean circuit boards as part of the manufacturing process. In
re Harmon Electronics. Inc.. RCRA (3008) Appeal No. 94-4 (EAB March 24, 1997),
at JA Vol. 1, p. 53 . All of these substances when discarded are classified as
hazardous wastes under RCRA. Id. These substances can have a harmful effect on
human health either through inhalation of vapors, contact with skin, eating
contaminated fish and/or drinking contaminated water. JA Vol. 1, p. 129. During
1973-1987, Harmon employees disposed of spent solvents at the Grain Valley
facility by pouring them onto the ground at its facility. 19 F. Supp. 2d at 991. Spent
solvents were poured onto the ground from three to five gallon pails every two to
three weeks. Harmon's Vice President for Human Resources and Safety estimated
that approximately 3,375 gallons of hazardous waste were disposed of in this
manner. JA Vol. 4, p. 958.
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In November of 1987, seven years after RCRA established standards that
effectively prohibited this type of disposal of hazardous wastes, Harmon's
management became aware of this practice and ordered it stopped. 19 F. Supp. 2d at
991. In December of 1987, Harmon changed its assembly process so that a
nonhazardous cleaning material was used to clean the circuit boards, and thereafter it
no longer generated spent solvents as hazardous wastes. M- In June 1988, after an
MDNR inspection at another nearby Harmon facility, Harmon told the Missouri
Department of Natural Resources ("MDNR") of its years of improper disposal of
hazardous substances at its Grain Valley facility. Id.
In December 1987, Harmon also began an investigation into the environmental
effects of its illegal disposal practices. This investigation found that soil and
groundwater at Harmon's Grain Valley facility were contaminated by hazardous
wastes. JA Vol. 1, pp. 127-30, 133-34. Harmon's Phase I Report, submitted in June
1988, contained a summary of the limited investigation that had been performed prior
to that date. While the full extent of contamination was still unknown, this Report
showed that there was soil contamination in the area of disposal. TCA and toluene
exceeded acceptable levels for ingestion of contaminated water and/or aquatic
animals. JA Vol. l,pp. 127-30.
Harmon's Phase II Report submitted in September 1989 showed that
hazardous solvents were in the groundwater beneath the facility as found in Phase I's
soil test. The groundwater analysis found solvents in all three monitoring wells.
Vol. 1, pp. 133-34. Harmon's Phase III Report submitted in July 1992 additionally
showed that environmental harm had occurred. JA Vol., pp. 1056-61.
When Harmon had disclosed its violations to MDNR in June 1988, it told
MDNR it wanted to reach a settlement concerning how to close the area in which the
illegal disposals had occurred. Nevertheless, years passed without any agreement
being reached. Much of this difficulty arose because Harmon insisted that it should
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be allowed to close the illegal disposal facility as an "Abandoned or Uncontrolled
site" under the minimal standards of Missouri Rev. Stat. §§ 260.435-.480, instead of
under the more rigorous state Hazardous Waste Management statute contained in
Missouri Rev. Stat. §§ 260.350-.430. Harmon argued that it was entitled to comply
under the less rigorous statute as a reward (in addition to paying no civil penalties)
for self-reporting its prior violations. JA Vol 4, pp. 1000-28. When MDNR told
Harmon in a letter dated May 16, 1990 that it must comply with the Missouri
hazardous waste law and RCRA requirements or face a civil enforcement action (JA
Vol. 4, pp. 996-98), Harmon filed a petition with the Missouri Hazardous Waste
Management Commission challenging MDNR's position. JA Vol. 3, p 674.
Harmon's petition became moot when MDNR subsequently stated in a letter dated
December 17, 1990, that its earlier letter insisting on a closure that would meet
RCRA standards was not a formal agency order. Id.
C. EPA's Administrative Enforcement Action. — In 1988, MDNR told
EPA Region VII (the Regional Office of EPA with responsibility for matters arising
in Missouri, Kansas, Nebraska, and Iowa) of Harmon's violations. EPA Region VII
considered Harmon's violations to be serious. In a letter dated May 29, 1990, EPA
told MDNR that it considered the violations at the Harmon facility to be high priority "
class I" violations pursuant to EPA's Enforcement Response Policy, and urged
MDNR to initiate an enforcement action against Harmon within 30 days that
included the assessment of monetary penalties. Addendum, p 1. When no action
was taken, EPA sent a second letter on October 15, 1990, stating that if MDNR did
not begin an enforcement action within 30 days, EPA would bring its own
enforcement action. Addendum, p 3. Additionally, in 1990 and 1991, MDNR
informed EPA Region VII that it was having difficulty getting Harmon to bring its
facility into compliance with RCRA standards. JA Vol. 4, pp. 835, 839-40.
In light of MDNR's inability to reach a settlement with Harmon and its
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reluctance to bring an enforcement action, on September 30, 1991, EPA filed an
administrative Complaint, Compliance Order and Notice of Opportunity for Hearing
("Complaint") pursuant to subsection 3008(a) of RCRA, 42 U.S.C. § 6928(a),
against Harmon. JA Vol. 5, pp 1105-30. The Complaint alleged that Harmon had
operated a hazardous waste disposal facility without a permit and without having
obtained interim status in violation of Section 3005 of RCRA, 42 U.S.C. § 6925
(Count I); that Harmon had failed to have an adequate groundwater monitoring
program in place while operating its disposal facility in violation of 40 C.F.R. Part
265, Subpart F (Count II); that Harmon had failed to establish and maintain financial
assurances for closure and post closure care of the facility in violation of 40 C.F.R.
Part 265, Subpart H (Count III); and that Harmon had failed to notify EPA that it was
a generator of hazardous waste in violation of Section 3010(a) of RCRA, 42 U.S.C.
§ 6930(a) (Count IV).2/ The Complaint was later amended to revise the penalty
calculation and to cure a pleading defect. JA Vol 1, pp56-59. The First Amended
Complaint sought to compel Harmon to close the disposal area in accordance with
RCRA, to obtain financial assurance for closure and post-closure, to obtain insurance
coverage, and to develop and implement a ground water monitoring plan. Id. The
First Amended Complaint also sought $2,343,706 in civil penalties. Id.
On March 5, 1993, eighteen months after EPA filed its administrative
complaint, the State of Missouri, on behalf of MDNR, simultaneously filed a petition
against Harmon and entered a consent decree with Harmon in Missouri Circuit Court
concerning the same conduct addressed by EPA's administrative complaint. The
y As noted in the Administrative Complaint, Missouri incorporated the federal
regulations by reference. 10 C.S.R. § 25-7.265(1). This is why the Administrative
Complaint refers to the Code of Federal Regulations, and not to Missouri regulations.
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petition alleged violations of the Missouri Hazardous Waste Management Act, §§
206.350 RSMo el seq. The decree required Harmon to perform certain remediation
activities pursuant to the Missouri statute and its regulations, but did not assess any
civil monetary penalty. 19 F. Supp. 2d at 991-92. Although EPA was aware that the
State was negotiating a consent decree addressing closure of the disposal area, it did
not approve the decision not to include a civil penalty in the settlement. Thus, before
entry of the decree, Missouri warned Harmon in a letter that "any issue as to a civil
penalty is between Harmon and the United States Environmental Protection Agency."
Addendum p. 4.
Although EPA concluded that the state court settlement between Harmon and
MDNR sufficiently addressed closure and post-closure issues raised by EPA's
administrative complaint, EPA continued its enforcement action to ensure that
Harmon paid an appropriate civil penalty for its violations and obtained financial
assurance. On August 17,1993, the Administrative Law Judge ("ALJ") issued an
order in the EPA proceeding finding Harmon liable for the violations alleged in
Counts I, II, part of Count III, and Count IV of EPA's Complaint, and granting
EPA's motion to strike Harmon's affirmative defenses. JA Vol 1pp. 57-58. An
evidentiary hearing was held January 12-14, 1994, to determine the appropriateness
of the $2,343,706 proposed penalty sought by EPA Region VII. Id. On December
15, 1994, the ALJ issued his Initial Decision, in which he substantially reduced the
proposed penalty to the amount of $586,716. Id.
Harmon filed an appeal of the ALJ's decision to EPA's three-judge
Environmental Appeals Board ("EAB"). EAB Decision at 10. On March 24, 1997,
the EAB issued a 71 page Final Order unanimously affirming the ALJ's Initial
Decision and assessing a $586,716 penalty against Harmon. JA Vol. 1, pp. 118-19.
D. The District Court Opinion ~ On March 24, 1997, Harmon filed an
action in the United States District Court for the Western District of Missouri
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challenging EPA's administrative enforcement action. After the district court held
that review would be limited to the Administrative Record, Harmon moved for
summary judgment, arguing that (1) because Missouri was authorized by 42 U.S.C.
6926 to administer and enforce a hazardous waste regulatory program, EPA's
administrative enforcement action became barred by the subsequent settlement
between Harmon and Missouri for the same violations; (2) the state settlement was
res judicata as to any claims EPA might have; (3) EPA's claims were barred by the
statute of limitations; and (4) even if EPA had authority to bring its administrative
enforcement action, the penalty amount was arbitrary, capricious, an abuse of
discretion, and lacked a sufficient evidentiary basis. 19 F. Supp. 2d at 993. EPA
cross-moved for summary judgment, asserting that it had the authority to bring its
administrative enforcement action, and that the penalty imposed was supported by
the Administrative Record.
The district court granted Harmon's motion. Addressing Harmon's statutory
argument first, the court found that Section 3006(b) of RCRA, 42 U.S.C. § 6926(b),"
provides that MDNR operates 'in lieu of or instead of the federal program." 19 F.
Supp. 2d at 995. The court stated the "concept of co-existing enforcement powers is
inconsistent with EPA's delegation of authority and the legislative history." Id. The
court also found support for its position in Section 3006(d) of RCRA, 42 U.S.C.
6926(d), which states as follows:
(d) Effect of State Permit
Any action taken by a State under a hazardous waste program
authorized under this section shall have the same force and effect as action
taken by the Administrator under this subchapter.
According to the district court, this language meant that "[a]ny action by a state shall
have the same binding effect as if the action was taken by the EPA." 19 F. Supp. 2d
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at 996.
The court next concluded that provisions of the Memorandum of Agreement
Between the State of Missouri and the United States Environmental Protection
Agency ("MOA") also provided that state settlements would be binding on EPA.
The court noted that the MOA provided that Missouri assumed "primary
responsibility" for implementing the authorized RCRA program. 19 F. Supp. 2d at
997. The court concluded that if EPA believed that a settlement by an authorized
State was inadequate, EPA's only recourse would be to withdraw authorization of
the state program under Section 3006(e) of RCRA, 42 U.S.C. § 6926(e). Id-
Alternatively, the district court held that the settlement between MDNR and
Harmon barred EPA's enforcement action under principles of res judicata. Applying
Missouri law, the court found that EPA was in privity with MDNR because the
interests MDNR was representing were "nearly identical" to those of EPA. 19 F.
Supp. 2d at 997-98. The court rejected as "puzzling" EPA's assertion that it had
separate interests from Missouri, even though, prior to the state settlement, EPA had
filed its own administrative enforcement action seeking substantial penalties not
included in the settlement.
Although the court's ruling made it unnecessary to reach the remaining issues
raised by Harmon, the court decided them anyway:
Anticipating that Defendants will appeal this Court's decision, and
acknowledging that the Eighth Circuit may be of a different opinion, ruling
[on] the final two issues may avoid revisiting those issues at a later date.
19 F. Supp. 2d at 1000 n. 15.
Harmon had asserted that EPA's administrative enforcement action was barred
by the five year statute of limitations contained in 28 U.S.C. § 2462 because EPA
could have first sued Harmon in 1980 and 1982 when the particular RCRA
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regulations at issue here became effective, but did not file its administrative
complaint until 1991. 19 F. Supp. 2d at 998. The court accepted EPA's argument
that Harmon's violations were continuing, and that the statute of limitations ran from
the date of the most recent violation. 19 F. Supp. 2d at 998-99. Since Harmon did
not stop its illegal disposal of spent solvents until 1987, that meant that EPA's action
was timely brought, and the court held that EPA was entitled to summary judgment
on this issue. Id-
Finally, the district court concluded that EPA's assessment of $586,718 as a
civil penalty was not arbitrary, capricious, an abuse of discretion, or unsupported by
substantial evidence in the record. The court reviewed the contentions of the parties
on this issue, and without comment held that the ALJ's penalty determinations "have
not been shown to be 'unwarranted in law' or 'without justification in fact.'" The
court accordingly granted EPA's motion for summary judgment on this issue. 19 F.
Supp. 2d at 999-1000.
STANDARD OF REVIEW
When reviewing agency action, this Court stands in the same position with
respect to the agency as did the district court: it "must make an independent decision
based on the same administrative record that was before the factfinder." Sierra Club
v. Davies. 955 F.2d 1188, 1192 (8th Cir. 1992). The standard of review is that
contained in the Administrative Procedure Act, 5 U.S.C. § 706, which requires a
determination of whether the agency action was arbitrary, capricious, an abuse of
discretion or otherwise not in accordance with law * * Brown v. U.S. Dept. of
the Interior. 679 F.2d 747, 749 (8th Cir. 1982). The district court's opinion "is
afforded no deference." First Nat'l Bank of Favettevile v. Smith. 508 F.2d 1371,
1374 (8th Cir. 1974), cert, denied. 421 U.S. 930 (1975).
Much of the district court's decision turns on its statutory interpretation of
RCRA, which is an issue of law reviewed de novo by this Court. Under Chevron
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U.S.A.. Inc. v. Natural Resources Defense Council. Inc.. 467 U.S. 837 (1984), a
court reviewing an agency's construction of a statute administered by the agency
begins by asking whether the statute has directly spoken to the precise question at
issue. If the intent of Congress is clear, that is the end of the matter. If the court
determines that "Congress has not directly addressed the precise question at issue *
* * the question for the court is whether the agency's answer is based on a
permissible construction of the statute." Chevron. 467 U.S. at 843; see also
Champion v. Shalala. 33 F.3d 963, 966 (8th Cir. 1994). When interpreting a statute,
the court must not only examine the express language, but also the overall purpose of
the act. In Re Graven. 936 F.2d 378, 385-386 (8th Cir. 1991); see also United
States v. Jones. 811 F.2d 444, 447 (8th Cir. 1987) ("[i]n determining legislative
intent, we must consider the statute read as a whole"). Where there is any ambiguity
in the statute, and particularly where Congress has expressly delegated responsibility
for interpreting and implementing the statute to a particular agency, this Court"
accord[s] substantial deference to the agency's interpretation of the statutes it
administers." Vue v. Immigration and Naturalization Service. 92 F.3d 696, 699 (8th
Cir. 1996); Trans-Allied Audit Co. v. Interstate Commerce Commission. 33 F.3d
1024, 1030 (9th Cir. 1994).
SUMMARY OF ARGUMENT
EPA filed its administrative action to address admitted violations of RCRA by
Harmon, violations that had not been resolved by Missouri for years. While
admitting that EPA had authority to file its own enforcement action, the district court
ruled that EPA's enforcement action became void upon entry of the settlement
between Missouri and Harmon in state court.
In so ruling, the district court seriously limited EPA's ability to ensure uniform
and vigorous enforcement of RCRA across the nation. The district court's decision
ignored the plain language of the statute, which imposes only the requirement that
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EPA must first give notice to an authorized State when EPA brings an enforcement
action in that state. The provisions of the statute the court does rely on make no
mention of any restriction on EPA's enforcement powers. By holding that EPA may
not maintain an enforcement action once an authorized State reaches a settlement
with a violator, the district court reads a limitation on EPA's enforcement power that
is not in the text of the statute.
Even if the scope of EPA's enforcement powers were not plain based on the
plain language of the statute, EPA's interpretation of the scope of those powers is
reasonable and entitled to deference. EPA's interpretation, allowing the agency to
maintain its own enforcement action where a state's independent determination to
settle its action does not adequately protect national interests, furthers the
congressional purpose of ensuring adequate and uniform national enforcement of
RCRA.
Furthermore, the district court's holding that the state court judgment between
Harmon and Missouri is binding on EPA as a matter of res judicata ignores basic
doctrines of federalism and sovereign immunity. Although the Full Faith and Credit
Statute, 28 U.S.C. § 1738, requires federal courts to give the same preclusive effect
to a state court judgment as would a court of that state, it does not enlarge the power
of state courts to give them jurisdiction where it does not exist. Here, the United
States was not a party to the Missouri court case entering the consent decree
between Missouri and Harmon. Nor could the United States have been made a party
to the state court proceeding because there has been no waiver of sovereign
immunity. Sovereign immunity also means that the district's court erred in applying
Missouri law in determining whether the United States was in privity with Missouri.
Under federal law, which must furnish the appropriate rule of decision when there is
a question of binding the United States, the United States would have had to have
exercised substantial control over the Missouri state court case to be deemed a de
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facto party. Clearly, the United States exercised no such control, and thus it could
not be bound by the judgment between Missouri and Harmon.
Finally, even if Missouri law were to apply, the district court still should not
have found that the United States was bound by the state court settlement. Under
Missouri law, parties with different interests are not in privity for purposes of res
judicata. Here, prior to the state court settlement Missouri disclaimed any interest in
a civil penalty, and told Harmon that it was leaving this issue to be addressed by
EPA. EPA, in contrast, had already filed its own enforcement action to ensure that
Harmon paid a substantial civil penalty to deter it and other members of the regulated
community throughout the nation from taking a lax attitude towards compliance with
RCRA. Thus, it was clear that the two sovereigns were seeking to protect different
interests, and the district court should not have found them to be in privity.
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ARGUMENT
I. RCRA Allows EPA to Bring and Maintain an Enforcement Action in
an Authorized State Notwithstanding a Later-Filed State Action that Obtains
Limited Relief. The district court's ruling limits EPA's ability to bring an
enforcement action in an authorized State by holding that a settlement by the state,
even if made long after the commencement of the federal action, voids the pending
federal enforcement action. This ruling is inconsistent with the plain language of the
statute, which imposes no such limitation. It also ignores EPA's reasonable and
longstanding interpretation of its powers under RCRA.
A. EPA's Interpretation Is Compelled bv the Plain Language of
the Statute ~ As the Supreme Court has stated, "[o]ur first step in interpreting a
statute is to determine whether the language at issue has a plain and unambiguous
meaning with regard to the particular dispute in the case. Our inquiry must cease if
the statutory language is unambiguous and 'the statutory scheme is coherent and
consistent.'" Robinson v. Shell Oil Co.. 117 S. Ct. 843, 846 (1997) (quoting United
States v. Ron Pair Enterprises. Inc.. 489 U.S. 235, 240 (1989)). The plain meaning
of a statute is not decided by looking at an isolated phrase, but by the context and
meaning of the statute as a whole. John Hancock Mut. Ins. Co. v. Harris Trust &
Sav. Bank. 510 U.S. 86, 96 (1993) ("[W]e examine first the language of the
governing statute, guided not by a single sentence or member of a sentence, but
looking to the provisions of the whole law, and to its object and policy.") (internal
quotations, brackets, and citations omitted).
The statutory requirements for EPA to bring an administrative enforcement
action under RCRA are set forth in Section 3008, 42 U.S.C. § 6928. That Section
provides:
§ 6928. Federal enforcement
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(a) Compliance orders
(1)	Except as provided in paragraph (2), whenever on the basis of any
information the Administrator determines that any person has violated or is in
violation of any requirement of this subchapter, the Administrator may issue an
order assessing a civil penalty for any past or current violation * * *.
(2)	In the case of a violation of any requirement of this subchapter where such
violation occurs in a State which is authorized to carry out a hazardous waste
program under section 6926 of this title, the Administrator shall give notice to
the State in which such violation has occurred prior to issuing an order or
commencing an action under this section.
Emphasis added. Thus, the only restriction RCRA places on EPA's ability to bring
an enforcement action (either administrative or in district court) in an authorized state
is that it first give notice to the state.
The district court's decision adds a prohibition not found in the statute: EPA
may not maintain an enforcement action if, at any time prior to judgment, an
authorized State settles with the violator. If Congress had intended to establish a
further limitation on EPA's authority to bring or maintain an enforcement action in an
authorized State in instances where a State had already taken some action, such as
entering into a settlement with a violator, it would have explicitly set forth such a
limitation within the text of section 3008.
RCRA's citizen suit provision, Section 7002(b)(1)(B), 42 U.S.C. §
6972(b)(1)(B), contains such a provision, which disallows citizen suits in instances
where the "State has commenced and is diligently prosecuting a civil or criminal
action * * The absence of such a limitation in Section 3008 establishes that
Congress intended to treat enforcement actions brought by the United States
differently than citizen suits, and not to impose the same limitations on them. "
[W]here Congress includes particular language in one section of a statute but omits it
in another section of the same Act, it is generally presumed that Congress acts
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intentionally and purposely in the disparate inclusion or exclusion." Brown v.
Gardner. 513 U.S. 115, 120 (1994^ quoting Russello v. United States. 464 U.S. 16,
23 (1983).
Ignoring the plain language of Section 3008, the district court instead relied on
parts of Section 3006 of RCRA, 42 U.S.C. § 6926, which creates the authority for
states to use state regulations, in lieu of federal regulations, as the federally
authorized hazardous waste program. Significantly, the court misstated the language
of the statute when it paraphrased it: "[t]he Court finds that the plain language of
section 3006(b) provides that the MDNR operates 'in lieu of or instead of the federal
program." 19 F. Supp. 2d at 995, emphasis added. In fact, Section 3006(b) of
RCRA, 42 U.S.C. § 6926(b), provides that upon authorization by EPA, "[s]uch State
is authorized to carry out such program in lieu of the Federal program under this
subchapter * * * ." Emphasis added. In other words, the state agency does not act in
lieu of EPA, as the district court seemed to conclude. Rather, it is the authorized
state regulations that are enforced in lieu of the federal regulations. Section 3006(b)
thus addresses which regulations are to be enforced in an authorized State, not who
has authority to enforce these regulations. See, e.g.. United States v. MacDonald &
Watson Waste Oil Co.. 933 F.2d 35, 43-46 (1st Cir. 1991) (rejecting argument that
the "in lieu of phrase disables Federal criminal enforcement authority under RCRA
section 3008 in an authorized State); Wvckoff Co. v. EPA. 796 F.2d 1197, 1199 (9th
Cir. 1986) (rejecting same argument for orders issued under RCRA § 3013). And as
shown above, Section 3008(a)(2) expressly provides that EPA may enforce these
regulations.
The court also rested its holding on subsection 3006(d) of RCRA, 42 U.S.C.
§ 6926(d), which provides:
(D) Effect of State permit
Any action taken by a State under a hazardous waste program authorized
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under this section shall have the same force and effect as action taken by the
Administrator under this subchapter.
The district court interpreted this subsection as meaning that when MDNR entered a
consent decree with Harmon, that consent decree was as binding on EPA as if EPA
had entered into the decree itself. 19 F. Supp. 2d at 996. This interpretation ignores
the context of this subsection, which is part of a section of the statute discussed
above on how states are authorized to administer a hazardous waste program; it does
not give the states rights over EPA. Rather, Section 3006(d) simply ensures that
state-issued permits have the same force and effect as permits issued by the EPA.
Absent this provision there could have been some doubt as to whether a facility
operating under a permit issued by an authorized state was in compliance with the
requirement of Section 3005(a) of RCRA, 42 U.S.C. 6925(a), that each hazardous
waste management facility have a RCRA permit.
Subsection 3006(d) of RCRA, 42 U.S.C. § 6926(d), makes no mention of any
restriction on EPA's ability to bring an enforcement action. As a general statement,
it cannot prevail over the specific authorization of Section 3008 for EPA to maintain
its own enforcement action in an authorized State upon the single condition of giving
notice to the State. Edmond v. United States. 117 S. Ct. 1573, 1578 (1997) ("
Ordinarily, where a specific provision conflicts with a general one, the specific
governs."). There is simply no basis to conclude that Congress, in addressing the
effect of permits issued by authorized states, intended to speak directly to the ability
of states to divest EPA of its enforcement power.
The absence of any limitation in Section 3008 on EPA's ability to bring an
enforcement action in an authorized state (other than giving notice), and the absence
of any reference to limitations on federal enforcement in Sections 3006(b) and (d)
show that the plain language of the statute compels EPA's interpretation of the
statute. The district court's ruling is inconsistent with that plain language and must
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be reversed.
B. EPA's Interpretation Is Reasonable and the District Court
Should Have Deferred to It.
1. EPA's Interpretation of RCRA Is Entitled to Deference —
If the lack of any restrictions on EPA's enforcement power in Section 3008 of RCRA
does not resolve the matter, then the statute must be considered ambiguous on the
subject of a state's power to end an EPA enforcement action by settling with the
violator. Certainly, there is no explicit statement that states have this power. Absent
such an express statement, the district court should have deferred to EPA's
interpretation of a statute which it is charged with administering. Chevron, supra.
2. EPA Has Consistently Interpreted RCRA as Allowing It to
Maintain an Enforcement Action Despite a State Settlement ~ In 1983, EPA
included in its regulations governing the authorization of state hazardous waste
programs a note stating that EPA could bring its own enforcement action where a
state judgment or settlement provided for an inadequate civil penalty. The relevant
part of this regulation is as follows:
NOTE: To the extent the State judgments or settlements provide penalties in
amounts which EPA believes to be substantially inadequate in comparison to
the amounts which EPA would require under similar facts, EPA, when
authorized by the applicable statute, may commence separate actions for
penalties.
48 Fed. Reg. 39615, 39622-23 (Sept. 1, 1983), 40 C.F.R. § 271.16(c) (Note)
ll This provision was originally proposed in 1982 as an amendment to a
consolidated rule applying to 5 separate State permit programs under RCRA, the
Clean Water Act, 33 U.S.C. § 1251 et seq., the Clean Air Act, 42 U.S.C. § 7401 et
seq.. and the Safe Drinking Water Act, 42 U.S.C. § 300f e£ seq. See 47 Fed. Reg.
25546, 25547, 25549 & 25554 (June 14, 1982). The use of the generic language in
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(emphasis added).1/
This interpretation has also been expressed in an opinion by EPA's General
Counsel. See, "Effect on EPA Enforcement of Enforcement Action Taken by State
With Approved RCRA Program," from Francis S. Blake, General Counsel, to Lee
M. Thomas, Administrator (May 9, 1986) ("RCRA allows the Administrator to
exercise complete prosecutorial discretion in deciding whether to commence federal
enforcement when a State has taken action.") J A Vol 5, pp. 1260-69 .
As previously noted, EPA's position was incorporated into its approval of
MDNR's application to administer and enforce a hazardous waste program pursuant
to Section 3006(b) of RCRA, 42 U.S.C. § 6926(b). See 40 C.F.R. § 272.1300(c) (in
announcing its authorization of MDNR's program, EPA stated that "EPA retains the
authority to exercise its enforcement authorities under sectio[n] * * * 3008 of
RCRA"). Additionally, the Memorandum of Agreement between MDNR and EPA,
which sets forth the obligations of the two sovereigns with respect to the RCRA
program in Missouri, provides as follows:
EPA retains its responsibility to ensure full and faithful execution of the
requirements of RCRA including direct implementation of the HSWA [the
Hazardous and Solid Waste Amendments] and of the full RCRA program in
the event the State is unable to act as a result of not having adequate
enforcement capability or authorization status or in the event EPA exercises its
enforcement authority to override state action.
MOA, Section II, JA Vol. 5, p. 1229.
the phrase "when authorized by the applicable statute" is explained by the need to
insert the concept into regulations that covered all five regulations. When the rule
was revised to apply only to RCRA, the phrase was not deleted. Because the entire
provision was included in the RCRA-only regulations, it is apparent that EPA
concluded that RCRA does authorize federal penalties in authorized states even if
there is a state settlement or judgment.
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Finally, there are a number of decisions of the Environmental Appeals Board
(which exercises the authority of the Administrator as the appellate court for EPA, 40
C.F.R. § 1.25(e)) holding that EPA can carry out an enforcement action even if an
authorized state has also taken action. See, e.g.. In re Gordon Redd Lumber Co.. 5
E.A.D. 301, 308, 1994 WL 276874, at *5 (EAB 1994) ("Nevertheless, under the
statute, even if the State brings an enforcement action tor violations of the State's
program, the Agency retains authority to bring its own enforcement action for such
violations.") JA Vol. 5, p. 1276; In re Southern Timber Prods. Inc.. 3 E.A.D. 371,
378, 1990 WL 303833, at *5(CJO 1990) ("The Agency has long interpreted RCRA
as authorizing a federal enforcement action in an authorized State even where the
State has 'acted' in some limited fashion.") JA Vol 1, p. 1308.
EPA's interpretation of the scope of its enforcement powers is longstanding
and consistent. The district court erred in not deferring to it.
3. EPA's Interpretation Is Reasonable — EPA's interpretation of the
statute is reasonable and should be followed by this Court. Turning first to Section
3008, there is no dispute that EPA had the legal authority to bring its administrative
enforcement action against Harmon. Under the district court's interpretation of the
statute, however, Missouri had the power to terminate that action at any time. This
could lead to the absurd result of EPA bringing and litigating an enforcement action
for years, only to have its power to maintain the action taken away by a state
settlement on the eve of judgment. Nowhere does the district court decision explain
why Congress would create a system that would allow such a waste of federal
judicial and administrative resources. Had Congress intended to limit federal
enforcement power when a state takes action, it would have included language
similar to that in the citizens' suit provision, which bars suit where the state is
enforcing the statute. The absence of such a provision, as we have argued,
demonstrates that there is no limit on EPA's ability to maintain an enforcement action
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in an authorized state.1/
EPA's interpretation is also reasonable because it respects federalism concerns
by allowing dual enforcement of hazardous waste programs. Thus, both EPA and
Missouri are free to pursue their own goals in enforcing these programs. If either
sovereign finds the other's enforcement of these programs to be inadequate, it is free
to pursue its own interests. In contrast, the district court's interpretation of RCRA
could lead to the undermining of both federal and state power by holding that an
authorized state in effect acts as a co-administrator of EPA in that state. In the
district court's reasoning, this makes a state court judgment as binding on EPA as
EPA's own settlements are on it. However, if the district court is correct in its
statutory and res judicata analysis, then presumably the reverse ~ that settlements by
EPA are binding on authorized states ~ is also true. Under the district court's
interpretation, either sovereign could forestall the other's enforcement action by
settling with a violator of RCRA. There is no indication that Congress intended to
create a statutory scheme that would allow federal and state governments to interfere
with each other's ability to enforce hazardous waste programs.
EPA's interpretation carries out the statutory goal of ensuring vigorous
enforcement on a nationally consistent basis. If EPA could not challenge any state
settlement agreement with a violator, no matter how inconsistent that agreement was
with hazardous waste enforcement in other states, effective enforcement of RCRA
would be compromised. Authorized states may be reluctant to bring an adequate
4/ Similarly, in Section 309(g)(6) of the Clean Water Act, 42 U.S.C. §
1319(g)(6), Congress specifically imposed a limit on federal enforcement under
certain conditions when a state is conducting its own enforcement action. This
shows that Congress provides specific limits on federal enforcement when it intends
to do so. There is no analogous provision in RCRA.
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enforcement action against a statutory violator for a variety of reasons. As the
Environmental Appeals Board noted in this case, authorized states may be more
interested "in encouraging regulated industries to remain in or relocate to the State,
thereby preserving or bolstering the State's economy," than in "enforcing, strict,
nationally-consistent hazardous waste management standards." EAB Decision at 17.
Authorized states may also be reluctant to allocate scarce resources towards
enforcement of strict nationally consistent hazardous waste management standards.
EPA also may be more interested than a specific state in enforcing against particular
types of violations that are prevalent nationwide but not widespread in the state, or
against companies that have violated hazardous waste laws in many states. Finally,
EPA may also have more interest in deterring violations in one state that result in
pollution in other states.
RCRA's legislative history makes clear that Congress intended EPA to have
the power to bring an enforcement action in an authorized state regardless of state
action. The final 1976 Act struck language proposed by the Senate that would have
explicitly prohibited EPA from enforcing violations in authorized States unless the
State had failed to bring an enforcement action. S. 3622, 94th Cong., 2d Sess. §214
(as reported, June 25, 1976), reprinted in 1 Legislative History of the Solid Waste
Disposal Act. 102d Cong., 1st Sess.at 370 (Comm. Print 1991)). This deletion
indicates that Congress considered and rejected the imposition of such a limitation on
EPA's enforcement authority. See Russello v. United States. 464 U.S. 16, 24 (1983)
("Where Congress includes limiting language in an earlier version of a statute, but
deletes it prior to enactment, it may be presumed that the limitation was not
intended.").
The facts of this case support the need for independent federal enforcement.
Here, EPA filed its administrative action three years after Harmon had disclosed its
illegal disposal practices to MDNR. JA Vol. 1, pp. 56-58. Studies concluded that
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Harmon's practices had resulted in environmental contamination of the soil and
groundwater at the Harmon facility. JA Vol 1, pp. 129-35. Although Harmon and
MDNR had engaged in negotiations to deal with that contamination, no agreement
existed. Indeed, for years Harmon would not agree to comply with the RCRA
standards for closure of hazardous waste disposal areas.
EPA filed its administrative complaint when it reasonably concluded that
MDNR was having difficulty getting Harmon to comply in the foreseeable future.
The administrative complaint sought to obtain through litigation that which MDNR
seemed at the time unable to procure through negotiation: closure of the disposal area
in accordance with RCRA standards. Accordingly, the complaint requested an order
requiring Harmon to install a groundwater monitoring system to detect any spread of
the contamination, and to establish financial assurance to pay the costs of any
corrective action that might have to be taken in the future. JA Vol. 5, 1105-16.
These and the other RCRA requirements were designed to protect the citizens and
the environment of Missouri from the consequences of years of illegal disposal of
hazardous substances by Harmon. Eighteen months after EPA filed its action,
Harmon entered into a settlement agreement with Missouri whereby it complied with
most of the relief sought by EPA; however, it has yet to satisfy RCRA's financial
assurance requirements.
In addition to demanding closure under RCRA standards, EPA also sought to
require Harmon to pay a significant civil penalty. Civil penalties in environmental
cases are routinely imposed by courts to serve the traditional social goals of
providing restitution and deterrence. See Tull v. United States. 481 U.S. 412, 422
(1987). When assessing civil penalties, courts seek to deter both the individual
defendant and other potential violators. See United States v. Environmental Waste
Control. Inc.. 710 F. Supp. 1172, 1242 (N.D. Ind. 1989) ("the major purpose of a
civil penalty [is] deterrence."). One court assessing civil penalties under the Clean
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Air Act stated:
Civil penalties are imposed "first, to discourage the offender himself
from repeating his transgression; and second, to deter others from doing
likewise." They "should be large enough to hurt, and to deter anyone in
the future from showing as little concern as [the defendant] did for the
need to [comply]."
United States v. Mac's Muffler Shop Inc.. 25 E.R.C. 1369, 1375 (N.D. Ga. 1986)
f quoting United States v. Velsicol Chemical Corp.. 12 E.R.C. 1417, 1421 (W.D.
Tenn. 1978) and United States v. Phelps Dodge Industries. Inc.. 589 F. Supp. 1340,
1367 (S.D.N.Y. 1984)) (citations omitted). In short, civil penalties under RCRA are "
to enhance compliance with RCRA rather than impose penal sanctions on those who
violate the statute." United States v. Charles George Trucking Co.. Inc.. 642 F.
Supp. 329, 334 (D. Mass. 1986).
By its own admission, for at least five years Harmon violated RCRA through
its practice of disposing of hazardous wastes by throwing them on the ground.1/ This
practice breached the most fundamental requirement of RCRA, which is that
hazardous wastes be disposed of in accordance with regulations designed to
minimize the risk to the environment and human health. Harmon's disposal practices
complied with none of these regulations. Accordingly, the district court found that
the penalty imposed by EPA was not arbitrary and capricious, or contrary to law. 19
F. Supp. 2d at 999-1000.
Harmon's excuse for these violations is that management did not know of the
practice. 19 F. Supp. 2d at 990. Accepting Harmon at its word, its management was
seriously negligent in not determining what was happening to the solvents the
y Harmon's practice extended back to 1972, but the various RCRA regulations
applicable to this practice only became enforceable during 1980 through 1982.
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company was using, and in not instructing its employees how to properly dispose of
hazardous waste. The result of Harmon's negligence was the contamination of the
environment. JA Vol. 1, pp. 125-29 . Although Harmon did finally report the
violation to MDNR in June of 1988, after an MDNR inspection of another nearby
Harmon facility, that fact does not obviate the need for a penalty. If it did, then
companies could take a lax attitude towards compliance with environmental laws
based on the assumption that they need only report the violations in order to escape a
civil penalty. Here, a significant civil penalty was needed to deter Harmon and other
members of the regulated community from taking a casual attitude towards their
obligation to comply with RCRA.
Turning to Section 3006 of RCRA, EPA's interpretation of this section as not
imposing any limits on its broad authority to enforce RCRA under Section
3008(a)(2) in an authorized state is reasonable. As we demonstrated in Section 1(B)
above, the language from section 3006 when read in context with the rest of the
statute makes clear that Congress intended only to give the states the power to
administer a hazardous waste program, and not to limit EPA's enforcement power.
This is further shown by the title of the principal section relied on by the district
court, Section 3006(d) ( 42 U.S.C. §6926(d)), which is "Effect of State Permit." This
demonstrates that the purpose of this section is merely to ensure that state permits
have the same force and effect as permits issued by EPA. See Almendarez-Torres v.
United States. 118 S. Ct. 1219, 1226 (1998) ("We also note that 'the title of a statute
and the heading of a section' are 'tools available for the resolution of a doubt' about
the meaning of a statute.") (quoting Trainmen v. Baltimore & Ohio R. Co. 331 U.S.
519, 528-29 (1947); INS v. National Center for Immigrants' Rights. Inc.. 502 U.S.
183, 189 (1991) (holding that title of a statute or section can aid in resolving an
ambiguity in the legislation's text).
The district court asserted that EPA's interpretation "would predictably result
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in confusion, inefficiency, duplicative agency expenditures and would thwart the
public policy of early and non-judicial dispute resolution." 19 F. Supp. 2d at 995.
However, in the proceeding below neither the district court nor Harmon pointed to
actual instances of confusion or duplicative enforcement action by EPA and
authorized states, even though EPA has followed this interpretation for at least
fifteen years. The absence of actual conflict is further demonstrated by this being a
case of first impression. In any event, the dual sovereignty inherent in the federal
system makes it common for persons to be subject to both federal and state authority
over the same subject matter. See, e.g.. Aminoil U.S.A. v. California State Water
Resources Control Board. 674 F.2d 1227, 1237 (9th Cir. 1982) (holding that plaintiff
had to litigate issue relating to Clean Water Act in both federal and state courts).
EPA's construction of federal intent, even if arguendo it allows some inefficiency, is
a reasonable interpretation of the statutory plan for federal and state enforcement.
As the Supreme Court stated in Chevron. "[t]he court need not conclude that the
agency construction was the only one it permissibly could have adopted to uphold
the construction, or even the reading the court would have reached if the question
initially had arisen in a judicial proceeding." 467 U.S. at 843 n.l 1. It is sufficient
that EPA's balancing of the competing interests is reasonable, as it plainly is.
The district court asserted that EPA's interpretation was unreasonable because
allowing EPA to maintain its own enforcement action despite a state settlement
contradicted the statement in Section 3006(d) that action by an authorized state has
the same force and effect of that of the Administrator, in that EPA's action somehow
interfered with that settlement. 19 F. Supp. 2d at 996. In fact, EPA's enforcement
action did not interfere with the state settlement; it merely sought to vindicate its own
interest in strong national enforcement of RCRA by making sure that Harmon paid a
substantial civil penalty. At no point prior to entry of its settlement with Harmon,
during the administrative proceedings before EPA, or in the litigation in district court
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has Missouri stated any objection to EPA's administrative enforcement action.
Moreover, both MDNR and Harmon were fully aware that EPA intended to continue
to pursue civil penalties following the state settlement, so no party's expectations
were upset by EPA's continued prosecution of its pre-existing enforcement action.
The district court also asserted that EPA's authority to withdraw authorization
of a state's program under Section 3006(e), 42 U.S.C. § 6926(e) allows EPA an
adequate check on a state's failure to vigorously enforce RCRA. 19 F. Supp. 2d at
996. However, this provision is not a substitute for EPA's discretion to bring an
enforcement action in a particular case when state action is inadequate. Withdrawal
of authorization is an across-the-board remedy that eliminates all state involvement in
the RCRA program, including permitting and inspections. It is a lengthy
administrative process that would consume significant resources of both EPA and the
state. It would also create confusion to the regulated community as to their status
under the law. cf. United States v. Cargill. Inc.. 508 F. Supp. 734, 740 (D. Del.
1981) (discussing revocation of state permitting program under Clean Water Act:"
[i]t was Congress's intention, however, that the EPA would exercise this latter power
with restraint and reserve it for only extreme situations."). Finally, even if
authorization were withdrawn in a case such as this, that withdrawal would be
ineffective to rectify the need for Harmon to pay a civil penalty for its violations.
In short, EPA's interpretation of RCRA is consistent with the statute and is
reasonable because it ensures vigorous and consistent national enforcement. In
contrast, the district court's interpretation of RCRA significantly curtails both EPA's
power to protect the environment on a national basis. There is no basis on which to
conclude that Congress intended to impose these limitations on EPA.
II. EPA Cannot Be Bound hv a State Court Judgment to Which It Was
Not a Party and Where Its Interests Are Different from that of the State
Plaintiff.
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A. The District Court's Holding That a Missouri State Court
Judgment Was Binding Against the United States Violates Sovereign Immunity
— The district court concluded that the Full Faith and Credit Act required it to apply
Missouri res judicata6/ law to determine whether EPA was in privity with Harmon.
We agree that the principles embodied in the Full Faith and Credit Act control the
preclusive effect of the state court judgment as between Harmon and MDNR.
However, that statute does not somehow enlarge a state court's jurisdiction and
permit a state court to enter judgments against the United States when it is immune to
suit in a state forum. Nor does that statute require that Missouri law be followed in
determining whether the United States, as opposed to a non-sovereign, is in privity
with that judgment.
The Full Faith and Credit Act provides, in pertinent part, that the records and
judicial proceedings of any of court of any State:
shall have the same full faith and credit in every court within the United States
and its Territories and Possessions as they have by law or usage in the courts
of such State, Territory or Possession from which they are taken.
28 U.S.C. § 1738.
The Supreme Court has explained that these provisions require a federal court
to accord the same preclusive effect to the state court judgment as that judgment
would be accorded under the law of the rendering state. Matsushita Elec. Indus.
Co.. Ltd. v. Epstein. 116 S. Ct. 873, 878 (1996). Thus, this statute would prevent
MDNR from re-litigating its claims against MDNR in federal court. At the same
time, however, the Court has noted that these full faith and credit requirements do
V "Res judicata" includes both issue preclusion (collateral estoppel) and claim
preclusion (merger and bar). To avoid confusion, we follow the district court's use of
the term "res judicata" to mean claim preclusion.
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not apply where the rendering forum lacks jurisdiction over either the subject matter
or the parties. Id. at 884. The Court has explained that this jurisdictional exception
to full faith and credit requirements is rooted in basic principles of federalism:
To be sure, the structure of our Nation as a union of States, each possessing
equal sovereign powers, dictates some basic limitations on the
fiill-faith-and-credit principles enumerated above. Chief among these
limitations is the caveat, consistently recognized by this Court, that a judgment
of a court in one State is conclusive in another State only if the court in the
first State had power to pass on the merits — had jurisdiction, that is, to render
the judgment. Consequently, before a court is bound by the judgment
rendered in another State, it may inquire into the jurisdictional basis of the
foreign court's decree. If that court did not have jurisdiction over the subject
matter or the relevant parties, full faith and credit need not be given.
Underwriters National Assurance Co. v. North Carolina Life & Accident Health Ins.
Guaranty Ass'n. 455 U.S. 691, 704-05 (1982) (internal quotations and citations
omitted, emphasis added).1/
Here, the "relevant parties" are not merely the named plaintiffs or defendants
in the state court litigation, but also those whom the litigant seeks to bind to the prior
judgment. If the state court would have no jurisdiction to bind the federal
government to a judgment in a suit that actually names the federal government as a
party, the court cannot, a fortiori, acquire jurisdiction to bind the government in a
suit where the government is not a party, and where there has been no waiver of
sovereign immunity. Put another way, the state court cannot do indirectly what it
cannot do directly.
z/ The Underwriters Court noted these principles in the context of construing
the Full Faith and Credit Clause of the Constitution. Later cases, however, make
clear that the Full Faith and Credit statute has an analogous jurisdictional exception.
See Matsushita. 116 S. Ct. at 884, citing Underwriters National Assurance Co..
supra.
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Here, the state court could not have had jurisdiction to have entered any
judgment against the United States as part of the entry of the consent decree between
Missouri and Harmon because there has been no waiver of sovereign immunity that
would have allowed the United States to be sued in state court. And absent
jurisdiction, a state court judgment purporting to bind the federal government is not
entitled to full faith and credit in subsequent federal litigation.
The district court's analysis of whether the United States was in privity with
Missouri was flawed because it failed to take into account the sovereign immunity of
the United States. In fairness to the district court, the federal defendants failed to
raise that issue in the proceedings below. Thatfailure, however, does not waive the
issue because sovereign immunity is jurisdictional. FDIC v. Mever. 510 U.S. 471
(1994) ("Sovereign immunity is jurisdictional in nature."); Preferred Risk Mut. Ins.
Co. v. United States. 86 F.3d 789 (8th Cir.), cert, denied 117 S. Ct. 1245 (1996)
(same); United States v. Johnson. 853 F.2d 619, 622-23 n. 8 (8th Cir. 1988) (holding
that the Government could raise sovereign immunity on appeal even though this
issue had not been raised in district court: "sovereign immunity * * * is a
jurisdictional question that may be raised at any time.").
The principle that res judicata does not usually overcome the restriction of
sovereign immunity is demonstrated by United States v. United States Fidelity &
Guaranty Co.. 309 U.S. 506 (1940). In that case, at issue was whether an earlier
judgment against the United States on a cross-claim was res judicata to a second
action brought by the United States against the same parties. Even though the United
States had been a party to the earlier proceeding (which was not the case here), the
Supreme Court held that the United States was not bound by the res judicata effect of
the earlier court decision because the judgment on the cross-claim in that case was
barred by sovereign immunity.
Sovereign immunity also controls the choice of law: Missouri law does not
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and cannot determine when exceptions apply to the general principle that the United
States is bound by a judgment to which it was not a party. To turn the question of
when federal sovereign immunity is waived over to state courts would itself be a kind
of waiver of sovereign immunity. Rather, one must look to federal law to resolve
this question. This is demonstrated by the following cases, all of which analyzed
whether the United States would be bound by a decision to which it is not a party by
applying principles of federal law.V
Respecting the dual sovereignty established by our federal system, the
Supreme Court has repeatedly held that, absent exceptions not applicable here, the
United States is not bound by proceedings to which it is not a party. See, e.g..
Johnson v. De Grandv. 512 U.S. 997, 1006 (1994) (at issue was effect of judgment
of Florida Supreme Court concerning whether reapportionment plan was valid under
federal and state law; the Court noted that "the State does not, of course, argue that
res judicata bars the claims of the United States, which was not a party in the Florida
Supreme Court action."); and Economy Light & Power Co.. 256 U.S. 113, 123
(1921) ("Of course, the [state court] decision does not render the matter res judicata,
as the United States was not a party."). Other courts have reached the same
conclusion. See, e.g.. Artrip v. Califano. 569 F.2d 1298 (4th Cir. 1978) (holding that
the United States was not party to a proceeding before the Industrial Commission of
Virginia, nor in privity with any party to that proceeding, and thus not bound by its
results).
V The United States acknowledges that United States v. ITT Ravonier. Inc.. 627
F.2d 996, 1002 n.7 (9th Cir. 1980) stated in dicta that state law would apply in
determining whether a state court judgment collaterally estopped the United States;
the court actually applied federal law because it concluded that the principles were
the same. The court did not address the question of sovereign immunity, and we
respectfully submit its conclusion on this point is erroneous.
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Additionally, it is well established in criminal cases that successive
prosecution by the Federal and State governments are not barred. See United States
v. Garner. 32 F.3d 1305, 1311 (8th Cir. 1994) (holding that state prosecution did not
bar second prosecution because the United States and the state were different
parties); see also. United States v. Tirrell. 120 F.3d 670, 677 (7th Cir. 1997)
(rejecting criminal defendant's argument that the United States' prosecution was
barred by collateral estoppel because the United States was not represented in state
prosecution); and United States v. Peterson. 100 F.3d 7, 12 (2d Cir. 1996) ("criminal
collateral estoppel, a relative of double jeopardy, * * * generally may not be invoked
against one sovereign on the basis of a ruling in a prosecution brought by a different
sovereign * * *."). While these cases involve multiple criminal prosecutions, there is
no reason that the result would be any different in civil enforcement cases such as
this one. Certainly, the divergence of interest between the separate sovereigns is less
distinct than is the case here. Similarly, the question of whether the United States is
bound by a state court judgment should be the same whether collateral estoppel
(issue preclusion) or res judicata (claim preclusion) is at issue.
As we have noted, under federal law there are limited exceptions when,
despite principles of sovereign immunity, the United States has been held to be
bound by judgments to which it was not a party. As the Supreme Court has stated,"
to bind the United States when it was not formally a party, it must have a laboring
oar in the controversy." Drummond v. United States. 324 U.S. 316, 318 (1945).
The "laboring oar" to which the Court referred consists of control by the United
States over a case to which it is nominally not a party. For example, in Montana v.
United States. 440 U.S. 147 (1979), the United States was held to be bound by a
state court judgment against one of its contractors where the United States required
the contractor to file the suit, approved the complaint, paid the contractor's attorney's
fees and costs, filed an amicus brief on behalf of the contractor in the Montana
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Supreme Court, and finally directed the contractor to abandon an appeal of the
Montana state court decision to the U.S. Supreme Court. 440 U.S. at 155. The
Court concluded, as a matter of federal law, that this level of control made the
outcome of the Montana state court litigation binding on the United States. Id-
The most extreme example of this doctrine is United States v. ITT Ravonier.
Inc.. 627 F.2d 996 (9th Cir. 1980). In that case, the State of Washington, at EPA's
urging, brought a suit under the Clean Water Act against ITT Rayonier. When the
state court litigation resulted in a victory for ITT Rayonier, the United States filed its
own enforcement action in federal court. The Ninth Circuit held that EPA was
bound by the outcome of that litigation since "the interests of [the State of
Washington] and EPA were identical and their involvement sufficiently similar." 627
F.2d at 1003.
Here, the United States exercised no control over MDNR's settlement with
Harmon, unlike in Montana v. United States. Even under the more lax test of ITT
Ravonier (which the United States respectfully believes was wrongly decided), there
is no basis for holding that the state court settlement binds the United States. In ITT
Rayonier. the Ninth Circuit stated that "EPA does not contend that [the Washington]
DOE failed to assert vigorously its position in the state proceedings." 627 F.2d at
1003. In this case, it is obvious that MDNR did not assert vigorously EPA's position
in state court, in that it ignored repeated requests from EPA that it obtain a
substantial civil penalty from Harmon.
The particular statutory scheme at issue here does not create a reason to vary
this rule. Harmon argued in the court below that because EPA had authorized
MDNR to administer a hazardous waste program pursuant to RCRA, a state court
consent decree entered pursuant to that authorization is binding on EPA. This
argument ignores the fact that a court cannot enter a binding judgment unless it has
jurisdiction over both the subject matter and the parties. As the Ninth Circuit
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observed with respect to the Clean Water Act, another pollution control statute under
which EPA authorizes state programs:
The doctrine of sovereign immunity and the allocation of judicial authority
implicit in the Act preclude the states from exercising jurisdiction over the
EPA. This allocation of federal-state jurisdiction is a product of the
congressional policy judgment underlying the Act itself. It is not for us to
revise that congressional judgment merely because it may place private
litigants in the unenviable and burdensome position of being required to
litigate their liability under the Act in two separate judicial systems.
Aminoil U.S.A. v. California State Water Resources Control Board. 674 F.2d 1227,
1237 (9th Cir. 1982). Thus, the mere fact that the RCRA authorizes both the states
and the federal government to participate in enforcement of hazardous waste
requirements is not, standing alone, sufficient to waive sovereign immunity and vest
state courts with jurisdiction to bind the federal government to a state court
judgment.
In short, there are no facts present here that justify departure from the
well-established rule that the United States cannot be bound by a judgment to which
it is not a party.
B. EPA Is not in Privity with MDNR under Missouri law ~ Even
assuming that the district court was correct in treating Missouri and the United States
as though they were private parties instead of sovereigns, the result is still the same:
EPA and MDNR are not in privity under Missouri law.2/
Under Missouri law, privity exists "when the interests of the nonparty are so
y Missouri law does not recognize a difference in determining privity for the
purpose of claim preclusion as opposed to issue preclusion. Hickman v. Electronic
Kevboarding. Inc.. 741 F.2d 230, 232 n.3 (8th Cir. 1984). Accordingly, the federal
defendants have relied on cases involving both parts of res judicata.
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closely related to the interests of the party that the nonparty can be fairly considered
to have had his day in court. Missouri Insurance Guaranty Association v. Wal-Mart
Stores. Inc.. 811 S.W.2d 28 (Mo. Ct. App. 1991). "Generally speaking, privies are
those legally represented at the trial." Drainage District No. 1 Reformed v.
Matthews. 234 S.W.2d 567, 574 (Mo. 1950). The determination of privity "depends
mostly on their relationship to the subject matter of the litigation." Clements v. Pitts.
765 S.W.2d 589 (Mo. en banc 1989).
Under Missouri law privity arises only if the interest in the subject matter of
the earlier litigation is acquired after the earlier litigation; if the interest existed at the
time of the earlier litigation, then the party having that interest had to have been
joined to be bound by the earlier litigation. Mathison v. Public Water Supply District
No. 2. 401 S.W.2d 424, 431 (Mo. 1966) (to make one 'privy' to an [earlier] action he
must have acquired his interest in the subject matter of the action subsequent to the
commencement of the suit or rendition of judgment."); Hocken v. Allstate Ins. Co..
235 Mo. App. 991, 147 S.W.2d 182, 186 (1941) ("privies, in such sense that they are
bound by the judgment, are those who acquire an interest in the subject matter after
the rendition of the judgment; if their title or interest attached before that fact, they
are not bound unless made parties.") (internal quotation marks and citations omitted);
and Q—F— L— v. M— R— R—. 518 S.W.2d 113, 119-20 (Mo. Ct. App. 1974)
(same).
Applying these principles to the case at hand, it is apparent that there is no
privity between the EPA and MDNR. MDNR did not claim to represent EPA in
state court, and given EPA's prior filing of its own administrative enforcement action,
it cannot be said that EPA had its day in court when MDNR filed its settlement in the
state court. Furthermore, the interest purportedly shared between EPA and MDNR
-- enforcement of hazardous waste programs ~ was "acquired" by EPA long before
the entry of the state court consent decree. Under Missouri law, EPA and MDNR
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plainly are not in privity.
Although the district court analyzed the relationship between the EPA and
MDNR in terms of privity, Missouri law also allows a judgment to control the rights
of a nonparty under the doctrine of "virtual representation." While Missouri courts
often treat this as synonymous with privity, virtual representation is actually an
equitable doctrine that allows someone not in privity with a party to a prior lawsuit to
be bound by the results of that prior lawsuit. Under Missouri law, "[t]he doctrine [of
virtual representation] is applicable if * * * the interests of the representative are so
identical that the inducement and desire to protect the common interest may be
assumed to be the same in each and if there can be no adversity of interest between
them. * * Drainage District No. 1 Reformed v. Matthews. 234 S.W.2d 567, 574
(Mo. 1950). See also. State of Missouri ex rel. Fort Zumwalt School District v.
Dickherber. 576 S.W.2d 532 (Mo. en banc 1979) (same).
Missouri courts have been careful to apply the doctrine of virtual
representation only when the parties have exactly the same interests. In Seibert v.
Citv of Columbia. 461 S.W.2d 808 (Mo. en banc 1971), the issue was whether
citizens who lived in the areas annexed by a city who sought to challenge annexation
were barred by res judicata because of an earlier, unsuccessful action brought by
citizens who lived in the original boundaries of the city. The court held that although
the two groups shared some interests, virtual representation did not exist because the
second group of citizens had different interests to protect (such as whether increased
taxes were worth the new services provided them) than did the original group of
citizens. 461 S.W.2dat811.
Here, as in Siebert. EPA and MDNR had different interests. EPA was
concerned with ensuring effective enforcement of RCRA on a national basis, and
with assuring consistency in assessing civil penalties. MDNR's concerns were
necessarily more local in nature. The differences in the concerns were made clear by
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EPA's repeated letters to MDNR stating that Harmon should pay a significant civil
penalty, and when it became clear that MDNR would not seek a penalty, by EPA's
filing its own administrative enforcement action. Accordingly, Missouri did not act
as EPA's virtual representative when it entered its consent decree with Harmon.
In concluding that EPA was in privity with MDNR, the district court relied on
the decision in Hickman v. Electronic Keyboarding. Inc.. 741 F.2d 230 (8th Cir.
1984). The district court's conclusion that this case is controlling rests on a
misunderstanding of the different statutory scheme present in that case. In Hickman,
the plaintiff brought a claim of employment discrimination under Title VII of the
Civil Rights Act, 42 U.S.C. § 2000e et se
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and the United States Environmental Protection Agency." Addendum, p. 4. Finally,
in Hickman the state court judgment became final when Hickman, who was given
notice of the MCHR's intent to dismiss its appeal, chose not to intervene and
prosecute the appeal itself. EPA had no such opportunity here.
The district court's conclusion that EPA's authorization of Missouri's
hazardous waste regulatory program created privity is also wrong. As noted above,
in authorizing Missouri's hazardous waste program, EPA explicitly reserved its
authority to enforce RCRA violations in the state. See 40 C.F.R. § 272.1300 ("EPA
retains the authority to exercise its enforcement authorities under sections 3007,
3008, 3013, and 7003 of RCRA"). Similarly, the MOA between EPA and Missouri
states that EPA retains the right to "exercis[e] its enforcement authority to override
state action." Finally, as discussed in Section I above, Congress intended EPA to
have independent enforcement power in an authorized state, imposing only the
condition that EPA give notice to the state prior to bringing an enforcement action.
By giving EPA this power, Congress could not have intended for EPA to be bound
by contrary state action.
This is a matter on which EPA is entitled to deference. Although the EPA is
not entitled to deference in its interpretation of Missouri law, the Agency is entitled
to deference on its views concerning the nature of the relationship between EPA and
an authorized state since that relationship is created by Section 3006(b) of RCRA.
Chevron, supra.
Thus, even under Missouri law, EPA was not in privity with MDNR, and the
state court settlement between MDNR and Harmon was no bar to EPA's
administrative enforcement action.
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CONCLUSION
For the foregoing reasons, the district court's decision should be reversed, and
the case remanded to the district court for entry of an order granting the federal
defendants' motion for summary judgment.
Respectfully submitted,
LOIS J. SCHIFFER
Assistant Attorney General
Environment & Natural Resources Div.
ERIC G. HOSTETLER
DAVID SHILTON
ROBERT H. OAKLEY
Attorneys. U.S. Department of Justice
P.O. Box 23795. Washington. DC 20026
r202^ 514-4081
December 1998
90-7-3-34
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<^pj-1"*-"
jbn\-#
Attachment 17 - 4/20/99 call
March 24,1999
MEMORANDUM
SUBJECT: Retention of Funds under CERCLA §122(b)(3)
FROM: Earl Salo, Assistant General Counsel for Superfund /s/
Solid Waste and Emergency Response Law Office (2366)
Steve Pressman, Assistant General Counsel /s/
Assistance Law Practice Group
Finance and Operations Law Office (2377)
TO:	Sandra Connors, Director
Regional Support Division, OSRE, OECA
You have asked whether, under section 122(b)(3) of Comprehensive
Environmental Response, Compensation and Liability Act of 1980 (CERCLA), EPA
may retain and use payments received in settlement of (1) penalties assessed under
Title I of CERCLA,1 (2) punitive damages under CERCLA § 107(c)(3), and (3) a claim
for cost-recovery of "past costs" under CERCLA section 107. We believe that section
122(b)(3) authorizes the retention of all three types of receipts for use in carrying out
actions under settlement agreements.
Section 221 of CERCLA, as originally enacted in 1980, provided "...(b) Transfers
to Superfund.- There are hereby appropriated to the Superfund amounts equivalent to-
... (2) amounts recovered on behalf of the Superfund under [CERCLA]..., (4) penalties
assessed under title I of CERCLA...[and], (5) punitive damages under section 107(c)(3)
of CERCLAUnder this statute, EPA entered into settlements covering, inter alia.
penalties and recovery of response costs under section 107. In light of section 221,
1 CERCLA Title I penalties include stipulated penalties and work takeover
penalties.
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EPA always transferred such receipts to the Superfund.
In 1986, Congress enacted the Superfund Amendments and Reauthorization Act
of 1986, P.L. 99-499, generally known as SARA. SARA added section 122,"
Settlements," to CERCLA. Section 122 provides, "...Whenever practicable and in the
public interest, as determined by the President,2 the President shall act to facilitate
agreements under this section ... in order to expedite effective remedial actions and
minimize litigation.... (b) Agreements with potentially responsible parties ... (3)
Retention of funds. If, as part of any agreement, the President will be carrying out any
action and the parties will be paying amounts to the President, the President may,
notwithstanding any other provision of law, retain and use such amounts for purposes
of carrying out the agreement." SARA also recodified the provision of section 221 of
CERCLA quoted above as 26 U.S.C. §9507(b), in the Internal Revenue Code.
Current EPA policy recommends that CERCLA settlement agreements
designate how much of the settling PRP's payment is reimbursement for past costs
under CERCLA §107 and how much of the payment is to be retained and used by EPA
for future response costs. When the settling PRP makes the payment, EPA deposits
the amount specified for past costs in the Trust Fund, and deposits the amount
designated for future costs in a Special Account. EPA also deposits amounts
recovered as penalties and punitive damages in the Trust Fund.
However, CERCLA section 122(b)(3) and 26 U.S.C. §9507(b) do not require this
approach. Section 122(b)(3) authorizes EPA, "notwithstanding any other provision
of law," to retain and use amounts paid by a settling party to carry out the settlement
agreement. The section does not distinguish among different types or purposes of "
amounts" paid in settlement. Accordingly, notwithstanding 26 U.S.C. sec. 9507(b)(2),
(4), and (5) and CERCLA § 107(c)(3) and, if consistent with the terms of the settlement
agreement, EPA may deposit amounts received for past as well as future costs,
penalties, or punitive damages in a Special Account.
Federal appellate courts have generally interpreted the phrase "notwithstanding
any other provision of law" to preempt any applicable law (statutory, regulatory, and
judicial) which would frustrate the new authorization. Liberty Maritime Corp. v. U.S., 928
F.2d 413 (D.C. Cir. 1991):
On its face, the "notwithstanding" clause appears to give the Secretary the
broadest possible discretion. This court has interpreted similar " notwithstanding"
language in other cases to supersede all other laws, stating that "[a] clearer
statement is difficult to imagine."
2 The President delegated section 122 to EPA, with exceptions not relevant here.
Executive Order 12580, 52 Fed. Reg. 2923 (January 29, 1987).
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Id., at 416. The preemption extends not only to other statutes, but also to provisions of the
statute containing the "notwithstanding" amendment. Id. The court noted, however, that the
Secretary's interpretation of the preemptive effect of the "notwithstanding" amendment was
supported by the "legislative history and purpose of the Act." Id., at 417. The latter point was
emphasized by the Third Circuit in an opinion upholding the Secretary's narrow interpretation of a "
notwithstanding" preemption:
Conoco is correct that Liberty Maritime interpreted expansively the
"notwithstanding" phrase contained in another maritime statute, the Merchant
Marine Act of 1936 (46 U.S.C. App. § 1275(c)). However, the Court of Appeals
for the D.C. Circuit did not blindly construe this phrase. Instead, it looked to the
"primary purpose" of the statute, which was to foster the development of the
merchant marine. Liberty Maritime, 928 F.2d at 419. Finding that Congressional
intent was consistent with an expansive interpretation of "notwithstanding," the
court read the phrase to preempt all laws. Id. Thus, courts must discern the
meaning of "notwithstanding" from the legislative history, purpose, and structure
of the entire statute. In the case before us, there is ample evidence that Congress
did not intend the Bowaters Amendment to supersede section 2. Conoco's
interpretation would ease restrictions on foreign ownership of vessels operating in
the coastwise trade, and thus run counter to the "primary purpose" of this
country's maritime statutes. Consequently, we will not read the "notwithstanding"
language of the Bowaters Amendment as superseding section 2.
Conoco, Inc., et al. v. Secretary of Transportation, 970 F.2d 1206, at 1224 (3d Cir. 1992),
footnote omitted.
We believe our interpretation of the preemptive effect of CERCLA § 122(b)(3) is
consistent with the legislative history, purpose, and structure of CERCLA,3 and would pass
muster under the Conoco test. Section 122 as a whole, and section 122(b)(3) in particular,
indicate a Congressional intent to give EPA substantial flexibility and discretion in developing and
reaching settlements. The legislative history of section 122(b)(3) shows that it was added to
encourage "negotiated private party cleanup of hazardous substances." H.R. Rep. No. 99-253, pt.
5, at 58 (1985), reprinted in 1986 U.S.C.C.A.N. 2835. Interpreting "amounts" to include past as
3 Interpreting section 122(b)(3) as preempting the earlier enacted 26 U.S.C.
9507(b) is consistent with modern principles of statutory construction. U.S. v. Nordic
Village, 503 U.S. 30 (1992) [statute must be interpreted so as to give meaning to every
provision]; Chefferv. Reno, 55 F.3d 1517 (11th Cir. 1995) [a more specific statutory
amendment prevails over a more general provision of the original enactment].
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well as future costs, and penalties and punitive damages will further these objectives. PRPs are
more likely to enter into settlements for the cleanup of a site if the entire amounts they pay are
used for the cleanup of the site. Not only does this allow a PRP to show that it is contributing to
site cleanup, but the use of these settlement funds at a site provides immediate funding for
response actions thereby maximizing environmental benefits. Our interpretation of "amounts" is
also supported by the conference report on EPA's FY 1999 appropriations act, which states that
special account funds should be disbursed to parties consenting to undertake response actions, but
that EPA "is entitled to a reasonable retention of special account funds for past and future
response costs of the United States and any affected State." H. Conf. Rep. No. 105-769, at 283
(1998).
If you have any questions about this advice, please call either of us or Alex Schmandt
(260-1708) or Carol Cowgill (564-4701).
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, DC 2 0460
OFFICE OF SITE REMEDIATION ENFORCEMENT
UNITED STATES DEPARTMENT OF JUSTICE
WASHINGTON, DC 20530
ENVIRONMENT AND NATURAL RESOURCES DIVISION
March 14, 1997
MEMORANDUM
SUBJECT:
FROM:
TO:
Defining "Matters Addressed"1 in CERCLA Settlements
Bruce S. Gelber /s/
Deputy Chief, Environmental Enforcement Section
Environment and Natural Resources Division
U.S. Department of Justice
Sandra L. Connors /s/
Director, Regional Support Division
Office of Site Remediation Enforcement
U.S. Environmental Protection Agency-
All EES Attorneys and Paralegals
EPA Regional Counsel Branch Chiefs, Regions I-X
This memorandum revises the policy of the Department of
Justice and the Environmental Protection Agency with respect to
the content of contribution protection clauses in judicial and
administrative settlements -under the Comprehensive Environmental
Response, Compensation and Liability Act (CERCLA). In many cases
it is appropriate for the settlement agreement to contain an
explicit definition of "matters addressed" that clarifies the
parties' intent regarding the scope of contribution protection.
Such a definition will reduce uncertainty and litigation
regarding the effect of CERCLA settlements on the contribution
claims of other persons, and will promote the rapid entry of
decrees. This memorandum will describe the principles to be
applied in defining "matters addressed," and will discuss the
application of these principles to the most common types of
CERCLA settlements. This memorandum supersedes EPA's "Interim
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A. Background
Section 113(f)(2) of CERCLA provides that:
A party who has resolved its liability to the United States
or a State in an administrative or judicially approved
settlement shall not be liable for claims for contribution
regarding matters addressed in the settlement. Such
settlement does not discharge any of the other potentially
liable parties unless its terms so provide, but it reduces
the potential liability of the others by the amount of the
settlement.
42 U.S.C. § 9613(f)(2) (emphasis added). Sections 122(g)(5) and
122(h)(4) of CERCLA provide virtually identical contribution
protection provisions for settlements with de minimis parties and
administrative cost recovery settlements, respectively.
In the past, CERCLA settlements have generally not included
a definition of "matters addressed," but instead have at most
contained a statement that the "Settling Defendants are entitled
to such protection from contribution actions or claims as is
provided in CERCLA Section 113(f)(2)" or the equivalent. This
approach has sometimes caused uncertainty regarding the effect of
the settlement on the contribution rights of persons not party to
the settlement, resulting in delays in the entry of decrees and
the entanglement of the United States in subsequent litigation
regarding the scope of contribution protection.1 Several courts
1 See, e.g., United States v. Alcan Aluminum. 25 F.3d
1174 (3rd Cir. 1994) (reversing denial of motion to intervene by
nonsettlors and remanding for determination as to whether consent
decree cut off nonsettlors'. contribution rights); United States
v. Charter International Oil Co., 83 F.3d 510 (1st Cir. 1996)
(dispute over scope of contribution protection)? United States v.
Colorado & Eastern RR Co.. 50 F.3d 1530 (10th Cir. 1995) ("CERC")
(U.S. argued as amicus that matters addressed in consent decree
were limited to EPA's past costs so that prior settlors
performing remedy could maintain action against defendant); Akzo
Coatings v. Aigner Corp. 30 F.3d 761 (7th Cir. 1994) (amicus
brief argued that RD/RA consent decree did not provide
contribution protection for early removal action); Dravo v.
Zuber. 13 F.3d 1222 (8th Cir. 1994) (amicus brief argued that de
minimis AOC provided site-wide contribution protection); Avnet.
Inc. v. Allied-Signal. Inc.. 825 F. Supp. 1132 (D. R.I. 1992)
(same); Waste Management of Pennsylvania. Inc. v. Citv of York.
Q1 n P flnnn 1 0^ I'M n Da 1QQR^ ^TT Q arnnoH linuiirPAOcful 1 i; a <3
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have indicated that the United States can reduce this
uncertainty by defining "matters addressed" explicitly in its
CERCLA consent decrees.2
Defining "matters addressed" in CERCLA settlements will
serve the public interest by reducing uncertainty and litigation
regarding the scope of contribution protection associated with
such settlements, and will enable the United States to maximize
the value of its CERCLA recoveries by affording greater certainty
and finality to settling parties. In addition, careful crafting
of the scope of matters addressed is important to the United
States where an agency other than EPA has a potential claim for
recovery of response costs that could be extinguished as a
result. Therefore, a definition of "matters addressed" should
2 United States v. Charter Internat'l Oil Co., 83 F.3d at
517, n. 9 ("The absence of specific language concerning 'matters
addressed1 might be thought to be of concern to the EPA and the
public. Having the scope of 'matters addressed' specifically
agreed upon should lead to greater certainty and finality. That
certainty and finality are attractive inducements to settle.");
CERC, 50 F.3d at 1537 (citing parties' failure to "draft around
the 'matters addressed' problem," presumably by defining "matters
addressed"); Akzo v. Aiqner, 30 F.3d at 766, n. 8 ("if the
parties'have included terms explicitly defining 'matters
i Var 1-Vifan r- co)- h 1 eamon f- hVien hhnoo t-or-mc will Vies h i rrh 1
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typically be included in the contribution protection section of
future CERCLA settlements.3
B. Defining "Matters Addressed": General Principles
The term "matters addressed" should be drafted on a site-
specific basis to correspond to the facts of the case and the
intent of the parties. Generally, the term "matters addressed"
should identify those response actions and costs for which the
parties intend contribution protection to be provided. At a
minimum, these will be the response actions or costs the settling
parties agree to perform or pay; however, "matters addressed" can
be broader if the settlement is intended to resolve a wider range
of response actions or costs, regardless of who undertakes the
work or incurs those costs. This broader contribution protection
is typical in most de minimis and ability to pay settlements, as
well as in certain RD/RA and cash-out settlements.
In crafting a definition of "matters addressed," the parties
should be prepared to satisfy the legal standard for entry, i.e..
that the settlement is "fair, reasonable and consistent with the
goals of CERCLA.1,4 Where the settlement is intended to
extinguish the contribution rights of other PRPs that may incur
or be held liable for response costs, the entering court may, as
one part of its fairness analysis, require a demonstration that
3 The following model CERCLA settlement documents already
contemplate inclusion of a definition of "matters addressed":
1) Revised Model RD/RA Consent Decree (July 13, 1995); 2) Model
CERCLA Section 107 Consent Decree for Recovery of Past Response
Costs (September 29, 1995); 3) Model CERCLA Section 122(h)(1)
Agreement for Recovery of Past Response Costs (September 29,
1995); 4) Revised Model CERCLA Section 122(g)(4) De Minimis
Contributor Consent Decree and Administrative Order on Consent
(September 29, 1995); 5) Model CERCLA Section 122(g) (4) De
Micromis Administrative Order on Consent and Consent Decree,
issued as attachments to the Revised Guidance on CERCLA
Settlements with De Micromis Waste Contributors (June 3, 1996).
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this result is fair to potential contribution plaintiffs whose
rights would be extinguished.5
Ordinarily, the required demonstration can be accomplished
by showing that the response actions or costs within the
definition of "matters addressed" were taken into consideration
in determining the amount of the settlement, and that the
settlors' payment or other contribution represents a reasonable
contribution to those costs based on some defensible criterion
such as the settlors' volumetric share'or ability to pay, or a
fair assessment of the litigation risks. Moreover, the impact of
the settlement on the contribution rights of any non-parties must
be fair under all of the relevant circumstances. In evaluating
the fairness of the settlement, it is relevant that the proceeds
from the settlement serve to "reduce the potential liability" of
all non-settling PRPs. See 42 U.S.C. § 9613(f) (2) .6
5	See United States v. Charter. 83 F.3d 523 (holding that
consent decree was not unfair to prior settling parties because
it did not bar contribution claims); U.S. v. Alcan Aluminum
Corp., 25 F. 3d 1174 (3d Cir. 1994) (a party whose contribution
rights may be extinguished should be permitted to intervene for
the purpose of opposing entry of a consent decree); but see U.S.
v. Rohm and Haas Company, 721 F. Supp. 666, 686-687 (if a decree
is otherwise reasonable in light of identified factors, the
reviewing court need not separately consider the fairness of the
decree to non-settling parties). At most, fairness to other
parties is but one dimension of the larger fairness analysis,
which has both procedural and substantive dimensions that are
beyond the scope of this memorandum. See United States v.
Cannons Enq'q Corp.. 899 F.2d at 89-90.
6	It may be appropriate in some instances to structure a
settlement to ensure that PRPs whose contribution rights are
being cut off receive an appropriate benefit from the settlement,
e.g., through direct reimbursement for work they have performed
or through establishment of a CERCLA § 122(b)(3) special account
to fund future work. For example, in cases where prior settlors
have agreed to perform the remedy and pay most of EPA's costs, it
may, in light of that cooperation, be appropriate to allocate the
proceeds from a subsequent settlement between the Superfund and
the prior settlors in order to ensure the fairness of the
settlement. On the other hand, if in the prior settlement the
United States compromised its past costs claims on the
understanding that it would seek the shortfall from others, the
prior settlors may have already received an appropriate benefit
H-\ rnnah i-lio m-ir-Hi-ial r-nmnr-nm 1 ao «n 1-h 3 1- -it- i s	fsi r fnr
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The scope of the covenant not to sue is relevant to, but not
dispositive of, the scope of "matters addressed." A cost or
response action is not a "matter addressed" merely because the
United States covenants not to sue for it. "If the covenant not
to sue alone were held to be determinative of the scope of
contribution protection, the United States would not be free to
release the settling parties from further litigation with the
United States, without unavoidably cutting off all private party
contribution rights." Akzo, 30 F.3d at 766 (quoting brief of
United States as amicus). The government may have reasons to
give such a covenant unrelated to an intent regarding the scope
of contribution protection affecting other parties, such as prior
settlors. Thus, in some cases "matters addressed" is
appropriately defined less broadly than the covenant not to sue.
On the other hand, an item that is not within the scope of the
covenant not to sue is not ordinarily considered to be a "matter
addressed" in the settlement. As always, it remains important to
keep the concept of "matters addressed" distinct from the scope
of the covenant not to sue.
C. Application of Principles to Typical Settlements
The following examples offer some guidance and suggested
language for defining "matters addressed" in different types of
CERCLA settlements. These are examples only. Site-specific
considerations may require changes to the language suggested in
these examples.
1. De Minimis Settlements
Typically, de minimis settlements are intended to provide
complete relief to the settlors by fully resolving all claims
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against them relating to cleanup of the site. To ensure that
such settlements achieve their intended purpose, it is important
that all costs for which contribution protection is being
provided be considered in determining the amount of the payment.
Thus, in de minimis (and other) settlements in which PRPs pay a
share of specified costs, an item is "addressed" if it is
included in the cost total-to which the parties' shares are
applied. Other items whose costs cannot be estimated at the time
of settlement (e.g., additional work that may be required as a
result of conditions that are not known or anticipated at the
time of the settlement, or work performed by other PRPs' for which
an accurate accounting is unavailable) may be included in
"matters addressed" if the settlors pay a premium that reflects
the risk that such costs will ultimately be incurred. Where a
diligent effort is made to include all currently anticipated site
costs (past and future, government and private) in the cost basis
of the settlement, the definition of "matters addressed" should
be drafted to include all such costs, as follows:
The "matters addressed" in this settlement are all response
actions taken or to be taken and all response costs incurred
or to be incurred by the United States or any other person
with respect to the Site.7 The "matters addressed" in this
settlement do not include those response costs or response
actions as to which the United States has reserved its
rights under this Consent Decree (except for claims for
failure to comply with this Decree), in the event that the
United States asserts rights against Settling Defendants
coming within the scope of such reservations.8
7	In cases in which a State has or is expected to take
response actions or incur response costs with respect to the
site, and those actions and costs are not considered in arriving
at the settlement amount, this definition should be modified to
exclude State response actions or response costs.
8	Section 7 of this Memorandum explains the rationale for
carving out reserved matters from "matters addressed, 11 and should
Vita PAncsiil haH -in pnnnoptinn uti hVi H r-s f h i nrr 3 Hof i ni f l nn nf ^maH-orq
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Of course, if the settlement is not based on an evaluation
of the party's appropriate share of all anticipated site costs
(e.g., where it is limited.to a particular operable unit, or
other portion of site costs), then the definition of "matters
addressed" should be modified accordingly.
2.	Final RD/RA Consent Decrees
in final RD/RA settlements, there often is no explicit
determination of percentage shares, but a group of settlors will
agree to perform the remedy and pay all or a portion of the
United States' past and future costs. Because such settlors
usually bear the bulk of the site costs, it is likely to be fair
that they receive contribution protection for all site costs,
including those that may have been incurred by other PRPs (such
as the costs of doing an RI/FS under an EPA order). In such
cases, so long as the costs borne by other PRPs are known (or can
be reasonably estimated) and were considered in determining how
much the final RD/RA settlors should be required to do and pay,
those earlier PRP costs should be included in "matters addressed"
along with all of the United States' costs. The definition of
"matters addressed" in such a settlement should include all
anticipated costs and work, and should be similar or identical to
the definition suggested above for de minimis settlements.
If, on the other hand, the United States is unable to
conclude that the settlors are paying an appropriate portion of
all costs, both public and private -- e.g., where the settlors
agree to perform a relatively inexpensive remedy, but do not
contribute to an expensive RI/FS that was performed by other PRPs
- - it may be appropriate either to limit "matters addressed" to
costs reimbursed or work performed under the decree or to list
specifically the matters for which the settlor is to receive
contribution protection, including costs incurred by PRPs to the
extent they have been considered or addressed.
3.	Partial (Operable Unit) Consent Decrees
In RD/RA settlements for only one of several operable units,
the "matters addressed" are likely to be limited to the portion
of the cleanup which the settlors are performing or funding. In
such cases, the following language should be used:
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The "matters addressed" in this settlement are Past and
Future Response Costs [as defined herein; or for specific,
described work] and the Work as defined herein.
However, where a settlor conducts the whole remedy at a site
through a series of operable unit decrees, the last operable unit
decree should generally use a definition of "matters addressed"
that is equivalent to what the settlor would have received if it
had performed the whole remedy under one, final RD/RA decree.
4. Past Cost-Only Settlements
In past cost settlements, settlors pay all or a portion of
the United States' past costs and the covenant is similarly
limited. Such decrees often contain a definition of "Past
Response Costs" that limits such costs to those incurred by the
United States with respect to the site prior to a given date. In
other cases, "Past Response Costs" may be defined as costs
relating to a specified set of response actions. In "Past Cost-
Only" settlements, the covenant not to sue covers such Past
Response Costs only. To prevent disputes regarding the parties'
intentions as to the scope of contribution protection in such
settlements, "matters addressed" should be narrowly defined as
follows:
The "matters addressed" in this settlement are limited to
the United States' Past Response Costs, as defined herein.
In some past cost settlements, the definition of "matters
addressed" should be even narrower. For example, if prior
settlors have already reimbursed part of the United States' past
costs, the amount of the settlement in issue may be limited by
the amount of the United States' remaining shortfall, so that the
settlor's payment may be smaller than what would be a reasonable
contribution by the settlor to all of the government's past
costs. In such a case, it may be appropriate to provide an even
narrower definition, such as by limiting "matters addressed" to
the past costs settling defendant has agreed to pay or to the
United States' past costs that were unreimbursed prior to any
payments to be made under the decree.
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5. Cash-Out Settlements
In cash-out settlements (where a settlor pays money and
typically receives a covenant not to sue under Sections 106 and
107 for both past and future costs and future liability, subject
to standard reopeners), the scope of "matters addressed" depends
on the circumstances and the intent of the parties. For example,
if the settlor's payment represents a reasonable contribution
toward all anticipated past and estimated future site costs
(including past and future PRP response costs), "matters
addressed" should include all such response activities and costs,
and the language suggested above for de minimis and final RD/RA
settlements is appropriate. If, however, the settlor's payment
was determined based on only a subset of site response costs,
only that subset is a matter actually addressed. Under these
circumstances, the following form should be used:
The "matters addressed" in this settlement are limited to
the Past and Future Response Costs, incurred or to be
incurred [by the United States; prior to a specified date;
or with respect to specified items of work such as an RI/FS
or Operable Unit].9
9 Note that one court has held that, because Section
122(h) of CERCLA allows EPA to settle claims only for costs
incurred by the government, administrative cash-out settlements
under Section 122(h) cannot extinguish contribution claims of
private parties with respect to the cleanup costs they incur.
Waste Management of Pennsylvania. Inc. v. City of York. 910 F.
Supp. 1035 (M.D. Pa. 1995). In light of this decision, it may be
prudent in the case of cash-out settlements in which the
government intends to afford protection from contribution actions
for private party response'costs (such as costs incurred by prior
RD/RA settlors), to utilize a settlement vehicle other than an
administrative settlement based solely on Section 122(h) of
PTrRPT.a csimh p q an aHmini ol-rst-i vo col- h 1 emon h biac-oi-1 r>n hVio
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6. Ability to Pay Settlements
The purpose of ability to pay settlements is to provide
repose to a defendant with limited financial resources, in return
for a contribution to the cleanup that takes into account the
defendant's limited financial means. Such a settlement often
represents a judgment that, given the total anticipated costs
(public and private, past and future) at this site, it is
appropriate that this impecunious PRP pay a specified portion of
its limited funds toward cleanup. So long as cost or work items
are considered in such an analysis, they should be included in
"matters addressed." Indeed, it may be difficult to secure such
settlements without some assurance of broad contribution
protection, because PRPs with limited resources may be unwilling
to settle if they must retain resources to defend against
contribution actions. Therefore, ordinarily "matters addressed"
should include all site co£}ts, using the language suggested for
de minimis and final RD/RA settlements.10
Note, however, that ability to pay settlements do not always
address all site costs. Partial settlements such as operable
unit settlements may contain ability to pay provisions for some
parties, without resolving those parties' liability for all site
costs. In such cases, a more limited definition of "matters
addressed" will be appropriate.
7. Reserved Matters
In most CERCLA settlements, the United States explicitly
identifies a variety of matters and claims that it is reserving
with respect to the settling defendants notwithstanding the
10 Note that because CERCLA § 113(f) (3) (C) subordinates
private party contribution claims to the rights of the United
States, there is nothing unfair about the United States
recovering all or substantially all of the settlement proceeds in
cases involving a limited ability to pay, so long as the total
recovery is reasonable. See United States v. Bav Area Battery,
895 F. Supp 1524 (N.D. Fla. 1995). As noted above, however, it
mav	annrnnri aho -in cnmo facAC hn rnnci rlor an a rranrrompn 1-
-------
plaintiff's covenant not to sue. There may be an overlap
between the subject matter of these reservations and the
definition of "matters addressed." Specifically, the definition
of "matters addressed" recommended above for certain settlements
would provide contribution protection for "all response actions
taken or to be taken and all response costs incurred or to be
incurred" with respect to the site. Many reservations of rights
in CERCLA decrees, such as'the statutory reopeners for unknown
conditions and new information, by their terms also relate to
potential liability for "response actions" and "response costs."
By virtue of the fact that the United States has reserved its
rights to pursue the settlors for such matters, however, in the
usual instance such matters are not "addressed" by the
settlement.
In order to avoid any uncertainty arising from the overlap
between the definition of "matters addressed" and the standard
reservations and reopeners, the following language should be
added to the definition of "matters addressed," as indicated
above, where a broad definition of matters addressed is being
used:
The "matters addressed" in this settlement do not include
those response costs or response actions as to which the
United States has reserved its rights under this Consent
Decree (except for claims for failure to comply with this
Decree),11 in the event that the United States asserts
rights against Settling Defendants coming within the scope
of such reservations.
It is important that the language excluding reopeners and
reservations from the definition of "matters addressed" be
drafted to require that the United States invoke the reservation
or reopener before a contribution plaintiff can avoid the bar to
11 See. e.g. . Model RD/RA Decree 1IH 80 and 84.a. The
issue of a settling defendant's compliance is between the United
States and that defendant. A determination by the United States
that the defendant is out of compliance can usually be addressed
by such mechanisms as stipulated penalties, motions to enforce,
nr nl-hor- c;<- on a anrl csVirMilrl 'nnh 311 t-nms hi pal 1 v eynnq <=> hho cot-hli-nrr
-------
contribution suits on the basis of such reservation or reopener.
This formulation is intended to preclude contribution claims
against the settlors based on frivolous allegations by the
contribution plaintiff that the conditions triggering such
reservations have been met.
where consent decrees are not intended to afford broad
contribution protection, as in the example of partial and past-
cost-only decrees described in Sections C.3 and C.4 above, the
more limited definition of "matters addressed" does not overlap
with the standard reservations and reopeners from CERCLA model
settlement documents, and there will be no need to add any
language to the definition in order to exclude such
items from "matters addressed" by explicit reference.
D. Purpose and Use of this Memorandum
This memorandum is intended exclusively as guidance for
employees of the U.S. Environmental Protection Agency and the
U.S. Department of Justice, and is subject to modification at any
time. This memorandum is not a rule and does not create any
legal rights or obligations. Whether and how the principles set
forth in this memorandum are applied in a particular settlement
will depend on the relevant facts. Questions regarding this
memorandum should be directed to Daniel C. Beckhard of the
Environmental Enforcement Section (202/514-2771) or Janice Linett
of the Regional Support Division (703/978-3057).
cc: Lisa K. Friedman, Associate General Counsel,
Solid Waste and Emergency Response Division
Stephen D. Luftig, Director, Office of Emergency and
Remedial Response
Barry Breen, Director, Office of Site Remediation
Enforcement
Letitia Grishaw, Chief, Environmental Defense Section
EDS Deputy and Assistant Chiefs
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10
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-	^	UNITED STATES ENVIRONMENTAL PROTECTION AGENCY	&

	w±	WASHINGTON, D.C. 20460
*1 PRCJ&

JUN 30 R2
OFFICE OF
GENERAL COUNSEL
MEMORANDUM
SUBJECT: Denial of Motion for Preliminary Injunction Requiring
Public Attendance at the Governors' Forum on
Environmental Management-'-)
FROM:	Raymond B. Ludwisze^ski
Acting General Counsel
TO:	The Administrator

On June 19, 1992, the District Court for the District of
Columbia denied the Natural Resources Defense Council's (NRDC)
motion for a preliminary injunction requiring that EPA permit
public attendance at meetings of the Governors' Forum on
Environmental Management (Forum) (copy of order attached). This
important legal victory for EPA may have far reaching effects.
This fdecision helps-to—establish that meetings with"" co-regulators
to"discuss shared programs should not generally be subject to
FACA's chartering, open meetings, and balanced membership
requirements. The purpose of this memorandum is to explain the
significance of this decision and to provide you with a status
report concerning this litigation.
Erik Olson, an employee of NRDC and a member of the National
Drinking Water Advisory Council, wrote a letter to EPA in May,
1992, requesting that the Forum meetings be open to the public
because the Forum was an "advisory committee" subject to the
Federal Advisory Committee Act (FACA). I responded to the letter
on May 18, 1992. In that letter, I explained that the Forum was
initiated by you to seek the assistance of various Governors in
considering those issues in which states have an operational role
as co-regulators under various delegated activities. The first
set of issues to be discussed by the Forum concerned the Safe
Drinking Water Act (SDWA). I stated that the Forum was not an
advisory committee subject to FACA. NRDC subsequently retained
Public Citizen to file this motion for a preliminary injunction
on June 12, 1992 in the District Court for the District of
Columbia. The motion sought the court to order that the Forum's
meetings be open to the public.
Primed on Recycled Paper
-------
Because of the pendency of the Forum meeting on Sunday,
June 21, the court ordered an expedited hearing for the morning
of June 19 in this case. Later that afternoon, Judge Joyce Hens
Green issued an order denying NRDC's motion.
The majority of the opinion deals with the unlikelihood of
plaintiff prevailing on the merits. The court could not
establish that Congress intended to include the Forum within the
definition of "advisory committee" for purposes of FACA. The
court holds that the Governors "act operationally as independent
chief executives in partnership with the federal agency." EPA
has traditionally relied on this "operational exception" to
exempt from FACA meetings with state officials that ser^e as co-
regulators with EPA. Accordingly, the court determined that the
plaintiff is unlikely to prevail on the merits.
The court will still decide this case on the merits unless
NRDC withdraws its suit. Judge Lamberth will be presiding over
this litigation in the future. NRDC may also file an appeal of
the denial of its motion for a preliminary injunction to the
United States Court of Appeals for the District of Columbia. If
you have any additional questions, please give me a call or ask
your staff to contact Hale Hawbecker, OGC's FACA expert. He can
be reached on 260-4555.
Attachment
cc: Deputy Administrator
Assistant Administrators
Associate Administrators
Regional Administrators
Regional Counsels
Associate General Counsels
2
-------
Author: Cheryl McMenamin at REGI0N4
Date: 4/22/99 8:01 AM
Priority: Normal
TO: Heather Turnbull, Patricia Strougal
Subject: Message from OGE Director
fyi
Forward Header
Subject: Message from OGE Director
Author: MASS MAILER at IN
Date: 4/21/99 7:20 PM
This message is being sent to all EPA Employees
April 21, 1999 6:45 PM
Please do not reply to this mass mailing.
A Message to Executive Branch Employees
From the Honorable Stephen D. Potts, Director
U.S. Office of Government Ethics
April 8, 1999
There appears to be some confusion about the legal effect of two recent
court cases on the restrictions on the acceptance of gifts by executive
branch employees. The first of these cases involved the acquittal of a
former Secretary of Agriculture of criminal charges of, in part, illegally
accepting gratuities from persons regulated by the Department of
Agriculture. The second case arose out of the same facts and involved
Sun-Diamond Growers, an agricultural cooperative that was charged with
bestowing illegal gratuities on that same Federal official. The appeal in
the United States v. Sun-Diamond Growers case was recently heard in the
U.S. Supreme Court. News reports covering the oral argument in that case
may have left some persons with the mistaken impression that if the Supreme
Court sustains an Appeals Court decision favorable to Sun-Diamond Growers,
the door will be open for executive branch employees to accept
entertainment, meals, and other gifts lavish or otherwise.
The fact of the matter is that neither of these criminal cases will have
any legal effect on the administrative rules on gifts contained in the
Standards of Ethical Conduct for Employees of the Executive Branch found
at 5 C.F.R. part 2635, subpart B. These rules, which implement noncriminal
prohibitions on gifts found at 5 U.S.C. ° 7353, and Executive Order 12674,
were not in issue in either case. Subject to certain limited exceptions
provided for in the rules themselves, executive branch employees will
continue to be prohibited from accepting gifts from persons or
organizations (like Sun-Diamond Growers in the case of the Department of
Agriculture) that do business with, are regulated by, seek official action
from, or otherwise have interests that could be affected by an employee's
agency. The rules also bar acceptance of gifts given because of the
official position which an employee occupies.
These gift rules implement fundamental principles of public service, namely
that Federal officials and employees should not use their public office for
their own personal gain or give the appearance that they are not carrying
out their official duties with complete impartiality. We have a Federal
-------
workforce that does maintain the highest standards of conduct and I want to
encourage each of you to continue to fulfill your commitment to the public
trust that has been placed in all of us as Federal employees.
-------

CONFIDENTIAL/PRIVILEGED/DO NOT RELEASE
CONFIDENTIAL
Please see the short summary below of an adverse 6th Circuit decision from last week. In case you are
interested, the court*s entire 8-page decision is attached in WordPerfect and can be printed directly from
your electronic mailbox.	n*
-f™ it i*
On April 14, 1999, a 3-judge panel of the U.S. Court of Appeals for the Sixth Circuit issued an unfavorable
opinion in the Spitzer Great Lakes TSCA PCB disposal case arising out of Region V. In this case, two
judges on the panel (Judges Moore and Jones) held that it was an abuse of discretion for the
Environmental Appeals Board (EAB) to dismiss an untimely appeal of an ALJ decision where the appellant
can demonstrate that he relied upon and complied with technically accurate but, in the majority's view,
materially misleading information provided by the Agency.
At issue was the previously common practice of the presiding officers to include in administrative penalty
'orders: (1) a statement that the Initial Decision becomes the final order of the EAB within 45 days unless
either the parties appeal or the EAB decides, sua sponte, to review the Initial Decision; and (2) a reference
to the applicable administrative practice requirements in 40 C.F.R. Part 22, but not explicitly referencing
the § 22.30(a) deadline for appeals to be filed within 20 days.
Spitzer filed its appeal on the 45th day, claiming to rely on the 45-day reference as allowing an appeal at
that time, and the Sixth Circuit agreed that the ALJ*s language deceptively implied a 45-day appeal
deadline. The court then remanded the case to the EAB for a review of Spitzer's appeal on the merits,
finding that the EAB should have waived strict compliance with the 20-day filing deadline, especially in
light of the fact that the EAB had waived the 20-day filing deadline in another case and, in the majority's
view, had not sufficiently justified its departure from its prior practice of granting such waivers.
In a dissenting opinion, Judge Ryan explained the meaning of the 45-day reference (i.e., simply to indicate
when the clock begins to run on payment of the penalty), and stated that he was not persuaded that
Spitzer had been misled, especially in light of EPA's having sent a copy of the Part 22 regulations to
Spitzer with explicit advice to 'carefully read and analyze* such regulations. Judge Ryan*s dissent also
concluded that the EAB did not abuse its discretion in choosing to apply the 20-day appeal deadline
provided for in the regulations, rather than in waiving it. In doing so, the dissent distinguished the prior
waiver case cited by the majority as a case involving 'patently inaccurate and erroneous advice* given by
an ALJ, as opposed to the Spitzer situation where the ALJ gave indisputably accurate advice regarding
the date that the order would become final and no specific advice concerning the time for filing an appeal.
Although the presiding officers appear to have changed the wording of their penalty orders to avoid this
specific problem from recurring, the decision remains potentially relevant for at least two reasons' First, it
offers a useful reminder that the Agency should be prepared to justify departures from previous policies
and practices. (See also Western States Petroleum Ass*n v. EPA, 87 F.3d 280 (9th Cir. 1996), holding
that EPA abused its discretion by inexplicably departing from its prior positions concerning exemptions for
'insignificant emissions units* (lEUs) under the Clean Air Act Title V operating permit program.) Second,
although the court did not frame this specifically as a *fair notice* issue, enforcement personnel should be
as clear as possible in any communications with regulated entities concerning legal requirements and
Agency procedures, even where companies are represented by counsel, given a copy of the applicable
regulations, and advised to read and analyze the regulations carefully.
In the interest of disseminating this decision in a timely manner, please note that these are initial
impressions. After further analysis and discussions with others in OECA, OGC, and at DOJ, we expect to
share additional thoughts on the meaning of this decision and/or options for responding to the court*s
ruling (including possibly seeking reconsideration en banc). If you have any comments or questions,
please call me at 202-564-4002. Thanks again.
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[Image] Case in WordPerfect Format Return to Sixth Circuit Home [Image]
Page
RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206
ELECTRONIC CITATION: 1999 FED App. 0136P (6th Cir.)
File Name: 99a0136p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
Spitzer Great Lakes Ltd., Company,
Petitioner,
v.
United States Environmental Protection Agency,
Respondent.
>
No. 97-3489
On Petition for Review of an Order of the United States Environmental
Protection Agency,
Environmental Appeals Board.
No. 97-4
Argued: July 29, 1998
Decided and Filed: April 14, 1999
Before: JONES, RYAN, and MOORE, Circuit Judges.
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COUNSEL
ARGUED: Terrence M. Fay, BENESCH, FR1EDLANDER, COP LAN & ARONOFF,
Columbus,
Ohio, for Petitioner. Eric Hostetler, U.S. DEPARTMENT OF JUSTICE,
ENVIRONMENT & NATURAL RESOURCES DIVISION, Washington, D.C., for Respondent.
ON BRIEF: Terrence M. Fay, Rex A. Littrell, BENESCH, FR1EDLANDER, COPLAN &
ARONOFF, Columbus, Ohio, Anthony B. Giardini, BRADLEY & GIARDINI COMPANY,
Lorain, Ohio, for Petitioner. Eric Hostetler, U.S. DEPARTMENT OF JUSTICE,
ENVIRONMENT & NATURAL RESOURCES DIVISION, Washington, D.C., for Respondent.
MOORE, J., delivered the opinion of the court, in which JONES, J., joined.
RYAN, J. (pp. 13-17), delivered a separate dissenting opinion.
OPINION
KAREN NELSON MOORE, Circuit Judge. Petitioner Spitzer Great Lakes Ltd.,
Company ("Spitzer") was assessed a civil penalty by an EPA administrative
law judge ("ALJ") for violations of the Toxic Substances Control Act (the
"TSCA"), 15 U.S.C.22 2601-2692. Relying on misleading language contained
in the ALJ's order, Spitzer filed an untimely appeal with the EPA's
Environmental Appeals Board (the "Board"). The Board rejected the appeal,
finding no special circumstances that warranted the relaxation of the EPA's
timeliness requirements. We conclude, however, that this decision was
inconsistent with EPA administrative precedent and thus constitutes an
abuse of discretion on the part of the Board. Accordingly, we REVERSE the
Board's denial of Spitzer's appeal and REMAND the case to the Board for
review of Spitzer's appeal on the merits.
I. FACTS AND PROCEDURAL HISTORY
The TSCA grants the EPA the authority to regulate the manufacture,
processing, distribution in commerce, use, and disposal of toxic chemical
substances and mixtures. See 15 U.S.C. Q 2605. Pursuant to this authority,
the EPA has promulgated rules governing the use, disposal, storage, and
marking of PCBs and PCB-containing articles.(l) Persons in violation of
these regulations are subject to civil penalties of up to $25,000 per day
for each violation. See 15 U.S.C. 2 2615(a). A civil penalty "shall be
-------
assessed by the Administrator by an order made on the record after
opportunity ... for a hearing." 15 U.S.C. Q 2615(a)(2)(A).
In 1986 Spitzer purchased property in Lorain, Ohio from the American Ship
Building Company. In 1992, the EPA commenced an administrative proceeding
against Spitzer for numerous violations of the rules governing the disposal
of PCB-containing equipment that Spitzer allegedly committed between 1986
and 1990. J. A. at 91 (EPA Letter Enclosing Compl. and Notice of Opportunity
for Hr'g). The EPA enclosed with the complaint served upon Spitzer a copy
of the EPA's Consolidated Rules of Practice, 40 C.F.R. Part 22, and a cover
letter advising Spitzer to "carefully read and analyze the enclosed
Complaint and Rules of Practice." Id. After Spitzer represented that the
facts set forth in the complaint were "reasonably accurate," the EPA issued
an accelerated decision on May 25, 1995 finding Spitzer liable for all
violations alleged in the complaint. See J. A. at 16 (Initial Decision at 1
& n.2). In the subsequent penalty phase of the proceedings, the ALJ issued
an initial decision on January 24, 1997 assessing a civil penalty against
Spitzer in the amount of $165,000. See id. at 16-31.
The initial decision on the penalty was sent by certified mail to Spitzer's
counsel and was served upon the parties on February 3, 1997. J.A. at 32
(Certificate of Serv.). The order required Spitzer to pay the full amount
of the civil penalty within sixty days of the service date of the final
order. J. A. at 31 (Initial Decision at 16). The order concluded with the
following statement:
Pursuant to 40 C.F.R. e 22.27(c), this initial decision shall become the
final order of the Environmental Appeals Board within forty-five (45) days
after its service upon the parties and without further proceeding unless
(1) an appeal to the Environmental Appeals Board is taken from it by a
party to this proceeding or (2) the Environmental Appeals Board elects, sua
sponte, to review this initial decision.
Id.
Relying on the foregoing statement, Spitzer believed it was required to
file its administrative appeal within forty-five days of being served the
initial decision. Spitzer complied with this implied deadline and filed its
appeal on March 20, 1997. Pursuant to the terms of 20 C.F.R. — 22.30(a)
and 22.07(c), however, to be timely an appeal from the initial decision had
to be filed within 25 days, or by February 28, 1997.(2) Consequently, the
Board issued an order on April 15, 1997 dismissing Spitzer's appeal as
untimely, finding "no special circumstances warranting a relaxation of the
time for filing an appeal." J.A. at 6 (Order Dismissing Appeal at 3).
-------
Spitzer now seeks review of the Board's order, and we have jurisdiction to
review the Board's decision pursuant to 15 U.S.C. 2 2615(a)(3).
II. ANALYSIS
A. Standard of Review
Because the Board's order dismissing Spitzer's administrative appeal was
based solely on Spitzer's failure to comply with the agency's procedural
deadlines, we limit our review to the question of whether, the Board abused
its discretion in requiring strict compliance with its regulatory
deadlines. We do not address Spitzer's challenge to the reasonableness of
the civil penalty assessed against it for violating the TSCA. See Blevins
v. Director, Office of Workers' Compensation Programs, United States Dep't
of Labor, 683 F.2d 139, 143 (6th Cir. 1982) (where petitioner seeks review
of order of an agency's board dismissing an administrative appeal as
untimely, court of appeals will not review the merits of the ALJ's
decision). Our review of the Board's action is narrowly circumscribed by
the Administrative Procedure Act, and we will only overturn the Board's
ruling if "arbitrary, capricious, an abuse of discretion, or otherwise not
in accordance with law." 5 U.S.C. 2 706(2)(A). See also Brown v. National
Transp. Safety Bd., 795 F.2d 576, 579 (6th Cir. 1986). We note, however,
that the Board's decision regarding the waiver of timeliness requirements
does not comprise a matter of particular agency expertise that warrants
heightened deference. See United States v. Members of Estate of Boothby, 16
F.3d 19, 21-22 (1st Cir. 1994); Mount Graham Red Squirrel v. Espy, 986 F.2d
1568, 1571 (9th Cir. 1993).
B. The EPA Administrative Appeals Process
40 C.F.R. Part 22 sets forth the rules of practice governing the EPA's
administrative assessment of civil penalties. Section 22.30(a) provides
that a party seeking to appeal an adverse ruling of an ALJ must file notice
of appeal and an accompanying appellate brief "within twenty (20) days
after the initial decision is served upon the parties." Where sendee of
the initial decision occurs by mail, five days is added to the time allowed
for the filing of an appeal. See 40 C.F.R. 2 22.07(c). The Board may elect
sua sponte to review the ALJ's initial decision by "serv[ing] notice of
such intention on the parties within forty-five (45) days after the initial
decision is served upon the parties." 40 C.F.R.2 22.30(b). When a party
does not appeal the initial decision and the Board does not review the
decision sua sponte, the initial decision becomes "the final order of the
Environmental Appeals Board within forty-five (45) days after its service
upon the parties and without further proceedings." 40 C.F.R. 2 22.27(c).
-------
"[U]pon timely motion of a party to the proceeding, tor good cause shown,
and after consideration of prejudice to other parties," the Board "may
grant an extension of time for the filing of any pleading, document, or
motion," including the filing of a notice of appeal, arising from the
penalty assessment process. 40 C.F.R. 2 22.07(b). A motion to extend the
time for the filing of an appeal must be filed before the appeal is due,
unless the delay in filing the motion to extend results from excusable
neglect. See id. Even in cases in which no motion for an extension of time
is made or in cases in which s 22.07(b) is inapplicable, however, the Board
nonetheless will waive strict compliance with the time limits for
perfecting an appeal in special circumstances. See Production Plated
Plastics, Inc., 5 E.A.D. 101, 1994 WL 60923, at *2 (I994).(3) Special
circumstances have been found to exist "[wjhere [the EPA] gives erroneous
filing information in writing and a petitioner relies on and complies with
it." BASF Corp. Chem. Div., 2 E.A.D. 925, 1989 WL 266771, at *2 n.3 (1989).
In BASF the petitioner had received transmittal letters from the EPA which
stated that a request for review would be timely if postmarked within the
filing period. In fact, the regulation required receipt by the EPA within
the filing period. Given the erroneous and misleading directive from the
EPA, and BASF's compliance with this erroneous directive, BASF's appeal was
not rejected as untimely. See id. See also Tecroney, Inc., 2 E.A.D. 661,
1988 WL 249374, at *3 n.5 (1988) (strict compliance with timeliness
requirements waived in similar circumstances); Gary Dev. Co., RCRA Appeal
No. 96-2, 1996 WL 514287, at *5 (EPA Aug. 16, 1996) (rejecting untimely
appeal as factual circumstances stood "in sharp contrast to those cases
where a petitioner claims to have relied on erroneous information given by
EPA").
C. Spitzer's Administrative Appeal
Spitzer filed its administrative appeal on the forty-fifth day following
service. EPA Region V filed a motion to dismiss the appeal as untimely, and
the Board granted that motion. As an initial matter, we note that,
apparently, Spitzer made no motion pursuant to 22 C.F.R.9 22.07(b) to file
its appeal out of time. Had Spitzer made such a motion after the expiration
of the twenty-five day period provided in the EPA's Rules of Practice for
the filing of appeals, and had such a motion been denied by the Board, we
would be considering today whether Spitzer's untimely filing of the motion
to extend the time for filing its appeal was the result of excusable
neglect. Because no such motion was filed, however, the question before us
is whether the Board abused its discretion in refusing to waive strict
compliance with its filing requirements in this instance.
In filing its appeal on the forty-fifth day following service, Spitzer
-------
claims to have relied on the final paragraph of the ALJ's order which,
citing 22 C.F.R. 2 22.27, stated that the initial decision would become
final "within forty-five days" unless an appeal was taken or the Board
initiated review sua sponte. We agree with Spitzer that this statement was
misleading if not technically erroneous. Read independently of the
regulations, this statement clearly implies that the petitioner had
forty-five days to appeal.(4) Further, we disagree with the assertion made
by the Board in its dismissal of Spitzer's appeal that "[w]hile the
statement [of the ALJ] can be faulted for not divulging the time period for
perfecting an appeal. . . this dereliction is one of parsimony, not
deception." J.A. at 5 (Order Dismissing Appeal at 2) (quoting Production
Plated Plastics, Inc., 1994 WL 60923, at *2). Despite its technical
accuracy, the ALJ's statement was deceptive and not merely parsimonious. In
fact, an even more parsimonious order that made no reference to an appeal
would have been preferable, as it would have forced the petitioner to
resort to the regulations for the pertinent filing information.
The EPA has apparently recognized that quoting this regulatory language out
of context is misleading. In Production Plated Plastics, Inc., 1994 WL
60923, at *2 n.4, as well as in its dismissal of the present appeal, the
Board "strongly recommend[ed]" that ALJs inform the parties of the correct
appeal filing period or at least cite the appropriate regulatory section.
Moreover, the EPA does not argue here that Spitzer was not misled by the
ALJ's language.
The EPA emphasizes the fact that the information provided to the petitioner
in BASF was erroneous, while the ALJ's statement in the present case
technically was not. Moreover, the EPA notes that Spitzer was provided a
copy of the regulations, was advised to read these regulations, and was
represented by counsel. We presume, however, that BASF also was represented
by counsel and had access to the pertinent regulations. Given these
presumptions, we do not think that it was any more reasonable for BASF to
have relied on inaccurate and misleading filing information than it was for
Spitzer to have relied on technically accurate but equally deceptive
information. In both cases familiarity with the regulations would have
overcome the effect of the receipt of misleading information and would have
allowed for a timely appeal.
Comparing these two cases, we conclude that the technical accuracy of the
information provided by the EPA to Spitzer represents a distinction without
a difference. Given the EPA's precedent, we hold that the Board abused its
discretion in refusing to regard Spitzer's reliance on the misleading ALJ
order as a special circumstance and in refusing to waive strict compliance
with the filing deadline. The EPA has not sufficiently justified its
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departure in this case from its practice of granting waivers in such
circumstances. See Hazime v. INS, 17 F.3d 136, 140 (6th Cir.) (inexplicable
departure from established policy may constitute an abuse of discretion),
cert, denied, 513 U.S. 934 (1994); Puerto Rico Sun Oil Co. v. United States
EPA, 8 F.3d 73, 77 (1st Cir. 1993) (inconsistency with past practice can
represent arbitrary and capricious conduct); Michigan v. Thomas, 805 F.2d
176, 184 (6th Cir. 1986) ("administrative agency may reexamine its prior
decisions and may depart from its precedents provided the departure is
explicitly and rationally justified").(5)
Today's holding is narrow. We simply hold that under EPA precedent it is an
abuse of discretion for the agency to dismiss an untimely appeal where the
appellant can demonstrate that he relied upon and complied with materially
misleading information provided by the agency. Because this holding is
nairow, we are not concerned that it impairs the agency's ability to
administer its regulations efficiently. We also expect that our holding
today will have only limited effect because, as we have noted above, once
it realized that its appeal was untimely, Spitzer could have moved for an
extension of time to perfect its appeal pursuant to 40 C.F.R. s 22.07(b).
It appears to us that the circumstances of this case would constitute
excusable neglect and that, had such a motion been made, it should have
been granted.
The definition of what constitutes excusable neglect for the puiposes of
the Federal Rules of Civil Procedure has been liberalized. See Pioneer Inv.
Servs. Co. v. Brunswick Assocs. Ltd. Partnership, 507 U.S. 380, 395-99
(1993); United States v. Thompson, 82 F.3d 700, 702 (6th Cir. 1996). The
Court determined in Pioneer that excusable neglect is an equitable
principle and that, in determining whether a party should be granted a
reprieve, a court should consider "all relevant circumstances surrounding
the party's omission," including "the danger of prejudice to [other
parties], the length of the delay and its potential impact on judicial
proceedings, the reason for the delay, including whether it was within the
reasonable control of the movant, and whether the movant acted in good
faith." Pioneer, 507 U.S. at 395. Although EPA cases discussing excusable
neglect in the context of 40 C.F.R. s 22.07(b) are infrequent, it appears
that the agency would look to the interpretation of the term as it is used
in the Federal Rules for guidance. See Robert Ross & Sons, Inc., TSCA
Appeal No. 82-4, 1985 WL 57157, at *2 n.5 (EPA Jan. 28,1985) (relying on
cases interpreting excusable neglect under the Federal Rules).
Spitzer's neglect under this formulation would almost certainly have been
excusable. There has been no assertion that the EPA was prejudiced by
Spitzer's compliance with the filing deadline implied by the ALJ's order.
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The delay in Spitzer's appeal, twenty days, was minimal, and, because the
order did not become final in the interim and payment had not yet become
due, the delay had no impact on the proceedings. Although Spitzer can be
faulted for not immediately reading the rules, the delay in filing was
substantially caused by the ALJ's misleading directive. Moreover, there has
been no suggestion that Spitzer did not rely in good faith on the ALJ's
language.
Finally, the EPA has stated that its purposes in adhering strictly to its
time limits are, inter alia,
to promote certainty and uniformity in the application of regulatory
deadlines; to limit reliance on the infinitely variable "internal
operations" of litigants and law firms as determinants of when obligations
must be met; to preserve the Agency's adjudicative resources for litigants
who timely exercise their appeal rights; and to ensure that the Agency
procedural rules are applied equally to all affected parties.
Gary Dev. Co., 1996 WL 514287, at *3. Far from undermining these
principles, we believe that our decision today firmly supports the spirit
of these goals. First, despite the EPA's exhortation to its ALJs, orders of
inconsistent clarity are currently being promulgated by these officials. We
fail to see how strict adherence to deadlines promotes uniformity and
limits reliance on law firm internal operations when some litigants receive
correct directives from ALJs relating to appeals while others receive
misleading directives.(6) Second, we agree that procedural rules should be
applied equally and that resources should be directed to litigants who
timely file. We are sure, however, that these goals are predicated on an
assumption that all litigants begin from an equal starting point. Blind
adherence to deadlines with relaxation solely in the case of literal agency
error advances these goals only in a technical and ineffectual sense.
111. CONCLUSION
For the foregoing reasons, we REVERSE the order of the Board and REMAND the
appeal for disposition on the merits.
DISSENT
RYAN, Circuit Judge, dissenting. To borrow an expression originally coined,
insofar as I know, by our distinguished former colleague, the Honorable
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Bailey Brown, the court today applies "a little fireside equity" to justify
reversing the judgment of the Environmental Appeals Board. The Board's
decision to decline to entertain the petitioner Spitzer's request for
review was based on an absolutely correct, indeed indisputably correct,
application of its own regulations, 40 C.F.R.Q 22.30, because the request
was filed 20 days too late. But this court reverses the Board's decision
upon the following "fireside" reasoning: the Board had discretion to
suspend the application of its rules and allow the late filing, and since
it did so in another case, albeit in significantly different circumstances,
it was an abuse of discretion not to do so in this case. That is an
understanding of the concept of abuse of discretion with which I am not
familiar and, not surprisingly, for which the majority opinion cites no
authority.
This court has no authority to disturb the judgment of the Environmental
Appeals Board, unless the court is able to say that the Board's decision is
"arbitrary, capricious, an abuse of discretion, or otherwise not in
accordance with the law." 5 U.S.C.2 706(2)(A). Relying upon that
authority, the court holds that the Board abused its discretion in not sua
sponte "waiving" (that is to say disregarding) the provision of 40 C.F.R.Q
22.30(a) which establishes the filing deadline for an appeal from a
decision of the Board. The rather convoluted route the majority takes to
get there is fully set out in the majority opinion and need not be
recounted here. The predicate for the majority's reasoning is language
found in the final sentence of the administrative law judge's 16-page
opinion and order holding Spitzer liable for a violation of the
Environmental Protection Act and imposing a civil penalty of SI 65,000. The
offending sentence is quoted in the majority opinion, but what is not
quoted is the single-sentence paragraph that immediately precedes it.
Together, the two paragraphs read as follows:
Failure upon the part of respondent to pay the penalty within the
prescribed statutory time frame after entry of the final order may result
in the assessment of interest on the civil penalty. 31 U.S.C.2 3717; 4
C.F.R. 2 102.13.
Pursuant to 40 C.F.R.2 22.27(c), this initial decision shall become the
final order of the Environmental Appeals Board within forty-five (45) days
after its service upon the parties and without further proceeding unless
(1) an appeal to the Environmental Appeals Board is taken from it by a
party to this proceeding or (2) the Environmental Appeals Board elects, sua
sponte, to review this initial decision.
(Emphasis added.)
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Only when the two paragraphs are read together, does the significance of
the statement in the final paragraph that "this initial decision shall
become the final order of the [Board] within forty-five (45) days" become
apparent: it tells Spitzer that the 45th day after the initial decision is
the time when the clock starts to run for the 60 days ("prescribed
statutory time frame") within which it must pay the assessed penalties in
order to avoid additional interest penalties.
The majority's view, as 1 understand it, is that the ALJ's indisputably
correct advice as to the date his decision would become a final order,
misled and deceived Spitzer, and more than that, established a new "implied
deadline" for Spitzer to file its appeal. However, the majority opinion
also states that the ALJ's advice to Spitzer was "not technically
erroneous" and was "technically] accurate]."
Spitzer claims it was "misled" by the language of the ALJ's order, because
both Spitzer and its counsel were led to believe that the 45-day
deadline-the date upon which the ALJ's order would become final-was also
the deadline for filing an appeal from the ALJ's order. Nevermind that
there is nothing whatever in any of the 16 pages of the ALJ's opinion and
order, and particularly nothing in the sentence in question, which speaks
to the subject of the deadline for filing an appeal.
Spitzer's claim that it was misled and this court's appellate finding of
fact that it was, is particularly unpersuasive in light of the history of
advice given Spitzer, early on in the case, that it should acquaint itself
with the Rules of Practice before the EPA.
When the EPA filed its complaint, it sent Spitzer a copy of the agency's
Consolidated Rules of Practice, 40 C.F.R. part 22, which explicitly spells
out the time within which an appeal from an ALJ decision must be taken in
order that it be timely—either 20 or 25 days from the date of the initial
decision. And just in case that gratuitous legal advice might not be
heeded, the EPA supplied Spitzer with a cover letter advising it to
"carefully read and analyze the enclosed Complaint and Rules of Practice."
(Emphasis added.) Notwithstanding all this advice, Spitzer and its counsel
disregarded the deadline for taking an appeal as stated in 40 C.F.R.9
22.30, and further disregarded the option of moving for an extension of
time for filing a .notice of appeal as provided for in 40 C.F.R. 2 22.07(b).
Confronted with Spitzer's argument that it had been "misled" about the time
within which it must take an appeal, the Board exercised its discretion to
follow the language of the regulation, rather than waive it, and to hold
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that Spitzer's appeal was filed out of time, as indeed it was.
The court now declares that it was an abuse of discretion for the Board to
apply the deadline as provided in section 22.30 because, in an unrelated
earlier case, it exercised its discretion to "waive" the deadline. The
earlier case, In re BASF Corp. Chem. Div., 2 E.A.D. 925, 1989 WL 266771
(Oct. 3, 1989), according to my colleagues, is an "EPA[] precedent" case in
which the Board waived "strict compliance" with the filing deadline
established in section 22.30. Therefore, the court holds, since the Board
exercised its discretion in BASF to "waive strict compliance with the
filing deadline," it had no discretion not to do so in this case. The
trouble with that reasoning, quite aside from its obvious misunderstanding
of the doctrine of "abuse of discretion," is that BASF is plainly
distinguishable from this case. In BASF the ALJ gave patently inaccurate
and erroneous advice, stating in a cover letter that a petition for review
would be timely if "postmarked" within a 30- day period, even though the
rule required actual filing within that period. 1989 WL 266771 at *2 n.3.
In this case, as the majority opinion acknowledges, the ALJ (1) gave no
inaccurate or erroneous advice concerning the subject he addressed—the
date upon which the ALJ's decision would become a "final order"—and (2)
indeed, gave no advice at all concerning the subject addressed in BASF,
i.e., the time for filing an appeal. Thus BASF, both on the facts involved
and the law announced, is distinguishable from this case and is not "an EPA
administrative precedent."
But even if BASF were a precedent of some sort, it is a strange and novel
notion of the doctrine of abuse of discretion that because the Board waived
the appeal deadline in BASF in which incorrect advice concerning the appeal
deadline was given, it has forever after lost its discretion not to waive
the deadline for filing an appeal in subsequent cases; particularly
subsequent cases in which indisputably correct advice is given on a subject
having nothing to do with the deadline for filing an appeal.
Today's decision adds to the books another case in which a federal court
substitutes its own discretionary judgment for that of an adjudicating
administrative agency with which it disagrees, while paying lip service to
the law of "abuse of discretion." Of course the court has the "power" to do
a little "fireside equity" today, but certainly not the "authority" to do
so. See Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402
(1971).
I would affirm.
FOOTNOTES
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1. PCB is a toxic substance frequently used in electrical transformers and
capacitors.
2. 20 C.F.R.2 22.30(a) allows twenty days for the filing of a notice of
appeal after service of the initial decision. Section 22.07(c) extends that
time by five days, however, if service is made by mail.
3. It is well established that an agency has the discretion '"to relax or
modify its procedural rules adopted for the orderly transaction of business
before it when in a given case the ends of justice require it.'" American
Farm Lines v. Black Ball Freight Serv., 397 U.S. 532, 539 (1970) (quoting
NLRB v. Monsanto Chem. Co., 205 F.2d 763, 764 (8th Cir. 1953)). See also
Baumgardner v. Secretary, United States Dep't of Hous. and Urban Dev., 960
F.2d 572, 577 (6th Cir. 1992).
4. In this regard the fact that the statement faithfully recited the
language of 22 C.F.R.2 22.27(c) is immaterial. Read out of context, that
subsection is equally misleading.
5. We do not believe that our decision is undermined by the fact that the
Board rejected an untimely appeal in Production Plated Plastics, Inc., 1994
WL 60923. Although the ALJ's order there contained language roughly
parallel to the misleading statement in the present case, the petitioner
there not only failed to meet the actual filing deadline but also failed to
meet the deadline implied by the misleading statement in the order. It was
clearly not unreasonable for the Board to reject that appeal.
6. Compare the directive provided in William Myers. I.F.&R. VII-475C-83P,
1983 WL 31571, at *7 n.16 (EPA Dec. 23, 1983) ("Unless appealed in
accordance with 40 CFR 22.30 or unless the Administrator elects, sua
sponte, to review the same as therein provided, this decision will become
the final order of the Administrator as provided in 40 CFR 22.27(c)."),
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with the statement of the ALJ in the present case reprinted supra.
[Image] Case in WordPerfect Format Return to Sixth Circuit Home [Image]
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i I*"'"
PAPERWORK REDUCTION ACT
The following summary results from a very brief review of the
major cases interpreting the Paperwork Reduction Act (PRA), 44
U.S.C. Section 3501, et seq. While most cases interpret the PRA
with regard to its application to criminal tax evasion cases,
several cases, including the most recent Supreme Court decision,
inyplve the PRA's connection to other federal statutes and
regulations, including OSHA, the Age Discrimination Act, and
National Forest Service regulations. The major PRA issues
discerned from these cases are set out below. NOTE: No review was
made of the 0MB regulations implementing the PRA and an exhaustive
case review was not done.
The PRA in General
The PRA was enacted in 1981 (effective April 1, 1981) in
response to the enormous growth of the federal bureaucracy and its
corresponding requests for information. Outcries from small
businesses, individuals, and state and local governments, that they
were being buried under demands for paperwork, led Congress to
institute controls. Dole v. United Steelworkers of America. 110
S.Ct. 929, 933 (1990). Congress designated the Office of
Management and Budget (0MB) the overseer of other agencies with
respect to paperwork and set forth a comprehensive scheme designed
to reduce the paperwork burden. Id. The PRA charges 0MB with
developing uniform policies for efficient information processing,
storage and transmittal systems, both within and among agencies.
0MB is directed to review federal collection of all information by
set percentages, establish a Federal Information Locator System,
and develop and Implement procedures for guarding the privacy of
those providing confidential information. Id., citing 44 U.S.C.
Sections 3504, 3505.
The PRA prohibits any federal agency from adopting regulations
which impose paperwork requirements on the public unless the
information is not available to the agency from another source
within the Federal Government, and the agency must formulate a plan
for tabulating the information in a useful manner. Agencies are
also required to minimize the burden on the public to the extent
practicable. Id., citing 44 U.S.C. Section 3507(a)(1). In
addition, the PRA institutes a second layer of review by 0MB for
new paperwork requirements. After an agency has satisfied itself
that an instrument for collecting information - termed an
"information collection request" - is needed, the agency must
submit the request to OMB for approval. Id., citing 44 U.S.C.
Section 3507(a)(2). Under the PRA, a federal agency must submit to
the Director of the OMB any "written report form, application form,
schedule, questionnaire, reporting or recordkeeping requirement,
collection of information requirement or other similar method
calling for the collection of information [from the public]." 44
U.S.C. Sections 3502(11), 3507. If OMB disapproves the request,
the" agency may not collect the information. Id., citing 44 U.S.C.
Section 3507(a)(3). The Director of OMB must approve or reject the
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agency's proposed information collection request within sixty days
of receiving it. 44 U.S.C. Section 3507(b). If the Director
approves the request, he must assign it a control number. 44
U.S.C. Section 3504. An agency may not engage in the collection of
information unless the Director has assigned a control number and
this number must be displayed in the upper right hand corner of the
front page of the from. 44 U.S.C. Sections 3507(f).
Scope of Coverage of the PRA
The PRA clearly covers more than just "forms." See, Dole, 110
S.Ct. at 933 (Supreme Court decision addressing the PRA's
applicability to OSHA regulations); U.S. v. Schweitzer. 775 F.Supp.
1355, 1357 (D.Mont. 1991) ("The court has no quarrel iwth
Schweitzer's position that the Paperwork Reduction Act should not
be construed as being applicable only to 'forms'").
Under the PRA, 0MB's review authority encompasses all
"information collections requests." 44 U.S.C. Section 3507. The
PRA defines such a request as
a written report form, application form, schedule,
questionnaire, reporting or recordkeeping requirement,
collection of information requirement, or other similar
method calling for the collection of information.
44 U.S.C. Section 3502(11). A "collection of information" is in
turn
the obtaining or soliciting of facts or opinions by an
agency through the use of written report forms,
applications forms, schedules, questionnaires, reporting
or recordkeeping requirements, or other similar methods
calling for ... answers to identical questions posed to,
or identical reporting or recordkeeping requirements
imposed on, ten or more persons ....
44 U.S.C. Section 3502(4) (emphasis added). A "recordkeeping
requirement" is a "requirement ...to maintain specified records."
44 U.S.C. Section 3502(17).
As noted above, the Supreme Court in Dole recently expounded
on the scope of coverage of the PRA. While the Court noted that
"typical information collection requests include tax forms,
medicare forms, financial loan applications, job applications,
questionnaires, compliance reports and tax or business records,"
110 S.Ct. at 933, the issue before Court dealt with the
applicability of the PRA to disclosure regulations promulgated
under OSHA. The Court found that the OSHA disclosure regulations
were not subject to the PRA not because they were "regulations" per
se, but because it found "third-party disclosure regulations to be
beyond the coverage of the PRA since the information required to be
disclosed was to third parties and not to a federal agency. 110
S.Ct. at 935-938. "By its very terms, the statute's enforcement
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mechanism does not apply to rules which require disclosure to a
third party rather than to a federal agency." Id. at 937. This
"disclosure rule exception" will be discussed infra. See also.
Action Alliance of Senior Citizens v. Sullivan. 930 F.2d 77 (D.C.
Cir. 1991) (Regulations of the Department of Health and Human
Services requiring the recipient of funds to complete a "self-
evaluation" of its compliance with the Age Discrimination Act was
held subject to review by OMB under the PRA as "collection of
information" and "recordkeeping."); U.S. v. Smith. 866 F.2d 1092
(9th Cir. 1989) (Ninth Circuit applies PRA to National Forest
Service regulations requiring the filing of a Plan of Operation);
U.S. v. Hatch. 919 F.2d 1394 (9th Cir. 1990) (Ninth Circuit applies
PRA to National Forest Service regulations requiring the filing of
a Plan of Operation).
The "Disclosure Rule" Exception
The Supreme Court, in Dole, carved out what it considered to
be rules and regulations clearly not covered by the PRA. That is,
the Court found that "the Act does not authorize OMB to review and
countermand agency regulations mandating disclosure by regulated
entities directly to third parties." Dole, supra. 110 S.Ct. at
930. The regulation under review in Dole was a "Hazard
Communications Standard" issued by the Department of Labor
requiring employers to supply all employees in multi-employer sites
and downstream manufacturers with material safety data sheets
describing the hazardous substances to which they were likely to be
exposed. Id. at 932. The regulations also required chemical
manufacturers to label containers of hazardous chemicals found at
their workplace.
The Court, in finding that these regulations were not subject
to the PRA, characterized the requirements as "disclosure rules."
Id. at 933. The Court found that the clear language of the PRA
indicated that the PRA covered only those information collection
requirements that require maintenance of information for an agency
or to be provided to an agency (including information filed for
possible dissemination to the public such as when the agency acts
as an intermediary in the process of data dissemination. Id. at
938. The Court found that the PRA did not apply to requirements
which require disclosure directly to third parties. Id.
... we find that the terms "collection of information"
and "information collect request," when considered in
light of the language and structure of the Act as a
whole, refer solely to the collection of information by,
or for the use of, a federal agency; they cannot
reasonably be interpreted to cover rules mandating
disclosure of information to a third party.
Id. at 937.
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In finding these "disclosure rules" outside the purview of the
PRA by virtue of clear congressional intent, the Supreme Court
rejected OMB's interpretation of the PRA as expressed in its own
regulations.	OMB's regulations specifically encompassed
"disclosure rules." 110 S.Ct. at 938, n.10.
In 1991, the D.C. Circuit Court, in Action Alliance of Senior
Citizens v. Sullivan. 930 F.2d 77, supra, issued a lengthy opinion
interpreting the Dole Supreme Court decision. The D.C. Circuit's
opinion tried to limit the potential impact of a casual reading of
Dole - i.e. one that would suggest that agency availability was a
necessary condition of the PRA. In Sullivan. the court
distinguished between information that disclosed safety matters to
parties likely to be injured by the product (Dole-type disclosure
rules) and information that may not be provided to an agency but is
required to be maintained for future compliance purposes. 930 F.2d
at 83. "In sum, because HHS's self-evaluation rule requires a fund
recipient to collect data describing its compliance with the norms
of the Age Discrimination Act, we find it more akin to the tax and
compliance records that are subject to the Paperwork Act than to
the disclosure and warning system that [Dole] found exempt." 930
F.2d at 83.
The PRA's Public Protection Provision
The "public protection" provision of the PRA, 44 U.S.C.
Section 3512, states:
Notwithstanding any other provision of law, no person
shall be subject to any penalty for failing to maintain
or provide information to any agency if the information
collection request involved was made after December 31,
19981, and does not display a current control number
assigned by the Director, or fails to state that such
request is not subject to this chapter.
This provision was designed to create an incentive for federal
agencies and the OMB to comply with the requirements of the PRA.
U.S. v. Burdett. 768 F.Supp. 409, 411 (E.D.N.Y. 1991). "This
section encourages the public to ignore information collection
requests which do not display current control numbers. Persons who
receive information collections requests which do not conform with
the Act may consider the requests as "bootleg" and avoid penalty."
Id. at 411, citing S.Rep. No. 930 at 52, reprinted in. 1980 U.S.
Code Cong. & Admin. News, 6241, 6242. Where a requirement to
provide information is mandated by statute, the "public protection"
provision is unavailable. "The PRA does not bar the imposition of
penalties on those who fail to comply with a legal duty." Id. at
412; see also. U.S. v. Karlin. 762 F.Supp. 911, 912 (D.Kan. 1991)
("For the PRA penalty bar in Section 3512 to operate here, the
defendants' duty to file an income tax return must be imposed only
by the regulations of the tax form instructions at issue. Since
the defendants' duty to file arises from statute, the argument
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fails."); U.S. v. Wunder. 919 F.2d 34 (6th Cir. 1990) ("...the
regulations do not need a number because the requirement to file a
tax return is mandated by statute, not by regulation. Defendant
was not convicted of violating a regulation but of violating a
statute....").
There appears to be a split of authority on whether the
"public protection" provision provides a defense to criminal as
well as civil actions. The Ninth Circuit, in the two National
Forest Service cases Smith and Hatch, found Section 3512 applicable
in criminal actions. Several district court cases in other
circuits have rejected this interpretation of the PRA. See, U.S.
v. Burdett. 768 F.Supp. 409, 412-13 (E.D.N.Y. 1991) ("Aside from
the reasons stated above, and after an exhaustive review of the PRA
and its legislative history, this Court concludes that Congress
never intended the Act to apply to criminal proceedings in general
.... Ninth Circuit precedent notwithstanding."); United States v.
Karlin, 762 F.Supp. 911, 912 (D.Kan. 1991) ("...Section 3512 only
protects persons from the imposition of administrative penalties
for the failure to comply with information requests which do not
conform to PRA requirements.").
The PRA as an Affirmative Defense
Four cases have been found that discuss the use of the "public
protection" provision (Section 3512) as an affirmative defense.
All four cases involved criminal prosecutions. Two of the cases,
Smith and Hatch, found Section 3512 to be an affirmative defense to
criminal tax evasion charges. One case, Burdett. discussed above,
found the PRA inapplicable to criminal matters. One case, U.S. v.
Weiss. 914 F.2d 1514 (2d Cir. 1991), found Section 3512, when
raised as an affirmative defense, inapplicable to criminal charges
for providing false information.
Further, in Smith, the Ninth Circuit engaged in a detailed
discussion of the proper time to raise such an affirmative defense,
(i.e. Rule 12 waivers). In essence, the Smith court found that
"the PRA bar of prosecution is in the nature of an affirmative
defense ... that 'is capable of determination without the trial of
the general issue ... [and therefore] it is a defense that 'may be
raised before trial by motion' but is not waived pursuant to Rule
12(f) [Federal Rules of Criminal Procedure] if not brought before
trial." 866 F.2d at 1095. The Smith court concluded that "the PRA
defense is a permissive pretrial matter that the defendant may, but
need not, raise by motion prior to trial .... It follows that
appellants did not waive the defense by failing to assert it prior
to the motion date but before the conclusion of their trial.
Miscellaneous Matters
The PRA does not require expiration dates to be listed. See,
U.S. v. Burdett. 768 F.Supp 409, 413 (E.D.N.Y. 1991) ("Although the
public protection provision requires control numbers on information
collection requests to be 'current,' there is no explicit
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requirement in the PRA that forms must display an expiration
date."); U.S. v. Salberq, 969 F.2d 379 (7th Cir. 1992) (failure to
display an expiration date does not violate the Act).
OMB is the agency entrusted with the administration of the PRA
and the courts will uphold its interpretation unless it is barred
by Congress's clear expression or is unreasonable. Sullivan. 930
F.2d at 79; Dole. 110 S.Ct. at 933.
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CONPiDEjSf i lAltl.S. Department of Justice
Environment tod Natural Resources Division
Environmental Enforcement Section
Benjamin Franklin Station
P.O. Box 7611
Washmgtcn, D.C. 20044-7611
September 20, 199 6
Sandra L. Connors, Director
Regional Support Division
Office of Site Remediation
Enforcement
U.S. Environmental Protection Agency
401 M Street SW
Mail Code 2272A
Washington, D.C. 20460
Earl C. Salo
Assistant General Counsel
for Superfund
U.S. Environmental Protection Agency
4 01 M Street SW
Mail Code 2366
Washington, D.C. 20460
Office of Regional Counsel
Branch Chiefs, Regions I-X
Re: Transmittal of Olin Model Brief
Dear Sandy, Earl and CERCLA Branch Chiefs,
Enclosed is a final version of our model brief in
response to challenges to CERCLA based on United States v. Olin
Corp.. 927 F. Supp. 1502 (S.D. Ala. 1996). The brief addresses
both the constitutionality of CERCLA under the Commerce Clause
and the retroactive application of CERCLA's liability scheme.
Versions of this brief have been filed in a number of
jurisdictions. Earlier drafts have been updated to include the
recent favorable decisions in United States v. NL Industries
Inc.. No. 91-CV-578-JLF (S.D. 111. Aug. 23, 1996); United States
v. Alcan Aluminum Corp.. No. 95-7570 (3d Cir. Aug. 22, 1996); and
Gould. Inc. v. A & M Battery & Tire Serv.. No. 3 CV-91-1714 (M.D.
Pa. July 15, 1996).
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The appellate briefing is complete in Olin. The case
will be heard by the Eleventh Circuit on an expedited basis on
October 4, 1996. Special thanks to EES attorneys Bob Kaplan,
Scott Siff and Brian Donohue who devoted a substantial amount of
time and effort to preparation of this model brief. If you have
any comments or questions about the brief, please call either one
of them or me.
Sincerely,
Bruce S. Gelber, Deputy Chief
Environmental Enforcement Section
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UNITED STATES DISTRICT COURT
FOR THE
DISTRICT OF
UNITED STATES OF AMERICA,
Plaintiff,
v.
Civil Action No.
Defendant.	:
UNITED STATES' MEMORANDUM
IN OPPOSITION TO DEFENDANT'S MOTION
FOR
I. INTRODUCTION
This is a civil action brought by the United States
pursuant to Section[s] 10[] of the Comprehensive Environmental
Response, Compensation, and Liability Act ("CERCLA"), 42 U.S.C.
§[§] 960[], seeking [relief sought] in connection with the
[Site].
[WE HAVE SEEN THAT, IN MANY INSTANCES, DEFENDANTS
MERELY CITES TO THE OLIN DECISION WITH ONLY A BRIEF
EXPLANATION OF ITS HOLDINGS. THUS, YOU MAY WANT TO
CHANGE THE FOLLOWING SENTENCES TO REFLECT YOUR
DEFENDANT'S ARGUMENT.]
The defendant argues in its motion, contrary to virtually every
court to consider the issue, that CERCLA does not apply
retroactively to conduct that occurred prior to the enactment of
the statute. In addition, the defendant argues that the
On
, the defendant filed a [title of
defendant's motion].
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application of CERCLA to this case, again contrary to numerous
court decisions, is an invalid exercise of Congress' power to
regulate interstate commerce under the commerce clause of the
U.S. Constitution. The defendant's argument is based on a May
20, 1996, decision in a Southern District of Alabama case now on
expedited appeal in the 11th Circuit. United States v. Olin
Corp.. 927 F. Supp. 1502 (S.D. Ala. 1996).'
The Olin decision is patently erroneous, represents a
significant departure from the body of case law governing these
issues, and thus should not be followed in the present matter.
As a result, the defendant's motion, which relies almost
exclusively on Olin. should be denied.
II.	BACKGROUND
[CASE SPECIFIC. FOR PURPOSES OF THE COMMERCE CLAUSE
ARGUMENT, BE SURE TO NOTE IF THERE ARE PRESENT
MANUFACTURING OR LANDFILLING ACTIVITIES OCCURRING; IF
THERE WAS PAST COMMERCIAL LANDFILLING AT THE SITE; IF
CONTAMINATION IS MIGRATING, OR THREATENS TO MIGRATE,
ACROSS STATE LINES.]
III.	ARGUMENT
A. STATUTORY BACKGROUND
Congress enacted CERCLA in 1980 "primarily to
facilitate the prompt cleanup of hazardous waste sites"
throughout the country. United States v. R. W. Mever. Inc.. 889
F.2d 1497, 1500 (6th Cir. 1989), cert, denied. 494 U.S. 1057
(1990) (citing Walls v. Waste Resources Corp.. 823 F.2d 977, 981
(6th Cir. 1987) (citations omitted)). At the time the statute
was enacted, Congress recognized that hazardous waste sites posed
1 The appeal of the Olin decision will be heard on an
expedited basis by the 11th Circuit on October 4, 1996.
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a nationwide threat to human health and the environment, and that
it would require massive resources to address that threat. See.
e.g.. S. Rep. No. 848, 96th Cong., 2d Sess. 2, 3-7 (1980),
reprinted in 1 Legislative History of the Comprehensive
Environmental Response. Compensation and Liability Act of 1980.
at 309-14 ("CERCLA Leg. Hist.11) (citing the tremendous amounts of
waste produced by manufacturing each year and the vast costs
associated with the generation, disposal, and cleanup of such
wastes); accord H.R. Rep. No. 1016, 96th Cong., 2d Sess. 17-22
(1980), reprinted in 2 CERCLA Leg. Hist, at 47-53.
The outlines of CERCLA's cleanup and funding scheme are
not particularly complicated. Pursuant to Section 104 of CERCLA,
42 -U.S.C. § 9604, the Environmental Protection Agency ("EPA") is
authorized to expend money from a fixed fund separately
maintained by the government (the Superfund)2 to respond to
hazardous waste sites by investigating and then remediating the
conditions at those sites that pose a threat to human health and
the environment. R.W. Mever. 889 F.2d at 1500. The availability
of Superfund money allows EPA to respond quickly to dangerous
conditions, without waiting for recovery from potentially
responsible parties.
2 EPA's response activities under CERCLA are financed by
the Hazardous Substance Response Trust Fund, originally
established by Section 221 of CERCLA, 42 U.S.C. § 9631, and then
continued as the Hazardous Substances Superfund ("Superfund"), by
Section 517 of the Superfund Amendments and Reauthorization Act
("SARA"), 100 Stat. 1613, 1772 (1986), which added Section 9507
to the Internal Revenue Code of 1986, 26 U.S.G. § 9507.
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Section 107 of CERCLA, 42 U.S.C. § 9607, provides that
once EPA has begun to expend money at a site pursuant to CERCLA,
the United States may then recover that money from specified
classes of liable parties identified in Section 107(a), including
the current and past owners and operators of the sites, as well
as anyone who generated, transported, or disposed of waste at the
site. Congress was aware when it enacted CERCLA that the costs
of government response activities would greatly exceed the
Superfund. See S. Rep. No. 848, 96th Cong. 2d Sess. at 17-18
(1980), reprinted in 1 CERCLA Leg. Hist, at 324-25; H.R. Rep. No.
1016, 96th Cong., 2d Sess. 20 (1980), reprinted in 2 CERCLA Leg.
Hist, at 51. Congress thus established a strict, joint and
several liability scheme to ensure "that those responsible for
any damage, environmental harm, or injury from chemical poisons
bear the costs of their actions." S. Rep. No. 848, 96th Cong.,
2d Sess. 13 (1980), reprinted in 1 CERCLA Leg. Hist, at 320.
Congress intended that the parties who.benefited from
the creation of a hazardous waste site, rather than the public,
should bear all costs incurred by the government in actions taken
in response to conditions at such sites:
[Sjociety should not bear the costs of protecting the
public from hazards produced in the past by a
generator, transporter, consumer, or dumpsite owner or
operator who has profited or otherwise benefited from
commerce involving these substances and now wishes to
be insulated from any continuing responsibilities for
the present hazards to society that have been created.
S. Rep. No. 848, 96th Cong., 2d Sess. 98 (1980), reprinted in 1
CERCLA Leg. Hist, at 405. See also. Id. at 13, reprinted in 1
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CERCLA Leg. Hist, at 320 ("To establish provisions of liability
any less than strict, joint, and several liability would be to
condone a system in which . . . those who conduct commerce in
hazardous substances which cause such damage benefit with
relative impunity."); State of Ohio v. Georaeoff. 562 F. Supp.
1300, 1312 (N.D. Ohio 1983) ("[T]here is little doubt that
Congress intended those individuals who were responsible for
creating the hazards from these wastes to bear the cost of the
clean up."). Money recovered by the government under Section 107
of CERCLA is used to replenish the Superfund. See 42 U.S.C. §
9607(a)(4)(A); B.F. Goodrich Co. v. Murtha. 958 F.2d 1192, 1197
(2d Cir. 1992) ("[CERCLA] also authorizes the EPA to recover its
costs from responsible parties as a means to replenish the
Superfund."); R.W. Mever. 889 F.2d at 1500 ("[R]ecovered funds
are used to replenish the Superfund"); United States v.
Northeastern Pharmaceutical & Chem. Co.. 810 F.2d 726, 731 (8th
Cir. 1986) ("NEPACCO"), cert, denied. 484 U.S. 848 (1987)
("CERCLA . . . authorizes the EPA to take direct . . . actions .
. . with funds from the *Superfund,' and to seek recovery of
response costs from responsible parties ... in order to
replenish the Superfund.") (citations and footnote omitted).3
3 In addition to undertaking cleanup activities using the
Superfund, the United States may seek to compel liable parties to
use their own funds to clean up sites that may present an
imminent and substantial endangerment, through issuance of
administrative orders and actions for injunctive relief. See 42
U.S.C. § 9606.
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B. IN ENACTING CERCLA, CONGRESS CLEARLY INTENDED THAT THE
STATUTE WOULD IMPOSE RETROACTIVE LIABILITY ON
RESPONSIBLE PARTIES.
The defendant asserts [for the first time after 	
years of litigation in this case] that CERCLA liability for the
costs of cleaning up a hazardous substance site cannot be
predicated on waste disposal activities that occurred before the
enactment of CERCLA, citing the Olin decision. That decision,
however, is contrary to the conclusion of every other court to
have decided the question. The issue was recently before the
Third Circuit in United States v. Alcan Aluminum Corp.. No. 95-
7570 (3d Cir. Aug. 22, 1996), an appeal of pre-enactment CERCLA
liability. The Third Circuit swiftly affirmed the district
court's entry of summary judgment on behalf of the United States
without opinion, implicitly rejecting all of Alcan's arguments.
Another court has recently refused to follow the Olin
retroactivity decision as well. Gould. Inc. v. A & M Battery &
Tire Service. No. 3 CV-91-1714, slip op. at 2 (M.D. Pa. July 15,
1996). These decisions accord with Nevada ex rel. Dep't of
Transp. v. United States. 925 F. Supp. 691, 695 (D. Nev. 1996),
which presents a careful analysis of the retroactivity issue
after Landaraf v. USI Film Products. 114 S. Ct. 1483 (1994), the
principal case on retroactivity relied upon by Olin. In the
Nevada case, decided just prior to Olin. the Court held that
"there is ample evidence of clear congressional intent on the
retroactive application of the liability provisions of the
statute [CERCLA]."
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Similarly, every court to consider the issue before Olin
concluded that CERCLA applied retroactively. See, e.g. . NEPACCO.
810 F.2d at 732-33 ("Although CERCLA does not expressly provide
for retroactivity, it is manifestly clear that Congress intended
CERCLA to have retroactive effect."); State of Nevada ex rel.
Dep't of Transp. v. United States. 925 F. Supp. 691, 695 (D. Nev.
1996) ("[T]here is ample evidence of clear congressional intent
on the retroactive application of the liability provisions of the
statute."); Aroland Properties Corp. v. Aluminum Co. of America.
711 F. Supp. 784, 790-91 (D.N.J. 1989); Kellv v. Thomas Solvent
Co.. 714 F. Supp. 1439 (W.D. Mich. 1989); United States v. Hooker
Chemicals and Plastics Corp.. 680 F. Supp. 546, 556-58 (W.D.N.Y.
1988) ; United States v. Mottolo. 695 F. Supp. 615, 621-22 (D.N.H.
1988); United States v. Dickerson. 640 F. Supp. 448, 451-52 (D.
Md. 1986); United States v. Miami Drum Services Inc.. 25 Env't
Rep. Cas. 1469, 1476-78 (S.D. Fla. 1986); United States v. Tvson.
25 Env't Rep. Cas. 1897, 1907-08 (E.D. Pa. 1986); United States
v. Ottati & Goss. 630 F. Supp. 1361, 1397-99 (D.N.H. 1985);
United States v. Conservation Chem. Co.. t619 F. Supp. 162, 217-20
(W.D. Mo. 1985); United States v. Shell Oil Co.. 605 F. Supp.
1064, 1072, 1075-76 (D. Colo. 1985); State of Ohio ex rel. Brown
v. Georaeoff. 562 F. Supp. 1300, 1302-14 (N.D. Ohio 1983); see
also Virginia Properties. Inc. v. Home Ins. Co.. 74 F.3d 1131,
1132 (llth Cir. 1996) (dictum) (stating that CERCLA is part of Ma
statutory scheme that retroactively imposed strict liability for
pollution cleanup"); O'Neil v. Picillo. 883 F.2d 176, 183 n.12
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(1st Cir. 1989) (dictum) (affirming the district court's holding
"that CERCLA may be applied to pre-enactment conduct"), cert,
denied 493 U.S. 1071 (1990); United States v. Monsanto Co.. 858
F.2d 160, 173-75 (4th Cir. 1988) (dictum) (noting that many
courts have held CERCLA to be retroactive, and holding that such
retroactivity is constitutional under the due process clause),
cert, denied. 490 U.S. 1106 (1989).
As stated by the court in Shell Oil. CERCLA "is by its
very nature backward looking. Many of the human acts that have
caused the pollution already had taken place before its
enactment; physical and chemical processes are at their
pernicious work, carrying destructive forces into the future."
605- F. Supp. at 1072. As discussed below, the Olin court
provided no basis for rejecting the vast body of precedent
holding that Congress intended to make CERCLA liability
retroactive.4
1. Contrary to Olin. the Landqraf decision does not
require an analysis or result different from that
reached in the previous cases upholding CERCLA's
retroactive effect.	
4 There can be no question that Congress has the
authority to create a statutory scheme that provides for
retroactive effect. See, e.g.. Usery v. Turner Elkhorn Mining
Co.. 428 U.S. 1, 16 (1976) (holding in regard to a statute
extending benefits to miners who had left the mining industry
before the act's effective date, that "legislation readjusting
rights and burdens is not unlawful solely because it upsets
otherwise settled expectations [citations omitted]. This is true
even though the effect of the legislation is to impose a new duty
or liability based on past acts [citations omitted]"; NEPACCO.
810 F.2d at 733-34 (upholding retroactive application of CERCLA
as permissible under the due process clause)..
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The linchpin of the Olin court's decision to abandon
this precedent was its erroneous view that the 1994 Supreme Court
decision in Landaraf. dramatically altered the longstanding
presumption against the retroactive application of statutes. See
Olin. 927 F. Supp. at 1508. The Supreme Court in Landaraf.
however, did not state a new rule for determining whether a
statute has retrospective effect. Rather, the Court clarified
some apparent tension in its prior decisions and reaffirmed that
presumption. 114 S. Ct. at 1502. Thus, the issue with respect
to CERCLA has been, both before and after Landaraf. whether the
presumption has been overcome by a clear expression of
legislative intent to apply the statute retroactively. See 114
S. Ct. at 1505.
In Landaraf. the Court faced the claim that certain
provisions of the Civil Rights Act of 1991 should be applied to
cases pending at the time of enactment. 114 S. Ct. at 1488.
That statute permitted the award of compensatory_and punitive
damages for certain violations of Title VII of the Civil Rights
Act of 1964, and granted the right to a jury trial when such
remedies are sought. See 42 U.S.C. § 1981a(a).
The Court first rejected the plaintiff's argument that
the text of the statute itself provided for retroactive
application. 114 S. Ct. at 1493-96. The Court then explained
that without a provision expressly stating that the statue was to
be applied retroactively, the traditional presumption against
retroactive application would apply "absent clear congressional
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intent favoring such a result." 114 S. Ct. at 1505. The Court
could find no such clear intent in the language, structure or
legislative history of the 1991 amendments.
Contrary to the Olin decision [and the claims of the
defendant], Landgraf did not announce a new rule of law or even
modify existing precedent. By its own word, it simply reaffirmed
"the line of decisions disfavoring 'retroactive' application of
statutes," and explained that the holdings in cases such as
Bradley v. Richmond School Bd.. 416 U.S. 696 (1974), and Thorpe
v. Housing Authority of Durham. 393 U.S. 268 (1969), were not
inconsistent with the traditional presumption. 114 S. Ct. at
1503. As stated by the Landgraf Court, those cases had not
involved instances where application of new statutory provisions
"would impair rights a party possessed when he acted, increase a
party's liability for past conduct, or impose new duties with
respect to transactions already completed." 114 S.Ct. at 1505.
As a result, and as the Landgraf Court itself emphasized
throughout its opinion, the Landgraf decision was not breaking
new ground, but was simply repeating and reemphasizing "a legal
doctrine centuries older than our Republic." 114 S. Ct. at 1497
(footnote omitted).
Thus, the presumption against retroactive application
of statutes absent congressional intent to the contrary remains
unchanged by Landgraf. As shown below, courts addressing the
issue in the context of CERCLA have applied the presumption
correctly, and have concluded that an analysis of CERCLA's
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liability provisions and legislative history indicates a clear
intent on the part of Congress that the statute is to be applied
retroactively.
2.	Existing precedent finding CERCLA to be
retroactive is based on the traditional principles
affirmed in Landaraf.	
The leading cases finding that CERCLA's liability
provisions are retroactive acknowledge and apply the same
traditional analysis reaffirmed in Landaraf. Thus, in NEPACCO.
the court stated that "[w]e acknowledge there is a presumption
against the retroactive application of statutes." 810 F.2d at
732 (citing United States v. Security Indus. Bank. 459 U.S. 70,
79 (1982)). The court concluded, however, that "it is manifestly
clear that Congress intended CERCLA to have retroactive effect."
810 F.2d at 732-33. Similarly, the district court decisions in
Shell Oil. 605 F. Supp. at 1069, and Georqeoff. 562 F. Supp. at
1308-09, which each examine in great detail Congress' purpose and
meaning in enacting CERCLA, concluded that Congress' clear intent
was to apply CERCLA retrospectively. Neither the reasoning nor
holding of those cases is affected by the decision in Landaraf~
See State of Nevada ex rel. Dep't of Transp. v. United States.
925 F. Supp. 691 (D. Nev. 1996) (holding, after Landaraf, that
CERCLA is retroactive, and reaffirming the line of cases finding
CERCLA retroactive before Landaraf}.
3.	The title, structure, and language of the statute
demonstrates an intent to apply CERCLA
retroactively.	
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It is fundamental that the "starting point for
interpreting a statute is the language of the statute itself",
and M[a]bsent a clearly expressed legislative intention to the
contrary, that language must ordinarily be regarded as
conclusive." Consumer Prod. Safety Comm'n v. GTE Sylvania. Inc..
447 U.S. 102, 108 (1980). Throughout CERCLA, the language of the
statute envisions the clear understanding of Congress that the
statute is to be applied retroactively.
Indeed, Congress' intention is manifest in the title
given to the statute. The legislation describes CERCLA as "An
Act: To provide for liability, compensation, cleanup, and
emergency response for hazardous substances released into the
environment and the cleanup of inactive hazardous waste disposal
sites." 94 Stat. 2767 (1980) (emphasis supplied). Moreover,
Section 107(a), which establishes the scope of CERCLA liability,
manifests an intent to impose that liability retroactively on
responsible persons. Sections 107(a)(1) and (2), for example,
impose liability not only on the current "owner and operator of a
vessel or facility" where there is a release or threat of release
of hazardous substances, but also on "any person who at the time
of disposal of any hazardous substances owned or operated any
facility . . ." 42 U.S.C. § 9607(a)(1) & (2) (emphasis
supplied). The phrase "at the time of disposal" is clear on its
face, is not time-limited, and means exactly what it says. See
NEPACCO. 810 F.2d at 732-33.
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Similarly, Section 107(a)(3) imposes liability on "any
person who . . . arranged for disposal or treatment, or arranged
with a transporter for transport for disposal or treatment, of
hazardous substances owned or possessed by such person ..." 42
U.S.C. § 9607(a)(3) (emphasis added). In addition, Section
107(a)(4) imposes liability on "any person who accepts or
accepted any hazardous substances for transport" under certain
specified conditions. 42 U.S.C. § 9607(a)(4). Congress' use of
the past tense, consistent with its imposition of liability under
Section 107(a)(2) on persons who owned a facility at the time of
disposal, evidences Congress' intent to establish retroactive
liability. See NEPACCO, 810 F.2d at 733.5
That Congress intended liability under CERCLA to be
retroactive is further demonstrated by the provisions in the
statute establishing liability for damages to natural resources.
As noted above, Section 107(a) sets forth the classes of persons
liable under CERCLA. It also sets forth the types of costs for
which such persons are liable, including costs incurred for
removal or remedial work of the type at issue in the present
matter, see Section 107(a)(4)(A) and (B) of CERCLA, 42 U.S.C.
§ 9607(a)(4)(A) and (B), and costs incurred for damages to
5 While the court in Georaeoff. 562 F. Supp. at 1309-10
(N.D. Ohio 1983), concluded that the use of past tenses in
Section 107(a) is too ambiguous to be used in the retroactivity
analysis, it nonetheless found that a "number of other provisions
of CERCLA support the view that CERCLA applies to pre-enactment
conduct." Accord Nevada. 925 F. Supp. at 699-700.
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natural resources and natural resource damage assessments, see
Section 107(a)(4)(C) of CERCLA, 42 U.S.C. § 9607(a)(4)(C).
The provisions in the statute establishing liability for
natural resource damages provide further compelling evidence that
Congress intended liability under CERLCA for response costs to be
retroactive. Under Section 107(f), 42 U.S.C. § 9607(f), natural
resource damages may not be awarded "where such damages and the
release of a hazardous substance from which such damages resulted
have occurred wholly before December 11, 1980," the date of
CERCLA's enactment. There is no comparable limitation on the
recovery of response costs under Sections 107(a)(4)(A) & (B).
See also Section 111(d)(1) of CERCLA, 42 U.S.C. § 9611(d)(1)
(providing that Superfund money also may not be used "where the
injury, destruction, or loss of natural resources . . . have
occurred wholly before December 11, 1980"). The express
limitation on recovery of natural resource damages would have no
purpose unless Congress understood and intended that no similar
limitation was to be applied to the recovery of response costs
under Section 107(a)(1) & (2). See Pension Benefit Guar. Corp.
v. White Consol. Indus.. 998 F.2d 1192, 1201 (3rd Cir. 1993)
("When Congress addresses a subject in only one section of a
reticulated statute, we assume the decision to omit the topic in
another section was intentional"), cert, denied. 114 S. Ct. 687
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(1994).6 See also Nevada. 925 F. Supp. at 693-94; Shell Oil. 605
F. Supp. at 1076.7
Congress' intent is further demonstrated by Section 103
of CERCLA, 42 U.S.C. § 9603, a provision designed to assist the
government in compiling a list both of sites potentially
requiring remediation and of parties potentially liable under the
statute for such remediation. Section 103(c) requires that
within 180 days of the December 11, 1980 passage of CERCLA, "any
person who owns or operates or who at the time of disposal owned
or operated, or who accepted hazardous substances for transport
6	The reasoning here derives from the twin canons of
statutory construction: (1) that a court should read a statute in
such a way as to give effect to every provision, see Mackev v.
Lanier Collection Agency & Service. Inc.. 486 U.S. 825, 837 &
n.ll (1988); and (2) expressio unius est exclusio alterius (the
expression of one thing is the exclusion of another). See
Leatherman v. Tarrant County Narcotics Intelligence and
Coordination Unit. 507 U.S. 163, 168 (1993); KCMC. Inc. v.
F.C.C.. 600 F.2d 546, 550 (5th Cir. 1979) ("a term carefully
employed in one place and excluded in another should not be
implied when excluded.").
7	Although the Court in Landgraf declined to conclude
that the mere presence of language limiting the application of
certain provisions to prospective application required
retroactive application as to the rest of the statute, the Court
noted that the two provisions that were limited to prospective
effect in the statute before the Court were "comparatively minor
and narrow provisions in a long and complex statute." 114 S. Ct.
at 1493. "In contrast," as the court noted in Nevada. 925 F.
Supp. at 702, the CERCLA provisions in question, "42 U.S.C.
§§ 9607(a)(4), 9607(f), and 9611(d) . . . are the very core of
the statute's liability scheme." Indeed, when CERCLA was enacted
in 1980, there were only two categories of liability at all for
responsible parties: liability for response costs under Section
107(a)(4)(A) & (B), and liability for natural resource damages
under Section 107(a)(4)(C). See 94 Stat. 2781. As a result,
there is a persuasive negative inference — drawn from the
limitation on the natural resource provisions — that Sections
107(a)(4)(A) and (B) are to be applied retroactively. See
Nevada. 925 F. Supp. at 701-02.
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and selected, a facility at which hazardous substances . . . are
or have been stored, treated, or disposed of," shall notify EPA
of the existence of such facility. 42 U.S.C. § 9603(c) (emphasis
supplied). The mere requirement by Congress that the government
collect such information for sites at which disposal occurred
prior to passage is consistent with the other aspects of CERCLA's
language and structure indicating Congress' intent both to clean
up such sites and to impose liability on all parties responsible
for the contamination at such sites.
Thus, the legislative aim and the entire scheme of the
statute was to address inactive sites, including those created
prior to enactment. Taken together, these elements of the
statutory language evidence a clear intent to apply CERCLA
liability retroactively.
4. The legislative history of CERCLA clearly
expresses an intent to accord the statute
retrospective effect.	
The legislative history confirms the retroactive nature
of the remedies created by CERCLA.8 Indeed, the committee
reports and the discussion in Congress relating to the proposed
bill were all set against the understanding that the bill was to
have retroactive application.
To understand the intent of Congress in enacting
CERCLA, it is important first to recognize the place of the bill
8 A good summary of the legislative history as to
retroactive liability is found in Nevada. 925 F. Supp. at 697-99;
Shell. 605 F. Supp. at 1077-79; and Georaeoff. 562 F. Supp. at
1311-14.
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in the context of other environmental statutes in effect prior to
CERCLA. Until CERCLA was passed, Congress had focused on
regulating specific activities in order to prevent pollution in
the future. The Resource Conservation and Recovery Act (RCRA),
in particular, 42 U.S.C. § 6901 et sea.. governed the way in
which hazardous waste was to be handled prospectively by existing
operators. Having enacted RCRA, however, Congress recognized
that a large hazardous waste problem still was not addressed,
namely, waste at inactive sites. CERCLA was designed to fill
that gap by focussing on those abandoned sites that were largely
outside the jurisdiction of the existing laws. As the House
Committee on Interstate and Foreign Commerce reported:
After having previously focused on air and water
pollutants, the Congress, in the Resource
Conservation and Recovery Act of 1976 ["RCRA"],
provided a prospective cradle-to-grave regulatory
regime governing the movement of hazardous waste
in our society. Since enactment of that law, a
major new source of environmental concern has
surfaced: the tragic consequences of improperly,
negligently, and recklessly hazardous waste
disposal practices known as the "inactive
hazardous waste site problem." . . . Existing law
is clearly inadequate to deal with this massive
problem.
H.R. Rep. No. 1016, 96th Cong., 2d Sess. 17 (1980), reprinted in
2 CERCLA Leg. Hist, at 48 (emphasis added).
From its very conception, "the whole purpose and scheme
of CERCLA [was] retrospective and remedial," Shell Oil. 605 F.
Supp. at 1079, — to give the government a mechanism for cleaning
up and paying for such notorious abandoned hazardous waste sites
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as Love Canal and the Valley of the Drums. As Representative
Florio stated during the signing ceremony with the President:
[T]he whole problem of the inappropriate disposal of
toxic materials[, r]eally that's a two part problem.
Prospectively we have a new regulatory system which is
just going into effect now, the Resource Conservation
and Recovery Act, and therefore we should have no new
Love Canals being created. And this bill [CERCLA], of
course, is the second part, which is to go back and
clean up what, unfortunately, has been done over the
last number of years.
Remarks on Signing H.R. 7020 Into Law (December 11, 1980), from
Weekly Compilation of Presidential Documents, vol. 16, No. 50, at
2797-2801 (Dec. 15, 1980), reprinted in 1 CERCLA Leg. Hist, at
49.
Similarly, as stated by Senator Randolph during the
final Senate floor debate on the bipartisan "Stafford-Randolph
compromise" bill which became CERCLA:
The problem of hazardous waste disposal in
this Nation has reached frightening
proportions .... [T]here is no procedure
for dealing with dangers posed by chemicals
. . . and past disposal of chemical wastes.
The increasing incidents of contaminated
drinking water, surface water, and ground
water; the destruction of fish and wildlife;
and the threats to public safety from health
hazards, explosions, and fires have all made
this bill necessary.
126 Cong. Rec. 30,930-31 (1980), reprinted in 1 CERCLA Leg. Hist.
at 682 (emphasis added). Senator Stafford echoed these concerns:
"The legacy of past haphazard disposal of chemical wastes and the
continuing danger of spills and other releases of dangerous
chemicals pose what many call the most serious health and
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environmental challenges of the decade." 126 Cong. Rec. 30,934
(1980), reprinted in 1 CERCLA Leg. Hist, at 691 (emphasis added).
In keeping with the retrospective focus of the statute,
the legislative history shows a clear intent to make responsible
parties pay for the cleanup of such abandoned sites, even if the
acts connecting those parties with the sites occurred entirely in
the past. The House Report states, for example, that EPA will
have authority to recover costs "with respect to [inactive
hazardous waste] sites," in other words, sites at which there are
no ongoing activities. H.R. Rep. No 1016, 96th Cong., 2d Sess.
17 (1980), reprinted in 2 CERCLA Leg. Hist, at 48. Similarly,
the Senate report declares that the statute addresses "[t]he
legacy of past haphazard disposal of chemical wastes." S. Rep.
No. 848, 96th Cong., 2d Sess. 2 (1980), reprinted in 1 CERCLA
Leg. Hist, at 309 (emphasis added).
In discussing the liability section itself, Section
107, the legislative history is especially clear .as to Congress'
intent regarding retroactivity. The Senate Report, for instance,
states that the overall goal of the liability scheme is to
"assur[e] that those who caused chemical harm bear the costs of
that harm . . . ." S. Rep. No. 848, 96th Cong., 2d Sess. 13
(1980), reprinted in 1 CERCLA Leg. Hist, at 320 (emphasis added).
The history of Section 107(f), in particular, reveals
congress' purpose to impose retroactive liability. As noted
above, the statute specifically provides that liability for
natural resource damages under Section 107(f) does not apply
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"where such damages and the release of a hazardous substance from
which such damages resulted have occurred wholly before" the date
of enactment of the statute- In the original bill that
eventually became CERCLA, S. 1480, liability for natural resource
damages was not so limited. That limitation was eventually added
to the bill, see S. 1480, 96th Cong., 2d Sess. § 4(n) (1980),
reprinted in 1 CERCLA Leg. Hist, at 499, but the Senate expressly
declined to expand the limitation beyond liability for natural
resource damages. As the Senate Report stated in that regard,
"Costs of removal (cleanup and containment) are not affected by
this provision .... Damages which are being repaired as part
of a cleanup action under the Fund are not affected by this
provision, and the Fund may recover for such cleanup
expenditures." S. Rep. No. 848, 96th Cong., 2d Sess. 37 (1980),
reprinted in 1 CERCLA Leg. Hist, at 344. Congress' clear
decision not to so limit liability for anything other than
natural resource damages was carried through to the final bill in
Section 107(f). See NEPACCO. 810 F.2d at 736-37; Shell Oil. 605
F. Supp. at 1077-79.9
Indeed, the understanding that CERCLA would apply
retroactively was so generally understood among the enacting
Congress that several individual members of Congress protested
9 Although the final version of the bill included
substantial revisions made after being reported by the Senate
committee, that aspect of the liability scheme was not materially
altered. Consequently, the Olin court incorrectly dismissed the
legislative history.
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during the legislative process that "[t]he issue of applying the
new standards retroactively remains a troubling one." S. Rep.
No. 848, 96th Cong., 2d Sess. 120 (1980), reprinted in 1 CERCLA
Leg. Hist, at 427 (Additional Views of Sens. Domenici, Bentsen,
and Baker). Representative Stockman went so far as to warn his
colleagues during the House debate that, if the bill passed, they
should be prepared to field calls in the future from companies in
their districts complaining that they had "just received a $5 or
$10 million liability suit from EPA" relating to some hazardous
waste site, because "that company in your district contributed a
few hundred pounds of waste to that site 30 years ago." 126
Cong. Rec. 26,786 (1980) , reprinted in 2 CERCLA Leg. Hist, at
358; see Georqeoff. 562 F. Supp. at 1312 n.16 (calling Stockman's
comments the "most relevant statements on this issue").
One reason that Congress decided not to limit the
liability provisions of CERCLA to a prospective application is
that the structure of the statute and its funding depend on
retroactivity. When CERCLA was enacted, estimates of cleanup
costs ranged from $7 billion to §44 billion. Compare S. Rep. No.
848, 96th Cong, 2d Sess. 2 (1980), reprinted in 1 CERCLA Leg.
Hist, at 309 (estimating that there are more than 2,000 dumpsites
in the country, which will cost an average of $3.6 million each
to clean) with Administration Testimony to the Subcommittees on
Environmental Pollution and Resource Protection. Committee on
Environment and Public Works. 96th Cong., 1st Sess. (1979)
(statement of Thomas C. Jorling, Assistant Administrator, Water
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and Waste Management, EPA) reprinted in 1 CERCLA Leg. Hist, at 92
(estimating that the range of costs for off-site treatment and
disposal of the 1,200 - 2,000 sites nationwide is between $26.2 -
$44.1 billion). Yet Congress appropriated only $1.6 billion for
the Superfund. See 42 U.S.C. §§ 9631-33; Georqeoff. 562 F. Supp.
at 1312-13.
Congress created the liability scheme to bridge the
gap. The Superfund would serve simply as a revolving fund to
initiate the program, and collections from responsible parties
would assure that the program continued. Congress created
CERCLA's now well-known scheme of strict, joint, and several
liability in order to give the government the power to recoup
money spent out of the Superfund, see S. Rep. No. 848, 96th
Cong., 2d Sess. 13 (1980), reprinted in 1 CERCLA Leg. Hist, at
320, and imposed that liability retroactively. Indeed, limiting
liability to only prospective application would have thwarted the
entire scheme because many of the sites that CERCLA was designed
to address were abandoned. Thus, the actions resulting in the
release of hazardous substances at such site occurred before the
statute was enacted. As the court in Georqeoff concluded,
"Congress could not have intended to limit the potential
defendants while accomplishing its purpose of making the
responsible individuals pay for the cost of clean up." 562 F.
Supp. at 1313.
5. Congress' failure to reject the uniform body of
caselaw when reauthorizing CERCLA confirms its
intent to impose liability retroactively.	
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In the years since CERCLA was enacted in 1980, the
courts have uniformly held — with the exception of the Olin
decision in May 1996 — that CERCLA is retroactive. Yet in that
time period, Congress has twice reauthorized CERCLA, without
taking any action to overturn or modify the decisions of those
courts on the question of retroactivity. Under applicable
principles of statutory construction, such reauthorizations of
the statute by Congress without any attempt to change the
existing case law constitutes a reaffirmation of Congress' intent
that CERCLA was to be applied retroactively.
Shortly after CERCLA was first enacted, challenges to
the retroactivity of the statute commenced. As early as 1983,
the courts began to hold, without exception until May 1996, that
Congress intended that CERCLA should be applied retroactively.
See Georqeoff. 562 F. Supp. at 1300; cases cited supra at pp. 6-
7. In 1986, Congress enacted the Superfund Amendments and
Reauthorization Act of 1986 (SARA), Pub. L. No. 99-499, 100 Stat.
1613. SARA rewrote a number of the provisions of CERCLA,
including the liability provisions — but only after Congress had
thoroughly considered virtually every aspect of the statute in
light of how it had been implemented since 1980. See Legislative
History of SARA ("SARA Leg. Hist."), vols. 1-7 (compiling the
testimony and debate and the numerous subcommittee, committee,
and conference reports preceding passage of SARA); 1 SARA Leg.
Hist, at 173 et sea, (comparing section by section the amendments
made to CERCLA by SARA). Again in 1990, Congress reauthorized
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the amended statute, that time with no substantive changes. See
Pub. L. No. 101-508, Section 6301, 104 Stat. 1388-319. Yet
neither in 1986 nor in 1990 did Congress take any action to upset
the established precedent holding CERCLA to be retroactive.
It is well settled that when Congress reenacts a
statute, with or without change, in the wake of clearly developed
case law, the reenactment includes the settled judicial
interpretations of the statute. See Herman & MacLean v.
Huddleston. 459 U.S. 375, 384-86 (1983) (holding that when
Congress enacted comprehensive revisions to the securities laws,
its intent to leave a particular liability provision intact
constitutes ratification of the judicial interpretations of that
provision); Lorillard v. Pons. 434 U.S. 575, 580 (1978)
("Congress is presumed to be aware of an administrative or
judicial interpretation of a statute and to adopt that
interpretation when it re-enacts a statute without change.")
(citations omitted).
That rule is plainly applicable to CERCLA. Congress
considered the statute in 1986 and again in 1990. It
significantly amended the statute in 1986, and reauthorized the
statute without substantive amendment in 1990. Yet in neither
instance did Congress take any action to change the existing
judicial interpretations with respect to the question of the
retroactivity of the statute. Accordingly, Congress must be
viewed to have ratified those decisions both in 1986 and 1990,
and agreed that CERCLA is to be applied retroactively. Cf.
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O'neil v. Picillo. 883 F.2d 176, 179 (1st Cir. 1989), cert,
denied. 493 U.S. 1071 (1990) (holding that by enacting the CERCLA
amendments in 1986, after many courts had held CERCLA liability
to be joint and several, Congress "chose to leave the issue with
the courts, to be resolved as it had been . . . ."). Therefore,
this Court should reject the Olin court's deviation from that
precedent, and reject the effort to use it here by the defendant.
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C. CERCLA IS A VALID EXERCISE OF CONGRESS' POWERS UNDER
THE COMMERCE CLAUSE.
[NOTE: This defense is geared to the usual CERCLA case
— disposal at a landfill long ago, without present
commercial activities at the Site. If you are lucky
enough to show goods and services moving in interstate
commerce presently, or migration of pollution across
state lines, you can distinguish Olin at the outset.
Olin acknowledges that the result might have been
different if the facility were still operating, and
clearly would be different for pollution migrating
across state lines. 927 F. Supp. at 1533]
The defendant also cites Olin for the proposition that
CERCLA is an invalid exercise of Congress' power to regulate
interstate commerce under the commerce clause of the U.S.
Constitution. In Olin. the district court held CERCLa
unconstitutional as applied to a manufacturing facility in
Alabama, where the court found "no evidence" that contaminants
"travel across state lines." 927 F. Supp. at 1533. The Olin
court based its ruling on the Supreme Court's decision in United
States v. Lopez. 115 S.Ct. 1624 (1995).
The Olin court seriously misinterpreted Lopez in concluding
that the Lopez decision undermines the validity of CERCLA. As
shown here, CERCLA not only directly regulates commercial
activity — and therefore does not fall within the ambit of Lopez
— the statute also plainly regulates economic activity that
"substantially affects" interstate commerce, under Supreme Court
and [	] Circuit authority.
1. The Lopez decision does not invalidate CERCLA or
its application here.	
a. The Lopez Decision
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The Supreme Court in Lopez struck down the Gun-Free
School Zones Act, 18 U.S.C. § 922(q) because "possession of a
firearm in a local school zone does [not] substantially affect
interstate commerce." 115 S. Ct. at 163 2. In doing so, the
Court identified three broad categories of activities that
Congress may regulate under the commerce power:
I.	Congress may regulate the use of the channels of
interstate commerce.
II.	Congress may regulate and protect the instrumentalities
of interstate commerce, or persons or things in
interstate commerce, even though the threat comes only
from intrastate activity.
III.	Congress may regulate those activities that
substantially affect interstate commerce.
Id. at 1629.
Lopez itself was concerned only with the third category,
because the Gun-Free School Zones Act was neither a regulation of
the use of the channels of interstate commerce (Category I) nor a
regulation of an instrumentality of interstate commerce or a
thing in interstate commerce (Category II). 115 S. Ct. at 1630.
Lopez is properly interpreted as a narrow decision within that
third category. It established an outer boundary of Congress'
power, but explicitly did not disturb any of the modern
precedents that have sustained a broad view of Congress' power to
regulate economic activities having a substantial relationship to
interstate commerce.10
10 Indeed, the Court explained that it was rejecting "the
possibility of additional expansion," or "declin[ing] here to
(continued...)
-27-
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b. CERCLA validly regulates activity within the
first two categories set out in Lopez.
By its terms, Lopez does not affect Congress' exercise
of its commerce power in either of the first two categories:
first, "the channels of interstate commerce," and second, "things
in interstate commerce." Because CERCLA regulates such commerce
itself, Lopez has no application here. Pollution itself, and the
media in which it is carried all move in interstate commerce or
are channels of interstate commerce, and thus are necessarily
subject to regulation by Congress. Moreover, the waste itself is
a regulable article of commerce.
A primary emphasis of CERCLA is the protection of the
nation's surface water and groundwater. For example, Section 105
of the statute requires special protection of surface water:
[T]he President shall ensure that the human health risks
associated with the contamination or potential contamination
(either directly or as a result of the runoff of any
hazardous substance or pollutant or contaminant from sites
of facilities) of surface water are appropriately assessed
where such surface water is, or can be, used for
recreational or potable water consumption. . . . The
President shall take into account the potential migration of
any hazardous substance or pollutant or contaminant through
such surface water to downstream sources of drinking water.
10 (. .. continued)
proceed any further" in expanding the reach of the commerce
power, but showed no signs of contracting that power. 115 S. Ct.
at 1634. The Court struck down the Gun-Free School Zones Act
only because it "plows thoroughly new ground." Id. at 1632
(internal quotation omitted). Justices Kennedy and O'Connor,
concurring in Lopez. were even more explicit on that score. They
identified the "immense stake" that the Court and the legal
system have "in the stability of our Commerce Clause
jurisprudence as it has evolved to this point," and they
emphasized the important role played by stare decisis in this
area. Id. at 1637.
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42 U.S.C. § 9605(c)(2). Section 118 similarly places a high
priority on protection of groundwater:
For purposes of taking action under section 9604 or
9606 of this title and listing facilities on the
National priorities List, the President shall give a
high priority to facilities where the release of
hazardous substances or pollutants or contaminants has
resulted in the closing of drinking water wells or has
contaminated a principal drinking water supply.
42 U.S.C. § 9618.
Remediation of and prevention of further harm to these
valuable resources falls squarely within Congress' traditional
power to protect both the channels of interstate commerce and
things in interstate commerce. The Supreme Court has recognized
that groundwater is itself an article of commerce. Sporhase v.
Nebraska. 458 U.S. 941, 953-54 (1982). The Court stated:
80% of groundwater is used for agricultural purposes.
The agricultural markets supplied by irrigated farms
are worldwide. They provide the archtypical example of
commerce among the several States for which the Framers
of the Constitution intended to authorize federal
regulation.
Id. Pollutants in groundwater render it unavailable for human
consumption and agricultural uses. The regulatory scheme
established by CERCLA to stem groundwater contamination at its
source is a valid exercise of commerce clause power, especially
where the groundwater moves through connections with surface
waters.
Even more obviously, surface water moves in interstate
commerce. Interconnected surface waters supports commercial
fishing, farming, recreation, and supply municipal drinking water
systems. Again, the water itself is an article of commerce that
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may be rendered unavailable by pollution. Of course, surface
water may also be a channel of commerce.
Thus, the court in United States v. NL Industr. Inc.. No.
91-CV-578-JLF (S.D. 111. Aug. 23, 1996) rejected a commerce
clause argument based on Olin on these grounds.
there is no doubt that surface waters, especially those
that border on or traverse through more than one state
are an integral part of commerce. Therefore, it is
within Congress' commerce power to regulate activities
that pollute these resources, even though the threat
may come only from intrastate activities.
Slip. Op. at 25-26 (citations and quotations omitted). The NL
Industries court recognized that groundwater and surface water do
not recognize state boundaries. Id. at 25. The court made clear
that CERCLA not only regulates activity that "substantially
affects" commerce, but that the statute also constitutes
"regulation and protection of the instrumentalities of interstate
commerce, or persons or things in interstate commerce." Id. at
24 .
[If appropriate, describe surface water and groundwater
contamination in particular case, with emphasis on
commercial effects and interstate connections. For example,
discuss how nearby river travels across state lines, various
uses of the river, etc).
[If a landfill, include this paragraph as appropriate]
Finally, in this case, the Site was operated as an economic
enterprise for the [disposal/treatment] of solid and hazardous
waste. Some of those wastes, including wastes containing
hazardous substances, were brought to the Site from other states.
As the Supreme Court noted in Chem. Waste Management. Inc. v.
Hunt. 504 U.S. 334, 340 at n. 3 (1992), and Fort Gratiot Sanitary
-30-
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Landfill. Inc. v. Michigan Department of Natural Resources. 504
U.S. 353, 359 (1992), waste, even if it has no value, is an
article of commerce. As such, the wastes here — including those
containing hazardous substances — fall within Category II, i.e.,
things in interstate commerce, even if the threat of release of
those substances into the environment is purely intrastate in
nature.
[If a generator, use this paragraph as appropriate].
Finally, there can be no dispute that the products manufactured
at defendant's facility moved in interstate commerce. A partial
list of products manufactured at the facility include: [till in
with examples]. This interstate economic activity necessarily
generated wastes, and those wastes have been disposed of at the
[fill in the name] Site. Disposal of wastes is an integral and
unavoidable part of Defendant's production activities, no
different from other commercial activities, such as the purchase
of raw materials, hiring and payment of employees, and the like.
If Defendant's products moved in interstate commerce, Congress
may regulate the process by which such goods are made —
including the unavoidable byproducts of that production. See.
e.g.. Hodel, 452 U.S. at 281 (ruling that the adverse affects
from coal mining may be regulated because "coal is a commodity
that moves in interstate commerce"); United States v. Darbv. 312
U.S. 100, 122-25 (1941) (sustaining federal minimum wage and
maximum hour restrictions on manufacturer of goods shipped in
interstate commerce because substandard labor conditions affected
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the commerce in the goods that were produced); Pennsylvania v.
EPA. 500 F.2d 246, 259 (3d Cir. 1974) (under Commerce Clause,
"the Federal Government clearly has the power to direct
individual vehicle owners to equip their automobiles with
emission control devices . . . designed to reduce air
pollution").
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c. CERCLA validly regulates intrastate activity
that substantially affects interstate
commerce.	
Under Lopez and other Supreme Court opinions on Congress'
commerce clause powers, a statute regulating economic activity
will be upheld if there is a rational basis to conclude that the
activity, or class of activities, substantially affect interstate
commerce. Lopez. 115 S. Ct. at 1630.
The court in Olin seriously misconstrues this test, olin
begins its Lopez analysis by setting out a two-part standard:
Lopez requires 1) that the statute itself regulate
economic activity, which activity "substantially,
affects" interstate commerce. Id. at 1630; and 2) that
the statute include a "jurisdictional element which
would ensure, through case-by-case inquiry, that the
[statute] in question affects interstate commerce."
Id. at 1631.
Olin. 927 F. Supp. at 1532. As shown below, the second part of
the test is not a requirement of Lopez. The error is important
because Olin was actually decided on grounds that "CERCLA fails
to meet the second criteria of Lopez." i.e., lacked a
jurisdictional element. The court's "substantial affects"
discussion is dicta, 927 F. Supp. at 1533 ("[i]t is not
necessary, however, for this court to reach such a conclusion
[concerning substantial affects]." Moreover, this part of the
court's opinion is unsupported, and engages in the precise
commerce clause analysis that the Supreme Court has foreclosed.
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i. Lopez does not require every statute to
contain a "jurisdictional element."	
Lopez nowhere requires that every statute enacted under the
commerce clause contain "jurisdictional elements that ensure . .
that [the statute] in question xaffects interstate commerce.'"
Olin, 927 F. Supp. at 1532. The Olin court created that test by
cobbling together several phrases from the Supreme Court's
opinion without regard to their context. Compare 927 F. Supp. at
1532 with 115 S. Ct. at 1630, 1631.
In Lopez. the Supreme Court simply noted that the Gun-Free
School Zones Act did not contain such a jurisdictional' element.
115 S. Ct. at 1631. In the course of cataloging the many ways
that statutes have been sustained against commerce clause attack,
the Court noted that it had upheld a statute making it a crime
for a felon to receive, possess or transport any firearm "in
commerce or affecting interstate commerce." 115 S. Ct. at 1631
(citing United States v. Bass. 404 U.S. 336 (1971)). The Olin
court improperly turned one acceptable method of legislating
under the commerce clause into a new and essential requirement of
federal legislation.
Therefore, the actual commerce clause holding of Olin is
plain error. It has been recognized as such by every subsequent
court. The Sixth Circuit reviewed and rejected Olin's
"jurisdictional clause" reasoning, stating "[t]his court does not
find such an interpretation of Lopez persuasive." United States
v. Wall. 	 F.3d 	, 1996 WL 457393 *3 n.ll (6th Cir. Aug. 15,
1996). So too has the Seventh Circuit: "in discussing the lack
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of a jurisdictional element in Lopez. the [Supreme] Court simply
did not state or imply that all criminal statutes must have such
an element ... or that any statute without such an element is
per se unconstitutional." United States v. Wilson. 73 F.3d 675
(7th Cir. 1995). Most recently, the Southern District of
Illinois rejected Olin's interpretation of Lopez in the CERCLA
context. United States v. NL Industr. Inc.. supra. at 30. The
court concluded: "Olin misconstrues Lopez. Lopez does not
require that a statute contain a 'jurisdictional element which
would ensure through a case-by-case inquiry, that the [statute]
in question affects interstate commerce."' Id. (emphasis in
original).
It is plain that the Supreme Court has imposed no such new
rule, the effect of which would be the facial invalidation of a
vast number of federal statutes. Olin is incorrect on this
point, a fatal error because the commerce clause issues in Olin
were the decisional ground of the case. See 927 F. Supp. at
1533. Defendant's motion, adopting the reasoning of Olin.
therefore fails as well.
ii. CERCLA regulates economic activity that
substantially affects interstate commerce.
After incorrectly determining that the commerce clause
requires a jurisdictional element in every statute, the Olin
Court stated that CERCLA does not appear to regulate economic
activity that substantially affects interstate commerce:
[T]he fact remains that this suit seeks clean-up of
real property. While environmental degradation
generally may have an effect on interstate commerce, it
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is not clear to this court that the degradation at
issue in this case is necessarily "economic activity"
or that it has a "substantial effect" on interstate
commerce. It is clear to this court that the law
regulating real property has been traditionally a local
matter falling under the police power of the states.
927 F. Supp. at 1533.
The court's main concern — intrusion upon matters of state
concern — has already been resolved by the Supreme Court. As
the NL Industries observed, "[T]his Court also finds unpersuasive
Olin's reliance on the argument that CERCLA is a usurpation of
the states' police power to control real property. This argument
was explicitly rejected by the Supreme Court in Hodel. v. Virginia
Surface Mining and Reclamation Association. 452 U.S. 264 (1981)."
Indeed, in Hodel a group of coal miners argued that "land-use
regulation is within the inherent police powers of the States and
their political subdivisions." 452 U.S. at 275. They further
contended that "the 'rational basis' test should not apply in
this case because the Act regulates land use, a local activity
not affecting interstate commerce." Id. at 281. The Supreme
Court flatly rejected these claims, holding that the commerce
power extends to these activities, "local" or not, if they have a
substantial effect on interstate commerce. The emphasis on
matters of traditional state concern is not relevant to the
proper inquiry.11
11 Moreover, CERCLA does not usurp any traditional state
prerogatives. Rather, it provides much-need support and
assistance to states in their own clean-up efforts. That is why
Alabama — the state where the Olin site is located — joined an
amicus brief of 29 states in the Olin appeal urging reversal, and
(continued...)
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The Olin court's advisory statements on CERCLA are similarly
flawed. CERCLA unequivocally regulates (1) economic activity,
which (2) substantially effects interstate commerce.
a. regulation of economic activity
Central to the Lopez Court's decision was the fact that
possession of a gun in a school zone "has nothing to do with
*commerce or any sort of economic enterprise, however broadly one
might define those terms." 115 S. Ct. at 1630-31. The
distinction between regulation of economic and noneconomic
activity is essential: the regulation of commercial activity
falls outside the concerns raised by Lopez. 115 S. Ct. at 1630.
Olin assumes that CERCLA regulates noneconomic activity. Olin.
927 F. Supp. at 1533.
The activity at issue here — the handling, disposal, and
clean-up of hazardous substances — is unquestionably economic
activity. CERCLA specifically regulates the conduct of economic
enterprises: the owners and operators, transporters and
11 (.. .continued)
stated:
If CERCLA liability is eliminated for . . . all sites
involving intrastate contamination, the major impetus for
the cleanup of the vast majority of hazardous waste sites
would disappear. Cleanup at most sites would grind to a
halt. Limited State resources would be insufficient to fund
these cleanups. As a result, our citizens would suffer from
potential exposure to toxic pollutants, a degraded
environment, and depressed property values.
Brief of State Amici Curiae, United States v. Olin Corp., No. 96-
6645 (11th Cir.) (filed July 25, 1996) at 1. Far from an
intrusion upon the States, CERCLA provides States with additional
flexibility and resources to carry out "local1! functions.
-37-
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generators responsible for disposing of hazardous substances.
See 42 U.S.C. § 9607 (a).12 CERCLA is concerned with the release
of "hazardous substances" that are created as a consequence of
commercial activities. See, e.g.. 42 U.S.C. § 9601(14) and 9603.
Those hazardous substances are created primarily by manufacturing
companies which obtain raw materials and distribute finished
products in commerce. Additionally, the entire statutory and
regulatory scheme of CERCLA regulates in detail the methods and
goals of hazardous waste cleanup, a commercial activity conducted
by a large industry with a nationwide presence. See 4 0 C.F.R.
Part 300 (setting forth criteria and goals for cleanups under
CERCLA); cf. S. Rep. No. 96-848, 96th Cong., 2d Sess., 2, 3-7,
reprinted in 1 Leg. Hist. 309 ("More than 2,000 dump-sites
containing hazardous chemicals are believed by the Environmental
Protection Agency to'pose threats to the public health. The
costs of containing their contents is estimated to be an average
of more than $3.6 million per site.").
The NL Industries Court recently held that CERCLA regulates
economic activity on these grounds:
[T]he improper disposal of hazardous waste is economic
activity. Hazardous waste is a by-product of numerous
industries, from chemical manufacturing to dry cleaning. In
12 Defendant and the Olin Court improperly define the
"regulated activity" as simply contamination in the ground.
However, CERCLA by its terms regulates commercial entities —
those that produced the waste, transported it, landfilled it, as
well as those that clean it up. Thus, as the NL Industries Court
stated, "the proper focus is on whether the regulated activity —
the improper disposal of hazardous waste and it subsequent clean-
up — can be regulated under any of the three categories of Lopez
and Perez." Slip. Op. at 19 n.ll.
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addition to discouraging the improper disposal of hazardous
waste through its liability provisions, CERCLA regulates the
clean-up of hazardous waste sites by establishing clean-up
schedules . . . and clean-up standards. * * * in sum,
CERCLA regulates economic activities that have a substantial
affect on interstate commerce.
NL Industries, supra. at 36-37 (statutory citations omitted).
Thus, unlike possession of a gun in a school zone —
noncommercial intrastate conduct — the environmental damage
remedied by CERCLA is wholly a product of economic activity, and
its remediation is itself a large commercial activity. The
creation of environmental degradation, as well as its
remediation, as the result of business activity such as
manufacturing is itself plainly economic activity.
This focus removes CERCLA from the ambit of Lopez. and
places it within Congress' usual commerce clause power. See
Cheffer v. Reno. 55 F.3d 1517, 1520 n.6 (11th Cir. 1995)
(upholding statute protecting access to abortion clinics against
a Lopez challenge because "unlike the Gun-Free School Zones Act,
the Access Act does regulate commercial activity, the provision
of reproductive health services").
b. Effects on Interstate Commerce
It also clear that CERCLA regulates activity that
"substantially affects" interstate commerce. The Olin court
demanded proof of such substantial effects in every instance, and
then found no effect on the facts of that case because the
contaminants did not "travel across state lines." 927 F. Supp.
at 1533. Under longstanding Supreme Court authority reaffirmed
by Lopez. however, that inquiry is patently incorrect. The
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question is not whether substantial effects on interstate
commerce are demonstrable in each instance, but whether the
activity to be regulated has such an effect in the aggregate.
Environmental degradation in individual cases need only be
slight, so long as the aggregate impact of similarly situated
individual cases creates a substantial effect on interstate
commerce. In reaffirming this principle, the Lopez Court cited
with approval its prior decision in Wickard v. Filburn. 317 U.S.
Ill (1942), which upheld federal regulation of wheat grown by a
farmer for home consumption. Such consumption, even by one
farmer making flour for his own table, "competes with wheat in
commerce," and "his contribution, taken together with that of
many others similarly situated, is far from trivial." 317 U.S.
at 127-28. After its discussion of Wickard. the Court in Lopez
held that the gun law at issue could not be sustained under "our
cases upholding regulations of activities that arise out of or
are connected with a commercial transaction, which viewed in the
aggregate, substantially affects interstate commerce." Lopez.
115 S. Ct. at 1624 (1995).
Indeed, the Supreme Court has ruled that where a statute
identifies a class that in the aggregate has a substantial effect
on interstate commerce, it is legally immaterial that the conduct
of an individual member of that class has only nominal affect.
As the Court stated in Maryland v. Wirtz:
[W]here a general regulatory statute bears a substantial
relation to commerce, the de minimis character of individual
instances arising under that statute is of no consequence.
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392 U.S. 183, 197 n. 27 (1968) (quoted in Lopez. 115 S. Ct. at
1629). Similarly, the Lopez Court reaffirmed its holding in
Perez v. United States. 402 U.S. 146 (1971), which upheld a
conviction for loansharking that involved "purely intrastate"
activity, with no direct connection to interstate commerce. The
Court reasoned that where the class of activities is "within the
reach of federal power, the courts have no power to excise, as
trivial, individual instances of the class." Id. at 154
(internal quotation omitted). Therefore, while the defendant's
loansharking itself had no significant effect on interstate
commerce, it was subject to federal regulation because, as the
Court stated in Lopez. it could "through repetition elsewhere,
substantially affect . . . interstate commerce." Lopez. 115 S.
Ct. at 1634.
The same principles support CERCLA and its application here.
There has been a legislative determination that the entire class
of releases of hazardous substances warrants regulation because
of the overall effects of environmental degradation on interstate
commerce. See Bolin v. Cessna Aircraft Co.. 7 59 F. Supp. 692,
707-08 (D. Kan. 1991) (noting that CERCLA's legislative history
is "replete with congressional findings regarding the pervasive
effects of hazardous substances released into the environment,"
and concluding that "Congress retains ample authority under the
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commerce clause to enact legislation regulating activities that
result in the release of hazardous substances.").13
CERCLA's legislative history contains extensive findings
concerning the enormous burdens and costs imposed by the improper
disposal of hazardous substances on interstate commerce. see.
e.g.. S. Rep. No. 848, 96th Cong., 2d Sess. (1980), reprinted in
1 CERCLA Leg. Hist, at 308 et sea.: H.R. Rep. No. 1016, 96th
Cong., 2d Sess., reprinted in 2 CERCLA Leg. Hist, at 47-53.
While Congress need not make specific findings in order to
legislate under the commerce clause, Lopez. 115 S. Ct. at 1631,
if such findings are made the court must defer to them as long as
they are rational. Hodel. 452 U.S. at 280.
In enacting CERCLA, Congress recognized that "[e]xisting law
is clearly inadequate to deal with the massive problem [of
improper waste disposal]." H.R. Rep. No. 1016, 96th Cong. 2d
Sess. 17-18 (1980) reprinted in 1980 U.S.C.C.A.N. 6119, 6120.
Both the Senate and House extensively considered the threats to
13 See also Wickland Oil Terminals v. Asarco. Inc. . 654 F.
Supp. 955, 957 (N.D. Cal. 1987) (Commerce Clause authorizes
enactment of CERCLA); Missouri v. Independent Petrochem. Corp..
13 Chem. Waste Lit. Rep. 463 (E.D. Mo. 1986) ("the Court holds
that a finding that disposal of hazardous waste affects
interstate commerce has a rational basis and that the regulation
here [CERCLA] is within the commerce power"); United States v.
NEPACCO. 579 F. Supp. 823 (W.D. Mo 1984), aff'd in part, rev'd in
part on other grounds, 810 F.2d 726 (1986), cert, denied 484 U.S.
848 (1987); cf. United States v. Chem-Dvne Corp.. 572 F. Supp.
802, 808 (S.D. Ohio 1983) ("improper disposal or release of
hazardous substances is an enormous and complex problem of
national magnitude involving uniquely federal interests. * * * a
driving force toward the development of CERCLA was the
recognition that a response to this pervasive condition at the
state level was generally inadequate.")
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the public from the contamination of surface and groundwater and
concluded that State and local response to the problem had been
inadequate. Id. Significantly, testimony before Congress
emphasized the interstate nature of the problem. See. e.g.. 2
CERCLA Leg. Hist, at 326 ("The contamination from these sites is
clearly an interstate problem.") (Remarks of Rep. Martin). There
are myriad congressional findings of substantial impacts on
interstate commerce caused by the disposal and release of
hazardous substances. For example:
In a report dated March, 1980 the Library of Congress
concluded that damages to natural resources of the United
States because of toxic chemicals were "substantial and
enduring." The report identified damaged resources ranging
from all five Great Lakes to the aquifer underlying the San
Joaquin Valley, possibly the richest agricultural area in
the United States. * * *
In a report released in the Spring of 1980, by the Office of
Technology Assessment, agricultural losses because of
chemical contamination were placed at $283 million. OTA
said the value was based on economic data from only six of
the fifty states and was therefore "likely to be a gross
underestimation of the actual costs." * * *
Portions of Lakes Ontario and Erie have been closed to
commercial fishing because of chemical contamination. * * *
In a recent report, the Department of Agriculture identified
surface water basins which were contaminated by chemicals.
These basins included practically the entire middle South.
* * *
The General Electric Company discharged PCB's, an electric
insulating fluid, into the Hudson [River] for many years.
As a result commercial fishing, which was making a comeback
as a result of other pollution controls, was largely
stopped. * * *
S. Rep. No. 848, 96th Cong., 2d Sess. 3-8 (1980), reprinted in 1
CERCLA Leg. Hist. 310-15.
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Moreover, control of pollution has long been recognized by
the courts as within Congress' power to regulate under the
commerce clause. See. e.g.. Hodel. 452 U.S. at 282 ("[W]e agree
with the lower federal courts that have uniformly found the power
conferred by the commerce clause broad enough to permit
congressional regulation of activities causing air or water
pollution, or other environmental hazards that may have effects
in more than one State.") (citing numerous federal courts). The
reasoning of the Supreme Court in Hodel is particularly
instructive in the present matter.
In Hodel. the Court considered whether Congress had exceeded
its authority under the commerce clause in enacting the Surface
Mining Act, "a comprehensive statute designed to ^establish a
nationwide program to protect society and the environment from
the adverse effects of surface coal mining operations."' 452
U.S. at 268 (quoting 30 U.S.C. § 1202(a)). The Court in Hodel
responded to the appellees' argument "that the Act's principal
goal is regulating the use of private lands within the borders of
the States, and not . . . regulating the interstate commerce
effects of surface coal mining." 452 U.S. at 264. Quoting its
decision in Fry v. United States. 421 U.S. 542, 547 (1975), the
Hodel Court stated that "x[e]ven activity that is purely
intrastate in character may be regulated by Congress, where the
activity, combined with like conduct by others similarly
situated, affects commerce among the States or with foreign
nations."'). The Court concluded that the Surface Mining Act
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satisfied that test, because the statute was designed to address
"xdisturbances of surface areas that burden and adversely affect
commerce and the public welfare by destroying or diminishing the
utility of land for commercial, industrial, residential,
recreational, agricultural, and forestry purposes . . .	421
U.S. at 277 (quoting 30 U.S.C. § 1201(c)); cf. S. Rep. No. 848,
96th Cong., 2d Sess. 3 (1980), reprinted in 1 CERCLA Leg. Hist,
at 310 (stating in the legislative history to CERCLA that
"damages to natural resources of the United States because of
toxic chemicals were xsubstantial and enduring"' and that
"agricultural losses because of chemical contamination were
placed at $283 million").
In addition, the Hodel Court found that the national
regulation provided by the Surface Mining Act addressed the
problem, fostered by inconsistent state laws, of competition
among the several states to adopt the least stringent
environmental regulations in order to attract industry. See 421
U.S. at 282 ("The prevention of this sort of destructive
interstate competition is a traditional role for congressional
action under the Commerce Clause.11). CERCLA was enacted for
essentially the same reasons, and therefore should be upheld
under the same analysis. See 126 Cong. Rec. H11787 (Nov. 24,
1980) (remarks of Rep. Florio) (stating that CERCLA was enacted
to "insure the development of a uniform rule of law, and to
discourage business dealings in hazardous substances from
locating primarily in States with more lenient laws"); see also
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Strinafellow. 20 Env't Rep. Cas. 1905, 1909 (C.D. Cal. 1984) ("a
uniform federal law will prevent excessive dumping in states with
lenient common law principles").
Therefore, nothing in the Lopez decision undermines the
validity of CERCLA in general, or its application here. The Olin
Court's insistence on proof of substantial effects on interstate
commerce at each Superfund site engages in the analysis that the
Supreme Court has foreclosed. As shown, Congress has regulated
the disposal of hazardous waste and its clean-up, and has imposed
liability on those responsible for its generation. The Olin
Court has simply "excise[d], as trivial, individual instances of
the class." Perez. 402 U.S. at 154. The defendant asks this
Court to make the same mistake here.
IV. CONCLUSION
For the foregoing reasons, this Court should deny the
defendant's Motion to [title of motion].
Respectfully submitted,
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Briefing Paper
State of North Carolina's Groundwater Reclassification Amendment
and the New Hanover County Airport Burn Pit Superfund Site
November 8, 1993	Js: ' '	^
GG1W10FNXI AI
The purpose of this briefing paper is to provide you wrtn"*Ofe/-*'^ -S-iiX./
Office of Regional Counsel CERCLA Branch's preliminary analysis
of the potential impact of the State of North Carolina's new
groundwater reclassification amendment, 15A NCAC 2L, on the
Superfund program. The paper is broken into four parts. First
is a brief background discussion of the new amendments to the
State's groundwater law. Second is a discussion of six possible
positions the Region may legally take regarding the impact of the
State's new amended groundwater rule on future RODs. The six
potential Regional positions are listed in descending order of
recommendation by ORC. Third is a analysis of the impact of the
amendment on previously finalized RODs. Finally, the paper
concludes with a synopsis of the stalled Consent Decree
negotiations for the New Hanover County Airport Burn Pit
Superfund Site. Attached is a copy of the amended rule itself.
BACKGROUND
On October 1, 19 93, North Carolina's Environmental Management
Commission promulgated amendments to the State's current
groundwater classification provisions set forth at 15A NCAC 2L.
Until this amendment, groundwater cleanup standards for Superfund
remedies in North Carolina have been "driven" by the State's
extremely protective cleanup groundwater standards (pursuant to
Section 121 of CERCLA, the State groundwater standards are ARARS
and must be met during remediation of a NPL site because they are
stricter than corresponding federal SDWA MCLs). The pertinent
portion of the new amendments to the current State rule makes
significant changes to the "Corrective Action" requirements of
15A NCAC 2L. These changes allow parties (including PRPs for NPL
sites) to petition the State to approve a corrective action plan
that allows for alternate cleanup levels and to reclassify the
portion of an aquifer underlying a site with a Restricted
Designation (RS) classification. In essence, if a party
successfully petitions the State and receives an RS
classification for a site, the State will not require site
remediation to meet its current strict groundwater cleanup levels
but will set new less stringent levels on a site-by-site basis.
The implications of this new rule for the Region are potentially
serious. The Region's Superfund, RCRA, and Groundwater programs
may all be significantly impacted. In the Superfund context, the
potential impacts include: conflict with the State and PRPs over
cleanup levels at future sites; PRPs, or the State, demanding the
"reopening" of past RODs to relax cleanup levels to new State
"site-by-site" levels -- meaning delays in the remediation
process and an enormous outlay of regional resources to do
required ROD Amendments and ESDs; and finally, an impact on the
current Superfund RCRA deferral policy.
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I. POSSIBLE POSITIONS THE REGION MAY LEGALLY TAKE REGARDING THE
EFFECT ON FUTURE SUPERFUND RODS
OPTION 1. EPA may specify in future RODS that groundwater cleanup
standards will meet, at a minimum, federal MCLs, but
that stricter State levels may be met contingent upon
whether or not the State allows an RS petition for the
site.
*	EPA could include language in the ROD providing for the
contingency that a PRP may petition the State and receive
approval from the State to reclassify the groundwater
underlying a site with RS status. The contingency language
would specify that the ROD'S groundwater cleanup goals were
based on presently set stringent State groundwater cleanup
standards, but that federal groundwater cleanup standards
may be implemented instead if the groundwater underlying the
site is reclassified by the State to an RS standard. The
language would specifically provide that, at a minimum,
federal groundwater cleanup standards will have to be met.
This language would obviate the need for a ROD Amendment or
ESD if the Region agreed to reduce the cleanup levels for a
site from current strict State levels to federal MCLs.
IMPACT: This alternative allows both the State and EPA the
greatest flexibility to deal with the new amendments. It
allows the State to move from its presently set more
stringent State cleanup standards to federal MCLs.
In addition, it involves minimal EPA resources and avoids
delays to the remediation process.
OPTION 2. When EPA requests ARARs for.a site from North Carolina
during the RI/FS peer review process, the State must
give "bottom-line" groundwater cleanup standards.
*	During the RI/FS, North Carolina must give EPA its bottom-
line groundwater cleanup standards for a Site, taking into
consideration the ability of persons in the future to
petition to reclassify groundwater under 15A NCAC 2L. In
other words, the State would need to apply the new
reclassification petitioning process itself when EPA
requests state ARARs. The "number" the State provides to
EPA as the ARAR would then be "frozen" and future petitions
to the State would not impact the ROD'S cleanup levels.
IMPACT: This option provides EPA with a possible compromise
position with the State. EPA avoids having to do ROD
Amendments for every successful future reclassification
petition, while at the same time, the State continues to
have input in establishing a Site's groundwater cleanup
standards. The State seems to favor this approach.
However, the State may be unable to comply with the
requirements of its own new petitioning process in time to
meet EPA's early ARARs requests.
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- 3 -
OPTION 3. EPA could argue that the groundwater reclassification
petitioning process under 15A NCAC 2L is not an ARAR
because it is an administrative process or a less
stringent substantive State requirement.
*	40 C.F.R. § 300.5 of the NCP defines relevant and
appropriate requirements (ARARS) to be substantive
requirements from federal or state environmental laws.
*	CERCLA Compliance with Other Environmental Laws Manual,
August 8, 1988, OSWER Directive 9234.1-01, chapter 1, page
11, states, that the permit exemption in Section 121(e) of
CERCLA applies to administrative requirements whether or not
they are styled as "permits." The manual further explains
the types of provisions which are administrative:
"Administrative requirements include the approval of, or
consultation of administrative bodies, issuance of permits,
documentation, reporting, recordkeeping and enforcement."
*	Section 121(d) of CERCLA states that only state requirements
that are more stringent than federal requirements qualify as
ARARS.
*	Because the operative language of the amendment sets forth a
petitioning process, it is administrative in nature, and
therefore, does not qualify as an ARAR. To the extent that
an RS petition results in any substantive modifications to
State cleanup levels, they would be less stringent than
federal MCLs and therefore would also not qualify as ARARs.
IMPACT: EPA would not consider the amendments to the rule
as ARARs. This approach may cause legal conflicts with the
State. However, it is a legally defensible position.
OPTION 4. EPA could take the position that the petitioning
amendment should be waived as an ARAR because its use
will result in the inconsistent application of State
cleanup standards.
*	The inconsistent application of a state standard,
requirement, criteria, or limitation in similar
circumstances at other remedial actions within the State is
a basis for an ARARs waiver. (SEE CERCLA § 121(d)(4)(E)).
*	40 C.F.R. § 300.400(f)(1)(ii)(c)(5) of the NCP provides for
a waiver of state ARARs. It is intended to prevent
application of state requirements at a site that have not
been consistently applied elsewhere in the state. The
preamble to the NCP explains that consistency must be
demonstrated by the similar application of a state rule to
similar sites and response circumstances.
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- 4 -
*	Because the State has not established a history of
using the new rule, to support this position, EPA must
anticipate how the State will apply the rule. The rule
does not mandate consistent application on it face,
i.e., as it is written it allows for different cleanup
levels at similar sites. For example, the rule
contains no defined criteria for determining RS status,
but rather, leaves the decision to the sole discretion
of the State's Director of the Division of the
Environment Management. Therefore, the rule as written
may allow for disparity in its application to sites
with similar circumstances. In addition, the potential
NPL sites deferred to the State's RCRA corrective
action program may be remediated to different cleanup
levels than those addressed by the Superfund program.
IMPACT; This option allows EPA to consider the amendment a
waived ARAR. However, this alternative could be subject to
legal challenges and may lead to conflicts with the State.
Option 5. EPA could issue a ROD Amendment for future RODs every
time a party successfully petitions for RS status.
*	Persons would petition the State of North Carolina for RS
status after future RODs are finalized and EPA could issue a
ROD amendment to reflect the groundwater redesignation. EPA
would not need to justify an ARARs waiver for the original
State cleanup level in such a ROD amendment because the
petitioning process itself is considered part of the State
ARAR for future RODs.
IMPACT: This option may result in delays in the Superfund
process and could be EPA resource intensive.
Option 6. EPA could delay the signature of future RODs until PRPs
completed the RS petitioning process.
*	Upon request by PRPs, EPA could delay signature of a ROD to
allow the PRP to petition for RS status. The petitioning
process may take over a year to complete. This is
essentially the option that the PRPs for the New Hanover
County Airport Burn Pit Superfund Site have requested.
IMPACT: This option may result in the total delay of the
Superfund process during RS petitions.
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- 5 -
II.	EFFECT OF AMENDMENT ON PAST SUPERFUND RODS
Option 1. EPA could legally argue that all cleanup levels set in
finalized RODs that are based on the original strict
State cleanup levels are "frozen" at the time of the
RODs signature.
*	Section 300.430(f)(1)(ii)(B) of the NCP provides that all
on-site remedial actions selected pursuant to CERCLA must
attain all ARARs identified at the time of ROD signature.
*	Pursuant to Section 121(d)(2)(A) of CERCLA,	a remedial
action must comply with a state requirement	when the state
requirement has been identified in a timely	manner, i.e.,
before the signature of the ROD.
*	EPA is not legally required to consider potential ARARs that
are not identified prior to the ROD unless they are
necessary to protect human health and the environment.
*	EPA can further support this position by incorporating the
legal arguments outlined above in Options 3 and 4.
IMPACT: EPA can legally refuse to consider a new State ARAR
if it was not promulgated at time the ROD was signed and it
results in a less strict standard. Caveat: This will leave
EPA in the position of forcing cleanups to continue to
levels beyond federal MCLs to strict levels the State itself
no longer considers necessary. For policy reasons this may
be an untenable position for EPA.
Option 2. EPA will issue ROD amendments or ESDs as necessary to
change cleanups levels set in current RODs to federal
MCLs if a party receives an RS status for a site.
*	PRPs currently remediating to strict State cleanup levels
could petition for RS status and, if successful, request
that EPA amend the ROD to reflect federal MCLs.
*	In order to incorporate the new RS status, EPA may need to
justify waiving the original ARAR in the ROD amendment
because "moving" to the federal MCLs is less protective.
IMPACT: EPA would expend resources to issue ROD amendments
or ESDs but would avoid the above-mentioned policy issues.
However, the justification of an ARARs waiver pursuant to
Section 121(d)(4)(D) of CERCLA in the ROD amendment may be
subject to legal challenge.
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EFFECT OF AMENDMENT ON THE NEW HANOVER SUPERFUND SITE
The municipal PRPs for the Site, with State support, have
requested that the Region delay Consent Decree negotiations
while they petition the State for RS status for the Site
pursuant to the new amendments. Negotiations have stalled
since the PRPs raised this issue to EPA Headquarters. The
Region has recently been forced to request a second 30-day
extension of the 120 day negotiation from OSWER.
Section 300.400(g)(4) of the NCP states that only those
state standards that are promulgated may be ARARs.
Therefore, the RD/RA consent decree negotiation team
informed the PRPs that because the amendments were not
promulgated at the time the ROD for this Site was signed
(September 29, 1992) it is not an ARAR for the Site.
Currently, the RD/RA consent decree negotiation team's
strategy has been to inform the PRPs that if the PRPs
petition and receive RS status for groundwater at the Site
which results in a modification of the lppb cleanup standard
for benzene, EPA would consider a ROD amendment (assuming an
ARARs waiver is possible) to reduce the benzene cleanup
standard to the federal MCL.
EPA has informed the PRPs that the reclassification of the
groundwater to RS will have a minimal effect on the
implementation of the groundwater contamination remedy
selected in the ROD because the same pump and treat remedy
will be utilized to meet federal MCLs. The only difference
might be that the length of time required to operate the
pump and treat system to reach the federal MCLs could be
shorter than it would take to reach the more stringent State
standards.
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A
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'i
2	UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
W*	REGION IV
345 COURTLAND STREET. N.E.
ATLANTA. GEORGIA 30365
PV-v
DRAFT	ATTORNEY/CLIENT PRIVILEGED
ENFORCEMENT CONFIDENTIAL
DO NOT RELEASE
MEMORANDUM
DATE:
SUBJECT:
Comment Periods for Explanations of Significant
Difference (ESDs)
FROM:	John R. Barker
Regional Counsel
TO:	Joseph R. Franzmathes, Director
Waste Management Division
I. ISSUESPURPOSE AND SUMMARY
Thio document is intended to provide guidance ao to Wwhat
circumstances should be considered in deciding whether to hold
comment periods for explanations of significant difference (ESDs)
to Records of Decision (RODs) under section 300.435(c)(2)(i) of
the National Contingency Plan (NCP), 40 C.F.R. § 300.435(c) (2)>;
aiid-.	It aloo addroDooo what Is the appropriate duration for
public comment periods held for ESDs?
*1. Pllgil
While there is no express legal requirement t&at public:
comment periods be :held for jss&s, ORC recommends it io
recommended th^t the Region coriouoly consider holding public
comment periods for ESDs when any of the enumerated conditions
ieiHjjRerefcfced diccuoood below exist or when other conditions are
present which, for legal, tactical or public policy reasons,
suggest the need for a greater level of public participation.
ORC further recommends that the minimum duration for public
comment periods held by the Region for ESDs be thirty days, which
is consistent with the shortest time period mandated by CERCLA
for decision documents related to the remedial process.
Mtavugh the conditions listed in Section III, below,
militate in favor of providing a comment period, there may be
instances in which countervailing considerations justify a policy
-------
decision not tup provide this opportunity to the public, such
:£nsfceu&d©& should be consiaered carefully to- minimize the tfis-k
that a decision not to provide a 3oimaent period will ds found to
be- axrb xtrai: ajc&d c -LCioxxs ~
III. LEGAL BACKGROUND
a. Opportunity to Comment. Section 117(c) of CERCLA
requires that the agency publish an ESD if a remedial or
enforcement action is taken, or if a settlement or consent decree
is entered into, which differs significantly from the ROD but
does not represent a fundamental change to the remedy. 42 U.S.C.
§ 9617(c). The NCP explains the process EPA must employ in
making the ESD available to the public.1
Neither CERCLA nor the NCP requires that a public comment
period be held for an ESD, but the NCP gives the agency
discretion to "hold additional public comment periods . . . after
a decision document has been signed on any issues concerning
selection of a response action." 40 C.F.R. § 300.825(b). Any
comments, and EPA responses to comments, made pursuant to this
process must be placed in the administrative record file. Id.
The applicability of section 300.825(b) to ESDs is recognized in
EPA's Guide to Addressing Pre-ROD and Post-ROD Changes, OSWER
Publication 9355.3-02FS-4 (April 1991), which notes that an
additional public comment period or public meeting may be useful
for an ESD when there is considerable public or PRP interest in
the matter addressed by the ESD. Thus, the NCP and relevant
guidance allows EPA to provide a public comment period after
finalizing an ESD, but do not require the agency to incorporate
the comments into the ROD or even to respond to them;2 and
xThe NCP provides that for significant changes to the ROD,
EPA must "publish an explanation of significant differences when
the differences in the remedial or enforcement action, settlement
or consent decree significantly change but do not fundamentally
alter the remedy selected . . . with respect to scope,
performance, or cost." The ESD must be made available to the
public in the administrative record and a notice summarizing the
ESD must be published in a major local newspaper. 40 C.F.R. §
300.435.
2In contrast, a fundamental change to the remedy requires
publication of the availability of a proposed ROD amendment, a
public comment period of 30 days which may be extended for 30
days, an opportunity for public hearing, and a summary of
responses to comments in the amended ROD. 40 C.F.R. §
300.845(c)(ii).
For a discussion of the distinction between a ROD amendment
2
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because the ESD is final when published, the comments will not
affect the content of the document.3
Other than the general comment in the aforementioned
publication, neither the NCP nor EPA guidance addresses when the
agency should provide the opportunity to comment on an ESD, and
no court decisions have been published which address the issue.
The lack of specificity in the NCP is intended to give a degree
of flexibility to EPA to allow it to address site-specific
situations. As stated in the preamble,
CERCLA establishes the basic framework for community
relations activities during response actions. Consistent
with the flexibility provided by CERCLA to allow public
participation activities to be tailored to site-specific
circumstances, the NCP specifies the minimum level of public
involvement but does not preclude the lead agency from
undertaking additional public involvement activities where
appropriate.
55 Fed Reg. 8766 (1990).
The flexibility provided by the CERCLA regulatory framework
should not be viewed as giving the agency unbridled discretion.
Inasmuch as provision of a public comment period for an ESD is
discretionary, failure to do so may be interpreted by a reviewing
court as an arbitrary and capricious act, where past agency
practice, or agency guidance or policy would indicate public
comment is appropriate. See, e.g.. Atchison, T. & S.F. Rv. v.
Wichita Bd. of Trade. 412 U.S. 800 (1973) (Interstate Commerce
Commission departure from "prior norms" in rate making may be
abuse of discretion if not adequately justified). Moreover, if
by failing to provide an opportunity for comment, information
significant to the changed remedy is not presented, the decision
will be subject to challenge on the basis that EPA failed to
and an ESD, see Interim Final Guidance on Preparing Superfund
Decision Documents. OSWER Directive 9355.3-02 (June 1981) and
Guide to Addressing Pre-ROD and Post-ROD Changes. OSWER
Publication 9355.3-02FS-4 (April 1991).
3Section 300.825 does not impose procedural requirements
equivalent to those required for ROD amendments under § 300.435,
and thus does not require responses to comments, the opportunity
for a public meeting, or a specific duration for the comment
period. However, in order to document that it considered
relevant information, the Region should respond to significant
comments received during the comment period and include the
responses in the administrative record. See Citizens to
Preserve Overton Park. Inc. v. Volpe. and the accompanying
discussion, below.
3
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consider all relevant factors.4 See Citizens to Preserve
Overton Park. Inc. v. Volpe. 401 U.S. 402 (1971) (abuse of
discretion review under Administrative Procedure Act requires
court to "consider whether the decision was based on a
consideration of the relevant factors . . ."), and Motor Vehicle
Manufacturers Ass'n v. State Farm Mut. Auto Ins. Co., 463 U.S. 29
(1983) (an agency rule is arbitrary and capricious if the "agency
has entirely failed to consider an important aspect of the
problem . . ."). See also Fertilizer Institute v. U.S.E.P.A.,
935 F.2d 1303 (D.C. Cir. 1991) (under the "logical outgrowth
standard," an administrative agency is not required to provide a
new round of notice and comment if a modified final rule is the
logical outgrowth of the proposed rule; conversely, if an
opportunity to comment is not provided when the public would have
its "first occasion to offer new and different criticisms which
the agency might find convincing," the agency risks being held as
having abused its discretion).
EPA consistency in providing opportunities to comment to the
public is also important in furthering its stated policy to
provide full and meaningful public involvement in the remedial
decision-making process. This policy is reflected in the
preamble to the proposed NCP revision, as follows:
By adding section 117, "Public Participation," to CERCLA,
Congress clearly indicated its intention that affected
communities be informed about and involved in the decisions
regarding the Superfund program's response to hazardous
releases. Congress directed EPA to ensure that affected
communities would be involved from the outset in developing
and selecting the actions necessary at a site. EPA strongly
believes that community relations is an integral part of the
4 Although § 300.825(b) provides for a public comment period
after the decision document, such as the ESD, is signed, and even
though remedial action may continue during the comment period
(see footnote 8), this provision contemplates that such comments
may lead to changes in the remedy. It requires, for example,
that the administrative record contain "documents supporting
. . . any final decision with respect to . . ." responsive
comments. Moreover, in the preamble to the final NCP rule, the
agency states that § 300.825(c), which defines the circumstances
in which EPA must consider comments submitted after the public
comment period, "recognizes CERCLA's mandate to proceed
expeditiously to implement selected response actions, but also
recognizes that there will be certain instances in which
significant new information warrants reconsideration of the
selected response action." 55 Fed. Reg. 8808 (1988).
Presumably, such reconsideration could result in changes to the
remedy under a ROD amendment or an additional ESD.
4
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Superfund program and encourages a coordinated effort . . .
to ensure that the concerns of the public are considered and
addressed.
53 Fed. Reg. 51450 (1988). A consistent approach to providing
ESD comment periods is important in maintaining the credibility
with the public essential to a successful community relations
program.
b. Duration of Comment Period. The NCP does not mandate a
duration for comment periods provided under section 300.825(b).
The shortest time required under CERCLA and the NCP for other
public comment periods is 30 days.5 In addressing comments
concerning public comment periods proposed in the draft NCP
revision, EPA recognized that the public comment period should
"take into account the length and complexity of the information
under review at the time, and the opportunity the public may have
had to review the information in the administrative record file."
55 Fed. Reg- 8770 (1990).
IV. RECOMMENDATIONS Cuidolinoo for Granting Public Comment
Poriodo for ESR&
Given the absence of specific case law on when public
comment periods should be provided for ESDs, general
administrative law, public policy, and tactical considerations
apply.6 Administrative law principles suggest that to avoid a
challenge of agency abuse of discretion, EPA must ensure that
relevant information is considered in the ESD process and that
relevant factors are incorporated into the decision-making
5 Minimum durations for comment periods are provided in the
following NCP provisions: § 300.415(m)(2)(ii) (30 day comment
for "emergency" removal); 300.415(m)(4)(iii) (30 day comment
period for non-emergency removal; extension may be requested for
15 days); § 300.430(f)(3)(i)(E) (30 day comment period for
proposed settlement); § 300.430(f)(3)(i)(C) (30 day comment
period for proposed plan extendable for 30 days); and
§300.435(c)(2)(ii)(C) (30 day period for ROD amendment extendable
for 30 days). A time period is not specified in
§ 300.430(f)(3)(ii)(b) ("additional public comment period" for
revised proposed plan), but a minimum duration is required for
the proposed plan initially.
6EPA has determined that the procedures of the NCP
adequately address any due process concerns related to comment
period procedures for remedial decision documents. As stated in
the preamble to the recent revision of the NCP, "the process
provided in the rules - including . . . the notice of significant
changes to the response selection ... is sufficient to satisfy
due process." 55 Fed. Reg. 8807 (1990).
5
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process on a consistent basis. Consistency is also important
from a public policy standpoint to ensure agency credibility with
the community. Other public policy interests include showing
awareness and sensitivity to important concerns in the community
and anticipating concerns that may arise due to the nature of the
change contemplated in the ESD, even if the change is
scientifically not as significant as the public may perceive it
to be.
Tactical concerns related to reaching settlement, or
engaging in or preventing litigation, may also be important in
determining whether to provide a public comment period. Certain
sensitive issues or cases in which there is high degree of
litigation risk or other conflict may warrant a greater degree of
public participation. The benefit of enhanced community
participation for mitigating conflict is well recognized by the
agency and is one of the three "overall objectives" of the
Superfund community relations program. As recognized in
Community Relations in Superfund: A Handbook. USEPA (January
1992), one of the primary tools of Superfund for identifying and
resolving conflict is to "bring alternative viewpoints based on
sound, factual reasons into the open ..." and "channe[ling]
conflict into a forum where it can serve a useful purpose."
a. Criteria for Providing Public Comment for ESDs. In
light of the legal and policy considerations set forth above, EPA
should consider granting a public comment period for an ESD when
one or more of the following factors is present:
(i)	There is a history of active community and public
involvement with the site which makes future litigation
likely;
(ii)	(a) There are sensitive public "environmental equity"
issues or othor conoitivo public ibouoo that increase the
likelihood of conflict with the community or (b) there is
otherwise a need for enhanced community involvement;
(iii)	There is ongoing litigation regarding the site or
there are particularly litigious PRPs;
(iv)	The administrative record supporting the remedial
action is subject to a claim that it is deficient;
—The ESP is occurring in a caco whoro tho Inopoctor
Gonoral has found deficiencies;
(viii) The ESD is changing the performance standards (such
as cleanup levels) so that they appear	protective te
6
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make them loco otringcnt than in the ROD7.
(vii) The ESD is being issued in an untimely manner	t&e
factors listed above were present at the time of the cnancie
or are present at the time of publication &£ tne esd>
(i/oti boing uood ao a follow up procedure booauoo tho
agonoy did not iocuo tho ESD whon it chould havo dono do);
(vii)—Proviouc opportunitioo to comment in tho oaoo ohould
havo boon provided concorning oignificant ioouoG related to
tho ESD?—ea?
The presence of the factors listed above should not be the
only instances in which comment periods for ESDs are provided.
Rather, whenever an ESD is proposed, the EPA should consider
whether i) a public comment period would protect the agency from
a claim that it abused its discretion in taking remedial action,
ii) the likelihood that conflict can be resolved or avoided by
providing a comment period, iii) whether a comment period is
warranted because of public policy considerations, and iv)
whether tactical advantage can be gained - or disadvantage
avoided - by providing a comment period.
Although tho conoidorationo diocuoood above militate in
favor of providing a oommont poriod/ there may bo inotanooo in
which countervailing concidorationc juGtify a policy decision not
to provide thin opportunity to the public«	Such inGtancoB/
howevert—ohould bo conoidorod carefully to onouro that tho
countervailing oiroumotancoo outweigh any riok that tho docioion
not to provide a comment poriod will bo found to bo arbitrary and
capriciouo t
b. Duration of Comment Period. While not specifically
stated in CERCLA, the NCP or legislative history, it can be
inferred that EPA and Congress believe that at least 30 days is
necessary for the public to have a real opportunity to become
aware of and provide a meaningful response to decisional
documents for which public comments are provided. Since the
complexity, volume and significance of an ESD may often be less
than other documents requiring notice and comment periods, a
period longer than 30 days should not be mandatory. Conversely,
7Even if less stringent standards imposed by the ESD are no
less protective, performance standards such as cleanup levels are
often, in the minds of the public, a baseline for protectiveness.
Reductions in such levels may, therefore, create conflict.
8!That is, the BSD is. being used as a foilow»«p procedure
because the agency did not issue the BSD wfien it should have done
SjJC?'*
7
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because the publication of an ESD does not require interruption
of the remedial action while the comment period is open, and
therefore will not ordinarily substantially disrupt the remedial
process,9 there is no compelling reason to make the comment
period shorter than 30 days. EPA may wish to provide a longer
period if needed to provide a meaningful opportunity for the
community to assimilate and respond to the ESD. This
determination will depend upon the nature of the changes
documented, the composition of the interested public, and other
factors.
K:USER\GIiAZE\ESD .MEM
9"The remedy may continue to be implemented . . . because
the ESD represents only a notice of change, and the Agency is not
reconsidering the overall remedy." Guide to Addressing Pre-ROD
and Post-ROD Changes. OSWER Publication 9355.3-02FS-4, April
1991.
8
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B
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sr'v,
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
REGION IV
(Vll5 b

345 COURTLAND STREET. N E.
ATLANTA. GEORGIA 30365
March 21, 1994
ATTORNEY-CLIENT PRIVILEGED
MEMORANDUM
SUBJECT: FOIA Request 4-RIN-00832 -94
FROM
John R. Barker
Regional Counsel

TO:
John Hankinson
Regional Administrator
STATEMENT OF FACTS
On December 20 and 21, 1993, a Merit Systems Protection
Board (MSPB) hearing was held to adjudicate the
Vaughn C. Willamson. Carlton R. Lavne v. EPA matter. After the
hearing, EPA procured a transcript of the hearing. No other
parties to the hearing procured a transcript. No conditions were
attached to the purchase of the transcript. The transcript was
transcribed by the Ellis Court Reporting Service (Ellis) and a
fee of $2 000 was paid by EPA to Ellis for the transcript. On
March 8, 1994, EPA received a FOIA request from Mr. Gene Andrews
that asked for a copy of the hearing transcript.
Whether a copy of the MSPB transcript that was purchased by
EPA from a court reporter may be released pursuant to a FOIA
request.
The transcript is an EPA record. Accordingly, a copy of the
transcript must be released under the FOIA Act.
DISCUSSION
Pursuant to 40 C.F.R. S 2.101 all EPA records (emphasis
added) shall be available to the public unless they are exempt
from the disclosure requirements of 5 U.S.C. 5 552.
40 C.F.R. S 2.100 further provides that
ISSUE
ANSWER
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2
A record means any document . . . from which the
information can be retrieved and copied, and over which
EPA has possession and control. [A record] may include
copies of the records of other Federal Agencies (see
52.111(d)). ... [A record also] includes documents
and the like which were created or acquired by
EPA ... by use of government funds or in the course
of transacting official business.
The transcript is an EPA record because EPA has possession
and control of the transcript and it was created at the direction
of EPA and acquired by EPA by use of government funds and in the
course of transacting official business. In addition, no
limitations were imposed by Ellis when EPA purchased the
transcript that may have precluded its release. While there may
be an argument that the transcript is a record of another Federal
agency (MSPB), and as a result, the request should be referred to
the MSPB for response (see 40 C.F.R. 52.111(d)), this argument is
without merit. After consulting with the MSPB's Office of
General Counsel about this issue, MSPB is of the opinion that
since EPA purchased the transcript, the transcript is the
property of EPA. Thus, there is no restriction by MSPB with
respect to EPA copying its own document for whatever
reason-- including responding to a FOIA request.
In conclusion, since the transcript is an EPA record and
there are no exemptions under FOIA that would preclude its
release, the transcript must be disclosed to the requestor.
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c
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<€c.
PROCEDURES FOR OBTAINING CONCURRENCE FROM DOJ
The purpose of this memorandum is to transmit to you procedures
for obtaining concurrence from DOJ on administrative settlements
that require DOJ concurrence or on judicial settlements that are
negotiated prior to the referral of the case.
There are several instances where the Region has the authority to
negotiate administrative settlements that require DOJ
concurrence.1 These instances include:
1.	For claims that have not been referred to the Department
of Justice, and total response costs at a facility exceed
$500,000, the claim may be compromised and settled only with the
prior written approval of the Attorney General;
2.	For administrative de minimis settlements where the
total response exceed $500,000, the order may be issued only with
the prior written approval of the Attorney General; and
3.	All prospective purchaser settlements2.
To obtain concurrence from DOJ in a timely fashion on
administrative documents that require concurrence or judicial
cost recovery settlements prior to referral, the staff attorney
should do the following:
1. At least 45 before the Region proposes a settlement offer
for an administrative settlement where response costs exceed
$500,000, for judicial cost recovery, for a de minimis
settlement, or prospective purchaser agreement, the staff
attorney should send a letter requesting an assignment of a staff
*Staff is strongly encouraged to consider using a consent
decree in lieu of an administrative order for cost recovery
settlements where costs exceed $500,000. DOJ concurrence is
required in both instances; therefore, it is preferable from a
"bean counting" sense for the Region to get credit for a civil
referral with settlement as opposed to credit for the
administrative settlement only. I am hopeful that in the near
future, that OECA will consider the administrative settlements to
the same degree as the civil referrals with settlement and
provide a referral credit.
2See "Guidance on Landowner Liability under Section
107(a)(1) of CERCLA, De Minimis Settlements under Section 122(g)
(1)(B) of CERCLA, and Settlements with Prospective Purchasers of
Contaminated Property,"OSWER Directive 9835.9.
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attorney to Walker Smith, Assistant Chief, Environmental
Enforcement Section, Department of Justice. If this is a new
matter, the staff attorney should also prepare a "mini" pre-
referral litigation report as an attachment to the letter. The
mini report should not be as detailed as the typical pre-referral
report. It should be no more than a five page document that
briefly details the facts about the site, the PRPs, and the
proposed settlement. The Ten-Point Settlment criteria is a good
starting point for drafting this report. The mini report should
also include a draft administrative agreement or consent decree.
If a pre-referral negotiations (PRN) report has been sent to the
Department of Justice, the staff attorney should provide
necessary information to update the PRN and the draft
administrative agreement or consent decree. If a DOJ staff
attorney has been previously assigned to the matter, the staff
attorney should also indicate the name of the DOJ staff attorney
assigned to the matter.
2.	After the DOJ staff attorney has been assigned, the
staff attorney should keep the DOJ attorney apprised of the
negotiations if the DOJ staff attorney is not a participant in
the negotiations. The staff attorney should make sure that the
DOJ staff attorney has pre-approval on any proposed compromises
before the PRP is given a final offer than includes a compromise
from EPA.
3.	After an agreement has been reached the staff attorney
should route the proposed settlement through ORC and the Program.
The agreement should contain a cover letter that "refers" the
administrative settlement to DOJ for concurrence or that
transmits a referral for the filing of a complaint and lodging of
the consent decree. The package should also include a Ten-Point
Settlement document for the administrative settlement or the
referral for the filing of a complaint and lodging of a consent
decree. If pre-approval of the settlement has been obtained, the
settlement should be signed by the PRPs.
In the case of an administrative settlement, since a public
comment is needed, the signature of the Division Director or his
delegatee should not be obtained until after DOJ has concurred or
the 30 day period for DOJ to concur has expired.
In the case of a referral for the filing of a complaint or
lodging of the consent decree, the PRPs should sign the
settlement and the signature of the RA should be obtained before
the settlement is transmitted to DOJ. .The referral package
should also contain a draft complaint.
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OCT 29 '92 09:46 OE filR/WATER
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r,
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. D.C. 20460
SEP - I :C-92	E
ENFORCEMENT
CONF~	"iTIAL
OFFICE OF ENFORCEMENT
MEMORANDUM
SUBJECT: Distribution of Case Memorandums for Economic Benefit
of Noncompliance and Ability to Pay
Attached are two case memoranda your respective staffs might
find useful when negotiating and_li.ti.a.atina economic benefit..and
ability to pay issues. These case memoranda were developed by
0~ffi
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OCT 29 '92 09=47 OE filR/WATER
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ENFORCEMENT SENSITIVE AND CONFIDENTIAL
ENP01O:M©n
September 1/ 1992	.	v-w <\ «'
MEMORANDUM
Subject: Ability to Pay — For-Profit Entities: An Analysis of
Judicial and Administrative Interpretation
From: Craig Spencer# Student Intern
Program Development and Training Branch
Matthew Azrael, student Intern
Program Development and Training Branch
To:	Jonathan Libber/ BEN/ABEL Coordinator
Program Development and Training Branch
1 j
I. ABILITY TO PAY: A SUMMARY
In assessing civil penalties, courts, Congress, and the EPA
have recognized ability to pay as a mitigating factor that must
be considered. Courts and administrative law judges (ALJs) have
consistently addressed the issue in their decisions; Congress has (
included language in most environmental statutes that mandates
its consideration. The EPA's Policy on civil Penalties, issued
on February 16, 19S4, and codified as EPA General Enforcement
Policy GM-21, lists ability to pay as an adjustment factor when
assessing penalties against a violator, as does A Framework for
Statute-Specific Approaches to Penalty Assessments, issued on
February 16, 1984, and codified as EPA General Enforcement Policy
GM-22.
Ability to pay generally encompasses a review of a
violator's solvency and an assessment of the effect a given
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OCT 29 '92 09:4? OE AIR/WATER
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ENFORCEMENT SENSITIVE AND CONFIDENTIAL
penalty will have on the firm's ability to continue in business.
A Framework for Statute-Specific Approaches to Penalty
Assessments. at page 17. In appraising ability to pay, courts
generally refer to the violator's income/ dividends paid, net
worth, or sales. Courts will also look at a firm's size and
financial stability. Penalties generally will be reduced for
small and/or financially troubled firms. If a firm cannot afford
a lump-sum payment, the court may require the payments to be made
in installments.
When determining ability to pay, courts also examine the
structure of the violating entity/ and the relationship it has to
its owners and to other entities. For example, sole proprietors
are personally responsible for their entity's violations.
Similarly, courts may consider the financial strength of parent
corporations in determining the ability to pay of their
subsidiaries and divisions.
Generally, the violator must demonstrate an inability to
pay. If the violator fails to meet its burden of proof, the
issue- will not be considered. If the violator can proffer
evidence of an inability to pay, the government may rebut this
claim with evidence from the firm's financial statements, tax
returns, or other documents that suggest that the penalty
actually is within the means of the violator.
The ABEL program is utilized for settlement purposes only to
rebut a violator's claim of inability to pay. ABEL provides a
2
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OCT 29 '92 09:48 OE PIR/WPTER
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ENFORCEMENT SENSITIVE AND CONFIDENTIAL
fast, conservative estimate of a firm's ability to borrow money-
arid pay current and long-term expenses.1 However, defeating a
polluter's claim in court requires a more extensive analysis of
the firm's business records, and the testimony of an expert
witness to explain the data.
When ability to pay is a legitimate issue, EPA's policy is
to first allow payment of the penalty in installments with
interest. If txie violator cannot even afford the penalty in
installments, EPA's policy is to reduce its penalty assessment
and permit the entity to remain in business and come into
compliance. However, the EPA need only consider the violator's
ability to pay. EPA reserves the right to impose a penalty that
will shut down a violator if the violations are egregious or the
violator is not willing to comply. EPA penalty policy GM-22
states:
The Agency will generally not request penalties that
are clearly beyond the means of the violator.
Therefore EPA should consider the ability to pay a
penalty in arriving at a specific final penalty
assessment. At the same time, it is important that the
regulated community not see the violation of,
environmental requirements as a way of aiding a
financially troubled business. EPA reserves the option,
in appropriate circumstances, of seeking a penalty that
1It is Important to note that ABEL only looks at a
violator's cash flow. If the violator "passes" ABEL, then one
can safely assume the violator can pay the amount ABEL indicates.
If ABEL is negative or indeterminate, the government must look
further as there are many other potential sources of income from
which penalties can be funded. The Agency is currently
developing a guidebook on looking at these other areas. It
should be ready in early 1993.
3
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ULI d.3 "=)<£ 09:4s OE UIR/WHIER.
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ENFORCEMENT SENSITIVE AND CONFIDENTIAL
might put a company out of business ... it is
unlikely that EPA would reduce a penalty where a
facility refuses to correct a serious violation. The
same could be said for a violator with a long history
of previous [repeated] violations. Id. at 23.
In practice, very few polluters are penalized beyond their means.
If, after consideration of ability to pay, a decision is
made to lower a penalty, the reduction may apply to both the
gravity component of the penalty as well as the economic benefit
of noncompliance.2 Methods of determining a polluter's ability
or inability to pay a penalty will be explored in this
memorandum.
II. STATUTORY REQUIREMENTS
Ability to pay is incorporated into the penalty policy
largely because it is required to be considered by most
environmental statutes. Courts are required to consider ability
to pay when assessing civil penalties for noncompliance under:
the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA)
814(a)(4); 7 u.s.c. 1361(a)(4), the Clean Air Act (CAA) §H3(b);
42 U.S.C. 7413(b), the Federal Water Pollution Control Act
(FWPCA) §309(d) ; 3'3 U.S.C. 1319(d), the Comprehensive
Environmental Response, Compensation, and Liability Act (CERCLA)
3109(a)(3); 42 tJ.S.C. 9609(a)(3); and the Toxic Substances
2While GM-22 prohibited reduction of the economic benefit
component for inability to pay, the policy entitled Guidance on
Determining a Violator's Ability to Pav a Civil Penalty.
(December 16,1986) permitted inclusion of the benefit component
based on almost three years of experience in applying GM-21 and
GM-22.
4
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ENFORCEMENT SENSITIVE AND CONFIDENTIAL
Control Act (TSCA) §16(a)(2)(B); 15 U.S;C. 2615 (a)(2)(B). As a
matter of policy, the Agency requires that ability to pay always
be considered, whether mandated by statute or not.
Where statutorily mandated, ability to pay, like economic
benefit and other required factors, must be considered by the
court or AU* in penalty assessment. Thus, although courts
possess broad discretion in determining the amount of a civil
penalty, United States v. Louisiana-Pacific Corporation, 682
F.supp. 1141, 1163 (D.Colo. 1988), failure to consider all
factors statutorily required is an abuse of discretion and
grounds for reversal. Atlantic States Legal Foundation. Inc. v.
Tvaon Foods. Inc. ~. 897 F,2d 1128, 1142 (11th Cir. 1990). With
this in mind, courts and ALTs have widely recognized the issue of
a violator's ability to pay a civil penalty.3
3 Atlantic States Legal Foundation. Inc.. v. Tvson Foods,
Inc. , 897 F.2d 11'28 (11th Cir. 1990); Powell Duffrvn Terminals
Inc., 913 F.2d 64 (3d Cir. 1990); Blue Legs v. United States
Bureau of Indian Affairs. 867 F.2d 1094 (8th Cir. 1989); Katzson
Bros.. Inc. v. United States Environmental Protection Agency. 839
F. 2d 1396 (10th Cir. 1988),' Duouesne Light Company v.
Environmental Protection Agency. 698 F.2d 456 (D.C. Cir. 1983);
United States v. A. A: Mactal Construction Co., Civil Action No.
89-2372-V (D.Kan. March 31, 1992); United States v. Roll Coater.
Inc.. Cause No. IP 89-828 C (S.D.ind. March 22, 1991); United
States v. Vertac Chemical Corp., 756 F.Supp 1215 (E.D.Ark. 1991);
United States v. Western Processing Co. , Inc.. 756 F.Supp 1424
(W.D.Wash. 1990); State of New Jersey. PEP v. J.T. Baker Chemical
Company. Docket No, C-6597-87 (January 3, 1990); United States v.
Vineland Chemical Co.. Inc.. 31 Env1t.Rep.Cas. (BNA) 1720 (D.N.J.
April 30, 1990); Kellev v. Thomas Solvent Co.. 717 F.Supp. 507
(W.D.Mich. 1989); United States v. Cannons Engineering Corp.. 720
F.Supp. 1027 (D.Mass. 1989); United States Environmental
Protection Agency v. Environmental Waste Control. Inc.. 710
F.Supp. 1172 (N.D.Ind. 1989); Student Public Interest Research
5
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ENFORCEMENT SENSITIVE AND CONFIDENTIAL
III- BORDEN OF PROVING AM INABILITY TO PAY
*
EPA penalty policy GM-22 states:
The burden to demonstrate inability to pay, as with the
burden of demonstrating the presence of any mitigating
circumstance, rests on the defendant. If the violator
fails to provide sufficient information, then the case
development team should disregard this factor in
adjusting the penalty. A Framework for Statute-
Specific Approaches to Penalty Assessments. at 23
(February 16, 1984).
Group of New Jersey. Inc. v. Hercules Inc.. civil Action No. 83-
3262 (D.N.J. April 6, 1989)? Proffitt v. Lower Sucks County Joint
Municipal Authority. Civil Action No. 86-7220 (E.D.Pa. May 12,
1988), rev'd on other grounds. 877 F.2d 57 (3rd Cir. 1989);
Student Public Interest Research Group of New Jersey, Inc. v.
Monsanto Co.. 29 Env1t.Rep.Cas. (BNA) 1078 (D.N.J. 1988); United
States v. Louisiana-Pacific Corporation. 682 F.Supp. 1141
(D.Colo. 1988);
United states v. SCM Corporation- 667 F.Supp. illO (D.Md. 1987);
Duouesne Licrht Co. v. E.P.A.. 791 F.2d 959 (D.C. Cir. 1986) ;
United States v. Mac's Muffler Shop. Inc.. 25 Env't.Rep.Cas.
(BNA) 1369 (D.Ga. November 4,1986); Chesapeake Bay Foundation v.
Gwaltnev of Smithfield. LTD.. 611 F.Supp. 1542 (E.D. Va. 1985),
aff'd on other grounds 791 F.2d 304 (4th Cir. 1986)), vacated 108
S.Ct. 376 (1987), on remand, 844 F.2d 170 (4th Cir. 1988),
judgment reinstated, 688 F.Supp. 1078 (E.D. Va. 1988), penalty
reduced, 890 F.2d 690 (4th Cir. 1989); State of Ohio v. Davton
Malleable. Inc.. Case No. 78-694 (October 10, 1979); United
States v. Reserve Mining Co., 412 F.Supp. 705 (D.Minn. 1976);
Ford Motor Company v. Coleman. 402 F.Supp. 475 (D.D.C. 1975) ;
United States v. Eureka Pipeline Company. 401 F.Supp. 934
(N.D.W.V. 1975); Federal Trade Commission v. Consolidated Foods
Corporation. 396 F.Supp. 1344 (S.D.N.Y. 1974); United States v.
Swinaline. Inc.. 371 F.Supp. 37 (E.D.N.Y. 1974); United States v.
J.B. Williams Company. Inc.. 354 F.Supp. 521 (S.D.N.Y. 1973); In
the Matter of Dr. Marshall C. sasser. CWA Appeal No, 91-1
(November 21, 1991), Docket No. 404-89-102 (July 30, 1991); In
the Matter of Universal Circuits. Inc.. Docket No, CWA-IV-88-001
(April 11, 1990); In the Matter of All Regions Chemical Labs.
Inc.. Docket No. CERCLA-I-88-1089 (December 1, 1989) ; In the
Matter of Federal-Hoffman. Inc.. Docket No. VW-87-R-001 (August
12, 1987); In the Matter of Timothy R. Ward. TSCA Docket Number
VII-86-T-635 (November 24, 1987); In the Matter of A.Y. McDonald
Industries. Inc.. Docket No. RCRA 85-H-0002 (July 23, 1987). ¦
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This EPA policy received support from the ALJ in In the Matter of
Universal circuits. Inc.:
The ability to pay question is analogous to an
affirmative defense. In that respondent would more
likely be the possessor of evidence concerning this
issue/ the burden rests with respondent to establish
its inability to pay the penalty proposed and why a
reduction in same is necessary; it is not for
complainant to establish respondent's ability to pay.
Docket No. CWA-IV-88-001, 36 (April 11, 1990).
The court in PTRG v. Powell-Duffrvn Terminals Inc., while noting
that the epa's penalty policy was not binding, utilized the
policy in placing the principal burden of establishing inability
to pay on the violator. 720 F.Supp. 1158, 1166 (D.N.J. 1989).
The court held that the defendant's claim was unfounded given the'
wealth of its parent company and the violator's rapid growth and
expansion in the recent past. Id.
other courts have adopted this approach as well. In United
States v. Roll Coater. Inc., Cause No. IP 89-828 C, 18 (S.D.Ind.
March 22, 1991), the court would not reduce the penalty imposed
due to an inability to pay because the violator had failed to
introduce evidence of a material adverse effect on its
operations. In In the Matter of Dr. Marshall C. Sasser. CWA
Appeal No. 91, 10 (November 21, 1991)? Docket No. 404-89-102
(July 30, 1991), the respondent failed to meet his burden of
proof demonstrating an inability to pay in suggesting that a
penalty of $125,000 would bankrupt him over time. His yearly
earnings totalled $100,000.
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The EPA's Guidance on Determining a Violator's Ability to
Pav a civil Penalty, (issued December 16, 1986, and codified as
GM-56) , states that after determining that a violator is planning
to claim extreme financial hardship, the violator's overall
financial health must be appraised. This requires a full review
of the violator's tax returns, financial statements, and other
pertinent documentation. Id. at 3. Though not utilized in a
trial setting, the.ABEL program is an effective tool for
settlement purposes, providing litigation teams with a fast and
realistic^assessment of a firm's ability to borrow money and pay
current and long-term expenses, id. at 5» The ABEL program
provides its user with a conservative estimate of ability to pay,
if ABEL indicates an ability to pay the full penalty, it can be
safely assumed that the ABEL result is reliable. An ABEL reading
indicating inability to pay is not at all determinative as ABEL
focuses only on one aspect of ability to pay. It must be
followed with a more detailed review of available financial
information on the violator. Id. A similarly detailed study is
essential for the purpose of refuting an ability to pay claim at
trial, even if ABEL indicates an ability to pay the full penalty,
IV. ASSESSING ABILITY TO FAY
A. FIRM SIZE
In EPA penalty policy GM-22, the size of the violator is
listed as a separate factor to be considered within the gravity
component of the penalty analysis, A Framework for statute-
a
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Specific Approaches to Penalty Assessments. at 15 (issued
February 16, 1984). Unlike ability to pay, firm size is not
utilized in the policy for mitigation, but to ensure that the
agency's deterrence goal is served by matching the size of the
penalty with the size of the violator. The policy states:
[T]he gravity component should be increased where it is
clear that the resultant penalty will otherwise have
little impact on the violator in light of the risk of
harm posed by the violation. Id.
Because consideration of this factor is often not statutorily
required, some courts and AUs choose to couple a review of firm
size with an ability to pay analysis.
In order to ensure that civil penalty assessments offer an
effective deterrent, courts try to assess penalties that, on a
case by case basis, are large enough to serve that purpose,
without becoming overly burdensome. The court in USEPA v.
Environmental Waste Control. Inc. defined the parameters of civil
penalty assessment:
A civil penalty must provide a meaningful deterrence
without being overly punitive; it should be large
enough to hurt; it should .deter anyone in the future
from showing a similar lack of concern with compliance.
710 F.Supp 1172, 1244 (N.D.Ind. 1989),
Thus, for large firms, penalties may be increased to act as an
effective deterrent to future noncompliance by similarly situated
firms.
In United States v. 5CM Corp.. even though the court reduced
scm's penalty due to other mitigating factors, the court stated:
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SCM ... is a major corporation. JOnly a substantial
penalty would have any economic impact or serve as any
deterrent.1 Chevron U.S.A, Inc.. 639 F.Supp. at 779.
Imposition of the entire $750,000 available would
result in a penalty equal to less than four percent of
the 20 Million dollars in cash dividend® paid by the
company in fiscal 1985. 667 F.Supp 1110# 1126 (D.Md.
1987) .
While a $750,000 penalty seemed inappropriately low to the court
in scjf, a smaller violator may not realize annual gross earnings
of $750,000. obviously, larger, wealthier companies require
larger penalties in order to offer any deterrent.
Other courts have also addressed firm size in calculating
penarcies. In Ohio ex rel. Brown v. Davton Malleable. Inc., the
violator was assessed a penalty of $493,500 for failing to comply'
with its NPDES permit. In considering DMI's suggestion that its
penalty should be only $30,000, the court stated!
A $30,000 civil penalty against DMI, considering its
size, would amount to little more than 'a slap on the
wrist,« while it might throw a small enterprise out of
business. Case No. 78-694, 12 (October 10, 1979).
See also: United States v. J.B. Williams Company. Inc.. 354
F.Supp. 521 (1973) (an FTC'case in which this judge granted the
government's motion for summary judgment and a penalty of $1
million. The judge stated that the severity of the sanction
depends on the ability of the defendant to pay what fines are
assessed).
Penalty assessments against smaller firms serve the same
goal of deterrence. Yet the firm's size, and thus inability to
pay a large penalty, can enable the smaller firm to escape larger
10
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penalties. The ALJ in In the Hatter of Timothy R, Ward described
this disparity:
Consideration of Respondent's 'ability to pay' should
not'suggest or imply that payment of the penalty
assessed will be without pain or borne with complete
facility; rather, it should be in such amount that
Respondent, and others similarly situated, will choose
to comply with pertinent regulations, promulgated for
the protection of the public, rather than pay an
appropriate penalty. TSCA Docket No« VII-86-T-635, 15
(November 24,< 1987) (emphasis added).
Here, the penalty initially proffered was substantially reduced
in response to the inability of the sole proprietor—defunct at
the time of the TSCA hearing—to pay a substantial penalty.
There is no question that there is a disparity in the size
of penalties paid by large violators as opposed to smaller ones.
The constitutionality of this disparity between members of the
same regulated community was tested in United States v. Eureka
Pipeline. 401 F.Supp 934, 942 (N.D.W.V. 1975). The court held
that:
[S]uch discrimination is not per se a violation of
constitutional rights. 'Unlike the Fourteenth
Amendment the.Fifth contains no equal protection clause
and it provides no guarantee against discriminatory
legislation by Congress.• Detroit Bank v. United
States. 317 U.S. 329, 337 (1943). And even under the
Equal Protection Clause of the Fourteenth Amendment
absolute equality is not required where wealth is
involved. San Antonio School District v. Rodriguez,
411 U.S. 1 (1973).
. . . [A]s long as there is a reasonable basis for
the classification which is founded upon a 'substantial
distinction* between the different parties of the same
class and which bears 'a proper relation to the objects
classified and the purposes sought to be achieved*
there is no denial of equal protection. Pfeiffer
Brewing Co, v. Bowles. 146 F.2d 1006 (Em.App. 1945).
11
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The "substantial distinction" in this instance is the reality
/
that different size firms are deterred by different size
penalties.
B. FIRM STRUCTURE
1. Sole Proprietor
When the violator is a sole proprietor/ penalties may be
assessed against the business owner's personal assets and income..
Similarly, the ability to pay analysis will include an accounting
of the proprietor's personal assets and earning potential.
In the Matter of Dr. Marshall Sassar. CWA Appeal No. 91-1
(November 21, 1991); Docket No. 404-89-102 (July 30, 1991), .Dr.
Sasser, a medical practitioner/ was assessed a penalty of
$125,000 for dredging and dumping in protected wetlands without a
permit. He was held personally responsible for the illegal
development, which was to have become an exclusive duck hunting
club. Sasaer's personal income was analyzed, including
projections of his future earnings based on prior years* income:
Respondent's claim that a $125,000 penalty, paid over
time, will bankrupt him lacks credibility. He earned
more than $100,000 from his medical practice in 1990,
and does not claim that he will be unable to continue
to practice medicine in the foreseeable future. Id. at
10.
in the Matter of Timothy R. ward. TSCA Docket No. VII-86-T-
63S (November 24, 1987), the ALT considered a sole proprietor's
personal financial condition in concluding that Ward was unable
to pay the proposed penalty. The discontinuation of the
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violating entity's operation forced the AU to consider Ward's
other sources of income. Id. at 15. Ward's mounting debts and
dwindling employment as a truck driver prompted the court to
reduce the penalty from $63,000 to $1,200.4
2. Corporations
Corporations afford their owners the advantage of limited
liability. That is, the owners (shareholders), generally are
prevented from incurring liability greater than the amount of
money actually invested in the corporation. This offers
protection to each individual stockholder should a large penalty
be assessed against the corporate entity. Because of the
corporate structure, personal income is of less concern in
evaluating ability to pay.
Courts, however, have not hesitated to consider the assets
of parent corporations when determining the ability of divisions
or subsidiaries to pay a penalty. The ALT in In the Matter of
Universal Circuits. Inc.. Docket No. CWA-IV-88-001 (April 11,
1990), held that a parent corporation is legally responsible for
its division and cannot insulate itself from a violating
division's liabilities. Ifl. at 36. This stance, in response to
the violator's claim that it was in serious financial difficulty,
4The court in United States v. A. A. Mactal Construction
Co.. Civil Action No, 89-2372-V, 7 (D.Kan. March 31, 1992),
recognized the fact that A. A. Mactal Construction Co. was "a
sole proprietorship with limited ability to pay", but the court
refused to allow that factor to mitigate the penalty below the
economic benefit of noncompliance.
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ENFORCEMENT SENSITIVE AND CONFIDENTIAL
prevents the parent corporation from abusing its corporate status
by insulating itself with divisions or subsidiary corporations,
capitalized with few assets, that sustain large penalty
assessments for noncompliance which they cannot pay. See also:
Federal Trade Commission v. Consolidated Foods Corporation. 396
F.Supp. 1353 (S.D.N.Y. 1975) (the threatened financial status of
-a division cannot excuse payment of the penalty by the parent
firm); Ohio ex rel. Brown v. Davton Malleable. Inc.. Case No. 78-
694 (October 10, 1979) (The financial well-being of a division is
irrelevant since "it is appropriate to assess the civil penalty
against the company as a whole"); PIRG v. Powell Duffrvn
Terminals. Inc.. 720 F.Supp. 1158, 1166 (D.N.J. 1989) (wholly
owned subsidiary's claim of inability to pay rejected since the
company was owned and controlled by a British Corporation traded
on the London stock Exchange).
Courts may look to financial transactions entered between
parent and subsidiary corporations. In United States v. J.B.
Williams Company. Inc.. 3 54 F.Supp. 521 (S.D.N.Y. 1973), the
court dismissed the notion that the subsidiary company could not
pay a $500,000 penalty for violating SEC advertising regulations,
holding that the violator's dealings with its parent corporation
served to undervalue the actual business generated by the firm.
Id. at 549.
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C. FINANCIAL SOLVENCY
1. General Application
EPA's penalty policy GM-22 states that violation of
environmental requirements should not be viewed by the regulated
community as a way of aiding financially troubled entities. Id.
at 23. The policy's point is to emphasize that allowing penalty
reductions for an inability to pay permits a violator to continue
operating and come into compliance. The penalty should act as a
deterrent to future violations, but generally not as a crushing
blow to the entity -from which it cannot recover. The Gwaltnev
court rejected a claim of inability to pay a substantial penalty
because the judge was "unpersuaded that any [reasonable] penalty
. . . would jeopardize Gwaltney's continued operations,11 611
F.Supp at 1562. Apparently# had the judge felt that Gwaltney's
financial health was at risk he would have reduced the penalty.
while courts will hesitate before putting a company out of
business, this may not result in the preservation of one division
within a corporation. The Federal Trade Commission dealt with
this issue in an enforcement action against the Consolidated
Foods corporation. The court in FTC v. consolidated Foods
Corporation. 396 F.Supp. 1353 (S.D.N.Y. 1975) assessed a penalty
of $25,000 for a company's violation of an FTC order prohibiting
price discrimination. Id. at 1357. In response to the
defendant's claim of financial inability to pay more than a
nominal penalty, the court indicated that financial difficulty is
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not a defense to a penalty, and the "threatened financial
position of a division of a company . . . cannot excuse payment
of penalties by the company itself — the named defendant in this
action." Id.
When deciding Student Public Interest Research Group of New
Jersey. Inc. v. Hercules Inc., Civil Action No. 83-3262, 11
(D.N.J.. April 6, 1989) the U.S. District Court of New Jersey
inferred that a penalty ceiling might exist at the point where a
penalty becomes an undue hardship. While refusing to. reduce the
$1.68 million npdes permit violation penalty on account of the
economic impact on the firm, the court outlined the instance in
which it would consider such a reduction:
If the penalty . . . would work an undue hardship on
the business involved or would interfere with its
continuing in business, the Court has discretion to
reduce the penalty accordingly. Id. at 11.
This, decision provides for the reduction of a penalty where a
violator can show a bona fide impending hardship. Because of
this, plaintiffs should closely scrutinize evidence of such
financial difficulty (See EPA's Guidance on Determining a
Violators Ability to Pav a Civil Penalty. Exhibit 1 (issued
December 16, 1986).
In In the Matter of Timothy R. ward, the court was convinced
that reduction of the penalty assessment was appropriate due to
financial hardship. TSCA Docket Number VII-86-T-635 (November
24, 1987). Ward was engaged in the business of scrapping
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transformers which, when first received, contained PCB-
contaminated oil. Id^ at 3. Ward's failure to contain,
transport, and label the substance properly resulted in his being
assessed penalties of $63,000. Id. at 4. However, the court
reduced the total penalty to $1,200, citing the following
reasons:
Ward no longer operates said salvago operation. The
land on which the operation was conducted was taken
from Ward by foreclosure. His earnings from his work
as a truck driver are apparently his sole source of
income. ... he is two months behind in his. house
rent. . . . Ward does not have the ability to pay the
penalty which normally would be assessed for the
violations found. Id. at 16.
In order for inability to pay to become an issue, the
penalty must cause the risk of forcing the violator to
discontinue operations. The ALT in In the Matter of All Regions
Chemical Labs. Inc.. Docket No. CERCLA-I-88-1089 (December 1,
1989) assessed penalties of nearly $90,000 for discharge and
discharge-reporting violations under CERCLA. In response to All
Regions' statement that they had gone out of operation due to a
fire, the ALT stated,
I find no basis to take that fact into consideration in
setting the penalty for the violation found. The
threat of a civil penalty did not force All Regions out
of operation; the inability to find another suitable
location did. Id. at 44.
In this case, no other evidence of inability to pay was offered,
therefore, All Regions failed to satisfy the financial difficulty
claim.
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ENFORCEMENT SENSITIVE AND CONFIDENTIAL
the impression that entities that have a .special relationship
with their community will pay a smaller penalty. However, if the
adverse effects on the surrounding community are unduly severe,
the court may take that into consideration.
V. ALTERNATIVE PAYMENT PLANS: INSTALLMENTS
EPA penalty policy GM-22 provides for the implementation of
a delayed payment schedule where a violator cannot afford to pay
a lump-sum penalty.5 The policy cautions that this policy,
which may be contingent upon sales or other indicators of
positive business activity/ places a "real burden on the Agency
and should only be considered on rare occasions." 13. This
provision has been utilized to a large extent where small but
viable polluters have been assessed large penalties (United
States v. J. B. Williams Company. Inc.. 354 F.Supp. 521 at 550
(s.d.n.y. 1973) (a penalty brought under FTC trade regulations);
In the Matter of Dr. Marshall C. Sasser. CWA Appeal No. 91-1, 10
(November 21, 1991)? Docket No. 404-89-102 (July 30, 1991), or
where a violator experiences severe financial difficulties. In
the Matter of Timothy R. Ward. TSCA Docket No. VII-86-T-635, 16
(November 24, 1987).
In both ward and Sasser, the ALJ ordered the defendant to
submit a proposed payment schedule to the Regional Administrator
for consideration. Ward, at 16; Sasser. at 10. Upon review, as
^GM-22 at 23.
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in an initial analysis, several options for payment are to be
considered. The violator and Regional Administrator may agree on
a method and schedule of payment which includes» (1) using cash
on hand, (2) selling assets, (3) increasing debt by commercial
borrowing, (4) increasing equity by selling stocJc, (5) applying
what would normally be distributed as profit to the payment of a
civil penalty, and/or (6) using internally-generated future cash
flows by deferring or eliminating planned future investments.
Guidance on Determining a Violator's Ability to Pav a Civil
Penalty, at 2 (issued December 16, 1986).
A Phase II ABEL analysis can also be useful in these
situations. The Phase II run can calculate an appropriate
payment schedule over a period of two to five years. This
analysis can assist enforcement personnel in constructing an
equitable payment schedule.
VI. CONSIDERATIONS IN PRESENTING
THE ABILITY TO PAY ISSUE
A. INCOME STATEMENT PROFITS AND EARNINGS
The most frequently referenced measure of ability to pay is
the violator's profits or net earnings. This can be found on a
firm's financial statements or its tax returns (although the
figures may be drastically lower in the latter case due to
different methods of depreciation and expensing). When an
ability to pay is determined using, a violator's reported net
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earnings, courts may find it unnecessary ,to look any further.6
when violators have proffered financial reports or income
tax statements that show a net loss, and therefore, an inability
to pay a sizable penalty, courts have occasionally rebuffed this
evidence as fictitious. In United States v. J.B. Williams
Company. Inc.. the court held that the violator's financial
statement did not accurately reflect the financial condition of
the firm. 354 F.Supp. at 549. In this case, an exclusive
arrangement between the parent and subsidiary companies permitted
the violator to report a modest profit while actually handling
large quantities of business and generating substantial income*
Id.
Similarly, the Gwaltnev court rejected the violator's
argument that it had sustained a large after-tax loss of
$247,000. 611 F.Supp. at 1562. The court refused to reduce the
$1.28 million penalty due to Gwaltney's professed inability to
pay, and de-emphasi26d the evidentiary value of the financial
reports, stating, "Gwaltney is clearly earning a substantial
dollar amount on its operations regardless of whether its profit
margin is 1 thin.M< Id.
^Cases relying substantially on a violator's net earnings to
prove ability to pay: State of Ohio v. Davton Malleable, Inc..
Case No. 78-694, 13 (October 10, 1979); U.S. EPA v. Environmental
Waste Control. Inc.. 710 F.Supp. 1172, 1244 (N.D.Ind. 1989); III
the Matter of Universal Circuits. Inc.. Docket No. CWA-IV-88-001,
37 (April 11, 1990); Student Public Interest Research Croup of
New Jersey. Inc. v. Hercules Inc.. Civil Action No. 83-3262, 11
(April 6, 1989).
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B.	DIVIDENDS
Dividends reflect the net profit of a corporation which has
been distributed to the shareholders. It often is representative
of a healthy corporation/ as the firm does not require the
generated income to meet its financial obligations. The Davton
Malleable court referred to the violator's distribution of
substantial dividends over a four year period as indicative of a
healthy and profitable corporation. Case No. 78-694, 13 (October
10, 1979).
C.	NET ASSETS/NET WORTH
Net assets represent the value of the corporation after-
liabilities have been subtracted. A violator might accumulate
large stockpiles of inventory or capital to decrease net income
for tax purposes, or to avoid a large penalty. An analysis of
the violator's net assets will expose this. Although
representative of a non or semi-liquid investment,7 net assets
have been referred to by some courts in the ability to pay
analysis. In Hercules. the court pointed out Hercules1 net
assets in holding that the penalty, $1.68 million, would have no
significant economic impact on the firm's ability to conduct
business. Civil Action No. 83-3262, 11 (D*N.J. April 6, 1989).
Hercules' assets totalled $3,492,000,000. Id.
Net Worth represents the "net assets" of an individual or
7The assets may be difficult to sell for cash, or may bring
only a portion of their book value upon liquidation.
22
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ENFORCEMENT SENSITIVE AND CONFIDENTIAL
sole proprietor. In this case, net wortja equals all equity minus
all debt. In situations where an individual can be made
responsible for payment of a penalty, net worth may be reviewed
by the court to assess the violator's ability to pay. The AU in
In the Matter of Dr. Marshall sasser. after having considered the
substantial debt the violator incurred in purchasing..his house
and office building, recommended that the EPA regional
administrator set up an installment payment schedule rather than
force sasser to pay in one lump sum* CWA Appeal No. 91-1, 10
(November 21, 1991), Docket No. 404-89-102 (July 30, 1S91) .
D.	SALES
Sales represent the gross income generated by the firm
before cost of goods sold, expenses, depreciation, and taxes are
deducted. Courts may decide to review this figure if net income
has been reduced through excessive expensing, such as inflated
salaries or corporate luxury-item purchases. The J.B. Williams
court considered the business activity, or sales generated, of
the violator because of the artificially low income reported on
the company's financial statements. 354 F.Supp. at 549.
E.	ACCOUNTS RECEIVABLE
The J.B. Williams court also considered the volume of
accounts receivable generated by the violator, id. a company
may be able to defer its income by extending credit to the
purchasers of its products and services. These credit sales are
generated but are not reported as earned until payment is
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received (sometimes not until the following accounting period).
The accounts receivable are reported on the balance sheet as an
asset, but the expected income from these sales is not reported
on the current year's income statement. A company may
artificially hold down reported income by converting cash sales
into credit sales and reporting the income in the following
accounting period.
F. ACQUISITION ACTIVITY AND EXPANSION
Acquisition activity has also been: used to show a violator's
ability to pay. The presumption raised here is, if a company has
money to expand its operations or purchase another entity, it
must.be in relatively stable economic condition* In PIRG v.
Powell Duffrvn Terminals. Inc.. 720 F.Supp. 1158/ 1166 (D.N.J.
1989), the court pointed to the defendant's expansion to a
facility twice its original size and to a joint venture with Dow
Chemical Company in rejecting the violator's contended inability
to pay.
The swinaline court rejected a similar inability to pay
argument, noting the violator's involvement with two acquisitions
and one merger during the polluter's period of alleged "financial
difficulties." 371 F.Supp. at 47.
VII. CONCLUSION
Two of the goals of civil penalty assessment are deterrence
and fairness to the regulated community. Different types of
violators are deterred by different size penalties, and they are
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ENFORCEMENT SENSITIVE AND CONFIDENTIAL
capable of paying different size penalties. In order to deter
future violations, a civil penalty must be large enough to hurt
the violator financially. Yet in order to be fair, civil
penalties should not impose an undeserved financial burden.
Along those lines, it would be unfair to expect a small business
to afford the same penalty as a much larger, wealthier
corporation. The consideration of the ability to pay issue
allows judges, AUs, and EPA officials to maintain an effective
deterrent in its civil penalty assessment while being fair to
smaller, less wealthy entities by lowering their penalty to an
affordable level.
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ENFORCEMENT SENSITIVE AND CONFIDENTIAL
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September 1, 1992

MEMORANDUM
Subject: Economic Benefit from Non-Compliance: An Analysis of
Judicial and Administrative Interpretation
From:	Craig Spencer, Student Intern
Program Development and Training Branch
Matthew Azrael, Student Intern
Program Development and Training Branch
To:
Jonathan Libber, BEN & ABEL Coordinator
Program Development and Training Branch
I. SUMMARY: ECONOMIC BENEFIT
AS HANDLED BY THE COURTS
Most environmental statutes reguire courts to consider the
economic benefit of non-compliance when assessing penalties
against violators. Courts, in general, attempt to follow
statutory language in their appraisal of the economic benefit
issue. In this context, EPA's generic penalty policy and the BEN
model have received varying degrees of deference in the courts'
formulation of civil penalties.
The EPA's GM-21, Policy on Civil Penalties. (1984) has
served as a guide in a string of cases in determining what
factors need to be considered in civil penalty calculations. The
goals of deterrence, restitution and retribution that are
explicitly outlined in the policy have been widely accepted by
the courts. Judges, on occasion, have adopted the elements of
economic benefit as outlined in the EPA Policy:	, A
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ENFORCEMENT SENSITIVE AND CONFIDENTIAL
First, by delaying the expenditure of funds on
compliance, a violator obtains the use of the money for
other purposes in the meantime. Second, a violator may
also avoid some costs altogether - for example, the
costs of maintaining and operating the pollution
control system until it is implemented. Third, a
violator may, in addition, obtain a competitive
advantage as a result of its violation. For example,
it may be able to offer goods at a lower price, thereby
possibly increasing its sales and profits. Chesapeake
Bay Foundation v. Gwaltnev of Smithfield. 611 F.Supp.
1542 (D.Va 1985).
The importance of recovering each element of economic benefit in
a civil penalty has crucial significance in serving the goal of
deterrence. Courts generally do appreciate the fact that a
penalty that does not recover economic benefit cannot offer an
effective deterrent to a violator.
The BEN model is essentially a settlement tool, but expert
witnesses have had some success using BEN's methodology to
explain the economic benefit calculation at penalty trials and
hearings. If uncontroverted, expert testimony utilizing a
methodology similar to that used in the BEN model can satisfy the
agency's burden of proving that the violator derived a specific
dollar value of economic benefit from delayed and avoided
compliance costs. Courts occasionally treat this economic
benefit figure as a floor below which civil penalties cannot be
reduced.
However, it is clear that the financial calculations
involved in an economic benefit analysis confuse judges. This
confusion has been amplified by disputes over benefit model
inputs. Conflicting expert testimony on the types and cost of
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ENFORCEMENT SENSITIVE AND CONFIDENTIAL
equipment, inflation rates, interest rates, investment discount
rates, and dates of compliance and noncompliance has, in the most
extreme cases, resulted in the judge discarding the economic
benefit issue altogether.
II. CONGRESSIONAL CONSIDERATION OF ECONOMIC GAINS
FROM NONCOMPLIANCE
The principal goals in imposing civil penalties are to
provide restitution, deterrence and retribution. Tull v. United
States. 481 U.S. 412, 422 (1987). The Senate outlined the policy
behind these goals and created simplified evidentiary provisions
for demonstrating economic benefit:
Violators should not be able to obtain an economic
benefit vis-a-vis their competitors due to their
noncompliance with environmental laws. The
determination of economic benefit or other factors will
not require an elaborate or burdensome evidentiary
showing. Reasonable approximations of economic benefit
will suffice. S.Rep. No. 50, 99th Cong., 1st Sess. 25
(1985) (emphasis added).1
It is clear that Congress appreciates the importance of
recapturing the economic benefit of noncompliance in deterring
further violations.
Environmental statutes use language that requires, or at
least allow, courts to consider economic benefit when assessing
penalties for noncompliance. Under the Clean Air Act, (CAA)
§120(d)(2)(A); 42 U.S.C. 742 0(d)(2)(A), "The amount of the
1As cited in PIRG v. Powell Duffrvn Terminals Inc.. 913 F.2d
at 80 (3d Cir. 1990). Emphasis supplied above was provided by
the court.
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ENFORCEMENT SENSITIVE AND CONFIDENTIAL
penalty . . . shall be equal to ... no less than the economic
value which a delay in compliance . . . may have to the
[violator]". The Federal Water Pollution Control Act, (FWPCA)
§309(d); 33 U.S.C. 1319(d), and the Comprehensive Environmental
Response, Compensation, and Liability Act, (CERCLA) §109(a) (3);
42 U.S.C. 9609(a)(3), say the court "shall" consider the economic
benefit of noncompliance in their penalty determination.2
The Toxic Substances Control Act, (TSCA) §16(a)(2)(B); 15
U.S.C. 2615(a)(2)(B), allows the court to consider "other matters
as justice may require". Clearly, preventing violators from
benefitting from their noncompliance requires that economic
benefit be considered.
The Resource Conservation and Recovery Act, (RCRA)
§3008(a)(3); 42 U.S.C. 6928(a)(3), does not contain specific
language mentioning economic benefit, but in United States v. T
& S Brass and Bronze Works, Inc.. 681 F.Supp. 314, 322 (D.S.C.
1988) the court held that it is appropriate for a penalty brought
under RCRA to deprive a violator of the economic benefit of
noncompliance. The court reviewed benefit despite the fact that
RCRA only requires that the seriousness of the violation and the
violator's good faith efforts to comply be considered.
Additionally, the court in United States v. The City of
2For a discussion focusing solely on Clean Water Act cases,
see: "Civil Penalty Assessment for Clean Water Act Wastewater
Discharge Violations: A Review of the Law" (U.S. EPA, March,
1992) .
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ENFORCEMENT SENSITIVE AND CONFIDENTIAL
North Adams. Civil Action No. 89-30048-F (D.Mass. May 18, 1992)
stated that:
[A]ny economic benefit to a violator of the SDWA [Safe
Drinking Water Act] regulations may be considered in
determining the amount of a civil penalty under 42
U.S.C. § 300g-3(b). A penal award serves a proper
function when it deters the punished from pursuing a
wrongful course of conduct.
Id.. at 7.
Although the "determination of the amount of a civil penalty
is committed to the informed discretion of the district judge"
U.S. v. Louisiana-Pacific Corporation. 682 F.Supp. 1141, 1163 (D.
Colo. 1988), failure by the trial court to consider all factors
statutorily required is an abuse of discretion and grounds for
reversal. Atlantic States Legal Foundation. Inc. v. Tvson Foods.
Inc.. 897 F.2d 1128, 1141-42 (11th Cir. 1990).
Congressional recognition and support of the importance of
denying violators economic gains from noncompliance, while
forcing courts to consider the issue, leaves the treatment of
economic benefit to the discretion of the court.
III. CALCULATION OF ECONOMIC
BENEFIT BY THE COURTS
A. ECONOMIC BENEFIT IN THE COURTS
The concept of recapturing economic benefit has been widely
recognized by courts and administrative law judges:
FEDERAL JUDICIAL DECISIONS: Tull v. United States. 481 U.S. 412,
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ENFORCEMENT SENSITIVE AND CONFIDENTIAL
423 (1987) ; Atlantic States Legal Foundation. Inc. v. Tvson
Foods. Inc. . 897 F.2d. 1128, 1141 (11th Cir. 1990); Ducruesne
Light Co. v. EPA. 791 F.2d 959, 960 (D.C. Cir. 1986); Duguesne
Light Company v. EPA. 698 F.2d 456, 462 (D.C. Cir. 1983); United
States v. City of North Adams. Civil Action No. 89-30048-F
(D.Mass. May 18, 1992); Atlantic States Legal Foundation, Inc. v.
Universal Tool & Stamping Co.. Inc.. Cause No. F 87-95, 16 (N.D.
Ind. March 13, 1992); United States v. Roll Coater. Inc.. Cause
No. IP 89-828-C, 10 (S.D.Ind. March 22, 1991); United States v.
A. A. Mactal Construction. Civil Action No. 89-2372-V (D.Kan.
March 31, 1992); United States v. Vineland Chemical Co.. Inc.. 31
ERC (BNA) 1720 (D.N.J. April 30, 1990); Public Interest Research
Group of New Jersey. Inc. v. Powell Duffrvn Terminals Inc.. 72 0
F.Supp. 1158, 1166 (D.N.J. 1989), aff'd in part and rev'd in
part. 913 F.2d 64, 79 (3d Cir. 1990), cert, denied. Ill S.Ct.
1018 (1991); Student Public Interest Research Group of New
Jersey. Inc. v. Hercules Inc.. 29 ERC 1417 (D.N.J. April 6,
1989); United States v. Louisiana-Pacific Corporation. 682 F.Supp
1141, 1164 (D. Colo. 1988); Student Public Interest Research
Group of New Jersey. Inc. v. Monsanto Co.. 29 ERC 1078, 1089
(D.N.J. 1988); Proffitt v. Lower Bucks County Joint Municipal
Authority. Civil Action No. 86-7220, 12 (E.D. Pa. May 12, 1988) ,
rev'd and remanded 877 F.2d 57 (3rd Cir. 1989); United States v.
T & S Brass and Bronze Works. Inc.. 681 F.Supp. 314, 322 (D.S.C.
1988) ; United States v. Mac's Muffler Shop. Inc.. 25 ERC (BNA)
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ENFORCEMENT SENSITIVE AND CONFIDENTIAL
1369 (D.Ga. November 4, 1986); Student Public Interest Research
Group of New Jersey. Inc. v. AT&T Bell Laboratories, 617 F.Supp.
1190, 1201 (D.N.J. 1985); Chesapeake Bay Foundation v. Gwaltnev
of Smithfield. LTD.. 611 F.Supp. 1542, 1557 (D.Va. 1985), aff'd,
791 F.2d 304 (4th Cir.1986), rev'd on other grounds, 108 S.Ct.
376 (1987); United States v. Phelps Dodge Industries. Inc.. 589
F.Supp. 1340, 1365 (S.D.N.Y. 1984) [note: action brought under
Federal Trade Commission cease-and-desist order].
FEDERAL ADMINISTRATIVE DECISIONS: In the Matter of Universal
Circuits. Inc.. Docket No. CWA-IV-88-001, 31 (April 11, 1990); In
the Matter of All Regions Chemical Labs. Inc.. Docket No. CERCLA-
1-88-1089, 31 (December 1, 1989); In the Matter of Federal-
Hoffman. Inc.. Docket No. V-W-87-R-001, 23 (August 12, 1987); In
the Matter of A.Y. McDonald Industries. Inc.. Docket No. RCRA 85-
H-0002, 32 (July 23, 1987).
STATE JUDICIAL DECISIONS: State of New Jersey. PEP v. J.T. Baker
Chemical Company. Docket No. C-6597-87 (January 3, 1990); Ohio
v. K & S Circuits. Case No. 79-950 (September 5, 1984); Ohio ex
rel. Brown v. Davton Malleable. Inc.. Case No. 78-694, 8 (October
10, 1979), rev1d. No. 6722 (Ct. App., Montgomery County, 1979),
rem'd for partial reinstatement. 1 Ohio St. 3d 151, 438 N.E.2d
120 (Sup. Ct. 1982).
These decisions represent a wide variety of reasoning in
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determining what value is appropriate in assessing civil
penalties based on the economic benefit of noncompliance. The
issues involved in that calculation and the disputes that
surround them will be discussed in turn in the following
sections.
B. CALCULATING ECONOMIC BENEFIT: DISPUTED INPUT VALUES
In a typical case involving economic benefit, the
plaintiff's expert witness will present testimony supporting one
value of economic benefit based on one set of inputs, and the
respondent's expert witness will present a much smaller estimate
based on another set of inputs. The dispute, in most cases, is
not about the methodology used, but about the choice of inputs.
The most dramatic example of how the "expert battle" can confuse
the economic benefit issue is New Jersey v. J.T. Baker Chemical
Company. Docket No. C-6597-87 (January 3, 1990). In this case,
plaintiff's expert calculated an economic benefit component of
$6.9 million, while respondent's expert's number ranged from a
$37,000 gain to a $191,000 loss. The disparity was caused
completely by the choice of input values; the methodologies used
were basically identical.
1. The Discount Rate
The choice of a discount rate is crucial to the economic
benefit calculation because it determines the benefit derived
from the investment of money that should have been utilized to
bring a pollution source into compliance. The higher the
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ENFORCEMENT SENSITIVE AND CONFIDENTIAL
discount rate, the greater the benefit. The[EPA's BEN model
currently incorporates a discount rate of (^8^1^) based on the
equity cost of capital for an average firm. This rate represents
the average return companies, and their shareholders, anticipate
receiving when investing in equity capital. The EPA default
discount rate has been disputed in a number of ways, and on
occasion, has been preempted for another rate when the
alternative was based on more specific data.
In Gwaltnev. 611 F.Supp. at 1559, the court favored the use
of the violator's 13% actual interest rate on borrowed funds over
the Chesapeake Bay Foundation's proffered 18.7%, which
represented the ten-year average rate of return on equity for
Gwaltney's parent corporation, Smithfield Foods, Inc. The court
reasoned that this lower rate was a more accurate and specific
estimation of Gwaltney's debt/equity rate of return.
Again, in Dayton Malleable. Case No. 78-694 at 9, the court
opted for the polluter's actual rate of return during the period
of noncompliance over the State of Ohio's higher recommended
historic (presumably industry-wide) rate of return on equity
(averaged over the four previous years).
These decisions do not invalidate EPA's methodology because
the court selected a company-specific rate of return. The rate
of 18.1% used in the BEN model is a default rate used if no other
reliable, company-specific number is available.
In Roll Coater. Cause No. IP 89-8828-C, the district court
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selected the defendant's Weighted Average Cost of Capital method
(WACC) over the EPA's equity rate calculation. The WACC rate
focuses on the average risk of an investment utilizing a mixture
of both debt and equity, and is consequently always lower than
the Agency's 100% equity rate.3 In deciding between the two
discount rates in Roll Coater. the court stated:
[WACC] concentrates on the return for a given industry
and does not look at investments in general. Because
Roll Coater should not be punished for not investing
its capital in other industries, [I] hold that Roll
Coater's discount factor of 10.84 percent (WACC) is
applicable in this situation. Id. at 11.4
Although this decision apparently favors the WACC method, the
judge focused on which discount rate yielded the most company-
specific estimate, not the formula applied. In fact, it is quite
possible that the judge would have accepted a company-specific
equity number.
The final penalty award was based on a reduction of the
statutory maximum penalty. Id. at 18-21. The judge first
calculated the statutory maximum and applied adjustments based on
a lack of actual damage to the environment and Roll Coater's good
faith. He then compared the resulting figure with the economic
benefit figure using the WACC rate. He determined that since the
3In negotiation, numerous violators have proposed WACC in
opposition to the equity discount rate advanced by the EPA. The
EPA's policy is to reject them.
4The assumption made by the court that a WACC rate is more
company-specific than an equity rate is not true. A WACC rate
could easily be based on an industry wide rate (investments in
general).
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final figure exceeded the WACC number, that was no reason to
increase the penalty to achieve deterrence. It is important to
note that the final penalty figure also substantially exceeded
the EPA's figure based on the equity rate. Therefore, one could
argue that the WACC-equity discussion was merely dicta. Finally,
it is important to note that Roll Coater is only a district court
case.
In Atlantic States Legal Foundation Inc. v. Universal Tool &
Stamping Co.. Inc.. Cause No. F 87-95 (N.D.Ind. March 13, 1992),
the court specifically opted for a company-specific equity rate
of 16.1%. The result was a penalty award of $85,000 that was
based solely on the interest Universal earned in the four years
that it was out of compliance. The judge made no adjustment for
tax deductions due to depreciation, and therefore, derived an
economic benefit number greater than that which would have been
generated by the BEN model.
The court has accepted the use of a standardized discount
rate, as utilized by a CAA §120 model, in Duguesne Light. 698
F.2d 456 (1983). In this case, petitioners claimed that the
industry-specific rate inaccurately reflected an individual
firm's anticipated return, and that is was "unreasonable to
assume that the investment opportunities available to an industry
as a whole represent the opportunity available to a particular
source." Id. at 483. The EPA argued that "the past performance
of an individual firm may have been influenced by non-recurring
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factors and . . . the industry-wide averages can be verified far
more easily." Id. at 483. The court upheld the use of the EPA's
proffered industry standard, stating that it was not arbitrary.5
It must be noted, however, that no alternative methodology was
offered by the petitioners in this action.
In Hercules. 29 ERC at 1420, Judge Bissell ignored the
discount rate altogether by deciding that Hercules could generate
the money necessary for pollution equipment from retained
earnings.6 Judge Bissell calculated the economic benefit from
Hercules' savings from delaying the purchase of equipment, and he
failed to consider Hercules' actual or expected return on that
savings.
The use of WACC vs. equity rates, and of standardized vs.
company-specific rates usually has a significant impact in
determining economic benefit. The choice of a discount rate has
a tremendous impact on the size of the benefit portion of a civil
penalty. The above decisions suggest that: (1) rates based on
firm-specific data inputs are more widely accepted by courts and
ALJs than standardized discount rates. Judges are much more
comfortable with actual numbers. (2) Any economic benefit
argument must be theoretically sound. And (3) plaintiff's expert
5The EPA model used here was applied only to CAA §12 0 cases.
Although similar to BEN, this model went through the rule-making
process, unlike BEN, and therefore, probably carried more weight
in court than the BEN model would if applied in a non CAA case.
^This assumes that retained earnings have no time value
which simply is not true.
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witness must be able to articulate a relatively simple position.
If there must be complexity, let the defendant's expert introduce
it.
2. Date of Noncompliance/Compliance
The period of noncompliance, as stated in the EPA generic
civil penalty policy, "begins with the earliest provable day of
violation and ends with the projected or, if available, actual
date of compliance.11 EPA General Enforcement Policy #GM-22, A
Framework for Statute-Specific Approaches to Penalty Assessments,
app. at 7 (February 16, 1984). This interval is the period of
time a violator has use of delayed and avoided expenditures. The
longer a violator is out of compliance, the more economic benefit
accrues to that violator.
There are several issues to consider in determining the
first date of noncompliance. The first issue is notice. In
assessing a civil penalty, can a violator be held responsible for
violations that pre-date a notice of violation (NOV)? First of
all, most violations neither require nor receive NOVs, but in
those that do, the NOV does not represent the first date of
noncompliance. If the violator remains out of compliance for the
grace period allowed by the NOV, he is liable for any provable
violation. "[T]he availability of penalties for pre-NOV
violations supports the purpose of the Clean Air Act, enhances .
the court's discretion to fashion an appropriate penalty, and is
consistent with the decisions of other federal courts". United
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States v. SCM Corp.. 667 F.Supp. 1110,1122 (D.Md.1987). The
burden of proving pre-NOV violations rests on the plaintiff.
Roll Coater. Cause No.IP 89-828 C at 12.
A second issue is government inaction. In some cases,
violators have been out of compliance for long periods of time
before the EPA filed any action. In Roll Coater. the penalty was
assessed starting on August 30, 1988, the first date of EPA's
involvement. The state of Indiana had "recognized and excused
the noncompliance. . . . [And] Roll Coater, in good faith, relied
on Indiana's directives". Id. at 17. The court held that
"[j]ustice requires that Roll Coater not be penalized for any
violations before August 30, 1988, because it could not have
reasonably known that satisfaction of state requirements did not
satisfy the USEPA". Id. at 18. Had EPA gotten involved in May
1986, when then violation started, the date of noncompliance
would most likely have been two years earlier.
Some courts have followed the EPA's GM-22 penalty policy, A
Framework for Statute-Specific Approaches to Penalty Assessments,
app. at 9 (February 16, 1984) in determining that the "date of
compliance" is the date when pollution control equipment is paid
for, installed, and operational. Louisiana-Pacific. 682 F.Supp.
at 1165; Gwaltnev. 611 F.Supp. at 1558. However, in A.Y.
McDonald Industries, the Chief Judicial Officer (CJO) construed
"date of compliance" more favorably to violators: "The economic
benefit component includes only the interest on costs that were
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delayed until McDonald began to bring the site into compliance.11
Docket No. RCRA 85-H-0002 at 33. The court suggests that
penalties assessed to recoup economic benefit accrue only until
the violator begins its efforts to comply.
	3. Cost of Equipment	
The weight of authority supports assessing only the cost
necessary for compliance. Gwaltnev. 611 F.Supp. at 1563; Roll
Coater, Cause No. IP 89-828 C at 12. In Gwaltnev. the court
states, "Gwaltney's benefit from delaying expenditures is the
benefit from delaying those expenditures that are necessary to
achieve compliance. 611 F.Supp. at 1563 n.25. Roll Coater adds:
"[A] company should not be penalized for building more than the
act requires .... [it] is only penalized for the facility they
were mandated to build." Cause No. IP 89-828 C at 12.
The CJO in A.Y. McDonald. Docket No. RCRA 85-H-0002 at 34,
supported the minimum cost to comply rule, but suggested that the
polluter has the burden to prove the BEN model incorrect and put
forth a reasonable, less costly alternative:
[I]t would be unreasonable to expect the complainant
. . .to prove that every conceivable compliance
alternative would have been more costly than the one on
which the economic benefit calculation is based. If
McDonald's benefit was actually lower due to a cheaper
means of compliance, McDonald had the burden to produce
evidence to that effect.
The ALJ in Federal-Hoffman reiterated that, where there is no
effort by a defendant to rebut BEN's cost estimates, they are
inferred to be correct. Docket No. V-W-87-R-001 at 23. See
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also: United States v. Phelps Dodge Industries. Inc.. 589 F.Supp.
1340, 1366 (1984) (the judge, upholding the government's penalty
assessment, stated that defendant had provided little assistance
in outlining an alternative methodology for the calculation of an
SEC-imposed price-fixing penalty).
Where a plaintiff's estimated cost of equipment is brought
into question, justification for the recommended equipment may be
required by the court. In Atlantic States Legal Foundation. Inc.
v. Universal Tool & Stamping Co.. Inc.. the plaintiff's
environmental engineer, Dr. Donald Hughes, suggested that
Universal should have installed an ultrafiltration system at or
before the time of noncompliance to avoid exceedances of the
defendant's NPDES permit. Cause No. F 87-95 at 12 (N.D. Ind.
March 13, 1992). An economic benefit estimate of $l-$2.5 million
was calculated based on this recommendation. The court held that
Hughes' familiarity with Universal's operations was insufficient
to offer a worthy opinion on the equipment needed. Further, due
to the types of discharges at Universal, "installation of an
ultrafiltration system . . . would not have corrected Universal
Tool's problem with its BOD [biochemical oxygen demand] permit
limitations." Id. at 14.
Because of this, the economic assumptions were found to be
flawed as well. The economic benefit calculation incorporated
cost figures for inappropriate equipment. The assessment also
failed to account for decreased discharges from production
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changes occurring during the violation period which resulted in
the need for less pollution-control equipment. With no further
guidance, the court limited the benefit assessment:
The evidence revealed that the defendant spent
$131,357.16 for the installation of a Lamella clarifier
and supporting equipment. The defendants had the use
of these funds for a four year period which based upon
the defendant's average return on equity of 16.1
percent, amounted to an economic benefit of
approximately $85,000.00. Id. at 16.
The court failed to consider operations and maintenance costs for
the four years of noncompliance.
A related issue is the use of "short-term" compliance
measures to offset the net economic benefit figure. The Gwaltnev
court, in valuing the delay of necessary compliance expenditures,
based its calculation on the cost of Gwaltney's "interim
solution", refuting the citizen-plaintiff's contention that
calculations should be based on the cost of "permanent solution
measures." 611 F.Supp. at 1563 n. 25. This is not to suggest,
however, that the cost of "patch-work" remedial action should be
deducted from the economic benefit calculation. In Dayton
Malleable. the violator's costs incurred to rebuild old sludge
tanks in order to comply for a particular month were not
considered. The judge stated:
This was a stop-gap measure and had nothing to do with
DMI's actual compliance with the OEPA schedule. Had it
complied with the schedule this expense would not have
been necessary . . . accordingly this Court will not
consider that amount deductible [from the total
penalty]. Case No. 78-694 at 9.
See also: Louisiana-Pacific Corporation, at 1156 (judge indicated
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that §113 of the Clean Air Act should be construed as creating
incentives for the violator to permanently correct the problem
and not to simply perform short-term remedies).
4. Choosing Input Values	
The court has given little guidance to lawyers in choosing
the input values that make up the economic benefit calculation.
As we have seen, it is exactly this choice that determines the
size of the penalty. One suggestion was offered by the Gwaltnev
court:
[P]roving the extent of some of these types of economic
benefits will often be impossible; thus, any objective
formulation of economic benefit is likely to
underestimate that benefit. The Court need not
painstakingly determine such an amount, however. The
purposes behind including an economic benefit component
in a penalty assessment are to ensure that the violator
disgorges at least its economic benefit, while also
providing some objective basis for at least part of the
penalty assessment. In light of these purposes and the
difficulty of demonstrating all elements of economic
benefit, the Court shall incorporate any objective
evidence to arrive at what it hopes is a rational
estimate of Gwaltney's economic benefit, resolving
uncertainties in favor of a higher estimate.
Gwaltnev. 611 F.Supp. at 1558.
The insight that input values may not be exact, as long as
they are reasonable, was echoed in The City of North Adams. "The
court nonetheless concludes that plaintiff's data, though far
from perfect, reasonably show that defendant enjoyed an economic
benefit worth several million dollars". Id. at 8 7
7The North Adams case opens the door to suits against
municipalities. Proffitt. like North Adams, also involved a
municipality. Though Proffitt was reversed and remanded on a
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These decisions appreciate the difficulty of choosing the
input values involved in the economic benefit calculation. When
a precise number is available, it should be given deference, but,
as in the vast majority of cases, when the number is reasonably
contested, Gwaltnev suggests the higher number be given
deference. In practice, however, courts have not followed this
decision, and in most cases, when a rational explanation can be
offered by each side, judges tend to go with the smaller of the
two numbers.
C. COMPETITIVE ADVANTAGE
The court is also to consider any advantage or benefit
gained in competitive position in the marketplace. Gwaltney. 611
F.Supp. at 1558. The BEN model does not incorporate competitive
advantage into its analysis because, in most cases, it is simply
too difficult to quantify.8 A Senate report accompanying the
1987 CWA amendment states in part:
Violators should not be able to obtain an economic
benefit vis-a-vis their competitors due to their
noncompliance with environmental laws. S.Rep. No. 50,
99th Cong., 1st Sess. 25 (1985).
Despite this acknowledgment of the issue, courts have been
standing issue, it is interesting to note the key difference
between the two cases. The fact the North Adams involved a
successful suit by the federal government, and Proffitt involved
an unsuccessful one by a private citizen is relevant. This
outcome suggests that courts may be reluctant to award a judgment
against a municipality to a private citizen.
8When the Agency elects to utilize BEN, the competitive
advantage factor is normally omitted altogether from
consideration.
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reluctant to include economic benefit from competitive advantage
in civil penalty calculations. The court in Hercules. 29 ERC at
142 0, stated that it would "not attempt to assess the advantages
of delay to Hercules' competitive position in its industry." In
fact, no court on record has addressed at length the possibility
of negating a competitive advantage gained by a violator's
failure to comply.
While the BEN model does not consider competitive advantage
in its calculation of economic benefit, the EPA's General
Enforcement Policy #GM-22 addresses some of the situations where
competitive advantage may be an issue:
For most violations, removing the savings which accrue
from noncompliance will usually be sufficient to remove
the competitive advantage the violator clearly has
gained from noncompliance. But there are some
situations in which noncompliance allows the violator
to provide goods or services which are not available
elsewhere or are more attractive to the consumer.
Examples of such violations include:
*	Selling banned products
*	Selling products for banned uses
*	Selling products without required labelling or
warnings
*	Removing or altering pollution control
equipment for a fee, (e.g., tampering with
automobile emission controls).
*	Selling products without required regulatory
clearance, (e.g., pesticide registration or
premanufacture notice under TSCA).
EPA General Enforcement Policy #GM-22, A Framework for
Statute-Specific Approaches to Penalty Assessments, „1CL
(February 16, 1984).
Theoretically, it is possible to prove to a court that a civil
penalty should include a component that recoups a violator's
gains resulting from an improved competitive position. In
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practice, however, the expert testimony needed to prove such a
gain might do more harm than good by confusing the court. Should
a litigation team decide to recapture such gains, it must
seriously consider this possibility and be careful that the
economic benefit argument as a whole does not suffer.
IV. EFFECTIVENESS OF BEN AND SIMILAR MODELS
A. USING MODELS TO ESTABLISH A PRIMA FACIE CASE
Expert testimony based on the BEN model or other similar
models is widely accepted by the courts when a violator fails to
offer an alternative methodology to the bench. In Ducruesne
Light. 698 F.2d at 483, 484, several utility companies challenged
EPA regulations mandating full recovery of economic benefit under
§12 0 of the Clean Air Act. Here, an EPA model similar to BEN was
brought into question, and became part of the focus of the
litigation. The industry petitioners did not disagree with the
use of the model or the parameters used in constructing the
model. However, petitioners argued that (1) the industry-wide
equity discount rate, (2) the long run inflation rate, and (3)
the long-term Debt-Equity ratio for calculating cost of
investment to the company, assumed by the model, overestimated
economic benefit. The court upheld the EPA's model's data
inputs, stating that the model was not arbitrary or capricious.
Further, the court held that petitioners had failed to show
excessive penalties resulting from the model's use, and had not
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presented a more reasonable alternative methodology. Id. at 483,
486.9
In Federal-Hoffman. Inc.. Docket No. V-W-87-R-001, 23
(August 12, 1987), the ALT indicated that the penalty figures
proffered by the government's expert witness seemed "reasonable
enough to be prima-facie correct .... Since FHI made no
attempt to rebut these estimates, the reasonable inference is
that they are not out of line with actual expenses". The judge
went on to state that the expert's recommendations for
calculating economic benefit, which included an annual operations
and maintenance cost estimate of ten percent of the original
equipment cost, were reasonable. Id. at 24.
Attempts to rely too heavily a model without explaining how
the figure was derived may be rebuffed by a court or ALJ. Such
was the case in In the Matter of Universal Circuits. Inc.. Docket
No. CWA-IV-88-001 (April 11, 1990). The EPA refused to supply
the working papers concerning the penalty or the formula used in
calculating the proposed penalty, providing instead, a witness to
explain the penalty calculations. Id. at 26. Judge
Vanderheyden, in deciding to disregard the economic benefit
element entirely, emphasized that the violator "is entitled
9The EPA model challenged here was created by regulation for
CAA §12 0 cases. The Ducruesne decision validates this model as a
legally acceptable methodology for penalty assessment. The BEN
model has not gone through rule-making and cannot be afforded the
same ringing endorsement. The holding indicates, however, that
EPA may fulfill its burden of production by presenting a
reasonably grounded, well supported model.
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legally to know the data in support of this amount in order to
answer same." Id. at 33. Thus, without reasonable support for
the figures generated by BEN, the burden of proving that the
proposed civil penalty is appropriate is not satisfied. Id. at
34.10
These cases indicate that EPA may satisfy its burden of
production for establishing economic benefit using calculations
similar to those in the BEN model, as long as the model is
adequately explained and not effectively rebutted by the
violator.
The ALJ in A.Y. McDonald Industries. Docket No. RCRA 85-H-
0002 at 35, refused to address this issue head-on, instead
indicating that the EPA had met its burden through the testimony
of one of its engineers, Donald Sandifer, and his application of
the Geraghty & Miller costs estimates to the BEN model. The
burden of production then shifted to McDonald to show the
unreasonableness of the EPA's reliance on the estimates, which it
did to a small extent through the use of actual data. Id. at 36.
See also: Dayton Malleable. Case No. 78-694 at 9 (court accepted
10In this case, the Agency took an unusually hard line in
refusing to disclose the BEN formula, and did so without
providing adequate justification. Universal Circuits. Docket No.
CWA-IV-88-001 at 34. If relying on BEN at trial, litigation
teams should be prepared to justify, using current financial
theory, each data input, not simply the use of the model itself.
To accomplish this, the Agency generally supplies an expert
witness who may refer to the BEN model, but only to support
his/her own assessment of the violator's derived economic
benefit.
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the estimate generated by a predecessor of the BEN model using
violator's actual discount rate in place of BEN's standard
default value).
B. FAILURE OF MODELS DUE TO COMPLEXITY
In citizen suit cases, the absence of a coherent methodology
has often resulted in confused presentations and penalty
assessments that underestimate economic benefit. In Student
Public Interest Research Group of New Jersey v. Monsanto Company.
29 ERC 1078 (1988), SPIRG brought a citizen suit under the Clean
Water Act. In their attempt to serve the goals outlined in the
EPA penalty policy, SPIRG's expert witness failed to present a
clear explanation of the calculations he used to determine
economic benefit. The expert continually adjusted his model with
the addition of new testimony and proceeded to thoroughly confuse
the judge. Id. at 1089. Thus, although the judge strongly
supported the policy of recouping all economic benefit derived
from noncompliance, and admitted that Monsanto had probably
gained some economic benefit, he held that "the evidence fail[ed]
to provide any satisfactory method of quantifying such benefit."
Id. at 1090; The judge's only reference to the BEN model
presented by SPIRG was "[i]t is complex". Id. at 1089.
In Hercules. 29 ERC 1417 (D.N.J.1989), the court elected not
to follow "the complex so-called BEN model". Id. at 1420. In
assessing an economic benefit amount of $490,000 (far below the
$1.1 million BEN estimation), the judge excluded the cost of
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borrowing for capital expenditures, reasoning that Hercules did
not need to borrow to cover the investment. This mistake
contributed to the reduction of the economic benefit figure. Id.
at 10. This omission contradicts the EPA's penalty policy by
allowing a violator to benefit by delaying compliance. The court
assumed that the money saved by delaying compliance had no time-
value because it was not borrowed money, but came from retained
earnings.11 Not only does such money have a time value, but
even if the violator has the cash "on hand", it will need to
raise capital to replace what was spent. This holding allowed
Hercules to retain a large portion of the economic benefit
derived from delayed compliance.
In cases that go to trial (or an administrative hearing),
the presentation of the economic benefit argument rests on an
expert witness1 ability to explain where the EPA's number comes
from. If the trier of fact does not understand where the number
comes from, he is likely to reject the entire analysis. If the
•^Actually, retained earnings do have a time-value: the
rate of return or discount rate anticipated by the stockholders
of the company. Retained earnings are the accumulation of net
income of the company not distributed to its owners—the
shareholders. To convince the shareholders that re-investing the
profits in the company is a better decision than declaring
dividends and distributing the profits, and to ensure that the
company's stock prices do not plummet, a sufficient anticipated
rate of return on the reinvested money must be projected. Thus,
this money does have a time-value. A conservative investment
might be to place the money in a bank account. A more likely
investment would involve more risk and, therefore, a higher
prospective rate of return. Schall and Haley, Introduction to
Financial Management 4th ed., p. 320 (1986).
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analysis is clear and simple, it stands a much better chance of
receiving the court's approval.
The EPA penalty policy is not binding on courts and ALJs.
It was "not intended, and cannot be relied upon, to create any
rights, substantive or procedural, enforceable by any party in
litigation with the United States." In the Matter of Universal
Circuits. Inc.. Docket No. CWA-IV-88-001 at 33 (April 11, 1990).
It is recognized by the courts that the penalty policy was
designed to give guidance to federal and district attorneys in
their settlement negotiations with polluters. Dayton Malleable.
Case No. 78-694 at 7 (October 10, 1979). It is, however, often
used as a guide in arriving at a civil penalty. Gwaltnev. 611
F.Supp. at 1556. In administrative hearings, "the AU's
discretion in assessing a penalty is in no way curtailed by the
Penalty Policy so long as he considers it and adequately explains
his reasons for departing from it." In the Matter of A.Y.
McDonald Industries, Inc.. Docket No. RCRA 85-H-0002 at 18 (July
23, 1987).12
The degree to which the policy is relied upon or
differentiated from varies, thus making the resulting decisions
vary as well. In Davton Malleable, the court stayed generally
within the confines of the BEN model's predecessor, adjusting
12The ALT is required under 40 C.F.R. §22.27(b) to set forth
specific reasons for any adjustment, up or down, from the
recommended assessment. Universal Circuits. Inc.. Docket No.
CWA-IV-88-001 at 31 (April 11, 1990).
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several of the input figures. Case No. 78-694 at 9. However, in
McDonald, the theory for determining the time frame in which
interest on costs delayed had accrued was completely altered.
Docket No. RCRA 85-H-0002 at 33.
V. ECONOMIC BENEFIT AS A
PENALTY FLOOR
There are two commonly used methods of calculating civil
penalties. The first method determines the statutory maximum
penalty, and then reduces that number in an amount that
corresponds to all applicable mitigating factors to arrive at a
final penalty assessment. The alternative method determines the
economic benefit of noncompliance and adds to that a gravity
component that reflects the seriousness of the harm, frequency of
the violation, and other mandated considerations. The gravity
component is then adjusted for relevant mitigating factors.
The EPA penalty policy supports the use of the latter method
when calculating a preliminary penalty figure. EPA General
Enforcement Policy #GM-22, A Framework for Statute-Specific
Approaches, 2 (February 16, 1984). That policy restricted
mitigating adjustments to the gravity component of the penalty
assessment. This policy was modified by the EPA's ability to pay
policy which permits mitigation of the economic benefit portion
in appropriate cases. This method guarantees that the penalty
recoups all economic benefit except in cases where there is a
clear inability to pay the full penalty. Having the economic
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benefit of noncompliance as a penalty floor ensures that the
penalty assessment will serve as a deterrent.
Courts, however, have demonstrated a preference for
assessing the maximum penalty first, and then applying all
mitigating factors to this figure.13 In Tvson Foods. Inc.. 897
F.2d 1128, 1142, the court advised that the maximum fine should
first be determined. If the court chooses not to impose the
maximum, "it must reduce the fine in accordance with the factors
spelled out in [33 U.S.C.] section 1319(d), clearly indicating
the weight it gives to each of the factors in the statute and the
factual findings that support its conclusions". The court in
Roll Coater. Cause No. IP 89-828 C, at 6 (S.D.Ind. March 22,
1991) stated that "first, the statutory maximum penalty must be
determined. Second, the Court reduces the penalty in accordance
with factors indicated by Congress."14
In some cases, courts have applied economic benefit as a
penalty floor under which no penalty may fall except when
EPA is not, however, opposed to this method because it
usually results in higher penalties. This fact could be useful
in negotiating settlements as well as future litigation.
14Use of this method could adversely affect the goal of
recovering at least the economic benefit derived from
noncompliance. Where economic benefit exceeds the statutory
maximum, any reduction of the penalty as mitigation will directly
reduce the economic benefit portion of the penalty, and provide
the violator with a windfall for its noncompliance. Even when
economic benefit lies below the statutory maximum penalty, any
reduction which lowers the penalty below the economic benefit
assessment would have the same effect. However, the statutory
maximum is usually so high that this is rarely a problem.
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statutorily required. The Gwaltnev and Hercules decisions
support the use of an economic benefit penalty floor. The
Gwaltnev court states that one of the purposes behind including
an economic benefit component in a penalty assessment is "to
ensure that the violator disgorges at least its economic
benefit". 611 F.Supp. at 1558. In dicta, the Hercules court
stated: "[t]he penalty should include, up to the . . . daily
maximum, the Court's assessment of what the company has saved by
not purchasing, installing and maintaining the appropriate
equipment to abate its discharge of pollutants". Civil Action
No. 83-3262 at 6.
Most recently, the court in United States v. A. A. Mactal
Construction, assessed a penalty equal to economic benefit,
reasoning "that the recovery of economic benefit is essential and
that economic benefit should serve as the floor below which the
maximum civil penalty should not be mitigated." Civil Action No.
89-2372-V, 8 (D.Kan. March 31, 1992). Similarly, CAA §120(d)(2)
specifies that the amount of the penalty assessed cannot be less
than the economic value of noncompliance.
VI. CONCLUSION
Both the courts and the legislature realize that recouping
the economic benefit of noncompliance when assessing civil
penalties is essential if these penalties are to provide an
effective deterrent to future violations. It is obvious that if
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violators can profit from delaying compliance with environmental
regulation, they will delay compliance. The conflicts
surrounding this issue involve how the economic benefit of
noncompliance is calculated.
The inputs that go into the economic benefit calculation are
not always straight-forward, and in almost every case, there is
more than one set of inputs proffered. The court's most
difficult task is to choose between input values. Most judges
are not experts in corporate finance, and they do not always
understand the calculations that are involved in the cases before
them. They are forced to rely on expert testimony that explains
where the penalty numbers come from. It is the conflicting
expert testimony that makes this choice so difficult.
It is obviously difficult to predict how a judge will rule
on economic benefit. In many cases, the outcome can turn on how
convincing or confusing an expert witness is. The case law
suggests that an effective presentation of the economic benefit
issue shows the court that each input value is rationally
determined and easily understandable. Precedent also clearly
demonstrates that plaintiffs who present an economic benefit
figure that seems arbitrarily determined are likely to face
severe difficulties in court.
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[12] From: Cheryl McMenamin 10/28/97 3:00PM (1598 bytes: 1 In)
Patricia Strougal, Heather Turnbull	//'S-''/'I ^
set: Environmental Permitting and NEPA Compliance	; " y- ^
	 Forwarded 	
From: David Moore 10/28/97 2:58PM (1353 bytes: 1 In)
To mailing list: #EAD Staff
Subject: Environmental Permitting and NEPA Compliance
	 Message Contents 	
//
ANSWER: According to OGC, NEPA compliance (environmental assessments,
environmental impact statements, findings of no significant impact) is
statutorily exempted under the Clean Water Act (except for New
Sources, see CWA 511), and the Clean Air Act (you will not find this
in the CAA statute - it is located in some other statute). For other
environemental statutes/permitting, there is a "functional equivelent"
jurisprudential doctrine whereby the permitting process is deemed to
consider the environmental impacts as would be required under NEPA.
QUESTION: Is compliance with NEPA required in the issuance of a
permit by EPA?
The above resolves an issue that I have had difficulty resolving and
hope that this information may assist others in the office
OGC Contact: David Courson (sp?) 202-260-4554
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iT°
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Accompanying the request were memoranda from Bruce Diamond,
Director, Office of Waste Programs Enforcement, dated August 15,
1990, and from Kim Rietdorf, Case Development Section, Region IX,
dated May 30, 1991. Further, an "issue paper" of September 3,
1991 from Sally Ann Harper, Chief of the Financial Management
Division, accompanied the request.
On June 22, the Claims and Property Lav Branch staff met
with Frank Biros and Fred Seitz of the CERCLA Enforcement
Division, Office of Waste Programs Enforcement, Ben Lammie of the
Office of Enforcement, and Kevin Brittingham of the Financial
Management Division to generally discuss the issues raised by the
use of FCCA to collect Superfund debts. The participants at the
meeting agreed that the Office of General Counsel Claims and
Property Law Branch would coordinate with the Superfund Branch
and submit written comments addressing the various issues raised
by use of the FCCA. This memorandum constitutes our comments.
DISCUSSION
1. EPA/s Authority to Collect and Compromise CERCLA Section 107
Debts
The scope of EPA's authority to collect and compromise
(accept less than the full amount of the debt) Superfund debts is
delineated by the FCCA and CERCLA. The FCCA provides general
authority to federal agencies to collect, compromise, suspend or
terminate the collection of debts they are owed. 31 U.S.C.
S 3711. Pursuant to the FCCA, an agency may compromise debts of
not more than $100,000. However, the regulations promulgated
pursuant to FCCA provide that the "laws and regulations which are
specifically applicable to claims collection activities of a
particular government agency take precedence over this chapter."
4 C.F.R. § 101.4. CERCLA section 122(h) is specifically
applicable to certain claims and collection activities under
CERCLA and thus takes precedence over FCCA limits. Section
122(h) authorizes EPA to compromise any section 107 claim,
subject to the requirement that "[i]n the case of any facility
where the total response costs exceed $500,000, (excluding
interest), any claim ... may be compromised and settled only with
the prior written approval of the Attorney General."
The $500,000 limit applicable to EPA's authority to
compromise a claim without the Attorney General's approval does
not apply if the agency collects the full amount of a Superfund
debt. Similarly, the FCCA does not impose any restrictions on a
agency's ability to collect the full amount of a debt.
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Assuming that EPA uses the FCCA authority to collect the
full amount of the Superfund debt at a Superfund site, EPA is not
"compromising" and the FCCA and CERCLA restrictions on
compromising claims mentioned above would not apply.
2.	Process for Utilizing the FCCA to Collect Superfund Debts
If EPA is to utilize the collection tools in the FCCA for
collection of Superfund debts, the agency should issue guidance
which explains our authority to use various FCCA collections
tools and the limits on such authority. Such guidance should
also address steps that should be taken to make a determination
that a Superfund debt exists and to build a strong record
supporting such a determination. Establishing a good record to
support our determination of a Superfund debt is important
because a debtor will have an opportunity to dispute the validity
of the debt before we use any of the FCCA collection tools.
We note that in another context where the Agency
administratively makes determinations of cost liability,
regulations have been promulgated which set out a procedure for
determination of the debt and for resolution of disputes
concerning such determination. The regulations at 40 C.F.R.
S31.70 provide the process by which the Agency hears disputes
regarding disallowed grant costs. This dispute resolution
procedure serves to create a strong record supporting the
validity of the debt before the agency attempts to use FCCA tools
to collect the debt. EPA may want to consider such an approach
for creating a record to support the validity of Superfund debts.
3.	FCCA Collection Tools
Following is a brief discussion of the utility of the
various FCCA tools and additional steps which need to be taken
prior to their implementation.
Collection by administrative offset.
The FCCA authorizes the use of administrative offset to
collect a debt owed to the United States. 31 U.S.C. S 3716. The
FCCA defines an administrative offset as "withholding money
payable by the United States Government to, or held by the
Government for, a person to satisfy a debt the person owes the
government." 31 U.S.C. S 3701. The FCCA sets out certain
procedures which must be followed before administrative offset is
used and requires the agency to prescribe regulations addressing
the use of administrative offset. 31 U.S.C. § 3716. The FCCA
requires that before administrative offset is used, the debtor is
given notice of the claim and the intention of the Agency to use
administrative offset as well as an opportunity for review within
the Agency of the decision of the Agency related to the claim.
Regulations promulgated pursuant to the FCCA set out additional
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requirements. See 4 C.F.R. S 101. The statute and the
regulations provide, for example, that an agency cannot initiate
administrative offset to collect a debt more than 10 years after
the government's right to collect the debt accrued.
EPA has promulgated regulations governing the use of
administrative offset, including requirements relating to the
debtor's right of administrative review of the validity of the
debt. 40 C.F.R. S 13.20.
Tax Refund Offset
31 U.S.C. S 3720A provides for the collection of agency
debts through tax refund offsets. The best potential for use of
the tax refund offset would appear to be in the area of corporate
tax refunds, where the Agency would offset amounts owed against
tax refunds owed to a corporate PRP. As currently established,
however, the Internal Revenue Service (IRS) only has a program in
place for offset against individual taxpayers. Surveys completed
by the Financial Management Division to date do not reflect a
great deal of utility for this procedure as few PRPs are
individual taxpayers.
If this tool is to' be effective, EPA must continue to push
IRS for a corporate offset procedure, and further, the draft MOU
with IRS would need to be completed setting forth the manner in
which we would share information with IRS regarding potential
offsets.
Use of Consumer Reporting Agencies
31 U.S.C 3711(f) authorizes federal agencies to utilize
consumer reporting agencies for the collection of debts. This
section provides for referral of debtor information to credit
reporting agencies. An MOU dictating the obligations of the
credit reporting agency, and establishing the method for
information-sharing has been prepared in draft form, and would
need to be completed before this tool could be utilized. The EPA
implementing regulations are at 40 C.F.R. § 13.14.
Contracting with Credit Collection Agencies
31 U.S.C. S 3718 authorizes federal agencies to contract
with collection agencies for the collection of agency debts.
Again, as with reporting debts to collection agencies, EPA will
need to execute MOU's with collection agencies to ensure the
requirements of 31 U.S.C. § 3718 and 40 C.F.R. S 13.13 are met.
EPA Financial Management Division currently has MOUs in place
with several collection agencies.
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Federal Salary Off-Set
5 U.S.C. S 5514 authorizes federal agencies to utilize
salary offset to collect agency debts. EPA regulations governing
federal salary offset are at 40 C.F.R. SS 13.21 and 13.22. The
procedures for EPA federal salary offset require a specific
appeal process prior to commencement of the offset.
Specifically, 40 C.F.R. § 13.22(d) requires the Financial
Management Division to arrange for an independent hearing
official to consider a debtor's appeal of the notification of
offset.
As noted above, the more thorough the Agency's process for
making the initial determination of the debt, the less
complicated and uncertain the 40 C.F.R. § 13.22 process.
Revocat ion/suspens ion
40 C.F.R. S 13.17 sets forth the Agency regulation regarding
suspension or revocation of licenses or eligibility. To our
knowledge, the Agency has utilized this tool only in the context
of grantees delinquent on repayment of disallowed grant costs.
As is already contemplated in the draft notification letter, the
utility of this tool will depend on the ability of the Agency to
identify licenses or other eligibility due the debtor. This tool
would have the most utility if PRPs are contractors or recipients
of EPA licenses or permits.
4. Applicability of CERCLA's Statute of Limitations
Section 113(g)(2) of CERCLA sets out the statute of
limitations applicable to section 107 actions to recover costs.
EPA efforts to collect Superfund debts pursuant to the FCCA tools
discussed above may not be subject to the time limitations set
out in section 113(g)(2). In general, statutes of limitation cut
off remedies without extinguishing rights. American Pipe &
Construction Co. v. Utah. 414 U.S. 538, 556-59 (1974). Thus,
although section 113(g)(2) clearly restricts one potential remedy
(the filing of a lawsuit to seek response costs), it may not
restrict EPA's ability to enforce its right to recover response
costs through a different remedy, such as administrative offset.
The effect of a statute of limitations on the underlying right is
governed by legislative intent. Davis v. Vallev Distributing
Co.. 522 F.2d 827, 830 n.7 (9th Cir. 1975). The language of
section 113(g)(2) may support an argument that its purpose is
only to extinguish the remedy of going to court to seek cost-
recovery. Section 113(g)(2) refers to "an initial action for
recovery of costs" and further provides that "in any such action
described in this subsection, the court shall enter a declaratory
judgment on liability." The reference to "action" and to "court"
suggest that section 113(g)(2) was intended to limit the time for
filing a cost-recovery action in court. The legislative history
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addressing section 113(g)(2) is sparse and does not reveal
whether or not Congress intended the statute of limitations to
apply to cost-recovery by means other than actions in court.
In cases addressing the Department of Education's use of the
IRS tax refund offset to recover student loan debts, courts have
held that the statute of limitation applicable to recovery of
such debts 1 does not apply to efforts to recover such debts
through an IRS tax refund offset. See, e.g. Gerrard v. U.S.
Office of Education. 656 F. Supp. 570 (N.D. Cal 1987) (Court
looked to the language and legislative history of the applicable
statute of limitations, 28 U.S.C. § 2415(a), and found that it
did not apply to tax refund offsets). The statute authorizing
use of the IRS offset procedure requires the existence of a
"legally enforceable debt." Debtors have argued that because the
relevant statute of limitations had run, the debt was not
"legally enforceable" and thus was not subject to a tax refund
offset. Courts have rejected this argument reasoning that
"[b]ecause the debt itself is not extinguished and other avenues
are available for its enforcement, the debt remains * legally
enforceable' and subject to income tax offset." Roberts v.
Bennett. 709 F. Supp. 222, 224 (N.D. Ga. 1989) (citing Thomas v.
Bennett. 856 F.2d. 1165. (8th Cir. 1988)).
Similarly, if a court determined that CERCLA's statute of
limitations extinguishes only a court remedy and not the
underlying debt, the tax refund offset would be available to
recover Superfund debts after CERCLA's statute of limitations has
run.
However, it is important to note that some of the FCCA debt
collection tools are subject to other time limitations. For
instance, the FCCA authorizes tax refund offset of "past-due
legally enforceable" debts. 31 U.S.C. S 3720A. Pursuant to IRS
regulations, a "past-due legally enforceable debt" is a debt
which "has not been delinquent for more than ten years at the
time the offset is made." 26 C.F.R. § 301.6402-6T. In addition,
the FCCA authority to use administrative offsets to collect debts
does not apply to a claim that "has been outstanding for more
than ten years." 31 U.S.C § 3716 (c)(1). EPA regulations
provide that "[a]dministrative offset will not be made more than
ten years after the Government's right to collect the debt first
accrued." 40 C.F.R. S 13.20(d).
1 The statute of limitations relied upon by the debtor to
challenge the offset was 28 U.S.C. 2415(a), the general six year
statute of limitations applicable to actions for money damages
brought by the United States.
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7
As noted above, we believe it would be useful to establish
guidance governing the use of the FCCA to collect Superfund debts
and would be happy to assist you in developing such guidance. If
you have questions or require further information regarding this
matter, please contact Andrew Gordon of the Superfund Branch
(202) 260-1137, or Steve Hess of the Claims and Property Law
Branch (202) 260-7513.
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
REGION IX
215 Fremont Street
San Francisco, Ca. 94105
November 4, 1988
MEMORANDUM
SUBJECT:
Disclosure of Penalty Calculations
Under the Freedom of Information Act
FROM:
N	Marvel
Regional Counsel
Marvel
TO:
Lawrence Jensen
General Counsel
Region 9 has taken the position that the calculation of
initial penalties and any discussion of the factors the Region
considers in arriving at settlement are exempt from release under
Exemptions 5 and 7(e) of the Freedom of Information Act.
However, because there appear to be conflicting views within the
Office of General Counsel (OGC) regarding the merits of our posi-
tion, we request a formal OGC resolution of the issue.
The legality of withholding penalty-related deliberations
most recently surfaced in connection with an Inspector General's
(I.G.) audit of Region 9's RCRA administrative penalty program.
Because the draft audit report discussed the penalty calculations
and settlement considerations in actual cases, the Region asked
the I.G. to withhold release of the enforcement-sensitive infor-
mation (Attachment A). Our rationale was that the information
could be withheld under Exemptions 5 and 7(e), and that its dis-
closure would reveal techniques, procedures, and guidelines for
prosecution and make it more difficult to enforce the law in sub-
sequent cases. For example, if a defendant were able to obtain
the detailed rationale for the Region's penalty assessment in a
prior case, our negotiating leverage in the latter case would be
undercut.
We understand the Waste Division of OGC to agree with us
based on a discussion prepared by Charles Openchowski in connec-
tion with revisions to the RCRA penalty policy (Attachment B).
This is also the view of the Office of Waste Programs Enforcement
(Attachment C). However, the I.G.'s final audit report
(Attachment D) indicates that the I.G. Division of OGC found our
legal and policy analysis unpersuasive. Consequently, we are
elevating the issue to you.
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We strongly believe that the Region must retain the discre-
tion to withhold penalty calculation documents. The issue takes
on particular significance in Region 9 now; in response to con-
cerns highlighted by the I.G., the Region is creating more
detailed memoranda for the Regional Administrator documenting
penalty calculations and reductions. If FOIA is interpreted to
require the release of such information, we will need to
reevaluate documentation practices.
Attachments
cc: John Wise
Jeff Zelikson
Lisa Friedman
Charles Openchowski
Maria Diamond
Craig Annear
Glenn Unterberger
Bruce Diamond
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
FEB 26 i'3S7
OFFICE OF
GENERAL COUNSEL
MEMORANDUM
SUBJECT: Adverse Water Quality Standards Decision,
Idaho Conservation League v. Browner. W.D. Wash.
FROM:
Susan G. Lepoy
Associate Genei
Water Division (2355)

TO:
Robert Perciasepe
Assistant Administrator for Water (4101)
On February 20, 1997, the District Court for ttye Western
District of Washington issued an order in Idaho Conservation
League v. Browner. No. C96-807WD (attached), directing EPA to
promulgate water quality standards for Idaho within 60 days.
This case involved allegations that EPA had failed to carry out
mandatory duties to approve or disapprove Idaho's 1994 water
quality standards submission and to propose or promulgate federal
standards to address the inadequacies in the standards. EPA
Region X reviewed the entire package and in June 1996 disapproved
certain elements. EPA then entered into a stipulation that it
had taken action under section 303(c)(3) (dealing with new and
revised standards). Subsequently, EPA Region X determined that
only certain of the disapproved items were in fact new or revised
standards., and hence subject to the Region's approval/disapproval
authority; the Region had previously approved the remainder of
the disapproved items which were thus only subject to the
Administrator's discretionary authority under section
303(c)(4)(B). EPA informed the parties of its corrected view of
the facts and the legal consequences, explaining that its duty to
promptly propose had, in fact, been triggered only with respect
to the properly disapproved new or revised items.
The court appeared to accept our view that new or revised
standards and previously approved standards are subject to
different authorities. However, the court declined to recognize
our attempt to "undo" our disapproval letter with respect to the
previously approved items, stating that the June 1996 letter was
an official action and that we had offered "no persuasive reason"
for vacating the stipulation.
Printed on Recycled Paper
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The court next held that where a state fails to revise a
disapproved standard within 90 days, EPA has a mandatory duty to
promulgate promptly. Under the facts of this case, where two
years had elapsed between the state's submittal and EPA's
disapproval and seven more months had elapsed since the
disapproval, the court found that "as a matter of law, the EPA
has failed to perform its mandatory duty to promptly prepare and
publish water quality standards for Idaho." Slip op. at 6-7.
The court also held that EPA's failure to carry out duties
clearly mandated by the CWA was arbitrary, capricious, and not in
accordance with law.
Accordingly, the court ordered EPA to promulgate within 60
days water quality standards for Idaho in accordance with Region
X's June 1996 letter of disapproval. Read literally, this'
requires us to promulgate final water quality standards (not
simply publish proposed standards) for all the disapproval items
in the June 1996 letter (not just the three segments we are
currently working on) by April 21, 1997.
We are discussing with the Department of Justice filing a
motion for reconsideration addressing the terms of the order and
the court's refusal to recognize EPA's effort to correct the
mistaken stipulation. We will be meeting with your staff and
staff in Region X to discuss the specifics. Such a motion must
be filed by Thursday, March 6, 1997. If you or your staff have
any questions, please call me or Lee Schroer (260-7711) or Cathy
Winer (260-7719).
Attachment
cc:
Jonathan Cannon (2310)
Scott Fulton (2310)
Dana Minerva (1102)
Tudor Davies (4301)
Bob Wayland (4501F)
Mike Cook (4201)
Jim Hanlon (4301)
Betsy Southerland (4305)
Fred Leutner (4305)
Ivan DeLoatch (8721)
Associate General Counsels
Regional Counsels, I-X
ORC Water Branch Chiefs, I-X
Water Management Division Directors, I-X
Water/waste attorneys
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<"¦ HPK 'J £ GiSTRi.-.T CC'JRT
WES^PN Di£T»lCT Of WASHIMCTOM
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
AT SEATTLE
IDAHO CONSERVATION LEAGUE,
et al.,
Plaintiffs,
v.
CAROL M. BROWNER, et al. r
Defendants.
IDAHO SPORTING CONGRESS, INC. ,
Plaintiff,
v.
CAROL M. BROWNER, et al. ,
Defendants.
NO. -C96-807WD
ORDER ON SUMMARY
JUDGMENT MOTIONS
NO. C96-629WD
The Clean Water Act ("CWA") aims wto restore and maintain the
chemical, physical, and biological integrity of the Nation's
waters" and to attain "water quality which provides for the
protection and propagation of fish, shellfish, and wildlife and
provides for recreation in and.on the water be achieved by July l,
1963." 33 U.S.C. §§ 1251(a) and 1251(a) (2). In pursuit of that
goal, the CWA regulates both pollution sources ("point sources")
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and water quality standards. Under the water quality approach,
each state is expected to develop water quality standards and
undertake public review of those standards at least every three
years, a process referred to as "triennial review." 33 U;S.C. §§
1313(a) and (c) . If the standards are "new or revised," formal
approval or disapproval of- them by the Environmental Protection
Agency ("EPA"), or by an EPA Regional Administrator, is required.
33 U.S.C. § 1313(c)(3), 40 C.F.R. § 131.21. In addition, the EPA
may impose a standard, regardless of whether state-promulgated
standards are new or revised, if it determines that rta new stan-
dard is necessary to meet the requirements of" the CWA. 33 U.S.C.
§ 1313(c) (4) (B) The Ninth Circuit has stated:
Section 303(c) of the Clean Water Act requires each
state to submit water quality standards to the EPA for
approval. 33 U.S.C. §§ 1313(c)(1) & (2) (West 1986 &
Supp. 1990). If a state's proposed water quality stan-
dards are rejected by the EPA, the EPA must notify the
state of the deficiencies within 90 days and specify the
changes required for approval. Id. § 1313(c) (3) . The
state then has 90 days to incorporate the EPA's sugges-
tions and resubmit the standards. Id. ' If the state
fails to do so, che EPA 'shall promptly prepare and
publish' federal regulations in lieu of the state regu-
lations. IcL § 1313(c)(4).
Idaho Conservation League. Inc. v. Russell. 946 F.2d 717, 718-19
(9th Cir. 1991).
The material facts here are not in .dispute. On July 11,
1994, the Idaho Division of Environmental Quality (nIDEQ") submit
ted water quality standards (WWQS") for Idaho's waters as part of
the triennial review process. On June 25, 1996, Philip Millair
Acting Director Office of Water, EPA Region 10, wrote a lecter to
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IDEQ that approved Idaho's WQS with certain, exceptions. As to the
exceptions,. the letter reiterated the grounds for disapproval
stated in an October 25, 1995, letter which was also written by
Mr. Millam. The grounds for disapproval included designations of
water usage, temperature criteria (specifically for the protection .
of bull trout) and the exclusion of private waters. The letter
mentioned that Idaho's WQS are subject to EPA review pursuant to
33 U.S.C. § 1313(c) (CWA § 303(c)) and 40 C.F:R. § 131.10. The
letter said that it constituted "official notification." On
August 12, 1996, the parties stipulated in writing that the June
1996 letter constituted official notification of disapproval (Diet.
# 25) . The EPA now seeks to disavow the June 1996 letter and the
stipulation.
To date, neither Idaho nor the EPA has promulgated improved
WQS for Idaho. However, the state has asserted that new WQS on
some disapproved waters may be adopted was early as June 30,
i
1997,"
The plaintiffs in these consolidated cases, who are nonprofit.
organizations concerned with water quality, allege that the EPA
has violated 33 U.S.C. § 1313(c) in that it has failed to timely
approve or disapprove Idaho's WQS and, upon formal disapproval, to
promulgate substitute standards. They seek injunctive and declar- !
atory relief. They now. move for summary judgment, contending
that, as a matter of law, the EPA has failed to exercise its
mandatory duties under 33 U.S.C. §§ 1313(c) (3) and 1313(c) (4) (A)..
The defendant EPA Administrator (referred to for convenience as
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the "EPA") has also moved for summary judgment, contending that
her duties are either satisfied or discretionary and that plain-
tiffs' claims must therefore be dismissed. The matter has been
fully briefed, and oral argument on the motions was heard on
February 10, 1997. There is no genuine issue of material fact for
trial, and summary judgment is appropriate under Fed. R. Ziv. P.
56.
The motions call for a decision as to (1)' whether the EPA
formally disapproved Idaho's submitted WQS. under § 1313(c)(3) and,
if so, (2) whether the EPA under § 1313(c) (4) (A) now has a manda-
tory duty to prepare and publish new Idaho WQS.
The CWA provides, in pertinent part:
If the Administrator determines that any such revised or
new standard is not consistent with the applicable
requirements of this chapter, he [sic] shall not later
than the ninetieth day after the date of submission of
such standard notify the state and specify the changes
to meet such requirements.
33 U.S.C. § 1313 (c) (3) . The authority to approve or disapprove
state WQS has been delegated to the regional administrators. 40
C.F.R. § 131.21 provides:
(a) After the State submits its officially adopted
revisions, the Regional Administrator shall either:
* * *
(2) Notify the State within 90 days that the revisions
are disapproved. . . .
The CWA and the regulations thus make clear that EPA Region .10 had
authority to approve or disapprove Idaho's water quality stan-
dards. See also Manasota-88. Inc. v. Tidwell, 896 F.2d 1318,
1320,- n.3 (11th Cir. 1990) (stating that w[t]he Regional Admini^-
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trator has the authority to approve or disapprove water quality
standards submitted by the states. 40 C.F.R. §§ 131.20(c),
131.21(a) - (b) . The June 25, 1996, letter from EPA Region 10
constituted official approval and disapproval action of this
nature.
Moreover, the parties stipulated on August 9, 1996, that the
June 25 letter constituted final disapproval under § 1313 (c)(3).
In reliance on that stipulation, plaintiff Idaho Sporting Congress
struck its partial summary judgment motion to compel. EPA to act on
Idaho's WQS. The EPA now contends that the stipulation was a mis-
take, but offers no persuasive reason to vacate it.
Because the June 1995 letter was an official disapproval
under 33 U.S.C. § 1313 (c) (3), the question whether the court
should order the EPA to approve or disapprove Idaho's water
quality standards is moot. That agency action has already been
taken.
Actions under the citizen suit provision of the.CWA may be
brought to enforce nondiscretionary duties of the Administrator.
33 U.S.C. § 1365(a)(2). Section § 1313 (c)(3) provides that where
a state fails to revise a disapproved standard within ninety days,
the EPA Administrator * shall promulgate such standard pursuant to
paragraph (4) of this subsection." Paragraph (4) says that- the
"Administrator shall promptly prepare and publish proposed regula-
tions" where necessary to meet the requirements of the CWA. The
EPA argues that the phrase "shall promptly ..." gives it discre-
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tion, and, thus, chat there is no mandatory duty. This question
has been, addressed by the Ninth Circuit as follows .-
Section 303(c) (3) uses mandatory language, stating the
Administrator shall promulgate such standard [pursuant
to Section 303(c) (4)]. The same mandatory language
appears in Section 303(c) (4): vThe Administrator (of the
EPA] shall promptly prepare and publish proposed regula-
tions setting forth a revised or new water quality
standard' if a state fails to adopt regulations within
the specified period. Id. § 1313(c)(4) (emphasis
added). There is no case law suggesting Section 303(c)
leaves the Administrator any discretion to'deviate from
this apparently mandatory course.
Idaho Conservation Leacrue. supra. 946 F.2d at 720 (emphasis in
original). See also Raymond Proffitt Foundation v. EPA. 930 F.
Supp. 1088, 1097 (E.D. Pa. 1996) (*The language and design of the
Clean Water Act as a whole supports [sic] the court's conclusion
that the duty imposed on the Administrator tinder § 1313(c) (4) i®
nondiscretionary."). By the plain language of the statute, and
under the cited authorities, the EPA's duty under § 1313(c) (4) (A)
is mandatory'.
It must next be determined whether the EPA has acted "prompt-
ly" under § 1313(c) (4)(A). Two prior district court cases,
holding that the agency had not acted promptly, declined to set a
bright line rule. See Defenders of Wildlife v. Browner. 909 F.
Supp. 1342 (D. Ariz. 1995) (eleven- and nineteen-month delays);
Proffitt. supra. 930 F. Supp. 1088 (E.D. Pa. 1996) (588-day
delay). Here, the EPA took almost two.years after Idaho submitted
its WQS to issue its disapproval. That earlier delay is now
compounded by the seven months that have gone by since disap-
proval, As a matter of law, the EPA has failed to perform its!
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mandatory duty to promptly prepare ana publisn water quality
standards for Idaho.
As to the Administrative Procedures Act claims, the Ninth
Circuit recently articulated the standard of review as follows:
Under the Administrative Procedure Act ("APA")< "the
reviewing court shall . . . hold unlawful and set aside
agency action, findings, and conclusions found to be
. . . arbitrary, capricious, an abuse of discretion, or
otherwise not in accordance with law." 5 U.s.c. §
706 (2) (A); Lonqview Fibre. 980 F.2d at 1313. We recent-
ly noted, [t]he APA does not give this court power "to
substitute its judgment for that of the agency" but only
to "consider whether the decision was based on a consid-
eration of the relevant factors and whether there has
been a clear error of judgment." [Citizens to Preserve!
Overton Park f. Inc. v. Voice 1 . 401 U.S. [402,] 416 [91
S.Ct. 814, 823-24, 28 L.Ed.2d 136 [1971] . We may re-
verse only if the decision was "arbitrary and capri-
cious" within the meaning of the APA, 5 U.S.C. I
706(2) (A), in that the agency has relied on factors
which Congress has sot intended it to consider, entirely
failed to consider an important aspect of the problem,
offered an explanation for its decision that runs coun-
ter to the evidence before the agency, or is so' implau-
sible that it could not be ascribed to a difference in
view or the product of agency expertise. Beno v.
Shalala. 30 F.3d 1057, 1073 (9th Cir.1994) (quoting
Motor Vehicle Mfr. Ass'n v. State Farm Ins., 463 U.S.
29, 44/ 103 S.Ct. 2856, 2867, 77 L.Ed.2d 443 (1983)).
Dioxin/Organochlorine Center v. Clark. 57 F.3d 1517, 1521 (9th
Cir. 1995). Here, the EPA's failure to carry out duties clearly
mandated by the CWA has been arbitrary, capricious, and not in
accordance with law, and thus a violation of the APA.
For the reasons stated, it is ordered that:
1.	Plaintiffs' motion is granted and the EPA's motion is
denied; and
2.	The EPA is directed to promulgate water quality stan-
dards for Idaho in accordance with its June 1996 letter of disap-
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uj)1'
U.S. Department of Justice
United States Attorney
Southern District of Florida
755 South Miami Avenue, Suite 700
Miami, Florida 33130
December 18, 1992
Patrick M. Tobin
Acting Regional Administrator
Region IV
United States Environmental
Protection Agency
345 Courtland Street, N.E.
Atlanta, G.A. 30365
Re: EPA Enforcement Action Concerning Sewage Pollution of the
Miami River, Biscayne Bay and the Atlantic Ocean
Dear Mr. Tobin:
I write to request that the EPA continue its investigation, as
expeditiously as possible, into serious problems concerning sewage
pollution and possible violations of the Clean Water Act in and
around the waters of the Miami River, Biscayne Bay and the Atlantic
Ocean in the vicinity of Dade County.
On November 3, I and others from my office met with Greer Tidwell,
your predecessor as Regional Administrator of the EPA for Region
IV, concerning this matter. At that time, we discussed carrying
forward a prompt and concentrated effort to document and seek
remedial measures for these apparent pollution problems, and to
bring Metropolitan Dade County into compliance with the Clean Water
Act. Of particular and pressing concern to the attendees were
warnings of the potential for failure or rupture of the overtaxed
cross-bay main sewer line running just under Biscayne Bay, between
downtown Miami and the Virginia Key sewage treatment plant. The
grave environmental, economic and public health consequences of
such a rupture have drawn all our concern, but they are only the
most dramatic of many adverse consequences facing this community
from possible violations of federal legal requirements and
standards applicable to the Miami River and the local sewer system.
This office, working cooperatively with the Department of Justice's
Environment and Natural Resources Division, stands ready to address
promptly findings or referrals from EPA suggesting the desirability
of legal action to enforce federal law in this matter. Other
governmental entities with an interest in the Miami River and its
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/
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REGIONAL-
COUNSEL
' U *->
'JlrlHitlir
¦i DEC22 1S32
fasEIPJE
EPA-Ftt.GlON IV
ATLANTA. GA.
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associated sewage and pollution problems, such as the Florida
Department of Environmental Regulation ("D.E.R.") and the Office of
the State Attorney for the Eleventh Judicial Circuit of Florida,
also are weighing in on this issue, and whether their respective
proposed resolutions are to negotiate or to litigate, the United
States needs to be able to respond knowledgeably to the proposed
resolutions, or to propose its own legal resolutions, based on a
well-documented, scientifically sound factual study and analysis of
the situation. I believe that your office is well suited to
oversee and carry out such study and analysis, and I request that
this be promptly undertaken, so that we may carry out our
respective duties to oversee the enforcement of federal legal
requirements concerning this matter.
Members of your staff have been dealing closely with Assistant
United States Attorney Peter Outerbridge of this office in this
matter already, and accordingly I will only briefly mention
highlights of the issues that are of mutual concern:
A May, 1992, public report of the Dade County Grand Jury described
the state of the Miami River in the gravest of terms, calling it a
"cesspool unfit to be utilized for drinking, fishing or swimming."
A copy of the report is attached, as Exhibit One. The report noted
that water-quality monitoring between 1979 and 1990 reflects
continual fecal coliform contamination of the river; that recycling
and salvage yards dump metals and wastes into the river, for which
sediment-testing consistently indicates concentrations of copper,
lead, cadmium, zinc, silver and mercury; and that antiquated and
inadequate local sewer and storm water systems periodically pour
raw sewage and other hazardous materials into the river. The
report concluded that the single largest polluter of the river is
the Metro-Dade Water and Sewer Authority (WASA). It should be
noted that Janet Reno, the Dade County State Attorney, together
with members of her staff, initiated and directed the investigation
leading up to this report; Ms. Reno's office remains acutely
concerned about the state of the river and what legal action may be
appropriate in connection therewith.
Over the course of the past few years, there have been a series of
multi-million-gallon sewage spills into the Miami River. These
incidents have grown in both frequency and magnitude over recent
months so that the Miami River, Biscayne Bay, Biscayne National
Park, the Atlantic Ocean and miles of beachfront have been
contaminated to the point that health alerts, beach closings and
boil-water orders have been placed into effect on multiple
occasions in the last few weeks alone. In addition to the obvious
hazards to human health in such incidents, experts within your
agency are considering whether continued discharges of sewage into
the waterways tributary to Biscayne Bay may have the potential of,
within a relatively short period of time, ruining the delicate
coral and marine life in the Biscayne National Park, the third
longest barrier reef in the world. See attached copies of recent
articles appearing in the Miami Herald dated November 23 and 29 and
December 10, 1992 ("Exhibit Two"). The United States also has made
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a considerable financial investment, upwards of $480-million, in
Dade County's water treatment system, providing yet another reason
for federal oversight and inquiry into the status of the facility.
The reasons for the sewage spills are multiple, including the
extremely high incidence of infiltration inflow in the Dade County
storm water system. See Attached Exhibit Three, excerpt from Dade
County Department of Environmental Resource Management ("DERM")
Technical Report 91-4, discussing infiltration inflow rate; the
inadequacy of the physical plant to cope with Dade County's
explosive rate of residential growth; and equipment breakdowns.
See attached Exhibit Four, in which WASA describes a mechanical
breakdown due to intruding debris as accounting for a recent 4-
million gallon sewage spill. The prospect of deliberate diversion
of sewage-contaminated storm water, so as not to tax the cross-bay
pipeline during heavy rains, remains a possibility as well.
The principal force main between downtown Miami and the Virginia
Key sewage treatment plant is a concrete pipe, 72 inches in
diameter, located in a trench below Biscayne Bay, a picturesque and
environmentally sensitive body of water. This cross-bay sewer
pipeline has deteriorated substantially since its construction in
1956. Smaller pipelines of similar construction design, which were
built at the same time, have already broken on two occasions within
the past few years. WASA projects but a few more years of
viability for the main cross-bay sewer pipeline. Should the line
develop a leak or break, upwards to one hundred and fifty million
gallons of untreated sewage could invade Biscayne Bay each day
until a repair could be accomplished. Such a repair could take
months. Public officials, the press, and the public are
understandably extremely concerned about this situation, which has
drawn increased attention following the May, 1992, Dade County
grand jury report. See New Times magazine article, "Straight
Flush," of July 1, 1992, and Miami Herald editorial, "On a pipe and
a prayer," dated November 25, 1992 ("Exhibit Five").
Concerns such as these have caused our respective offices to focus
on the Miami River and its attendant problems, and to contemplate
an official E.P.A. fact-finding inquiry pursuant to §308 of the
Clean Water Act. It is my understanding that §3 08 requests for
information have been substantially drafted. It is hoped that
these will issue as soon as possible.
In addition, on-site evaluation, investigation and testing
procedures for the river, sewer system and the cross-bay pipeline
and adjacent waters should be considered. It is quite likely that
the various governmental and private parties and entities with a
broad range of interests — some public-spirited, some self-serving
— in controlling any remedies enacted for the river will propose
their own plans and timetables for solutions. It is in the
interest of the United States that the federal government be able
to assess these proposals and timetables knowledgeably, or,
alternatively, to propose its own resolutions. The United States
would derive great benefit from the E.P.A. being in a position,
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through its own on-site scientific and engineering analysis, to
assess and document the problem and any violations of the Clean
Water Act, and to evaluate proposed plans and timetables for
resolving those problems. In particular, and not to exclude other
necessary factual inquiries, it is desirable that E.P.A. have an
engineer or engineering firm evaluate Metro-Dade's current
projected timetable for replacing the cross-bay sewer pipeline,
taking into account your own evaluation of the time necessary to
comply with the permitting requirements of the National
Environmental Policy Act ("N.E.P.A."), and the utilization of the
best available technology appropriate to conclude this project.
Please do not hesitate to call on me personally if you have any
questions in this regard. This office looks forward to working
with yours on this important and pressing matter. AUSA
Outerbridge, assisted by AUSA Larry Rosen of our Civil Division,
and supervisory AUSA Wendy Jacobus, stand ready to work with your
staff.
cc: Frederick F. Stiehl
Associate Enforcement Counsel
United States Environmental
Protection Agency
John Cruden
Chief, Enforcement Section
Environment and Natural Resources Division
Untied States Department of Justice
-------
IN THE CIRCUIT COURT OF THE ELEVENTH JUDICIAL CIRCUIT
OF FLORIDA IN AND FOR THE COUNTY OF DADE
FALL TERM A.D. 1991
FINAL REPORT OF THE DADE COUNTY GRAND JURY
FILED
May 11, 1992
t GOVERNMENT
I EXHIBIT
f QNB
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Circuit Judge Presiding
MARTIN GREENBAUM
Officers and Members of the Grand Jury
JOSEPH F. JENNINGS
Foreperson
KIRKWOOD E. CLARKE
Vice Foreperson
JUNE C. MARTIN
Clerk
DEBRA T. McLEROY
Treasurer
CATHERINE MANUEL
MICHAEL J. MAXWELL
DOYLE J. McDANIEL
MARIBEL NIEVES
JOSE RAMON RUIZ
KENT TATE
MIREYA B. VAZQUEZ
*********
State Attorney
JANET RENO
Chief Assistant State Attorney
KATHERINE FERNANDEZ RUNDLE
*********
Clerk of the Circuit Court
MARSHALL ADER
*********
Administrative Assistant
ROSE ANNE DARE
*********
Bailiff
EDDIE PIERONI
ENRICO ALVINO
CYRIL BUFKIN
AUDREY C. FETSCHER
JAMES JOHNSON
JAYNE W. KEARSON
JEREMY S. LARKIN
LENA M. LUCAS
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INDEX
PAGES
THE MIAMI RIVER: BEAUTY AND BEAST I	1 - 24
I. INTRODUCTION	1
II. GOVERNANCE AND ACCOUNTABILITY	3
A.	LACK OF EFFECTIVE ENFORCEMENT	3
B.	DERELICT VESSELS	5
C.	BENEFITS OF CONTROL AND AUTHORITY	7
III. CHRONIC CONTAMINATORS	10
A.	SANITARY SEWER SYSTEMS	10
B.	STORM WATER RUNOFF SYSTEM	12
C.	ADDITIONAL CONTAMINATORS OF	THE
MIAMI RIVER	14
D.	CROSS BAY SEWER LINE	15
IV. DREDGING OF THE MIAMI RIVER	16
V. SUMMARY AND CONCLUSIONS	20
FIREARMS REGULATION	25 - 29
INDICTMENTS	30 - 39
ACKNOWLEDGEMENTS	40
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THE MIAMI RIVER: BEAUTY AND BEAST!
I . INTRODUCTION
Although most of Dade's citizenry barely notice the Miami River
today, its "sweet water" led to the development of the Miami/Dade
County area. The name Miami was derived from the Seminole Indian
word meaning "sweet water".1 For centuries, Indians, explorers,
pirates and sailors sailed up the Miami River to replenish their
water supplies. In Miami's early days, the four mile long river
extended from Biscayne Bay to the Everglades and was fed by its
fresh water and the natural springs along the route. During the
19th century, the river was known for its beauty. The Brickell
family built their home and store by its clear water and reveled in
its beautiful palm and mangrove lined banks. Julia Tuttle, the
"Mother of Miami" with her visionary's eye, had a dream for the wild
beauty of the Miami River. She wrote to a friend:
"It may seem strange to you but it is the dream of my life
to see this wildness turned into a prosperous country and where
this tangled mass of vine, bush, trees and rocks now are to see
homes with modern improvements surrounded by beautiful grassy
lawns, flowers, shrubs and shade trees."
While much of Ms. Tuttle's wish for a prosperous city came
true, the cost of this wish has been heavily borne by the Miami
River. Progress meant industrialization and commerce, so the river
took on a new face. In the early 1900's, its rapids were dynamited
and its bottom dredged to improve drainage and stimulate commerce.
Its clear, "sweet waters" turned salty and muddy. The Miami River
would be unrecognized by Julia Tuttle and the Brickell family today.
It is now 5 miles long from its mouth at Biscayne Bay to the
salinity dam at N.W. 36th Street and N.W. 40th Avenue. The Miami
River has become a major urban waterway and seaport. It is seen as
an ideal port for shipping interests servicing the shallow draft
ports of the Caribbean, Central and South America. The smaller,
shallow draft ships needed to serve these ports are the same ships
that are able to navigate the Miami River.
The Miami River is the fifth largest port in Florida equal in
container cargo volume to Port Everglades. The volume of traffic on
the Miami River, when combined with the volume of traffic at ^the
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Port of Miami, makes the Dade County area the eighth largest seaport
in the nation. The Miami River is also a main port for an estimated
25-35 smaller wooden vessels that primarily serve Haiti. One of the
river's main assets to shipping is its location which offers high
accessibility to major domestic and international markets. As a
result, 100 marine businesses are concentrated on the Miami River
and provide Dade County with 25% of its total marine related
employment. It is home to shipyards, boat yards, marinas, pleasure
boat storage, repair facilities, stevedoring, seafood processing,
metal recycling, towing assistance and diving and salvage
operations. Over time, these river uses have contributed to its
pollution, general neglect and incessant degradation.
Today, the county's sewer system pours raw sewage into the
Miami River because of deteriorating pipes and operating systems
unable to meet peak flow requirements. Routine water quality
monitoring from 1979 to 1990 has documented both acute and chronic
fecal coliform contamination of the river. Such findings indicate
unhealthy levels of bacteria, from tens of times to hundreds and
thousands of times beyond what is considered acceptable. Today,
each rainfall fills the storm water system with hazardous materials
washed from the streets and deposits these materials into the river.
Today, due to a lack of enforcement at all levels of government,
vessels empty their bilge tanks of pollutants contaminating the
river. Today, recycling and salvage yards both intentionally and
inadvertently dump metals and wastes into the river. Today,
shipyards and ships dump waste materials, waste oil and paint flakes
into the river. Sediment testing for trace metals, done in 1984,
1989 and 1990, has consistently indicated concentrations of copper,
lead, cadmium, zinc, silver and mercury. Through benign neglect and
planned desecration, this gentle river has been turned into a
cesspool unfit to be utilized for drinking, fishing or swimming.
As citizens and residents of this community, we realized that
we too had contributed to the river's degradation perhaps through
ignorance and a failure to care. We never truly appreciated the
historical richness and resources this body of water offered. We
received testimony from numerous regulatory agencies, including:
local, state and federal officials; environmentalists; private
marine and shipping facility owners and representatives from
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numerous other advisory or interested groups. We toured the river
and reviewed numerous studies and the biological data regarding the
quality of the river's water and sediment. We have considered the
river's romantic history, beauty and promise while painfully
analyzing the beastly state it presents today. In doing so we have
focused our report on:
*	Governance and accountability for our river
*	Primary and other pollution sources
*	Dredging of the Miami River
I I . GOVERNANCE AND ACCOUNTABILITY
A. LACK OF EFFECTIVE ENFORCEMENT
Historically, smugglers who lived on the river, often called
"River Rats", have been synonymous with the river since the turn of
the century. The "Miami River cops" scandal of the 1980's is only
one of many illegal activities that have led the river to be dubbed
the "Wild West". Today, drugs and illegal aliens are smuggled by a
new generation of criminals. During our term there were numerous
alien smuggling attempts reported. On April 22, 1992, upon
discovering an illegal alien smuggling operation on the river, the
Assistant Chief of the U.S. Boarder Patrol summed it up in saying:
"There's no control whatsoever over the Miami River.
There are no checkpoints. They sail right in. There's nothing
to stop them. Normally they come posing as crewmen. Every
week, we catch some."
Illegal aliens and drug smuggling are obvious concerns, but
health and safety issues may ultimately be far more dangerous and
vastly outstrip our resources. Contrary to law, some ships empty
their contaminated bilge water and sewage directly into the river.
Not only does this pollute the waterway but threatens to introduce
dangerous communicable diseases into our community. Cholera has
become epidemic throughout South and Central America. It is easily
spread by infected waste that enters the water and food supply,
which then infects the population. In 1991, cholera bacteria were
discovered in the oyster beds of Alabama's Mobile Bay. Government
health officials believed sewage illegally dumped from a freighter
was the source of the disease bacteria. Upon further examination^of
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freighters entering Mobile Bay, cholera bacteria was found in the
ballast water of two vessels. Six months later, an additional ship
carrying cholera bacteria was discovered. In addition to cholera,
waste transmitted hepatitis and dysentery may be introduced into our
food chain with each night's bilge pumping or the dumping of buckets
of sewage from an island freighter, with no sanitary facilities
moored on the river.
It appears that years of governmental apathy has .been a
contributing factor to the environmental and operational abuse which
exists today. During our one day tour, we observed countless zoning
and environmental violations occurring, yet never saw a single
police officer or regulatory agent. How else can one explain the
deteriorated docks and bulkheads along the river; the trash and
debris on properties lining the river; the obvious illegal
use of residential properties for commercial marine purposes;
vessels tied to palm trees; sunken and abandoned boats; and an
apparent lack of fire prevention equipment along the banks. We
observed vessels being sanded, stripped and painted right on the
river. Emanating from salvage and recycling plants was an
unidentifiable white fluff that covered the river's surface. Huge
mounds of garbage and waste were clearly visible. Many houseboats
appeared to have open hoses discharging unknown substances into the
water.
Attempts to control these problems on the river are hampered by
the lack of a visible and aggressive law and regulatory enforcement
presence. Florida's only privately owned, unorganized seaport has
the dubious reputation and distinction of being a "lawless",
"wide-open", "unwatched door" where "anything goes". Neither the
City of Miami nor Dade County have full-time police presence on the
river. The City of Miami Police Marine Patrol avoids patrolling the
Miami River, preferring instead the Biscayne Bay shoreline.
Despite Dade County's Department of Environmental Resources
Management (DERM) attempts to allocate full-time pollution
inspectors to the river, the department lacks adequate enforcement
powers. Unfortunately, despite DERM's apparent commitment toward
aggressive enforcement, is thwarted because it lacks the authority
to board and inspect vessels for environmental and sanitary code
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compliance. The U. S. Coast Guard, which does have adequate powers,
lacks the personnel necessary to patrol the entire river and
normally only works the day shift from 8:30 to 4:30 P.M. Most of
the illegal activities occur after 4:30 P.M. and through the night
because absolutely no one is policing-the river during these hours.
Currently, 38 municipal, county, state and federal agencies
have varying degrees of jurisdiction or regulatory control of
particular facets of the Miami river (see attachment A). Despite
this wealth of regulatory agencies, there is no legal structure to
unify their divergent governmental actions. Therefore, enforcement
is, at best, fractured, unnecessarily costly or duplicative, and at
worst simply non-existent. Within the last year, the field
enforcement agents have nobly attempted to coordinate themselves at
a grassroots level, led primarily by DERM. While this attempt to
eliminate or minimize fragmented enforcement is admirable, it is
insufficient. These federal, state and local enforcement agencies
openly admit a frustration with often overlapping authorities, a
lack of resources and no overall leadership or direction.
Additionally, despite the number of laws, regulations and regulatory
agencies there remain numerous legal loopholes which do not seem to
present such flagrant problems for other areas where port
authorities exist.
B. DERELICT VESSELS
The derelict vessels on the Miami River often arrived as old
freighters on their last legs transporting cargo and sometimes
drugs. Many are vessels, seeking another shipment of cheap
foodstuffs, bicycles and plastic jugs while possibly smuggling a few
well-paying countrymen to Miami. Others may be pleasure boats or
assorted working vessels providing their owners with an income. But
when repairs become too costly or smuggling vessels are discovered,
many owners find it cheaper to abandon their boats. During our tour
of the river, we were appalled by the number of abandoned and
derelict vessels. Lax financial liability and insufficient owner
identification requirements allow these vessels to become safety
hazards, polluting both the water and the view, and cost taxpayers
handsomely for their removal and cleanup.
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During our term we heard testimony regarding numerous instances
of abandoned ships requiring government intervention and dollars to
remove them. For instance, La Concepcion, a Honduran freighter
bound for Haiti, lacked the necessary $200 to repair its engine.
Eventually, it became beached and several regulatory agencies were
required to obtain a court order to remove and dispose of it.
Nearly $200,000 of taxpayers money was spent to accomplish this,
because the owner lacked the funds and the legal responsibility to
pay for it.
The Miss Juanita is another example of a vessel owner's ability
to escape legal and financial responsibility for a vessel. This
former WWII minesweeper which had been docked on the river, drifted
free for some time and eventually sank. Unable to hold its owner
responsible, regulatory agencies eventually removed the vessel and
in the process discovered hazardous asbestos which almost doubled
the removal costs. The total cost to taxpayers was nearly $75,000,
excluding the agency personnel time involved.
No one was held financially or legally responsible for either
of these vessels because apparently no law requires it. Government
has limited authority to seize vessels, even if they are apparently
abandoned or in need of "financial aid". In many instances,
unethical shippers shift ownership to avoid financial or legal
responsibility. If no financially responsible party can be
established for a derelict vessel, then government pays. As is
required at the Port of Miami, all vessels entering the Miami River
should be bonded through a local agent, who can then be held
financially and legally accountable. To gain entry to the river,
evidence of adequate bonding should have to be exhibited and failure
to do so, should preclude entry.
Many of the larger derelict vessels we observed on the river
were forfeited vessels under the jurisdiction of the U.S. Marshall.
These vessels appeared no different than the other problem ships
described above. In fact, it appeared that two of these forfeited
vessels were simply tied up to palm trees posing a potential danger
to river traffic. Government must lead by example. We urge the
U.S. Government to remove these potentially dangerous and unsightly
derelict vessels from the river.
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C. BENEFITS OF CONTROL AND AUTHORITY
The river has no one to assure safe operations; to insure
proper loading to prevent capsizing; to control the movement of
toxic, hazardous or even nuclear cargos that may enter the very
heart of the city. At present, safe cargo operations on the river
depend on the ability, integrity and conscientiousness of each
terminal operator. The good operators care and strictly regulate
activities at their docks. But others do not. This explains why
some dockages appear clean, efficient, well-constructed and safe
while others contain collapsing docks and bulkheads with freighters
double parked into the channel and other ships tied to trees while
piles of trash and drums push to the water's edge.
Until control and leadership exist, there is little that can be
done to effectively manage, improve or even maintain the river.
Simply put, problems of the Miami River are not about too much or
too little government but about methods of governance. Initially,
we did not favor adding another bureaucratic layer to those already
existing. Testimony and evidence, however, strongly indicated that
in order to effectively organize governmental activities, reduce the
present costs to the taxpayers, enhance the environmental quality
and provide better services to river businesses, a port authority
appears necessary.
The federal, state and local officials we spoke with
uniformly recommended the establishment of a port authority as the
simplest, most efficient means to coordinate the Miami River. The
U.S. Coast Guard, which is perceived as the "lead authority" on the
river, suggested merely extending the present port authority's
jurisdiction' to the river. A U. S. Coast Guard official stated that
the federal government will not and cannot increase its present
level of activities and pointed out that the river is primarily a
local concern and operation.
The compelling evidence supports the need for control and
accountability to assure that all interests are protected. Control
would assure safer operations, provide immediate response to
dangerous situations or spills of hazardous materials and would
significantly reduce the costs associated with fragmented and
duplicative regulations. An authority could and should establish"- a
check-in point or harbor master to insure that no ship or cargo
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comes into the river unexpectedly, or without proper review. Such
control should insure that vessels are met by appropriate agencies
such as customs, immigration and DERM prior to docking thus
effectively reducing the ability to smuggle drugs and illegal
aliens and violate environmental regulations. Port control is also
vital to preventing derelict ships from entering the river. Such
oversight may also avoid the problem of unsafely loaded ships losing
control and ramming bridges, capsizing or sinking.
The Port of Miami is a shining example of sound operational
management that also ably maintains the environmental integrity of
our natural resources. The port is able to coordinate all of the
same regulatory agencies that have jurisdiction over the river. In
addition to its lucrative operations, the port has developed
sophisticated contingency responses to potential catastrophic
incidents such as oil or nuclear waste spills and fires. While it
has the advantage of ownership of the property, its real strength
comes from its legal ability to establish rules and regulations and
mandate compliance and sanctions.
It has established tariffs or fees that are reinvested into the
port. For instance, all the dredging, expansion and improvement
projects that occur are funded through the profits raised by its
tariffs. While most agree with the need for coordinated
accountability and overall management, the Miami River Marine Group
(MRMG), composed of 14 businesses on the river, understandably fears
increased governmental regulations and the imposition of tariffs and
fees that will diminish their profits. Surprisingly, some major
river business owners confided that they privately support the
establishment of an authority' despite the fact it will reduce their
profits. Unfortunately, we as a community can no longer accept and
afford the laissez-faire, hands-off attitude the river's businesses
have enjoyed for years.
Port authorities may be formed in a variety of ways. Extending
the existing authority of the Port of Miami over the river is an
option that makes good sense. The port possesses the experience,
reputation and legal wherewithal to make such an expansion work.
The county and city may consider the establishment of an independent
municipal authority over the river. Authority for the creation of a
port authority over the river exists in Florida Statutes, Chapters
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315 and 125. It appears that either or both the City of Miami and
Metropolitan Dade County can establish a port authority. These
laws, in fact, encourage cooperation with other agencies, public and
private. In developing a river authority, it is critical that local
control be maintained. It is equally important to insure that
tariffs and fees be tailored to suit the unique needs of the river
and its businesses are met. Neither the controls nor the tariffs or
fees imposed should cause valued enterprises to abandon the river
for other ports.
Governance does have a price. The most equitable proposition
is to finance management by those who use and profit from the river
rather than from taxpayers at large. Port authorities typically
offset the cost of operations by user fees. These fees are
ultimately passed on to consumers who buy shipped services or
products. All persons deriving benefit from the use of this public
waterway should pay for its operation and maintenance much like the
Federal Highway Use Tax for trucking lines or tolls for cars and
trailers that use certain roads.
The costs to operate an authority over the river should not
be expensive, especially if it emanates from one that presently
exists. This alone would significantly reduce authority start-up
costs, time and staff and keep costs low by avoiding the creation of
a complicated, costly and unnecessary new bureaucracy. An authority
would also result in a more effective use of existing enforcement
personnel and resources and eliminate unnecessary costs caused by
duplication. The City of Miami's River Master Plan has estimated
the cost to be about $500,000 annually. Coincidentally, this amount
is close to the budget of the private industry organization, The
Miami River Marine Group (MRMG).
RECOMMENDATIONS;
1.	Local government needs to establish a port authority over
the Miami River. This authority should govern and
coordinate all regulations, the needs of the river, the
needs of the river's industry and the needs of the
community at large.
2.	The river authority must address the entire operational
and environmental integrity of the river.
3.	The first priority of the port authority should be the
establishment of a harbor master for the river and the
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creation of an interdiction or check in point prior to
entry to the river.
4.	All working vessels should be required to be registered,
including barges. Ownership must be sufficiently
established prior to docking on the river.
5.	All owners of commercial vessels should be required to
post a bond or other form of financial responsibility
sufficient to pay for the costs of cleanup and removal
and/or fines for environmental and safety violations.
6.	Local officials should be given the authority to dispose
of "lost", abandoned and/or derelict vessels.
7.	Registered owners of vessels should be required to
maintain legal and	financial responsibility for their
vessels until a bill	of sale and a transfer of title is
registered with the	port authority and the new owner
becomes of record.
8.	DERM should be authorized by ordinance to board and
inspect all commercial vessels for compliance with
environmental and sanitary codes.
III. CHRONIC CONTAMINATORS
A. SANITARY SEWER SYSTEM
If the average Dade County resident was questioned as to who
provides their water and sewer service, the majority would state the
Metro-Dade Water and Sewer Authority (WASA). If they were further
questioned as to who is the single largest polluter of the Miami
River, they would be very surprised to learn that the answer is the
same. Dade's antiquated and inadequate sanitary sewer system today
accounts for over one-half of the pollution presently in the Miami
River.
Throughout America's history, rivers and the metropolitan areas
which developed around them have been inextricably linked. Miami,
like so many other cities, grew because of its river and the
degradation of the river seemed inevitable in the search for
progress. As Miami grew, the river became its waste receptacle.
Every city in America did the same. The sewer system of young Miami
was specifically designed to discharge both stormwater runoff and
raw sewage directly into the river and the bay. In developing
Miami, this "good urban planning" resulted in the establishment of
some 70 sewage outfalls, including 29 on the Miami River, that
discharged 30 to 40 million gallons of sewage per day.
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By 1947, the adverse effects of these acts became known. The
Florida State Board of Health and the U.S. Public Health Service
recognized the consequences of our "urban planning". Their tests
revealed the widespread contamination of the river and the bay and
caused areas to be declared unsafe for shellfishing, swimming or
other recreational activities. Only the creation of the sewage
treatment plant on Virginia Key in 1956 led to the limiting of
sewage being dumped into Biscayne Bay. Unfortunately, outfalls in
the Miami River continued to dump raw sewage into the river during
the 1970's and 1980's. 4
The bulk of the present sewer system was built over thirty
years ago. The result ''today is that untreated sewage still seeps
into the river daily through illegal sewer hookups and old, cracked
pipes. During the 1980's, WASA discovered that a significant portion
of the sewer pipes had deteriorated, requiring remedial work, such
as the replacement and relining of existing pipes. Unfortunately,
the pipes under the Miami River were not addressed before one
failed. In 1987, the sewer line under the Miami River collapsed,
resulting in six million gallons of raw sewage spewing forth. This
spill necessitated an extended closing of the Miami River and
portions of Biscayne Bay to the public for any use whatsoever. The
number of sewer pipes on the brink of failure, like those under the
Miami River, are unknown.
The failures of WASA's system are primarily due to:
1.	Illegal connections made into the sewer system.
2.	Storm water lines that are either intentionally or
accidentally tied into the sewer lines.
3.	Corroding and deteriorating pipes.
4.	Antiquated systems or ones that have no back-up systems.
5.	Systems that are operating at or near capacity.
Numerous illegal connections to the sewer system have occurred
over the past 30 years. The sole way to discover these connections
is to inspect every linear foot of sewer line via cameras, smoke or
some other invasive procedure. It is a time consuming, expensive
process; but a necessary one if these connections are to be
eliminated. DERM and WASA have been undertaking such nan
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investigation for pipe lines 36" inches or more in diameter. Not
only must this continue, but it must be expanded to evaluate the
status of all pipe lines smaller than 36 inches in diameter. Only
by such actions can improper connections and the storm water
intrusion into the sewer system be identified and corrected.
WASA, over the last few years, has finally begun a system
of constructing safeguards and adding duplicity into several areas
of the sewer system operations. These include, interconnecting all
three regional treatment plants to redirect portions of the flow
from one system to the others; adding additional pumping capacity at
major pumping stations; and identifying the expansion potential of
each regional processing facility. However, the system is not fail
safe. Today, if there was a catastrophic failure at any of the
regional processing facilities, the entire flow directed at that
facility could not be redirected to other plants. The result would
be another multi-million gallon spill of raw sewage into the most
likely location, the Miami River.
The county's sewage treatment facility on Virginia Key has a
current capacity of 133 million gallons per day (MGPD). The plant's
expansion potential is another 15 MGPD, or less than an additional
12% increase over current capacity. The current flow is 130 MGPD.
This does not include what occurs during a heavy rain fall which can
increase the flow by up to 7 0%. During such a rain, the plant
operates well beyond capacity, the lines back up and the raw sewage
spills out of the 4th Street pump station into the Miami River or
the streets of downtown Miami.
B. STORM WATER RUNOFF SYSTEM
A significant contributor to the river's problem is the storm
water runoff system. Originally designed and constructed to drain
developed areas rapidly after heavy rains, this system has for years
been a conduit bringing raw sewage and pollutants to the river.
Storm water drainage lines have, in many cases, been intentionally
tied into the sewer lines by County and City governments. The
rationale was that it was better to pump storm water into the sewer
system than to have downtown Miami flood. While the thought may
have had merit once, it now results in an up to 70% increase in rhe
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sewer system flow rate during heavy rains. Since the central sewer
facility is regularly operating at close to capacity, the additional
flow has overburdened the 4th Street pump station located on the
banks of the Miami River. The result is raw sewage pouring into the
Miami River or backing up in manholes and pouring onto the very
streets the system was intended to keep dry. Over the last two
years, serious spills occurred at the 4th Street pump station:
5/19/90 - 10 million gallons; 6/19/90 - 1 million gallons; 9/19/90 -
10 million gallons; 10/8/91 - 10 million gallons. This stormwater
overload also affects other areas of the county. In October 1991,
the City of Hialeah dumped 20 - 25 million gallons of sewage into
the Gratigny Canal that feeds into the Miami River.
Recent surveys have developed a clearer picture of the maze of
piping, culverts, conduits and other structures, many installed one
half century ago, to provide drainage to downtown sections of the
City of Miami. Years of growth, neglect, corrosion and errant
interconnections have turned most of this system into branches of
the sewer system. Pipes intended to drain storm waters to the river
now often carry raw sewage instead. Not all of this was unplanned.
In fact, it was discovered that the sanitary sewer system design
intended to use the storm sewer system as an overflow relief valve
and for flood control in abnormal situations. This practice,
primitive as it may seem, was expanded throughout the county as
development progressed.
Failures of the storm water system were discovered as early as
1970. In 1988, after more than 15 years of discussions and study,
the first of 55 storm water basins identified as directly impacting
the river was relined to cleanse the stormwater prior to discharging
it into the river. Subsequently, the City of Miami has continued
its corrective program. At present, six basins have been completed,
with another seven under construction. Though the number completed
or under construction combined is only 25% of the total number to be
addressed, indications are that progress will be expedited as
greater efficiency occurs. These projects are funded through the
Storm Sewer General Obligation Bonds, Storm Water Utility Trust
Fund, DERM and Surface Water Improvement and Management Funds, known
as the Swim Plan.
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C. ADDITIONAL CONTAMINATORS OF THE MIAMI RIVER
Non-point pollution sources are additional contributing
contaminators. These originate from the ground's surface as litter,
chemicals and other contaminants that- enter the storm water system
after rains or through illegal connections. Other sources such as
faulty underground structures or systems, retention tanks, and fuel
tanks leak and allow pollution to enter into the stormwater system.
The Miami International Airport is another example of
yesterday's good municipal planning having terrible environmental
consequence for the Miami River today. When built in the
mid-1920's, efficient drainage was a major consideration for the
safety of all airline traffic. Subsequent expansions of the
airport, have led to it becoming one of the busiest airports in the
world which increased drainage concerns. Unfortunately, all of its
drained stormwater was designed to eventually lead to the river.
However channeled, all of its drainage canals intersect, either
directly or indirectly with the Miami River. This means that many
of the greases, oils, fuel, lubricants, de-greasers, additives and
other chemicals spilled on the concrete aprons, by design, are
washed by the rains into the river.
Other deliberate actions taken by governmental bodies to dump
waste into the Miami River through the storm water runoff systems
are equally offensive. The continued activities of the Metro-Dade
Transit Authority (MDTA) at its 3311 N.W. 31st Street site and the
City of Miami Sanitation Department, at 1320 N.W. 20th Street,
either indicate an administrative inability to oversee worker
actions or an unwillingness to consider hydrocarbon pollution of the
Miami River a serious concern. Both of these sites use large
amounts of fuel oils, lubricating oils and degreasers as part of
their vehicle maintenance programs. Both of these sites have drain
systems that discharge into the Miami River either directly (MDTA)
or indirectly via the Wagner Creek (City of Miami). Both of these
sites have been the focus of environmental agency action for many
years but continue to dump hydrocarbon pollutants into the Miami
River. It appears extreme steps must be taken by local governments
to stop their own departments from fouling Dade's environment.
- 14 -
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D. CROSS BAY SEWER LINE
However, all of the above contaminators pale in comparison to
potentially the most serious environmental catastrophe waiting to
happen under Biscayne Bay. When a sewage spill occurs in the Miami
River, few people are concerned unless it affects Biscayne Bay.
After a few days of inconvenience, when the Bay returns to normal
"healthy" conditions, people forget. Unfortunately, while studying
the problems of the river we discovered that lying under Biscayne
Bay is a future environmental catastrophe that could lead to the
closing of the bay for weeks, if not months. The time bomb laying
under the bay is the sewer line that pumps Central Dade County's raw
sewage to Virginia Key for processing. The one pressurized pipe,
pumping 130 MGPD of raw sewage from the 4th Street pump station on
the Miami River to Virginia Key, is located 20 feet below the bottom
of Biscayne Bay.
In the early 1980's, WASA discovered that pipes of a similar
age and construction as those connected to Virginia Key were
degrading at a faster than anticipated pace. According to the
director of WASA, up to 50% of all pipes the same age and type of
construction have failed. Based on statistical probability, it is
only a matter of time until the cross bay sewer pipe collapses,
while DERM optimistically predicts this main line will not collapse
until 1996 or 1997, we feel the problem is a critical concern
demanding action. The replacement of this system or the
construction of an alternative feeder system to Virginia Key should
occur as soon as possible. In 1985/86, WASA determined that the
cross bay pipe needed replacement. After seven years, nothing has
been completed other than studying the problem. After seven years,
the pipes have had more time to deteriorate. After seven years,
WASA still has not identified a method to inspect the cross bay pipe
and determine their actual condition. After seven years, in the
event that the cross bay lines fail, WASA does not have the ability
to redirect its raw sewage flow to the other two treatment plants.
If this sewer line experiences a complete failure, hundreds of
millions of gallons of raw sewage will pour into Biscayne Bay. The
time needed to cap an underwater leak twenty feet below the_ bay
\
bottom is undetermined. In the meantime, the Miami River'- and
- 15 -
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Biscayne Bay would experience their worst environmental catastrophes
in modern history. The detrimental impact of a spill of this type
and the cleanup and mitigation costs are incalculable. If we are
seriously concerned about the bay, we must address this known
environmental hazard now.
RECOMMENDATIONS - SANITARY SEWER SYSTEM:
1.	WASA should immediately assign its highest priority to
the construction*of a replacement pipeline to Virginia Key.
2.	WASA should immediately continue the development of their
regional interconnections to provide enough capacity in
each regional system to support the additional flow from at
least one of the other regional systems.
3.	WASA should increase its activities regarding the internal
investigation' of sewer lines for interconnections and
eliminate as many as possible as soon as possible. WASA
should embark on programs to increase its pumping capacity
and establish redundant systems of mapping and handling se-
wage flows.
4.	WASA should increase its efforts to identify and replace or
reline deteriorating sewer lines and inefficient or
inadequate equipment.
RECOMMENDATIONS - STORM WATER SYSTEM:
1.	Municipal and county government need to complete
renovations to the stormwater drainage and sanitary sewer
system to prevent further contamination.
2.	Implement new laws and, where needed to prohibit direct
run-off from private and public properties and discharge of
industrial wastes, enhance enforcement of existing laws
IV. DREDGING OF THE MIAMI RIVER
In 1933, the U.S. Army Corps of Engineers (Corps) dredged a 15
foot deep channel in the Miami River making it a federal navigation
project. Since then, shore line erosion and sediment build-up have
caused some reduction to the channel's width and depth. Subsequent
environmental studies have determined that the river sediments have
become contaminated with waste materials including hazardous trace
metals, such as mercury and copper.
In 1986, the Army Corps of Engineers concluded a feasibility
study, which began in 1974, for redredging the Miami River's
navigational channel to its designed depth and width. Since then,
additional studies and plans have been developed and meetings held
among government and private interest groups regarding -this
- 16 -
-------
"maintenance dredging" effort. Additionally, Dade County requested
the Corps to expand the dredging beyond the navigational channel to
include a shoreline to shoreline dredging for environmental
purposes. Local government agencies also requested that the Corps
test the river's sediment to confirm its contamination. Based on
these results, the EPA determined that the sediment cannot be dumped
three miles out in the ocean, as originally planned, due to its
adverse affect on sea life and because a change in EPA's ..testing
guidelines made the standards more restrictive.
Local government will now be required to insure the
environmentally safe disposal of the river's sediment. Local
government will need tq place the sediment temporarily on land, dry
it and dispose of it properly and permanently. Testimony presented
was unclear as to whether or not this material could be placed in
Dade County's landfills. However, the shipyards on the Miami River
that dredge their own docks of this same sediment, have routinely
received DERM permits to dispose of it in the Dade County landfill.
The Corps estimates that the volume of sediment will be at
least 600,000 cubic yards. This may require an adjacent land mass
of up to fifty acres to store the material while it is dried. The
cost of obtaining land in downtown Miami, the costs of preparing it
to prevent seepage, the transportation and landfill costs, wherever
the ultimate disposal site will be, will increase the final dredging
costs by many millions of dollars.
The Corps was initially prepared to dredge the navigation
channel, where the bulk of the contaminated material exists, and
bear virtually all the costs, including transportation of the
dredged material. Local governments' request to expand dredging and
the subsequent determination that the sediment is contaminated has
escalated what began as a projected $7 million for maintenance
dredging, to today's projected cost of over $20 million. Even this
figure is a vague estimate. Unfortunately, no one is certain of the
actual costs of proper disposal. According to testimony, it
conceivably could be in excess of $120 million. More importantly,
the community's share of costs grew from a near zero cost to a
projection of $10 million to $12 million with no known ceiling at
this point. Costs may still escalate substantially, as government
- 17 -
-------
agencies spend the next year analyzing options.
Of all the issues relating to the river, the necessity of
dredging initially seemed to be the least controversial. Every
witness supported dredging. Business'owners argued that failure to
do so would impede navigation and reduce the tonnage of cargo and
size of vessels the river can support. Because the size of cargo
vessels on the river has increased over the years, they frequently
must load less or require tugboats to drag them out to the bay.
Environmentalists advocated dredging because they believe the
sediments pose a threat to the water quality and the integrity of
the Biscayne Bay ecosystem.
Initially, we concurred in the need to dredge. While we still
appreciate these legitimate arguments, we are not convinced that the
utilization of scarce local tax payers' dollars for the entire
dredging project is prudent at this time. Due to the polluted and
neglected state of the river, a dredging project which initially
would have occurred virtually free of cost to the local community,
may now require millions of local dollars. Too many questions
remain unanswered and too many issues remain unclear. The benefit
dredging brings to Dade County citizens as a whole versus the cost
to each citizen has yet to be considered and resolved.
We were additionally concerned by an apparent lack of accurate,
convincing data regarding the volume and toxicity of the
contaminated sediment. We did not find the Corps' recently
instituted testing methodology convincing. Furthermore, absolutely
no one was able to project the percent of sediment that may be
hazardous or toxic. While government attempts to project exorbitant
costs associated with disposal of all the sediment, it may be that
only a small percentage cannot be disposed in the ocean.
Additionally, since the bulk of the contaminated material exists in
the navigational channel, it may be fiscally wiser to limit dredging
and disposal to the navigation channel. Ironically, we were unable
to reconcile the county's need to prepare a special site for the
sediment while the sediment from private dredging is permitted to be
placed in existing landfills.
We listened to numerous experts and witnesses discuss the
- 18 -
-------
continued pollution of the Miami River and Biscayne Bay by
governmental and industrial dumping. The evidence failed to
establish to our satisfaction, that the river is contaminating the
bay. If it is, or potentially may, evidence needs to be developed
that strongly indicates how this occurs, or may occur. For
instance, we received no evidence regarding contamination that may
occur as a result of storm surges. We can only wonder when the
large amounts of money necessary to study these issues will -finally
be expended. Instead of upgrading a defective stormwater drainage
and sanitary sewer system or replacing an aging cross bay sewer
line, the citizens of Dade County are being quietly committed to
spending untold millions to benefit a few Dade County businesses.
Dredging of the channel will allow larger vessels to traverse the
river, yet these benefits have not been weighed against the disposal
costs. The environmental concerns generated by the river sediment
will pale in comparison to the ecological disaster awaiting Biscayne
Bay when, not if, the cross bay sewer line fails. Since government
is the apparent culprit of this foreseeable disaster and since this
remedy lacks a powerful oligarchy of monied business interests to
support it, further years of inaction will in no doubt sadly occur.
It is readily apparent that few, other than the businesses on
the Miami River, will benefit from its dredging. Therefore, the
businesses should bear the financial responsibility of providing the
local,matching funds now required. Our recommendation is that
additional dredging costs should be funded solely by those who most
directly benefit from it, such as the owners of river businesses'
properties and related interests. It is they, not local government
who should bear the burden of the costs not paid for by the federal
government. instead, local government funds that were contemplated
for this project should be reallocated toward that which is
threatening to the community at large: the replacement of the cross
bay sewer lines and completion of modifications to the sanitary and
storm water runoff systems. In the interim, data needs to be
accumulated and assessed that precisely identifies the river's
contamination of the bay and the circumstances by which this may
occur. This needs to occur before local government can make an
intelligent and informed decision.
- 19 -
-------
RECOMMENDATIONS
1.	Local government must continue to analyze the costs and
benefits of dredging and potential alternatives. In so
doing:
a.)	As accurately as possible, assess the extent of the
contamination and its primary location.
b.)	Develop creative funding partnerships with the private
sector and the federal government which should also have an
interest in protecting Biscayne National Park.
c.)	Readdress ocean disposal. Consider a one-time
exception for disposal with approval from the Corps and the
EPA; and consider disposal further out in the sea, safely
past the continental shelf.
2.	We urge the MRCC's newly created subcommittee on dredging
to: re-examine the need for upland disposal of the
sediment; to r'e-examine the mortality tests conducted by
the Corps; and to determine if this government spending is
in the best interest of the community as a whole. The MRCC
should determine how this cost can also be shared with the
private sector.
3.	A mandatory shoreline stabilization and erosion control
program should be instituted along the river to prevent
further narrowing of the channel. In so doing, government
should:
a.)	Stabilize publicly owned property (parks, street and
bridge right-a-ways and public housing) which represent a
significant portion (3,500 linear feet) of the shoreline in
need of stabilization.
b.)	Co-operate with upland owners to streamline the
bureaucracy presently entailed in obtaining permits from
half a dozen governmental agencies.
IV. SUMMARY AND CONCLUSIONS:
For centuries the sweet waters of the Miami River gently flowed
from its origin in the Everglades to its end at Biscayne Bay largely
undisturbed. In the last century and half, the city that grew
around the river has prostituted it for the sake of growth and
commerce. The U. S. Coast Guard predicts that, if and when trade
with Cuba becomes permissible, river traffic could increase by 500%.
Such potential trade with Cuba could result in a new era of decline
for the river.
Not all about the river is out of control. Despite its dubious
honor as the "most polluted body of water in Florida", it has the
respect of being the state's fifth largest port, supports a growing
commerce that rivals Port Everglades and provides employment ror
- 20 -
-------
7,000. Additionally, a recent resurgence of concern for the river
offers promise to reversing the present conditions plaguing the
river. We believe the existing problems with the river can be
resolved even if not simply and inexpensively.
Strides have been made to initiate steps to foster the Miami
River's rebirth. The City of Miami has begun the modernization of
its stormwater runoff system. WASA, with DERM'S assistance, has
begun the repair and correction of its sanitary sewer and storm
water runoff related systems. The 38 collective governmental
agencies with authority over the river are attempting to coordinate
their enforcements efforts. Private industry has begun to
participate in the process of the clean-up and the discussions
regarding the river's future. These are all positive signs.
A port authority to coordinate regulation of all shipping and
river interests on the Miami River with a check-in point must be
created. The City of Miami has begun to address the river's
operational and environmental concerns as part of its January, 1992
Miami River Master Plan. While we disagree with a number of the
plan's recommendations, the report does make a number of worthwhile
suggestions including the proper administration of the river. The
Miami River Coordinating Committee (MRCC), is an appointed advisory
body representing a cross section of governmental and industry
interests along the river. While it has been publicly divided on
the issue of control by an authority, toward the end of our term, it
established a task-force to hold public hearings to readdress this
issue. A representative of the MRCC testified that those on the
committee which opposed control of the river by a port authority do
so fearing an authority will hamper their freedom. We say, if this
freedom also allows dangerous and irresponsible business practices
to continue, then they are correct.
Overall, we concluded that more aggressive action needs to
immediately be taken. Action, not more studying of the river's
problems, needs to occur today. The Miami River needs its priority
status increased at all levels within the public and private
sectors. Our community must immediately elevate the restoration,
maintenance and governance of the river to the highest priority.
Failure to do so will have a negative impact on the quality of life
- 21 -
-------
and reputation of our community. The continued lawlessness and
pollution must end now and be replaced by a tangible commitment to
restore and enhance this great natural and commercial resource.
Steps should aggressively be taken to mandate the elimination of
pollution sources primarily: raw sewage; storm water runoff;
hazardous materials; bilge materials; and materials from all
properties along the river or its tributaries.
After the sources of pollution have been eliminatfed or
significantly reduced, it would then seem appropriate to dredge the
river of the hazardous materials in its sediments. This would be
accomplished via the dredging as planned by the Army Corps of
Engineers. Dredging will allow larger vessels to traverse the
river, thereby increasing profits. Our endorsement of this dredging
is contingent upon requiring the disposal costs to be largely
absorbed by those who will primarily benefit from the project.
Finally, the Grand Jury cannot sufficiently stress the
magnitude of concern it has regarding the cross bay sewer line to
Virginia Key. The high probability of the line's potential collapse
in the near future, resulting in an untold catastrophe, screams for
immediate action. Dade County and WASA should make this project the
county's highest priority. They should immediately take the
necessary actions to fast track the final planning and
implementation of this project in order to safeguard one of the
area's most cherished resources, Biscayne Bay. This project demands
action, as the ramifications of reacting to the problem when it
occurs, are untold, unquantifiable and potentially permanent.
Three or four generations have had a voice in what the river
has become. We need to revive Julia Tuttle's dream for the Miami
River. Due to special interests, politics and hidden agendas,
little has been done to maintain or improve it. In Dade County, we
have been blessed with a unique environment. The Everglades,
Biscayne Bay and the once sweet waters of our Miami River are
nature's gifts which we must all preserve for the future of Miami
and its children.
- 22 -
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attachment A
AGENCIES WITH JURISDICTION
ON THE MIAMh RIVER
(FEDERAL AGENCIES)
1.	United States Coast Guard
2.	United States Customs Service
3.	Immigration and Naturalization Service
4.	United States Border Patrol
5.	United States Army Corps of Engineers
6.	United States Department of Agriculture
7.	Drug Enforcement Agency (DEA)
8.	Federal Bureau of Investigation (FBI)
9.	United States Marshalls Service
10.	United States Occupational Safety & Health Administration (OSHA)
11.	United States National Park Service
12.	Unites States Environmental Protection Agency (EPA)
13.	Unites States Alcohol, Tobacco and Firearms
14.	Unites Department of Transportation
(STATE AGENCIES)
15.	Florida Marine Patrol
16.	South Florida Water Management District (SFWMD)
17.	Florida Department of Transportation
18.	Florida Department of Law Enforcement
19.	Game and Freshwater Fish Commission
20.	Florida Department of Environmental Regulation (DER)
21.	Florida Department of Natural Resources (DNR)
(COUNTY AGENCIES)
22.	Dade Department of Environmental Resources Management (DERM)
23.	Dade County Water and Sewer Authority (WASA)
24.	Dade County Fire Department
25.	Dade County Public Works
26.	Dade County Building and Zoning
27.	Dade County Solid Waste
28.	Metro-Dade Police Department
29.	Dade County Public Health Department
30.	Dade County Planning Department
(CITY AGENCIES)
31.	Miami Building and Zoning
32.	Miami Public Works
33.	Miami Fire Department
34.	Miami Solid Waste Department
35.	Miami Police Department
36.	Miami Planning Department
37.	Miami Parks and Recreation
38.	Miami Marine Operations
- 23 -
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FOOTNOTES
1	E. v. Blackman, Miami and Dade County, Florida (Chulota,
Florida: Mickler House, 1977), p.20.
2
Helen Muir, Miami, U.S.A. (New York: Henry Holt and Co.,
1953) , p.49.
^ Rachel L. Swarms, "Haitians nabbed trying to sneak in", Miami
Herald, April 23, 1992, Section B, p.l.
4
Susan M. Markley, Dorian K. Valdes, and Robert Menge,
Sanitary Sewer Contamination of the Miami River, Metro-Dade DERM
Technical Report 90-9 (Miami, 1990), p.l.
- 24 -
-------
ACKNOWLEDGEMENTS
We wish to thank the Honorable Judge Martin Greenbaum, Chief
Judge Leonard Rivkind and State Attorney Janet Reno. We especially
thank Chief Assistant State Attorney Katherine Fernandez Rundle,
whose dedication and skill in presenting the facts and explaining
the law made our task more enjoyable and certainly easier to
perform.
To Rose Anne Dare, Administrative Assistant to the Grand Jury,
who graciously and expeditiously managed the myriad of
administrative details of the Grand Jury; "Eddie" Pierone, our
faithful Bailiff and Mary Cavalaris, our Deputy Clerk of Court, all
of whom contributed greatly in assisting this Jury in fulfilling its
duties, we express our gratitude.
We gratefully acknowledge and thank the many dedicated
representatives of the law enforcement agencies of Dade County and
its municipalities, where skill and professionalism have earned our
lasting respect.
With great sadness, we acknowledge the great love the late
Judge, The Honorable George Orr had for the unique institution known
as the Grand Jury. We also regret the death of Richard Gerstein,
who played such an instrumental role in our criminal justice system
and who effectively guided the Grand Jury for so many years.
Sadly, during our term, we lost a faithful member of this Jury,
Ulysee Jackson, whose presence we all missed.
ATTEST:
Clerk
DATE:	May 11, 1991
40
-------
Sewage spill
may reach
causeway
beaches
Broken pump leads
to waste overflow
By JON O'NEILL
Herald Staff Writer
A broken pump sent four mil-
lion gallons of raw sewage oozing
into the Miami River Sunday,
prompting health officials to
warn people away from fishing
and swimming anywhere near
the mouth of the river and the
beaches along the Rickenbacker
Causeway.
Heavy rains have played havoc
with the sewage system this week,
causing minor spills as sewers
filled with water and overflowed.
"The warnings were already in
effect because of the problems
caused by rainfall this week,"
said Bob Ready, assistant direc-
tor of operations for the Miami-
Dade Water and Sewer Author-
ity. "Now, with this additional
contamination, the health hazard
is even greater."
Walter Livingstone, environ-
mental administrator for the
Department of Health and Reha-
bilitative Services, said workers
will be monitoring bacteria levels
in Biscayne Bay this week.
"We will place a special
emphasis on Key Biscayne near
the Rickenbacker Causeway," he
said. "Experience has shown us
the tides will usually carry the
spill that way. Until we get below
an acceptable level, people
should just stay away from the
area."
Depending on the winds and
movement of the tides, it could
take a day or two for the spill to
reach the Rickenbacker Cause-
way beaches, a favorite spot for
swimmers, sail boarders and
water bike riders.
"It's a concern for us," Living-
stone said. "The good thing was
that they were able to contain the
spill fairly quickly."
The problem started at about
6:30 a.m. at the main pumping
station on North River Drive
and Northwest Fourth Street.
The station usually has eight
pumps handling 100 million gal-
lons of sewage a day from Miami,
Coral Gables and the area
around the airport. The sewage is
PLEASE SEE SEWAGE, 3B
2 GOVERNMENT
1 EXHIBIT
I TUJO
-------
ARMING: Bob Ready of the Water and Sewer Authority says the additional contamination makes the health hazard even greater.
>ewage spill threatens beaches along causeway
•WAGE, FROM IB
imped across the bay to the
unty's treatment plant on Vir-
lia Key.
In May 1991, more than six
llion gallons of sewage were
mped into the river when a
lve at the same stat;cn_mal-
ictioned. That spill was con-
sidered the largest in county his-
tory and it took 10 days before
the waters along the Ricken-
backer were considered safe
again.
Sunday, maintenance workers
were replacing one of the older
pumps and the other seven were
running at peak capacity.
"With the heavy rain this
week, we've been running the
pumps continuously," Ready
said. "Because of the heavy use,
the shafts on one of the older
pumps broke.".
The broken shaft damaged the
pump and several pipes and
forced workers to shut down all
but three pumps. That over-
loaded the station and unleashed
a torrent.
"The three remaining pumj
weren't enough to pump all tf
sewage," Ready said.
The spill continued until aboi
1:15 p.m. when repairs wei
made and the spill was coi
tained. It's not known how lor
the contamination warning wi
be effect, Livingstone said.
-------
SUNDAY,
NOVEMBER 29,1992 6B
0K iiTiami Herald
Risky flush
Experts say sewage harming Keys coral
By DAN KEATING
Herald Stafl Writer
Keys residents have borne crit-
icism for years that their pres-
ence harms the living coral, but a
new study points some of the
blame at Miami's influence — or
effluents.
The city's sewage appears to
have harmed the coral along the
top of the Keys in Biscayne
National Park, the tip of the
third longest barrier reef in the
world. The study found evidence
of three decades of pollution.
The study was revealed a week
ago at an environmental summit
focusing on the entire Keys eco-
system — from the Everglades
through the reef — organized by
the University of Miami Rosen-
stiel School of Atmospheric Sci-
ence. Other coral studies released
at the same event portrayed the
coral dying off through much of
the Keys and faring better near
the Dry Tortugas, far from man's
impact.
Biologist Harold Hudson of the
Key Largo National Marine
Sanctuary discussed the decline
of coral within Biscayne National
Park. Hudson, geologist Robert
Halley and oceanographer
Thomas Smith drilled cores from
the rocklike calcium deposits of
the largest boulder corals.
Growth rings
They counted the annual
growth rings in the coral, just the
way it can be done with trees.
Like trees, the coral shows years
of better growth and poor
growth, allowing scientists to
estimate the health of the speci-
men.
The coral showed tremendous
longevity. One boulder of star
coral revealed 242 years of
growth.
An interesting anecdote also
shows up in the historical record:
the "black water" incident of
1878. The coral growth drops off
the chart that year. The best
explanation scientists have is a
report that year from the boat
captain who ran supplies out to
the Dry Tortugas, 70 miles from
Key West. He said he saw a vast
area of jet black water with dead
fish floating in it. The water
moved along the Keys and up the
coast, and was reported by other
ships and traders.
The more startling informa-
tion, however, was recent.
Looking at the collective results
of eight coral sites sampled, the
reef went through periodic ups
and downs, generally growing
around nine millimeters every
year.
Fading growth
But since 1950, growth has
faded consistently. Before then,
the growth rate dipped below
eight millimeters per year only
for the black water. Between
1950 and 1980, however, the rate
was always below that threshold.
There was no similar 30-year
slump anywhere else in the
record.
"We had a really good growth
rate until the 1950s, then things
went to hell in a handbasket out
there," Hudson said. "That just
can't be natural, 1 don't believe."
The trend seems obvious. Hud-
son was less certain, however, on
the cause. He pointed to the
post-World War II growth of
Miami, where raw sewage was
dumped into Biscayne Bay until
1955. That was when-a sewer
plant on Virginia Key was built
and a sewage dumping pipe was
laid just off that island.
The pipe didn't help things for
the coral.
The site most influenced by
water currents from the outfall
pipe took a nose dive as soon as it
was installed. From a growth rate
as high as 13 and 14 millimeters
per year, it dove to five millime-
ters. It stayed down until 1977,
when the pipe was extended far-
ther out to sea. Then it perked up
again, growing by more than 10
millimeters a year.
Hudson considered it good evi-
dence of the impact of the sew-
age.
'Miami's wealth'
"I hypothesize we're getting
part of Miami's wealth moving
south." he said.
Hudson didn't propose a direct
means for how the sewage could
hurt the reef, but water quality
has consistently been a top con-
cern of the reef researchers.
The good news is that the fed-
eral Environmental Protection
Agency has a study starting this
winter to test the impart of
Miami's sewage. It will check for
traces of sewage in the water and
sediments, and maybe eventually
in fish, coral and sponges, said
federal microbiologist Richard
Coffin from the EPA lab in Gulf
Breeze.
Samples will be taken by boat
on 50 days spread over a one-
year period.
Hudson and others at the sym-
posium said, however, that the
water flow between the gulf
stream, Keys reef, Florida Bay
and Everglades may be tied to
events, such as heavy rainfall,
swirl currents triggered by storms
and reverse currents caused by
cold fronts and heavy winds.
-------
THE«VSTER*4)FIHE CORftL^sS^^
Sewage release 1955-1977
^ Sewage pipe extended, 1977
Water
currents	;
Scientists study the health of
Irving coral by checking growth ¦.
rings - much like one would
date a tree. When eight coral -
sites were studied recently in -
Biscayne National Park, a
major decline in growth was
noted in rings since 1950.
Some scientists believe it may.
be related to pollution that
came with the growth of Miami.
One coral site near Soldier Key
showed a direct decline "
beginning the year thai city " I '
sewage was dunped nearby. -
The coral improved after the \,
sewage pipe was extended to
another area more than 20 s
years later. Federal researchers
will study the impact of the city's
sewage on the bay beginning
this winter. - - > , •
LEGEND
0 Coral sampling site
CORAL GROWTH NEAR SOLDIER KEY
MILLIMETERS OF
GROWTH PER YEAR
15
13
Sswtgt Sawaga
P
-------
- 2B THE MIAMI HERALD. THURSDAY, DECEMBER 10. 1992
Swimmers warned of sewage overflow
Beachgoers are being cautioned about swimming in the
ocean after a sewage overflow at Collins Avenue and 167th
Street on Wednesday afternoon.
The sewage was diverted into the ocean after a Metro-
Dade Water and Sewer main broke at 1 p.m.
The Dade County Department of Public Health was test-
ing the water to determine the level of contamination, but
earned bathers to stay out of the water at the northern beaches
near the site of the spill.
"If you don't have to swim there, don't take the chance,"
said Walter Livingston, environmental administrator at the
health department.
-------
Metropolitan Dade
County, Florida
Department of
Environmental
Resources
Management
Utilities Sewage Collection and
Transmission Systems Service
Evaluation Program
DERM Technical Report 91-4
2 government
exhibit
three-
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Page 26
irrigation of the plant and the Bay Vista FIU campus green
areas.
During 1991 dry weather months the average plant flow was 80
MGD with average BOD5 of 142 mg/1 and Chlorides of 500-600
mg/1. High BOD5 days during dry weather were at 160 mg/1.
In June 1991 the average flow was 88 MGD with average BOD5 of
124 mg/1 and Cl- of 460. However, during three days of high
flow at 100 MGD the BOD5 was 110 mg/1 and the Cl- was 430
mg/1. From this information the following I/I may be
estimated:
Dry weather infiltration (10 MGD)	14 %
Wet weather average I/I above normal (8 MGD) 11 %
Wet weather peak I/I above average (12 MGD) 17 %
Total: 30 MGD	42 %
WASAD Pump Station 307 serving the north area of the City of
Hialeah discharges into WASAD Pump Station 300 through a 42"
F/M with limited sewage transmission capacity. The City of
Hialeah had several sewage overflows during high rainfall
periods associated with the high I/I flows in this area.
The North District wastewater treatment plant has been the
most affected by industrial discharges and unidentified
operational problems. Several incidents of low pH associated
with a green colored sludge high in chromium have been
documented in the recent past. Pump Station 386 12" F/M
serving an industrial park along 112th Street and 32nd Avenue
has been chemically corroded by industrial discharges. Also
high COD influent have significantly reduced the oxygen in the
activated sludge reactors. A new oxygen plant is being
installed to meet the increased treatment requirements.
Chloride data ( Mr. Robert Ready, P.E. memo dated August 27,
1991) provided by WASAD was reduced to Cl mass average daily
flows for purposes of analysis in Table V. The average
reduction from 1990 to 1991 (12 month apart) of Chloride mass
flows is 12.8 %. This represents an average monthly drop
during this period of approximately 1 % of the total flow,
that is 0.430 MGD. However, this reduction in saline
infiltration was not enough to prevent a total increase in
flows going to this plant.
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Page 30
These last two force mains cross the Biscayne Bay through a
common 72" FM. Evidence of crown corrosion in other similar
pipes leads to the prediction of a structural failure of this
important force main within the next 10 years. All the
influent to the two plant trains is contaminated with high
levels of chlorides.
Central District plant operated during 1991 dry weather months
at 124 MGD with average influent composition with BOD5 of 120
mg/1 and Cl- of 1600-1700 mg/1. High BOD5 levels during this
period ranged from 140 to 159 mg/1. The average flow during
the month of June 1991 was 130.8 MGD with average BOD5 of 100
mg/1 and average Cl- of 1464 mg/1. A three day peak flow
period during this month had flows of 147 MGD with BOD5 of 79
mg/1. Based on these information the I/I may be estimated as
follows:
Normal dry weather infiltration (31 MGD)	25 %
Wet weather average I/I above normal (7 MGD+) 25 %
Wet weather peak flows above average (16 MGD-t-) 40 %
Total: 54 MGD	90 %
Excess I/I flows from the Central District are diverted to the
South District to prevent sewage overflows to the Miami River.
WASAD has completed extensive slip lining of the major
interceptors south of the Miami River. In addition to sewage
overflow incidents into the Miami River, the River has a
chronic high level of contamination mainly from sewage, leaks,
exfiltration and discharges that get to the storm water
outfalls. Abatement of this pollution problem is a very high
priority for Dade County.
A ten year highest tide was experienced on September 23, 1991.
This higher tide period had caused additional salt water
inflow through the emergency overflow weirs at the Miami River
and in the Bay. In general higher chlorides have been detected
in the treatment plants.
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Page 32
Total Industrial Users to the South District Treatment Plant:
12 month average daily flovj (ADF)	73.27 MGD
% Existing SIU Flow to ADF	1.0 %
% SIU Flows + Contaminated water to ADF	1.8 %
DERM has identified all Significant Industrial Users (SIU)
under the Federal Pretreatment Program that discharges to the
South District WWTP. These existing SlU's are listed above
along with their flow contributions. The flow figures from
the South Dade Shredded Waste Landfill, for both leachate and
contaminated groundwater, are maximum expected flows given by
the Department of Solid Waste Management (DSWM) in the April
25, 1991 meeting at WASAD. The present permitted SIU's flows
represent 1 % of the 12 month POTW Average Daily Flow (ADF).
When the proposed contaminated groundwater discharge is added
to this existing flow, the non-domestic significant industrial
users contribution to the plant increases to 1.8 %.
DSWM facilities are required to meet Federal Pretreatment
Standards as any other SIU, unless a variance is granted by
the Environmental Quality Control Board (EQCB) under the Rules
of Dade County Code. A monitoring and compliance plan will be
developed by the DSWM to establish the necessary level of
treatment and/or to request a variance to the EQCB. This plan
.will be part of the pretreatment permit.
The collection and'transmission system for the South District
plant is divided in three areas: the normal northern portion
of the District, the expanded service area on the north from
Central District and the southern portion of the District. All
these areas are very low in saline contamination and they are
mostly domestic sewage.
The average influent flow during the dry weather months in
1991 was 65 MGD with BOD5 of 114 mg/1 and Cl- of 75 mg/1. The
high BOD5 days during this period were in the range of 140-160
mg/1. Wet weather flow during the month of June 1991 averaged
100 MGD with a BOD5 of 86 mg/1. The highest three days flows
averaged 117 MGD with average influent BODS of 62 mg/1. Based
on this information the I/l may be estimated as follows:
Normal dry weather infiltration (21 MGD) 32 %
Wet weather flow above normal (35 MGD)	79 %
Wet weather peak above average (17 MGD)	39 %
Total: 73 MGD
150 %
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Page 33
[he extremely high I/i flows in the South District requires
pecial attention and study. Revaluation of construction
practices, inspection, and exfiltration Jies.ts is necessary
since this area is mostly served by relative new sewers.
-------
MIAMI-DADE WATER AND SEWER AUTHORITY DEPARTMENT
Incident of November 22, 1992 at
Sewage Pump Station No. 1
at NW 4 Street, Miami, Florida
At approximately 1:45 AM Sunday, November 22, 1992, pump No.7
at Sewage Pump Station No. 1 at NW 4 Street and the Miami River in
the City of Miami failed. The failure was probably caused by a
large piece of debris, which somehow passed the bar screens,
entered the pump and lodged in the scroll casing. This resulted in
severe damage to the impeller and sheared the pump casing resulting
in a large opening, which enabled sewage to enter the dry well or
basement of the pump station. The liquid level in the basement
rose rapidly, flooded the east dry well and spilled over into the
west dry well.
When the pump suddenly stopped as a result of the intrusion of
the piece of debris, the drive shaft which connects the motor on
the ground floor to the pump, broke and the loose end of the shaft
flailed around in the dry well and damaged piping in the area.
This damage to the control piping prevented the cone check valve on
the discharge side of pump No. 7 from closing. As a result, sewage
was flooding into the dry well both from the wet well of the pump
station and from the east discharge main. The dry well flooded too
quickly for the operator or maintenance personnel at the pump
station to go down into the basement and close the valves to pump
No. 7. Consequently, the dry well continued to flood until the
discharge valve on the east discharge manifold was closed and pumps
Nos. 3,4 and 8 were shut off. Therefore, the only pumps still in
operation, were Nos. 1, 2 and 6 which discharge through the west
manifold. Pump No. 5 was out of service because it is being
replaced by a new pump under Contract No. S-3 25.
Portable pumps were brought to the pump station and operated
to pump the liquid from the dry well into the wet well. The wet
well level began to rise because the inflow to the station exceeded
the capacity of the three pumps in operation. By 6:30 AM a
reconnaissance revealed a slight overflow into the Miami River at
Pump Station No. 1 and that sewers on the west side of the river
were just starting to back up. It was decided to open the bypass
valve on the discharge side of pump station No. 1 to increase the
volume being pumped so that the wet well level could be lowered.
This relieved sewer backups in the area but permitted sewage to
flow into the Miami River. There wais no sewer overflow at the
structure at Jose Marti Park.
The pumping from the dry well gradually lowered the liquid
level and at 11:35 AM, Sunday the discharge valve from the No. 7
pump was closed. It was then possible to put two additional pumps,
No. 3 and No. 4, on line. At 1:08 PM the suction valve to the No.
7 pump was closed and the leakage of sewage into th^^^j^jW^^was
I ; GOVERNMENT |
i EXHIBIT 1
| FOfff I
-------
stopped. At 1:15 PM, the bypass valve from the discharge piping
which permitted overflow to the river, was closed and the pump
station returned to normal operation.-
As previously reported, the NW Fourth Street pump station is
undergoing major rehabilitation and improvement. All eight pumps,
all six diesel engines, all eight electric motors and all major
valves and piping are being replaced. In addition, an oxygen
injection system is being installed. The total cost of these
projects exceeds $5 million dollars. At present, pumps No. 1,2,3
and 4 on the west side of the pump station have been replaced and
the new pumps are in operation. Pump No. 5 is in the process of
being replaced, and the new pump is expected to be in service
shortly. Pumps No. 6,7 and 8 are old pumps that will be replaced
in the coming months. By the afternoon of Wednesday, November 25,
the damaged pump No. 7 had been removed and a spare pump was
installed in its place. At present, there are seven pumps
available for operation at the Fourth Street Pump Station.
The amount of sewage which had overflowed into the Miami River
was estimated at 4 million gallons. For the purpose of comparison,
the NW Fourth Street Pump Station handles an average of 100 million
gallons of sewage per day, although under recent conditions with
heavy rainfall and high groundwater, this pump station has been
discharging at rates as high as 121 million gallons per day.
The public was notified of the overflow and possible danger of
water contact in the following manner. At approximately 4 AM
Sunday, Deputy Director, Jorge Rodriguez telephoned Raul Alonso, of
the Department of Health and Rehabilitative Services and John
Renfrow of DERM and notified them of the problem. It was not
necessary for HRS to take specific action because contamination
warnings were already in effect for several beaches and waterfront
areas in Dade County including those affected by the overflow at NW
4th Street. At 4:30 AM Assistant Director, Robert Ready phoned the
DERM hotline at 858-0601 and officially notified DERM of the
situation. At 6:45 AM contact was made with Kate Hale of the
Emergency Operations Center. She prepared and released a statement
to the news media about the spill. During the day Sunday numerous
interviews were conducted for print, television and radio media,
confirming the information in the news release.
December 3, 1992
2
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fcCfia
STRAIGHT FLUSH
Experts say the big sewage pipeline under
Biscayne Bay could burst at any moment tf ft
does — bye, bye, Miami. 	
BY KIRK SEMPLE
An unsettling stillness has befallen the
Miami coast Swimmers have abandoned
the beaches of Key Biscayne and Virginia
Key. Sailboats and windsurfers no longer
ply the bay, the marinas are lifeless, and
there isn't a fishing boat in sight. Rotting
fish rod natural sponges dog the shoreline
from Coconut Grove to the Julia Tuttle
Causeway, and wash up against Bayside
Marketplace, now a ghost town enmty of
tourists Biscayne Bay just south of the
port has turned a roan color and a putrid
smell settles heavily over downtown
Miami like a mildewed sweatshirt
Radio bulletins and the television news
broadcast emergency messages: A huge
sewer pipeline carrying Central Dade's
waste water to the treatment plant on
Virginia Key has burst, spewing millions
of gallons of raw sewage into Biscayne
Ba j every hour. Public officials take to the
airwaves urging lesidents to flush as little
Radio and television
broadcast emergency
messages: A huge sewer
pipeline has burst, spewing
millions of gallons of raw
sewage into Biscayne Bay.
as possible and avoid all contact with bay
waters until the problem is sotved — in
several weeks, maybe months.
Incidences of cholera and hepatitis
skyrocket.
Miami's environmental disaster
becomes front-page fodder from New
York to ToJcyo to London. Frantic Miarm-
boxnd tourists jam the phone tries at
airline ticket offices around the world,
trying to reschedule their vacations for
other tropical destinations. And the Magic
City braces for hs worst winter season m
history.
This is not the feverish nightmare of
some nervous South Florida hotelier, b
fact such a tragedy wouldn't come as any
surprise to Dade's officials responsible for
maintaining the county's sewage system •
and the health of its natural resources. For
years they've known about the
pecanousness of the 36-year-old cross-
bay pipeline. But beyond studying
possible solutions, they've done nothing to
forestall the impending calamrty. "The
high probability of the line's potential
collapse in the near future, resulting in an
untold catastrophe, screams for
immediate action," warned a Dade County
Grand Jury report this past May. "Dade
County and HAS A [the Water & Sewer
Authority] should make this project the
county's highest priority."
Smce 1956 the cross-bay sewer Ene —
a reinforced-concrete pipe six feet in
diameter — has tolled the mainland to the
Central District Wastewater Treatment
Plant on Virginia Key The pipeline, which
Bes in an underwater trench beneath It
leas! five feet of sand, shells, «nd
limestone material, enters the bay
beneath Bayfront Park and cuts a straigiit
trie to Virginia Key. Everything flushed
down the toilets or washed dcrwn the
drains in homes and offices in the dties of
Miami, Coral Gables, South Miami, and
Miami Spnngs, as weE as neighborag
areas of unincorporated Dade, enters the
pipeline. About 100 million gallons of
effluvium roars through the conduit every
day, enough to Dearly fin the Orange
Bowl.
Dade's engineers began narking the
waste line's final days alter two similar,
but smaller, concrete pipes located n the
same antiquated sewer system sprung
leaks in the late Eighties. A pipe installed
m 1956 under the Miami River at NW
Fourth Street burst in 1987 because of
htemal corrosion. The following year a
concrete pipeline installed in 1971 mder
Flagler Street at SW 67th Court
collapsed. It took engineers ten days to
find the river pipe's leak and temporarily
plug it. Waste water was diverted to two
other pipes during the next seven months
as a contractor repaired the break. With
comparative ease, the Flagler Street pipe
was patched within a day because it was
not underwater and easily arrrwihlf to
workmen.
But the cross-bay pipeline is
underwater and underground, k s
continually in service, and there is no way
to divert the flow, all of which w31
enormously complicate repair efforts.
Furthermore, engineers cant check the
pipe's condition arid can only guess bow
long it's going to last. The Metro-Dade
Department of Environmental Resources
Management (DERM) has estimated that
corrosive hydrogen sulfide gas in the
sewage will eat through the seven-ncb-
thick pipe by 1997. And that calculation,
admits Josi L6p«, chief of DERM's
Wastewater Section, may be optimistic.
Correspondence between DERM and
the Metro-Dade Water & Sewer
Authority Department (WASA), which
operates and maintains the county's
sewer system, indicates that offiaals in
both agencies have been trying to develop
plans for a newptpebne since the
mid-Eighties (While the planning and
installation of a pipeiine is VVASA's
reponsibihty, DERM has provided input
regarding the environmental impacts of
various proposals.) After evaluating
several cross-bay routes for their cost tnd
environmental ramifications, V&SA,
DERM, and the Miami city manager's
office settled two years ago on a route
below the seabed akxvg the south tide of
the Rickenhacker Causeway.
Hoping to find a cheaper, taster, Bid
more environmentally sensitive way to
construct a new pipeline, VASA director
Garrett Sloan began investigating the
possibility of tunneling under Biscayne
bay to lay the pipehne instead of digging a
trench in the bay bottom. According to
Sloan, a feasibility study completed this
past May shows that the tunnel option
would probably not save money cr time,
but would do less harm to the
environment than a conventional pipeline.
"Its big advantage is environmental,"
areues Sloan "It won't disturb the
sea grass on the bottom of Biscayne Bay n
its construction."
GOVERNMENT
EXHIBIT
Ft \!£
-------
About 100 million gallons of raw sewage roar through Oucross-b
-------
10A THE MIAMI HERALD. WEDNESDAY. NOVEMBER 25. 1992
Miami Herald
JOHN S. KNIGHT (1894-1961)	JAMES L KNIGHT (19011991)
DAVID LAWRENCE JR., Publiihtr and Chairman
ROBERTO SUAREZ	JIM HAMPTON	DOUGLAS C. CLIFTON
Pretident	Editor	Ezecutivt Editor
MARTHA MUSGROVE tnd TONY PROSCIO	PETE WEITZEL
Astottatt Editors	Managing Editor
On a pipe and a prayer
DON'T GO near the water: That's
what local health officials "were
advising would-be beachgoers the
other day after four million gallons of raw
sewage leaked into the Miami River and
flowed on to Biscayne Bay.
It could have been worse. The leak
occurred when a pump broke during an off-
peak period. It was halted within six hours.
Imagine the consequences of a larger, lon-
ger leak. Imagine, for instance, that the
spill wasn't four million gallons in one six-
hour period — but 150 million gallons a day
entering the bay for days on end. That
could make Alaska's Exxon Valdez oil spill
seem positively fragrant in comparison.
It could happen, too. The Miami-Dade
Water and Sewer Authority even has a con-
tingency plan to cope with the conse-
quences. The plan is to find the leak first,
then fix it as fast as possible. In the mean-
time. the leakage would continue.
The source o7 concern is a six-foot-diam-
eter pipe that the sewage enters as it
leaves the pumping station. That high-
pressure main, installed in 1956, is the only
link between the pumping station and the
treatment plant on Virginia Key. Two simi-
lar pipes have failed in recent years when
ROTTEN STATUS OF SEWAGE
bubbles of hydrogen sulfide gas ate into the
concrete. One failure resulted indirectly in
another spill of raw sewage into the river;
the other caused a road to collapse near
West Flagler Street and 67th Avenue.
The pipe beneath the bay differs slightly
in its design and function, so officials aren't
sure whether it's likely to fail. The trouble
is, there's no safe and sure way to check
while it's in operation — and there's no
backup system so that it can be shut off.
That's why the authority plans to build a
10-foot-diameter main as a replacement by
1996. Recent advances in burrowing tech-
nology allow the new pipe to go deep
beneath the bay's floor. Until it's opera-
tional, officials must cross their fingers.
Taxpayers, meanwhile, deserve an
answer to a long and complex question
raised by environmentalists: Would these
symptoms of deterioration in Dade's older
facilities be occurring if local officials
weren't so busy pushing new infrastructure
in fringe areas where their developer pals
fear a state-imposed building moratorium?
Thus far, an answer hasn't leaked out.
-------



'*t PB0-tC
5 UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
OFFICE OF
ENFORCEMENT AND
COMPLIANCE MONITORING
MEMORANDUM
SUBJECT: Application of Katzson Brothers v. E.P.A. and
EPC v. Thomas Decisions to Administrative Penalty
Enforcement
FROM:	Frederick F. Stiehl
Associate Enforcement Counsel
for Pesticides and Toxic Substances
THROUGH: Edward E. Reich,
Deputy Assistant Administrator - Civil
TO:
Thomas L. Adams, Jr.
Assistant Administrator
Two recent decisions, Katzson Brothers, Inc. v. U.S. E.P.A.,
U. S. District Court of Appeals, Tenth Circuit interpreting FIFRA
and Environmental Protection Corporation v. Lee Thomas, District
Court for the Eastern District of California,, interpreting RCRA,
have addressed the question of EPA penalty calculations. These
decisions hold that under FIFRA and RCRA directly and, by
implication, several other major environmental statutes, the	1
Agency has an affirmative duty as part of its prima facie case to
present evidence that a proposed civil administrative penalty is
"appropriate" before an ALJ may rule in a case. As this is not t
the standard procedure which the Agency follows, it appears thaf
a strict application of Katzson Brothers, and E.P.C. v. Thomas,
may expose the Agency's pending administrative cases to a
challenge of the civil penalty amount.
Katzson Brothers is a Region VIII, FIFRA case which sought a
$4,200 penalty from an algicide producer for failure to file an
annual production report. After repeated attempts to settle the
matter, EPA filed a motion for a default order. Katzson failed
to respond and EPA was granted a default judgement and the full
amount of the proposed penalty. Katzson then moved to vacate the
default order and the Regional Administrator denied the motion
because "good cause" to vacate had not been shown. Katzson
appealed to the Administrator for reconsideration and the motion
was denied. Katzson appealed. The Tenth Circuit held that the
language of FIFRA 14(a)(4) requires the Administrator to consider
-------
4-u

f
.V C.
•wUi^i ,>-1 bP.^\ c^,,U^
~2~ ^ "v "* ^ ^ Ael^ ,, ,	f
£r'j' l^iwh^y Uc^cA c ^ yCL/y /	^
the effect of the penalty upon the ability of a business to
continue and the gravity of the violation. While noting that tPA'JV
justified the penalty amount by stating that it had adhered to <; „
-------
-3-	k*.-* ft¦ .~c(y 0*. 4-Ll ///Jf?
concluded.	UA-f
There appears to be a solution to this impasse in the c,, /L^	,
Administrative Procedures Act, 5 U.S.C. 551 et seq. and the L ^
Consolidated Rules of Practice. Under the Administrative ( ^7
-------
BACKGROUND
Two recent decisions, Katzson Brothers. Inc. v. U.S. E.P.A..
U. S. District Court of Appeals, Tenth Circuit interpreting FIFRA
and Environmental Protection Corporation v. Lee Thomas. District
Court for the Eastern District of California, interpreting RCRA,
have addressed the question of EPA penalty calculations. These
decisions hold that under FIFRA and RCRA directly and, by
implication, several other major environmental statutes, the
Agency has an affirmative duty as part of its prima facie case to
present evidence that a proposed civil administrative penalty is
"appropriate" before an ALJ may rule in a case. As this is not
the standard procedure which the Agency follows, it appears that
a strict application of Katzson Brothers. and E.P.C. v. Thomas.
may expose the Agency's pending administrative cases to a
challenge of the civil penalty amount.
The authority to levy civil penalties is given to the Agency
in all of the regulatory statutes. It is the Agency's position
that the determination of the amount of civil penalties to be
imposed on violators of the environmental statutes is an Agency
function. The amount of the civil penalty is of vital importance
to the Agency's regulatory program as a deterrent against
continued violations. The amount is important to the Respondent,
not only because it has a direct and immediate effect on its
business, but because the Respondent, as well as the public,
often sees the amount charged by the Agency as an indication of
the amount of environmental "harm" which has been done. In many
instances it is the only issue which prevents a settlement from
being reached. It thus becomes a central issue which Respondents
contest to the Administrative Law Judge for resolution and
likewise seek to have reviewed by the Court upon appeal.
The Agency has developed procedures (penalty policies) for
determining the appropriate penalty amount to be charged under
each statute. In the context of administrative hearings, the
regulations codified in the Rules of Procedure, 40 C.F.R. 22 must
also be followed. In cases which are handled through the
Department of Justice, "Justice isT~bound by the perimeters" of the
"complaint, which is drafted by T:he Agency againusing the Agency
generated penalty policy. "	'	~
Included is an synopsis of some of the cases which resulted
in judicial reevaluation of the penalty amounts proposed. In
appeals from the EPA Administrator's final rulings, the cases
have been remanded for further hearing, requiring the expenditure
of Agency resources on cases where liability had already been
established. In administrative cases, the Hearing officers have
either lowered the penalty amount or required further evidence
from the Agency. In appeals to the Chief Judicial Officer, he
-------
-2-
has either refused to grant a default motion or remanded the
cases for further development of the evidence. It is our opinion
that standard Agency case development procedures and
administrative penalty policies should be reevaluated for
compliance with these judicial interpretations of the statutes.
Further, we recommend that the»Rules of Procedure be utilized to-
obtain the appropriate financial information from Respondents in
the event the Agency cannot secure it.
Katzson Brothers is a Region VIII, FIFRA case which sought a
$4,200 penalty from an algicide producer for failure to file an
annual production report. After repeated attempts to settle the
matter, EPA filed a motion for a default order. Katzson failed
to respond and EPA was granted a default judgement and the full
amount of the proposed penalty. Katzson then moved to vacate the
default order and the Regional Administrator denied the motion
because "good cause" to vacate had not been shown. Katzson
appealed to the Administrator for reconsideration and the motion
was denied. Katzson appealed. The Tenth Circuit held that the
language of FIFRA 14(a)(4) requires the Administrator to consider
the effect of the penalty upon the ability of a business to
continue and the gravity of the violation. While noting that EPA
justified the penalty amount by stating that it had adhered to
its published penalty guidelines, the court found reversible
error because the Regional Administrator and the Chief
Administrator "rubber stamped" the penalty amount and made no
factual inquiry into the basis for the penalty. The decision not
to appeal Katzson Brothers was made by OGC, DOJ, Region VII and
OECM, in part based on the fact that such an appeal would have
been to the Supreme Court. However, in view of the California
District Court's reliance upon it, the case may potentially have
greater consequences than originally anticipated.
In EPC v. Thomas, the Court cited Katzson Brothers and held
that it and 40 CFR 22.14(a) of EPA's Consolidated Rules of
Practice require that each complaint must contain the factual
basis for the EPA's determination to enable the Respondent to
mount a defense. It held that such an omission would not be
considered merely procedural and remanded the issue to the
Administrative Law Judge with instructions to consider the
"correctness of the amount of the penalty imposed in view of the
Agency's default in pleading the basis of the penalty amount" If
EPA may be precluded from even issuing a complaint until such
information is obtained, the problem then becomes one of a
factual impasse as, under FIFRA, EPA lacks the power to subpoena
such financial information and is prohibited by Section 8(b)(2)
of FIFRA from gathering any financial data during an inspection.
In a case where a violator refuses to cooperate with EPA in any
way, as happened in Katzson Brothers, it is possible to have a
situation where EPA is precluded fprm initiating an enforcement
action to collect a civil penalty.
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-3-
JUDICIAL APPEALS
The Ninth and D.C. Circuits have based their finding of
insufficiency of the Agency's evidence to support the penalty
amount on statutory language (The Administrator or Secretary
shall consider	while the Eighth and Tenth Circuits have
reached the same conclusion by holding that an Administrator's
decision must be supported by evidence in the administrative
record.
Katszen Brothers v. United states Environmental Protection
Agency.839 F.2d 1396, 1400 (10 Circuit, 1988) the Court was
troubled at the "complete absence of inquiry into the factual
basis for the penalty..." and remanded the case for a hearing on
the mitigating factors which the Respondent wished considered,
"encouraging the Agency to reconsider the penalty amount.
Bosma v. United States Department of Agriculture. 754 -F. 2d
804 ((th Circuit, 1985) states that the burden of going forward
with evidence of the size of the Respondent's business and the
effect of the penalty on the Respondent's ability to continue in
business rested on the Department of Agriculture, not the burden
of proof.
In National Independent Coal Operators Association v. Mortonr
357 F. Supp. 509, 513 (D.D.C., 1973),»plaintiffs successfully
challenged the Bureau of Mines procedures for assessing penalties
under the Federal Coal Mine Health and Safety Act. The Court
found "It is the Secretary's responsibility to see that the
statutory requirements are fulfilled in all cases, even where the
operator does nothing."
Hudson Stations v. United States Environmental Protection
Agency. 642 F. 2d 261 (8th Circuit, 1981). The Court held that
in enforcement actions under the Clean Air Act, the ability to
continue in business must be considered. The Court looked, not
at the Act itself, but at 40 C.F.R. §80. 3 27(b)(1), Assessment of
Civil Penalties.
Harborlite Corp. v. ICC. 613 F.2d 1088 (D.C.C. 1979) relied on
by the Court in Environmental Protection Corporation v. Thomas,
and Katszen Brothers held that the administrator must state in
writing the finding of facts and reasons to support its decision
to allow the reviewing court to determine the sufficiency of such
reasoning and conclusions. The California District Court in EPC
also considered 40 C.F.R. 22.14 (a)(5) which directs that "each
complaint shall include a statement explaining the reasoning
behind the proposed penalty". It remanded EPC for further
consideration of the penalty "in view of the Agency's default in
pleading the basis of the penalty assessment".
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-4-
ADMINISTRATIVE CASES
Optivision Corporation. FIFRA 88-H-05, "To rule on your motion
for a default judgement, I will need a detailed report on EPA's
determination of the penalty, plus proposed findings respecting
that go into penalty calculations. See Katzson Brothers..."
Buerae Feed and Seed, FIFRA Appeal-VII-764C-88P, "I have
carefully considered the factual basis for the proposed penalty
and upheld the amount.
Sporicidin International. FIFRA-88-H-02, "The Act also
requires that the size of Respondent's business and the effect of
the penalty on its ability to continue in business be
considered...Moreover the Rules of Practice (40 C.F.R. §22.24)
make it clear that the burden of demonstrating the
appropriateness of the penalty is on the complainant... Although
the FIFRA penalty guidelines provide that the burden of providing
information that a proposed penalty would have an adverse effect
on Respondent's ability to continue in business is on Respondent,
the guidelines are not binding (40 C.F.R. §22.27) and obviously
cannot prevail over contrary provisions of the statute, e.g. the
Administrative Procedures Act or the Rules of Practice."
Kay Dee Veterinary. FIFRA Appeal, 86-1, "Pursuant to FIFRA and
its implementing regulations, I am exercising my discretion to
reduce the civil penalty amount from $30,000 to §1,200.
In accordance with the civil penalty guidelines, complainant
did not consider the respondent's financial condition at the time
it issued the complaint. (Footnote cite to 30 Fed.Reg, at
27712)...However the regulations do require the complainant to
convince me that the proposed penalty is reasonable... The Region
has not contradicted respondent's financial data, either by
cross-examination or by furnishing data of its own,,, However the
record contains no analysis of the [Respondent's] financial
statement by Regional personnel.... The complainant bears the
burden of persuasion that the proposed penalty is appropriate and
has failed to satisfy it."
Leatex Chemical Company. FIFRA-III-298-C, "Respondent's
silence on the amount of the penalty could be construed as an
admission that there is no dispute over the penalty... If
Respondent contends that the penalty amount will adversely affect
Respondent's ability to continue in business, Respondent must
submit copies of its latest Federal Income Tax returns or, in
lieu thereof, copies of its financial records for all its
business operations for its complete fiscal year."
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3
Author: Cheryl McMenamin at REGI0N4
Date: 10/19/98 9:52 AM
Priority: Normal
): Patricia Strougal
lbject: New FACA case
fyi
	 Forward Header
Subject: New FACA case
Author: Bill Anderson at REGION4
Date: 10/19/98 9:36 AM
in July, the Court of Appeals for the D.C. Circuit vacated a district court
decision in a FACA case brought by NRDC against DOE. NRDC v. Pena,
147 F.3d 1012 (D.C. Cir. 1998). The district court had granted a use
injunction prohibiting DOE from using a report that a National Academy of
Sciences (NAS) Committee had prepared for DOE because NAS violated
FACA. (Until a recent decision, the common belief was that NAS was
not subject to FACA -- DOE and NAS had preceded under this belief in
forming the committee and issuing the report.) The D.C. Circuit noted that
the case posed the recurring question of what remedy is. appropriate for
a federal agency's violation of FACA.
The court first questioned whether NRDC even had standing to sue for a
use injunction because that would not correct any of their claimed
injuries -- namely exclusion from past Committee meetings and denial of
access to Committee records and documents. The Court stated that
injunctions are to serve a corrective function -- and should not be issued
either to punish the agency for violating the law or in the guise of
imposing penalties to prevent the agency from violating the law in the
future. Moreover, the court was concerned that a use injunction would
result in a waste of money that DOE had spent for the report, which
olated one of FACA's principal purposes: avoidance of wasteful
penditures. The court strongly implied that a better remedy -- in
dition to the court's enjoining DOE from providing further funds to the
Committee -- would have been for the district court to issue an injunction
requiring DOE to give plaintiffs copy of the reports to the extent allowed
by FACA (many of the documents were classified and thus DOE
probably would have been able to deny the public access to them
anyway).
The key language for determining an appropriate remedy for FACA
violations begins on page 1025 of the opinion. The court stated that use
injunctions should be granted rarely -- i.e., it "should be the remedy of
last resort." The court also noted that "[siubstantial efforts to include
members of the interested public in at least some committee meetings and
attempts to screen for conflicts of interest among committee members
counsel against a use injunction. Moreover, if members of the public will
have another opportunity to comment on an agency decision, the district
court should determine whether subsequent opportunity will render
harmless (or at least less harmful) the loss of any past opportunity to
participate." Id. at 1026 [emphasis added].
The court further expanded upon the highlighted part in footnote 8: "If a
report produced in violation of faca cannot be acted on by the agency
without first undertaking a rulemaking or adjudication, the plaintiff may
have difficulty showing the FACA violation is responsible for a concrete
injury it has sustained or will sustain based on the administrative
decisionmaking process." Id. n.8.
while the decision does not mean that we should encourage our clients
to ignore FACA obligations, it does reduce the risk of courts precluding
encies from using advice and recommendations prepared by
immittees (or other groups) in violation of FACA, particularly if there will
: another opportunity for the public to comment. This case also will be
..jlpful to us in preparing a brief we have due at the end of the month in
the Byrd v. EPA case, which is an appeal of a district court decision that
found EPA did not violate FACA when having a contractor form a
committee regarding ORD's benzene reassessment.
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Notes
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
OFFICE OF ENFORCEMENT
January 27, 1993
MEMORANDUM
SUBJECT: Advisory on Part 28 Discovery
FROM:	David Drelich, Senior Attorne
OE-Water
LsA
L
TO:
Addressees
This memorandum is to advise you on the best approach for
the use of discovery under proposed Part 28, based on an analysis
of the procedures and some preliminary Regional experience with
the proposed rules. Please make this information available to
members of your staff involved in Part 28 litigation.
Discovery is not automatic; it must be requested. The time
to request discovery is at the prehearing conference (see
§28.23[b][2]). The conference is to be held no later than thirty
days after the response is filed.1 EPA should seek full
discovery of the respondent under §28.24(b) in every case that
reaches the prehearing conference stage, although any Agency
decision to stipulate to additional discovery, such as
depositions, should remain a case-by-case decision. It will
usually not be in EPA's interest to allow for additional
discovery against it.
The discovery section, §28.24 Information Exchange, limits
discovery by the respondent to the Agency's witness list (and
summary identifying information) and any liability and penalty
proof documents that EPA has not already filed with the Hearing
Clerk (see §28.16[e]).2 The respondent cannot get the Presiding
1	If the respondent has not filed a timely response, there
is an automatic default and waiver of the right to appear in the
proceeding for any purpose (§28.20[e]), including requesting
discovery (§28.24[a]).
2	By contrast, under §28.24(b)(2) the respondent is also
subject to Agency discovery on the issues of economic benefit and
ability to pay — penalty assessment issues. This apparent
imbalance in discovery power attempts to eliminate an imbalance
between the parties regarding their knowledge of material penalty
Printed on Recycled Paper
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- 2 -
Officer to expand discovery, since §28.24 states it "provides
exclusive authority for the provision of information by
parties."3 Attempts by the respondent to get collateral policy
documents are limited to timely FOIA requests (§28.24[a]), and
the Presiding Officer may not delay the enforcement proceedings
to accommodate such requests (§§28.4[c][4] and 28.13[a]).
Discovery is available only to parties, not to commenters. EPA's
discovery response burdens should therefore be minimal.
If the complainant does not request discovery, the
respondent may spring surprises on the enforcement team in any
trial or even in pleadings. No such problems should arise under
the discovery deadlines of §28.24(c)(1) if EPA has requested full
§28.24(b) discovery. But if the respondent does not honor a
discovery request, the respondent itself is barred from using the
requested information (§28.24[e]), and the Presiding Officer may
not place that information in the administrative record
(§28.2[b][15][ii]).4 Since the proposed regulations employ a
"produce or lose it" approach, the respondent should, in its own
assessment information. The respondent is likely to have the
only reliable information on these two subjects, and should
therefore bear the burden of coming forward with information
needed to make an adequate record relating to penalty assessment.
By clearly (and appropriately) placing the burden on the
respondent to provide such exclusive information under
§§28.10(a)(2) and 28.24(b)(2), proposed Part 28 eliminates the
possibility of the respondent frustrating Agency assessment of a
penalty through noncooperation with the administrative
enforcement process.
3	Under §28.24(a), the parties are free to stipulate to more
extensive discovery which is not subject to a Presiding Officer's
schedule under §§28 . 23 (b) (2) and 28.24 (c)-.
4	Discovery requests and discovery responses are not
automatically part of the administrative record of a Part 28
case. Discovery materials, although served on the Presiding
Officer as well as the other party, are not pleadings and are not
filed with the Hearing Clerk under the service rules of §28.9(a).
Discovery materials may become part of the administrative record
of a case if (1) they are filed with the Hearing Clerk, (2) they
are not barred from the record by operation of §28.2(b)(15)(ii),
which, inter alia, bars late discovery responses, and (3) are
found relevant and useful by the Presiding Officer under
§28.2(b)(15). The Presiding Officer is the gatekeeper of the
record under that subparagraph in order to avoid parties
"flooding the record with voluminous documents." 56 Fed. Reg.
30000 (July 1, 1991).
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- 3 -
best interests, comply with discovery requests.5 Although severe,
this approach is primarily intended to make as clear as possible
to the parties that their interests are best served by
cooperating with §28.24 discovery requests. It should discourage
discovery motion practice and abuse of the discovery process.
5 A complete discovery request should request the
production, in writing, of:
"1. Each witness respondent intends to present at
any proceeding under §28.26, as well as a brief
description of the witness' connection to the action,
the witness' qualifications (in the case of an expert
witness), and the subject matter of the intended
testimony.
"2. Each document (other than a document to be
used solely for purposes of impeachment) respondent
intends to introduce at any proceeding under §28.25 or
§28.26.
"3. All information known to the respondent
relating to the respondent's inability to pay a civil
penalty.
"4. All information known to the respondent
relating to the respondent's net profits, delayed or
avoided costs, or any other form of economic benefit
resulting from any activity or failure to act by the
respondent which is alleged in the administrative
complaint to be a violation of applicable law."
Outside of collateral instructions, this is all the discovery
information that the complainant is entitled to under Part 28
procedures. By contrast, all that a respondent may require of
EPA in discovery is the following written information:
"1. The name of each witness that EPA intends to
present at any proceeding under §28.26, as well as a
brief description of the witness' connection to the
action, the witness' qualifications (in the case of an
expert witness), and the subject matter of the intended
testimony.
"2. Each document (other than a document to be
used solely to for purposes of impeachment) EPA intends
to introduce at any proceeding under §28.25 or §28.26
and which has not been filed with the Hearing Clerk
pursuant to §28.16(e)."
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- 4 -
If the respondent does not provide the requested discovery,
or provides it after the §28.24(c)(1) deadline, EPA litigators
should take one of two approaches. If the respondent's
noncompliance was partial, the Agency should move for an
administrative declaration that the unproduced discovery may not
be placed in the administrative record, citing §§28.2(b)(15)(ii),
28.10(b)(2)(if applicable), and 28.24(e).6 If the respondent's
noncompliance was total, the Agency should move for a summary
determination and accelerated decision on the basis that no
opposing information can be accepted into the administrative
record under the provisions cited above, and that there is
therefore no genuine issue of fact in dispute and no basis for
any further fact-finding regarding remedy. See §28.25(a).7 The
Agency may also consider whether to request the Presiding Officer
to declare a default or impose another sanction against the
respondent under §§28.4(a)(xi) and 28.24(e)(2).
If the Presiding Officer improperly denies an appropriate
declaratory or summary determination/accelerated decision motion,
ORC should consider moving for reconsideration, pointing out that
an improper ruling on such a major motion, in contravention of
Part 28 procedures, may be grounds for a request for a new
Presiding Officer under §28.13(a).8
Please call me at (202) 260-2949 if you have any questions.
6	In all practice under Part 28, litigators should consult
the preamble to the proposed rule as further support for their
legal analyses. An electronic version of the proposed rule has
been provided to each ORC water branch chief; it is also
published at 56 Fed. Reg. 29,996 (July 1, 1991).
7	Under the "produce or lose it" approach of the Part 28,
using motions to compel discovery should disfavored, since they
are essentially unnecessary. Overdue discovery responses are
ineligible for inclusion by the Presiding Officer in the
administrative record.
8	The reason for taking this aggressive approach is the
degree of finality of Presiding Officer decisions under Part 28.
There are no administrative appeals, and the Presiding Officer
will not otherwise be subject to review for this type of
administrative record error. Without early motions by the
complainant, the Presiding Officer could potentially commit error
regarding the administrative record in performance of duties
under §28.27 (a)(1), at a time when the complainant will be
without a remedy. Further, sua sponte review by the
Environmental Appeals Board is extremely unlikely to pick up this
type of Presiding Officer error.
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- 5 -
Addressees: ORC Water Branch Chiefs
Region III ORC Waste Branch Chief
Region V ORC Multi-media Branch Chief
-------
Notes
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<&
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. O.C. 20460
I ffi'

MAR.' 3 I 992.
OFFICE OF ENFORCEMENT
MEMORANDUM
SUBJECT: Civil Penalty Assessment For Clean Water Act Wastewater Discharge
Violations: A Review of The Law
FROM: Frederick F. Stiehl ^	^ ^
Enforcement Counsel tot Water
TO:	Regional Counsels, Regions I - X
Water Division Directors, Regions I-X
I am pleased to transmit for your use a comprehensive review of the relevant
law, legislative history and court ruliqgs governing how courts assess civil penalties
for wastewater discharge violations under section 309(d) of the Clean Water Act.
Much of this material is also relevant to the assessment of administrative penalties
under section 309(g) of the Act.1
We have prepared this document so it will be useful for several purposes.
First, by reading the text of the document only, and ignoring the footnotes, you can
obtain a quick review of civil penalty assessment under the Clean Water Act. Without
the footnotes, the document may be read in approximately IS minutes. The footnotes
provide the details and the legal citations for use in briefs and court arguments.
Second, this document should serve as a detailed reference that our staffs may
use to prepare for settlement discussions with defendants. For example, EPA should
routinely point out to defendants that settlement penalties calculated pursuant to our
Penalty Policy2 start from zero and build upward and generally end up orders of
1	Depending on interest and resources, we may revise this document, or create a
separate document, reviewing administrative penalty case law by the end of the fiscal
year.
2	See Clean Water Act Penalty Policy for Civil Settlement Negotiations,, February 11,
1986.
Prinltd on RtcycUd Paper
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- 2 -
magnitude less than the statutory maximum penalty. In contrast, the prevailing case
law establishes that a court in assessing a penalty starts its assessment at the statutory
maximum and only reduces the penalty based on specific factors set out in the Act.
The case law shows that even when the court bends over backwards for the defendant
in trying to reduce the penalty, the resulting penalty is still likely to be much higher
than EPA's settlement demand.
Third, this document should assist our staff and Department of Justice attorneys
in preparing legal briefs and arguments on the issues of penalties. The document has
been set up so that large sections of it may be easily copied into briefs. Copies of the
WP5.1 floppy file may be obtained from my staff. A model penalty brief is also
available upon request.
Fourth, this document should serve as a useful training tool for new
enforcement staff. New staff may start off by reading the text only and then studying
the footnotes as necessary. We will be distributing copies of this document to
regional staff in the penalty workshops as they are conducted.
Finally, this document contains three tables that may be useful. Table 1
provides examples, with legal citations, of how to calculate the statutory maximum
penalty for multiple permit limitation violations. In general, EPA enforcement staff
should use this table, and the rules set forth in the Atlantic States Legal Foundation
vs. Tyson Foods. 1990 case in calculating the maximum statutory penalty. Table 2
provides a listing of all cases in which federal courts have assessed civil penalties for
Clean Water Act wastewater discharge violations. Note that we are only aware of 10
such cases over the past 20 years. For purposes of comparison, Table 3 contains a
listing of the top ten Clean Water Act civil penalties that EPA has obtained, all but
one through settlement. While almost everyone likes such listings, we must remember
that the appropriate penalty in a case is governed by the facts of that case, which may
be completely different than the cases listed in Tables 2 and 3.
This document was prepared by David A. Hindin, with the assistance of Jenefer
L. Stenzel. Ms. Stenzel was a law clerk in our office during the Fall of 1991. David
Hindin is an attorney/advisor in the Water Division. Credit also should be given to
Gary Hess, previously with my office and now with ORC Region IX, who prepared a
much earlier version of this paper in 1986. Questions regarding this paper and
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3
penalty assessments may be directed to David Hindin at FTS/202 260-9500 or 260-
8547.
Attachment.
cc: (w/attachment)
Scott Fulton, OE
Bob Van Heuvelen, OE
Mike Cook, OWEC
Richard Kozlowski, OWEC
Dave Lyons, OWEC
OE Water Division Attorneys
Jonathan Libber, OE
ORC Water Branch Chiefs, I-X
Gary Hess, ORC, Region IX
John Cruden, DOJ, EES
Assistant Chiefs, DOJ, EES
-------
EPA, REGION iV
ATU v ftA
Apr 15 3 3? PH '92
DATE/TIME RECEIVED
-------
CIVIL PENALTY ASSESSMENT FOR CLEAN WATER ACT
WASTEWATER DISCHARGE VIOLATIONS:
A REVIEW OF THE LAW
Water Division
Office of Civil Enforcement
U.S. Environmental Protection Agency
Washington, D.C. 20460
March 1992
' Questions regarding this paper may be directed to David Hindin at FTS/202 260-
9500 or 260-8547.
-------
CIVIL PENALTY ASSESSMENT FOR CLEAN WATER ACT
WASTEWATER DISCHARGE VIOLATIONS:
A REVIEW OF THE LAW
TABLE OF CONTENTS
A.	Introduction 		3
B.	Text of Clean Water Act § 309(d)		3
C.	Legislative History and Purpose of Clean Water Act Penalties 		4
D.	Application of 309(d) -- In General		9
E.	Mandatory Penalty Required When Violation Proven		10
F.	Statutory Maximum Used as Starting Point in Assessment 		11
G.	How to Calculate Statutory Maximum Penalty 		12
H.	Statutorily Mandated Factors 		20
1.	Seriousness of the Violations		21
2.	Economic benefit 		24
3.	History of Violations		29
4.	Good Faith Efforts to Comply		30
5.	Economic Impact of Penalty on Violator		32
6.	Such Other Matters as Justice May Require		33
I.	Payment of Penalties		34
J. EPA's Clean Water Act Penalty Policy for Civil Settlement
Negotiations		37
K. Penalty Records 		38
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CWA Penalty Assessment
March 1992
page 3
A.	Introduction!
This paper reviews how federal courts assess civil penalties under section
309(d) of the Cfeami Water Act, 33 U.S.C. 51329(d), for wastewater discharge
violations. This paper does not review penalties for violations related to the
disposal of dredged or fill materials (i.e., wetlands), nor does it review the
assessment of administrative penalties under section 309(g) of the Act. However,
much, if not most, of the law reviewed herein is applicable to these two areas.
Subsequent updates of this paper may include a detailed review of the law in these
two areas.
B.	Text of Clean Water Act § 309(d). 33 U.S.C. §1319(d):
Any person who violates section 1311,1 1312,2 1316r3 1317,4
1318,5 1328,® or 13457 of this title, or any permit condition or
limitation implementing any of such sections in a permit issued under
section 13428 of this title by the Administrator, or by a State, or in a
' This section forbids discharge of any pollutant by any person except in compGance with the
Clean Water Act.
3This section provides for the establishment of effluent limitations to protect water quality.
3This section provides for the establishment of performance standards for new sources of
polluting discharges.
4 This section provides for the establishment of toxic effluent and pretreatment standards.
"This section provides for the establishment of monitoring, recordkeeping and reporting
requirements.
eThis section governs aquaculture.
'This section governs sewage sludge disposal.
'This section establishes the National Pollution Discharge Elimination System ("NPDES") and
requirements for permit issuance under the system.
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CWA Penalty Assessment
March 1992
page 4
permit issued under section 1344® of this title by a State, or any
requirement imposed in a pretreatment program approved under
section 1342(a)(3)10 or 1342(b)(8)11 of this title, and any person
who violates any order issued by the Administrator under subsection
(a) of this section,12 shall be subject to a civil penalty not to exceed
$25,000 per day for each violation. In determining the amount of a
civil penalty the court shall consider the seriousness of the violation or
violations, the economic benefit (if any) resulting from the violation,
any history of such violations, any good-faith efforts to comply with
the applicable requirements, the economic impact of the penalty on
the violator, and such other matters as justice may require. For
purposes of this subsection, a single operational upset which leads to
simultaneous violations of more than one pollutant parameter shall be
treated as a single violation.
C. Legislative History and Purpose of Clean Water Act Penalties
Finding that sanctions under previously existing law were inadequate to
deter illegal pollution of the nation's waters. Congress provided severe penalties for
discharges in violation of the law when it enacted the 1972 Federal Water Pollution
Control Act [hereinafter "Clean Water Act" or "Act"l. The Act added civil
penalties of up to $10,000 per day for each violation, as well as criminal
sanctions, to the EPA's right to sue for injunctive relief.13 The maximum daily
"This section establishes a permit system for disposal of dredged or fill material into navigable
waters.
10	This subsection references the requirements that apply to permits issued by EPA.
11	This subsection establishes the requirements states must comply with in order to receive
approval from EPA to administer the NPDES pretreatment program in their state.
12Subsection 309(a) provides authority for the EPA to issue administrative compliance orders,
and initiate civil actions under 5 309(b).
13 U.S. v. Detrex Chemical Industries. Inc.. 393 F. Supp. 735, 737 (N.D. Ohio 1975), states
that, with respect to the Federal Water Pollution Control Act. and its amendments:
(continued...)
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CWA Penalty Assessment	page 5
March 1992
penalty was increased to $25,000' withithe passage off the "BS87 Clean Water Act
Amendments.14
Penalties under the Clean Water Act are designed! to farther its primary
purpose, "to restore and maintain the; chemical, physical;, and biological integrity of
the Nation's waters."15 In other wardsr Clean Water Act:penalties are imposed
to effect environmental protection through deterrence Ojf illegal discharges of water
pollutants.18
,3(...continued)
The legislative history of the Acts reveafs Congressional concern over the apparent
insufficiency of the penalties provided'to encourage compliance prior to the 1972
amendments. [Citation omitted.] The Senate Committee believed that if the Act's
purposes were to be met, "the threat of sanctions must be real. and the
enforcement provisions must be swift and direct." [Citation omitted.] Therefore
the . . . criminal sanctions and civil penalties [authorized by 33 U.S.C. 1319(c) and
1319(d)] were added to the administrator's right to sue for an trvmction.
The Senate Report cited in Detrex. supra, states that, "sanctions under existing law have not been
sufficient to encourage compliance with the provisions of the Federall Water Pollution Control Act."
S. Rep. No. 414, 92d Cong., 2d Sess., reprinted in 1972 U.S. Code Cong. & Admin. News 3668,
3730.
14 Pub. L. No. 100-4, S 313(b)(1), 10T Stat. 45. Also see Section. G, especially footnotes 34
and 35, below for legislative history of penalty increase.
,s Clean Water Act, 5 101(a), 33 U.S.C. § 1251(a).
18 Student Public Interest Research Group of New Jersey. Inc. v. AT & T Bell Laboratories. 617
F. Supp. 1190, 1201 (D.N.J. 1985), summarizes the goal of penalty assessment as follows:
There is little doubt that Congress intended deterrence as a purpose of sanctions
under the FWPCA. This includes both general and specific deterrence. The EPA
has stressed these points in its policy statement on enforcement of civil penalties:
The first goal of penalty assessment is to deter people from violating
the law. Specifically, the penalty should persuade the violator to
take precautions against falling into noncompliance again (specific
deterrence). Successful deterrence is important because it provides
the best protection for the environment. In addition, it reduces the
resources necessary to administer the laws by addressing
noncompliance before it occurs.
(continued...)
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CWA Penalty Assessment
March 1992
page 6
Congress intended Clean Water Act sanctions to serve both as a specific
deterrent to the violator against whom penalties are assessed, and as a general
deterrent to violations by all other dischargers. As one district court stated in
discussing Clean Water Act penalties:
There is no requirement of willfulness or negligence. . . . Neither are
civil penalties tied to damages actually suffered [citation omitted]. In
this regard, civil penalties bear some similarity to punitive damages.
Their object should be to act as deterrent: first, to discourage the
offender himself from repeating his transgression; and second, to
deter others from doing likewise [Citation omitted].17
In order for a penalty to deter noncompliant discharges, it must be sufficiently large
to both remove the economic benefit gained by noncompliance, and to inflict a true
penalty, or economic disincentive to pollute. Even before economic benefit was
made a statutory factor in penalty calculations, courts recognized the need to
include it when constructing an effective financial deterrent to noncompliance.18
ie{... continued)
The importance of deterrence under the Clean Water Act was reaffirmed when a district court held
that a claim by the United States for a civil penalty under section 309 of the CWA is not subject to
the admiralty-related Limitation of Liability Act. U.S. v. CF Industries. Inc.. 542 F. Supp. 952 (D.
Minn. 1982). The court reasoned that "the public policies embodied in the CWA are stronger and
more important than those embodied in the Limitation Act," and "if the government's claim for a
civil penalty must be brought in the (imitation action, it will have no deterrent effect." isL at 956.
17	United States v. Velsicol Chemical Corporation. 12 Env't. Rep. Cas. (BNA) 1417, 1421
(W.D. Tenn. 1978). The purpose of civil penalties under the Act is threefold: retribution,
deterrence and restitution. Tull v. United States. 481 U.S. 412, 422 (1987).
18	Student Public Interest Research Group of New Jersey. Inc. v. American Cvanamid Co.. 23
Env't. Rep. Cas. (BNA) 2044 (D.N J. 1985), noted:
The EPA has stated that penalties for past violations are essential to execute the
purpose of the Act even when the violations have ceased:
An important aspect of determining the appropriate penalty amount
is the amount of money saved or expenses that were delayed as a
(continued...)
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March 1992
In particular, a penalty imposed for violation of an NPDES permit must represent
more than a mere effluent or discharge fee incurred as;a. regular cost of doing
business.19 "[I]f a [Cleani Water Act civil] penalty dbes;no more than simply
10(...continued)
result of being fro non-compliance. Civil penalty actions are often
necessary even if the underlying violation has beeni corrected, to
deter future violations, and to restore economic equity fa other
regulated parties which have invested the resources needed to be in
compliance all along. (Emphasis by court.]
Aoencvwide Compliance and Enforcement Strategy and Strategy Framework for
EPA Compliance Programs (May 1984), p. 26. Without the; imposition of penalties,
the Act would not serve its; function as a specific and general! deterrent to
violations. .
id. at 2049.
With respect to removal of economic benefit, §s§L Diver, The Assessment and Mitigation of Civil
Money Penalties bv Federal Administrative Agencies. 79 Colum. L>Rev. 1435, 1466-68 {1979):
Mere removal of economic benefit will usually be insufficient by itself to secure
compliance with regulatory standards. It is necessary, at least in theory, to multiply
the documented benefit by a factor representing the likelihood of escaping
punishment altogether. For example, suppose a firm realizes a profit of $1,000
from an activity that, on average, is detected and punished only ten percent of the
time. If the only cost of being apprehended were the penalty and if the firm were
behaving rationally, a S 10,000 penalty would presumably be necessary to deter
that conduct.
}d. at 1467.
See also Sierra Club v. Hanna Furnace Corp.. 23 Env't. Rep. Cas. (UNA) 1910, 1911-12 (W.D.N.Y.
1985), suggesting that unless faced with the fear of being penalized, "the potential polluter verging
upon bankruptcy or shutdown for any reason would be tempted to disregard restrictive effluent
controls, lured perhaps by an added incentive to maximize profits or reduce lasses of an ailing
business."
19 The Supreme Court of Ohio summarized as follows:
The penalty is supposed to be a deterrent to violation, insofar as the violator is
concerned, and an example to others, not just an effluent or discharge fee which
might be considered nothing more than the cost of doing business. (Citations
omitted.] . . . Federal courts have also observed that civil penalties serve to deter
future violations of the Federal Water Pollution Control Act. (Citations omitted.] . . .
One commentator has stated succinctly the principle as applicable to water pollution
(continued...)
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page 8
take away the economic benefit, it does not, as a practical matter impose any real
economic penalty against the violator."20
A subsidiary goal of penalties may be reimbursement of the government for
expenses associated with enforcement.21 Civil penalties under the Clean Water
"(...continued)
cases: "[Blecause the function of a monetary penalty is to deter the polluting
activity altogether and thus not give rise to the penalty at all, the amount of the
penalty must be greater than abatement or compliance costs.". . . Note,
Assessment of Civil Monetary Penalties for Water Pollution: A Proposal for Shifting
the Burden of Proof Regarding Damages. 30 Hastings L.J. 651, 670.
Ohio ex rel. Brown v. Dayton Malleable. Inc.. 1 Ohio St. 3d 151, 438 N.E. 2d 120 (Sup. Ct. 1982).
See also Student Public Interest Research Group of New Jersey. Inc. v. American Cvanamid Co..
23 Env't. Rep. Cas. (BNA) 2044, 2048 (D.N.J. 1985) (noting that the public derives a benefit
"from the specific and general deterrence" obtained through civil penalties); Student Public Interest
Research Group of New Jersey. Inc. v. P.P. Oil & Chemical Storage. Inc.. 627 F. Supp. 1074,
1083 (D.N.J. 1986) ("Congress intended both general and specific deterrence to be a purpose of
the sanctions under the FWPCA"); U.S. v. Ferro Corp.. 23 Env't. Rep. Cas. (BNA) 2052, 2056
(M.D. La. 1986), which quoted U.S. v. Tull, 769 F.2d 182, 187 (4th Cir. 1985), rev'd on other
grounds ("[T]he assessment of penalties intertwines with the imposition of traditional equitable
relief. . . . This combined relief serves several goals, including environmental protection ... as well
as deterrence"); U.S. v. Lambert. 19 Env't. Rep. Cas. (BNA) 1055 (M.D. Fla. 1983) and U.S. v.
Board of Trustees of Florida Kevs Community College. 531 F. Supp. 267, 275 (S.D. Fla. 1981)
(regarding deterrence of unlawful discharges of dredged or fiO material); Comment The Use of Civil
Penalties in Enforcing the Clean Water Act Amendments of 1977. 12 Univ. of San. Fran. L. Rev.
437 (1978); Diver, The Assessment and Mitigation of Civil Money Penalties by Federal
Administrative Agencies," 79 Colum. L. Rev. 1435, 1455-57 (1979).
20	Student Public Interest Research Group of N.J, v. Monsanto. 29 Env't. Rep. Cas. 1078,
1090 (D.N,J. 1988). The Monsanto court continued: "To simply equalize the economic benefit
with the penalty would serve ill the possibility of discouraging other and future violations. Some
additional penalty shoufd be imposed as a sanction." Id. at 1090.
21	See Diver, The Assessment and Mitigation of Civil Money Penalties bv Federal Administrative
Agencies. 79 Colum. L. Rev. 1435, 1456 (1979). Cf. Hetverino v. Mitchell. 303 U.S. 391, 398-
401 (1938) (penalties under the revenue laws are intended in part "to reimburse the Government
for the heavy expense of investigation and the loss resulting from the taxpayer's fraud"); One Lot
Emerald Cut Stones v. U.S.. 409 U.S. 232, 237 (1972) (hobfing that forfeiture of smuggled goods
"serves to reimburse the Government for investigation and enforcement expenses").
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March 1992
page 9
Act also may be regarded as a form of liquidated damages designed to compensate
the public for the harm caused by an illegal discharge.22
D. Application of 309(d) -- In General
The imposition of penalties under the Clean Water Act is governed both by
the 1987 Amendments to the Act and by case law. much of which predates the
1987 Amendments but continues to be applicable to certain aspects of penalty
calculation. The 1987 Amendments restricted a district court's discretion by
setting forth explicit factors which courts must consider in assessing penalties.23
Issues such as when the imposition of a penalty is mandatory, what amount to use
as a starting point in the calculation, and how separate violations of specific
discharge limitations should be counted for purposes of establishing the maximum
statutory penalty, have been addressed by judicial decisions, and are discussed in
the following three sections.
22 See Comment, The Use of Civil Penalties in Enforcing the Clean Water Act Amendments of
1977." 12 Univ. of San. Fran. L. Rev. 437, 451-52 (1978); Diver, The Assessment and Mitigation
of Civil Money Penalties bv Federal Administrative Agencies. 79 Colum. L. Rev. 1435, 1456
(1979). £f. One Lot Emerald Cut Stones v. United States. 409 U.S. 232 (1972): Rex Trailer Co. v.
U.S.. 350 U.S. 148 (1956); Helvering v. Mitchell. 303 U.S. 391 (1938) (each characterizing
penalties as a form of liquidated damaoes); U.S. v. W.B. Enterprises. 378 F. Supp. 420 (S.D.N. Y.
1974) (penalty imposed under § 311 of the ACT).
23 Atlantic States Legal Foundation v. Tvson Foods. Inc.. 897 F.2d 1128, 1140 (11th Cir.
1990).
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March 1992
E. Mandatory Penalty Recmired Wften Violation Proven
Once a defendant's liability tmder the Clean Water Act has been established,
the United States is entitled to recovers penalty for past violations. The language
of §309(d) is not permissive with regard to penalty imposition, but mandatory,
"Any person who violates [any of several sections of the Act] . . . shall be snhiert
to a civil penalty of not to exceed $25,000 per day for each violation [emphasis
added]."24 Recently the Eleventh Circuit held that 5309(d) of the Act required
that some penalty be assessed once a violation has been established.25 The
Fourth Circuit, in a case where violations were demonstrated spanning over four
years, determined that §309(d)'s statement that a violator "shall" be subject to
civil penalties meant that "the court is virtually obligated to assess penalties."26
Another Fourth Circuit case held that the failure to assess penalties for pervasive
violations was an error of law.27 In another case, the court held that a state
agency's failure to seek imposition of civil penalties against a defendant was a
24 Clean Water Act, $ 309(d), 33 U.S.C. S 1319(d).
26 Atlantic States Legal Foundation v. Tyson Foods. Inc.. 897 F.2d 1128 (11th Cir. 1990).
The Eleventh Circuit emphasized the section 309(d) language "shall be subject to a civil penalty"
and then stated that this language makes dear that once a violation has been established, some
penalty is required. In fact, the court went even further, saying that the district court's
determination, "based solely on the good faith efforts of [the defendant] to comply with the law,
that no penalty was appropriate was and would be (on remand] an abuse of discretion." Id. at
1142.
26	Chesapeake Bav Foundation v. Gwaftnev of Smithfield. 890 F.2d 690, 697 (4th Cir. 1989).
27	Stoddard v. West Carolina Regional Sewer Authority. 23 Env't. Rep. Cas. (BNA) 2105,
2111 (4th Cir. 1986). The Circuit Court emphasized that, under the Act, any person who violates
any permit condition "shall" be subject to a civa penalty, and that section 309 left little doubt that,
under the circumstances of that case, "a penalty in some form [wasl mandated." itf. The Circuit
Court reversed the district court's decision not to assess civil penalties, and remanded the case.
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CWA Penalty Assessment	page 11
March 1992
failure to "diligently prosecute" a civil action, for purposes of determining whether
the filing and maintenance of a citizen's suit against the defendant was proper in
that case.28
F. Statutory Maximum Used as Starting Point in Assessment
The Eleventh Circuit recently held that in calculating civil penalties for Clean
Water Act violations "the point of departure for the district court should be the
maximum fines for such violations permitted by the Clean Water Act."29
Consistent with the Eleventh Circuit's opinion in that case, the Third Circuit
subsequently endorsed a district court's establishment of penalties at the statutory
maximum.30 Still more recently, an Indiana district court followed the lead of the
Third and Eleventh Circuits, holding that, "In determining the appropriate penalty,
28 Student Public Interest Research Group of New Jersey. Inc. v. American Cvanamid Co.. 23
Env't. Rep. Cas. (BNA) at 2049. The court made this finding despite the fact that the state agency
had sought to compel American Cyanamid's compliance by issuing an administrative order, filing
suit and obtaining a consent judgment against the company.
28 Tvson Foods. 897 F.2d at 1137. The Eleventh Circuit continued, saying:
Upon remand, the district court should first determine the maximum fine for which
[the defendantl may be held liable. If it chooses not to impose the maximum
[penalty], it must reduce the fine in accordance with the factors spelled out in
Section 1319(d), clearly indicating the weight it gives to each of the factors in the
statute and the factual findings that support its conclusions.
id. at 1142.
30 See Public Interest Research Grouo of N.J, v. Powell Duffrvn Terminals. Inc.. 913 F.2d 64
(3d Cir. 1990). In addition, the Third Circuit reversed the district court's reduction of the maximum
penalty based on an alleged failure of the government to act. The appellate court found that the
$ 1 million reduction of the statutory maximum penalty by the district court could not be based on
the "as justice may require" factor set out in 5309(d), and thus remanded the case back to the
district court for recalculation of the penalty without the reduction. 1^ at 80-81. Prior history for
this case is found at 720 F. Supp. 1158 (D.N.J. 1989) and 627 F. Supp. 1074 (D.N.J. 1986).
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CWA Penalty Assessment
March 1992
first, the statutory maximum penally must be determined. Second, the Court
reduces the penalty in accordance with factors indicated by Congress."31 EPA
interprets the Act and the prevailing) case law to require a court to first calculate
the statutory maximum penalty. If the court chooses not to impose the maximum
penalty, it may only reduce the penalty in accordance with the factors set forth in
§309(d), clearly indicating the weight it gives to each factor and the evidence and
rationale that supports its concfiisitms.32
G. How to Calculate Statutory Maximum Penalty
As noted in Section C. above, the 1987 Clean Water Act Amendments
raised the maximum penalty froira $10,000 to $25,000. In cases where the period
of violation extends both before amrf after the effective date of the amendments,
penalties under the Act must be "pro-rated" to reflect the increase.33 The 1987
Amendments also clarified that uitufer 5309(d), the daily maximum penalty (raised
to $25,000) applies separately to each violation of an express requirement or
31	United States v. Roll Coater. Inc.. 21 Envtl. L. Rep. (Envtl. L. Inst.) 21,073, 21,074 (S.D.
Ind., 1991). "The Court must clearly indicate the weight given to each of the factors and the
factual findings that support its conclusion." Also see, Tvson Foods. 897 F.2d at 1142, 1143.
32	But see, Monsanto. 29 Env*t. Rep. Cas. at 1091, in which the court refused to first set the
penalty at the statutory maximum and then place the burden on the defendant to establish facts
justifying a reduction.
33	See, e.g.. PIRG v. Powell Duffrvn Terminals. Inc.. 720 F. Supp. 1158 (D.N.J. 1989), aff'd in
part, rev'd in part, 913 F.2d 64 (3d Cir. 1990) {issue not raised on appeal), holding that "each
violation of the NPDES permit limitation* prior to the 1987 amendments, subjects the defendant to
a statutory maximum penalty of $10,000 per violation. However, in 1987 Congress increased the
statutory maximum to $25,000. Therefore, defendant's violations occurring on or after February
4. 1987. are subject to a penalty of up to $25,000.00" Id. at 1160 (emphasis added).
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CWA Penalty Assessment	page 13
March 1992
limitation under the Act that occurs on a given day., Prior to the 1987
Amendments an argument could be made that there: was a daily cap on penalties
regardless of how many separate violations occurredion a given day.34
Multiple penalties may be imposed as the result of a single illegal discharge,
if that discharge violates more than a single parameter of the discharger's permit.
This concept is appropriately applied in at least two different scenarios. The first is
where there are violations of the limits for two or more different effluent
parameters on the same day. For example, a discharger may violate its daily
maximum limits for both cadmium and BOD5 within the same 24-hour period. In
such a case, the violator is subject to two penalties because it has exceeded
34 The legislative history makes clear that Section 309(d) of the Act does not pface a cap on
the amount of daily penalties that can be imposed on a polluter.
Section 309 and 404 of the Act are amended to increase the civil judicial penalty
limit from $10,000 to $25,000 per violation, to clarify that each distinct violation is
subject to a separate daily penalty assessment of up to $25,000, and to clarify that
violations of pretreatment program requirements are subject to civil penalties.
H.R. Conf. Rep. No. 1004, 99th Cong., 2d Sess. 132 (1986)(emphasis added). Pribrto the
enactment of the 1987 Amendments, Section 309(d) of the Act stated, in relevant part:
Any person who violates section 1311, 1312, 1316, 1317, 1318,,
1328, or 1345 of this title . . . shall be subject to a civil penalty not
to exceed $10,000 per day of such violation.
Prior to the 1987 Amendments, there was some confusion as to whether Sectioni 309(d) imposed
an absolute daily maximum civil penalty for violations of the Act. Sfifl Chesapeake Bav Foundation
v. Gwaltnev of Smithfield. 611 F. Supp. 1542, 1554-55 (E.D. Va. 1985), aff'd on other mounds
791 F. 2d 304 (4th Cir. 1986), vacated 108 S. Ct. 376 (1987), on remand, 844 F.2d 170 i4th Cir.
1988), judgment reinstated, 688 F.Supp. 1078 (E.D. Va. 1988), penalty reduced,. 890 F. 2d 690
(4th Cir. 1989); United States v. Amoco Oil Company. 580 F. Supp. 1042, 1046^47, t©47 n. 1
(W.D. Mo. 1984); United States v. Detrex Chemical Industries. Inc.. 393 F. Suppi.735* 736-38
(N.D. Ohio 1975).
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March 1992
discharge limits for two different substances, and § 309 requires that a penalty be
imposed "for each violation."35
The second scenario occurs when a discharger has violated a discharge limit
defined in terms of a time period longer than one day, e.g., a monthly average
limit. In general, compliance with a monthly average limit is determined by the
average of all daily sample results for a particular pollutant obtained during a
calendar month.36 Although the Act does not address whether a penalty should
36 In Tvson Foods. 897 F.2d at 1138, the court found:
that the statutory language of section 1319(d) [Clean Water Act S 309(d)] as
originally written is ambiguous and .. . the varying interpretations given to that
language [are] equally plausible. In amending the statute, however, Congress
specified that the penalties were not to exceed "25,000 per day for each violation*
(emphasis added). This language, applicable to violations occurring after February
4, 1987, is, we find, capable of only a single reasonable interpretation: the daily
maximum penalty applies separately to each violation of an express limitation
[footnote omitted]. Certainly then, for violations occurring after February 4, 1987,
there is no daily cap of $25,000. Instead, each excessive discharge of a pollutant
on a given day will subject the polluter to a $25,000 maximum fine.
jdj. at 1138-39 (emphasis by court). In a footnote, the court explained,
In addition, the amended statute also states: "For purposes of this subsection, a
single operational upset which leads to simultaneous violations of more than one
pollutant parameter shall be treated as a single violation." 33 U.S.C. 5 1319(d).
The necessity of spelling out this exception implies that the rule is to treat violations
of different pollutant parameters as distinct violations.
!& at 1138 n.19 (emphasis added). Accord. Public Interest Research Group of New Jersey. Inc. v.
Powell Duffrvn Terminals. Inc.. 913 F.2d 64, 77 (1990); Monsanto. 29 Env't. Rep. Cas. at 1087;
Amoco Oil. 580 F. Supp. at 1047.
M The court in Tvson Foods. 897 F.2d at 1139, provides a good description of the difference
between violation of a daily maximum limit and violation of a daily average limit:
For each "effluent characteristic" the NPDES lists both a "daily maximum discharge
limitation" and a "daily average discharge limitation." The "daily maximum" is
defined by the permit as the highest value of a sample result obtained during a
single day. The "daily average" is defined as the arithmetic mean value of alt
sample results for a particular pollutant obtained during a calendar month.
(continued...)
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March 1992
be imposed for each day of the month in whichi violation of the monthly average
occurs, a majority of courts have held that it is appropriate to assess penalties for
each day of that moMfii.17 Thus, the prevailing case law, and U.S. EPA policy,
"(...continued)
Typically, the daily average discharge limitation lor the month is much lower than
the daily maximum* reflecting the fact that harm may be done in the aggregate even
when the defendant stays within the maximum limitations for each day.
37 This issue has been addressed most recently in the Tvson Foods opinion, 897 F.2d at 1139:
The language of thai statute does not make clear whether the penalty for a monthly
violation [i.e., violation of the daily average for that month} should consist of a fine
for each day of that month or of a single fine of $10,000 (or $25,000). In
Gwaltnev. the Fourth Circuit agreed with the district court's holding that a violation
of a monthly average should be deemed to involve a violation of each of the days of
that month. 791 F.2d' 304 (4th Cir. 1986). The court reasoned that:
While the statute does not address directly the matter of monthly
average limitations, it does speak in terms of penalties per day of
violation, rather than penalties per violation. This language strongly
suggests that where a violation is defined in terms of a time period
longer than a day, the maximum penalty assessable for that violation
should be defined in terms of the number of days in that time period'.
Idi at 314 (emphasis in original). Thus, under the Gwaltnev court's readTng of the
pre-amendment statute, violating a monthly limitation in a month with thirty days
would subject a polluter to a maximum penalty of $300,000 per pollutant. Under
the statute as amended, a polluter would be subject to a maximum penalty of
$750,000 for that month. The EPA agrees in its Penalty Policy that "violation of a
monthly average effluent limitation should be counted as 30 violations."	We find
the reasoning of the Fourth Circuit persuasive and consistent with the language of
section 1319(d).
See also United States v. Amoco Oil Company. 580 F. Supp. 1042 (W.D. Mis. 1984)1 in which the
court concluded:
where effluent limitations are set on some basis other than a daily limit — that n. for
example, where they are set as ... a monthly maximum or monthly average; limit,
etc. ~ a "violation" necessarily encompasses all the days involved in the time; period
covered by the limitation. Thus, for example, where effluent limits are set: on; a
"monthly average" basis, a "violation" of that limit would be a violation covering
and including all of the 30 days of that monthly period, and a civil penalty	could
be imposed for each of those 30 days.
1^81 1045. Also see Amoco at 1051. fn.3.
But see SPIRG v. Monsanto. 29 Env't. Rep. Cas. (BNA) 1078, 1087 (D.N.J. 198SL whTchiftoJds
that a violation of the daily average should be counted as a single violation.
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March 1992
hold that when a violation is defined in terms of a time period longer than a day,
the maximum penalty assessable for that violation encompasses a penalty for each
day within that time period.
A further complication arises when there are violations of two or more
different limits measuring the same pollutant, e.g., where both a daily maximum
and a monthly average limitation for discharge of a particular pollutant have been
exceeded. Although the case law is not settled, the leading case, Tvson Foods
holds that a polluter may not be assessed a penalty of greater than $25,000 per
day for its discharge of a particular pollutant regardless of how many different
limitations for that pollutant it violated. Thus, if during the month of January, a
discharger were to violate its monthly average limit for cadmium and its daily
maximum limit for cadmium on 5 separate days, the maximum penalty for
cadmium violations in January would be $775,000, i.e., $25,000 x 31 days,
without adding 5 more days of violations at $25,000 each. The Eleventh Circuit in
Tyson Foods reached this conclusion "because discharge of a single pollutant may
be the cause of both daily and monthly violation, fining the violator twice may
result in imposing two fines for the same illegal act."38 Examples of possible fact
38 Tvson Foods. 897 F.2d at 1140. In a footnote to this passage, the court continued:
In addition, if a polluter violates the monthly average for both pollutant A and
pollutant B, there is no bar to a minimum fine of $10,000 (or of $25,000) times the
number of days in the month for discharge of each pollutant,
at 1140 n.22 (emphasis by court).
In contrast, in PIRG of New Jersey v. Powell Duffrvn. 913 F.2d at 77, the Third Circuit took
the position that penalties could be imposed simultaneously for violations of the daily maximum an£
of the daily average for the same pollutants. The defendant argued that the district court
(continued...)
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March 1992
variations under each of the preceding scenarios^aeufiihow the statutory maximum
penalty should be calculated are presented in TabJteU..
In calculating the statutory maximum penalty* the Act carves out one
exception -- a single operational upset -- in whicftiaoHtscharger's penalty liability for
violations would be limited to no more than $25,j0(B©fper day, regardless of how
many different parameters were violated on a gwtentatey. The last sentence of
§309(d> of the Act, 33 U.S.C. 51319(d) states: "Em ,purposes of this subsection,
"(...continued)
improperly "double counted" violations because a single reparad exceedance for a pollutant was
counted as a violation of both the average concentration liinitand the maximum concentration limit
for that pollutant. The Third Circuit Court rejected this argument:
... [Defendant's] permits provide limits for both the;daily average and daily
maximum concentration of certain pollutants. These; are dearly separate limitations
and we see no reason why PDT [the defendant] should! not be penalized separately
for violating each limitation, {reference omitted] While: the permit requires that PDT
test a minimum of three effluent samples there is ma limit on the maximum number
of samples that PDT may test. Therefore, if one sample contained a concentration
in excess of the maximum for a particular pollutant;, POT could have taken measures
to clean up its discharge and taken more samples iim the hope that later samples
would have lower concentrations and so bring the diaily average within the permit
limits. PDT did not do so and therefore is subject ta> penalties for violating both the
average and maximum concentration limits.
Id. at 78.
Unfortunately, in Powell Duffrvn. the plaintiff had not argued; that a violation of a monthly limit
should be counted as a violation for each day of the month.. Thus, the Third Circuit stated in a
footnote that it would not reach the interesting question of whether the district court had
undercounted violations by counting an exceedance of a 3Q> day average as one violation. Id- at 79
n.29. Therefore, pursuant to the Third Circuit in Powell Duffrvn. if a defendant only sampled once
during a given month (assume 31 day month), and that one sample violated the daily maximum
limit, the weekly average limit, and the monthly average limit aO for the same pollutant, that would
be three separate violations, but the penalty would be only $25,000 per violation for a total penalty
of $75,000. In contrast, pursuant to the Seventh Circuit in, Tvson Foods. 897 F.2d at 1140, this
same fact pattern would yield a maximum penalty liability of $775,000 because a violation on the
monthly limit would count as 31 days of violations; an additional Fine for the daily and weekly limit
violations in that month for that pollutant would not be imposed.
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page 18
TABLE 1 PENALTIES FOR VIOLATIONS OF
MULTIPLE POLLUTANT DISCHARGE LIMITS
Violation scenario
Maximum
statutory
penalty
Authority
Violation of daily maximum limit for
pollutant A, on the 5th of January.
$25,000
Plain reading of CWA, § 309(d): "$25,000 per
day for each violation"
Violation of daily maximum limit for
pollutant A, on the 5th, 10th, and 15th
of January.
$75,000
Plain reading of CWA, S 309(d): "$25,000 per
day for each violation'
Violation of daily maximum limits for each
of pollutants A and B, on the 5th of
January.
$50,000
Tvson Foods and Powell Duffrvn. as wpII as
plain reading of CWA, 5 309(d): "$25,000 per
day for each violation"
Violation in January of monthly average
limit for pollutant A.
$25,000 per day,
multiplied by 31 days
in January =
$775,000
Tvson Foods. 897 F.2d at 1139. under
'Calculation of the penalty for violation of a
monthly average". Also see. Gwaltnev. 897 F.
2d at 314.
Violation in January of weekly average
limit for pollutant A.
$25,000 per day,
multiplied by 7 days
in a week =
$175,000
Tvson Foods. 897 F.2d at 1139: Gwaltnev.
791 F.2d at 314. Where a violation is defined
in terms of a time period, the maximum penalty
assessable is the number of days in that time
period.
Violation in January of monthly average
limits for both pollutants A and B.
$50,000 per day,
multiplied by 31 days
in January,
= $1,550,000
Tvson Foods. 897 F.2d at 1140. footnote 22
Violation in January of monthly average
limit for pollutant A, and of daily
maximum limit for pollutant B on January
5th and 15th.
$775,000 for
pollutant A, +
$50,000 ($25,000
per day x 2) for
pollutant B, =
$825,000
Tvson Foods. 897 F.2d at 1140. under "The
interaction of daily and monthly violations*
Violation in January of monthly average
limit for pollutant A, and of daily
maximum limit for pollutant A on Jan. 5th
and 15th.
25.000 per day,
multiplied by 31 days
in January, =
$775,000
OR
$75,000 ($25,000
for each violation)
Tvson Foods. 897 F.2d at 1140. under "The
interaction of daily and monthly violations"
OR
Powell Duffrvn. 913 F.2d at 78-79. Note that
plaintiff in this case waived its argument that a
violation of a monthly limit should consist of a
penalty for each day of the month. The Third
Circuit in a footnote suggests that this may
have led to undercounting of violations, but it
did not reach this issue.
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March 1992
a single operational upset which leads to simultaneous violations of more than one
pollutant parameter shall be treated as a single violation." While neither the Act
nor the legislative history provides a definition of a "singfe operational upset", the
Eleventh Circuit in Tvson Foods has concluded, consistent with EPA's guidance on
the subject, that an "upset" means some unusual or extraordinary event, such as
the non-routine malfunctioning of a facility otherwise in compliance.39 Further,
the single operational upset defense is not a defense to liability, but relates only to
the amount of penalties that may be imposed. 40 The Eleventh Circuit quoted
approvingly from EPA's guidance which defines a single operational upset as:
An exceptional incident which causes simultaneous, unintentional,
unknowing (not the result of a knowing act or omission), temporary
noncompliance with more than one Clean Water Act effluent
discharge pollutant parameter. Single operational upset does not
include ... noncompliance to the extent caused by improperly designed
or inadequate treatment facilities.41
Thus, not surprisingly, a defendant's argument that it was entitled to the single
operational defense for almost six years of continuous operations in violation was
strongly rejected by the court.42
With respect to unlawful discharges of dredged or fill material, the Supreme
Court has let stand a ruling that a day of violation occurs on each day in which the
39	Tvson Foods. 913 F.2d at 77.
40	Tvson Foods, at 76.
41	Tvson Foods, at 77.
42	Tvson Foods, at 77 and 78-79.
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page 20
material is actually beingi discharged and on each day that the discharger allows
the illegal fill to rernarn im place.43
H. Statutorily Mandated Factors
Section 309(d) of the Act (as amended in 1987) requires courts to consider
specific factors in determining the appropriate civil penalty to be assessed for
violations of the Act.44 These factors are the seriousness of the violation(s), the
resulting economic benefit fiif any) to the violator, history of violations, any good-
faith efforts to comply with the law, the economic impact of the penalty on the
violator, and "such other matters as justice may require."45 Each of these
factors is discussed below.
43 U.S. v. Tull. 615 F. Supp. 610. 626 (1983), aff'd. 769 F.2d 182 (4th Cir. 1985), rev'd on
other grounds, 481 U.S. 412 (1986).
** The court in Tvson Foods. 897 F.2d 1128, held:
In the case of civil penalties, a district court's discretion is constrained by Congress'
enumeration of factors to be considered when assessing such a penalty. [Court
cites Clean Water Act $ 309(d)] Congress' use of the words "shall consider"
suggests that in arriving at a dollar figure for penalties, the court is to take each
listed factor into account as well as any additional factors the court feels have
bearing on the question of penalties. The legislative history also notes that
Congress intended to "expressly require the courts to consider [these factors)."
[Citation omitted.]
at 1140-41.
See also PIRG v. Powell Duffrvn Terminals. Inc.. 720 F. Supp. at 1160.
46 Clean Water Act § 309(d). 33 U.S.C. § 1319(d).
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1. Seriousness of the Violations
No actual environmental damage need be shown in order to find a defendant
liable under the Act, but consideration of environmental harm is relevant to penalty
assessment. The presence of substances in the effluent which are toxic to aquatic
life, either because the substances are themselves toxic pollutants or because of
their potential for harm to the organisms' environment, may contribute to
seriousness of violations.46 A large number of violations is also significant in
determining "seriousness" under the Act, as are violations which exceed the
corresponding permit limitations by large amounts.47
46	Justifying the imposition of penalties on a pesticide chemical manufacturer for violation of
its NPDES permit, the court in United States v. Velsicol Chemical Corporation. 12 Env*t. Rep. Cas.
(BNA) 1417 (W.D. Tenn. 1978) stated:
The toxic nature of the effluent is ... relevant in determining the appropriate civil
penalty to be assessed. Pesticide manufacturers such as [the defendant! must be
held to the highest degree of care due to the well-known hazardous nature of their
products. This has been the rule in civil tort liability cases involving injuries from
pesticides, and some jurisdictions have even developed a standard of strict dvfl
liability for such cases. . . . The indifferent corporate attitude demonstrated' by [the
defendant] is more serious in light of the toxic nature of the pesticide pollutants
being discharged.
I£. at 1422. Also see. PIRG v. Powell Duffrvn Terminals. Inc.. 720 F. Supp. at 111163-
47	PIRG v. Powell Duffrvn. 720 F. Supp. at 1163, and 913 F.2d at 79.
But see, United States v. Roll Coater. 21 Envtl. L. Rep. (Envtl. L. Inst.) 21073, 2TQTO ((S.D. Ind.
1991), in which the court stated:
[Clonsidering harm at the damage stage of litigation places the issue of
environmental harm on the defense. ... The change of the standard in detemriming
liability does not foreclose considering lack of harm as a mitigating factor:. As. used
in the Act, 'serious' means more than the amount of pollutant over that:authorised
by the regulations.
Also see, U.S. v. Reserve Mining Co.. 412 F. Supp. 705, 709-10 (D. Minn. 1976);,$43 F.2d
1210 (8th Cir. 1976), where the district court required the discharger to pay the;Statff off
(bzratinued...)
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While lack of actual harm may mitigate the penalty amount,48 courts do
not, and must not. refrain from imposing penalties where the plaintiff is unable to
prove environmental damages.49 The risk or potential for environmental harm is
*7(.. .continued)
Minnesota a penalty of $837,500 ($2,500 for each of 335 days of violation). The court concluded
that the discharger's violations of state law justified the penalty assessment, notwithstanding the
fact that "it has not been shown, and in the view of the court of appeals it is not likely it can be
shown, that the past violations have caused actual harm to the public health." ]£. at 709. Note
this case was interpreting State law, not the Federal Clean Water Act.
48 Since the court must first calculate the maximum penalty, it can only reduce the penalty if it
finds no evidence of environmental harm.
In United States v. Roll Coater. 21 Envtl. L. Rep. (Envtl. L. Inst.) 21073, 210777 (S.D. Ind.
1991), the court ultimately reduced the amount of the penalty by half because of the lack of
damages shown, stating:
[W]hile [defendant's] violations were numerous, there was no proven damage to the
environment, and hence, the violations were not serious within the meaning of the
Act. The purpose of the Act is to prevent pollution of the nation's waterways.
[Defendant] did not pollute a waterway, and the Act's purpose has not been
defeated. However, [defendant] did violate the Act and some penalty is required.
A reduction in the penalty of less than 50 percent due to the lack of damage would
not adequately represent that preventing harm to the environment is the purpose of
the Act. A reduction of more than 50 percent would not preserve the deterrent
effect upon others desired by Congress, and would not recognize the seriousness of
any violation of the Act indicated by the strict liability structure of the Act. Thus,
the lack of damage reduces the penalty by 50 percent.
However, support for the general proposition that a civil penalty may recover more than the
damages suffered by the public is found in U.S. ex rel. Marcus v. Hess. 317 U.S 537 (1943):
"This remedy does not lose the quality of a civil action because more than the precise amount of
so-called actual damage is recovered . . . Congress could remain fully in the common law tradition
and still provide punitive damages." J& at 550.
** In Gwaltnev. 611 F. Supp. at 1564, the court held that the defendant's penafty should not
be mitigated because the condition of the receiving water was generally improving. The court
reasoned that "Gwaltney's violations may have contributed to delaying that improvement.
Compliance incentives would be undermined if polluters believed that their violations would not be
treated seriously where environmental regulations have generated some improvement in the
environment."
In response to defendant's contention that no penalty should be assessed against it because there
had been no adverse impact on the receiving waters as a result of permit violations* the court in
PIRG v. Powell Duffrvn. 720 F. Supp. at 1167, stated:
(continued...)
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appropriate justification for imposing a significant penalty-50 Furthermore,
Congress knew, and courts recognize, that proving that a particular discharger has
caused some identifiable environmental harm is an inherently difficult, if not often
impossible task. If significant penalties could not be imposed without proof of
environmental harm, such as dead fish or closed beaches, the objective of the Act
to restore and maintain the quality of the nation's waters would be frustrated.
Even if one discharger's violation did not produce a measurable harm to the
receiving waters, if that discharger is not severely punished for its violations, other
potential polluters might be encouraged to similarly discharge in excess of their
limits; the sum of these dischargers could cause significant harm to the
environment and public health.61
*9(...continued)
tlln PIRG V. C.P. Chemicals. 26 E.R.C. 2017, 2021 (D.N.J. 1987), the Court
concluded "if the Court were to adopt defendant's view, ... any permittee could
ignore the requirements of its permit with impunity so long as it discharged into
already heavily polluted waters. Clearly any argument that toxic discharges fail to
make the receiving waters measurably worse frustrates the Act's intent to improve
the quality of our nation's waters." . . . even if defendant's discharge did not
measurably damage the (receiving water], the fact that defendant violated' its permit
by discharging more pollutants than authorized means that the restoration and
enhancement of the river's water quality was inhibited and therefore, the objective
of the Act was frustrated.
60	"The gravity (seriousness] component should account for risk of environmentaf harm as well
as for any actual environmental harm." Gwaltnev. 611 F. Supp. at 1560 (emphasis, added).
61	In Ohio ex rel. Brown v. Davton Malleable. Inc.. 13 Env't. Rep. Cas. (BNAI at. 2189, 2193
{C.P. Montgomery Co., Ohio 1979), the trial court assessed a penalty of $50 for each of 683 days
for violation of an NPDES permit limit, "to redress the harm or risk of harm to public health or the
environment." (Subsequent history of Davton Malleable is set forth at note (461, infra.l The Court
in Davton Malleable, at 2193, found that in view of the size of the receiving water;, the defendant's
discharge "in and of itself would have little effect on water quality." However, the court was
persuaded that if the quantity of the defendant's discharge was duplicated by other potential
polluters along the river, the sum of the discharges could cause serious harm. ]£.. Thus the court
(continued...)
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2. Economic; benefit
Courts have Identified three different types of economic berrefiit that a
violator may enp.y as a result of its noncompliance.52 First, delaying any
expenditures necessary for compliance with the Act makes funds available to the
violator for investment elsewhere. Second, the costs of operating and maintaining
61(...continued)
held, "A civil penalty tnay be imposed even if the harm to the public as to the violator is not
quantifiable. See U.S. v. J.B. Williams [498 F. 2d 414, 438 (2d Cir. 1974)1. It is not necessary to
prove actual damages." isL
In U.S. v. Velsicol Chemical. 12 Env't. Rep. Cas. at 1421, the court stated: "Neither are civil
penalties tied to damages actually suffered, [citation omitted]."
In SPIRG of N.J, v. Monsanto. 29 Env't. Rep. Cas. at 1091, the court stated:
Although there is no way to quantify any actual harm to the quality of the Delaware
River by reason of the discharges, actual harm need not be precisely proved.
Penalties may properly be imposed even absent any proof of deleterious effect. If
penalties could otherwise be avoided, there would be little, if any, penalty left in the
civil penalty provisions of the Act.
In SPIRG of N.J, v. Hercules 29 Env't. Rep. Cas. at 1421, the court stated:
Further, the congressional declaration of goals and policy set forth in 33 U.S.C.
§1251 seeks the restoration and maintenance of the chemical, physical and
biological integrity of the nation's water. Hercules' violation have produced at least
a potentially destructive impact on the waterways in its area. Therefore, the Court
does not agree with Hercules that a relatively low penalty factor should be assigned
to this aspect of its violations.
"Gwaltnev identifies the types of economic benefit that a violator may wrongfully obtain:
[Tlhere are at least three distinct types of economic benefits that a violator may
enjoy as a result of its violation. [Citation omitted.] First, by delaying the
expenditure of funds on compliance, a violator obtains the use of the money for
other purposes in the meantime. Second, a violator may also avoid some costs
altogether - for example, the costs of maintaining and operating the pollution control
system until it is implemented. Third, a violator may, in addition, obtain a
competitive advantage as a result of its violation. For example, it may be able to
offer goods at a lower price, thereby possibly increasing its sales and profits.
Gwaltnev. 611 F. Supp. at 1558.
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pollution control equipment which would otherwise; fiiave been incurred during the
period of noncompliance are permanently avoided! by the violator.53 Third, by
delaying compliance and the expenses associated) with it, the violator may secure a
competitive advantage within its industry, and increase its sales and profits.54
The first two types of economic benefit - the avoided and delayed costs from
failure to timely install and operate pollution control equipment - are generally
referred to as economic benefit when the U.S. EPA discusses economic benefit.55
Since a precise determination of the amount of economic benefit which has
accrued to a violator is inherently difficult, if not impossible, Congress and the
courts have stated that a reasonable approximation of economic benefit is
63	Nor should violators be allowed to apply expenditures they have made on temporary,
inadequate pollution control systems to reduce penalties assessed against them for noncompliance.
In Davton Malleable. 13 Env't. Rep. Cas. (BNA) at 2194, the defendant argued that the measure of
its economic benefit should be reduced by the amount which it spent to rebuild some treatment
related equipment for temporary use. Rejecting the argument, the trial court reasoned that if the
violator had complied with its original compliance schedule the expense for the "stop-gap measure"
would not have been incurred. Accordingly, the court held that the expense for rebuilding the
equipment should not reduce the total penalty, id- Although the trial court judgment was reversed
by the Court of Appeals (No. 6722, Ct. Ap., Montgomery County, 1979), the Ohio Supreme Court
reversed the holding of the Court of Appeals. The Supreme Court remanded for further
proceedings in accordance with its opinion, which included the statement that the trial court did
not abuse its discretion in its assessment of the penalty. Ohio ex re I. Brown v. Davton Malleable.
Inc.. 1 Ohio St. 3d 151, 438 N.E. 2d 120 (Sup. Ct. 1982). The suit is discussed at Note,
Environmental Law - Assessment of Penalties for Violations of Compliance Prescribed bv a National
Pollutant Discharge Elimination System Permit. 12 Cap. Univ. L. Rev. 335 (1982).
64	For example, in U.S. v. Reserve Mining Co.. 412 F. Supp. 705, 709, aff'd. 543 F.2d 1210
(8th Cir. 1976), the district court noted that the defendant "returned very substantial profits to its
corporate owner-parents," and that, "It is reasonable to conclude that some of those profits are
attributable to operations made less costly by discharging tailings in Lake Superior rather than on
land, as is done by its competitors." id.
66 For purposes of calculating settlement penalties, U.S. EPA uses a computer model, the BEN
program, to estimate the economic benefit a violator obtained as a result of its failure to timely
install and operate the necessary pollution control equipment.
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sufficient for purposes of penalty assessment,56 and that uncertainties should be
resolved in favor of a higher estimate.57 While some financial consultants have
68 Economic benefit need not be demonstrated with scientific accuracy. In PIRG of New
Jersey v. Powell Duffrvn. 913 F.2d at 80, the court said.
Precise economic benefit to a polluter may be difficult to prove. The Senate Report
accompanying the 1987 amendment that added the economic benefit factor to
section 309(d) recognized that a reasonable approximation of economic benefit is
sufficient to meet plaintiff's burden for this factor.
Violators should not be able to obtain an economic benefit vis-a-vis
their competitors due to their noncompliance with environmental
laws. The determination of economic benefit or other factors will
not require an elaborate or burdensome evidentiary showing.
Reasonable approximations of economic benefit will suffice.
S. Rep. No. 50, 99th Cong., 1st Sess. 25 (1985) (emphasis supplied).
67 Gwaltnev. 611 F. Supp. 1542, supports the view that difficulties in quantifying the benefit
should be resolved to the violator's disfavor: "The Court. . . believes that the period of benefit for
computing the economic benefit of delayed compliance should run for the entire time during which
the violator is out of compliance ..." Id- at 1558. See also jsJ. at 1563, "The court feels
compelled to ensure that Gwaltney receives no economic benefit whatever from its delay in having
a properly operating chlorination system." jg. at 1558. The court continued.
While these different types of benefit are not difficult to understand in the abstract,
determining their amounts is more complicated. Indeed, proving the extent of some
of these types of economic benefits will often be impossible; thus, any objective
formulation of economic benefit is likely to underestimate that benefit. The Court
need not painstakingly determine such an amount, however. The purposes behind
including an economic benefit component in a penalty assessment are to ensure
that the violator disgorges at least its economic benefit while also providing some
objective basis for at least part of the penalty assessment. In light of these
purposes and the difficulty of demonstrating all elements of economic benefit, the
Court shall incorporate any objective evidence to arrive at what it hopes is a rational
estimate of Gwaltnev's economic benefit, resolving uncertainties in favor of a higher
estimate.
id. (Emphasis added.)
In PIRG v. Powell Duffrvn. 720 F. Supp. 1158, economic benefit as calculated under any of several
methods far exceeded the statutory maximum. The court noted, "Needless to say, those numbers
compel this Court to gravitate towards the higher end of the penalty range, if not the maximum."
Id. at 1163.
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criticized EPA's ecOTomic benefit methodology, these critics; often appear
motivated by their ©wrr business interests in selling the defense: b®- and the
regulated commimiity their services.58 Further, these critics ofteni ftail to recognize
that EPA need only provide a reasonable estimate of benefit; aim elaborate and
burdensome evaluation of a violator's finances in order to precisely calculate
benefit is neither required nor practical.
One aspect of economic benefit calculation which ofteim has been debated is
the discount rate which should be used to estimate the value tG» the violator of
delaying and avoiding pollution control expenditures during the period of
noncompliance. Since using a higher discount rate results in ai l&rger economic
benefit estimate, defendants, predictably, argue for a lower discount rate than
plaintiffs.59 Courts have extended economic benefit analysis to; mon-profit
68 See Fuhrman, Penalty Assessment at the Environmental Protection Agency: A View from
the Outside, 22 Environment Reporter 1574 (1991); Fuhrman, The Role of EPA's BEN Model in
Establishing Civil Penalties, 21 Envtl. L. Rep. 10246, (May 1991); Fuhrmamv, Comments on
Jonathan Libber's Article on the EPA Civil Penalty Assessment Model, National! Environmental
Enforcement Journal 20, (Dec. 1991/Jan. 1992); and Saunders, Civil Penalties and the Economic
Benefits of Noncompliance: A Better Alternative for Attorneys Than EPA's BEN Model, 22 Envtl L.
Rep. 10003 (January 1992).
Also see, Libber, Penalty Assessment at the Environmental Protection Agency: A View from the
Inside, 35 South Dakota Law Review 189 (1990) and Libber, Penalty Assessment at the
Environmental Protection Agency: A View from the Inside, National Environmental Enforcement
Journal 3, (April 1991).
69 In general, a discount rate (somewhat similar to an interest rate) quantifies the time value of
expected cash flows. The discount rate quantifies the basic economic principle that a dollar today
is worth more than a dollar tomorrow. The time value of future cash flows is quantified by
"discounting" future expected cash flows to determine their "net present value". A cash-flow
today is worth more than a cash-flow one year later because today's flow can be invested and earn
additional revenue. There are different methods for calculating discount rates depending on the
intended use of the rate and the theoretical approach held by the individual using the discount rate.
Parties have argued over whether economic benefit should be calculated using an equity (cost of
(continued...)
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entities such as municipalities,60 and to Oeara Water Act violations in wetlands as
69(...continued)
capital) discount rate or a weighted average cost of capital (WACC) discount rate. Defendant's
typically have argued for a WACC discount rate, white EPA's position has been an equity based
discount rate.
Three court decisions address the discount rate issue. There are two older decisions involving a
citizen suit and a state enforcement action. While the choice before each of those courts was not
specifically equity versus WACC, both courts adopted the defendant's lower discount rate.
Chesapeake Bav Foundation v. Gwaltnev of SmithfieM. 611 F. Supp. 1542 (E.D. Va. 1985), aff'd,
791 F.2d 304 (4th Cir. 1986), vacated and remanded on other grounds. 484 U.S. 49 (1987); Ohio
ex rel. Brown v. Davton Malleable. Inc.. 13 E.R.C. 2189. 2194 (Ohio Ct. C.P. 1979), aff'd 438
N.E. 2d 120 (Ohio 1982).
A third decision directly addressed the WACC versus equity issue in an EPA enforcement action,
but the holding of the court was unclear. United States v. Roll Coater. Inc.. 21 Envtl. L. Rep.
(Envtl. L. Inst.) 21,073 (S.D. Ind. 1991). While the judge accepted the defendant's corporation-
specific WACC discount rate over the EPA's generic equity rate, the court's rational very brief and
appears based on the fact that the defendant's rate was corporation-specific, not because it was
based on the WACC theory. ifL. at 21,075. The Roll Coater court's approach is consistent with
the Davton Malleable and Gwaltnev cases in regard to preferring corporation-specific numbers over
generic numbers.
In a recent case, Atlantic States Leoal Foundation v. Universal Tool 8t Stamping Co.. Cause No.
F 87-95 (N.D. Ind., March 13, 1992), p. 16, the court itself appears to have used an equity cost of
capital discount rate of 16.1 percent, although there is no discussion of the rationale for this
selection.
60 Economic benefit analysis also applies to municipalities. The opinion in United States v. Citv
of San Diego. 21 Envtl. L. Rep. (Envtl. L. Inst.) 21,223 (S.O. Cal., 1991), stated:
Contrary to the position advocated by the City, the court finds that plaintiffs'
analysis of economic benefit is valid as to municipalities. While it is difficult to
quantify precisely the savings realized by the City as a result of its intransigence,
plaintiffs have demonstrated by a preponderance of the evidence that the City has
saved in excess of $300 million dollars [sic] over approximately the last thirty years
by failing to invest in capital improvements. Residents living here in those years
earned "dividends" in the form of lower sewer rates. A direct parallel to corporate
operations is apparent."
Id. at 21,225. However, the court backed off from this position when it considered the "economic
impact of the penalty," as mandated under § 309(d), saying that "insofar as plaintiffs' request (for
penalties] would represent a transfer of wealth from the residents of San Diego to the federal
treasury, the court is concerned that the only victims in this case will be those residents." ]d- at
21,226.
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well as noncompliance with NPDES permits.61 See Section D, above, for a
review of why the penalty assessed against a violator must be greater than the
economic benefit it obtained from its; violations.82
3. History of Violations
Consistent with EPA's view, most courts appear to consider past
unpunished violations as a part of tfra "history of violations" factor used in penalty
assessments.83 However, one court Iftas stated that a "past violation" should be
81 After quantifying the defendant's profit from the sale of building lots which were filled in
violation of section 301 of the CWA, the trial1 court in U.S. v. TulL 615 F. Supp. at 626, concluded
that "[it] would be inequitable for this court to allow the defendant to benefit from the commission
of an unlawful act." The court ordered the defendant to pay a $35,000 "penalty or civil fine" and
restore wetlands at three properties, and to either restore a canal which had been filled or pay an
additional "fine" of $250,000. Id. at 626-27.
62	Also see. Roll Coater. 21 Envtl. L. Rep. at 21,077.
63	In Student Public Interest Research Group of New Jersey v. Hercules. Inc.. 29 Env't. Rep.
Cas. (BNA) 1417 (D.N.J., 1989), the court stated:
The fact that [the defendant] violated' its permits for at least eight years . . . before
it finally built the wastewater treatment facility required to control its effluent
pollutants, does not speak highly of its commitment to the goals of the Act.
Moreover, the duration of violations by [the defendant} is nearly staggering. The
168 violations analyzed here are predated and postdated by many other apparently
conceded but not adjudicated permit violations. . . Based on this long history of
avoidance and delay in installing appropriate anti-pollution systems, the Court will
exact a further penalty over and above confiscation of its economic benefit for
delay and the assessment for the severity of its violations.
Id. at 1423. See also PIRG v. Powell Duffrvn. 720 F. Supp. at 1163.
In Atlantic States Legal Foundation v. Universal Tool & Stamping Co.. Cause No. F87-95 (N.D,
Ind.. March 13. 1992). the court stated it would not mitigate the maximum penalty based on the
history of violation factor since the defendant had been in violation of its permit limits for many
years prior to the violations in the instant case.
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unrelated to the subject of the current litigation, believing that calculation of the
maximum penalty already takes into account violations which are ongoing.64
4. Good Faith Efforts to Comply
Although the courts have not specifically described what constitutes good-
faith efforts at compliance, several opinions describe what actions do not. For
example, defendants' arguments that they did not have adequate engineering
staffs to ensure compliance, that self-reporting of violations should mitigate
penalty amounts, and that correction of noncompliance prior to instigation of a
lawsuit constituted "cooperation" have each been rejected by courts determining
penalties.65 Further, good faith is not present even when a defendant is building
64 The court in Roll Coater. 21 Envtl. L. Rep. 21073, interpreted
'any history of such violations' in 5 309(d) of the Act to refer to previous violations
not related to the instant litigation, and not a continuing violation. Continuing
violations are adequately considered in the calculation of the maximum penalty, and
in assessing the seriousness of the violation and good faith efforts to comply. A
'recidivist' offender is one who has been caught and punished. [The defendant]
does not have a history of violations because it has not been found guilty of a
violation previous to the one at bar.
[d. at 21,076. However, the court went on to say:
Even though [the defendant] is not a recidivist, the Court will not mitigate the
penalty due to this factor. [The defendant] is not a first time offender who was
surprised by the violation. . . . The 'history of such violations' factor considers the
time frame before a violation. Even though [the defendant] had not been found
guilty of a previous violation, it was aware that it would probably be in violation.
Therefore, the Court will not mitigate the maximum penalty due to this factor.
Id-
66 in Davton Malleable. 13 Env't. Rep. Cas. (BNA) at 2194, the defendant sought to lessen its
penalty liability by arguing that it did not have a sufficiently large engineering staff to remedy its
wastewater problems. The trial court characterized the argument as "lame," and assessed a
penalty of $750 per day for each of 714 days of violation against the corporation "for its
recalcitrance and indifference." i£i. at 2194.
(continued...)
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a new wastewater treatment system, if the defendant continues to discharge in
violation of its limits during the construction period.68 In addition, good faith
efforts certainly are not present if a discharger fails to repair its pollution control
equipment with the same level of diligence it would exercise if its production
equipment was broken.67 Rather, a strong argument can be made that "good
faith" requires a company to exercise a higher level of care in properly operating
and maintaining its wastewater treatment equipment (compared to the operation of
its production equipment) since the treatment system is necessary to protect the
66(...continued)
The defendant in Gwaltnev argued that its penalty should be reduced because of its "cooperation"
in controlling its chlorination problem and because it "corrected the problem without the threat of a
lawsuit to prod it along." The court rejected the argument, finding it "inappropriate to give
Gwaltney credit for correcting violations for which Gwaltney plainly knew it was responsible." 611
F. Supp. at 1562, 1565. Although the defendant suggested that its cooperation in self-reporting
the violations should mitigate the penalty amount, the court specifically declined to decrease the
penalty on that ground. Id. at 1562 n. 22.
66 Tvson Foods, at 1141.
87 In the past (before the 1987 Amendments), some courts applied a kind of negative good
faith analysis, increasing penalties commensurate with the "willfulness'' of a violator's
noncompliance. The Gwaltnev opinion suggests a penalty should be increased if a violator failed to
repair pollution control equipment with the same speed that he would repair equipment that has
halted production, the penalty should be increased for each day of unnecessary delay. See
Gwaltnev. 611 F. Supp. at 1561-62:
One may speculate how long Gwaltney would have taken to repair a machine the
faulty operation of which would have halted production. It is reasonable, in the
Court's view, in [sic] conclude that at the very least Gwaltney would have exerted
more effort to repair such a machine than it did to bring its discharges into
compliance with pollution standards. Gwaltney acknowledges that the evidence
supports the conclusion that it could have reduced the compliance time by 125
days. The Court agrees, and shall increase the penalty by $1,000 per day that
Gwaltney could have eliminated in correcting the problem.
Of course, if the court starts the penalty analysis at the statutory maximum, per the 1987
Amendments, a positive finding of good faith efforts (such as truly extraordinary efforts to repair
broken wastewater treatment equipment) could only serve to lower the penalty.
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public health and environment.68 Occasionally, courts may view a violator's delay
in achieving compliance as nevertheless a "good-faith effort" if the violator
received confusing signals from EPA and the State regulatory agency.69
5. Economic Impact of Penalty on Violator
The size of the corporate defendant has long been an appropriate factor in
determining the size of the penalty. Much case authority exists to support the
general principle that civil penalties should be tailored to the ability of the
defendant to pay.70 However, some courts have said that penalties should only
be reduced based on a defendant's inability to pay if payment would jeopardize the
68	In Velsicol Chemical Corporation. 12 Env't. Rep. Cas. at 1422. the court concluded that a
pesticide manufacturer has a duty to exercise a sense of urgency in meeting its permit limits
because of the hazardous nature of its products and its responsibility for complying with laws
protecting the public interest, such as environmental laws.
69	See, e.g.. Roll Coater, Inc.. 21 Envtl. L. Rep. 21,073, 21,076-77 (finding that mixed signals
from U.S. EPA and state agency contributed to difficulty of defendant's compliance, and holding
that defendant exhibited good faith despite its delay of treatment facility construction even after its
awareness of U.S. EPA involvement in the matter, and ultimately reducing the penalty imposed by
75 percent for the defendant's "good faith in working with the State of Indiana").
Also see United States v. Crtv of San Diego. 21 Envtl. L. Rep. 21225, 21226. In the San Diego
case the court used the conflicting messages sent by EPA and the State to mitigate the penalty
under the factor of "Other Matters as Justice May Require."
But see PIRG v. Powell Duffrvn. 913 F.2d 64, 80-81.
70	See, e.g.. U.S. v. Eureka Pipeline Co.. 401 F. Supp. 934 (N.D.W.V. 19751 fCWA, 5 311);
Ohio ex rel. Brown v. Davton Malleable. Inc.. 1 Ohio St. 3d 151, 438 N.E.2d 120(1982); Ford
Motor Co. v. Coleman. 402 F. Supp. 475 (D.D.C. 1975); U.S. v. ITT Continental Baking Co.. 420
U.S. 223 (1975); F.T.C. v. Consolidated Foods Corp.. 396 F. Supp. 1353 (S.D.N.Y. 1975); U.S. v.
Swinaline. Inc.. 371 F. Supp. 27 (E.D.N.Y. 1974); Diver. The Use of Civil Penalties in Enforcing the
Clean Water Act Amendments of 1977. 12 Univ. San. Fran. L. Rev. 437, 460-62 0 978) and Note,
Environmental Law - Assessment of Penalties for Violations of Compliance Prescribed bv a National
Pollutant Discharge Elimination System Permit. 12 Cap. Univ. L. Rev. 335 (1982K.
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CWA Penalty Assessment	page 33
March 1992
defendant's continued operation.71 In determining a defendant's capacity to
withstand payment of a substantial penalty, the financial health of the entire
company will be considered, not just the penalty's impact on a particular
subdivision.72
6. Such Other Matters as Justice May Require
The statutory catch-all category invites the courts to exercise their equitable
authority in adjusting penalty amounts.73 However, the penalty after mitigation
71	The court in Gwaltnev rejected the defendant's request to reduce its penalty, despite
defendant's claims that its "profit margin" was "extremely thin" and that it would be unable to pay
a substantial penalty. Gwaltnev. 611 F. Supp. at 1562.
In Roll Coater. 21 Envtl. L. Rep. 21,073, the court declined to reduce the civil penalty imposed on
the defendant due to its economic impact because "[n]o evidence was admitted at trial that
indicated a large civil fine would have a material adverse effect on the [defendant's! operation." Id.
at 21,077 (emphasis added).
72	Although the corporate defendant in Davton Malleable. 13 Env't. Rep. Cas.. fBNA) 2189,
was profitable, the specific facility that was the source of the discharges had shown a pre-tax loss
of four million dollars for four years. ]£., at 2190, 2195. In calculating the amount of penalty the
trial court held that, "The financial wellbeing of the Ironton Division, standing alome„ however, is
irrelevant, since it is appropriate to assess the civil penalty against the company as a whole,
[citation omitted]" id;, at 2195. See also U.S. v. Reserve Mining Co.. 412 F. Supp1. at 709.
The court in PIRG v. Powell Duffrvn. 720 F. Supp. at 1166, was "not persuaded"* that the
defendant was in a poor economic position to bear the effect of a substantial penalty. It noted that
during the preceding eleven years, the defendant had more than doubled the size of its
manufacturing facility, and had added a new division four years earlier, in addition; to its two
wholly-owned subsidiaries.
73	In a recent lawsuit brought by EPA against a POTW, the district court in United States v.
Citv of San Diego. 21 Envtl. L. Rep. (Envtl. L. Inst.) 21,223 (S.D. Cal., 1991), provfdied an
interpretation of this statutory factor in penalty calculation. It said.
By including this factor in the statutory mix. Congress clearly intended thattffedenrf
courts exercise their full equitable authority. In utilizing its equitable discretion tins
court is attempting to strike a balance between the related policy goals of
retribution and deterrence, white at the same time providing incentives tO)theGfey
to engage in prudent planning for the future.
Gssminued...)
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CWA Penalty Assessment
March 1992
page 34
must still be larger than economic benefit, in order to constitute an adequate
deterrent.74
I. Payment of Penalties
Most cases which have addressed the issue of where to direct civil penalties
awarded by a court have been initiated not by the U.S. government, but by private
plaintiffs; in these citizens' suits, penalties generally are payable only to the U.S.
Treasury.75 Therefore, only limited authority exists to determine the appropriate
"(...continued)
Id. at 21,226. The court went on to say that the defendant's failure to comply with federal and
state mandates was "at least partially mitigated by the conflicting regulatory messages sent to the
City by the EPA and the State." kL This "mitigation" reasoning also appears in many cases under
the heading of "good faith," §ee PIRG v. Powell Duffrvn. 913 F.2d at 80-81, supra note 25, and
Roll Coater. 21 Envtl. L. Rep. 21,073, supra note 49.
74See Roll Coater. 21 Envtl. L. Rep. at 21,077.
75The court in PIRG of New Jersey v. Powell Duffrvn. 913 F.2d at 82, summarized:
Courts have consistently stated that penalties in citizen suits under the Act must be
paid to the Treasury. See, e.g.. Gwaltnev of Smithfield v. Chesapeake Bav Found..
484 U.S. 49 [parallel citations omitted] (1987) ("If the citizen prevails in such an
action, the court may order injunctive relief and/or impose civil penalties payable to
the United States Treasury"); Middlesex County Sewerage Auth. v. National Sea
Clammars Ass'n. 453 U.S. 1, 14 n.25 [parallel citations omitted] (1981) ("Under
the FWPCA, civil penalties, payable to the Government, also may be ordered by the
court"); Atlantic States Legal Foundation v. Tvson Foods. Inc. 897 F.2d 1128,
1131 n.5 (11th Cir. 1990) ("Penalties paid as a result of a § 1365 suit do not go to
the plaintiff who instituted the suit, but rather are paid into the United States
Treasury"); Sierra Club v. Simkins Industries. Inc.. 847 F.2d 1109, 1113 (4th Cir.
1988), [subsequent history omitted} ("the judicial relief of civil penalties, even if
payable only to the United States Department of the Treasury, is causally connected
to a citizen-plaintiff's injury"); Sierra Club v. Chevron U.S.A.. Inc.. 834 F.2d 1517,
1522 (9th Cir. 1987) ("any penalties recovered from such an action are paid into
the United States Treasury"); see also Sierra Club Inc. v. Electronic Controls Design,
Inc.. 909 F.2d 1350 (9th Cir. 1990) [allowing money paid to go elsewhere as part
of a settlement].
The court continued:
(continued...)
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CWA Penalty Assessment	page 35
March 1992
beneficiary of penalties awarded where the Lfmiited States has successfully brought
an enforcement action. Courts differ in their approaches to payment of civil
penalties. Although most contend that once jucfieiEfl relief to the plaintiff is
characterized as a "civil penalty," that amount of naoney must be paid directly to
the U.S. Treasury,76 others have allowed alternative remedies, such as a water
conservation project implemented by a municipality against whom penalties were
assessed.77
76(...continued)
Ordering that civil penalties be paid to the Treasury is entirely consistent with
Congress' intent that citizen suits supplement the enforcement authority of the
EPA. Directing that penalties be paid into the Treasury ensures that citizens bring
suits to protect the public health and welfare, and not for private gain. Middlesex
County. 453 U.S. at 18 n.27 [parallel citation omitted].
Id. The court then proceeded to reverse "that portion of the district court's order creating [a trust
fund to address environmental problems in New Jerseyl and remand with instructions that the
court order the penalties paid into the United States Treasury." ]£.
78ln Roll Coater. Inc.. 21 Envtl. L. Rep. 21,073, the defendant tried to convince the court to
award the United States some alternative remedy instead of a payment of penalty money to the
U.S. Treasury. However, the court rejected this, saying,
Under the Act, a court may fashion injunctive relief requiring a defendant to pay
monies to other entities, if there is a nexus between the harm and the remedy. But,
once labeled as a civil penalty, the money must be paid to the Treasury. Powell
Duffrvn. 913 F.2d at 82. .. . [Because the United States' claim for injunctive relief
in this case was dismissed without prejudice earlier in the lawsuit,] the Court lacks
equitable jurisdiction to grant [defendant's] request for an alternative remedy.
[Defendant] further states that this Court can order payment of money to entities
other than the Treasury as long as the payment is not characterized as a civil
penalty. The Court is at a loss for another characterization other than an injunction
or a civil penalty. Any such payment is not a voluntary contribution after judgment.
Therefore, . . . [defendant] must pay the imposed penalty to the United States
Treasury and no other relief will be granted.
id. at 21,077-78.
77 In San Diego. 21 Envtl. L. Rep. 21,223, the court established an alternative remedy subject
to the defendant's speedy election and implementation of that "optional credit project." Basing its
(continued...)
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CWA Penalty Assessment	page 36
March 1992
A further consequence of a court's characterization of a remedy as a civil
penalty is that it will not be deductible from income, for purposes of calculating
federal tax liability.70
"(...continued)
finding on the language of 5 251 regarding cooperation of federal, state, and local agencies in
water pollution control, the court found:
that § 309(d) permits the court... to consider permanent water conservation
projects as a form of penalty to be imposed upon the City. .. . The court approves
the concept of an optional project of permanent water conservation ordinances,
which if enacted in full, shall fulfill and discharge up to $2.5 million of the penalty
imposed above.
Id. at 21,226. The court then proceeded to outline the required elements of such ordinances,
including mandatory water conservation devices such as 1.6 gallon toilets, 2.5 gal./min. shower
heads, and restricted-flow bathroom and kitchen sink faucets, to be installed in all new or resold
residential or commercial buildings in San Diego, and cost rebates to owners of residences who
voluntarily refit such devices. ]jj.
Roll Coater. supra note 52, and San Dieao are readily distinguishable in that the while the former
imposed penalties on a private industrial user of a POTW, the latter was a publicly funded,
municipal entity.
78 Colt Industries. Inc. v. United States. 880 F.2d 1311 (Fed. Cir. 1989) squarely addressed
this issue in an action arising partly under Clean Water Act § 309(d), in response to violations of
defendant's NPDES permit. After reciting that Internal Revenue Code § 162(f), which provides a
deduction for ordinary and necessary expenses paid or incurred by a business during the taxable
year, precludes the deduction of "any fine or similar penalty paid to a government for the violation
of any law," i£L at 1313, the court in that opinion said,
The applicability of section 162(f) here is dictated by its plain language. If there
were any doubt about the meaning of the phrase "fine or similar penalty", it is
readily removed by reference to Treasury regulations promulgated in interpretation
of the provision. As defined in the regulations, "a fine or similar penalty includes an
amount . . . (plaid as a civil penalty imposed by Federal, State, or local law, ... [or
plaid in settlement of the taxpayer's actual or potential liability for a fine or penalty
(civil or criminal)." [Citation omitted.]
Also see, Slavitt, An Overview of the Tax Implications of Environmental liability. 20 Envtl. L. Rep.
10548 (December 1990)
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CWA Penalty Assessment	page 37
March 1992
J. EPA's Clean Water Act Penalty Policy for Civil Settlement Negotiations -
February. 1986
U.S. EPA calculates penalties to settfe Clean Water Act cases pursuant to its
February 1986 Penalty Policy for Civil Settlement Negotiations,79 Recovery of
economic benefit plus some amount reflective of the gravity of the violation is a
core principle of the Penalty Policy. The Penalty Policy is intended to be used to
calculate the minimum penalty EPA will accept in settlement of the case. At trial,
U.S. EPA will request a much higher penalty amount and will ask the Court to
assess a penalty at the statutory maximum unless a review of the evidence
pursuant to the statutory factors suggest reasons for reducing the penalty.80
EPA's Penalty Policy was never intended for use at trial (or in an
administrative hearing pursuant to §309(g) of the Act), and citations to the Policy
at trial or in an administrative penalty hearing are inappropriate and may be
misleading, especially now that explicit statutory criteria govern a court's
assessment of civil penalties.81
19 This policy implements EPA's general Policy on Civil Penalties, February, 14. 1984 (see Env't
Rep. [BNA, Federal Laws] 41:2991} for Clean Water Act cases.
80	Pursuant to the settlement Penalty Policy, U.S. EPA begins the calculation at zero and works
upwards based on the factors set forth in the Policy and the facts of the case known at the time.
In contrast, in a civil trial or at an administrative hearing, U.S. EPA will ask the court (or hearing
officer) to start the penalty calculation at the statutory maximum and then only mftigate as
appropriate pursuant to the statutory factors and evidence in the case. (See Section F, above.)
81	While some courts have found EPA's Penalty Policy to be helpful in determining an
appropriate penalty (especially before the 1987 Amendments), a "district courts primary focus
should be on the statutory language of section 1319(d) [footnotel" Tvson Foods.. 897 F.2d at
1142.
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CWA Penalty Assessment
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K. Penalty Records
Table 2 provides a summary of all cases in which federal courts have
assessed civil penalties for wastewater discharge violations of the Clean Water
Act. The Table does not include penalties negotiated as part of settlements (i.e.,
consent decrees) nor penalties derived from violations of settlement agreements
(i.e., stipulated penalties and contempt) because such penalties are not based on a
court's assessment of penalties through application of 5309(d) of the Act.82 For
purposes of comparisons. Table 3 contains a list of the top ten Clean Water Act
penalties obtained by EPA, all of which are settlements, except for the Roll Coater
case. While these lists usually generate much interest, caution must be exercised
in using these figures as the appropriate penalty in a particular case will be
governed by the facts of that case, which may be completely different than the
cases listed in Tables 2 and 3.83
82	Penalties in settlements, although entered by courts as consent decrees, cannot be readily
compared with penalties imposed by a court (after an evidentiary hearing or trial) since settlement
penalties are agreements between the parties, often made without any findings of violation.
Further, and more important, settlement penalties are not subject to the standards set forth in
§309(d) of the Act. For example, in U.S. v. Metropolitan St. Louis Sewer District. , the Court of
Appeals held:
When reviewing a proposed consent decree, the trial court is to review the
settlement for fairness, reasonableness, and adequacy, [citations omitted] A
consent decree is not reviewed as a judgment on the merits. Accordingly, the
District Court was not required to apply the standards of section 1319(d), which
spells out the factors to be used in determining an appropriate civil penalty to be
levied against a party found to be in violation of the Clean Water Act.
952 F.2d 1040, 1044 (8th Cir. 1992)
83	Additions and corrections to Tables 2 and 3 should be submitted to the Office of
Enforcement, Water Division (LE-134W), U.S. EPA, 401 M St., S.W., Washington, D.C. 20460,
Attention: David Hindin.
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CWA Penalty Assessment
March 1992
page 39
TABLE 2 COURT-ASSESSED CIVIL PENALTIES
IN CLEAN WATER ACT WASTEWATER DISCHARGE CASES*
Case Name & Citation
Amount of
Penalty
Description
Atlantic States Leoal Foundation v Universal
$450,000
Penalty assessed for 1,977 permit violations,
with statutory maximum at $25,830,000 and
economic benefit estimated at $85,000.
Tool & StamDina Co.. Cause No. F 87-95
(N.D. Ind., March 13, 1992).
U.S. v. Citv of Beaumont and State of Texas.
$400,000
City fafletf to implement its approved
pretreatment program. No effluent violations
and City was m compliance at time of trial.
Statutory maximum penalty amount was $8
million.
Action No. B-89-0837-CA (E.D. Texas, Feb.
20, 1992).
U.S. v. Citv of San Dieao. 21 Envtl. L. Reo.
21223 (S.D. Cat., March 28. 1991).
$3,000,000
For POTW's. chronic violations of effluent
limitations, where some environmental damage
had been proven; court required immediate
payment of $500,000 to U.S. Treasury, but
provided "optional credit project" for which the
city could elect to implement permanent water
conservation measures in lieu of paying the
remaining $2.5 million to the Treasury; City
elected to implement such measures.
U.S. v. Roll Coater. 21 Envtl. L. Reo. 21073
(S.D. Ind., March 22, 1991)
$2,093,750
Numerous violations of pretreatment
regulations were cited as the basis for the
penalty; lack of demonstrated environmental
harm, and violator's "good faith" efforts to
comply, and its reliance on state direction,
mitigated the penalty amount
Sierra Club v. Simkins Industries. Inc..616 F.
$977,000
Penalty imposed for failive to file discharge
monitoring reports for 977 days. Penalty
imposed by district court, upheld by Court of
Appeals.
Supp 1120 (D. Md. 1985), 847 F.2d 1109
(4th Cir. 1988)
SPIRG v. P.D. Oil and Chemical. 913 F.2d 64
(3rd. Cir 19891. ISPIRG v. Powell Duffrvn
Terminals. Inc.. 720 F. Suoo 1158 (D.N.J.
1989)1.
$4,085,000
Court of Appeals reversed $ t million penalty
reduction made by district court for inaction by
EPA and State. Penalty assessed (after
reversal by Court of Appeals! was statutory
maximum for 386 effluent violations of NPDES
permit. Sept 1977 through Nov 1988.
SPIRG v. Hercules. Inc.. 29 Env't. Reo. Cas.
1417 (D.N.J. 1989)
$1,680,000
Maximum penalty assessed tor 168 violations
of NPDES permit.
This table only includes federal court assessed penalties for violations pursuant to section
309(d) of the Act. Neither settlement penalties (i.e., consent decrees) nor penalties from consent
decree violations (i.e., stipulated penalties and contempt) are included. This information is current
as of a March 5, 1992 Lexis check.
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CWA Penalty Assessment
March 1992
page 40
Case Name & Citation
Amount of
Penalty
Description
Chesaoeake Bav Foundation v. Gwaltnev of
$289,822
Against pork product processor, for violations
of its NPDES permit resulting from problems
with its biological treatment and chlorination
systems. Original penalty of $1,285,322
lowered by Court of Appeals based on finding
some violations were not continuing at time of
Citizen suit filing.
Smithfield. Ltd.. 611 F. Sudd. 1542 (E.D. Va.
1985) (... middle history omitted ...); 890 F.2d
690 (4th cir. 19891
SPlRfi v. Monsanto. 29 Env't. ReD. Cas.
1078, 29 Env't. Rep. Cas. 1092 (D.N.J. 1988)
$380,000
Maximum penalty imposed for 38 violations of
NPDES permit.
United States v. Velsicol Chemical CorD.. 12
Env't. Rep. Cas. 1417 (W.D. Tenn. 1978)
$30,000
Penalty imposed for 300 days of NPDES permit
violations.
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CWA Penalty Assessment
March 1992
page 41
TABLE 3 RECORD EPA PENALTIES
.,t0 rr4f.
|	UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. DC. 20460
OFFICE OF ENFORCEMENT
Oteubir 2«, i»»i
MEMORANDUM
SUBJECT:
FROM:
TO:
Here is an update on how to rank recent CWA penalty cases on
an all-time list. What follows is, as of December 26, 1991, the
top ten national CWA penalty results and the top three results
for each Region. These figures represent only net present value
cash payments to the U.S. Treasury in civil cases, without any
adjustment for inflation.
Record CWA Civil Penalties
David Drelich
OE-Water Attorneys
Some environmental enforcement cases have associated
criminal fines, or State penalties, or environmental credit
projects. It is quite difficult to track or quantify the
penalties in such cases. Consequently, this list represents a
conservative penalty approach.
National Top Tan
1.
$6,184,220
Region
5
FY91
Wheeling-Pitt
2 .
3,100,000
Region
3
FY91
Pfizer, Inc.
3 .
2,925,000
Region
5
FY77
U.S. Steel (Gary)
4 .
2,191,000
Region
3
FY91
BP Oil
5.
2,100,000
Region
5
FY90
Menominee Paper Co.
6.
2,093,750
Region
5
FY91
Roll Coater
7 .
2,050,000
Region
9
FY90
Shell Oil Co.
8 .
2,000,000
Region
2
FY88
PRASA
9.
1,600,000
Region
5
FY91
USX Corp.
10.
1,540,000
Region
5
FY89
Koch Refining
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CWA Penalty Assessment
March 1992
page 42
Reaion-bv-Reaion
Region
1.
2	.
3	.
$930,000
425,000
276,640
FY91 Microfab/Semicon
FY88 Boston Harbor
FY90 Manchester, Connecticut ($300K
discount by NPV)
Region 2
1.	$2,000,000	FY88
2.	550,000	FY8 6
3.	450,000	FY90
PRASA
Omar* Caribbean
Digital Equipment Corp.
Region 3
1.	$3,100,000	FY91 Pfizer, Inc.
2.	2,191,000	FY91 BP Oil
3.	1,000,000	FY90 City of Philadelphia
Region 4
1.	$762,500	FY86 Ashland Oil
2.	600,000	FY86 Key Heat, Florida
3.	487,000	FY88 General Development Utilities
Region 5
1.	$6,184,220	FY91 Wheeling-Pitt
2.	2,925,000	FY77 U.S. Steel (Gary)
3.	2,100,000	FY90 Menominee Paper Co.
Region 6
1.	$850,000	FY82 Missouri Pacific Railroad
2.	695,810	FY89 Baton Rouge ($750K discounted)
3.	600,000	FY85 Texaco, Inc.
Region 7
1.	$1,500,000	FY90 Eagle-Picher Industries
2.	789,000	FY81 NL Industries
3.	350,000	FY8S Amoco Oil
Region 8
1.	$1,043,720	FY89 Metro Denver ($1,125 mil dsct'd)
2.	434,200	FY88 Central Valley (450K discounted)
3.	200,000	FY90 CR Industries, Inc.
Region 9
1.	$2,050,000	FY90 Shell Oil Co.
2.	1,500,000	FY88 Chevron
3.	1,000,000	FY87 Phelps Oodge
Region 10
1.	$620,000	FY83 Mobil Oil
2.	400,000	FY80 Scott Paper Co.
3.	250,000	FY80 Georgia-Pacific Corp.
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Srv,
0

>~	r->

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
REGION IV
345 COURTLAND STREET. N.E.
ATLANTA. GEORGIA 30365
MEMORANDUM
DATE: January 29, 1993
SUBJECT:
FROM:
TO:
THRU:
Research Request: Legal Effect of A Federal Agency's
Failure to Comply With Its Own Regulations, Policies,
and Guidance
Stedman S. Southall JM
Assistant Regional Counsel
Rowland Heyward
Branch Chief
Simon Miller, Chief
NPDES Section
THE PURPOSE of this memorandum is to examine the legal effect of
a federal agency's failure to comply with its own regulations,
policy, and guidance.
The United States Congress makes the national laws. The national
laws are enacted as acts or statutes, such as the Clean Water Act
and Clean Air Act. The acts or statutes enacted by Congress are
found in the United States Code. The acts or statutes enacted by
Congress are the foundation for the legal superstructure of
regulations which are developed by federal agencies.
Federal agencies which are responsible for administering the
various Congressional acts and statutes may refine the basic
statutory law by developing their own rules in the form of
regulations. Federal agency regulations are reflections of the
primary Congressional acts, but are fine tuned to facilitate
agency administration of the Congressionally enacted national
laws. Federal agency regulations have the effect of law.
Violation of a federal agency regulation is a violation of the
law and is subject to enforcement.
Federal agency regulations must conform to the specific
underlying congressional act or statute. Federal agency
regulations are developed in accordance with the federal
Administrative Procedures Act (APA), 5 USCA 551 et.seq. The APA
requires proposed regulations be subjected to a period of public
notice and comment, and be compiled in a set of regulations
available to the public.
Regulatory Compliance
Courts have taken the position that the failure of an agency to
comply with its own regulations can be viewed as arbitrary and
capricious conduct, warranting overturning the contested agency
Printed on Recycled Paper
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- 2 -
actions. 1
"Policy" and "Guidance"
Once Congress has enacted an act or statute, and a particular
agency has promulgated its regulations, the agency may then
develop its own policy for how it will interpret and manage its
regulations. Policies provide the general principles by which
agencies are guided and managed. Agencies often supplement
policies by developing guidances which reflect agency opinion of
how a policy should be practically applied.
It has often been difficult to distinguish the difference between
"policy" and "guidance". Courts vary in their use of the terms
"policy" and "guidance". Language such as "policies and
guidelines," "policy guidelines," or "policies, guidelines", is
used by courts to refer to administrative agency rules. The APA
distinguishes only between substantive rules and all other agency
pronouncements, with the result that attempting to draw
distinctions between policy statements and agency guidance
pronouncements is of little benefit.2
Research indicates that the label "policy" or "guidance" is not
as important as the classification of a policy or guidance as
"substantive" or "interpretative".3
Distinction Between "Substantive" and Interpretative"
Courts have addressed the distinction between "substantive" and
"interpretative" policies. One court reasoned:
A great distinction exists between interpretative rules
and substantive regulations issued by administrative
agencies, especially in the formalities necessary for
issuance and in the legal impact accorded them. An
administrative interpretation or interpretative rule is
a clarification or explanation of existing laws or
1	In Simmons v. Block. 782 F.2d 1545 (11th Cir. 1986), the
court found that the U.S. Department of Agriculture acted
arbitrarily and capriciously in the award of a land contract. The
regulations promulgated by the Secretary provide that the property
shall be offered for sale for cash or on terms that will provide
the best net return for the government. The USDA then awarded to
a cash bidder a contract which was lower than a credit bid. The
USDA relied on an "internal policy" of preferring cash bids that
are within five percent of credit bids. This "internal policy"
appeared nowhere in the relevant regulations.
2	William F. Fox, Jr. Understanding Administrative Law 150
(1986).
3	It is interesting to note that some cases used
"interpretive" while others used "interpretative". This writer
used "interpretative" for this memorandum.
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- 3 -
regulations rather than a substantive modification in
or adoption of new regulations. Substantive
legislative rules and regulations "create law . . .
whereas interpretative rules are statements as to what
the administrative officer thinks the statute or
regulation means."4
Another court reasoned: "Administrative officials frequently
announce their views as to the meaning of statutes or
regulations. Generally speaking, it seems to be established that
xregulations', xsubstantive rules', or vlegislative rules' are
those which create law, usually implementary to an existing law;
whereas interpretative rules are statements as to what the
administrative officer thinks the statute or regulation means."5
Courts are in general agreement that "substantive" rules (also
termed legislative rules) have the force of law, impose new
duties or restrictions and bind agencies whereas interpretative
rules clarify existing law, state the agency's interpretation of
a statute or advise the public of the agency's position on an
issue.6
Applicability of "Substantive" and "Interpretative" to
"Policy/Guidance"
Substantive rules must be followed while interpretative rules may
be departed from. Courts have allowed discretion where agencies
have departed from interpretative policies.7 Legislative rules
bind the courts, but interpretative rules or policy statements do
not. Statements whose language, context, and applications
suggesting intent to bind agency discretion and private party
conduct will have that effect if they are valid but
interpretative rules or policy statements will not have that
effect.8
It is significant to determine whether a federal agency policy is
4	Continental Oil Company v. Burns, 317 F. Supp. 194, 197 (D.
Del. 1970), quoting Gibson Wine Co., Inc. v. Snyder, 194 F.2d 329,
331 (D.C. Cir. 1952) .
5	Gibson Wine Co.. Inc. v. Snyder, 194 F.2d 329, 331 (D.C.
Cir. 1952).
6	Dyer v. Sec, of Health and Human Services, 889 F.2d 682
(6th Cir. 1989), Jerri's Ceramic Arts, Inc. v. Consumer Product
Safety Commission, 874 F.2d 205 (4th Cir. 1989), U.S. v. Picciotto
875 F.2d 345 (D.C. Cir. 1989).
7	Nelson v. Andrus. 591 F.2d 1265 (9th Cir. 1978).
8	Vietnam Veterans v. Secretary of the Navy. 843 F.2d 528
(D.C. Cir. 1988).
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- 4 -
"substantive" or "interpretative". An agency policy is
considered to be substantive when it is intended to be a binding
standard of agency action. Substantive agency policy must be
promulgated under the procedures of the APA. Agency policy is
considered to be "interpretative" rather than "substantive" when
it is not promulgated pursuant to the legislative power delegated
to the agency by Congress to make rules having the force of law,
or the agency intends it to be "no more than an expression of its
construction of a statute or rule." 9
It can be important to examine a policy to see if it specifically
states that it is binding or non-binding. Some policies clearly
state that they are non-binding and may be departed from under
certain circumstances and through certain procedures. While a
policy may state that it is non-binding and may be departed from
at will by an agency, it is important to understand that if a
challenge were made to an action based on that policy, a court
may examine the basis of the policy to determine if it is truly
interpretative or really substantive.
Departures from "Policy/Guidance"
When an agency departs from it own policies, whether substantive
or interpretative, it may encounter a claim that it acted
arbitrarily and capriciously. As noted earlier, substantive
policies must be observed but interpretative policies may be
departed from. Courts have discussed this matter and stated that
agency action is arbitrary and capricious if the agency "entirely
failed to consider an important aspect of the problem, offered an
explanation which runs counter to the evidence before the agency,
or is so implausible that it could not be ascribed to a different
viewpoint or the product of agency expertise. The reviewing
court must look to see if the agency has examined relevant data
and has articulated a rational explanation for its action. The
court must engage in a searching and careful review of both the
facts and the agency's reasoning to ensure that the agency's
decision was a product of reasoned decision-making based on a
consideration of the relevant facts.10
Although courts have allowed agencies to depart from the
constraints of interpretative policy and guidance, it is probably
useful that any departures be documented and explained. A
totally unexplained and extreme departure could be refused by a
court.11
9	West Virginia Coal Ass'n v. Reilly, 728 F.Supp. 1276
(S.D.W.Va. 1989).
10	DeLoss v. Dept. of Housing & Urban Development. 714 F.
Supp. 1522 (S.D. Iowa 1988).
11	In Ohio Fast Freight. Inc. v. U.S.. 574 F.2d 316 (6th Cir.
1978), the court found that the United States acted improperly.
The court stated, it is axiomatic that an administrative agency
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- 5 -
Research revealed a case in which the EPA was sued, with one of
the claims being alleged failure to follow a policy concerning
when to bring civil or criminal prosecution. The Plaintiff filed
suit under the Federal Tort Claims Act against the United States
and others for alleged negligent acts and or omissions by the
defendants in connection with a criminal prosecution which had
been brought against the Plaintiff. The Plaintiff contended that
the United States had failed to abide by a policy which addressed
when and against whom criminal actions should be directed. The
policy stated that it was intended as guidance to EPA and other
Government employees. The policy also stated it did not
constitute rule-making by the Agency, and may not be relied on to
create a substantive or procedural right or benefit enforceable
by any other person. The policy further stated the Government
could take action that was at variance with the policies and
procedures in the memorandum. The court dismissed the claim.
The court also reaffirmed the government's discretion on when,
whether, and whom to prosecute.12
Standard of review applied deviation from interpretative policy
and guidance.
Section 7 06 of the APA sets forth the scope of review provisions
that a court may use when reviewing agency action when the
enabling statute itself does not set out the appropriate
standard.13 The standard of review most often applied is
"arbitrary and capricious", or "abuse of discretion", or
"otherwise not in accordance with law".14
either must conform with its own precedents or explain its
departure from them. The court found that the ICC departed without
explanation from its policy against fragmentation of general
commodity authorities and failed to explain its apparent
application of a more stringent standard of proof than
traditionally required in gateway elimination proceedings. An
agency changing its course must supply a reasoned analysis
indicating that prior policies and standards are being deliberately
changed, not casually ignored, and if an agency glosses over or
swerves from prior precedents without discussion it may cross the
line from the tolerably terse to the intolerably mute.
12 K.W. Thompson Tool Co.. Inc. v. U.S., 836 F.2d 721 (1st
Cir. 1988).
13Fox, Understanding Administrative Law at 252.
14 Citizens to Preserve Overton Park, Inc. v. Volpe. 401 U.S.
402 (1971); Beazer East. Inc. v. EPA. 963 F.2d 603 (3d Cir.
1992).
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- 6 -
CONCLUSIONS:
1)	A federal agency's failure to comply with its owns regulations
is a violation of federal law which could result in claims by an
aggrieved party that the agency abused its authority, or acted
arbitrarily and capriciously. If a court were to find in favor
of an aggrieved party, the questioned agency action could be
reversed.
2)	The operative term to be considered in the review of a federal
agency standard is not whether it is "policy" or "guidance", but
rather, is it "substantive" or "interpretative" in nature.
3)	A federal agency's failure to comply with its own substantive
policy and guidance may occasion a claim of relief from an
aggrieved party which will be heard under a standard of
"arbitrary and capriciousness". If a federal agency fails to
observe a "substantive" policy or guidance, then the particular
agency action may be reversed.
4)	If a federal agency fails to observe an "interpretative"
policy or guidance, the action may survive reversal as a
discretionary action left to agency wisdom.
5)	The inclusion of the disclaimer that an action is
interpretative and not substantive and thus not subject to
review, is not dispositive of the issue. A court may still
examine a disclaimed item to determine if it is truly
interpretative and not substantive in nature.
The assistance provided by Paralegal Marcia English and Legal
Intern Rose Marie Wade in the completion of this research
assignment is gratefully acknowledged.
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Notes
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Author: Cheryl McMenamin at REGI0N4
Date: 10/19/98 9:53 AM
Priority: Normal
): Patricia Strougal
iibject: Favorable overfiling decison by ALJ
fyi
	 Forward Header
Subject: Favorable overfiling decison by ALJ
Author: Bill Anderson at REGION4
Date: 10/19/98 9:29 AM
** High Priority **
On September 28, I sent the message below
regarding a Region III ALJ brief filed on
September 24. The good news is that barely two
weeks after EPA's brief was filed, ALJ McGuire
ruled in EPA's favor on October 8. Judge
McGuire's decision on this point is very brief, so I
have quoted it in its entirety here:
"The court in Harmon Industries addressed issues
pertinent to this proceeding in that it severely
narrowed and restricted EPA's authority under
RCRA to initiate an enforcement action in a State
with an authorized program. However, the Court's
decision contradicts the unambiguous language of
RCRA, the statute's legislative history, and a long
line of judicial and administrative rulings to the
contrary. Moreover, Complainant has provided
cnfficent case authority to establish that the Court's
cision is not binding on the case at bar. For
ese reasons, the undersigned declines to adopt
.e Court's rationale in Harmon Industries and
concludes that Complainant is fully authorized to
initiate the current enforcement action.
Accordingly, a discussion on the issues of liability
and penalty will follow." Initial Decision, at 13, In
the Matter of Bil-Dry Corporation, Docket No.
RCRA-III-264 (Oct. 8, 1998).
ORE'S RCRA Enforcement Division is sending to
the Regions in the next day or two a copy of the
Harmon briefs that the United States filed in the
district court litigation, with the intent that you
look in the first instance to those briefs in
responding to similar issues that may arise in
negotiations or litigation. Please continue to
contact Christine McCulloch of ORE-RED
(202-564-4008) and myself (202-564-4002) if
these issues arise in an enforcement context, so
that we can continue to coordinate a consistent
national response to these arguments. Thanks.
From: GARY JONESI
Date: 9/28/98 5:29pm
Subject: Responding to Harmon Industries adverse
overfiling decison
On September 24, 1998, Region III filed the
attached brief in a RCRA administrative
forcement matter involving the Bil-Dry
rporation. ALJ McGuire recently asked for
uj-iefs concerning the impact of the Missouri
district court's decision.in the Harmon case. This
is the first, and so far only, written response to the
Harmon decision that has been made public.
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'Region III worked closely with OECA1s RCRA
Enforcement Division on the response and, as you
can see, the brief argues that the district court's
holding in Harmon is both: (1) incorrect as a
m=itter of law; and (2) factually distinct from, and
lus inapplicable to, the Bil-Dry matter.
..j are aware of other circumstances where parties
are trying to use the decision to their advantage.
Please feel free to use the attached brief as a
useful starting point when you encounter these
issues. Your cases, however, necessarily will raise
distinct factual and strategic implications, when
these issues arise under any statute, please
continue to contact Christine McCulloch of the
RCRA Enforcement Division, at 202-564-4008,
who is the lead OECA contact for the ongoing
Harmon case, and myself (202-564-4002) so that I
can help to coordinate responses to these
arguments across all media. Thanks.
P.S. The references in the attached brief to
Chevron deference (pp. 7-8, 19) are appropriate in
judicial litigation, and supporting discussion on
that point may be useful in court pleadings. Note
however, that the EAB has stated (see footnote 55 in
the 9/30/97 Lazarus decision) that Chevron deference
arguments normally are unavailable to parties (such
as EPA's enforcement program) in administrative
cases because the EAB speaks for the Agency in
administrative matters and we do not. If you are
considering making deference arguments in
enforcement litigation, please let us know and we
will work with OGC to determine the best
course to follow. Thanks.
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BEFORE THE UNITED STATES
ENVIRONMENTAL PROTECTION AGENCY
REGION III
In the matter of:	U.S. EPA Docket No.: RCRA-lll-264
BIL-DRY CORPORATION,
Respondent.
COMPLAINANT S SUPPLEMENTAL POST-HEARING BRIEF
FILED IN ACCORDANCE WITH
PRESIDING OFFICER'S SEPTEMBER 2,1998
ORDER REQUIRING FURTHER BRIEFING
Joseph J. Lisa III
Assistant Regional Counsel
U.S. EPA - Region III
1650 Arch Street
Philadelphia, PA 19103-2029
(215) 814-2479
Counsel for Complainant
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TABLE OF CONTENTS
Page
No.
INTRODUCTION	 1
LEGAL ANALYSIS
I.	THIS PRESIDING OFFICER IS NEITHER BOUND BY NOR
REQUIRED TO GIVE DEFERENCE TO THE DISTRICT
COURTS DECISION IN HARMON	 2
II.	THE DISTRICT COURT'S HOLDING IN HARMON IS INCORRECT
AS A MATTER OF LAW AND, THEREFORE, SHOULD NOT BE
FOLLOWED BY THE PRESIDING OFFICER IN THE BIL-DRY CASE... 6
A. EPA's RCRA Enforcement Authority	 7
1.	The unambiguous language of the RCRA statute expressly provides
that EPA has the authority, subject only to the "determination of a
violation" and "prior notice" requirements, to initiate an enforcement
action in a State with an authorized program	 7
2.	RCRA's Legislative History supports the conclusion that Congress
intended to allow EPA to initiate an enforcement action in a state
with an authorized program subject only to the "determination of a
violation" and "prior notice" requirements	 16
3.	Even if the RCRA statute is deemed to be ambiguous, EPA's
longstanding interpretation of its enforcement authority under
RCRA is a reasonable interpretation of the language of the statute
and, therefore, should be upheld by this Presiding Officer	
17
4.	The District Court's ruling in Harmon did not address the
extensive line of well-reasoned judicial and administrative
decisions concerning EPA's enforcement authority	 20
5.	EPA complied with its statutory obligations under RCRA in
initiating the action at bar		23
6.
Conclusion
25
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B. "Res Judicata" Doctrine	 25
1. EPA and states with authorized hazardous waste management
programs are not pen ££ in "privity" for purposes of the "res
judicata" doctrine	 25
III. SIGNIFICANT FACTUAL DIFFERENCES BETWEEN THE
HARMON AND THE BIL-DRY CASES CLEARLY MAKE THE
DISTRICT COURT'S HOLDING IN HARMON INAPPLICABLE
TO THE CASE AT BAR	 26
A.	PADEP, to date, has neither entered into a court-approved
settlement with nor initiated its own enforcement action against
Respondent and, therefore, even under the District Court's
ruling in Harmon. EPA was permitted to have filed the action at
bar against Bil-Dry	 26
B.	There has been no prior adjudication or "final, valid judgment"
of the matters at issue in the Bil-Dry case and, therefore, the
"res judicata" doctrine is not applicable to the action at bar	
IV. DUE TO THE FACT THAT RESPONDENT HAS NEVER RAISED
THE APPLICABLE FIVE-YEAR STATUTE OF LIMITATIONS
CONTAINED IN 28 U.S.C. § 2462 AS A DEFENSE IN THE
ACTION AT BAR, THE DISTRICT COURT'S RULING IN
HARMON ON THIS MATTER IS NOT RELEVANT TO THE
BIL-DRY CASE	 30
V. THE PENALTY WHICH EPA HAS ASKED THIS COURT TO
ASSESS AGAINST RESPONDENT IS APPROPRIATE AND
SHOULD BE ASSESSED IN ITS ENTIRETY	 31
CONCLUSION
32
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INTRODUCTION
Complainant, the United States Environmental Protection Agency - Region III ("
EPA" or the "Agency") hereby submits this Supplemental Post-Hearing Brief in
accordance with Presiding Officer Stephen McGuire's ("Presiding Officer") September
2,1998 Order Requiring Further Briefing1 issued in light of the August 25,1998
decision of the U.S. District Court for the Western Division of the Western District of
Missouri in Harmon Industries. Inc. v. Browner, et al.. Docket No. 97-0832-CV-W-3
(W.D. Missouri, August 25, 1998) f'Harmon").
This Brief provides an analysis of the Harmon decision and explains why the
District Court's opinion is neither applicable to nor controlling over the case at bar.
More specifically, this Presiding Officer is not legally bound by nor required to defer to
the District Court's ruling in Harmon, but rather should adopt the reasoning of the
Environmental Appeals Board ("EAB") in In re: Harmon Electronics. Inc.. 1997 EPA
App. LEXIS 6 (March 24,1997). Futhermore, the District Court clearly erred as a
matter of law when it held that EPA does not have statutory authority under the
Resource Conservation and Recovery Act, 42 U.S.C. §§ 6901 et seq. ("RCRA"), to
impose its own separate penalties after a party negotiates a settlement with an
authorized State agency and that settlement is approved by an appropriate State court.
Harmon. Slip Op. at 15. Finally, even assuming arguendo that the District Court's
holding is legally correct, it is readily apparent based upon the significant factual
differences between the Harmon case and the action at bar that the Court's holding in
Harmon is entirely inapplicable to the Bil-Dry matter. Therefore, Complainant requests
1 Pursuant to Presiding Officer McGuire's Modified Order, issued via telephone on
September 2, 1998, Complainant and Respondent, Bil-Dry Corporation, are required to submit by
Thursday, September 24, 1998 concurrent briefs concerning the applicability of the Harmon
decision to the action at bar.
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that this Presiding Officer hold Respondent, Bil-Dry Corporation, liable under all nine
Counts of the September 30,1996 Complaint, Compliance Order and Notice of
Opportunity for Hearing ("Complaint") filed by EPA in this matter, order Respondent to
comply with the proposed Compliance Order, and assess against Respondent the
entire recommended penalty of $231,800.
LEGAL ANALYSIS
I. THIS PRESIDING OFFICER IS NEITHER BOUND BY NOR REQUIRED
TO GIVE DEFERENCE TO THE DISTRICT COURT S DECISION IN
HARMON-
This Presiding Officer is clearly bound by the rulings of the Environmental
Appeals Board ("EAB"), which, as discussed below, have upheld EPA's interpretation
of its enforcement authority under RCRA. The EAB "acts as the final Agency decisionmaker
on an array of appeals from permit decisions and administrative enforcement action" and its
decisions are "final and cannot be further appealed to the Administrator".2 Furthermore, it is
clear that this Presiding Officer should defer to the reasoning and ruling of the
Environmental Appeals Board in In re: Harmon Electronics. Inc.. 1997 EPA App. LEXIS
6 (March 24,1997), which held that EPA's enforcement'authority is limited only by the
requirements that the Agency make a determination of the occurrence of a violation
and provide "prior notice" to a state with an authorized program of the Agency's intent
to initiate an enforcement proceeding concerning such violation.
This Presiding Officer is neither legally bound by nor required to defer to the
statutory interpretation and ruling rendered by the District Court in Harmon.
Clearly, the holding of the U.S. District Court for the Western Division of the
2 The ENVIRONMENTAL APPEALS BOARD, PRACTICE MANUAL at 1 -2
(November, 1994).
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Western District of Missouri in Harmon cannot reasonably be considered a nationally binding
resolution of EPA's enforcement authority under RCRA, thereby, barring relitigation by the
Agency. The District Court is a court of limited and not national jurisdiction. It has never been
invested by Congress with exclusive authority with regard to interpreting any statute, let alone
RCRA. Indeed, under the doctrine of "stare decisis"3, other district courts throughout the United
States are not required TO adopt or defer to the ruling of the District Court in Harmon.4
Furthermore, even if the U.S. Court of Appeals for the Eighth Circuit, in considering an appeal of
Harmon, issues an opinion, its ruling is not binding on other U.S. Courts of Appeal, including, but
not limited to the Third Circuit.5 Rather, the United States Supreme Court is the only court
invested by the Constitution with national jurisdiction and authority to define what a law "says and
means", and the Supreme Court, to date, has not spoken concerning its interpretation of EPA's
3	"Stare decisis, briefly stated, makes each judgment a statement of the law, or
precedent, binding in future cases before the same court or another court owing obedience to its
decision." Northwest Forest Resource Council v. Dombeck. 107 F.3d 897, 900 (D.C. Cir. 1997)
(quoting. IB JAMES WM. MOORE ET AL„ MOORE'S FEDERAL PRACTICE P 0.401 (2d
ed. 1996).
4	"Stare decisis does not mandate that a district court in this circuit follow the
decision of a district court in another circuit." 107 F.3d at 900. Indeed, as noted in MOORE'
FEDERAL PRACTICE 3D, "[t]he decision of a single federal district judge is not binding on
the same judge in a subsequent action." I*L at § 134.02[l][d] (emphasis added¥citing. e.g..
TMF Tool Co v Muller 913 F.2d 1185, 1191 (7th Cir. 1990).
5	"The court of appeals in one circuit owes no obedience to decisions of a court of
appeals in another circuit, though of course it may find the reasons given for such a decision
persuasive, or may be influenced by the accumulation of authority. This freedom of the circuits
to come each to its own conclusion is not only tolerated, but is an important feature in the
operation of the Supreme Court's certiorari practice. The district courts, like the court of
appeals, owe no obedience to the decisions of their counterparts in other districts, nor to the
decisions of the courts of appeals in other circuits." 107 F.3d at 900 (emphasis added). See also
MOORE'S, FEDERAL PRACTICE 3D at § 134.02[l][c] ("The decisions of the court of appeals
for one circuit are not binding upon the courts of appeal for other circuits. The courts should
consider the decisions of another circuit, if persuasive, in the interest of maintaining a reasonable
uniformity of federal law.")
6	MOORE'S, FEDERAL PRACTICE 3D at § 134.02[2] ("State and federal
courts owe obedience to the decisions of the Supreme Court of the United States."); and
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enforcement authority under RCRA.6 As a result, this Presiding Officer, like the aforementioned
courts, is not required to defer to the District Court's decision in Harmon.7
The United States Supreme Court in United States v. Mendoza. 464 U.S. 154, 162, 104
S.Ct. 568, 78 L.Ed.2d 379 (1984) held that the United States may not be collaterally estopped
concerning an issue adjudicated against the government in an earlier lawsuit brought by a different
party. In Mendoza. a U.S. naturalization examiner recommended against accepting a petition for
citizenship, rejecting the claim that the petitioner was denied due process of law by the
government's administration of the Nationality Act of 1940. A Federal district court reversed the
examiner's decision holding that the government was collaterally estopped from litigating the
constitutional issue because of an earlier, unappealed decision against the government in Federal
district court on the same due process question. In reversing this holding, the Supreme Court
stated that collateral estoppel under such circumstances would substantially thwart the
development of important questions of law by effectively freezing in place the first final court
decision rendered on a legal issue. Mendoza. 464 U.S. at 160. It also would require substantial
revision of the Solicitor General's policy for determining when to appeal, forcing an appeal of
every adverse decision to avoid foreclosing further review. Mendoza. 464 U.S. at 160-161.
Finally the Court noted that allowing collateral estoppel would preclude subsequent
DeOuijas v. Shearson/Am. Express. Inc.. 490 U.S. 477, 484, 109 S.Ct. 1917, 104 L.Ed.2d 526
(1989)(courts of appeals should follow case that directly controls, leaving Supreme Court to
overrule its own decision).
7 It is important to note that, in addition to binding effect of a decision issued by the
United States Supreme Court, "[w]hen an agency is subject to review by only one court of
appeals (e.g., decisions of the FCC are reviewable only by the Court of Appeals for the District of
Columbia), the position of the agency is analogous to that of a lower court, and it would seem
that a precedent established by this reviewing court should be binding upon that agency."
MOORE'S, FEDERAL PRACTICE 3D at § 134.02[5] (emphasis added). Such a situation,
however, does not arise in the case at bar. More specifically, the Harmon decision was issued by
a district court in the Eighth Judicial Circuit, whereas, the matter at bar, if appealed, would be
appealed to a district court in the Third Judicial Circuit. Therefore, there is no single Judicial
Circuit with exclusive authority concerning consideration of the matters at bar.
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administrations from taking differing positions with respect to the resolution of a particular case
where warranted. Mendoza. 464 U.S. at 161.
Similarly, the Seventh Circuit's discussion of the affect of the Mendoza decision in a
situation similar to that currently facing this Presiding Officer is also instructive. In Nielsen
Lithographing Co. v. NLRB. 854 F.2d 1063, 1066 (7th Cir. 1988), the Court concluded that the
National Labor Relations Board did not have to "knuckle under to the first court of appeals (or
the second, or even the twelfth) to rule adversely to the Board," citing the Mendoza decision.
Even though the Board's interpretation of the controlling statute had been rejected in an earlier
court decision, the decision was not binding on the Board in future case involving different
litigants. The court "is not authorized to interpret the labor laws with binding effect throughout
the whole country, and the Board therefore is not obliged to accept our interpretation." Nielsen.
854 F.2d at 1066-67. See also American Federation of Government Employees v. FLRA. 835
F.2d 1458 (D.C. Cir. 1987)(Collateral estoppel applies against the Government only if mutuality
of parties exists); Hercules Carriers. Inc. v. Claimant State of Florida. 768 F. 2d 1558, 1579 (ll"1
Cir.l985)(Defendants are not entitled to assert doctrine of non-mutual collateral estoppel as a
defense to a suit brought by Government); and Baeder v. Heckler 768 F.2d 547(1985)(District
court does not have authority to control subsequent decisions of the Secretary of Labor in
disability benefits cases involving different litigants).
It is also clear that this Presiding Officer need not acquiesce or give any weight to the
District Court's Harmon decision in adjudicating the matter at bar. The United States
Environmental Protection Agency has been charged by Congress with the responsibility of
administering and enforcing RCRA on a national basis.8 As a result, this Presiding Officer this
Presiding Officer should defer to the reasonable intepretation of the Act proffered by this Agency.
Finally, as discussed later in this Brief, this Presiding Officer also need not address the
8
See, e.g.. RCRA Sections 3005(b) and 3008, 42 U.S.C. §§ 6905(b) and 6928.
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issue of deference or precedent, but rather can rule that, based upon the significant factual
differences between the Harmon case and the Bil-Dry matter, the District Court's ruling in
Harmon is neither applicable to or binding upon the case at bar.
II. THE DISTRICT COURT S HOLDING IN HARMON IS INCORRECT AS A
MATTER OF LAW AND, THEREFORE, SHOULD NOT BE FOLLOWED
BY THE PRESIDING OFFICER IN THE BIL-DRY CASE.
Not only is this Presiding Officer not bound by the Harmon opinion issued by the
District Court, he also should not adopt the legal analysis and statutory interpretation of
the District Court due to the fact that it is incorrect as a matter of law.
A. EPA's RCRA Enforcement Authority
With respect to EPA's enforcement authority, the District Court's ruling in
Harmon contradicts the unambiguous language of RCRA, the statute's legislative
history, EPA's long-standing and reasonable interpretation of RCRA, and an extensive
list of judicial and administrative rulings including, but not limited to, the EAB's decision
in In re: Harmon Electronics. Inc.. 1997 EPA App. LEXIS 6 (March 24, 1997), which
have held that the only restraints on EPA's authority to bring an enforcement action in a
State with an authorized program are that the Agency: (1) make a determination that
there is or has been a violation, and (2) provide "prior notice" to a State before
initiating an enforcement action. As a result, the District Court's much narrower and
more restrictive interpretation, that the Agency cannot impose its own penalties after a
party negotiates a settlement with an authorized State agency and that settlement is
approved by an appropriate State court, is clearly incorrect as a matter of law and
entitled to no deference by this Presiding Officer.
1. The unambiguous language of the RCRA statute
expressly provides that EPA has the authority, subject
only to the "determination of a violation" and "prior
-------
notice" requirements, to initiate an enforcement action
in a State with an authorized program.
The United States Supreme Court in Chevron U.S.A.. Inc. v. Natural Resources
Defense Council. Inc.. 467 U.S. 837, 842-45, 104 S.Ct. 2778, 2781-83, 81 L.Ed.2d 694
(1984), set forth the principles to be utilized by a Court when reviewing and ruling upon
EPA's construction of a statute that the Agency is charged with administering (e.g,
RCRA).
First, the Court must consider "whether Congress has directly spoken to the
precise question at issue." kL at 842. Second, if Congress has not unambiguously
addressed the issue, the Court must uphold the agency's interpretation of the statute
unless that interpretation is unreasonable. JtL at 843-45. Here a plain reading of RCRA
demonstrates that EPA has the authority to bring an action and impose a civil penalty
against Bil-Dry.
The scope of EPA's enforcement authority under- RCRA Subtitle C is specifically
set forth in Section 3008 of RCRA, 42 U.S.C. § 6928. Subsection 3008(a)(1)9 provides,
in relevant part, that EPA may bring a federal enforcement action "whenever on the
basis of information" it determines that there is or has been a violation of any
applicable requirement. In those cases involving violations which occur in a State with
9 EPA's enforcement authority under the RCRA statute is primarily
conferred by RCRA Section 3008(a)(1), 42 U.S.C. § 6928(a)(1), which states:
[e]xcept as provided in paragraph (2), whenever on the basis of any
information the Administrator determines that any person has violated or
is in violation of any requirement of this subchapter, the Administrator
may issue an order assessing a civil penalty for any past or current
violation, requiring compliance immediately or within a specified time
period, or both, or the Administrator may commence a civil action in the
United States district court in the district in which the violation occurred
for appropriate relief, including a temporary or permanent injunction.
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an authorized hazardous waste program, RCRA Section 3008(a)(2), 42 U.S.C. §
6928(a)(2), further provides that,
the Administrator shall give notice to the State in which such violation
has occurred prior to issuing an order or commencing a civil action under
this section.
(emphasis added). Thus, the only express limitations in the enforcement provisions of
Section 3008 of the RCRA statute concerning EPA's authority to initiate an
enforcement action in a State with an authorized program are that the Agency must: (a)
determine that there is or has been a violation ("determination of a violation"
requirement), and (b) provide the State with notice prior to initiating its enforcement
action ("prior notice" requirement).10 No other limitation on EPA's enforcement
authority exists. Rather, the statute plainly provides that EPA may commence an
enforcement action "whenever" the aforementioned two conditions are satisfied. RCRA
Section 3008(a)(1), 42 U.S.C. § 6928(a)(1).
The District Court in Harmon, as discussed in more detail below, chose to
disregard the unambiguous language of the RCRA statute and held that EPA cannot
impose its own separate penalties after a State with an authorized program enters into
a settlement with a party and the settlement is approved by an appropriate State court.
For a number of reasons, the District Court's decision is incorrect as a matter of law.
First, if Congress had intended to establish a further limitation on EPA's
authority to commence an enforcement action in a State with an authorized program,
Congress would have explicitly set forth such a limitation within the text of the
enforcement provisions of the statute in which it had incorporated the aforementioned "
determination of a violation" and "prior notice" requirements, RCRA Section 3008.
10 The RCRA statute does not delineate the manner in which such "prior notice" is to
be provided. For example, it does not specify whether such notice must be provided in writing.
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Congress' failure to include such a limitation in Section 3008 demonstrates that it did
not intend to condition EPA's enforcement authority in such a manner. As an example,
RCRA's citizen suit provision, RCRA Section 7002(b)(1)(B), 42 U.S.C. § 6972(b)(1)(B),
demonstrates that Congress was well aware of how to explicitly condition enforcement power
based upon State action or inaction. The citizen suit provision disallows citizen suits in instances
where the "State has commenced and is diligently prosecuting a civil or criminal action ...." It
is generally presumed that Congress acts intentionally and purposefully when it includes particular
language in one section of the statute but omits it from another. £££ BFP v. Resolution Trust
Corp.. 511 U.S. 531, 537, 114 S.Ct. 1757, 128 L.Ed.2d 556 (1994); and City of Chicago v.
Environmental Defense Fund. 511 U.S. 328, 114 S.Ct. 1588, 128 L.Ed.2d 302 (1994). As a
result, Congress clearly acted "intentionally" and "purposefully" when it chose not to limit or make
EPA's enforcement authority contingent upon the enforcement decisions of States with authorized
programs.
Second, despite the fact that the primary issue before the District Court in
Harmon was the scope of EPA's enforcement authority,.the Court basically ignored the
RCRA provisions that address the Agency's enforcement authority, Section 3008.
Rather, the Court based its opinion almost exclusively upon the language of RCRA
Section 3006, 42 U.S.C. § 6926, which addresses the process for the authorization
of State hazardous waste management regulatory programs. Such an approach to
statutory interpretation, however, is illogical. As noted by EPA's Office of General Counsel
in its 1986 Memorandum entitled "Effect on EPA Enforcement of Enforcement Action Taken By
State with Approved RCRA Program",
[t]o read [Section 3006(d)] as applying to state enforcement actions thus raises
serious problems	It is unlikely that Congress would have buried such an
important limit on federal enforcement powers in [Section 3006(d)], a
provision concerning state permits.
Exhibit A at 3-4 (emphasis added). As a result, the District Court's preoccupation with the
language of Section 3006, to the almost total disregard of the enforcement provisions
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of the statute in Section 3008, serves to undermine the legitimacy of its holding in
Harmon.
It also is important to note that, despite the fact that the District Court relied
predominantly, if not solely, upon Section 3006 as the legal basis for its opinion, the
Court misconstrued the language of that Section and demonstrated its lack of
understanding of the authorization process in issuing its decision in Harmon.
Pursuant to RCRA Section 3006(b), 42 U.S.C. § 6926(b), EPA can authorize a
State's hazardous waste program if the Agency determines that such a State program
is equivalent to the federal RCRA program, consistent With the federal and other State
programs, and provides adequate enforcement of compliance. After such
authorization, the State's program is to be carried out "in lieu of the Federal [RCRA]
program". RCRA Section 3006(b). As a result, it is the State's program that EPA
authorizes to be carried out "in lieu of the Federal program"; mil a State agency in lieu
of EPA. This is an important distinction that the District Court in Harmon failed to
appreciate.11 By authorizing a State program, EPA does not authorize the State
governmental entity to act as the sole enforcer of RCRA, nor does the Agency "
delegate" to the State its federal enforcement authority. Rather, the authorization
process results in a situation whereby EPA and the State hold co-existing enforcement
authority with regard to the requirements of the State authorized program.12
11	The District Court incorrectly interpreted the RCRA statute as providing
that EPA's authorization of the Missouri hazardous waste management program also
comprised EPA's authorization of the Missouri Department of Natural Resources ("
MDNR") to act in lieu of the Agency with regard to enforcement matters. More
specifically, the District Court stated that the "MDNR [the Missouri Department of
Natural Resources] operates 'in lieu of' or instead of the federal program" or, in other
words, EPA. Harmon. Slip Op. at 13.
12	The District Court rejected such a "concept of co-existing enforcement powers".
Harmon. Slip Op. at 13. However, the Court failed to cite any language in the RCRA statute or
its legislative history as authority for this decision.
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As a result, the "in lieu of" language of Section 3006(b) cannot reasonably be
interpreted as limiting EPA's enforcement authority in a.State with an authorized
program. Indeed, the United States Court of Appeals for the First Circuit in United
States v. MacDonald & Watson Waste Oil Co.. 933 F.2d 35, 43046 (1st Cir. 1991)
expressly rejected the argument that the "in lieu of" language of Section 3006 disables
Federal criminal enforcement authority under RCRA Section 3008 in a State with an
authorized program.13 Rather, it is clear that RCRA Section 3006(b) only defines the
body of regulations with which a facility in a State with an authorized program must
comply, and the legal authority EPA and/or a State must cite generally in an
13	As noted by EPA's General Counsel in its 1986 Memorandum, such an
interpretation "that the 'in lieu of language [of Section 3006] bars federal enforcement
cannot be squared with the plain language of Section 3008(a)(2), which requires the
Administrator to notify an approved state 'prior to issuing an order or commencing a
civil action'". Exhibit A at 5. Under such an interpretation, the language of Section
3008(a)(2) would have "no meaning if the Administrator's enforcement powers
terminate upon interim or final authorization" of a State program. kL
14	As discussed later in this Brief, in some situations, despite the existence of an
authorized state hazardous waste management program, EPA will still have exclusive authority to
enforce the federal RCRA regulations promulgated pursuant to the Hazardous and Solid Waste
Amendments of 1984 ("HSWA") in a State because such State has not received authorization to
administer and enforce such regulations. RCRA Section 3006(g)(1), 42 U.S.C. §
6926(g)(1), states that:
Any requirement or prohibition which is applicable to the generation,
transportation, treatment, storage, or disposal of hazardous waste and
which is imposed under this subchapter pursuant to the amendments
made by the Hazardous and Solid Waste Amendments of 1984 shall take
effect in each State having an interim or finally authorized State program
on the same date as such requirement takes effect in other States. The
administrator shall carry out such requirement directly in each such
State unless the State program is finally authorized (or is granted)
interim authorization as provided in paragraph (2) with respect to
such requirement.
(emphasis added). Currently, no State program within EPA Region Ill's jurisdiction has
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enforcement action they initiate concerning such a facility.14
The District Court also misinterpreted the language of RCRA Section 3006(d),
42 U.S.C. § 6926(d), as providing the basis for its holding concerning the scope of
EPA's enforcement authority. Section 3006(d), however, does not address on its face
the Agency's enforcement authority, but rather defines the effect of a RCRA hazardous
waste treatment, storage or disposal permit that is issued by a State pursuant its
authorized program. Section 3006(d), which is entitled "Effect of State permit",
provides,
Any action taken by a State under a hazardous waste program authorized
under this section shall have the same force and effect as action taken by
the Administrator under this subchapter.
The principal purpose of the language of this Section is "plainly to assure [the
regulated community] not only that a state will have authority to issue permits, but also
that those permits have the same [force and] effect, and are enforceable to the same
extent, as if they had been issued by EPA." Exhibit A at 4. The Section was not
intended nor can it reasonably be interpreted as limiting EPA's enforcement authority
been authorized with regard to the Hazardous and Solid Waste Amendments of 1984.
EPA retains sole authority and jurisdiction under RCRA Section 3006(g)(1) to enforce
these provisions. In such cases, EPA must cite the federal HSWA regulations as authority for
its enforcement action. £§£ RCRA Section 3006(g), 42 U.S.C. § 3006(g). As an example, in
the case at bar, part of the Agency's allegations against Respondent pertain to Bil-Dry violating
the Land Disposal Restrictions, 40 C.F.R. Part 268, which were implemented by the 1984
Amendments and, therefore, are solely enforceable by EPA. Even if the Commonwealth of
Pennsylvania had filed its own enforcement action with regard to Bil-Dry Corporation, the
Commonwealth would not have been able to address such violations (i.e., LDR requirements,
etc.) pursuant to its authorized program due to the fact that Pennsylvania's hazardous waste
management program has not received authorization concerning the 1984 Amendments.
15 The United States Court of Appeals for the Tenth Circuit's recent decision in
Chemical Weapons Working Group. Inc. v. United State Dep't of the Armv. Ill F.3d 1485 (10th
Cir. 1997), reflects the logic of the "same force and effect" language under EPA's straightforward
interpretation. In Chemical Weapons, the Court denied a citizens' challenge to a State-issued
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under RCRA.15 Indeed, the fact that Section 3006(d) is entitled "Effect of a State
Permit" provides compelling evidence that Congress' intent in enacting the Section was
to ensure the integrity of State-issued permits and not to preclude EPA enforcement of
RCRA "whenever" necessary. £££ INS v. National Center for Immigrants' Rights. Inc..
502 U.S. 183, 189, 112 S.Ct. 551, 116 L.Ed.2d 546 (1991) (holding that the title or
section of a statutory provision can aid in resolving an ambiguity in the legislated text).
The District Court's opinion in Harmon should be rejected because it prevents
the achievement of RCRA's primary goal of protecting public health and the
environment, and does not comport with the statute's remedial purpose.16 "While words
employed by Congress [in a statute] must be given their ordinary meaning, they must
also be interpreted 'in light of the purposes Congress sought to serve'." United States
v. Conservation Chem. Co.. 619 F. Supp. 162, 192 (W.D. Mo. 1979) (quoting Chapman
v. Houston Welfare Rights Organization. 441 U.S. 600, 608, 99 S.Ct. 1905, 60 L.Ed.2d
508 (1979). Statutes, like RCRA, which are enacted for the protection of public health,
are to be given "an extremely liberal construction" in order to best effectuate their
public health and safety goals. JsL (quoting 3 Sutherland, Statutes and Statutory
Construction. § 71.02). £££Tcherepnin v. Knight. 389 U.S. 332, 336, 88 S.Ct.
548, 19 L.Ed.2d 564 (1967); U.S. v. Johnson & Towers. Inc.. 741 F.2d 662, 666 (3d.
Cir. 1984); U.S. v. Allan Drum Corp.. 357 F.2d 713, 719' (10th Cir.t. cert, denied. 385
permit under RCRA's citizen suit provision, RCRA Section 7002, 42 U.S.C. § 6972. Citing the "
same force and effect" provision, the Court concluded that the RCRA citizen suit provision did
not allow a collateral attack on either an EPA-issued permit or a State-issued permit. 111 F.3d at
1492.
16 "The legislative history on the enactment of RCRA in 1976, emphasized that
RCRA's purpose and overriding concern was to provide nationwide protection against the grave
dangers of improper hazardous waste disposal through a regulatory scheme. H.R. Rep. No. 1491,
94th Cong., 2nd Sess. 3-4, 11 reprinted in 1976 U.S. Code Cong. & Admin. News 6238, 6241,
6249." In the Matter of Harmon Electronics. Inc.. 1994 RCRA LEXIS 31 at * 34-35 (December
12, 1994).
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U.S. 899, 87 S.Ct. 205, 17 L.Ed.2d 132 (1966); United States v. Conservation Chemical
Co.. 619 F. Supp. 162, 192 (W.D. Mo. 1985) (referring to CERCLA); and U.S. v. 62
Packages. More or Less, of Marmola Prescription Tablets. 48 F. Supp. 878, 887 (W.D.
Wise. 1943), aff'd 1423 F.2d 107 (1944). If followed, the District Court's ruling in
Harmon, will bar EPA from exercising oversight responsibilities when, for example, a
State enters into a settlement that fails to promote statutory compliance. As a result, it
will seriously impede EPA's ability to protect human health and the environment.
In light of the foregoing, this Presiding Officer should reject the District Court's
interpretation in Harmon and uphold the unambiguous language of the RCRA statute
which clearly provides that EPA's enforcement authority is limited only by the
requirements that the Agency identify a violation and provide a State with an authorized
program prior notice of the Agency's enforcement actions.
2. RCRA's Legislative History supports the conclusion that
Congress intended to allow EPA to initiate enforcement
actions in a State with an authorized program subject
only to the "determination of a violation" and "prior
notice" requirements.
A fair examination of RCRA's legislative history confirms that Congress intended
to allow EPA to initiate an enforcement action in a State with an authorized program,
even if that State has taken some type of enforcement action on its own to address the
facility and violations at issue. In the final 1976 version of the bill that was eventually
enacted into RCRA, language was proposed in the Senate that would have explicitly
prohibited EPA from enforcing violations in a State with an authorized program unless
the State had failed to bring an enforcement action of its own. The language, however,
was deleted from the bill and never enacted into law. S. Rep. No. 94-988, 94th Cong.,
2d Sess. (1976) reprinted in 1 Senate Committee on Environment and Public Works,
Legislative History of the Solid Waste Disposal Act, at 317, 370 (1991). This deletion
indicates that Congress considered and rejected the imposition of a "State inaction"
limitation on EPA's enforcement authority and that the District Court's ruling in Harmon
is clearly incorrect as a matter of law. See Russello v. United States. 464 U.S. 16, 24,
104 S.Ct. 296, 78 L.Ed.2d 17 (1983) ("Where Congress includes limiting language in
an earlier version of a statute, but deletes it prior to enactment, it may be presumed
that the limitation was not intended").
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3.
Even if the RCRA statute is deemed to be ambiguous,
EPA's longstanding interpretation of its enforcement
authority under RCRA is a reasonable interpretation of
the language of the statute and, therefore, should be
upheld by this Presiding Officer.
EPA's interpretation of its statutory authority is longstanding. Since the adoption
in 1980 of consolidated regulations governing State program approval, EPA has
required that authorized States assess civil penalties that are appropriate to the
violation. §££45 Fed. Reg. 33377, 33462 (May 19, 1980) (codified originally at 40
C.F.R. § 123.9(c) and now codified at § 271.16(c)). At the same time, EPA prescribed
parameters to govern a State's determination of appropriate penalties, and stated in the
preamble that these requirements were intended to mitigate the cases in which EPA
would need to bring a Federal enforcement action in States with authorized programs:
The Agency has determined that it is necessary to set specific minimum
levels of tines and penalties which State must have the authority to
recover in order to ensure effective state enforcement. Without such
minimum levels, EPA would be forced to take its own enforcement action
in approved states because the state action imposed inadequate
penalties. Such EPA action, while available as a backstop, is not
intended to be relied upon as the prime enforcement mechanism in
approved States.
45 Fed. Reg. 33377, 33382 (May 18, 1980) (emphasis added).
Subsequently, EPA promulgated a final rule in 1983 that retained the
requirement for States to assess appropriate penalties, but dropped specific
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parameters for penalties in favor of a simple regulatory statement that EPA would bring
federal enforcement action if it determined that State judgments or settlements were
substantially inadequate:
NOTE: To the extent that State judgments or settlements provide
penalties in amounts which EPA believes to be substantially inadequate
in comparison to the amounts which EPA would require under similar
facts, EPA, when authorized by the applicable statute, may commence
separate actions for penalties.
48 Fed. Reg. 39615, 39622-23 (Sept. 1, 1983), 40 C.F.R. § 271.16(c )(emphasis
added).17 This text has remained unchanged since it was promulgated in 1983, and
clearly contemplates federal enforcement when the action of an authorized State
results in an inadequate penalty.
The scope of EPA's enforcement authority in authorized States additionally
received in-depth consideration in 1986 when EPA's General Counsel rendered a legal
opinion based upon the language of RCRA, the Act's legislative history, and case law
interpreting the statute. EPA's General Counsel concluded that:
RCRA allows the Administrator to exercise complete prosecutorial
discretion in deciding whether to commence federal enforcement when a
state has taken action. The contrary reading ~ that RCRA bars such
actions - is unsupported by the statute and legislative history. . . . [T]he
only prerequisites to EPA enforcement action in an authorized state
17 This provision was originally proposed in 1982 as an amendment to a consolidated
rule applying to 5 separate State permit programs under RCRA, the Clean Water Act, 33 U.S.C.
§ 1251 et seq., the Clean Air Act, 42 U.S.C. § 7401 et seq., the Safe Drinking Water Act, 42
U.S.C. § 300f et seq. £££ 47 Fed. Reg. 25546, 25547, 25549 & 25554 (June 14, 1982). This
explains the presence of the "when authorized by the applicable statute" language, since the
statutes have various provisions addressing federal enforcement of State programs. As noted,
EPA enforcement of State-administered RCRA programs is expressly "authorized" by RCRA
whenever there is a finding of violation and notice to the State. EPA would not have included this
provision in the final rule governing solely RCRA hazardous waste program authorizations if EPA
believed that it did not have authority under RCRA Subtitle C to bring an action after an
inadequate State settlement or judgement. If Harmon's construction of RCRA were accepted,
this regulation would be meaningless.
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are those set out in Section 3008(a)(2): a finding of violation and
notice.
(Exhibit A at 1 and 11. (emphasis added).18 Clearly, in light of EPA's longstanding
interpretation of RCRA, even if the language of RCRA is deemed to be ambiguous,
EPA's interpretation of its enforcement authority under the Act is reasonable and must
be accorded deference under the Chevron decision.19
As a result, this Presiding Officer should adopt the Agency's reasonable
18	In summarizing the methodology used and conclusions drawn by the
OGC, it is appropriate to start where the General Counsel started, with the language of
the RCRA. Based upon its review of the Act, the Office of General Counsel concluded
that the statute is unambiguous and on its face provides that "the only prerequisite to
an EPA enforcement action in an authorized state is a finding that a violation of the
authorized state program has occurred or is occurring and that notice of EPA's intent to
take action has been provided to the state." Exhibit A at 2-6. Furthermore, OGC
concluded that o& part of Section 3006, which deals exclusively with the authorization
process, reasonably can be interpreted as limiting EPA's enforcement authority under
the Act. More specifically, the General Counsel noted that Section 3006(d) is merely a
provision to ensure the integrity of State-issued permits, while the "in lieu of" language
of RCRA Section 3006(b) addresses the body of law to be enforced and not the identity
of the governmental entity acting as enforcer. IsL The General Counsel next examined
the legislative history of RCRA and concluded that it supports an interpretation of the
statute in favor of EPA enforcement authority being limited only by the "determination of
a violation" and "prior notice" requirements. ]& at 6-8. As part of its analysis, the
General Counsel's Office noted that a 1976 Senate Report concerning the passage of
RCRA indicates that Congress intended to "draw on the similar provisions of the Clean
Air Act of 1970 and the Federal Water Pollution Control Act of 1972" in allocating
enforcement responsibilities between EPA and the States under RCRA. Jd. at 6,
quoting H.R. Rep. No. 94-1491, 94th Cong., 2d Sess. 17 (1976), reprinted in Vol. 1
Senate Committee on Environment and Public Works, Legislative History of the Solid
Waste Disposal Act, at 558, 592 (1991) ("1976 House Report"). A detailed review of
the enforcement provisions of the Clean Air Act and Clean Water Act, and case law
construing those provisions, led the General Counsel to conclude that RCRA allows
EPA to bring an enforcement action irrespective of whether a State has already
initiated its own enforcement action or concluded a settlement. Id at 6-10.
19	Chevron deference is based upon a "presumption that Congress, when it left
ambiguity in a statute meant for implementation by an agency, understood that the ambiguity
would be resolved, first and foremost, by the agency." Smiley v. Citibank. 517 U.S. 735, 116
S.Ct. 1730, 1733, 135 L.Ed.2d25 (1996).
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interpretation of the RCRA statute and uphold EPA's action at bar against the
Respondent.
4. The District Court's ruling in Harmon did not address
the extensive line of well-reasoned judicial and
administrative decisions concerning EPA's enforcement
authority.
The District Court's failure to address the numerous administrative and judicial
rulings which have upheld EPA's interpretation of its enforcement authority under
RCRA undermines the Court's legal analysis and holding.
A number of courts in construing the scope of EPA's enforcement power have
upheld the Agency's authority under RCRA to initiate an enforcement action in a State
with an authorized program. $££, £,&, Waste Management of Illinois. Inc. v. EPA. 714
F. Supp. 340 (N.D. III. 1989); United States v. Rogers. 685 F. Supp. 201 (D. Minn.
1987);	United States v. Environmental Waste Control. 698 F. Supp. 1422 (N.D. Ind.
1988);	and LJSG Corp. v. Brown. No. 89C2874, 1997 WL 89229 (N.D. III. 1997). More
specifically, as explained by the Court in Waste Management:
[o]nce a state program is authorized, any action taken by the state "shall
have the same force and effect as action taken by the Administrator....
Nonetheless, the U.S. EPA retains certain residual controls under RCRA.
For example,... the Administrator may take enforcement action in a state
with its own hazardous waste program, as long as he informs the state
before taking action.
714 F. Supp. at 340. Similarly, in USG Corp . the Court observed that while any action
by the State "shall have the same force and effect as action taken by the
Administrator," EPA is, nonetheless, authorized to "override the state program when
necessary to enforce compliance with that statute." 1997 WL 89229 at *6 (emphasis
added).
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A number of rulings by Presiding Officers and the EAB have also confirmed that,
under RCRA, EPA can initiate an enforcement action irrespective of whether or not a
State has commenced an action of its own. As an example, in In re Gordon Redd
Lumber Company. 5 E.A.D. 301, 1994 WL 276874 (EAB, June 9, 1994), the EAB
affirmed EPA's interpretation of its overfiling authority under RCRA and stated that,
Mississippi is authorized to carry out a hazardous waste program under
section 3006 of RCRA, 42 U.S.C. § 6926, in lieu of the federal program.
Nevertheless, under the statute, even if the State brings an enforcement
action for violations of the State's program, the Agency retains authority
to bring its own enforcement action for such violations. . . . The sole
statutory restriction on this authority is.that the Agency, before filing
its own action ("overfiling") must first notify the State of its intention
to overfile.
Gordon Redd. 5 E.A.D. at 308,1994 WL 276874 at * 5. (emphasis added). Similarly, in
In re Southern Timber Products. Inc.. et al.. 3 E.A.D. 371, 1990 WL 303833 (C.J.O.
Nov. 15, 1990), the presiding Chief Judicial Officer held that EPA could initiate an
overfiling action even though the State had "acted" with regard to the Respondent's
violations. Southern Timber. 3 E.A.D. at 378, 1990 WL 303833 at *5. Likewise, in in_
the Matter of Martin Electronics. Inc.. 2 E.A.D. 381, 1987 WL 109670 (C.J.O. 1987),
Chief Judicial Officer McCallum adopted the previously discussed reasoning of EPA's
General Counsel as presented in the GCO's 1986 Memorandum, and held that,
even if a State's enforcement action is adequate, such State action provides no
legal basis for prohibiting EPA from seeking penalties for the same RCRA
violation. EPA's decision whether to defer to prior State action is a matter of
enforcement discretion and policy.
Martin Electronics. 2 E.A.D. at 385, 1987 WL 109670 at *3.
It also is important to note that, prior to the appeal of the Harmon case to the
District Court, the Environmental Appeals Board upheld EPA's interpretation of its
enforcement authority under RCRA and definitively rejected the arguments proffered by
the Respondent, Harmon Electronics, Inc. More specifically, the EAB held that,
[w]e need not dwell for long on this statutory argument. It is well settled
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that, even when the authorized State has taken action, RCRA
nevertheless authorizes the Agency to take its own action. Harmon has
not offered any persuasive reasons to reopen this well established
reading of the statute, and we decline to do so.
Harmon. 1997 EPA App. LEXIS 6 at *21. As the basis for its opinion, the EAB cited
and relied upon the 1986 Memorandum of EPA's General Counsel, regulations
implementing RCRA, including 40C.F.R. § 271.16(c), numerous administrative
decisions concerning the scope and extent of EPA's enforcement authority, and similar
decisions at the judicial level, such as EPA v. Environmental Waste Control. Inc.. 710
F. Supp. 1172, 1186 (N.D. Ind. 1989), 917 F.2d 327 (7th Cir. 1990), cfiEt. denied.
499 U.S. 975, 111 S.Ct. 1621,113 L.Ed.2d 718 (1991). li In sum, the EAB's decision
provides a comprehensive, documented and well-reasoned analysis of the Agency's
enforcement authority that should be adopted by this Presiding Officer.
The legal analysis offered by the District Court in Harmon, however, fails to give
proper weight to the plain meaning of RCRA Section 3008(a), offers a cursory review of
the applicable legislative history of the Act, and fails to address and/or distinguish the
numerous administrative and judicial decisions that have addressed EPA's
enforcement authority under RCRA.20 As a result, the District Court's decision should
not be followed by this Presiding Officer.
5. EPA complied with its statutory obligations under RCRA
in initiating the action at bar.
20 Indeed, even the District Court in Harmon appreciates the possibility that its
interpretation of the Act will be overturned on appeal. In Footnote 15 of the District Court's
decision, the Court notes the likelihood that its ruling will be reversed on appeal to the Eighth
Circuit by stating "[anticipating that the Defendants will appeal this Court's decision and
acknowledging that the Eighth Circuit Court of Appeals may be of a different opinion, ruling
[on the] final two issues may avoid revisiting those issues at a later date" on remand. ^Harmon.
Slip Op. at 22, n. 15) (emphasis added).
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In the matter at bar, EPA complied with its statutory obligations under RCRA and
provided the Commonwealth of Pennsylvania, by and through the Pennsylvania
Department of Environmental Protection ("PADEP"), with notice of the Agency's
enforcement action against Bil-Dry prior to the filing of EPA's Complaint on September
30, 1996. Attached is the affidavit of Christopher B. Pilla, the EPA - Region III RCRA
Enforcement Branch Chief, who provided to PADEP "prior notice" of EPA's
enforcement action against the Bil-Dry. (Exhibit B). Also attached to this Brief is the
affidavit of Nancy Roncetti, the PADEP Operations Supervisor for Waste Management
Operations who received and acknowledged Mr. Pilla's notice of EPA's enforcement
action. (Exhibit C).
The affidavits establish that, prior to the filing of the Agency's Complaint against
Bil-Dry on September 30, 1996, EPA's Christopher Pilla contacted by telephone Nancy
Ronsetti of PADEP. Mr. Pilla's job-related responsibilities as a RCRA Enforcement
Branch Chief included providing a State with an authorized hazardous waste program,
like Pennsylvania, prior notice of EPA Region Ill's intention to bring an enforcement
action concerning a facility located within that State. Similarly, one of Ms. Roncetti's
job-related responsibilities as an Operations Supervisor for Waste Management
Operations included being PADEP's contact person for the receipt of such notice from
EPA of the Agency's pending enforcement actions in the Commonwealth.
During the course of their telephone conversation, Mr. Pilla notified Ms. Roncetti
of EPA's intent to initiate an enforcement action against the Bil-Dry Corporation
concerning violations discovered at the Grays Avenue facility. PADEP readily agreed
to the Agency taking the lead in bringing an enforcement action against Bil-Dry,
especially in light of the prior consultation and coordination that had taken placed
between EPA and PADEP concerning the matter. At the time of the aforesaid
telephone conversation in 1996, EPA and PADEP were in the process of implementing
a joint enforcement compliance initiative called the "South-Southwest Philadelphia
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Enforcement Initiative". The purpose of this initiative was to coordinate between EPA
and PADEP the responsibilities for conducting inspections and initiating enforcement
actions to address violations discovered at facilities located in the south and southwest
areas of the city. With regard to the Bil-Dry facility, PADEP and EPA coordinated their
investigatory and enforcement actions under this initiative. In their official capacities
and on behalf of their respective governmental entities, Mr. Pilla and Ms. Roncetti
decided that EPA would take the lead role in bringing an enforcement action against
Bil-Dry.
Additionally, it is important to note that, during the aforesaid telephone
conversation, Ms. Roncetti on behalf of PADEP agreed to support and provide
technical assistance to the Agency with regard to its enforcement action against
Bil-Dry. At the December, 1997 hearing of the matter at bar, PADEP made available
Heather Bouch, a PADEP inspector, who testified on behalf of the Agency as to the
observations she made during the Department's April 1,1996 inspection of the Bil-Dry
facility. Furthermore, PADEP has continued, to date, to assist the Agency with its
enforcement action against Bil-Dry by providing the affidavit of Ms. Roncetti in support
of this Brief by Complainant.
As a result, it is clear that EPA satisfied its statutory obligations under RCRA in
filing the action at bar. Indeed, in addition to determining that violations had and were
occurring at the Bil-Dry facility and providing the Commonwealth of Pennsylvania with "
prior notice" of its intention to initiate an enforcement action, EPA consulted and
coordinated its enforcement action against Bil-Dry with PADEP.
6. Conclusion
For the reasons discussed, the District Court's holding in Harmon and
interpretation of EPA's enforcement authority under RCRA is clearly erroneous as a
matter of law and, therefore, should be rejected by this Presiding Officer. Furthermore,
EPA's enforcement action at bar against Respondent, Bil-Dry Corporation, should be
upheld.
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B. "Res Judicata" Doctrine
1. EPA and states with authorized hazardous waste management
programs are not per §£ in "privity" for purposes of the "res
judicata" doctrine.
EPA believes that it is clear that the District Court in Harmon was incorrect as a
matter of law with regard to the applicability of the "res judicata" doctrine to the facts of
the Harmon case and the issue of "privity" between EPA and the State of Missouri.
However, because the facts in the Bil-Dry matter are signficantly different than those in
Harmon, as explained in Section III of this Brief, below, it is not necessary for EPA to
address further in this Brief the holding of the District Court in Harmon concerning the "
res judicata" issue.
III. SIGNIFICANT FACTUAL DIFFERENCES BETWEEN THE HARMON AND THE
BIL-DRY CASES CLEARLY MAKE THE DISTRICT COURT'S HOLDING IN
HARMON INAPPLICABLE TO THE CASE AT BAR.
Even assuming arguendo that the District Court's holding is legally correct21,
significant factual differences between the Harmon matter and the action at bar render
the Court's holding in Harmon inapplicable to the Bil-Dry case.
A. PADEP, to date, has neither entered into a court-approved settlement
with nor initiate its own enforcement action against Respondent and,
21 It is important to note that EPA does not accept that the District Court's opinion is
legally correct and the government may appeal such decision to the U.S. Court of Appeals for the
Eighth Circuit.
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therefore, even under the District Court's ruling in Harmon. EPA was
permitted to have filed the action at bar against Bil-Dry.
To date, PADEP has not entered into a court-approved settlement with or
initiated an enforcement action against the Respondent concerning the violations
alleged in EPA's September 30,1996 Complaint. Indeed, PADEP has not filed a
Complaint nor sought any type of legal redress from an administrative tribunal or a
court concerning these violations, but rather deferred to EPA assuming the lead in
bringing and enforcement action against Bil-Dry.
PADEP did issue on May 30, 1996 a Notice of Violation ("NOV") to Bil-Dry
concerning violations the Department discovered during its April 1, 1996 inspection of
the Grays Avenue facility. However, such a Notice of Violation is not a final formal
action. It constitutes neither a "court approved settlement", "final valid judgment on the
merits" or a final formal "enforcement action" for the purposes of either the issue
regarding EPA's enforcement authority under RCRA or the applicability of the "res
judicata" doctrine to the case at bar. Rather, an NOV is merely a notice of the
observations made by a regulatory entity and the conclusions it drew from such
observations concerning the compliance status of a facility being inspected. NOVs
generally place no legal obligation upon the recipient of the Notice to take action, nor
do they assess any type of penalty for the failure of the recipient to action concerning
the matters addressed in the Notice.
In the case at bar, it is important to point out that the NOV issued by PADEP
expressly provided that it did "not impose any obligation upon Bil-Dry Corporation" to
come into compliance, but rather merely suggested actions the company could take to
rectify problems at the facility. (December, 1997 Hearing - Complainant's Exhibit Book -
Exhibit C-8 at 2-3).
The Department suggests that Bil-Dry Corporation submit to the
Department within fifteen (15) days of receipt of this Notice of Violation a
written report addressing the circumstances under which these violations
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occurred, a proposed program and schedule for the abatement of these
violations and a proposal to prevent their recurrence. This letter does
not impose any obligation upon Bil-Dry Corporation and shall not be
construed as an appealable decision or adjudication of the
Department of Environmental Protection.
Id. at 3. Furthermore, PADEP reserved its right to file, at a later date, an enforcement
action against Bil-Dry concerning the violations at its Grays Avenue facility.
This Notice of Violation does not waive, either expressly or by
implication, the power or authority of the Commonwealth of
Pennsylvania to prosecute for any and all violations of law arising
prior to or after the issuance of this letter or the conditions upon
which the letter is based. This letter shall not be construed so as to
waive or impair any rights of the Department of Environmental Protection,
heretofore or hereafter existing.
JsL (emphasis added). As a result, the NOV issued by PADEP clearly did not seek the
imposition by a judge or presiding officer of an order requiring the Respondent to come
into compliance with its regulatory obligations within a defined time period or face the
imposition of penalties for its non-compliance. PADEP, therefore, has neither initiated
an "enforcement action" against, nor entered into a court approved settlement with
Bil-Dry Corporation concerning the issues at bar. Rather, as previously discussed,
PADEP consulted and agreed with the Agency that EPA would take the lead in initiating
a formal enforcement action by filing an administrative Complaint and Compliance
Order against Bil-Dry to address the violations discovered at Respondent's Grays
Avenue facility.
As a result, the Harmon case is clearly factually different from the action at bar,
and the District Court's ruling in Harmon, therefore, is neither applicable to, nor
controlling over the Bil-Dry matter. Furthermore, even if one were to assume for
argument's sake that the District Court's interpretation of the Agency's enforcement
authority under RCRA in Harmon is legally correct and applicable to the Bil-Dry case,
EPA clearly was permitted under the court's interpretation to have filed the action at bar
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against Bil-Dry due to the fact that the Commonwealth of Pennsylvania, to date, has
failed to enter into a court-approved settlement with or initiated an enforcement action
against Bil-Dry concerning the violations alleged in EPA's Complaint.22
B. There has been no prior adjudication or "final, valid judgment" of the
matters at issue in the Bil-Dry case and, therefore, the "res judicata"
doctrine is not applicable to the action at bar.
Even assuming arguendo that the District Court in Harmon is correct in its
analysis of the applicability of the "res judicata" doctrine between EPA and States with
authorized programs, in the case at bar, no prior adjudication or "final valid judgment
on the merits by a court of competent jurisdiction" exists with regard to the violations
alleged by EPA against Bil-Dry Corporation. The case at bar is the only legal action
currently and, to date, to have been filed concerning the violations alleged in EPA's
Complaint. Furthermore, as previously discussed, unlike the Harmon case, PADEP
and Bil-Dry have never entered into any type of settlement agreement or consent
decree, let alone a court approved settlement agreement or consent decree,
concerning the violations alleged by EPA in this proceeding. Nor have these violations
been addressed by any court or administrative tribunal as part of a valid, final judgment
on the merits concerning the liability of the Bil-Dry Corporation.
Under Pennsylvania law, the doctrine of "res judicata" provides that a "final
judgment on the merits by a court of competent jurisdiction precludes a future suit
22 As a result, the Bil-Dry case does not involve an "overfiling" action due to the fact
that there is no underlying State enforcement action at bar for EPA to have "overfiled". The
holding of the District Court is, therefore, factually distinquishable from and not applicable to the
Bil-Dry case due to the fact that the District Court's holding in Harmon addressed specifically an
overfiling situation in which EPA and MDNR had each brought their own separate enforcement
actions against the respondent. MDNR entered into a settlement with the violator that was
lodged simultaneously with the formal Complaint with and approved by the appropriate Missouri
State court.
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between the parties or their privies on the same cause of action." §££ R/S Financial
Corp. v. Kovalchick. 1998 Pa. LEXIS 1742, *6 (August 19,1998). More specifically, in
order for the doctrine to apply there must be a "final judgment" in one action to which a
court in a second action is being asked to give preclusive effect, and the two underlying
actions must possess the following common elements: (1) identity of the thing sued for;
(2) identity of the cause of action; (3) identity of the person and parties to the action;
and (4) identity of the quality of the person for or against whom the claim is made."
Citv of Pittsburgh v. Zoning Bd. of Adj. of Citv of Pittsburgh. 522 Pa. 44, 54, 559 A.2d
896, 901 (1989); Schubach v. Silver. 461 Pa. 336, 336 A.2d 328 (1975); and Dempsey
v. Cessna Aircraft Co.. 439 Pa. Super. 172, 653 A.2d 679, 681 (Pa. Super. 1995) (en
banc).
Therefore, due to the fact that there has been no final, valid adjudication or
judgment entered concerning the issues at bar, the "res judicata" doctrine is completely
inapplicable in the Bil-Dry case and the District Court's ruling in Harmon on this matter
is neither applicable to nor controlling over the Bil-Dry case.
IV. DUE TO THE FACT THAT RESPONDENT HAS NEVER RAISED THE
APPLICABLE FIVE-YEAR STATUTE OF LIMITATIONS CONTAINED IN 28
U.S.C. § 2462 AS A DEFENSE IN THE ACTION AT BAR, THE DISTRICT
COURT S RULING IN HARMON ON THIS MATTER IS NOT RELEVANT TO
THE BIL-DRY CASE.
In Harmon, the District Court held in favor of the Agency concerning the issue of
the application of the relevant statute of limitations and ruled that "the continuing
violation doctrine applies to Plaintiff's violations of the regulations and the statute of
limitations runs from the date of the most recent violation." Harmon. Slip Op. at 19.
In the case at bar, Respondent waived its right to raise the five year statute of
limitations, found at 28 U.S.C. § 2462, as a defense to its liability by failing to assert the
statute of limitations as an affirmative defense in its Answer to EPA's September 30,
1996 Complaint.23 Additionally, to date, Respondent has never raised or made an
argument concerning the statute of limitations being a bar to EPA's action.
Furthermore, even if Bil-Dry had made such an argument, it would clearly be incorrect
based upon the facts of this case. The violations at issue were first discovered by EPA
-------
during its December, 1995 inspection of Respondent's Grays Avenue facility. An
enforcement action concerning these violations was initiated by the Agency against
Bil-Dry on September 30, 1996, within two years of the EPA's discovery of such
violations. As a result, EPA clearly complied with the applicable five year statute of
limitations and the portion of the District Court's August 25,1998 decision, which
addresses this matter, is neither relevant to, nor controlling over the case at bar.
V. THE PENALTY WHICH EPA HAS ASKED THIS COURT TO ASSESS
AGAINST RESPONDENT IS APPROPRIATE AND SHOULD BE ASSESSED IN
ITS ENTIRETY AGAINST BIL-DRY.
The following discussion is made by the Agency in anticipation of arguments and
representations, concerning the appropriate penalty amount to be assessed in the case
at bar, that the Respondent may include in its brief, despite the fact that this Presiding
Officer's Order of September 2,1998 requested that the parties brief only the
applicability, or lack thereof, of the Harmon decision to the Bil-Dry Matter.
As explained in detail in Complainant's Post-Hearing Brief, the penalty which
EPA has asked this Presiding Officer to assess against Respondent for its violations is
fair, reasonable, appropriate in light of Bil-Dry's violations, and in accordance with the
Agency's 1990 RCRA Civil Penalty Policy. To date, Respondent has failed to introduce
any evidence that EPA's recommended penalty of $231,800 was not calculated in
accordance with the RCRA Civil Penalty Policy, or is "unwarranted in law" or "without
justification in fact". Harmon. Slip Op. at 21. As a result, this Presiding Officer should
assess against Respondent the entire recommended penalty of $231,800.
Furthermore, as the basis for this Presiding Officer's decision concerning the
appropriate penalty amount to be assessed against Bil-Dry, this Presiding Officer
23 Respondent was required by Federal Rule of Civil Procedure Rule 12 to raise the
statute of limitations as an affirmative defense in its Answer to the Agency's Complaint or,
thereby, waive the right.
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should take into consideration only the evidence presented by the parties at the
December, 1997 hearing. Respondent must not be permitted to unilaterally
supplement the evidentiary record of this case by improperly seeking to introduce new
information into the record as part of the brief it will be filing in response to this
Presiding Officer's Order of September 2,1998. EPA would clearly be prejudiced by
such an action by Respondent. The Agency would not be able to respond to such new
information, nor would EPA be able to verify the accuracy of such representations by
cross-examining the officers of the Bil-Dry Corporation.
As a result, any assertions made by Respondent concerning, but not limited to, a
possible change in financial circumstances at the Bil-Dry Corporation since the
December, 1997 hearing must be disregarded by this Presiding Officer. Rather, this
Presiding Officer's decision must be limited to the evidentiary record compiled at the
December, 1997 hearing. Based upon that record, it is clear that this Presiding Officer
should assess against the Respondent, Bil-Dry Corporation, the entire recommended
penalty of $231,800.
CONCLUSION
For the foregoing reasons, Complainant, the United States Environmental
Protection Agency, requests that this Presiding Officer hold Respondent, Bil-Dry
Corporation liable under all nine Counts of the September 30,1996 Complaint,
Compliance Order and Notice of Opportunity for Hearing ("Complaint") filed by EPA in
this matter, order Respondent to comply with the proposed Compliance Order, and
assess against Respondent the entire recommended penalty of $231,800.
Respectfully submitted,
-------
Joseph J. Lisa III
Assistant Regional Counsel
U.S. EPA - Region III
Attorney for Complainant
Dated
-------
A
-------
j^/y\ -
Author: JONES I. GARY at IN	<=^
Date: 10/23/1998 4:42 PM
Priority: Normal
BCC: phyllis harris at REGION4
[¦0: RABBINO.DAVID at IN, RAACK.PETER at IN, NEY.FRANK at IN, MILLER.BRUCE at IN,
MARVEL.NANCY at IN, LEIF.FREDERICK at IN, JANIK.DAVID at IN, HOLLIMON.SHELIA at IN,
HESTMARK.MARTIN at IN, HARRIS.PHYLLIS at IN, GORDON.SCOTT at IN, GAYDOSH.MIKE at IN,
FIELDS.SHERRI at IN, COOPER.GAIL at IN, CARTER.DEBORAH at IN, ASAMI.JOANN at IN,
ANDERSON.BILL at IN
Subject: Useful overfiling materials & news re Harmon case
** High Priority **
Following up on my October 15 LAN message (see
attached), I am attaching a copy of the full text of
the Region III RCRA decision in the Bil-Dry matter,
which (finally) appeared on the ALJ's web site today.
Also attached are the final versions of the district
court briefs that DOJ filed in the Harmon case.
In order to help ensure consistency in our
positions on these issues, we urge you to look in
the first instance to the Harmon briefs in
determining what our position is and how to react
when these issues arise under any statutory
program. Obviously, there are case-specific
considerations that will be necessary to consider
(e.g., the law concerning res judicata and collateral
estoppel varies amongst the States). Therefore, we
ask that you continue to consult with Christine
McCulloch of ORE'S RCRA Enforcement Division
(202-564-4008) and myself (202-564-4002) as
soon as these arguments are raised in enforcement
matters under any statute, to allow us to work, in
close consultation with OGC, on coordinating a
onsistent and effective national response to these
rguments.
s to the (good) news re the Harmon case: DOJ
_iled in the 8th Circuit a Notice of Appeal on
October 21, 1998.
Together, all of these materials allow us to state
publicly that we disagree with the Harmon decision,
that we have appealed it, and that the one judge so
far who has been asked to follow the district
court's Harmon decision has rejected its rationale
and declined to do so.
In addition, I want to reiterate that even though the
district court overturned the EAB's penalty
assessment in the Harmon case, the district court
did not, and has no authority to, invalidate or "throw
out" the EAB's decision insofar as it interprets the
Agency's overfiling authority in other cases
nationally. Thus, for example, it remains the
Agency's position (as espoused by the EAB in its
Harmon ruling) that State authorization alone does
not per se create a privity relationship between EPA
and the State (i.e., these are case-specific
determinations). This is important to remember
because it appears to have relevance to all of our
regulatory enforcement statutes. Thanks.
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From:
To:
Date:
Subject:
GARY JONESI
nsidocket, RTPMAINHUB.INTERNET.RISNER-MICHAEL, RTP...
10/15/98 6:09pm
Favorable overfiling decison by ALJ
On September 28, I sent the message below regarding a Region III ALJ brief filed on September 24.
The good news is that barely two weeks after EPA's brief was filed, ALJ McGuire ruled in EPA's favor
on October 8. Judge McGuire's decision on this point is very brief, so I have quoted it in its entirety
here:
"The court in Harmon Industries addressed issues pertinent to this proceeding in that it severely
narrowed and restricted EPA's authority under RCRA to initiate an enforcement action in a State with an
authorized program. However, the Court's decision contradicts the unambiguous language of RCRA,
the statute's legislative history, and a long line of judicial and administrative rulings to the contrary.
Moreover, Complainant has provided sufficent case authority to establish that the Court's decision is not
binding on the case at bar. For these reasons, the undersigned declines to adopt the Court's rationale in
Harmon Industries and concludes that Complainant is fully authorized to initiate the current enforcement
action. Accordingly, a discussion on the issues of liability and penalty will follow." Initial Decision, at
13, In the Matter of Bil-Drv Corporation. Docket No. RCRA-lll-264 (Oct. 8, 1998).
ORE's RCRA Enforcement Division is sending to the Regions in the next day or two a copy of the
Harmon briefs that the United States filed in the district court litigation, with the intent that you look in
the first instance to those briefs in responding to similar issues that may arise in negotiations or
litigation. Please continue to contact Christine McCulloch of ORE-RED (202-564-4008) and myself
(202-564-4002) if these issues arise in an enforcement context, so that we can continue to coordinate a
consistent national response to these arguments. Thanks.
From: GARY JONESI
Date: 9/28/98 5:29pm
Subject: Responding to Harmon Industries adverse overfiling decison
On September 24, 1998, Region III filed the attached brief in a RCRA administrative enforcement
matter involving the Bil-Dry Corporation. ALJ McGuire recently asked for briefs concerning the impact
of the Missouri district court's decision.in the Harmon case. This is the first, and so far only, written
response to the Harmon decision that has been made public.
Region III worked closely with OECA's RCRA Enforcement Division on the response and, as you can
see, the brief argues that the district court's holding in Harmon is both: (1) incorrect as a matter of law;
and (2) factually distinct from, and thus inapplicable to, the Bil-Dry matter.
We are aware of other circumstances where parties are trying to use the decision to their advantage.
Please feel free to use the attached brief as a useful starting point when you encounter these issues.
Your cases, however, necessarily will raise distinct factual and strategic implications. When these
issues arise under any statute, please continue to contact Christine McCulloch of the RCRA
Enforcement Division, at 202-564-4008, who is the lead OECA contact for the ongoing Harmon case,
and myself (202-564-4002) so that I can help to coordinate responses to these arguments across all
media. Thanks.
P.S. The references in the attached brief to Chevron deference (pp. 7-8,19) are appropriate in judicial
litigation, and supporting discussion on that point may be useful in court pleadings. Note however, that
the EAB has stated (see footnote 55 in the 9/30/97 Lazarus decision) that Chevron deference
arguments normally are unavailable to parties (such as EPA's enforcement program) in administrative
cases because the EAB speaks for the Agency in administrative matters and we do not. If you are
considering making deference arguments in enforcement litigation, please let us know and we will work
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with OGC to determine the best course to follow. Thanks.
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B
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'yf
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF MISSOURI
WESTERN DIVISION
HARMON INDUSTRIES, INC.,
Plaintiff,
v.
CAROL M. BROWNER, et al..
Defendants.
Case No. 97-0832-CV-W-3
EPA'S COMBINED SUGGESTIONS
IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT
AND OPPOSITION TO PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT
OF COUNSEL:
BELINDA L. HOLMES
Senior Assistant Regional Counsel
U.S. Environmental Protection Agency
Region VII
726 Minnesota Avenue
Kansas City, Kansas 66101
CHRISTINE J. McCULLOCH
U.S. Environmental Protection Agency Office of
Regulatory Enforcement
Mail Code 2246-A
401 M. St., S.W.
Washington, D.C. 20460
VICKIE L. PATTON
U.S. Environmental Protection Agency
Office of General Counsel
401 M. St, S.W.
Washington, D.C. 20460
LOIS J. SCHIFFER
Assistant Attorney General
Environment and Natural Resources Division
ERIC G. HOSTETLER, Attorney
U.S. Department of Justice
Environmental Defense Section
P.O. Box 23986
Washington, D.C. 20026-3986
(202) 305-2326
STEPHEN L. HILL, JR.
U.S. Attorney
J. CURTIS BOHLING
Assistant United States Attorney
1201 Walnut Ste. 2300
Kansas City, Missouri 64106-2149
Attorneys for Defendants
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EPA'S COMBINED SUGGESTIONS
IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT
AND OPPOSITION TO PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT
INTRODUCTION
From 1973 to 1987, plaintiff Harmon Industries, Inc. ("Harmon") disposed of thousands
of gallons of hazardous solvents at its Grain Valley, Missouri manufacturing facility by routinely
dumping them onto the ground, without taking any precautions to prevent potential human
exposure to hazardous constituents. In this action, Harmon challenges a Final Order of the
United States Environmental Protection Agency ("EPA") assessing a civil penalty of $586,716
against it based on those illegal disposal practices.-"
EPA's penalty is based on Harmon's undisputed multiple violations of the Resource
Conservation and Recovery Act ("RCRA"), 42 U.S.C. §§ 6901-6992k, the nation's principal
hazardous waste management law. Harmon's violations strike at the very heart of RCRA, and
EPA has full authority under the statute to assess a civil penalty in this matter. EPA's penalty
assessment comports with the plain language of RCRA, comports with EPA's longstanding
construction of a statute it is charged with administering, and furthers RCRA's overarching goal
of protecting public health and the environment. The penalty assessed is reasonable and follows a
full evidentiary hearing on the merits pursuant to EPA's consolidated rules of practice (40 C.F.R.
Part 22).
The decision of the State of Missouri, which has concurrent authority to enforce
hazardous waste regulations in Missouri, to forego assessing a civil penalty against Harmon does
not affect EPA's authority to assess a penalty itself. EPA did not direct, participate in, or
otherwise give its endorsement to a settlement agreement reached between Harmon and the
Missouri Department of Natural Resources ("MDNR") 18 months after EPA initiated its
enforcement action, and more than two years after EPA advised MDNR that EPA would bring an
^ "EPA," for purposes of this brief, refers collectively to all Defendants: Carol Browner, sued in her
official capacity as Administrator of EPA, EPA, and the United States of America.
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enforcement action against Harmon if MDNR failed to bring one that included monetary
penalties.2
Additionally, EPA's penalty assessment is not precluded by the applicable statute of
limitations. Just because Harmon's ongoing illegal disposal practice had been maintained for years
before the date in 1988, when Harmon finally disclosed the practice, does not render Harmon
immune from pecuniary sanction. Therefore, EPA's penalty assessment should be upheld, and
EPA's motion for summary judgment should be granted.
I. STATEMENT OF I INCONTROVERTED MATERIAL FACTS*
Pursuant to Local Rule 56.1(a), EPA sets forth the following uncontroverted facts which
support entry of summary judgment in EPA's favor.
1.	Harmon assembles and manufactures electronic equipment for the railroad industry at
its Grain Valley, Missouri facility. Harmon's Statement of Uncontroverted Facts ("Harmon's
Stmt."), 11111-2.
2.	From the time Harmon began operations at its Grain Valley facility in 1973 until
approximately the end of 1987, its employees used several types of solvents, including
1,1,1-trichloroethane (TCA), freon, trichloroethylene (TCE), toluene, xylene and methylene
chloride, to clean circuit boards as part of the manufacturing process. All of these substances
when discarded are classified as hazardous wastes under RCRA. Initial Decision at 5. These
substances can have a harmful effect on human health either through inhalation of vapors, contact
with skin, eating contaminated fish and/or drinking contaminated water. Initial Decision at 9.
Harmon's Phase I Report, June 1988, RX 6 at 4-1 to 4-5 (App. 3).1
^ Merely exemplifying the emptiness of Harmon's legal claims in this matter is Harmon's emphasis on,
and repeated citation to, a District Court decision in Ohio, interpreting a different statutory scheme, that
was subsequently reversed, in relevant part, on appeal by the United States Court of Appeals for the Sixth
Circuit. See Harmon Suggestions at 2, 36, 51, Harmon Summary at 6, 8, citing Horizon Coal Corp. v.
United States. 876 F. Supp. 1512 (N.D. Ohio 1993), rev'd, in relevant part, 43 F.3d 234, 240-42 (6th Cir.
1994).
^ EPA's Response to Harmon's Statement of Uncontroverted Material Facts is being filed separately.
^ "CX" refers to EPA's exhibits which were admitted during the evidentiary hearing before the ALJ. "RX"
refers to Harmon's exhibits that were admitted during the evidentiary hearing. Portions of the
administrative record that are cited are contained in a separate Appendix, filed together with EPA's
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3.	From 1973-1987, Harmon employees disposed of spent solvents at the Grain Valley
facility by pouring them onto the ground at its facility. Initial Decision at 5-6; Harmon's Stmt.
1T1I3, 5, 7.5 Spent solvents were poured onto the ground from three to five gallon pails every
two to three weeks. Approximately 30 gallons per month were disposed of in this manner. Initial
Decision at 7; Transcript of Administrative Hearing, conducted January 12 - 14, 1994 ("Tr.")
375-76.4 Harmon's Vice President for Human Resources and Safety estimated that approximately
3,375 gallons of hazardous waste were disposed of in this manner. February 11, 1992, Affidavit
of Ronald Breshears, RX 72, App. A (App. 4).
4.	As a generator of hazardous waste and the operator of a hazardous waste disposal
facility, Harmon was subject to RCRA requirements. Initial Decision at 2-3; EAB Decision at 63.
5.	From the time applicable RCRA requirements became effective in 1980 and thereafter
until 1987, Harmon operated a hazardous waste facility without a permit or obtaining interim
status by filing a permit application in violation of subsection 3005(a) of RCRA, 42 U.S.C. §
6925(a), and 40 C.F.R. Part 270, the requirements of which were implemented by Missouri State
Code of Regulations at 10 C.S.R. § 25-7.270(1). Initial Decision at 2-3, 6-7; EAB Decision at
5-10; Respondent's Answer and Request for a Hearing, at 3, H7 (App. 5).
6.	From the time applicable RCRA regulations became effective in 1981 and thereafter
until 1993, Harmon had no groundwater monitoring system in place in violation of 40 C.F.R. Part
265, Subpart F, implemented under state law at 10 C.S.R. § 25-7.265. Initial Decision at 2-3;
EAB Decision at 5-10. Groundwater monitoring requirements are important in detecting
Suggestions. Citations to EPA's separate Appendix are designated "App.	
^ "Initial Decision" refers to the Initial Decision of the Administrative Law Judge in In re Harmon
Electronics. Inc.. No. RCRA-VII-91-H-0037 (EPA, Dec. 15, 1994). This decision is attached as Exhibit A
to Harmon's brief. "EAB Decision" refers to the Final Order of EPA's Environmental Appeals Board, In re
Harmon Electronics. Inc. RCRA (3008) Appeal No. 94-4. This order is attached as Exhibit B to Harmon's
brief.
^ Cited excerpts from the transcript are included in the Appendix at Tab 2.
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contaminants within the aquifer beneath a hazardous waste facility. Initial Decision at 45-50.
Harmon installed its first groundwater well in 1989 and its monitoring system was not completed
until 1993. Initial Decision at 13; Tr. 137-40; CX 26 (App. 6).
7.	From the time applicable RCRA regulations became effective in 1982 and thereafter
until November 1991, Harmon had no financial assurance instrument in place, in violation of 40
C.F.R. §§ 265.143 and 265.145, implemented under state law at 10 C.S.R. § 25.7.265. Initial
Decision at 2-3; EAB Decision at 5-10. Financial assurance regulations are designed to insure
that there will be sufficient funds to properly close a facility.
8.	From the time applicable RCRA regulations became effective in 1982 and thereafter
until at least November 1993, Harmon had no insurance coverage for sudden and non-sudden
accidental occurrences, in violation of 40 C.F.R. § 265.147, implemented under state law at 10
C.S.R. 25-7.265. Initial Decision at 2-3; EAB Decision at 5-10. Liability insurance regulations
are designed to lessen the risk of uncompensated injuries from operation of hazardous waste
disposal facilities. Initial Decision at 53.
9.	From the time applicable RCRA requirements became effective in 1980 and thereafter
until 1987, Harmon generated hazardous waste without registering as a hazardous waste
generator in violation of subsection 3010(a) of RCRA, 42 U.S.C. § 6930(a). Initial Decision at
2-3, 11; EAB Decision at 5-10; Notification of Hazardous Waste Activity, August 8, 1988, CX 9
(App. 7).
10.	Sometime in November, 1987, Harmon's upper management realized that its
employees were disposing of hazardous solvents as stated in Paragraph 3 above. Harmon's upper
management had previously been aware that solvents were being used at the Grain Valley facility.
Initial Decision at 6, 36; Tr. 397-98. The Chairman and Chief Executive Officer of Harmon
Industries, Robert Harmon, walked through the plant approximately once a week and observed
that solvents were in use. Initial Decision at 7; Tr. 398-99.
11.	After November 1987, Harmon ceased disposing of hazardous waste and changed
its manufacturing process to a water soluble flux. This process change had been in the planning
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stages for several years prior to November 1987 in reaction to the belief that these solvents would
eventually become illegal to use. Initial Decision at 7; Tr. 378-79.
12.	After determining in November 1987 that employees had been disposing of
hazardous solvents as stated in Paragraph 3 above, Harmon began an investigation into the
potential effects of this action. Harmon, however, did not disclose its disposal practices to
regulators until a meeting with MDNR seven months later in June 1988. Harmon's June 1988
disclosure to MDNR followed a RCRA compliance inspection by MDNR of Harmon's
Warrensburg facility in May 1988, which was cited for 10 violations of Missouri's hazardous
waste management laws. Initial Decision at 8-10; CX 8 (App. 8).
13.	MDNR informed Harmon at the June 1988 meeting that Harmon would be required
to comply with all applicable RCRA regulations at its Grain Valley facility. Initial Decision at 11;
Tr. 40-45. MDNR is the state agency authorized to administer the RCRA program in Missouri.
Harmon's Stmt. H21.
14.	MDNR performed a RCRA compliance inspection at Harmon's Grain Valley facility
in August 1988. MDNR's inspection report cited Harmon for operating a hazardous waste
facility without a permit, for failure to register as a hazardous waste generator, and noted that 40
C.F.R. Part 265 standards applied to Harmon's facility. Initial Decision at 11; Tr. 45-46, 53;
Sept. 1988 Compliance Inspection Report, RX 14 at 4-5 (App. 9).
15.	In a letter dated November 1, 1989, MDNR once again informed Harmon that
Harmon's Grain Valley facility was a hazardous waste disposal facility and was subject to
applicable hazardous waste laws and regulations, including financial assurance requirements at 40
C.F.R. Part 265. Nov. 1, 1989 Letter from Nicholas DiPasquale to James Lemieux, RX 33 at 1
(App. 10). Harmon received an additional written communication dated May 16, 1990 from
MDNR informing Harmon that Harmon's facility was a hazardous waste disposal facility subject
to applicable RCRA requirements. May 16, 1990 Letter from G. Tracy Mehan to William
Frerking, RX 40 (App. 11). Harmon's counsel acknowledged in a February 1990 memorandum
submitted to MDNR that "[t]he express language of the Missouri statutes permits MDNR to
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classify the Facility as a 'hazardous waste and disposal facility.'" Feb. 26, 1990, Research
Memorandum on the Authority of MDNR, RX 37 at 22 (App. 12); EAB Decision 63.
16.	Harmon did not establish a trust fund in fulfillment of the regulatory requirement to
obtain financial assurance for closure until November 22, 1991, over three years after it had first
been informed of the need to comply with standards applicable to operators of hazardous waste
disposal facilities. Initial Decision at 17; Trust Agreement, RX 69 (App. F) (App. 13).; Harmon's
Stmt. 1133.
17.	Harmon did not obtain liability coverage for sudden and non-sudden accidental
occurrences as required by 40 C.F.R. § 265.147. Initial Decision at 19-20; Joint Stipulation
concerning Count III, JX 2 (App. 14). Harmon did not even attempt to obtain such coverage
until some time in 1991. Harmon's search was then limited to only three companies and did not
include lower rated carriers that might have offered coverage. Tr. 631-642; Initial Decision at
17, 57.
18.	Investigation reports submitted to MDNR by Harmon demonstrated that soil and
groundwater at Harmon's Grain Valley facility were contaminated by hazardous wastes. Initial
Decision at 7-10; Phase I Report (June 1988) at 4-1 to 4-4, RX 6 (App. 3); Initial Decision at
13-14; Phase II Report, RX 31 at 6-6 to 6-10, Tables 3 and 4 (App. 15).
19.	Harmon's Phase I Report, submitted in June 1988, contained a summary of the
limited investigation that had been performed prior to that date. While the full extent of
contamination was still unknown, this Report showed that there was soil contamination in the area
of disposal. TCA and toluene exceeded acceptable levels for ingestion of contaminated water
and/or aquatic animals. Initial Decision at 7-10; RX 6 at 3-1 to 4-5 (App. 3).
20.	Harmon did not install any groundwater monitoring wells until June 1989. Initial
Decision at 13. Harmon's Phase II Report submitted in September 1989 showed that hazardous
solvents were in the groundwater beneath the facility as found in Phase I's soil test. The
groundwater analysis uncovered the solvents in all three monitoring wells. Initial Decision at
13-14; RX 31 at 6-6 to 6-10, Tables 3 and 4 (App. 15). Harmon's Phase III Report submitted in
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July 1992 additionally showed that environmental harm had occurred. RX 75 at 6-1, 6-6, App.
16. 21. In 1988 EPA became aware of Harmon's violations when an EPA Region VII
Compliance Officer was informed by MDNR enforcement personnel.2 EPA Region VII classified
Harmon as a high priority class 1 violator under EPA's 1987 RCRA Enforcement Response
Policy. This Enforcement Response Policy provided that once discovery of a violation is made,
EPA expects that a State authorized to administer a State RCRA program will take a formal
administrative enforcement action within 90 days, or a referral will be made for judicial or EPA
action. Initial Decision at 15; Tr. 104-05; EPA Enforcement Response Policy, CX 25 at 6 (App.
17).
22. EPA Region VII believed the violations to be of a serious nature and became
concerned when MDNR failed to take enforcement action against Harmon. Initial Decision at 15;
Tr. 103-110.
23.	In a letter dated May 29, 1990, EPA informed MDNR that EPA considered the
violations at the Harmon facility to be high priority class I violations pursuant to EPA's
Enforcement Response Policy, and urged MDNR to initiate an enforcement action against
Harmon within 30 days of MDNR's receipt of the letter, including the assessment of monetary
penalties. May 29, 1990 Letter from Michael J. Sanderson to Nicholas DiPasquale, CX 3 at
Exhibit 1 (App. 18); Tr. 107-09; Initial Decision at 15; EAB Decision at 8-9.
24.	No enforcement action was initiated by MDNR. In a letter dated October 15, 1990,
EPA again informed MDNR that if MDNR did not initiate a formal enforcement action against
Harmon within 30 days, including the assessment of monetary penalties, EPA would take its own
action. Letter from David A. Wagoner to David Schorr, CX 3 at Exhibit 2 (App. 18); Tr. 110;
Initial Decision at 15-16; EAB Decision at 9. MDNR made it clear to Harmon that it would not
impose a monetary penalty. RX 37 at 17 (App. 12).
^ EPA Region VII is an EPA Regional Office that handles issues arising in the States of
Missouri, Kansas, Nebraska, and Iowa, and is centered in an EPA office in Kansas City, Kansas.
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25.	After no enforcement action had been taken by MDNR, on September 30, 1991,
EPA filed an administrative Complaint, Compliance Order and Notice of Opportunity for Hearing
("Complaint") pursuant to subsection 3008(a) of RCRA, 42 U.S.C. § 6928(a), against Harmon
Electronics, Inc. The Complaint alleged numerous violations of RCRA; specifically, that Harmon
operated a hazardous waste disposal facility without a permit and without having obtained interim
status (Count I); that Harmon failed to have an adequate groundwater monitoring program in
place while operating its disposal facility (Count II); that Harmon failed to establish and maintain
financial assurances for closure and post closure care of the facility (Count III); that Harmon
failed to obtain liability insurance coverage (Count III); and that Harmon failed to notify EPA that
it was a generator of hazardous waste (Count IV). Complaint (App. 19). The Complaint was
later amended to revise the penalty calculation and to cure a pleading defect. The First Amended
Complaint ("Complaint") ordered Harmon to pay $2,343,706 in civil penalties. First Amended
Complaint (App. 20).
26.	Harmon requested a hearing pursuant to EPA's Consolidated Rules of Practice
Governing the Administrative Assessment of Civil Penalties at 40 C.F.R. § 22.15 (App. 5).
27.	In August 1992, EPA filed a Motion for Partial Accelerated Decision (App. 21),
seeking a finding of liability for all violations alleged in EPA's Complaint, and a Motion to Strike
certain of Harmon's affirmative defenses (App. 22).
28.	On March 5, 1993, 18 months after EPA had filed its administrative complaint, and
more than two years after EPA had notified MDNR that it would bring an enforcement action if
MDNR did not institute an enforcement action including monetary penalties, MDNR filed a
petition against Harmon and simultaneously entered a consent decree with Harmon in Missouri
Circuit Court relating to Harmon's illegal disposal practices. The decree required Harmon to
perform certain remediation but did not assess any civil monetary penalty. Petition for Injunctive
Relief and Consent Decree, Missouri v. Harmon. No. CV93-4629 (Mo. Cir. Ct.), RX 82 (App.
23).
29.	On August 17, 1993, the Administrative Law Judge ("ALJ") issued an Order (App.
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24),	in the EPA proceeding finding Harmon liable for the violations alleged in Counts I, II, part of
Count III, and Count IV of EPA's Complaint and granting EPA's motion to strike Harmon's
affirmative defenses. After EPA filed its amended Complaint, the ALJ on January 5, 1994,
granted EPA's Motion for Accelerated Decision with respect to the remainder of Count III (App.
25).	Initial Decision at 2-3.
30.	An evidentiary hearing was held January 12-14, 1994, to determine the
appropriateness of the $2,343,706 proposed penalty sought by EPA Region VII. Initial Decision
at 3-4. Pursuant to EPA's consolidated rules of practice at 40 C.F.R. Part 22. Harmon had an
opportunity to present a defense on the record through submission of oral and documentary
evidence, including the opportunity to present rebuttal evidence and to cross-examine EPA
witnesses.
31.	On December 15, 1994, the ALJ issued his Initial Decision, ordering Harmon to pay
a penalty in the amount of $586,716. Initial Decision at 66.
32.	The ALJ substantially reduced EPA Region VII1 s proposed multi-day penalty on all
counts of the complaint to reflect Harmon's self-reporting and cooperation with MDNR in the
investigation and remediation of the site. EPA Region VII had recommended more modest
reductions for Harmon's self-reporting. Initial Decision at 32-66; EAB Decision at 2.
33.	The ALJ rejected Harmon's arguments that a penalty was barred by the statute of
limitations at 28 U.S.C. § 2462. The ALJ limited the penalties assessed to the five-year period
preceding the filing of the complaint. Initial Decision at 20-32; EAB Decision at 2.
34.	The ALJ determined the amount of the civil penalty pursuant to the statutory criteria
at 42 U.S.C. § 3008 and EPA's RCRA Civil Penalty Policy. Harmon Stmt. U58, Initial Decision
at 32-33; EAB Decision at 69.
35.	EPA's RCRA Civil Penalty Policy ("penalty policy") sets up a system for calculating
penalties consisting of a "gravity-based" penalty, a "multi-day" penalty, adjustments for various
factors, and recapturing the economic benefit of noncompliance. The gravity-based component is
based on: (1) the potential for harm posed by the violation, and (2) the extent of deviation from
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the statutory or regulatory requirement. 1990 RCRA Penalty Policy, CX 11 at 2 (App. 26); EAB
Decision at 67. Each of these factors is characterized as either major, moderate or minor, which
in part determines the recommended penalty amount. M.
36.	In determining the potential for harm posed by a violation, EPA's Penalty Policy
recommends consideration of (a) "the likelihood that human or other environmental receptors may
be exposed to hazardous waste and/or hazardous constituents and the degree of such potential
exposure," and (b) whether the violation "undermines the statutory or regulatory purposes or
procedures for implementing the RCRA program." CX 11 at 13, 14 (App. 26). The potential for
harm is properly characterized as major if a violation either poses a substantial risk of exposure or
if it substantially undermines the integrity of the RCRA program.
37.	The Penalty Policy lists the following violations as ones that would have a serious
adverse impact on the continued integrity of the RCRA program so as to justify a finding of major
potential for harm:
•	failure to notify as a generator of hazardous waste;
•	failure to comply with financial assurance requirements;
•	operating without a permit;
•	failure to install or conduct adequate groundwater monitoring.
CX 11 at 14-15 (App. 26).
38.	For each violation in EPA's Complaint, the ALJ agreed with EPA Region VII's
determination regarding the potential for harm from Harmon's violations. Consistent with EPA's
Penalty Policy, the ALJ found that there was a major potential for harm for (1) Harmon's
operation of a waste landfill without a permit (Count I), (2) Harmon's failure to install a
groundwater monitoring system (Count II), and (3) Harmon's failure to comply with financial
requirements (Count III). The ALJ found that there was a moderate potential for harm resulting
from Harmon's failure to register as a hazardous waste generator. Initial Decision at 36-59.
39.	Pursuant to the Penalty Policy, the gravity-based component of the penalty may be
adjusted upward for lack of good faith, willfulness and/or negligence. CX 11 at 34 (App. 26);
Initial Decision at 35.
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40.	The ALJ accepted Region VII's proposed 25% upward adjustment factor on Count
III of the Complaint based on Harmon's failure to attempt to comply with financial assurance
requirements until 1991 despite notification in 1988 that it was subject to them, and Harmon's
failure to attempt to secure liability insurance until 1991. Initial Decision at 55-58.
41.	Harmon filed an appeal of the ALJ's decision to EPA's three-judge Environmental
Appeals Board ("EAB"). Harmon's Stmt. U68.
42.	On March 24, 1997, the EAB issued a 71 page Final Order unanimously affirming
the ALJ's Initial Decision and assessing a $586,716 penalty against Harmon.
43.	The EAB held that (1) RCRA authorizes EPA to bring an action in an authorized
State even if the State has taken action against the same respondent for the same violations, (2)
EPA's action was not precluded by the doctrine of res judicata, (3) EPA's penalty assessment was
not barred by the applicable statute of limitations, (4) the ALJ's determinations regarding the
seriousness of the violations were proper, and (5) the ALJ properly included an upward
adjustment for Count III based on Harmon's bad faith. EAB Decision at 70-71.
44.	Harmon filed the instant action on March 24, 1997, challenging EPA's Final Order.
U. STATUTORY AND REGULATORY BACKGROUND
Congress enacted RCRA in 1976 to address increasingly serious environmental and health
dangers arising from the generation, management, and disposal of waste. In enacting RCRA
Congress's overriding concern was "the effect on the population and the environment of the
disposal of discarded hazardous wastes — those which by virtue of their composition or longevity
are harmful, toxic, or lethal" and "present a clear danger to the health and safety of the population
and to the quality of the environment." H.R. Rep. No. 94-1491 at 3, 11 (1976), reprinted in 1976
U.S.C.C.A.N. 6238, 6241. Although RCRA as a whole addresses non-hazardous and hazardous
wastes, Subtitle C of RCRA, 42 U.S.C. 6921-3939e, fulfills RCRA's purpose of providing
nationwide protection against the dangers of improper hazardous waste disposal and establishes a"
'cradle to grave' regulatory structure overseeing the safe treatment, storage and disposal of
hazardous waste." United Technologies Corp. v. EPA. 821 F.2d 714, 716 (D.C. Cir. 1987).
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RCRA further provides for dual Federal and State responsibilities to carry out the regulatory
program
To establish the foundation for the regulatory structure, RCRA directed EPA to establish
a comprehensive national regulatory program for hazardous waste management. Some of the key
programmatic elements of this national program are set forth below. First, EPA is required to
identify hazardous wastes under RCRA § 3001, 42 U.S.C. § 6921 (see 40 C.F.R. Part 261),
which in turn triggers notification requirements for facilities engaged in hazardous waste activity,
RCRA § 3010, 42 U.S.C. § 6930. Next, generators are obligated to comply with management
standards promulgated by EPA pursuant to RCRA § 3002, 42 U.S.C. § 6922 (see 40 C.F.R. Part
262). Owners and operators of hazardous waste treatment, storage, and disposal facilities ("TSD
facilities") must comply with standards promulgated by EPA pursuant to section 3004, 42 U.S.C.
§ 6924 (see 40 C.F.R. Parts 264-265), and obtain permits pursuant to section 3005, 42 U.S.C. §
6925 (see 40 C.F.R. Part 270 & §§ 271.13 & 274.14). Among other requirements, owners and
operators of TSD facilities must (1) operate a monitoring system capable of determining any
impact on groundwater quality (see 40 C.F.R. Part 265, Subpart F), (2) establish and maintain a
financial insurance assurance mechanism to ensure that the funds needed to implement safe
closure are available (see 40 C.F.R. Part 265 Subpart H), and (3) obtain liability insurance for
coverage for claims arising out of hazardous waste management operations (see 40 C.F.R. Part
265, Subpart H). Thus, EPA has responsibility to establish the national regulatory framework for
hazardous waste management under RCRA Subtitle C.
RCRA further provides that EPA may authorize States to assume responsibility for
implementing a State hazardous waste program "in lieu of the federal regulatory program
outlined above. RCRA section 3006(b), 42 U.S.C. § 6926(b). To receive authorization, a State
regulatory program must be equivalent to and consistent with the federal program and must
provide for adequate enforcement of RCRA requirements. Li. & 40 C.F.R. Part 271. When a
State is authorized to administer a hazardous waste program, State regulations become the body
of regulations with which a facility must comply. States authorized to administer RCRA
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hazardous waste programs do not operate as Federal delegatees or agents.
It has long been a Federal goal and EPA policy to encourage and support primary State
administration of the RCRA hazardous waste management program. §££ RCRA § 1003(a)(7), 42
U.S.C. § 6902(a)(7). At the same time, EPA has been directed to ensure that hazardous wastes
are managed nationally in a responsible manner. §££ RCRA § 1003(b), 42 U.S.C. § 6902(b).
Recognizing both the state interest in program administration and the national interest in
consistent and effective implementation of the RCRA program, RCRA provides for dual state and
federal authority in authorized states. Section 3007(a) of RCRA broadly empowers EPA to
conduct inspections and sampling, and to require production of information in order to enforce
RCRA requirements. 42 U.S.C. § 3007(a). Likewise, section 3008(a) broadly empowers EPA
to bring a Federal enforcement action "whenever" it determines there is a violation of RCRA
requirements. 42 U.S.C. § 6928(a).
Federal enforcement is a critical tool to promote the national interest in protecting human
health and the environment by promoting consistent compliance with RCRA requirements,
including those requirements administered by an authorized State. Thus, while States are
encouraged to assume primary program administration responsibility under RCRA, EPA retains
certain oversight responsibilities concerning the activities regulated under State programs. EPA
also retains its independent authority to take direct enforcement action against a violator of
State-administered RCRA requirements, so long as it informs the State before taking action.
Section 3008, 42 U.S.C. § 6928, provides in relevant part:
§ 6928. Federal enforcement
(a) Compliance orders
(1)	Except as provided in paragraph (2), whenever on the basis
of any information the Administrator determines that any person
has violated or is in violation of any requirement of this subchapter,
the Administrator may issue an order assessing a civil penalty for
any past or current violation ....
(2)	In the case of a violation of any requirement of this
subchapter where such violation occurs in a State which is
authorized to carry out a hazardous waste program under section
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6926 of this title, the Administrator shall give notice to the State in
which such violation has occurred prior to issuing an order or
commence an action under this section.
(Emphasis added).2 In accordance with section 3008, EPA regulations provide for EPA
enforcement when an authorized state fails to obtain adequate penalties. &££ 40 C.F.R. §
271.16(c).
Pursuant to subsection 3006(b) of RCRA, 42 U.S. C. § 6926(b), the State of Missouri was
granted final authorization by EPA in 1985 to administer and enforce a hazardous waste program
in that State. Upon authorizing Missouri's hazardous waste program EPA reiterated that it has
independent enforcement authority under RCRA section 3008. See 40 C.F.R. § 272.1300(c) ("
EPA retains the authority to exercise its enforcement authorities under sections .. . 3008 of
RCRA"). Further, the State and EPA Agreement governing coordination of the RCRA program
in Missouri expressly and unconditionally affirms EPA's enforcement and other oversight
responsibilities under RCRA. $££ Memorandum of Agreement between the State of Missouri and
the United States Environmental Protection Agency, Region VII at §1,114 & §11, HI (executed
by the State and EPA in 1988) (App. 27).
ARGUMENT
EPA has full authority under RCRA to assess a civil penalty against a violator such as
Harmon even where an authorized State has taken some action based on the same regulatory
violations. The plain language of RCRA section 3008 provides that the only limitations on EPA's
enforcement authority in an authorized State are that EPA must determine there is a violation and
provide notice to the State. Harmon's construction of the statute would frustrate its important
^ EPA has other authorities it may invoke in the course of its oversight duties under RCRA.
For example, EPA has authority under subsections 3005(d) and 3008(a)(3), 42 U.S.C. §§
6925(d) and 6928(a)(3) to revoke a State-issued permit if the permittee fails to comply with
RCRA standards, and EPA has authority under subsection 3006(c), 42 U.S.C. § 6926 to
withdraw State program authorization if the State is not administering its program in
accordance with RCRA. Federal enforcement in appropriate cases represents a
narrowly-tailored alternative to State program withdrawal that promotes national compliance
with RCRA but does not displace primary state program administration.
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remedial health and safety objectives, and deference is owed to EPA's reasonable construction of
a statute it administers.
EPA further is not barred by the applicable statute of limitations from imposing a penalty
on Harmon based on illegal conduct that continued into the limitations period. RCRA imposes
continuing obligations to engage in responsible hazardous waste management practices.
Harmon's continuing violations of the statute tolled the statute of limitations until the offenses
ceased. EPA additionally did not abuse its discretion in assessing a $586,718 penalty against
Harmon. EPA considered the seriousness of the violations and reasonably assessed a penalty for
Harmon's violation of financial requirements.
Because EPA has full authority to assess a penalty against Harmon and because the
penalty assessed is reasonable, EPA's motion for summary judgment should be granted.
I. THE APA ESTABLISHES A DEFERENTIAL
STANDARD OF REVIEW OF AGENCY ACTION
Review of final administrative decisions such as the Environmental Appeals Board's Final
Order falls under the Administrative Procedure Act ("APA"), 5 U.S.C. § 706. The scope of
review of an administrative order assessing penalties is very narrow. If the administrative order is
supported by substantial evidence, and the Agency's determination is not arbitrary, capricious, or
otherwise contrary to law, it must be upheld. 5 U.S.C. § 706(2); Panhandle Coop. Ass'n v. EPA.
771 F.2d 1149 (8th Cir. 1985). An agency action is considered arbitrary and capricious only if a
court can find no rational basis for the agency's decision. $££ Bowman Transp.. Inc. v.
Arkansas-Best Freight Svs. Inc.. 419 U.S. 281, 285-86 (1974). "The assessment of a penalty is
particularly delegated to the administrative agency. Its choice of sanction is not to be overturned
unless 'it is unwarranted in law' or 'without justification in fact.'" Panhandle Coop. Ass'n v. EPA.
771 F.2d at 1151 (citation omitted).
n. EPA MAY LAWFULLY PENALIZE HARMON FOR ITS RCRA VIOLATIONS
A. EPA Mav Issue a Civil Penalty for Violations of RCRA in an Authorized State.
RCRA section 3008 provides EPA with full authority to issue a civil penalty against
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Harmon based on Harmon's RCRA violations at its Grain Valley, Missouri, facility.
Harmon contends that EPA cannot assess a penalty here because Harmon has entered into
a settlement agreement with the State of Missouri (thorough MDNR) related to its RCRA
violations. Harmon concedes that EPA had authority to impose a civil penalty at the time EPA
filed its administrative complaint in September 1991. Harmon Suggestions at 24. Harmon
nonetheless argues that EPA lost its authority to issue a final penalty order in March 1993 when
Missouri filed a petition and simultaneous consent order in State court relating to Harmon's illegal
conduct. This argument must be rejected because it does not comport with a plain reading of the
statute, would frustrate the statute's important health and safety objectives, and is at odds with
EPA's longstanding interpretation of its enforcement authority.
1. The Plain Language of RCRA Provides that the Only Limitations
on EPA's Authority to Issue a Civil Penalty For Violations in an
Authorized State is That EPA Must Determine There is A
Violation and Provide Notice to the State	
In reviewing EPA's construction of a statute that it administers, this Court is guided by the
principles set forth by the United States Supreme Court in Chevron U.S.A.. Inc. v. Natural
Resources Defense Council. Inc.. 467 U.S. 837, 842-45 (1984). First, the Court must consider "
whether Congress has directly spoken to the precise question at issue." M- at 842. Second, if
Congress has not unambiguously addressed the issue, the Court must uphold the agency's
interpretation of the statute unless that interpretation is unreasonable. Id. at 843-45.
Here, a plain reading of the statute demonstrates that EPA has authority to impose a civil
penalty against Harmon. The scope of EPA's enforcement authority under RCRA Subtitle C in
States authorized to administer a hazardous waste program is specifically set forth in section 3008
of the statute, 42 U.S.C. § 6928. Subsection 3008(a) provides, in relevant part, that EPA may
bring a federal enforcement action "whenever on the basis of any information" it determines there
is or has been a violation and provides notice to the State (emphasis added).
The text of RCRA subsection 3008(a) confirms that Congress has broadly empowered
EPA to bring an enforcement action against violations revealed on the basis of any information,
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and that the only restraints on EPA's authority to bring an enforcement action in an authorized
State are that EPA must: (a) determine that there is or has been a violation, and (b) must notify
the authorized State before issuing an order or commencing a civil action for violations in that
State. The statute plainly provides that EPA may commence an enforcement action "whenever"
these conditions are met. RCRA § 3008(a)(1), 42 U.S.C. § 6928(a)(1).
If Congress had intended to establish a further limitation on EPA's authority to bring an
enforcement action in an authorized State in instances where a State had already taken some
action, such as entering into a settlement with a regulated entity, it would have explicitly set forth
such a limitation within the text of section 3008. RCRA's citizen suit provision, RCRA
subsection 7002(b)(1)(B), 42 U.S.C. § 6972(b)(1)(B), demonstrates that Congress was well
aware of how to explicitly condition enforcement power based on State action. The citizen suit
provision disallows citizen suits in instances where the "State has commenced and is diligently
prosecuting a civil or criminal action .. . ." 42 U.S.C. § 6972(b)(1)(B).
Congress' failure to include analogous explicit language in section 3008 demonstrates that
it did not intend to condition EPA's enforcement authority based on State
action. It is generally presumed that Congress acts intentionally and
purposefully when it includes particular language in one section of the
statute but omits it from another. BFP v. Resolution Trust Corp.. 511 U.S.
531, 537 (1994). As EPA has principal authority to administer the statute,
one would expect that any condition on EPA's enforcement authority
would be stated at least as explicitly as a condition on citizen enforcement.
2. Oblique Language in Section 3006 of RCRA Does Not
Modify the Plain Exposition of EPA's Enforcement
Authority Set Forth in Section 300ft.	
Harmon's contention that language in section 3006, which relates generally to EPA
authorization of State hazardous waste programs, modifies the plain exposition of EPA's
enforcement authority in section 3008 is without merit. When the language in section 3006 relied
on by Harmon is considered in context, it is clear that this language does not affect EPA's
enforcement authority. Cf. Bailev v. United States. 516 U.S. 137, 145 (1995) (The Court"
considers] not only the bare meaning of the word but also its placement and purpose in the
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statutory scheme").
Harmon points first to language in RCRA subsection 3006(b), 42 U.S.C. § 6926(b),
providing that an authorized State:
is authorized to carry out [a hazardous waste program] in lieu of the Federal program under this
subchapter in such State and to issue and enforce permits for the storage, treatment, or disposal of
hazardous waste ....
No serious argument can be made that the "in lieu of language limits EPA's enforcement
authority in an authorized State. $££, United States v. MacDonald & Watson Waste Oil Co..
933 F.2d 35, 43-46 (1st Cir. 1991) (rejecting argument that the "in lieu of phrase disables Federal
criminal enforcement authority under RCRA section 3008 in an authorized State); Wvckoff Co. v.
EPA. 796 F.2d 1197, 1199 (9th Cir. 1986) (rejecting same argument for orders issued under
RCRA § 3013). When a State is authorized to administer a hazardous waste program in lieu of
the Federal program, this means that State regulations become the body of regulations with which
a facility must comply. Section 3006(b) thus addresses what regulations are to be enforced in an
authorized State, not who has authority to enforce these regulations.
Harmon next points to subsection 3006(d), 42 U.S.C. § 6926(d), which provides:
(D) Effect of State permit
Any action taken by a State under a hazardous waste program
authorized under this section shall have the same force and effect as
action taken by the Administrator under this subchapter.
Considered in context, this language plainly functions to ensure the integrity of State authorized
permit programs without eviscerating EPA's enforcement authority set forth explicitly in
subsection 3008(a). The broad construction of the "same force and effect language" advocated by
Harmon does not hold up when consideration is given to the following factors: (1) the presence of
such language in a section that does not address EPA's enforcement authority and the absence of
preclusive language in a statutory section that plainly does, (2) the absence of any need to
eviscerate subsection 3008(a) to give effect to subsection 3006(d), (3) the underlying purpose of
RCRA Subtitle C to protect human health and the environment, (4) judicial precedent, and (5)
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consideration of legislative intent.
As discussed above, if Congress had intended to limit EPA's enforcement authority it
would have placed a limitation directly in subsection 3008(a), not buried it in a subsection
unrelated to EPA enforcement. Harmon's argument that the plain meaning of subsection 3008(a)
must be ignored so as to give effect to subsection 3006(d) is without merit. Subsection 3006(d)
addresses the scope of State authority, not the diminution of Federal authority ~ enforcement or
otherwise. Most obviously, the "same force and effect" language in subsection 3006(d) ensures
that permits issued by an authorized State will have the same effect as, and will be as enforceable
as, EPA-issued permits. Without such language, there might be some question as to whether a
facility operating under a State hazardous waste permit was operating legally under RCRA, and
whether the conditions of such a permit were federally enforceable.2 Thus, the plain meaning of
subsection 3008(a) does not nullify the vitality of subsection 3006(d).
The fact that subsection 3006(d) is entitled "Effect of State Permit" provides compelling
evidence that Congress' intent in enacting subsection 3006(d) was to assure the integrity of
State-issued permits and not to preclude Federal enforcement of violations whenever necessary.
See TNS v National Center for Immigrants' Rights. Inc.. 502 U.S. 183, 189 (1991) (holding that
title of a statute or section can aid in resolving an ambiguity in the legislation's text). The
reference in the heading to the effect of permits belies Harmon's claim that Congress was
concerned with limiting EPA's enforcement discretion.
Harmon's suggested construction of the statute additionally does not comport with its
fundamental remedial purpose. "While words employed by Congress must be given their ordinary
meaning, they must also be interpreted 'in light of the purposes Congress sought to serve.'"
* The Tenth Circuit's recent decision in Chemical Weapons Working Group. Inc. v. United
States Dep't of the Armv. 111 F.3d 1485 (10th Cir. 1997), reflects the vitality of the "same
force and effect" language under EPA's straightforward interpretation. In Chemical Weapons,
the Court denied citizens' challenge to a State-issued permit under RCRA's citizen suit
provision, RCRA § 7002, 42 U.S.C. § 6972. Citing the "same force and effect" provision, the
Court concluded that the RCRA citizen suit provision did not allow a collateral attack on either
an EPA issued permit or a State-issued permit. 111 F. 3d at 1492.
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United States v. Conservation Chem. Co.. 619 F. Supp. 162, 192 (W.D. Mo.) (quoting Chapman
v. Houston Welfare Rights Organization. 441 U.S. 600, 608 (1979). '"Statutes which are enacted
for the protection of public health' are to be given 'an extremely liberal construction for the
accomplishment and maximization of their beneficent objectives.'" M (quoting 3 Sutherland,
Statutes and Statutory Construction. § 71.02).
RCRA Subtitle C exists to promote the protection of health and the environment by
assuring that hazardous waste management practices are conducted in a safe manner. 42 U.S.C. §
6902(a)(4), (5) and (b). Harmon's suggested construction would frustrate, not further, the public
safety and health goals of RCRA by barring EPA from exercising oversight responsibilities when,
for example, the State enters a settlement that fails to provide for adequate injunctive relief to
abate hazardous waste pollution or that fails to promote statutory compliance. Congress created
a "statutory scheme of dual enforcement [to] 'serve[] as an incentive to encourage handlers of
hazardous waste to adopt environmentally sound procedures and to keep States operating their
own programs on their toes.'" United States v. Conservation Chem Co.. 660 F. Supp. 1236,
1245 (N.D. Ind. 1987) (quoting R. Andersen, The Resource Conservation and Recovery Act of
1976: Closing the Gap. 1978 Wise. L. Rev. 635, 664).^
Judicial decisions construing the scope of EPA's enforcement power in authorized States
under RCRA provide further solid support for EPA's plain reading of the statutory scheme. See.
Waste Management of Illinois. Inc. v. EPA. 714 F. Supp. 340 (N.D. 111. 1989); United States
^ Harmon's analogy to various other statutes containing the words "same force and effect" at
pages 22-23 and n.5 of its brief, is unavailing. The use of these words in different statutes
with different provisions and purposes sheds little light on the meaning of the words as used in
subsection 3006(d) of RCRA. Harmon suggests these statutes are relevant inasmuch as they
address the question of when a "junior official" might be deemed to bind a "senior official."
Delegations to "junior officials" are a wholly different matter from the questions of federalism
and sovereignty that are implicated here where a State is authorized to carry out state
regulations in lieu of Federal regulations. The two district court decisions in North Carolina and
Maine addressing veterans' benefits are also inapposite. The language at issue in those
cases -- providing that a decision of a VA Administrator is "final and conclusive" -- is not the
same language at issue here.
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v. Rogers. 685 F. Supp. 201 (D. Minn. 1987); United States v. Environmental Waste Control.
698 F. Supp. 1422 (N.D. Ind. 1988); USG Corp. v. Brown. No. 89C2874, 1997 WL 89229 (N.D.
111. 1997) (App. 28). As explained by the Court in Waste Management:
Once a state program is authorized, any action taken by the state "
shall have the same force and effect as action taken by the
Administrator ... Nonetheless, the U.S. EPA retains certain
residual controls under RCRA. For example,... the Administrator
may take enforcement action in a state with its own hazardous
waste program, as long as he informs the state before taking action.
714 F. Supp. at 340 (emphasis added). Similarly, in USG Corp. the Court observed that while
any action by the State "shall have the same force and effect as action taken by the Administrator,"
EPA is nonetheless authorized to "override the state program when necessary to enforce
compliance with that statute." 1997 WL 89229 at *6 (emphasis added) (App. 28).
3. RCRA's Legislative History Supports the Conclusion that Congress
Intended to Allow EPA to Overfile State Actions
A fair examination of RCRA's relatively scant legislative history adds further weight to the
conclusion that Congress intended to allow EPA to initiate an enforcement action in authorized
States (this is sometimes referred to as "overfiling") even if the State has taken some action. As
noted by Harmon (Suggestions at 27, n.10), the final 1976 Act struck language proposed by the
Senate that would have explicitly prohibited EPA from enforcing violations in authorized States
unless the State had failed to bring an enforcement action. This deletion indicates that Congress
considered and rejected the imposition of such a limitation on EPA's enforcement authority. See
Russello v. United States. 464 U.S. 16, 24 (1983) ("Where Congress includes limiting language in
an earlier version of a statute, but deletes it prior to enactment, it may be presumed that the
limitation was not intended").
Furthermore, nothing in the excerpt from the House Report cited by Harmon — providing
that "the Administrator is not prohibited from acting in those cases where the states fail to act" —
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places a limitation on EPA's enforcement authority. &££ Harmon Suggestions at 26-27. The best
reading of this language (and the only one that comports with the actual language of section
3008) is that it provides an obvious example of when EPA might elect to exercise discretionary
enforcement authority (e.g. when the state has failed to act). Such language does not address
when or how EPA may be prohibited from acting. In any event, the instant case is one where
EPA acted to enforce a civil penalty against Harmon because the State had failed to act to do so
itself.
The balance of the legislative history cited by Harmon is unenlightening. Harmon's
analysis in large part misconstrues Congress' manifest intent to encourage establishment of State
hazardous waste programs as an intent to limit EPA oversight of those programs. See Harmon
Suggestions at 25-26, nn. 6-9. The fact that Congress sought for a variety of reasons to
encourage authorization of State programs does not reflect any Congressional intention to
preclude EPA from playing a role in the implementation, enforcement or oversight of those
programs in authorized States. Indeed, as Harmon concedes, subsection 3008(a)(2) plainly allows
EPA to take enforcement actions in authorized States.
Harmon's analysis further confuses the RCRA Subtitle D program, 42 U.S.C. §§
6941-6949a, addressing non-hazardous solid wastes, with the RCRA Subtitle C program, 42
U.S.C. §§ 6921-6939e, addressing hazardous wastes. "Unlike Subtitle C, Subtitle D was
designed and intended to be largely state-administered upon the Agency's approval of the state's
solid waste management plan," Sierra Club v. EPA. 992 F.2d 337, 339 (D.C. Cir. 1993)
(emphasis added), with limited enforcement authority provided to EPA.1* Legislative history
quoted by Harmon that pertains to solid waste regulation under Subtitle D is inapposite as
Congress established a solid waste (Subtitle D) regulatory scheme which minimizes federal
activity while under Subtitle C EPA is key in the development, implementation and enforcement
^ Under RCRA Subtitle D, subsection 4005(c)(2), EPA is only allowed to enforce the minimum federal
revised criteria (40 C.F.R part 258) where the Administrator has determined that the State has no! adopted
an adequate program. 42 U.S.C. § 6945(c)(2).
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of the hazardous waste program (see Harmon Suggestions at 25-26, nn. 6, 9, 15) (Congress
minimized Federal requirements "except in the control of hazardous wastes," 122 Cong. Rec.
33816, 33818 (Sept. 30, 1976) (statement of Sen. Bakerl reprinted in A Legislative History of
the Solid Waste Disposal Act, as Amended, at 770, 102d Cong., 1st Sess. (S. Print 102-35
1991 )).ii
In short, the legislative history supports EPA's interpretation of the statute.
4. To the Extent There is any Ambiguity in the Statute,
EPA's Reasonable and Longstanding Construction of its
Enforcement Authority is Entitled to Deference	
Even if there were deemed to be any ambiguity in the statutory language, EPA's
interpretation of the statute which it administers is reasonable, and therefore, must be accorded
Chevron deference. Chevron deference is based on a "presumption that Congress when it left
ambiguity in a statute meant for implementation by an agency, understood that the ambiguity
would be resolved, first and foremost, by the agency." Smiley v. Citibank. 116 S. Ct. 1730, 1733
(1996).
EPA's interpretation of its statutory authority is not only consistent with the plain
language of the statute, but furthers important policy goals. Achieving and maintaining a high
level of compliance with environmental laws and regulations is one of the most important
objectives of EPA. &££ 42 U.S.C. § 6902(a)(5). Dual Federal and state enforcement authority of
RCRA strengthens compliance and furthers the statute's overriding national goal of ensuring that
hazardous waste is disposed in an environmentally protective manner. See 42 U.S.C. § 6902(b) ("
The Congress hereby declares it to be the national policy of the United States that...
^ Harmon's reliance on statements made in Congressional hearings that were not made by
a member of Congress or included in official House and Senate reports is misplaced. See
Harmon Opposition at 27 n.11,28 n.12, and 32 n.15. The Supreme Court has recognized that
no significance is to be accorded to such statements. Kellv v. Robinson. 479 U.S. 36, 50-51 at
n.13 (1986).
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[hazardous] waste should be treated, stored, or disposed of so as to minimize the present and
future threat to human health and the environment") (emphasis added). It "is important that the
possibility of EPA enforcement be available as a backstop to ensure that wrongdoing is properly
addressed and to fully vindicate national interests." EAB Decision at 18.1*
EPA and an authorized State do not have the same motives and interest in enforcing
RCRA requirements. 42 U.S.C. § 6902. Authorized States may be more interested "in
encouraging regulated industries to remain in or relocate to the State, thereby preserving or
bolstering the State's economy," than in "enforcing, strict, nationally-consistent hazardous waste
management standards." EAB Decision at 17.^ Authorized States may also be reluctant to
allocate scarce resources towards enforcement of strict nationally consistent hazardous waste
management standards. "To assume that [EPA] and the State government will always have
identical interests and concerns in the enforcement of matters... would ignore political barriers
and fiscal realities." EAB Decision at 18.
EPA's interest in creating an effective deterrent to non-compliance may go beyond what a
State feels is appropriate to support its own program. For example, EPA may have a special
interest in enforcing particular kinds of violations that are prevalent nationwide, or in bringing an
action against a company that has violated laws in many States. EPA also may have a greater
concern for violations resulting in cross-border pollution.
^ As a policy matter, EPA does consider a variety of factors, including the sufficiency of any
State action, in determining whether it is appropriate to bring an enforcement action in a
particular case. £££ RCRA Enforcement Response Policy at 16-17 (Dec. 21, 1987), CX 25,
App. 17. In light of its limited resources and its desire that states should implement the
hazardous waste program to the extent feasible, EPA in practice limits its exercise of
enforcement discretion in authorized states to when the state has failed to assess, seek or
obtain a penalty appropriate to the violation. EPA's decision about whether to bring an
enforcement action is discretionary, however, and non-reviewable. Heckler v. Chaney. 470
U.S. 821, 828-32 (1985).
^ See generally Peter B. Swire, The Race to Laxity and the Race to Undesirabilitv: Explaining Failures
in Competition Among Jurisdictions in Environmental Law. 14 Yale J. on Reg. 67 (1996); Kristen H.
Engel, State Environmental Standard-Setting: Is There a 'Race' and is it 'to the Bottom?. 48 Hastings L.J.
271 (1997)..
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EPA's interpretation of its statutory authority is longstanding. Since the adoption in 1980
of consolidated regulations governing State program approval, EPA has required that authorized
States assess civil penalties that are appropriate to the violation. 45 Fed. Reg. 33377, 33462
(May 19, 1980) (codified originally at 40 C.F.R § 123.9(c) and now codified at § 271.16(c)). At
the same time, EPA prescribed parameters to govern a State's determination of appropriate
penalties, and stated in the preamble that these requirements were intended to mitigate the cases
in which EPA would need to bring a Federal enforcement action in authorized States:
The Agency has determined that it is necessary to set specific
minimum levels of fines and penalties which States must have the
authority to recover in order to ensure effective State enforcement.
Without such minimum levels, EPA would be forced to take its
own enforcement action in approved States because the State
action imposed inadequate penalties. Such EPA action, while
available as a backstop, is not intended to be relied upon as the
prime enforcement mechanism in approved States.
45 Fed. Reg. 33377, 33382 (May 18,1980) (emphasis added).
Subsequently, EPA promulgated a final rule in 1983 that retained the requirement for
States to assess appropriate penalties but dropped specific parameters for penalties in favor of a
simple regulatory statement that EPA would bring federal enforcement action if it determined that
State judgments or settlements were substantially inadequate: :
NOTE: To the extent the State judgments or settlements provide
penalties in amounts which EPA believes to be substantially
inadequate in comparison to the amounts which EPA would require
under similar facts, EPA, when authorized by the applicable statute,
may commence separate actions for penalties.
48 Fed. Reg. 39615, 39622-23 (Sept. 1, 1983), 40 C.F.R. § 271.16(c) (emphasis added).^
^ This provision was originally proposed in 1982 as an amendment to a consolidated rule
applying to 5 separate State permit programs under RCRA, the Clean Water Act, 33 U.S.C. §
1251 et seq., the Clean Air Act, 42 U.S.C. § 7401 et seq., and the Safe Drinking Water Act, 42
U.S.C. § 300f et seq. See 47 Fed. Reg. 25546, 25547, 25549 & 25554 (June 14, 1982). This
explains the presence of the "when authorized by the applicable statute" language, since the
statutes have various provisions addressing federal enforcement of State programs. As noted,
EPA enforcement of State-administered RCRA programs is expressly "authorized" by RCRA
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The text of this rule has remained unchanged since it was promulgated in 1983, and clearly
contemplates federal enforcement when the action of an authorized State results in an inadequate
penalty.
The scope of EPA's enforcement authority in authorized States additionally received
in-depth consideration in 1986 when EPA's General Counsel rendered a legal opinion rejecting
the very same arguments that Harmon raises now. EAB Decision at 12 n.7, citing "Effect on EPA
Enforcement of Enforcement Action Taken by State With Approved RCRA Program," from
Francis S. Blake, General Counsel, to Lee M. Thomas, Administrator (May 9, 1986) (App. 29).
EPA's General Counsel concluded that "RCRA allows the Administrator to exercise complete
prosecutorial discretion in deciding whether to commence federal enforcement when a State has
taken action." (App. 29 at 1).
Numerous Agency enforcement decisions have also affirmed EPA's position. See, e.g.. In
re Gordon Redd Lumber Co.. 5 E.A.D. 301, 308, 1994 WL 276874, at *5 (EAB 1994) ("
Nevertheless, under the statute, even if the State brings an enforcement action for violations of the
State's program, the Agency retains authority to bring its own enforcement action for such
violations.") (App. 30); In re Southern Timber Prods. Inc.. 3 E.A.D. 371, 378 1990 WL 303833,
at *5(CJO 1990) ("The Agency has long interpreted RCRA as authorizing a federal enforcement
action in an authorized State even where the State has 'acted' in some limited fashion") (App. 31);
Tn re Martin Elecs.. Inc.. 2 E.A.D. 381, 385, 1987 WL 109670, at *3 (CJO 1987) ("[E]ven if a
State's enforcement action is adequate, such State action provides no legal basis for prohibiting
EPA from seeking penalties for the same RCRA violation. EPA's decision whether to defer to
prior State action is a matter of enforcement discretion and policy") (App. 32).
In short, should the Court find any ambiguity in the statutory language, EPA's
whenever there is a finding of violation and notice to the State. EPA would not have included
this provision in the final rule governing solely RCRA hazardous waste program authorizations
if EPA believed that it did not have authority under RCRA Subtitle C to bring an action after an
inadequate State settlement or judgment. If Harmon's construction of RCRA were accepted,
this regulation would be meaningless.
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longstanding position on its enforcement authority is reasonable and entitled to deference.15
B. EPA's Civil Penalty Against Harmon
is not Barred Bv Principles of Res Judicata
EPA is not precluded by principles of res judicata from imposing a civil penalty against
Harmon for Harmon's substantial violations of the nation's principal law governing hazardous
waste management. EPA's interests and the interests of a State authorized to administer a State
RCRA program in lieu of the federal program are not identical, and in this case, they very
obviously diverged. EPA acted to impose a civil penalty on Harmon in light of the State's refusal
to impose any penalty itself. EPA was not a party to, did not participate in, and did not otherwise
endorse MDNR's consent decree with Harmon. Nor in authorizing Missouri's state hazardous
waste program did EPA deputize MDNR to act for it. Accordingly, the MDNR-Harmon consent
decree does not preclude EPA from assessing a civil penalty against Harmon.
Under Missouri law, "[r]es judicata prevents a party or privy from relitigating facts or
questions in issue in a former action between the same party which has been settled by a judgment
on the merits." Clements v. Pittman. 765 S.W.2d 589, 591 (Mo. 1989). Privity connotes those
who are so connected with the party to the judgment as to have an identity of interest. Id, at 591. "
^ Harmon's assertion that after RCRA's enactment "EPA interpreted the law in a manner directly
contrary to its current view" is simply erroneous. Harmon Suggestions at 29. Harmon points to two
statements from a 1978 Congressional hearing by an EPA Assistant Administrator, but these statements do
not address EPA's authority to bring enforcement actions in authorized States. Rather, they address issues
related to the authorization process and the cohesive program of hazardous waste regulations to be
implemented by a State. Harmon's superficial analysis again confuses the distinction between
issues related to State program authorization and EPA's authority to enforce against violations
in authorized States. The testimony of Mr. Jorling cited by Harmon at page 29 of its brief
relates to whether EPA should grant partial, as opposed to full, authorization of State programs
during the period of "interim authorization," (42 U.S.C. § 6926c)) and has no relevance here.
See Resource Conservation and Recovery Act Oversight. Hearing before the Subcomm. on
Resource Protection of the State Comm. On Environment and Public Works. 95th Cong., 2d
Sess. at 22 (Mar. 20, 1978) (App. 33). Moreover, even if this had been a case where EPA had
previously adopted a different interpretation of its statutory authority, Chevron deference would be
appropriate because the agency's position is reasonable. See Lovilia Coal Co. v. Harvev. 109 F.3d 445,
452 (8th Cir. 1997) (deference owed even where change in position unless Agency's action was "arbitrary,
capricious, or abuse of discretion").
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[P]rivity is not established because the parties are interested in the same question or in proving the
same set of facts." M-
Harmon suggests that EPA and a State authorized to administer the RCRA program
necessarily have the same motives and interest in enforcing RCRA's requirements. For the
reasons stated supra, pp. 27-29, EPA has unique interests and concerns in carrying out its
responsibilities under RCRA, and Harmon's position is incorrect.
In this case there can be no doubt that EPA and the State of Missouri (through MDNR)
did not share an identical interest in assessing a civil penalty against Harmon. Before filing its
administrative complaint, EPA in repeated communications to MDNR unequivocally expressed its
interest in the assessment of a civil penalty. EAB Decision at 18-21. For example, on May 29,
1990, EPA Region VII sent a letter to MDNR, stating that the Region considered Harmon a high
priority violator under EPA's Enforcement Response Policy, and stating that the Region hoped
MDNR would expedite its enforcement of the violations including the assessment of monetary
penalties. EPA stated:
If MDNR fails to take formal enforcement action with thirty (30)
days of receipt of this letter, which shall also include the filing for
or attainment of monetary penalties, then EPA may initiate an
enforcement action against this facility.
Stmt. 1123. EPA Region VII then sent an additional letter on October 15, 1990, to MDNR
restating EPA's view that appropriate enforcement action must include the assessment of
monetary penalties, and informing MDNR that EPA might initiate an enforcement action against
Harmon if MDNR failed to take appropriate enforcement action. Stmt. H24. The State,
however, made it clear to Harmon that it would not impose any penalty. Id.
Given this manifest clash of interests over the propriety of penalties, it is clear that no
identity of interest existed between MDNR and EPA. $££ United States v. Chevron. U.S.A.. Inc..
757 F. Supp. 512 (E.D. Pa. 1990) (execution of release by State agency authorized to enforce the
Clean Air Act not binding on EPA under theory of res judicata); Annaco. Inc. v. Hodel. 675 F.
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Supp. 1052 (E.D. Ky. 1987) (rejecting argument that res judicata barred suit by Federal Office of
Surface Mining Reclamation and Enforcement against surface mine operator to enforce federal
and State mining standards, despite settlement agreement between surface mine operator and
State environmental cabinet). Accord United States v. Smithfield Foods. Inc. 965 F. Supp. 769,
787-790 (E.D. Va. 1997) (United States was not party to any agreements between State Water
Control Board and company, and never affirmatively agreed to be bound by Board's special
orders, so special orders did not preclude EPA's action to enforce wastewater discharge permit),
appeal filed No. 97-2709 (4th Cir. Dec. 5, 1997).
Harmon suggests that irrespective of whether EPA and Missouri shared an identity of
interests, MDNR and EPA were in privity because MDNR was authorized to administer a State
RCRA Subtitle C program Harmon Suggestions at 35. Harmon misconstrues the nature of
EPA's authorization of the MDNR regulatory program. EPA through State program
authorization did not deputize MDNR to act for EPA or to bind EPA. To the contrary, when
EPA authorized Missouri's hazardous waste program to operate in lieu of the federal program
through regulation and agreement with the State, EPA articulated that it had independent
enforcement authority and could override State actions that failed to impose a sufficient penalty.
See 40 C.F.R. § 272.1300(c) ("EPA retains the authority to exercise its enforcement authorities
under sections.. . 3008 of RCRA"); 40 C.F.R. § 271.16 (providing that EPA may commence
separate action in authorized States for penalties if State settlement inadequate); Memorandum of
Agreement between EPA and MDNR at §1, U4 (App. 27) (providing that "[n]othing in the
Agreement shall be construed to restrict in any way EPA's authority to fulfill its oversight and
enforcement responsibilities under RCRA .. .."). See also United States v. Chevron. 757 F.
Supp. 512 (E.D. Pa. 1990) (rejecting argument similar to one raised by Harmon and holding that
EPA's delegation of enforcement authority to a State agency under the Clean Air Act did not
deprive EPA of the power to act when necessary to carry out the purposes of the Act).
United States v. ITT Ravonier. Inc.. 627 F.2d 996 (9th Cir. 1980), cited by Harmon, is
distinguishable. As Harmon notes, in Ravonier. the Ninth Circuit rejected EPA's argument that
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the Clean Water Act per se negated the application of res judicata principles. In finding privity
between EPA and a State agency, however, the Court specifically did not rely on the theory that
the State agency acted as EPA's agent because it had approved the State program under the Act.
Rather, the Court looked to the unique circumstances of the case. Specifically, the Court relied
on the fact that the State agency "maintained the same position as the EPA before . . . state
hearings board and state courts," and the fact that EPA made no allegation that the State agency
had failed to assert vigorously its position in the State proceedings. Ravonier. 627 F.2d at 1003.
In this case, EPA made unequivocally clear to MDNR its view that substantial monetary
penalties were called for. MDNR did not advance EPA's position before the State Court; nor did
MDNR provide EPA with any opportunity to intervene in the State proceedings. MDNR's
petition for relief and consent decree were filed and entered simultaneously on March 5, 1993.
MDNR's petition did not seek any monetary penalty, and the consent decree did not require any.
Furthermore, any claim by Harmon that it understood MDNR to be acting as EPA's agent
rings hollow where Harmon's settlement with MDNR was entered in State court 18 months after
EPA filed its administrative complaint. By March 1993, Harmon should have been aware that
MDNR was not prosecuting the interests of EPA with due diligence, when MDNR agreed to a
consent decree failing to impose any civil penalty for Harmon's illegal conduct while EPA's
complaint was still pending. §££ Restatement (Second) of Judgments § 42(1 )(e) (1982) (A
person is not bound by a judgment for a party who purports to represent him if representative fails
to prosecute the action with due diligence and reasonable prudence and the opposing party was
on notice of facts making that failure apparent).
In short, under the circumstances Missouri and EPA were not in a relationship of privity
and principles of res judicata do not preclude assessment of a penalty against Harmon.
C. EPA is not Barred by the Statute of Limitations
From Imposing a Penalty on Harmon Based on Illegal
Conduct that Continued into the Limitations Period
EPA is not barred by the applicable statute of limitations from imposing a penalty against
Harmon based on Harmon's illegal conduct occurring within five years of
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the filing of EPA's administrative complaint. Harmon's continuing
violations of RCRA tolled the applicable statute of limitations until the
offenses ceased. Harmon's contrary reading of the statute of limitations
leads to absurd results. Under Harmon's logic, by the time Harmon finally
informed authorities of its illegal disposal practices, Harmon was free to
continue to engage in the same activity in perpetuity, without risk of
pecuniary sanction.
1. Harmon's Violations Were Continuing in Nature
The federal statute of limitations at 28 U.S.C. § 2462 provides:
[A]n action ... for the enforcement of any civil fine,... [or]
penalty... shall not be entertained unless commenced within five
years from the date when the claim first accrued.
Harmon does not dispute that it maintained an ongoing practice of pouring hazardous waste onto
the ground at its facility every 2-3 weeks from 1973-1987 without ever notifying authorities of its
conduct, without ever trying to obtain a RCRA permit, without instituting groundwater
monitoring, and without complying with other applicable requirements. In other words, it is
undisputed that Harmon was continuing to violate applicable requirements after September 1986,
five years preceding the filing of EPA's Complaint. Harmon nonetheless argues that the violations
accrued for purposes of 28 U.S.C. § 2462 between 1980 and 1982, when Harmon first became
subject to RCRA's permitting and other requirements. Under Harmon's view, its violations were
complete and instantaneous when RCRA requirements became effective.
Harmon's argument is without merit because the "limitations period for a continuing
offense does not begin until the offense is complete." United States v. Rivera-Ventura. 72 F.3d
277, 281 (2d Cir. 1995). The continuing violations doctrine is a recognized exception to the
general rule that a claim accrues when the factual and legal prerequisites for filing suit are in
place. EAB Decision at 25. Accordingly, "the date when a violation 'first accrues' [pursuant to
28 U.S.C. § 2462] is not to be confused with the date when a violation 'first occurs.'"
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Cornerstone Realty. Inc. v. Dresser Rand. No. CIV3:94CV1560, 1998 WL 45277 at *7 (D.
Conn. 1998) (quoting EAB Decision at 28) (App. 34). As stated by the Supreme Court:
[Statutes of limitation ... are intended to keep stale claims out of
court. Where the challenged violation is a continuing one, the
staleness disappears.
Havens Realty Corp. v. Coleman. 455 U.S. 363, 380 (1982) (citation omitted).
RCRA imposes continuing obligations on persons who generate and manage hazardous
waste. RCRA states explicitly that a person engaged in hazardous waste activity must notify
EPA; otherwise that person is prohibited from transporting, storing, or disposing of the hazardous
waste. RCRA section 3010, 42 U.S.C. § 6930. Similarly, a person who owns or operates a
facility that treats, stores or disposes of hazardous waste must have a permit; otherwise the
treatment, storage or disposal of hazardous waste is prohibited. RCRA § 3005, 42 U.S.C. §
6925. These statutory obligations do not arise and then simply vanish.12
This explains why the statute explicitly provides that penalties may be assessed for each
day of noncompliance. 42 U.S.C. § 6928. The continuing nature of RCRA's obligations has been
recognized by courts repeatedly, most recently by a federal court in Connecticut which cited
approvingly the opinion of EPA's Environmental Appeals Board in this case. £fi£ Cornerstone
Reality. 1998 WL 45277 at *7 (failure to comply with RCRA's closure requirements a continuing
violation) (App. 34)
^ This Court need not reach the question of whether EPA has authority to impose a per day
penalty for Harmon's illegal conduct that preceded September 30, 1986. The ALJ limited
assessment of penalties to the period after September 30,1986, and EPA Region 7 did not
appeal this decision to the EAB. See Initial Decision at 31-32.
^ See also, e.g.. United States v. White. 766 F. Supp. 873, 886-87 (E.D. Wash. 1991) (illegal
storage of hazardous waste without a permit is a continuing offense and thus criminal
prosecution not barred by statute of limitations); United States v. Conservation Chem. Co.. 660
F. Supp. at 1242 (present storage of hazardous waste constitutes continuing violations of
RCRA's groundwater monitoring and financial responsibility regulations); DeHart v. Indiana.
471 N.E.2d 312 (Ind. Ct. App. 1984) (storage of hazardous wastes without permit held a
continuing offense under a state law modeled on RCRA; guilt found even though defendant
placed drums at the site before regulations took effect and had not operated the site since
then).
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Not only does the statute contemplate continuing obligations, but RCRA's implementing
regulations also support the conclusion that requirements under RCRA impose continuing
obligations upon the regulated community. As extensively detailed in the EAB's Final Order,
each of the specific RCRA violations for which a penalty was assessed against Harmon in this
case is continuing in nature. EAB Decision at 28-50. RCRA's regulations, for example,
make clear that the obligation to have a permit (Count I of EPA's Complaint) is continuing, as
owners and operators "must have permits during the active life (including the closure period) of
the [facility]." 40 C.F.R. § 270.1(c).1*
2. The Supreme Court's Analysis in
Toussie has no Application Here
Harmon relies principally on the Supreme Court's decision in Toussie v. United States.
397 U.S. 112 (1970) (superseded by 50 U.S.C.App. § 462(d)), in support of its contention that
RCRA violations are not continuing violations. Toussie has no application to a civil
environmental penalty, and the standard set forth in that case is met in any event. In considering
the application of a criminal statute of limitations in Toussie. the Supreme Court held that the
failure to register for the draft was not a continuing violation, and the limitations period began to
run when petitioner failed to register. In reaching this conclusion, the Court considered whether:"
the explicit language of the substantive criminal statute compels" that the offense be treated as a
continuing one . .. ." 397 U.S. at 115 (emphasis added).
There is no indication that the Toussie Court intended its holding to be applied to civil
environmental cases. Specifically, the Toussie Court reasoned:
The purpose of a statute of limitations is to limit exposure to
criminal prosecution to a certain fixed period of time following the
^ Similarly, RCRA's regulations provide that groundwater monitoring (Count II) "must be carried out
during the active life of the facility") (40 C.F.R. § 265.90(b)), and the ongoing nature of financial
requirements (Count III) is supported by the language of 40 C.F.R. Part 265 (see EAB Decision at 47-48).
The fourth count, the continuing obligation to provide notification of hazardous waste activity is supported
by the language of RCRA section 3010 (EAB Decision at 48-49).
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occurrence of those acts the legislature has decided to punish by
criminal sanctions. Such a limitation is designed to protect
individuals from having to defend themselves against charges when
the basic facts may have become obscured by the passage of time
and to minimize the danger of official punishment because of acts in
the far-distant past.
397 U.S. at 114-15 (emphasis added). Thus, all that can fairly be said about Toussie is that the
Court was motivated by a manifest concern that potential liability for "criminal sanctions" should
not be extended through the continuing offense doctrine absent congressional intent.
While it is true that the policies behind statutes of limitations fi.e.. to insure prompt law
enforcement, prevent stale evidence, advance repose) are similar in the criminal and civil contexts,
the interests that are at stake ~ the deprivation of life and liberty in the form of incarceration
versus the payment of civil penalties for harming the environment -- are vastly different. This
difference explains why the burden of proof in criminal cases is higher than in civil cases, why the
rule of lenity is applied to ambiguous criminal statutes, and why statutes of limitations should be
more strictly construed in criminal cases than in environmental civil enforcement actions. Indeed,
numerous courts, including the Supreme Court, have considered "continuing violation" allegations
raised in response to statute of limitations defenses in civil cases without any reference to or
reliance upon Toussie. £££, United Air Lines. Inc. v. Evans. 431 U.S. 553, 558 (1977) (Title
VII employment case); Zenith Radio Corp. v. Hazeltine Research. Inc.. 401 U.S. 321, 338-41
(1971) (antitrust action).
Even if this Court decides that Toussie is applicable to the present civil action, however,
the standard is met. Toussie articulated a two-prong test for determining whether a particular
statute contemplates a continuing offense. Under the test, a statute should be interpreted as
describing a continuing offense only if one of the following is true: (1) '[T]he explicit language of
the substantive criminal statute compels such a conclusion, or (2) [T]he nature of the crim
involved is such that Congress must assuredly have intended that it be treated as one." EAB
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Decision at 34-35. For the reasons stated above, the nature of the violations are "such that
Congress must assuredly have intended that [they] be treated as . . . continuing one[s]" Toussie.
397 U.S. at 115.^
3. Harmon's Construction of the Statute
of Limitations Would Frustrate the
Health and Safety Objectives of RCRA
The applicable statute of limitation "must receive a strict construction in favor of the
Government." Badaracco v. Commissioner. 464 U.S. 386. 391 (1984V This is particularly true
where application of a statute of limitations would impede the government's ability to enforce a
remedial statute intended to protect public health and welfare, since the latter are to be construed
liberally to effectuate their important purposes. Tcherepnin v. Knight. 389 U.S. 332, 326 (1967) ("
familiar canon of construction [is] that remedial legislation should be construed broadly to
effectuate its purposes").
Harmon's construction of the statute of limitations would frustrate the remedial purpose of
RCRA and "leads to a fundamentally absurd result." EAB Decision at 38, n. 34. Under Harmon's
logic, if a party is able to engage in a continuous pattern of illegal conduct under RCRA for a
period of greater than five years, then that party has the freedom to continue to engage in that
conduct indefinitely, "safely beyond the reach of the law's pecuniary sanctions." EAB Decision at
39 n.34. Under this position, the most egregious long-term violators of the statute would be
rewarded, and would, in fact, be given an incentive to hide illegal conduct from regulators until
the statute of limitations period had expired. Such a result hardly comports with Congress' intent
that hazardous waste be managed from cradle-to-grave in order to protect public health and the
environment. For these reasons, EPA's penalty is not barred by the statute of limitations.
^ United States v. Del Percio. 870 F.2d 1090 (6th Cir. 1989), cited by Harmon, is
distinguishable. This case involved criminal offenses under the Atomic Energy Act, as
opposed to assessment of a civil penalty. Moreover, in Del Percio. the government was aware
well prior to the expiration of the limitations period that defendants might be guilty of criminal
violations. M- at 1097. The Court indicated that if defendants had precluded the government
from discovering the alleged offenses then it would have found a continuing offense. Jd-
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III. EPA DID NOT ABUSE ITS DISCRETION ASSESSING
A $586.718 PENALTY AGAINST HARMON
A. Substantial Evidence Supports EPA's Assessment
of the Potential for Harm on All Counts
RCRA authorized EPA to assess a penalty not to exceed $25,000 per day of
noncompliance for each violation. RCRA § 3008(a)(3), 42 U.S.C. § 6925(a)(3). In assessing a
penalty EPA "shall take into account the seriousness of the violation and any good faith efforts to
comply with applicable requirements." Li.
Substantial evidence supports EPA's penalty assessment. Contrary to Harmon's
suggestion, EPA considered seriousness of Harmon's violations. Under EPA's 1990 Revised
RCRA Civil Penalty Policy, the "seriousness of a violation" is reflected in the gravity-based
component of the penalty.21' The gravity-based component, in turn, is based on two factors: (1)
the potential for harm posed by the violation, and (2) the extent of deviation from the statutory or
regulatory requirement. EAB Decision at 67; RCRA Penalty Policy, CX 11 at 2 (App. 26). Each
of these factors is characterized as either major, moderate or minor, and these characterizations in
part determine the recommended penalty amount. M-
Harmon disputes the ALJ's finding that there was a major potential for harm for the first
three counts of EPA's Complaint and a moderate potential for harm for the fourth count. In
determining the potential for harm posed by a violation, EPA's Penalty Policy recommends that if
the Presiding Officer finds that either the violation poses a substantial risk of exposure or that it
substantially undermines the integrity of the RCRA program, the potential for harm should be
characterized as major. Penalty Policy at 15 (App. 26).22
^ As noted by the ALJ, the Penalty Policy guidelines do not rise to the level of binding regulations and
the ALJ's discretion in calculating the penalty is not constrained by the Penalty Policy. In this case, the
ALJ concluded that the Penalty Policy guidelines supplied a coherent, reviewable explanation of the
penalty determination. Initial Decision at 32-33.
^ As guidance, the Penalty Policy lists the following violations as examples of ones that would have a
serious adverse effect on the continued integrity of the RCRA program so as to justify a finding of major
potential for harm:
• failure to notify as a generator of hazardous waste;
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Harmon violated the RCRA requirements that go to the very core of the statutory and
regulatory program Harmon failed to notify EPA of its hazardous waste activity, Harmon failed
to obtain a permit, and Harmon failed to manage its waste in a manner that protected human
health and the environment. Harmon's violations undermined the "cradle-to-grave" system put in
place by Congress. Accordingly, the ALJ properly found a major potential for harm for Counts
I-ffl, and a moderate potential for harm for Count IV. Initial Decision at 40, 49-50, 54 and 66;
See EAB Decision at 66-70.^
EPA's determination that Harmon's violations were serious violations irrespective of
consideration of actual environmental harm is consistent with EPA's treatment of violators in
other cases. See, e.g.. Everwood Treatment Co. v. EPA, slip op. at 4-5. Civil No. 96-1159 (S.D.
Ala. Jan. 21, 1998) (App. 35). Moreover, the Eighth Circuit rejected an argument similar to
Harmon's in Panhandle Coop. Ass'n v. EPA. 771 F.2d 1149 (8th Cir. 1985). In Panhandle, the
Eighth Circuit found the ALJ's did not abuse his discretion in finding an extremely high potential
for harm even though no actual injury to the health or the environment was alleged. Id. at
1151-1152.
B. Substantial Evidence Supports EPA's Penalty Assessment on Count III
•	failure to comply with financial assurance requirements;
•	operating without a permit;
•	failure to install or conduct adequate groundwater monitoring.
Penalty Policy at 14-15 (App. 26). Harmon admittedly violated these very requirements.
^ The ALJ's determination that Harmon's violations not only presented a threat to the
integrity of the RCRA program but also presented a risk of harm to the environment was more
than reasonable. The record establishes that Harmon dumped over 3,000 gallons of
hazardous waste solvents onto the ground, that soil and ground water contamination occurred
as a result, and that Harmon instituted no procedures for preventing potential exposure. EPA
Stmt., UU 3,19, 20. To the extent no actual harm resulted, Harmon was indeed "lucky," and
this does not render Harmon's conduct any less egregious. Initial Decision at 39. "[Violators
should not be rewarded with lower penalties simply because the violations happened not to
have resulted in actual harm." Penalty Policy at 14 (App. 26); Initial Decision at 38.
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Substantial evidence supports EPA's penalty assessment for Harmon's failure to comply
with financial assurance and liability insurance requirements. As a threshold matter, contrary to
Harmon's suggestion at p. 47 of its brief, the record reflects that the ALJ did not increase the
Count III penalty proposed by EPA Region VII in its complaint, but actually reduced the
proposed penalty on this Count by nearly 80%, from $1,150,000 to $251,000, based on Harmon's
self-reporting of its violations, cooperation with MDNR in implementing groundwater
monitoring, and rejection of EPA Region VH's model for calculating economic benefit to
Harmon. Initial Decision at 32-66. The ultimate $251,000 penalty assessed by the ALJ for Count
III reasonably included Region VII's proposed 25% upward adjustment factor based on Harmon's
unwarranted delay in attempting to comply with financial assurance requirements. Initial Decision
at 55; EPA Stmt. HHI3-17.
1. Harmon Waited Years Before Even Attempting to Comply
with Financial Assurance and Liability Requirements	
Harmon's contention that it was not notified until September 1991 of the need to comply
with RCRA's financial assurance and liability requirements is unpersuasive. Harmon Suggestions
at 48. First, MDNR informed Harmon that it would be required to comply with all applicable
RCRA regulations at its meeting with Harmon in June 1988. EPA Stmt. 1113. Next, in August
1988 Harmon was informed again by MDNR that it was in violation of applicable hazardous
waste disposal requirements. EPA Stmt. 1J14. Among these standards are the financial
responsibility requirements of 40 C.F.R. Part 265. Sfi£ 40 C.F.R. § 265.1(b). Harmon then
received further notice in the form of a letter from MDNR on November 1, 1989. EPA Stmt.
1115. Not until Harmon received specific prodding in September 1991 did it attempt to comply
with financial assurance requirements. The ALJ reasonably found this to be "luminous example of
willful indifference or selective blindness to the financial assurance requirements." Initial Decision
at 56.
Further, Harmon did not engage in a "good-faith legal challenge to RCRA's applicability."
Harmon Memorandum at 48. The record reflects that Harmon early on conceded RCRA's
applicability, but hoped to dissuade MDNR from exercising its enforcement discretion. EPA
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Stmt. U16; Final Order at 63.2* This does not excuse noncompliance with the law; it is
comparable to a motorist arguing that he should not be faulted for running a red light because he
tried to talk the police officer out of issuing a citation.
2. Harmon's Failure to Comply with Insurance
Requirements Was Reasonably Penalized
Harmon additionally argues that any penalty assessment based on Harmon's failure to
obtain liability insurance is unjustified because Harmon introduced evidence that it was unable to
obtain insurance coverage from a financially responsible carrier. This argument is without merit.
First, Harmon did not even attempt to obtain insurance until 1991, three years after having
received notice that it was subject to RCRA requirements. EPA Stmt. 11 HI3, 17. Moreover, the
record reflects that Harmon's search for insurance was limited to only three companies and that a
more thorough search was warranted. EPA Stmt. HI7; Initial Decision 57.
Furthermore, even if Harmon had been able to demonstrate the unavailability of insurance,
it "is the architect of its own legal misfortune." Initial Decision at 57. Any inability to obtain
insurance would be due in large part to Harmon's history of noncompliance with RCRA, resulting
in contamination at its facility. "A facility cannot by its own actions contribute to its own
uninsurability, and then expect a good faith reduction in the penalty, if the insurance is then
unobtainable. M- at 57-58. See United States v. T & S Brass & Bronze Works. Inc.. 681 F.
Supp. 314, 321 (D.S.C. 1988), modified on appeal. 865 F.2d 1261 (4th Cir. 1988) (Mem).
Harmon additionally fails to consider that the penalty in Count III reflects Harmon's
^ Harmon's counsel presented a memorandum to MDNR in 1990 acknowledging that "[T]he express
language of the Missouri statutes permits MDNR to classify the Facility as... 'a hazardous waste disposal
facility."' EPA Stmt. H16; EAB Decision at 63. Harmon concedes that MDNR is the state agency
authorized to implement RCRA's hazardous waste program in Missouri. Harmon Stmt. H21. Harmon
further has cited to nothing in the record reflecting an action of any sort by the Missouri Hazardous Waste
Commission on February 7, 1991, much less any "formal classification," based on their "appeal." Harmon
Suggestions at 48, Harmon's Stmt. U30. In addition, Harmon's claim that it was engaged in some sort of
good-faith challenge up until February 7, 1991, is inconsistent with its unsupported assertion that it had
reached an "agreement in principle" on a consent decree with MDNR in January 1991. Harmon Stmt. H39.
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violations of two separate RCRA requirements - the financial assurance requirements at 40
C.F.R. §§ 265.143, and the liability insurance requirements at 40 C.F.R. § 265.147. Even if
Harmon had not violated the liability insurance requirements, the $250,000 penalty assessment
would have been wholly justified based entirely on Harmon's failure to comply with the financial
assurance requirements.
Harmon next mischaracterizes its March 1993 consent decree with MDNR as "specifically
excus[ing] Harmon from any obligation to comply with RCRA's liability insurance requirements."
Harmon Suggestions at 50. To the contrary, the consent decree provided that until Harmon
submitted closure certification, it "must continue its good faith attempts to fulfill the liability
requirements in accordance with 40 C.F.R. § 265.147, as incorporated in 10 CSR § 25-7.265(1)."
In any event, Harmon is not entitled to rely on a consent decree entered in 1993 to excuse a
penalty assessment based on conduct prior to 1992. For these reasons, EPA's penalty assessment
in Count III is reasonable.
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CONCLUSION
EPA reasonably imposed a $586,716.00 civil penalty on Harmon based on its numerous
violations of RCRA stemming from its 14 year practice of dumping hazardous waste onto the
ground at its Grain Valley facility. For all of the foregoing reasons, EPA respectfully asks the
Court to deny Plaintiffs motion for summary judgment and to grant EPA's motion for summary
judgment, upholding EPA's assessment of a civil penalty against Harmon and entering judgment in
favor of EPA in the amount of $586,716, plus accrued interest and costs since March 24, 1997.
LOIS J. SCHIFFER
Assistant Attorney General
Environment and Natural Resources Division
OF COUNSEL
BELINDA L. HOLMES
Senior Assistant Regional Counsel
U.S. Environmental Protection Agency
Region VII
726 Minnesota Avenue
Kansas City, Kansas 66101
CHRISTINE J. McCULLOCH
U.S. Environmental Protection Agency
Office of Regulatory Enforcement
401 M. St., S.W.
Washington, D.C. 20460
VICKIE L. PATTON
U.S. Environmental Protection Agency
Office of General Counsel
401 M. St., S.W.
Washington, D.C. 20460
ERIC G. HOSTETLER, Attorney
U.S. Department of Justice
Environmental Defense Section
P.O. Box 23986
Washington, D.C. 20026-3986
(202)305-2326
STEPHEN L. HILL, JR.
U.S. Attorney
J. CURTIS BOHLING
Assistant United States Attorney
1201 Walnut Ste. 2300
Kansas City, Missouri 64106-2149
Attorneys for Defendants
Respectfully submitted,
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IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF MISSOURI
WESTERN DIVISION
HARMON INDUSTRIES, INC.,
Plaintiff,
v.
CAROL M. BROWNER, et al..
Defendants.
Case No. 97-0832-CV-W-3
EPA'S REPLY TO HARMON'S OPPOSITION TO
EPA'S MOTION FOR SUMMARY JUDGMENT
INTRODUCTION
The Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C. §§ 6901-6992k,
provides the United States Environmental Protection Agency ("EPA") with full authority to assess
a civil penalty against Harmon based on its admittedly illegal hazardous waste disposal practices,
and EPA's $586,716.00 penalty is supported by substantial evidence in the record.
The arguments advanced by Harmon in response to EPA's motion for summary judgment
cannot withstand scrutiny. Harmon contends that EPA's interpretation of its enforcement
authority ignores the context of RCRA as a whole; yet Harmon's statutory interpretation, not
EPA's, is blind to the statute's overarching objective of protecting human health and the
environment. Harmon contends that its settlement with the State of Missouri binds EPA under
principles of res judicata; yet, far from demonstrating that EPA and the State of Missouri shared
an identity of interest in this matter, Harmon characterizes EPA and the State as "dueling
government bureaucracies" (Harmon Opposition at 1). Harmon contends that its reading of the
statute of limitations is consistent with the purposes of RCRA, but proposes that by the time it
finally reported its illegal hazardous waste disposal practices to authorities, it was free to repeat
its violations of RCRA requirements indefinitely, safely beyond the reach of the law's pecuniary
sanctions.
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DISCUSSION
I. Material Facts as to Which There is No Genuine Dispute
As Harmon points out, pursuant to Local Rule 56.1(a), all facts set forth in the statement
of the movant shall be deemed admitted unless specifically controverted by the opposing party.
Harmon does not controvert paragraphs 1, 4-5, 7-8, 11, 14, 16, 18-19, and 24-44 in EPA's
Statement. Therefore, these facts are admitted.^
In its opposition to EPA's Statement of Fact, Harmon makes a number of inaccurate
and/or misleading statements. These are noted and discussed very briefly below:
•	Contrary to Harmon's claim (Harmon Opposition at 3), EPA's statement does not"
exaggerate^ ... the quantity of hazardous waste disposed"; the volume set forth in
EPA's Statement 113 ("Stmt.") is taken from the sworn affidavit of Harmon's Vice
President for Human Resources and Safety.
•	Contrary to Harmon's claim (Harmon Opposition at 3-4), EPA's statement alleges
violations from the time applicable RCRA requirements became effective. See
EPA Stmt. HH5-9.
•	Contrary to Harmon's claim (Harmon Opposition at 4), EPA's Statement
acknowledges that Harmon's upper management became aware of its employees'
practice of disposing of hazardous solvents by dumping them onto the ground in
November 1987. See EPA Stmt. IT 10.
•	Contrary to Harmon's claim (Harmon Opposition at 4), the Administrative Law
Judge ("ALJ") did not make any finding regarding whether Harmon reported the
Grain Valley disposal practice in June 1988 as a result of the inspection of its
Warrensburg plant in May 1988. The ALJ finding quoted by Harmon did not
address this issue and merely rejected the presumption of EPA's compliance officer
that since timely compliance had previously occurred at Harmon's Warrensburg
facility, Harmon was a sophisticated entity meriting a less significant good faith
^ Harmon's suggestion that EPA failed to specifically controvert disputed facts in its response to Harmon's
Statement is misplaced. Consistent with Federal Rule of Civil Procedure 56(e) and Local Rule 56.1(a),
EPA identified material facts in dispute in separate paragraphs, and cited those portions of the record upon
which it relies to rebut inaccurate factual characterizations in Harmon's statement.
^ "Initial Decision" refers to the Initial Decision of the Administrative Law Judge in In re Harmon
Electronics. Inc.. No. RCRA-VII-91-H-0037 (EPA, Dec. 15, 1994) (contained in Harmon's Appendix). "
EAB Decision" refers to the Final Order of EPA's Environmental Appeals Board, In re Harmon
Electronics. Inc. RCRA (3008) Appeal No. 94-4 (EAB Mar. 24, 1997) (contained in Harmon's Appendix).
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penalty adjustment reduction for its Grain Valley facility violations. Initial
Decision at 42-43.2
•	Contrary to Harmon's suggestion (Harmon Opposition at 5), EPA did not claim
that Harmon conceded the classification of the Grain Valley plant as a RCRA
facility based on its meeting with the Missouri Department of Natural Resources ("
MDNR") in June 1988. Harmon did concede that the Grain Valley plant was
properly classified as a hazardous waste facility subject to applicable RCRA
regulations in its February 1990 legal memorandum. EPA Stmt. IT 15; RX 37 at 22
(EPAApp. 12).
•	Contrary to Harmon's suggestion (Harmon Opposition at 5), Harmon did not
engage in a good-faith challenge to RCRA's applicability. Harmon's February
1990 legal memorandum to MDNR "fail[ed] to contain any legal arguments"
supporting an exemption from RCRA requirements. RX39 (contained in
Harmon's Appendix). Moreover, contrary to Harmon's suggestion (Harmon
Opposition at 6), MDNR did not reject Harmon's proposal to be excused from
RCRA requirements because they "technically fit"; rather, MDNR rejected
Harmon's proposal because of its "responsibility to .. . assure that harm to human
health and the environment caused by the illegal disposal of hazardous waste is
eliminated." RX 40 (contained in Harmon's Appendix).
•	Contrary to Harmon's suggestion (Harmon Opposition at 7), some delay in
addressing contamination at Harmon's facility is attributable to Harmon. The ALJ
found that Harmon unnecessarily "delayed two years before it installed its first
monitoring well," and characterized this delay as a "two-year siesta." Initial
Decision at 50-51.
•	Contrary to Harmon's suggestion, the record supports EPA's statement that EPA
Region VII classified Harmon as a high priority class I violator under EPA's 1987
RCRA Enforcement Response Policy. Tr. 103-05 (EPA App. 2).
•	Contrary to Harmon's claim, EPA's Statement did not contend that its
Enforcement Response Policy required MDNR to bring an enforcement action
against Harmon assessing penalties. $££ EPA Stmt. H21.
n. EPA's Reasonable Construction of Its Enforcement Authority
^ "Initial Decision" refers to the Initial Decision of the Administrative Law Judge in In re Harmon
Electronics. Inc.. No. RCRA-VII-91-H-0037 (EPA, Dec. 15, 1994) (contained in Harmon's Appendix). "
EAB Decision" refers to the Final Order of EPA's Environmental Appeals Board, In re Harmon
Electronics. Inc. RCRA (3008) Appeal No. 94-4 (EAB Mar. 24, 1997) (contained in Harmon's Appendix).
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Under RCRA Furthers Protection of Health and the Environment
In arguing that general language in section 3006 somehow modifies the plain exposition of
EPA's enforcement authority in section 3008, Harmon emphasizes the fundamental canon that
statutory provisions must be construed in the context of the statute as a whole. Robinson v. Shell
Oil Co.. 117 S. Ct. 843, 846 (1997). But it is Harmon's interpretation, not EPA's, that focuses on
statutory provisions in isolation without regard to the overarching statutory objective of
promoting environmental protection and without regard to principles of statutory construction.
Subsection 3008(a) specifically addresses the scope of EPA's enforcement authority and
provides that the only limitations on EPA's enforcement authority in an authorized state are that
EPA must (1) determine there is a violation, and (2) provide notice to the state. While Congress
could have elected to place additional restrictions on EPA's enforcement authority within RCRA,
it is apparent that Congress did not do so. The general language in section 3006 emphasized by
Harmon does not address the scope of EPA's enforcement authority, and there is no reason to
conclude that Congress intended for the general language cited to modify the specific exposition
of EPA's enforcement authority set forth in subsection 3008. $££ Hickman v. Cliff Peck
Chevrolet. 566 F.2d 44, 47 (8th Cir. 1977) ('"Specific terms prevail over the general in the same
or another statute which otherwise might be controlling'" (quoting D. Ginsberg & Sons v. Popkin.
285 U.S. 204, 208 (1932)).
Contrary to Harmon's suggestion, RCRA's legislative history supports the conclusion that
Congress intended to allow EPA to initiate enforcement actions in authorized states even where a
state has taken some action. The final 1976 Act struck language proposed by the Senate (S.
3622, 94th Cong., 2d Sess. §214 (as reported, June 25, 1976), reprinted in 1 Legislative Hisotrv
of the Solid Waste Disposal Act. 102d Cong., 1st Sess.at 370 (Comm. Print 1991)), that would
have explicitly prohibited EPA from enforcing violations in authorized states unless the state had
failed to bring an enforcement action. This deletion indicates that Congress considered and
rejected the imposition of such a limitation on EPA's enforcement authority. Sec Russello v.
United States. 464 U.S. 16, 23-24 (1983) ("Where Congress includes limiting language in an
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earlier version of a bill, but deletes it prior to enactment, it may be presumed that the limitation
was not intended.").
Harmon additionally fails to offer any coherent explanation for how its interpretation
furthers RCRA Subtitle C's fundamental objective of assuring that hazardous waste management
practices are conducted in a safe and nationally consistent manner. Limiting the scope of EPA's
enforcement authority can only frustrate, not further, the statute's remedial purpose. If EPA"
does not have oversight authority, it has no way of insuring that society and the environment are
indeed protected." Annaco . Inc. v. Hodel. 675 F. Supp. 1052, 1056 (E.D. Ky. 1987) (holding
that Federal Office of Surface Mining Reclamation and Enforcement had authority to enforce
state mining standards adopted pursuant to Surface Mining Control and Reclamation Act despite
settlement agreement between surface mine operator and state agency with primary responsibility
for enforcing state standards).
As discussed in EPA's opening brief, authorized states may be reluctant to bring an
adequate enforcement action against a statutory violator for a variety of reasons. For example,
authorized states may be more interested "in encouraging regulated industries to remain in or
relocate to the State, thereby preserving or bolstering the State's economy," than in "enforcing,
strict, nationally-consistent hazardous waste management standards." EAB Decision at 17.
Authorized states may also be reluctant to allocate scarce resources towards enforcement of strict
nationally consistent hazardous waste management standards.1
^ Moreover, as discussed in EPA's opening brief (EPA's Suggestions at 29-30), EPA in 1983
promulgated a final rule that noted that to the extent state judgments or settlements provided for
substantially inadequate penalties, EPA may commence its own separate action for penalties. 48 Fed. Reg.
39615, 39622-23 (Sept. 1, 1983), 40 C.F.R. § 271.16(c). Subsequent to EPA's setting forth its
interpretation in a rule, Congress amended RCRA, Pub. L. No. 98-616, 98 Stat. 3221 (Nov. 8, 1984),
without contradicting EPA's interpretation of its enforcement authority. See Lorillard v. Pons. 434 U.S.
575, 580 (1978) ("Congress is presumed to be aware of an administrative or judicial interpretation of a
statute and to adopt that interpretation when it re-enacts a statute without change.").
^ EPA's authority to withdraw state program approval is not a substitute for EPA's discretion to bring
an enforcement action in a particular case when state action is inadequate. Withdrawing approval for a
state program is a draconian remedy that would eliminate all state involvement in the RCRA program and
that would frustrate Congress' intent that states participate in RCRA program administration.
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As a policy matter, EPA considers the sufficiency of any state action and limits exercise of
its enforcement discretion in authorized states to those instances when the state has failed to
assess, seek or obtain a penalty or injunctive relief appropriate to the violation. Twenty years
after enactment of RCRA, Harmon points to no evidence that the remedial purpose of RCRA has
been thwarted as a result of EPA's consistent and longstanding construction of its enforcement
authority.3 Indeed, Harmon cites not to a single instance where a court has determined EPA's
exercise of its RCRA enforcement discretion after state action in an authorized state to be
unlawful or an abuse of discretion.
Harmon's contention that EPA's enforcement authority should be limited to further the
remedial purpose of RCRA is without merit. $££ Harmon Opposition at 13. The purpose of the
enforcement provisions is to promote environmental protection by providing an incentive for
regulated entities to comply with the statute in the first instance, not to provide statutory violators
with certainty that an inadequate settlement agreement with the state will negate any possibility of
an EPA enforcement action. If Harmon had managed its hazardous waste in a responsible manner
in the first instance and not regularly dumped hazardous waste out the back door of its facility,
neither state regulators nor EPA would have any basis for assessing a civil penalty.
Harmon's argument that it was unreasonably deprived of finality is singularly unpersuasive
under these facts; the record reflects that Harmon completed its settlement agreement with the
State of Missouri fully aware that an EPA administrative penalty action had been pending for over
a year.6 The record further reflects that Harmon did not make any effort to obtain EPA approval
^ Harmon continues to erroneously state that EPA expressed a different view of its enforcement
authority in 1978. As discussed in EPA's opening brief at page 31 n. 16, there is utterly no basis for such a
claim.
^ Harmon's focus on EPA's actions prior to the filing of EPA's administrative complaint in 1991 misses
the point. $££ Harmon Opposition at 8. The salient fact here is that at the time of Harmon's settlement
agreement with the State of Missouri, Harmon was fully aware of EPA's interest in assessing an
appropriate civil penalty since EPA had already filed its complaint.
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of its settlement. Rather, Harmon's settlement with the State of Missouri was filed and entered on
the same day, without any opportunity for EPA intervention. EPA Stmt. 1T28.
For these reasons and those discussed in EPA's opening brief, EPA has foil authority to
assess a penalty against Harmon based on its statutory violations,
m. EPA's Civil Penalty is Not Barred bv Principles of Res Judicata
Principles of res judicata do not bar EPA's assessment of a civil penalty against Harmon.
EPA was not a party to Harmon's settlement with the State of Missouri, entered in state court 18
months after EPA filed its administrative complaint, nor was EPA in privity with the State of
Missouri. As explained in EPA's opening brief, EPA and states authorized to administer a state
RCRA program do not necessarily share an identity of interest in enforcing RCRA requirements.
See EPA Suggestions at 28-31. The record further establishes that in this instance EPA and the
State beyond any doubt did not share an identity of interest in assessing a civil penalty against
Harmon. EPA expressed to MDNR in no uncertain terms its view that an appropriate
enforcement action must include the assessment of a civil penalty. EPA Stmt. UH23, 24. Harmon
concedes as much and itself highlights the lack of privity between EPA and the State of Missouri
when it characterizes EPA and the State of Missouri as "dueling government bureaucracies"
engaged in a "cross-fire." Harmon Opposition at 1.
Harmon's res judicata theory centers on the theory that even though the interests of EPA
and the State of Missouri manifestly clashed with respect to the appropriateness of a civil penalty,
privity can nonetheless be presumed based on RCRA language and the fact that the State of
Missouri has been authorized to administer a hazardous waste program Harmon's res judicata
argument thus amounts to nothing more than a restatement of Harmon's position that RCRA does
not provide EPA with authority to enforce Harmon's statutory violations. For the reasons stated
in EPA's opening brief at 18-31, and at pages 4-7, supra, this claim is without merit.
IV. EPA's Penalty Claim is not Barred hv the Statute of Limitations
EPA is not barred by the applicable statute of limitations from imposing a penalty against
Harmon based on Harmon's illegal conduct occurring within five years of the filing of EPA's
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administrative complaint. Contrary to Harmon's suggestions: (1) Harmon's violations did not
accrue between 1980 and 1982; (2) the continuing violations doctrine is fully applicable to 28
U.S.C. § 2462; and (3) it will not further environmental protection to allow long-term violators of
RCRA to continue illegal practices without risk of pecuniary sanction.
EPA does not, as Harmon states, "concede" that Harmon's violations occurred between
1980 and 1982 or "concede" that EPA's claims accrued at that time. Harmon Opposition at 15.
To the contrary, Harmon's violations unquestionably continued into the limitations period (i.e.
after September 1986, Harmon was continuing to pour hazardous waste onto the ground without
a permit or without complying with any other applicable requirement). Continuing violations do
not accrue for purposes of the statute of limitations until the course of illegal conduct is
complete.2
Moreover, Harmon's argument that the "first accrued" language of 28 U.S.C. § 2462
precludes application of the continuing violations doctrine to cases subject to that provision is
without merit. Harmon Opposition at 15. Contrary to Harmon's suggestion, several courts have
held that the continuing violations doctrine applies to civil penalty cases subject to 28 U.S.C. §
2462, and the recent decision in Cornerstone Realty. Inc. v. Dresser Rand Co.. No.
CIV3:94CV1560, 1998 WL 45277, at *7 (D. Conn. 1998) (EPA App. 34) (holding that failure to
comply with RCRA closure requirements for hazardous waste sites is a continuing violation under
28 U.S.C. § 2462) is squarely on point. See also United States v. Reaves. 923 F. Supp. 1530,
1534 (M.D. Fla. 1996) (holding that unpermitted discharge of fill material is a continuing violation
of Clean Water Act that tolls statute of limitations under 28 U.S.C. § 2462); Interamericas
Investments. Ltd. v. Board of Governors. 111 F.3d 376, 382-83 (5th Cir. 1997) (holding that
^ Stated in other words, under a continuing violation theory, a new claim accrues each day the violation
is extant. Interamericas Investments. Ltd. v. Board of Governors. Ill F.3d 376, 382 (5th Cir. 1997).
Contrary to Harmon's suggestion (see Harmon Opposition at 19), the question of whether EPA may assess
a civil penalty for conduct that occurred more than five years before the filing of EPA's administrative
complaint is not before the Court. No penalty was assessed against Harmon for the period prior to
September 30, 1986.
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violations of Bank Holding Company Act are continuing violations that toll statute of limitations
under 28 U.S.C. § 2462) *
Harmon's position that its interpretation of the statute of limitations furthers
environmental protection defies logic. Harmon Opposition at 17. Harmon cannot deny that
under its interpretation of the statute, parties that have engaged in RCRA violations for a period
of greater than five years can continue to engage in illegal conduct indefinitely without risk of
pecuniary sanction.2 Such a result hardly promotes statutory compliance and responsible waste
management practices.13
Accordingly, EPA's penalty assessment is not barred by the applicable statute of
limitations.
V. EPA's Penalty Assessment is Supported bv Substantial Evidence
EPA reasonably assessed a $586,718.00 penalty based on Harmon's serious statutory
violations over a multiyear period. Contrary to Harmon's suggestion, EPA properly considered
the statutory factors set forth in section 3008(a) (i.e. the seriousness of the violations and any
good faith efforts to comply with applicable requirements).11
^ For the reasons stated in EPA's opening brief at 39-40, Toussie v. United States. 397 U.S. 112 (1970)
has no application to this civil proceeding. Harmon's argument (Harmon Opposition at 15 n.8) that the
limitations set forth in Toussie must be applied in determining whether violations of a civil statute are
continuing is misplaced. For example, in Interamericas Investments. Ltd. v. Board of Governors. 111 F.3d
376 at 382, the Fifth Circuit, upon considering whether violations of the Bank Holding Company Act were
continuing violations, did not apply the limitations in Toussie. but rather stressed that "statutes of
limitations in the civil context are to be strictly construed in favor of the Government against repose."
^ Contrary to Harmon's contention (Harmon's Opposition at 17), the five-year statute of limitations at 28
U.S.C. § 2462 is generally applied to citizen suit actions, so that citizen suits would be affected by
Harmon's interpretation of the statute of limitations. £££ Cornerstone Realty. Inc. v. Dresser Rand Co..
1998 WL 45277 at n.6 (EPA App. 34).
^ EPA's authority to correct imminent and substantial endangerments under section 7003 of RCRA, 42
U.S.C. § 6973, is not a substitute for the RCRA cradle-to-grave regulatory scheme, which controls the
handling, generation, storage, treatment, transportation, and disposal of hazardous waste in all facilities in
the United States, not just one individual facility. If such authority were enough to assure environmental
protection, the cradle-to-grave regulatory scheme established by Congress would serve no purpose.
^ The standard of review set forth in Panhandle Coon. Ass'n v. FPA. 771 F.2d 1149 (8th Cir. 1985),
squarely applies here. The assessment of an administrative penalty is "particularly delegated" to an agency.
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A.	EPA Took Into Account the Seriousness of the Violations
The record demonstrates that EPA, consistent with section 3008(a), took into account the
seriousness of Harmon's violations. &££ Initial Decision at 36-66; EAB Decision at 66-70.
Harmon violated requirements (disposing of hazardous waste without a permit, without
notification to EPA, and without taking action to detect and prevent harm to human health and
the environment) that go to the very core of the RCRA statutory and regulatory program.
Accordingly, EPA reasonably determined Harmon's violations were serious in nature. See
Panhandle Coop Ass'n v. EPA. 771 F.2d 1149, 1152 (8th Cir. 1985) (holding Administrative
Law Judge did not abuse discretion in finding an extremely high potential for harm even though
no actual injury to human health or the environment was alleged).
B.	EPA Took Into Account Good Faith Efforts to Comply
The record demonstrates that EPA, consistent with section 3008(a), considered any good
faith efforts by Harmon to comply with applicable requirements. The record reflects that in
determining the amount of the penalty the ALJ considered Harmon's voluntary disclosure of its
violations in 1987, as well as Harmon's cooperation with MDNR in investigating and remediating
contamination. $££ Initial Decision at 32-66. The record further reflects that the ALJ
substantially reduced EPA Region VII's proposed multi-day penalty on all counts based on these
factors. M12
The ALJ additionally reasonably made an upward adjustment to the penalty for Harmon's
violation of financial assurance and liability insurance requirements (Count III) in light of the fact
that Harmon did not attempt to comply with these requirements until 1991, years after it was put
Id. at 1152. EPA's choice of sanction is not to be overturned unless '"it is unwarranted in law'" or "
'without justification in fact."' Id (citation omitted). EPA's penalty assessment is entitled to a presumption
of regularity, and Harmon has the burden of overcoming that presumption. Arkansas Poultry Ass'n v.
EPA. 852 F.2d 324, 325 (8th Cir. 1988).
^ EPA Region VII had also considered these factors but proposed more modest reductions in the
proposed penalty. EPA Stmt. If 32.
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on notice that it was subject to them Id. at SS-SS.1*
CONCLUSION
EPA reasonably imposed a $586,716.00 penalty on Harmon based on its numerous
violations of RCRA stemming from its practice of dumping hazardous waste onto the ground at
its Grain Valley facility. For all of the foregoing reasons, and the reasons stated in EPA's opening
suggestions, EPA respectfully asks the Court to grant EPA's motion for summary judgment,
upholding EPA's assessment of a civil penalty against Harmon and entering judgment in favor of
EPA in the amount of $586,716, plus accrued interest and costs since March 24, 1997.
Respectfully Submitted,
LOIS J. SCHIFFER
Assistant Attorney General
ERIC G. HOSTETLER, Attorney
U.S. Department of Justice
Environmental Defense Section
P.O. Box 23986
Washington, D.C. 20026-3986
(202)305-2326
(202) 514-8865 (Facsimile)
STEPHEN L. HILL, JR.
U.S. Attorney
^ Contrary to Harmon's suggestion, Harmon did not engage in a good-faith challenge to RCRA's
applicability during this period; rather, Harmon simply attempted to dissuade MDNR from exercising its
enforcement discretion. United States v. Cumberland Farms. 647 F. Supp. 1166, 1183 (D. Mass. 1986),
affd. 826 F.2d 1151 (1st Cir. 1987), cited by Harmon, is inapposite. In that case, a farming corporation
placed before courts "issues worthy of careful consideration" regarding its legal culpability.
Moreover, an upward adjustment would have been proper based on Harmon's three-year delay in
attempting to obtain insurance whether or not Harmon had obtained insurance in 1991 when it finally tried
to do so. Harmon's lack of success in obtaining insurance in 1991 and 1993 therefore is of little relevance.
See Initial Decision at 57. Evidence was introduced, however, that even when Harmon finally did try to
obtain insurance, its search was limited to only three companies, so that a more thorough search was
warranted. EPA Stmt. U17; Initial Decision at 57.
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J. CURTIS BOHLING
Assistant United States Attorney
1201 Walnut Ste. 2300
Kansas City, Missouri 64106-2149
(816) 426-3130
May 7, 1998	Attorneys for Defendants
OF COUNSEL
BELINDA L. HOLMES
Office of Regional Counsel
U.S. Environmental Protection Agency
Region VII
726 Minnesota Avenue
Kansas City, Kansas 66101
CHRISTINE J. McCULLOCH
U.S. Environmental Protection Agency
Office of Regulatory Enforcement
401 M. St., S.W.
Washington, D.C. 20460
MARY GLEAVES
U.S. Environmental Protection Agency
Office of General Counsel
401 M St., S.W.
Washington, D.C. 20460
13
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c
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IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF MISSOURI
WESTERN DIVISION
HARMON INDUSTRIES, INC.,
Plaintiff,
v.
CAROL M. BROWNER, et al..
Defendants.
Case No. 97-0832-CV-W-3
EPA'S SUPPLEMENTAL BRIEF
IN SUPPORT OF ITS MOTION FOR SUMMARY JUDGMENT
INTRODUCTION
Plaintiff Harmon Industries challenges a civil penalty assessed by Defendant United States
Environmental Protection Agency based on Harmon's undisputed violations of the Resource
Conservation and Recovery Act ("RCRA"), 42 U.S.C. §§ 6901-69921^ At the hearing on the
parties' cross-motions for summary judgment, the Court granted EPA leave to file this
supplemental brief addressing a case brought to the attention of the Court by Harmon for the first
time at the hearing, Hickman v. Electronic Kevboarding. Inc.. 741 F.2d 230 (8th Cir. 1984). As
discussed below, Hickman does not support Harmon's contention that it could defeat EPA's
penalty action by entering into an agreement with the State of Missouri 18 months after EPA filed
its administrative complaint.
DISCUSSION
Harmon's Reliance on Hickman is Misplaced Because Missouri Had No Authority
to Act on Behalf of EPA and Because Missouri Did Not Actively Defend EPA's Interests
^ As set forth in EPA's statement of uncontroverted material facts, Harmon management was fully aware
that hazardous solvents were in use at the plant during the period of illegal waste disposal, and Harmon
failed to promptly come into compliance with even after management learned of illegal waste disposal
practices. Fully four years after discovery of the illegal disposal practice, Harmon still had not made an
effort to come into compliance with RCRA's financial responsibility requirements.
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EPA is not precluded by principles of res judicata from imposing a civil penalty against
Harmon pursuant to RCRA where during the pendency of EPA's penalty proceeding the State of
Missouri acted independently to settle Missouri's claims against Harmon based on Harmon's
violations of state law. Under Missouri law, res judicata requires "identity of the persons and
parties to the action." Prentzler v. Schneider. 411 S.W.2d 135, 138 (Mo. 1966) (en banc). EPA
was not in privity with Missouri in this matter as the State neither had authority to act on behalf of
EPA nor sought to defend EPA's clearly communicated interest in assessing a civil penalty.
Harmon's reliance on Hickman is misplaced. In Hickman, plaintiff Hickman brought suit
against Electronic Keyboarding for race discrimination under Title VII of the Civil Rights Act, 42
U.S.C. §§ 2000e etseq., and 42 U.S.C. § 1981. Hickman previously had filed a charge of race
discrimination with the Missouri Commission on Human Rights, which had subsequently acted on
behalf of Hickman in state court proceedings. The United States Court of Appeals for the Eighth
Circuit held that Hickman's Title VII action was barred by res judicata because he was both a
party to the state court proceeding and in privity with the Missouri Commission on Human
Rights. The Eighth Circuit determined that the relationship between Hickman and the
Commission was sufficiently close to deserve the label of "privity" because Hickman was the real
party in interest in the Commission's action in state court, because the Commission's appearance
was for "the sole purpose of defending Hickman's legal rights," and because in the state court
proceeding, the Commission had "actively defended plaintiffs interests." 741 F.2d 232-33 (1984).
Hickman is readily distinguishable from this case. Unlike Hickman, in this case (1) EPA
did not initiate or participate in state court proceedings, (2) Missouri's agreement with Harmon
was not entered "for the sole purpose of defending [EPA's] legal rights," and (3) Missouri
obviously failed to "actively defend" EPA's clearly communicated interest in obtaining a civil
penalty.
Missouri Did Not Share an Identity of Interest With EPA
In simultaneously filing a petition for injunctive relief and a consent decree in state court
18 months after EPA filed its penalty action, Missouri did not act for the sole purpose of
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defending EPA's legal rights, or otherwise act as EPA's agent. See Restatement (Second)
Agency § 1 (1957) ("Agency is the fiduciary relation which results from the manifestation of
consent by one person to another that the other shall act on his behalf and subject to his control,
and consent by the other so to act"). Rather, Missouri's action was brought on behalf of the
citizens of Missouri in response to Harmon's undisputed violations of state law.2
As discussed in EPA's earlier briefs, EPA's authorization of Missouri's
hazardous waste program pursuant to RCRA had the effect of making state hazardous
waste regulations the body of regulations with which a facility must comply in order to
be in compliance with RCRA. In authorizing Missouri's state hazardous waste program
pursuant to RCRA, EPA did not grant Missouri authority to preclude the exercise of EPA's
enforcement authority. To the contrary, EPA explicitly reserved its statutory authority to enforce
RCRA violations in the State of Missouri in order to assure environmental protection and
nationwide consistency in RCRA enforcement. 40 C.F.R. § 272.1300 ("EPA retains the
authority to exercise its enforcement authorities under sections 3007, 3008, 3013, and 7003 of
RCRA.. .").
EPA specifically reserved its authority to bring a federal penalty action in the event the
state failed to obtain an appropriate penalty under state law. Missouri and EPA's Memorandum
of Agreement relating to Missouri's program authorization not only provides that "Nothing in this
Agreement shall be construed to restrict in any way EPA's authority to fulfill its oversight and
enforcement responsibilities under RCRA," but clearly provides that "EPA retains its responsibility
to ensure full and faithful execution of the requirements of RCRA ... in the event EPA exercises
its enforcement authority to override state action" (emphasis added). EPA Appendix 27 at 1-2.
Similarly, EPA's published regulations governing state program authorization provide in relevant
part that:
To the extent the State judgments or settlements provide penalties
^ As discussed in EPA's earlier briefs, EPA and States do not have the same motives and interest in
enforcing hazardous waste requirements. EPA seeks to further unique and important national interests.
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in amounts which EPA believes to be substantially inadequate in
comparison to the amounts which EPA would require under similar
facts, EPA, when authorized by the applicable statute, may
commence separate actions for penalties.
40 C.F.R.§ 271.16.
While RCRA provides EPA with independent authority to impose federal penalties,
Missouri retains discretion to seek enforcement of Missouri's own state laws. See Johnston v.
Warren County Fair Ass'n. 110 F.3d 36, 38 (8th Cir. 1997) ("[A] critical element for the existence
of an agency relationship under Missouri law is that the principal has the right to control the
conduct of the agent with respect to the matters entrusted to the agent"). Thus, while EPA has
authority to override state action, EPA had no authority to prevent Missouri from entering into an
agreement with Harmon under state law.
Missouri Did Not Actively Defend EPA's Interests
It is beyond dispute that Missouri failed to "actively defend" EPA's interests in this matter.
EPA in repeated communications to Missouri in 1990 unequivocally expressed its position that an
appropriate enforcement action must include the assessment of a civil penalty. $££ EPA
Appendix, Exhibit 18. When Missouri failed to initiate an appropriate enforcement action, EPA
brought its own penalty action in September 1991. Missouri's subsequent petition for injunctive
relief filed in state court in March 1993, long after EPA filed its complaint, did not seek payment
of any civil penalty; nor did Missouri's consent decree with Harmon provide for any.
It is also beyond dispute that Harmon, a sophisticated business entity, could not
reasonably have understood Missouri to be acting as EPA's agent with respect to the assessment
of a civil penalty at the time Harmon entered into a settlement with the State. Not only do EPA's
published regulations make clear to the regulated community that EPA has authority to
commence a separate action for penalties under RCRA, but Harmon knew that EPA had initiated
an independent penalty action at the time of its settlement, filed 18 months after EPA initiated its
action. Moreover, the record reflects that Missouri expressly informed Harmon as far back as
December 1991 that while Missouri sought to enter a consent decree governing compliance
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issues, "any issue as to a civil penalty is between Harmon and the United States Environmental
Protection Agency." December 27, 1991, Letter from Shelley Woods to Terry Satterlee, RX 89
(Attachment 1) (emphasis added).2 Despite the pendency of EPA's penalty action, and Missouri's
clear indication to Harmon that it did not have authority to bind EPA, there is nothing in the
record evidencing any attempt by Harmon to have EPA join in or otherwise endorse Harmon's
agreement with Missouri.
In short, Hickman is readily distinguishable from this case; EPA is not bound by Harmon's
agreement with Missouri.
CONCLUSION
EPA reasonably imposed a civil penalty on Harmon based on its dangerous and illegal
practice of regularly dumping hazardous solvents onto the ground at its Grain Valley facility,
without taking any precautions to protect human health and the environment. For the foregoing
reasons, and the reasons stated in EPA's previous briefs, EPA respectfully requests that the Court
grant EPA's motion for summary judgment.
Respectfully Submitted,
LOIS J. SCHIFFER
Assistant Attorney General
ERIC G. HOSTETLER, Attorney
U.S. Department of Justice
Environmental Defense Section
P.O. Box 23986
Washington, D.C. 20026-3986
(202) 305-2326
(202) 514-8865 (Facsimile)
STEPHEN L. HILL, JR.
U.S. Attorney
^ To clarify the record on this matter, Missouri's letter to Harmon reflects that EPA was aware that
Missouri was attempting to assure performance of remedial work by Harmon by seeking to negotiate a
consent decree relating to compliance issues. The record does not reflect that EPA participated in
settlement discussions between Missouri and Harmon, or that EPA had any meaningful opportunity to
intervene in state court proceedings that were initiated and resolved in the same day.
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J. CURTIS BOHLING
Assistant United States Attorney
1201 Walnut Ste. 2300
Kansas City, Missouri 64106-2149
June 22, 1998	Attorneys for Defendants
OF COUNSEL
BELINDA L. HOLMES
Office of Regional Counsel
U.S. Environmental Protection Agency
Region VII
726 Minnesota Avenue
Kansas City, Kansas 66101
CHRISTINE J. McCULLOCH
U.S. Environmental Protection Agency
Office of Regulatory Enforcement
401 M. St., S.W.
Washington, D.C. 20460
MARY GLEAVES
U.S. Environmental Protection Agency
Office of General Counsel
401 M St., S.W.
Washington, D.C. 20460
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D
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
BEFORE THE ADMINISTRATOR
In the Matter of:	)
)
) Docket No. RCRA-lll-264
BIL-DRY CORPORATION )
)
Respondent	)
INITIAL DECISION
Resource Conservation and Recovery Act of 1976. This proceeding
involves a Complaint filed by the U.S. Environmental Protection
Agency, seeking $231,800 in civil penalties pursuant to § 3008(a)(1)
of the Solid Waste Disposal Act of 1976, as amended by the Resource
Conservation and Recovery Act of 1976. Respondent is alleged to have
committed nine violations of the authorized Hazardous Waste Management
Regulations of the Commonwealth of Pennsylvania, 25 Pa. Code § 75.259
et seq., and the Federal Hazardous Waste Management Regulations, 40
C.F.R. Parts 260-271. An evidentiary hearing in this matter was held
in Philadelphia, Pennsylvania on December 2-3,1997. Held: Respondent
is found liable under all counts of the Complaint and is assessed a
civil penalty in the total amount of $103,400.
Before: Stephen J. McGuire
Administrative Law Judge
Date: October 8, 1998
APPEARANCES:
For Complainant:
Joseph J. Lisa, III
Assistant Regional Counsel
Benjamin Fields
Senior Assistant Regional Counsel
Office of the Regional Counsel
U.S. EPA, Region 3
1650 Arch Street
Philadelphia, Pennsylvania 19106
For Respondent:
Glenn R. Matecun
Bil-Dry Corporation
3505 West Grand River Avenue
Howell, Michigan 48843
I. INTRODUCTION
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This is a civil administrative proceeding instituted by issuance of a
Complaint on September 30,1996, by the United States Environmental
Protection Agency, Region 3, Philadelphia, Pennsylvania
(Complainant/EPA), pursuant to § 3008(a)(1) of the Resource
Conservation and Recovery Act (RCRA), 42 U.S.C. § 6928(a)(1) and the
Consolidated Rules of Practice Governing the Administrative Assessment
of Civil Penalties and the Revocation or Suspension of Permits
(Consolidated Rules), 40 C.F.R. Part 22. The Complaint alleges that
Bil-Dry Corporation (Respondent/Bil-Dry) violated numerous provisions
of the authorized Hazardous Waste Management Regulations of the
Commonwealth of Pennsylvania, 25 Pa. Code § 75.259 et seq., and the
Federal Hazardous Waste Management Regulations, 40 C.F.R. Parts
260-271 (Complainant's Exhibit 14).(1)
EPA asserts inter alia, that Respondent is liable for the unpermitted
and improper management, storage and disposal of "hazardous wastes" in
four (4) fifty-five (55) gallon drums and three (3) underground
storage tanks at its facility located at 5525 Grays Avenue,
Philadelphia, Pennsylvania (facility). EPA further charges Respondent
with failure to comply with the administrative and financial assurance
obligations imposed upon an owner and/or operator of a Hazardous Waste
Management facility (HWM facility).
A. The Complaint
The Complaint asserts nine counts of alleged violations and proposes a
recommended civil penalty of $231,800 (CX-14) as follows:
Count I alleges that Respondent is the owner and operator of a
hazardous waste storage facility for which a permit or interim status
is required under 25 Pa. Code § 270.1(a) (25 Pa. Code § 75.270(a)).
EPA asserts that Respondent's failure to comply with this section
constitutes a moderate extent of deviation supporting the assessment
of a gravity based penalty of $6,000. The EPA requested a multi-day
penalty component for this violation of $250 per day for a total of
$30,000 based on the duration period of December 11, 1995, through
April 10,1996 (120 Days). The total penalty proposed for Count I by
EPA is $36,000.
Count II alleges that Respondent violated 25 Pa. Code § 262.11 (25 Pa.
Code § 75.262(b)), by failing to determine that its ignitable (D001),
corrosive (D002), chromium (D007) and Methyl Ethyl Ketone ("MEK")
(D035) wastes, were hazardous wastes. EPA asserts that Respondent's
failure to determine that the wastes it generated were hazardous
wastes constitute a moderate deviation from the regulatory
requirements supporting the assessment of a gravity-based penalty of
$6,000. EPA requested a multi-day component for this violation of $250
per day for a total of $30,000 based on the duration period of
December 11, 1995, through April 10, 1996 (120 days). The total
penalty proposed for Count II by EPA is $36,000.
Count III alleges that Respondent violated 40 C.F.R. § 268.7(a) by
failing to determine that its chromium and MEK wastes were Land
Disposal Restricted ("LDR"). EPA asserts that given the amount of
material at issue, the Respondent's failure to determine that the
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wastes were LDR, constituted a moderate deviation from the RCRA
requirements supporting a gravity-based penalty of $6,000. EPA
requested a multi-day component for this violation of $250 per day for
a total of $30,000 based on the duration period of December 11,1995,
through April 10,1996 (120 Days). The total penalty proposed for
Count III by EPA is $36,000.
Count IV alleges that Respondent's failure to properly store land
disposal restricted waste as required by 40 C.F.R. § 268.50, could
have posed a significant risk to human health and the environment
through deviation from the requirement that facilities properly manage
their hazardous wastes prior to disposal. EPA asserts that
Respondent's failure to properly store LDR waste constituted a
moderate deviation from the regulations, supporting a gravity-based
penalty of $6,000. EPA requested a multi-day component for this
violation of $250 per day for a total of $30,000 based on the duration
period of December 11,1995, to April 10,1996 (120 Days). The total
penalty proposed for Count IV by EPA is $36,000.
Count V alleges that Respondent's failure to establish a schedule for
inspections of the facility in compliance with 25 Pa. Code § 262.15(b)
(25 Pa. Code § 75.265(e)(2)), constituted potentially significant harm
to the RCRA regulatory program, human health and the environment. EPA
asserts that Respondent's failure to comply with this section
constituted a moderate deviation from the regulatory requirements,
supporting a proposed gravity-based penalty totaling $1,000.
Count VI alleges that Respondent violated 25 Pa. Code § 265.112 (25
Pa. Code § 75.265(o)(3)) by not having a closure plan for the
facility, which represented a significant potential harm to human
health and/or the environment because of possible delays in the
closure process. EPA asserts that Respondent's failure to provide a
closure plan constituted a significant deviation from the regulatory
requirements supporting a gravity-based penalty of $6,000. EPA
requested a multi-day penalty component for this violation of $250 per
day for a total of $30,000 based on the duration period of December
11,1995, through April 10,1996 (120 Days). The total penalty
proposed for Count VI is $36,000.
Count VII alleges that Respondent violated 25 Pa. Code § 265.142 (25
Pa. Code § 75.265(p)(2)) by failing to have a written cost estimate
for closing the facility and/or by failing to update or adjust its
cost estimate, incrementally contributing to the harm caused by
respondent's failure to develop a closure plan in the first instance.
EPA asserts that these regulations are intended to ensure that the
owner and operator of a hazardous waste facility is aware of the funds
needed to ensure proper closure of the facility and meet the program
goal of advance planning and preparation for hazardous waste
activities. The Respondent's alleged failure to have a written cost
estimate in this case, was determined by EPA to constitute a moderate
deviation from the regulatory requirements supporting a gravity-based
penalty totaling $1,400.
Count VIII alleges that Respondent violated 25 Pa. Code §§ 265.171,
265.173 and 265.178 (25 Pa. Code Sections §§ 75.265(q)(1),
75.265(q)(3) and 75.265.265.(q)(10)) by storing hazardous waste in
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containers in poor condition; by storing at least one container of
hazardous waste that was not covered with a lid when it was not
necessary to add or remove hazardous waste; and by storing hazardous
wastes in containers which were kept in a storage containment area
without a container system capable of collecting and holding spills,
leaks and precipitation. EPA asserts that Respondent's failure to
properly store hazardous waste constituted a significant deviation
from the regulations supporting a gravity-based penalty of $6,000,
moderated only by the relatively small number of drums and tanks known
to contain hazardous waste at the facility. EPA requested a multi-day
component for this violation of $250 per day for a total of $30,000
based on the duration period of December 11,1995, to April 10,1996
(120 Days). The total penalty proposed for Count VIII by EPA is
$36,000.
Count IX alleges that Respondent violated 25 Pa. Code § 267.11 (25 Pa.
Code § 75.311) by failing to file a bond payable PADEP to prevent the
creation of a Superfund site at the facility. The Respondent's alleged
failure to file a bond for a facility storing the amount of waste
known to be present at the facility, constituted a moderate deviation
from the regulatory requirements, supporting a gravity-based penalty
of $1,400. EPA requested a multi-day component for this violation of
$100 per day for a total of $12,000 based on the duration period of
December 11, 1995, through April 10, 1996 (120 Days). The total
penalty proposed for Count IX by EPA is $36,000.
On October 30,1996, Respondent filed an Answer denying the
allegations contained in the Complaint and requested a settlement
conference and evidentiary hearing in the matter. Subsequently, on
April 7,1997 Respondent filed its Pre-hearing Exchange and on April
24,1997, Complainant filed its Rebuttal Pre-hearing Exchange.
II. FINDINGS OF FACT
1.	Since 1985, Respondent Bil-Dry Corporation, has been the owner and
operator of a facility which manufactures grout and cement patching
products, wall and floor coatings and other consumer products located
at 5525 Grays Avenue, Philadelphia, Pennsylvania (CX-1). Bil-Dry is a
Nevada corporation with wholly-owned subsidiaries located in Florida
(Stone Mountain Manufacturing of Florida, Inc.) and Georgia (Stone
Mountain Manufacturing of Georgia, Inc.) (CX-1).
2.	On December 11, 1995, Inspector Ronald Jones, an Environmental
Protection Specialist, in response to a request from the EPA's Region
3 office in Philadelphia, Pennsylvania, conducted an inspection at the
Bil-Dry facility to determine the existence and condition of any
underground storage tanks (USTs) located at the site (CX-3; Tr.
56-59). Inspector Jones had previously contacted Joseph Mazza, General
Manager of the facility, on November 29,1995, and received permission
to perform the inspection (Tr. 57). Mr. Mazza denied the existence of
any USTs on the property (Tr. 58; CX-3).
3.	During the December 11 inspection, Inspector Jones discovered tank
caps, vent pipes, fill pipes and a dispenser unit which indicated the
presence of two to four USTs in the front of the facility (Tr. 48, 59,
65; CX-3). Inspector Jones stated that the dispenser and four steel
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caps were immediately visible from outside the fenced-in loading area
prior to his entry to the Bil-Dry facility (Tr. 59, 65-66).
4.	After presenting a notice of inspection to Mr. Mazza (Tr. 60;
CX-3), Inspector Jones toured the facility and pointed out the
presence of the steel caps and dispenser unit on the property. Mr.
Mazza agreed with Inspector Jones' assessment that USTs were indeed
present under the concrete in the loading area of the facility (Tr.
60-61). No records were available at the Bil-Dry facility concerning
the contents of the USTs (Tr. 60, 65-66; CX-3) and Mr. Mazza stated
that Bil-Dry was unaware of the presence of USTs prior to the December
11 inspection (Tr. 58, 472-473; CX-3).
5.	Due to the fact that the tanks were locked and sealed, Inspector
Jones was unable to conduct sampling of the UST's contents during the
December 11 inspection (Tr. 66). He did note that the caps looked like
they had been locked and sealed for a long period of time (Tr. 64;
CX-3). There were no signs or labels present on the UST's associated
equipment or in their vicinity to indicate the contents of the tanks
(Tr. 66-67).
6.	Inspector Jones and Mr. Mazza toured the remainder of the facility
to determine the presence of any additional USTs (Tr. 64). During this
tour, Inspector Jones observed "around 100 drums" (Tr. 65,104) stored
in a building adjacent to an open area at the rear of the facility
(Tr. 64; CX-3). Inspector Jones noted that some of the drums were
rusty and appeared to be in poor condition (Tr. 64, 67; CX-3). Mr.
Mazza stated that he did not have any records concerning the drums at
the rear of the facility (Tr. 65-66), except that he was aware that
they had been there since 1985 or 1986 when Bil-Dry took possession of
the facility (Tr. 66). Inspector Jones attempted to move several of
the drums and found that they contained materials (Tr. 68). No samples
were taken from the drums (Tr. 100,106) and no determination was made
concerning Bil-Dry's storage of waste materials (Tr. 107).
7.	On March 21, 1996, the Pennsylvania Department of Environmental
Protection (PADEP) received a citizen complaint regarding suspected
improper storage of drums at the Bil-Dry facility (Tr. 134; CX-6,
CX-7). The complaint stated that "some 15 to 20 drums are being stored
outside at this facility; some are rusted and there appears to be no
containment area" (CX-7).
8.	On April 1,1996, a PADEP inspection team led by Heather Bouch
arrived at the Bil-Dry facility to conduct an inspection of the site
(Tr. 133, 136; CX-6). Mr. Mazza suggested at that time that there was
no reason for the PADEP to conduct an inspection of the facility
because the EPA had already done so and that an inspection would not
be allowed to take place (Tr. 136). After explaining the legal basis
for the inspection and the concurrent jurisdiction of the EPA and the
PADEP, Inspector Bouch was allowed to begin her inspection of the
facility (Tr. 137,152). Neither PADEP nor Inspector Bouch had been
informed of the inspection on December 11,1995, or the planned April
9,1996 inspection by the EPA (Tr. 140).
9.	After inspecting the production areas of the facility, Inspector
Bouch noted in her report that the primary waste generated by Bil-Dry
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was unusable packaging and that there were no violations of
Pennsylvania Hazardous Waste Management ("HWM") Regulations associated
with the ongoing manufacturing processes (Tr. 138,151-152; CX-G).
10.	During the course of the inspection, Inspector Bouch observed a
"large quantity" of drums located within a building at the rear of the
facility (Tr. 139; CX-6). According to Inspector Bouch, Mr. Mazza
stated that the contents of the drums had been sampled by Bil-Dry (Tr.
139,152) however, he did not have the results at that time. Inspector
Bouch noted that there were approximately 130 drums within the
building (Tr. 140; CX-6) and that a large percentage appeared to be in
rusted and poor condition (Tr. 139; CX-6). Outside the building,
Inspector Bouch observed an open roofed area containing between 100
and 150 drums stacked three pallets high six pallets wide and two
pallets deep, most containing three or four drums (Tr. 143; CX-6). The
drums were noted to be in poor condition, some with materials hanging
out of the top and down the side (CX-6).
11.	During the inspection, Inspector Bouch observed markings on drums
located both inside the building and in the open roofed area, but was
unable to determine their meaning (Tr. 141-142). No samples were taken
during this inspection for laboratory analysis to determine if
hazardous waste was present at the facility (Tr. 150). Nor were any
photographs taken of the condition of the drums on site (Tr. 150).
12.	In a follow-up to the December 11 inspection, EPA Inspector Jones
contacted Mr. Mazza on March 25 and 26,1996 to request an additional
inspection to obtain samples from the USTs and drums (Tr. 69). On
April 9,1998 an EPA inspection team consisting of Inspector Jones,
Environmental Protection Specialist Jerry Donovan, and RCRA
Enforcement and Compliance Officer Zelma Maldonado, conducted an
inspection of the entire Bil-Dry facility (Tr. 70, 373-374).
Inspectors Jones and Donovan returned on April 10 to complete the
inspection (Tr. 70). Present for both days of inspections representing
Bil-Dry were Mr. Mazza, William Rodgers, President of Bil-Dry
Corporation, and George Sode, Senior Process Engineer (Tr. 70, 372,
446).
13.	Prior to commencing the inspection, Inspector Jones inquired about
the existence of any records concerning the USTs and the drums at the
facility. He was told by Mr. Sode that no records existed for the
USTs. Mr. Sode did however, present a nine-page "inventory" list for
the drums (Tr. 71, 82). Inspector Jones then went to the rear of the
facility by himself to verify that markings on the drums matched those
on the inventory list. He was unable to determine whether the drums
matched those on the list, but never requested assistance from any
Bil-Dry representative to interpret the information (Tr. 71-72,118,
445).
14.	Samples were taken from seven random drums (EPA Drums No. 1
through 7) and four USTs (Tanks A through D) during the April 9 and 10
inspection according to standard EPA procedures (Tr. 72- 75, 77-78,
83, 84, 372, 416-417, 446; CX-4). EPA Drums No. 1 through 3 were
located inside a building at the rear of the facility and Drums No. 4
through 7 were located outside the building. Bil-Dry representatives
did not obtain split samples from the EPA inspectors nor did they
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undertake any sampling of their own while the inspectors were present.
(Tr. 77, 85-86,115, 416).
15.	Inspector Jones noted that the drums which had been stacked
outside at the rear of the facility had been placed on a concrete pad
and several had plastic lids covering tops which had rusted out (Tr.
78-79, 81,121; CX-4). In addition, some of the drums Inspector Jones
had seen during the December 11,1995, inspection were missing from
the storage area. In response to the inspector's questions about this
change, Mr. Mazza stated that the drums had been either used or
repacked since the December inspection (Tr. 80,115-117, 367; CX-4).
Inspector Jones estimated that there were 50 to 100 drums present at
the facility at the time of the April 9 and 10 inspection (Tr. 78;
CX-4). Inspector Bouch estimated that there were between 100 and 150
drums present, in poor condition with no labels, but containing some
sort of "chicken scratch" numbers or markings (Tr. 139-142).
16.	Drums at the rear of the facility were observed to be in poor
overall condition and this, combined with Mr. Mazza's statement that
they had been stored there since 1986, resulted in the inspectors'
classification of their contents as solid waste (Tr. 83,118-121;
CX-4). At the time of the April 1996 inspection, Mr. Sode stated that
Bil-Dry's position was that the contents of the drums were "raw
materials" and therefore not solid waste. Bil-Dry representatives
however, were unable to answer why the drums had been stored as they
had since 1985, when the property was acquired by Bil-Dry. (Tr.
474-476; CX-4).
17.	Analysis performed by the EPA's Office of Analytical Services and
Quality Assurance (OASQA) in May/June of 1996 on the samples taken
from Drums No. 1 through 7 and Tanks A through C. The contents of
Tanks A, B and C and Drums No. 3,4 and 5 exhibited the characteristic
of "hazardous waste" according to Dr. Samuel Rotenberg, EPA Regional
Toxicologist (CX-10): the contents of Tank A exhibited the
characteristic of ignitability (EPA Hazardous Waste No. D001) (Tr.
222-223; CX-5, CX-11); the contents of Tank B exhibited the
characteristic of toxicity for 2-Butanone (also known as Methyl Ethyl
Ketone ("MEK")) (EPA Hazardous Waste No. D035) (Tr. 223; CX-5, CX-11);
the contents of Tank C exhibited the characteristic of ignitability
(EPA Hazardous Waste No. D001) and MEK (EPA Hazardous Waste No. D035)
(Tr. 223; CX-5, CX-11); the contents of Drum No. 3 exhibited the
characteristic of ignitability (EPA Hazardous Waste No. D001) and
toxicity for MEK (EPA Hazardous Waste No. D035) (Tr. 212-214, 216-217;
CX-5, CX-11); the contents of Drum No. 4 exhibited the characteristic
of ignitability (EPA Hazardous Waste No. D001) (Tr. 217-218; CX-5,
CX-11); and the contents of Drum No. 5 exhibited the characteristic of
corrosivity (D002) and the characteristic of toxicity for chromium
(EPA Hazardous Waste No. D007) (Tr. 218-220; CX-5, CX-11).
18.	MEK is a colorless, flammable liquid used in the production of
protective surface coatings, adhesives, paint removers and special
lubricating oils. Exposure to MEK can occur following releases into
the air, water, land or groundwater and can enter the human body
through breathing contaminated air, consumption of contaminated food
or water, or absorbed through skin contact. MEK evaporates when
exposed to air and dissolves when mixed with water and does not bind
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well to soil. Breathing MEK for short periods of time can have adverse
effects on the nervous system, ranging from headaches to
unconsciousness depending upon levels of exposure. MEK vapors irritate
the eyes, nose and throat. Direct, prolonged contact with liquid MEK
irritates the skin and damages the eyes..Concentrations greater than
200 parts per million ("ppm") are considered to be toxic according to
the EPA. (Tr. 213-214, 224-225; CX-5, CX-11, CX-12-a, CX-12-c,
CX-12-d, CX-12-e)
19.	Chromium is a naturally occurring element found in rocks, soil,
plants, animals and volcanic dust and gases. In the compound known as
chromium (IV), it is used for making steel and other alloys, bricks in
furnaces, dyes and pigments, and for chrome plating, leather tanning
and wood preserving. Very small amounts of the compound chromium (III)
are found in everyday foods. Manufacturing, disposal of products or
chemicals, or burning of fossil fuels release chromium into the air,
soil and water. Chromium binds easily to soil and when mixed with
water, sticks to dirt particles that fall to the bottom. Only small
amounts dissolve or move through soil into groundwater. Exposure can
occur through air or ingesting water or food from soil contaminated
with chromium. Chromium (IV) can be toxic at high levels, resulting in
damage and irritation to nasal passages, lungs, stomach and
intestines. Ingestion of very large amounts can cause stomach ulcers,
convulsions, kidney and liver damage, even death. Skin contact may
lead to allergic reactions and skin ulcers. Concentrations greater
than 5,000 parts per billion are considered to be toxic according to
the EPA. (Tr. 227-228, 238-240; CX-5, CX-11, C-12-b).
20.	The EPA standard for ignitability in hazardous waste
determinations is a flashpoint of less then 60 degrees Celsius.
Materials which ignite and burn at less than this temperature are
considered to be hazardous waste. (Tr. 212-214; CX-11).
21.	The content of Drum No. 2 was found by the OASWA laboratory to
exhibit the characteristic of corrosivity (EPA Hazardous Waste No.
D002) by registering a pH value of 12.6 during inorganic analytical
testing according to Dr. Rotenberg (Tr. 211-212; CX-5, CX-11). During
the initial organic testing of the sample, the laboratory report
states that the pH was 11.8. (Tr. 397; CX-5). EPA standards for
corrosivity testing designate materials which have pH values of
greater than 12.5 and lower than 2 as hazardous in nature (Tr. 166,
211; CX-11). James Barron, an EPA Chemist called as an expert witness,
stated at the hearing that the difference in pH values existed because
the inorganic testing was done with an Orion brand electrometric pH
meter according to RCRA methodology SW-846, while the organic testing
was done with pH paper, a less reliable method (Tr. 167,170,188,
197, 200-201). Only the analysis for the inorganic testing was
properly calibrated to take into account the presence of sodium in
high alkaline solutions, temperature, positioning of electrodes and
the age of the sample (Tr. 171-175).
22.	On May 30,1996, based upon Inspector Bouch's findings from the
April 1,1996, inspection, PADEP sent a letter to Bil-Dry which cited
14 violations of the Pennsylvania Solid Waste Management Act of July
7, 1980 ("SWMA"), (P.L. 380, No. 97), as amended 35 P.S. § 6018.101 et
seq. and the rules and regulations promulgated in 25 PA. Code.
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Violations cited included failure to perform a hazardous waste
determination, failure to notify the PADEP and EPA of hazardous waste
activities, failure to obtain an EPA identification number, operating
a hazardous waste disposal facility without a permit and failure to
maintain records to identify quantities of hazardous wastes generated
at the site (Tr. 145-146; CX-8). The notice did not impose any
obligation upon Bil-Dry and served to provide an opportunity for
Bil-Dry to come into compliance with the provisions of the SWMA
through voluntary action (CX-8).
23.	In response to PADEP's letter citing numerous violations of the
SWMA, Bil-Dry sent a letter dated June 14,1996, to Inspector Bouch,
stating Bil-Dry's belief that despite the condition of the containers,
the drums contained useable raw materials.The absence of a readable
marking system was attributed to heavy rain and snow during the
previous winter which resulted in a wearing-off of previously made
marks. In order to comply with PADEP regulations however, Bil-Dry
offered to remove all materials from the facility's previous paint
production processes, repackage all materials from drums showing signs
of wear, apply for and adhere to all permit regulations affecting its
operations, develop or update pollution prevention, spill contingency
and emergency action plans and empty and close the USTs on the
facility's property. (RX-26).
24.	On June 12,1996, Bil-Dry was requested to send certain
information to the EPA concerning the USTs, pursuant to RCRA §§ 9001
et seq. (Regulation of Underground Storage Tanks) and 40 C.F.R. Part
280 (Technical Standards and Corrective Action Requirements for Owners
and Operators of Underground Storage Tanks). The information requested
included a copy of Bil-Dry's Notification for Underground Storage
tanks submitted to PADEP; the identities of prior and current
owners/operators of the USTs and the dates of respective ownership;
technical information on each UST and associated underground piping; a
complete description of release detection methods used on each UST;
information regarding the manufacturing processes undertaken at the
facility and the waste streams generated by those processes; and all
information relating to hazardous waste determinations made by Bil-Dry
in accordance with 40 C.F.R. § 261.24. A response was mandated within
30 days of receipt by Bil-Dry. (CX-18-a).
25.	Bil-Dry responded by stating that it was not aware of the presence
of the USTs until the December 11,1995 inspection. It did not
consider itself to be the current owner/operator of the tanks and was
unable to provide any information concerning their operation, contents
or construction. Copies of the EPA laboratory analyses of the samples
taken from the USTs was also requested at this time. (CX-18-b).
26.	On August 29,1996, Bil-Dry received a letter from EPA mandating
that information be provided regarding the type, generator or
producer, amount and date of acquisition and use, purpose for
acquisition, current and previous condition and date of storage and
sampling for each container that had been at the open-roofed area at
the Bil-Dry facility since its acquisition. The letter also requested
that Bil-Dry furnish all documents relating to the containers on site,
records regarding the transport of materials in the containers from
the facility, methods of storage, the existence of hazardous waste
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determinations, the contents of EPA Drum Nos. 1 through 7, training
records of personnel, inventories of items located on the third floor
of the production building and what action had been taken in response
to the PADEP's letter dated June 14,1996. Bil-Dry was given until
September 13,1996 to reply to this inquiry. (CX-19-a)
27.	Thereafter, on September 30,1996, EPA issued an administrative
complaint notifying Bil-Dry that it was in violation of RCRA Subtitle
C, 42 U.S.C. §§ 6921-6939(e) and the regulations thereunder at 40
C.F.R. Parts 260-271, as well as Pennsylvania's HWM program. The
Complaint listed seven counts of violations of the Pennsylvania HWM
program and two counts of violations of the federal Hazardous Waste
Management Act's restrictions on land disposal of certain materials.
The Complaint also contained a compliance order mandating that Bil-Dry
cease storing hazardous waste at its Philadelphia facility, conduct a
hazardous waste determination of all materials currently stored at the
facility, obtain a hazardous waste identification number and submit a
closure financial assurance plan for the facility and the materials
currently stored there (CX-14; RX-11)
28.	A recommended penalty was prepared by Ms. Maldonado based upon the
violations of federal and the Pennsylvania HWM programs described in
the Complaint. The penalty calculation utilized guidelines established
by the RCRA Civil Penalty Policy, dated October 1990 (Tr. 245-247;
CX-14; RX-12). The calculation consisted of the gravity of each
violation (Tr. 247, 250-251, 255, 258-259, 262-266, 270-274; CX-14;
RX-12), the duration between the initial inspection of December 11,
1995, and the April 9-10, 1996, inspection (120 Days) (Tr. 247, 251,
257-259, 262, 264, 270-274; CX-14; RX-12) and the damage done to the
administration of the RCRA regulatory program (Tr. 247, 252-255,
267-268; CX-14; RX-12). The proposed penalty for all nine counts
contained in the Complaint combined with the multi-day duration
component for non-compliance totaled $231,800. (Tr. 246, 275; CX-14;
RX-12).
29.	By letter to the Regional Hearing Clerk on October 30,1996,
Respondent answered the administrative complaint by asserting that it
did not consider itself to be the owner or operator of a hazardous
waste treatment, storage or disposal facility and that a permit or
application for interim status under Pennsylvania or federal law was
unnecessary as a result. The answer also went on to state that Bil-Dry
had determined that the materials at issue were not hazardous wastes
and therefore Bil-Dry was not in violation of either Pennsylvania or
applicable federal laws covering hazardous wastes. Respondent also
stated that it considered the proposed penalties to be excessive and
unreasonable, payment of which would jeopardize the company's
existence. (CX-17).
30.	On November 19,1996, Bil-Dry responded to EPA's August 29,1996
request for information concerning the containers stored in the open
area at the rear of its facility (Tr. 411, 412; CX-19-b). The letter
noted that the EPA request was "extremely broad" and that while
Bil-Dry had answered the request to the best of its ability, nothing
in the response should be interpreted to be an admission that Bil-Dry
was storing hazardous wastes because it had concluded that the
materials were useable (CX-19-b). Bil-Dry also stated that the drums
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had been the property of Harrod Paints, the previous owner of the
property and were in generally good shape overall but "Rather than
getting into a dispute with the EPA, Bil-Dry [has] decided that the
better alternative would be to have the drums tested for disposal and
disposed" (CX-19-b). As of the date of the letter, Bil-Dry claimed
that the material in the USTs and 150 drums had been removed and
disposed of and a further 110 drums were awaiting analysis pending
disposal (RX-18, RX-19, RX-20, RX-21, RX-23; CX-19-b). The letter also
stated that it was not aware of the contents or locations of EPA Drum
Nos. 1 through 7 and had no other documentation than that which was
provided to the inspectors during the April 9-10 inspection (Tr.
411-412; CX-19-b).
31.	All of the drums which were the subject of the EPA's Complaint
(Nos. 2 through 5), were disposed of by the end of November 1996,
according to Mr. Sode (Tr. 426-429). No detailed sampling was done to
determine the contents of these containers prior to their disposal.
32.	At some point after the April 9-10 inspection of the Bil-Dry
facility, Mr. Sode received a sample of material which he claimed was
drawn from Drum No. 2. Mr. Mazza was personally instructed by Mr. Sode
to collect samples from each of the seven drums which were labeled by
the EPA as Drum Nos. 1 through 7. However, no verifiable chain of
custody exists for this sample (Tr. 381-384, 422). In April 1997, Mr.
Sode conducted a pH analysis on the sample he believed to be from Drum
No. 2 and received apH value of 12.17 (Tr. 422, 394; RX-13-27). This
result was documented through photographs of a sample with electrodes
in place and a pH meter showing the result of the test (Tr. 423-424;
RX-13-27).
33.	Between 1991 and 1996, Bil-Dry had attempted to formulate a tile
and grout cleaner at the Grays Avenue facility based upon Hillyard
Industries' "Tile and Grout Cleaner/Renovator" and "Super Shine AN"
brand tile cleaner in conjunction with New York Carpet World (Tr.
421-422, 440, 450-451; RX-4). Both of these products as well as a
solvent that Mr. Rodgers and Mr. Sode attempted to develop contained
materials similar to those at issue in the drums located at the rear
of the Bil-Dry facility (Tr. 447-454; RX-2, RX-3, RX-5, RX-7, RX-10).
Mr. Rodgers and Mr. Sode also produced "maintenance" paints for its
own use and attempted to develop commercial paints from materials
located around the facility, including those in the same area as EPA
Drums No. 2 through 5 (Tr. 441-444; RX-13-6).
34.	On December 2-3 1997, an evidentiary hearing was held before the
undersigned in Philadelphia, Pennsylvania, at the Environmental
Protection Agency's Region 3 courtroom.
III. APPLICABLE LAW
On January 30,1986, pursuant to § 3006(b) of RCRA, 42 U.S.C. §
6926(b) and 40 C.F.R. Part 271, Subpart A, the Commonwealth of
Pennsylvania was granted final authorization^) to administer a state
hazardous waste management program in lieu of the federal hazardous
waste management program established under RCRA Subtitle C, 42 U.S.C.
§§ 6921 - 6939(e). The provisions of Title 25 of the Pennsylvania
Code, § 75.259 et. seq., through this final authorization, have become
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the applicable requirements of RCRA Subtitle C and are accordingly
enforceable by EPA pursuant to § 3008(a) of RCRA, 42 U.S.C. § 6928(a).
Title 25, Pa. Code § 260, Definitions and Requests for Determination,
"Definitions" (25 Pa. Code § 75.260(a) (1986)), defines the following
pertinent terms:
Hazardous Waste - -
Any garbage, refuse, sludge from an industrial or other waste water
treatment plant, sludge from a water supply treatment plant, or air
pollution control facility and other discarded material including
solid, liquid, semisolid or contained gaseous material resulting from
municipal, commercial, industrial, institutional, mining, or
agricultural operations, and from community activities, or any
combination of these factors, which, because of its quantity,
concentration, or physical, chemical or infectious characteristics
may:
	(ii) pose a substantial present or potential hazard to
human health or the environment when improperly treated,
stored, transported, disposed of or otherwise managed.
Solid Waste - - Waste, including but not limited to, municipal,
residual, or hazardous waste, including solid, liquid, semisolid, or
contained gaseous materials	
IV. DISCUSSION
On September 2,1998 the undersigned issued an Order Requiring Further
Briefing issued in light of the August 25,1998 decision of the U.S.
District Court for the Western Division of the Western District of
Missouri in Harmon Industries, Inc. v. Browner, et al., Docket No.
97-0832-CV-W-3 (W.D. Missouri, August 25,1998). Complainant filed its
brief on September 24, 1998. Respondent elected not to file a brief on
this issue.
The court in Harmon Industries addressed issues pertinent to this
proceeding in that it severely narrowed and restricted EPA's authority
under RCRA to initiate an enforcement action in a State with an
authorized program. However, the Court's decision contradicts the
unambiguous language of RCRA, the statute's legislative history, and a
long line of judicial and administrative rulings to the contrary.
Moreover, Complainant has provided sufficient case authority to
establish that the Court's decision is not binding on the case at bar.
For these reasons, the undersigned declines to adopt the Court's
rationale in Harmon Industries and concludes that Complainant is fully
authorized to initiate the current enforcement action. Accordingly, a
discussion on the issues of liability and penalty will follow.
A. Liability
The Complaint alleges that Respondent managed, stored and disposed of
hazardous wastes in three tanks (A-C) and four drums (Nos. 2-5), at
its Grays Avenue facility from 1985 until 1996, in violation of
federal and state regulations. Respondent's defenses to the
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allegations are 1) that the material in the drums was not waste, but
rather raw materials used occasionally at the facility; 2) that it is
not the owner or generator of material in the USTs, as it neither used
the material nor had knowledge that the tanks existed prior to EPA's
inspection; and 3) that it is unable to pay the proposed penalty.
Three inspections conducted at Respondent's facility form the basis
for the allegations contained in the Complaint: the December 11,1995
EPA inspection led by Inspector Ronald Jones (CX-3); the April 1,
1996, PADEP inspection, led by inspector Heather Bouch (CX-6); and the
April 9 and 10,1996, EPA inspection led by Inspector Ronald Jones
(CX-4). A discussion of Respondent's liability follows.
1. Underground Storage Tanks
Respondent asserts that it is not liable for the material stored in
the three USTs as it was neither the "owner", nor the "generator" of
such material under Pennsylvania law (25 Pa. Code § 75.260(a) and §
75.261). Rather, Respondent asserts that its predecessor, Harrod Paint
should be considered the generator of the material in the tanks, and
relies upon the affidavit of its owner, Dr. Joon Moon, as support for
its argument that Respondent was unaware of the USTs and that the
tanks were abandoned prior to Respondent's purchase of the facility.
Such arguments however, are unpersuasive.
Respondent has stipulated that it has been the owner of the Grays
Avenue facility from late 1985 to the present (CX-1). It has failed to
cite to any evidence that when it purchased the facility it did not
purchase Tanks A-C (Ex. C-19-b). Respondent's alleged lack of
knowledge of the existence of the tanks for more than ten years is
also not supported by the evidence. Inspector Jones testified that the
tank caps, vent pipes, fill pipes and dispenser unit were in plain
view and easily discoverable during his inspection (FOF 3; CX-3; Tr.
59, 65-66). Moreover, the testimony of Respondent's President, Mr.
Rodgers, with respect to the caps, that "I would think that we
probably saw them and didn't think a thing about it" (Tr. 472) further
undermines the credibility of such argument.
Respondent stipulated to EPA's June 1996, test results which revealed
that the contents of the tanks exhibited hazardous characteristics
(CX-1 at 17(a-e); CX-5). Respondent further admitted at the hearing
that it was undisputed that the contents of the tanks were hazardous
waste (Tr. 483). In addition, no evidence has been introduced by
Respondent which demonstrates any activities by Harrod Paint with
regard to the tanks. In the absence of such evidence, Respondent is
deemed the "generator" of the contents of Tanks A-C, due to its
decision to abandon or discard the tanks after its purchase of the
facility in 1985. Under the corresponding federal definition of a
"generator" at 40 C.F.R. § 260.10, such initial acts by Respondent
first caused the materials to become solid waste and, thereby subject
to regulation as hazardous waste under Pa. Code § 75.260(a).
The Environmental Appeals Board (EAB), in In re Rybond, Inc., Dkt. No.
RCRA-lll-247 (3008) Appeal No. 95-3,1996 RCRA LEXIS 16 at *57-58, 6
E.A.D. 614 (Final Order, November 8,1996) clearly held that
"ownership" of a facility, and not knowledge of the conditions present
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thereon, is determinative of a person's liability under RCRA.
Therefore, Respondent's alleged lack of knowledge of the existence of
the storage tanks is not a defense to the allegations of the
Complaint. However, in reducing the amount of penalty imposed, the
EABstated that "we find persuasive Rybond's argument that its penalty
for these violations should reflect the fact that its involvement in
these violations was indirect" supra, at 61-62.
The contents of the tanks having been found to contain hazardous
waste, and given Respondent's Stipulations Nos. 6, 8,10,12,14
(CX-1), Bil-Dry's non-compliance with the statutory requirements, has
been established. Respondent is thus liable under each count of the
Complaint as they pertain to Tanks A-C.
2. Drums
The Complaint also addresses Respondent's alleged improper management,
storage and disposal of hazardous wastes in various drums during the
period between 1985 and 1996. Of seven drums sampled by EPA, four
(Drums 2-5), tested as having hazardous characteristics (CX-5). EPA
argues that the evidence clearly demonstrates that the contents of
Drums 2-5 had been discarded by Respondent and therefore were "solid
waste", and thus subject to regulation as "hazardous waste" due to
their chemical and physical properties.
a. Applicable Definition of Hazardous Waste
It is Respondent's position that the material in the drums was not
"discarded material.... resulting from	operations" at the
facility, and thus does not fit within the definition of "hazardous
waste" pursuant to 25 Pa. Code § 75.260. Respondent argues that EPA
erroneously relies on the broader federal definition of hazardous
waste not contained in the Pennsylvania law, which additionally
includes waste "discarded or accumulated prior to being discarded", 40
C.F.R. § 261.2(b) (1984). Respondent argues, in effect, that the
Pennsylvania regulations should be interpreted as applying only to
materials that are discarded, and not accumulated prior to being
discarded (Respondent's Brief at 9-10). These arguments however, are
clearly without merit.
Under the authorized Pennsylvania regulations, "hazardous waste" is
defined, in pertinent part, as a "solid waste which is not excluded as
hazardous waste under subsection (c)..."25 Pa. Code § 75.261(b)(1).
Therefore, in order for a material to qualify as a "hazardous waste,"
it must first satisfy the definition of a "solid waste". The term
"solid waste" is defined by the Pennsylvania regulations as "[w]aste,
including but not limited to, municipal, residual, or hazardous waste,
including solid, liquid, semisolid, or contained gaseous materials."
25 Pa. Code § 75.260(a). The term "waste" is not further defined in
the Pennsylvania authorized regulations.
However, it is well-established that authorized state hazardous waste
programs must be "consistent with" and "equivalent to" the federal
regulations in effect at the time of authorization.
RCRA § 3006(b), 42 U.S.C. § 6926(b). See, also, Chemical Waste
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Management, Inc., v. Templet, 967 F.2d 1058 (1992), cert, denied 113
S.Ct. 1048,122 L.Ed. 2d 357. The preamble to the September 4, 1982
Pennsylvania Bulletin further provides "[t]hese revisions to
Pennsylvania regulation on generation, transportation, treatment,
storage, and disposal of hazardous waste are designed to bring
Pennsylvania's regulation of hazardous waste into conformance with
revisions to the Resource Conservation and Recovery Act (42 U.S.C.A. §
6901, et. seq.) enacted since November, 1980"(25 Pa. Code, Chapter 75
Preamble, at 2981).
Under RCRA, federal guidelines establish minimum hazardous waste
control standards below which a state hazardous waste program may not
operate, although a state may institute stricter standards. State ex
rel. Iowa Dept. Of Water, Air and Waste Management v. Presto-X Co.,
417 N.W. 2d 199 (1987). RCRA sets a floor, rather than a ceiling, for
state regulation of hazardous wastes. Old Bridges Chemicals, Inc. v.
New Jersey Dept. of Environmental Protection, C.A.3 (N.J.) 965 F.2d
1287 (1992), cert, denied 113 S.Ct. 602,121 L.Ed. 2d 538. In People
v. Roth, 492 N.Y.S. 2d 971,129 Misc.2d 381 (1985), the Court held
that although the Congress, in enacting the Solid Waste Disposal Act,
did not choose to occupy the hazardous waste field to the total
exclusion of states, it did choose to establish minimum ecological
standards and preempt states from establishing less stringent rules,
and thus the Commissioner of Environmental Control was mandated to
adopt, as a minimum, the federal list of hazardous wastes.
Respondent's assertion that the court adopt the narrower state
definition of hazardous waste to the exclusion of the RCRA definition
is, therefore, contrary to law and is rejected.
b. Allegation That Drums 2-4 Contained Raw Material
Respondent next asserts that the material contained in Drums 2-5 was
actually "raw material" and does not fit within the § 75.260
definition of hazardous waste. Rather, Respondent submits that such
material was "used occasionally" at its facility for use in its
products and is thus exempt from regulation as hazardous waste (Tr.
117, 367-369; Respondent's Brief at 4). Respondent's argument however,
has no legal or evidentiary support.
At the time of Pennsylvania's authorization, the federal regulations
defined "solid waste" to include "other waste material". 40 C.F.R. §
261.2(a) (1984). The term "other waste material" was further defined
by the federal regulations to include "any solid, liquid, semi-solid
or contained gaseous material...which (1) is discarded or is being
accumulated [orjstored....prior to being discarded". 40 C.F.R. §
261.2(b) (1984) (emphasis added).A material is "discarded" if its
"abandoned (and not used, reused, reclaimed or recycled) by being (1)
disposed of...". 40 C.F.R. § 261.2(c) (1984). Concomitantly, a
material is "disposed of" if it is "discharged ...or placed into or on
any land or water so that such material...may enter the
environment..." 40 C.F.R. § 261.2(d) (1984).
The EAB has held that the spill or potential spill of stored raw
materials can constitute discard of waste, for purposes of Subtitle C.
In the Matter of Sandoz Pharmaceuticals Corporation, RCRA Appeal No.
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91-14; 4 E.A.D. 75; 1992 RCRA LEXIS 25 (Order denying review in part
and remanding in part, July 9,1992), the EAB held that "the term
'solid waste' as defined in RCRA generally does not extend to stored
raw materials or fuel. The investigation requirements at issue here,
however, are directed to potential releases or spills of the stored
materials, not to the materials in their original condition of
storage. A spill or release of stored materials into the surrounding
area would generally constitute 'solid waste' under RCRA."
(emphasis supplied).
Similarly, the EAB citing In the Matter of Amerada Hess Corporation
Port Reading Refinery, RCRA Appeal No. 88-10, 2 E.A.D. 910,1989 RCRA
LEXIS 16 (Order denying review, August 15,1989), held that
"....Despite the original status of the stored [raw] materials,
however, a spill or release in the excavated area would be 'solid
waste' under RCRA because the spilled materials would be
unquestionably discarded. Hess is correct that the Agency's RCRA
jurisdiction does not extend to [raw] product or feedstock which is
not otherwise solid waste. The disputed soil sampling requirements,
however are not directed toward the storage of product or feedstock,
but instead address a potential release of solid waste to the
environment."
Respondent has failed to meet its burden of showing that the contents
of Drums 2-4 were beneficially used or reused, or legitimately
recycled or reclaimed at the Grays Avenue facility. See, The Ekoteck
Site PRP Committee v. Self, 881 F. Supp. 1516,1524 (C.D. Utah 1995).
Respondent's brief goes into great detail generally alleging its
"occasional" use of such materials for solvents, wallpaper paste and
maintenance paints and asserts that the contents of Drum No. 2 was a
dilute sodium hydroxide solution (Tr. 380-381, 447; CX-4, photo
No.20); that Drum No. 3 contained a "useful solvent blend" (Tr. 233,
410-411); and that Drum No. 4 contained a possible acrylic co-polymer
(Tr. 407-408). However, evidence demonstrating that Respondent
actually used these materials for a beneficial purpose is
unpersuasive.
Rather, the preponderance of the evidence regarding the storage and
condition of these drums indicates that for regulatory purposes,
Respondent failed to provide the level of containment for Drums 2-4
necessary to protect human health and the environment pursuant to 40
C.F.R. § 265.171. (CX-4, photos 19-24; C-6; C-8; Tr. 64-67, 243-244).
Given Bil-Dry's lack of record-keeping regarding these materials it is
reasonable to conclude that the contents of these drums were discarded
by the Respondent.
The preamble to the rulemaking which defined the term "solid waste" as
set forth in 40 C.F.R. Parts 260-261, explicitly provides that a
facility's failure to maintain records of its materials generally is
evidence that such materials are not being beneficially or
legitimately used or reused by the facility.(3) Other than the
"inventory" of drums in the rear of the facility (Tr. 371),(4) which
constituted a less than adequate marking system pursuant to 40 C.F.R.
§ 262.32 and 268.50(a)(1)(Tr. 141-142), Respondent has produced no
documentation, such as receipts, purchase dates, supplier names, etc.,
concerning the existence or use of alleged raw materials in the drums
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in question. This undermines its assertion that the alleged raw
materials in issue were not discarded material "resulting from
operations"under 25 Pa. Code § 75.260. Nor has Respondent definitively
demonstrated from witness testimony that the contents of Drums 2-4
were beneficially used or actually utilized at the Grays Avenue
facility (See, testimony of Mr. Sode at Tr. 69; Mr. Rodgers at Tr.
447).(5) Mr. Mazza's statements to inspectors that he had no knowledge
as to the contents of the drums in the rear of the facility or why the
drums had been located on site since Respondent had purchased the
plant in 1985, clearly contradict such assertions (Tr. 65; CX-3, CX-4
and CX-6 at 2).
The evidence thus demonstrates that Respondent handled the contents of
Drums 2-4 not as raw materials actively used in the facility's
production processes, but as discarded materials. Inspectors Bouch and
Jones both testified that some of the drums in the rear of the
facility were "open" with material "hanging out of the top and down
the sides of some drums" (CX-6 at 3), which Respondent's President,
Mr. Rodgers conceded, were "unusable" and could not be considered raw
materials (Tr. 477-478). Contrasted with the handling practice of
materials actually used at the facility, stored inside a dry
warehouse, in clearly marked containers and maintained in drums
designed to preserve their value (CX-3, photo 13), it is evident that
the drums at the rear of the facility were stored and handled as
discarded materials.
Respondent's post-inspection activities further support this
conclusion. During the August 1996 off-site disposal of more than 260
drums located at the rear of its facility, both analyses of the
contents of said drums and the certification of Mr. Sode, on behalf of
Respondent, indicated that the materials contained therein were
"hazardous waste" (RX-23). The expense related to the disposing of
such material is clearly inconsistent with the handling of valuable,
useful, raw materials being actively used at the facility.
Respondent's stated rationale for disposing of such alleged valuable
materials in an effort to accommodate the PADEP is therefore,
unpersuasive (RX-26).
Respondent has failed to demonstrate, through documentary or
testimonial evidence, that the contents of Drums 2-4 were legitimately
used or recycled raw materials and not previously discarded or
abandoned . Courts have generally been hesitant to adopt such
arguments, see United States v. ILCO, 996 F.2d 1126 (11th Cir.1993),
and Respondent has not shown that this alleged useful material was
anything other than "solid waste."
c. Drum No. 5
Unlike the evidence relating to Drums 2-4, Respondent has provided
sufficient evidence to allow a finding that the contents of Drum No. 5
were beneficially used and thus were not discarded waste material.
Although Drum 5 tested as corrosive (See, Discussion at Section IV, A
(2)e), EPA's analysis indicated that such material was in fact
phosphoric acid raw material (Ex. C-5, Organics p. 8).
The testimony from Respondent's President, Mr. Rodgers, shows that the
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material from Drum No. 5 was being used to develop a phosphoric acid
based tile and grout cleaner (Tr. 448-449). Rodgers identified from
CX-4, photograph 24, marked Drum No. 5, a "bladder" drum, used for
storage of acid-based materials. He further asserted Respondent's
efforts over 2Vz years to formulate a tile and grout cleaner.
Specifically, Rodgers described identifying a target competitor's
product, requesting MSDS sheets, data sheets and a label and then
attempting to formulate the product (Tr. 450).
One of the materials in the target tile and grout cleaner was
phosphoric acid. In seeking to emulate the target product, Respondent
made some samples, using phosphoric acid from the Grays Avenue
facility. Such material, as contained in Drum No. 5, was stored in
bladder drums in order to prevent the acid from corroding the interior
of the drum. Rodgers testified that he used material contained in
these drums to formulate samples. He also formulated products using
this solvent on "several" occasions to produce maintenance paints for
use in the facility(Tr. 449-452).
Rodgers testimony is corroborated by the affidavit of Pete Bentley, a
representative of Respondent's largest customer, New York Carpet World
(NYCW), who requested Respondent to develop a comparable product to a
high industry performer, Hillyard Chemical's Tile and Grout
Cleaner/Renovator No. 475. Respondent had since been working to
develop such a product for sale to NYCW (RX-4).
Although Rodgers did not unequivocally identify Drum No. 5 as the
bladder drum used for formulating product, the undersigned, construing
the evidence in the light most favorable to Respondent, concludes that
minimally sufficient evidence exists which shows that the contents of
Drum No. 5 were not discarded waste, but material beneficially used by
Respondent. To find otherwise would be to ignore credible evidence
which supports such a conclusion.
d. The December 11,1995 Inspection
Respondent next asserts that the EPA inspection of the Grays Avenue
facility on December 11,1995, should have no bearing on whether the
four drums at issue contain hazardous waste. Respondent correctly
asserts that EPA took no samples during the December 1995, inspection
(Tr. 100) and that Inspector Jones could not identify any of the four
drums at issue from that inspection (Tr. 105-106). Similarly,
Respondent argues that the photographs taken during this inspection
have no probative value with respect to whether Drums 2-4 contained
hazardous waste (CX-3).
Such evidence may be considered as relevant in showing Respondent's
general handling and storage activities at the Grays Avenue facility,
but does not demonstrate that Drums 2-4 were on site or contained
hazardous waste as of December 11, 1995. EPA asserts that Respondent
has failed to "introduce any evidence to support its claim that Drums
2-4 were not present at the time of EPA's first inspection"
(Complainant's Reply Brief at 6). EPA however, misplaces the
evidentiary burden in this proceeding.
The Consolidated Rules of Practice, at 40 C.F.R. § 22.24, indicate
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that EPA "has the burden of going forward with and of proving that the
violation occurred as set forth in the complaint and that the proposed
civil penalty....is appropriate". See, In the Matter of Sandoz, Inc.,
Docket No. RCRA-84-54-R, Appeal No. 85-7; 2 E.A.D. 324,1987 EPA App.
LEXIS 7 (Final Decision, February 27,1987). With respect to the
December 11 inspection, EPA has failed to meet that burden.
The Complaint asserts, with respect to Drums 2-4, that "Respondent is
liable pursuant to RCRA § 3008(a)(1)....for the unpermitted and
improper management, storage and disposal of hazardous waste and
failure to comply with the administrative and financial assurance
obligations imposed upon an owner and operator of a hazardous waste
management facility" (CX-14). The penalty portion of the Complaint
further asserts a "multi-day" component of "120 days of violation
(12/11/95 through 4/10/96)"(CX-14).
EPA's penalty calculation infers Respondent's liability for Drums 2-4
from December 11,1995. However, it has offered no definitive evidence
which would establish liability for these specific drums as of that
date. EPA admits that "the primary purpose of the December 1995,
inspection was to determine the existence and compliance status of any
tanks located at the Grays Avenue facility. As a result, Inspector
Jones was neither expecting nor equipped at that time to collect
samples for drums" (emphasis supplied)(Complainant's Reply Brief at
7). His December 11 inspection report only generally notes "the way
drums are stored and the condition of these drums in both
areas"(CX-3). No samples were taken and no identification of Drums 2-4
was ever made until the follow-up inspection and testing on April
9-10, 1996 (CX-4).
Thus, the evidence has failed to establish any violations pertaining
to Drums 2-4 as of December 11,1995. Respondent's liability can only
be viewed in the context of the April 1996, inspection and any test
results emanating therefrom.
e. Testing of Drums 2 through 4
With regard to the testing of samples taken from seven drums during
the April 9-10,1996 inspection, and memorialized in an Analytical
Report dated June 17,1996 (CX-5), the parties have stipulated that
except for the pH analysis performed on the sample from Drum No. 2
that: a proper chain of custody was maintained for all samples,
including Drum No. 2; the equipment and materials used for the
analyses of all samples, except concerning the pH analysis on the
sample from Drum No. 2, were properly calibrated and maintained; and
the methodology utilized for the analyses of all samples, except
concerning the pH analysis on the sample from Drum No. 2, was correct,
in accord with accepted and required standards (CX-1 at 17).
Respondent argues that the contents of Drum No. 2 were not hazardous
waste because they possessed a pH level below 12.5,(6) and therefore
did not exhibit the hazardous characteristic of corrosivity (Tr. 394;
CX-1 at 17). Both EPA and Respondent performed separate pH analyses on
the material in Drum No. 2 to determine whether it displayed hazardous
characteristics.
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EPA's corrosivity analyses for Drum No. 2 were conducted by chemist
James Barron of EPA's OASQA, whose testimony detailed the precautions
taken to insure accuracy of the tests against a myriad of variables,
including the averaging of two pH tests, which was standard EPA policy
and consistent with industry practice (CX-5; Tr. 164,166-167,
170-175, 179-203). In sum, Mr. Barron's analysis revealed that the
contents of Drum No. 2 had an average pH level of 12.6 and therefore
exhibited the hazardous characteristic of corrosivity (Tr. 201-202).
Upon review of the evidence, Respondent has failed to demonstrate any
error in the EPA's corrosivity analysis on the contents of Drum No. 2.
(7)
Rather Respondent's argument that the contents of Drum No. 2 were
non-hazardous, is based entirely on the analysis of George Sode, its
chemical engineer, with experience in sampling techniques relating to
acids and bases (RX-6; Tr. 359-360). Sode's three pH tests on Drum No.
2 revealed readings of 12.24,12.17 and 12.17, all under the hazardous
limit of 12.5 (RX-13, photos 24-27; Tr. 388). Unlike the EPA tests
however, Sode's methodology and resulting analysis raise serious
concerns as to reliability and accuracy, and are not accorded
substantial weight (Tr. 385-386).
The sample tested by Sode was not a split sample of the material
collected by EPA during the April 1996, inspection. Inspector Jones
did not see Bil-Dry personnel take separate samples of the drums, nor
did they ever request a split sample of such materials (Tr. 77,115).
Moreover, the sample analyzed by Sode has an uncertain chain of
custody. Although Sode asserted that he had instructed the Grays
Avenue facility manager, Mr. Mazza, on how to properly collect a
sample, Mr. Mazza was neither trained in such collection methods nor
was he present at the hearing to testify (Tr. 382-385). As such,
Respondent is unable to show what sampling methods or equipment were
used to collect this sample.
In addition, many of the variables addressed and accounted for by the
EPA analysis which could significantly effect the test results, i.e.,
temperature, time(8), application of a properly prepared buffered
calibration solution, the "sodium effect", etc., were missing from
Sode's analysis. Nor did Respondent document its test results in a
detailed lab report, but merely through photographs of a calibrated pH
meter and even then for only a single test. Such deficiencies render
Sode's conclusion that such material was non-hazardous, unfounded and
unreliable (Tr. 179, 388-389, 423-424; RX-13, photo 24-27).
The evidence therefore indicates that the contents of Drum No. 2 had a
pH level exhibiting the hazardous characteristic of corrosivity. It
has been previously concluded that the contents of Drums 2-4 have not
been shown to be beneficially used raw materials. Given Respondent's
stipulation that Drums 3-5 contained hazardous characteristics, it is
concluded that the contents of Drums 2-4 contained "solid waste" and
thus subjected them to regulation as "hazardous waste" pursuant to 25
Pa. Code § 72.259 et. seq., as enforceable by RCRA § 3008(a)(1), 42
U.S.C. § 6928(a)(1). As a result, Respondent is found to have violated
its regulatory obligations and is liable under the nine counts
contained in the Complaint.
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Summary of Liability
Respondent's management, storage and disposal of the aforesaid
hazardous wastes in Tanks A-C and Drums 2-4 rendered its Grays Avenue
plant a HWM facility. As owner and operator of such facility,
Respondent was required to comply with the permitting, management, and
administrative obligations imposed by the authorized Pennsylvania HWM
regulations at 25 Pa. Code § 75.259 et. seq., which are directly
enforceable under RCRA § 3008(a), 42 U.S.C. § 6928(a). Having failed
to do so, Respondent is liable under all nine counts of the Complaint.
Discussion of the appropriate penalty for these violations follows.
V. PENALTY
A. Ability to Pay
In civil penalty cases, the courts have held that the agency has the
burden of proof on all factors which the statute requires it to
consider in assessing a penalty. Premex, Inc. v. Commodity Futures
Trading Comm., 785 F.2d 1403 (9th Cir. 1986); Bosma v. U.S. Dept. Of
Agriculture, 754 F.2d 804 (9th Cir. 1984). Pursuant to the RCRA
penalty provision, 42 U.S.C. § 6928(a)(1) and (3), in assessing a
penalty, EPA must consider the seriousness of the violation and the
good faith efforts to comply by the violator.
Respondent asserts that the penalty should be reduced because payment
of the proposed penalty "will put Bil-Dry out of business"
(Respondent's Brief at 33). RCRA however, does not include ability to
pay as one of the factors that EPA must consider in assessing a
penalty, and is therefore not an element of EPA's proof. In the Matter
of Central Paint and Body Shop, Inc., RCRA Appeal No. 86-3, 2 E.A.D.
309, 313-314,1987 EPA App. LEXIS 8 (Final Decision, January 7,1987).
EPA's RCRA Civil Penalty Policy of October 1990, however, allows EPA
to consider a Respondent's ability to pay, if the Respondent presents
sufficient information to substantiate its claim. The Penalty Policy
states that the Agency "generally will not assess penalties that are
clearly beyond the means of the violator." It also clearly provides
that "EPA reserves the option, in appropriate circumstances, to seek
penalties that might put a company out of business" (emphasis
supplied). The Policy further provides "the burden to demonstrate
inability to pay rests on the Respondent, as it does in any mitigating
circumstance	If the respondent fails to fully provide sufficient
information [to meet this burden] then	enforcement personnel
should disregard this factor in adjusting the penalty" (CX-13 at 36).
As the proponent of a reduction in the penalty, Respondent has the
burden of persuasion on its alleged inability to pay, as it has
control over information on its financial condition. In the instant
proceeding, the only information offered by Respondent to support its
inability to pay claim consisted of four consolidated tax returns for
FY 1993 through 1996, and the testimony of its President, William
Rodgers (RX-14-17; Tr. 469-470). Generally, however, such self serving
testimony is entitled to little weight. In the Matter of F& K Plating
Company, RCRA Appeal No. 86-1 A, 2 E.A.D. 443, 449 (Final Decision,
October 8, 1987); Central Paint, supra.
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Respondent has failed to meet its burden. Other than making conclusory
comments that a full penalty assessment would put Respondent out of
business (Tr. 470), Rodgers failed to provide the type of detailed
analysis required to establish Respondent's inability to pay claim.
Rodgers did cite to Respondent's FY 1995 and FY 1996 consolidated tax
returns as indicating the company had incurred taxable income losses
of $36,026 and $66,170 respectively (Tr. 457).
These conclusions were questioned however, by EPA's financial expert,
Dr. Joan Meyer, who noted that such losses were the result of
questioned discretionary expenses (Tr. 317, 320). It is not imperative
however, that Respondent show a profit in order to pay a civil
penalty. In TSCA cases, it has been held that EPA may assess a penalty
of 4% of gross sales, even where a firm's net income is negative.
Central Paint, supra, at 317, n.13.
The financial statements show that Respondent's sales have been fairly
constant over the past 4 years at around $3,500,000, as have labor
costs, which increased in 1996 (Tr. 307-308, 311). Dr. Meyer did note
however, discretionary expenses over the previous 4 years which
Respondent did not have to make in order to produce the products and
services it sells to customers (Tr. 308). Meyer specifically cites to
a $100,000 FY 1995 payment to Respondent's officer, Dr. Joon Moon, a
17% minority shareholder, concluding that such payments were excessive
given the size of the company and the time Moon devoted as an officer.
(Tr. 308, 315-318).
Dr. Meyer further questioned discretionary expenses in FY 1996,
including management, cash flow, advertising lees and a $500,000
"loan" carried for FY's 1993 through 1996 from Respondent's affiliated
companies (Tr. 309, 312-315, 319-323). Under general accounting
principles, the loan is but "equity capital" and as such, is not
considered as debt (Tr. 323-324). In summation, Dr. Meyer concluded
that payment of the entire proposed penalty would not cause Respondent
undue financial hardship, given the various resources at its disposal
(Tr. 325-326).
Apart from the merits of Meyer's conclusions, they were offered in
rebuttal of Respondent's case in chief. They are therefore only
relevant upon Respondent's having satisfied its burden of proving an
inability to pay. This it has failed to do. Respondent could have
submitted evidence "such as examples of austere measures being taken
at the business because of hard times, loan extensions obtained, or
statements of back taxes owed." Central Paint, supra, at 318. Short of
this, its inability to pay an appropriate penalty is not established.
B. Assessment of Appropriate Penalty: Statutory Criteria
Respondent being liable under Counts l-IX of the Complaint, the next
task is to determine an appropriate civil penalty. Rule 27(b) of the
Consolidated Rules states that an administrative law judge (ALJ) is to
assess a civil penalty "in accordance with any criteria set forth in
the Act". 40 C.F.R. § 22.27(b). The ALJ must also "consider" any civil
penalty guidelines or policies issued by the agency. Ultimately
however, any penalty assessed must reflect "a reasonable application
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of the statutory penalty criteria to the facts of the particular
violations." In re Predex Corporation, FIFRA Appeal No. 97-8,1998 EPA
App. LEXIS 84 (Final Decision, May 8, 1998), at 15, citing In re
Employers Ins. of Wausau, TSCA Appeal No. 95-6, 6 E.A.D. 735, 758,
1997 EPA App. LEXIS 1 (Order Affirming Initial Decision, in Part and
Vacating and Remanding in Part (February 11,1997).
Section 3008(g) of RCRA sets forth the following with regard to
assessment of a penalty:
Any person who violates any requirement of this subchapter
shall be liable to the United States for a civil penalty in
an amount not to exceed $25,000 for each such violation.
Each day of such violation shall for purposes of this
subsection, constitute a separate violation.
Section 3008(a)(3) sets forth the criteria for the penalty assessment:
In assessing such a penalty, the Administrator shall take
into account [1] the seriousness of the violation and [2]
any good faith efforts to comply with the applicable
requirements (emphasis supplied)..
42 U.S.C. § 6928(a)(3) and (g).
In an effort to provide guidance for the calculation of civil
penalties, in October 1990 EPA issued the RCRA Civil Penalty Policy
(CX-13 at 5), which incorporates a gravity based matrix, a multi-day
component to account for duration, an adjustment for case specific
circumstances and a calculation for the amount of economic benefit
gained through non-compliance (CX-13 at 1).
Zelma Maldonado, the Region III RCRA Compliance and Enforcement
Officer, testified extensively as to the penalty policy methodology
used to calculate the recommended penalty (Tr. 241-288). Ms.
Maldonado's testimony related to what the agency viewed as a
reasonable framework for incorporating the statutory criteria into a
recommended penalty assessment.
Respondent's challenge to the appropriateness of the proposed penalty
stems not from the propriety of EPA's calculations, but from the
application of the rationale for reducing said penalty based on its
interpretation of EAB's decision in In re Rybond, Inc., supra.
Respondent asserts that its involvement in the violations at bar, like
Rybond, were indirect and thus justifies a reduction of the proposed
penalty. Such argument is of limited persuasion. Unlike Rybond, the
facts here show clear evidence of Respondent's "affirmative
misconduct" and its direct involvement as owner/operator of the
facility after 1985.
The facts of the instant case are distinguishable from Rybond in that
the violations at issue posed a potential for serious and substantial
risk of harm to the Grays Avenue community and environment.(9)
Respondent has conceded that the "housekeeping", i.e., storage and
handling of hazardous waste at its facility was "terrible" (Tr. 443).
It continued to operate under such conditions however, for a period of
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up to ten (10) years without regard to its regulatory obligations.
Having failed to demonstrate that its activities were exempt from
regulation, it must now bear a substantial penalty for its neglect.
However, EPA's recommended penalty of $231,800 is inappropriate given
the facts and violations at issue. Upon careful analysis of the
evidence, in the exercise of his discretion, the undersigned departs
from EPA's calculations and assesses a penalty different from that
proposed by the agency. See, Predex Corp., supra at 14, citing In re
James C. Lin and Lin Cubing, Inc., FIFRA Appeal No. 94-2,1994 EPA
App. LEXIS 4, 5 E.A.D. 595, 598 (Final Order, December 6,1994).
EPA's penalty calculations are incompatible with previously reached
conclusions that Drum No. 5 did not contain solid waste, and the fact
that violations pertaining to Drums 2-4 are found to have only
occurred as of April 9, 1996. The proposed penalty's "multi-day
component" of 120 days, which constitutes a large portion of EPA's
assessment and which runs from December 11,1995 through April 10,
1996, is not only inapplicable to the violations pertaining to the
drums, but is found to be arbitrarily calculated in general.(10) As
such, the proposed penalty offers no guidance for the application of
the multi-day component in assessing separate penalties for the drums
and the tanks. EPA did not utilize this approach either in framing the
counts in the Compliant or in calculating the proposed penalty, and it
is not practical to do so now.
Given the difficulty of extrapolating a multi-day assessment under the
RCRA penalty policy and the facts of this case, the undersigned,
pursuant to § 3008(g), will treat each count as a singular violation,
requiring assessment of a penalty not to exceed $25,000. In doing so,
the undersigned has considered the penalty policy's gravity and
economic benefit from non-compliance components. The undersigned
further allows a downward adjustment for Respondent's minimal good
faith effort to comply, which was not credited in the proposed penalty
calculation.
Application of § 6928(a)(3) of RCRA statutory criteria to the evidence
presented in this case, including Respondent's Stipulations at Nos. 4,
6, 8,10,12,14 and 17 (CX-1), results in the assessment of an
appropriate civil penalty totaling $103,400, as analyzed below:
1. Seriousness of the Violation
Count I- Violation of 25 Pa. Code § 75.270(a)-Failure to Have a
Hazardous Waste Permit or Interim Status- A penalty of $20,000,
corresponds to the relative seriousness of the violation. Ms.
Maldonado testified that a facility like Respondent's, which fails to
comply with the RCRA permitting requirements also usually fails to
follow the proper management procedures outlined in the regulations.
This, she indicated, results in an increased likelihood of releases of
hazardous wastes being managed and a major potential for harm to human
health and exposure of the environment (Tr. 252). Compounding the
factor in this case, is the location of the Grays Avenue facility in a
residential area.
The fact that only 3 drums of the nearly 260 located at the site were
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found to contain hazardous waste, in addition to the 3 USTs reduces
the potential for harm given the amount of waste in question (Tr.
253). However, Respondent's argument that it was unaware of the USTs
until the December 11,1995, inspection lacks credibility. Despite the
fact that much of the material in issue may have been originally
produced as a result of Harrad Paint's operations, Respondent had as
long as ten (10) years to ascertain its hazardous waste management
responsibilities and failed to do so. Combined with the fact that
these items were subsequently mishandled and stored as abandoned
materials, Respondent's failure posed a substantial risk to the
community and constitutes a serious violation.
Count ll-Violation of 25 Pa. Code § 75.262(b)-Failure to Perform
Hazardous Waste Determinations-A penalty of $15,000 for the
seriousness of the violation is appropriate. The types of hazardous
wastes contained in Respondent's drums and tanks significantly
increased the risks posed to residents of the local community. EPA's
expert toxicologist testified that the contents of Drums 3 and 4 were
highly ignitable wastes which could have adversely effected the
remaining 260 drums at the site, further jeopardizing the health of
local residents. However, other evidence indicates that the drums
containing base solutions and acid solutions were stored in different
areas of the facility thereby lessening the chance for interaction
(Tr. 211-213). Tanks B and C however, contained "MEK" a known irritant
which if released, could adversely affect the respiratory and nervous
systems of those who come in contact with it. (CX-12(a-e)).
Respondent's failure to identify the contents of the tanks and drums
as hazardous waste constituted a serious violation and created a
potential for harm to the environment and the health of residents of
the local community.
Count Ill-Violation of 40 C.F.R. § 268.7(a)-Failure to Perform LDR
Waste Determination-A penalty of $15,000, for the seriousness of the
violation is appropriate. LDR wastes which are not identified may be
improperly treated and disposed of in landfills not equipped to
minimize or prevent their leaching into groundwater and drinking water
sources, and thereby pose a significant threat to human health (CX-12
(a, b)). Inspector Jones further testified that Respondent's
management practices created an extreme danger of fire and explosion
and release of the hazardous waste in the drums and tanks into the
environment (Tr. 87-88). As noted above, however, the drums containing
base solution and acid solution were unlikely to be mixed given their
separate locations at the facility (Tr. 211-213). Nevertheless, by not
performing LDR determinations, the resulting potential for harm to
human health and the environment was serious. Respondent failed to
comply with pertinent LDR management requirements, thereby negating
the express objectives of the statute.
Count IV-Violation of 40 C.F.R. § 268.50-Prohibitions on Storage of
Restricted Waste-A penalty of $15,000, is appropriate for the
seriousness of the violation. As mentioned in previous counts,
Respondent's failure to properly manage the LDR wastes in the drums
and tanks posed significant health risks to the local community. PADEP
Inspector Bouch testified that Respondent's management practices of
hazardous wastes in its drums posed a major safety hazard (Tr. 140).
Respondent having completely deviated from its regulatory obligations
-------
concerning the proper storage of LDR wastes and the attendant
requirement to prevent contamination of groundwater and human exposure
to such wastes constitutes a serious violation.
Count V-Violation of 25 Pa. Code § 75.265(e)(2)-Failure to Maintain
General Inspection Schedule-A penalty of $1,000 is appropriate. The
undersigned finds the EPA's proposed penalty for this violation to be
consistent with the statutory criteria for the seriousness of the
violation. The Agency reasonably concluded that Respondent's violation
of this regulatory requirement warranted a minor penalty for potential
harm to the environment and human health. The significance of
maintaining an inspection schedule serves a preventative purpose,
i.e., insuring that a facility is able to ascertain and prevent
releases of hazardous substances in order to eliminate a potential
threat to human health and the environment. Based on the facts of this
case, Respondent's failure to meet its required inspection schedule
obligation constitutes a minor violation.
Count Vl-Violation of 25 Pa. Code § 75.265(o)(3)- Failure to Prepare a
Written Closure Plan for the Facility-An assessment of $15,000 is
appropriate. Respondent in this case failed to ever develop or submit
to the Agency a closure plan for the Grays Avenue facility. Such
failure is considered to be a serious violation as such plan insures
that when a facility ceases operation it will be closed in a manner
designed to minimize the release of hazardous waste into the
environment. Failure to comply with this section poses a major threat
to human health and abrogates the purpose of preventing such
facilities from becoming future Superfund sites (Tr. 267-268).
Count Vll-Violation of 25 Pa. Code § 75.265 (p)(2)-(4)-Failure to
Prepare a Written Cost Estimate for Closure of the Facility-An
assessment of $1,400 is appropriate for the seriousness of the
violation. The undersigned finds that EPA's proposed penalty for this
violation to be reasonable given the fact that such violation is
deemed to be minor with respect to potential for harm to human health
and the environment. The integrity of the RCRA program requires
compliance with this type of record-keeping obligation despite the
fact that it does not cause any actual impact on the environment (Tr.
269-270; CX-13at13).
Count Vlll-Violation of 25 Pa. Code § 75.265(q)(1), § 75.265(q)(3), §
75.265(q)(10)-lmproper Management of Containers Containing Hazardous
Waste-An assessment of $15,000, is appropriate. An extensive analysis
of Respondent's management practices with respect to the handling,
storage and labeling of the contents of the drums and tanks is made in
the liability section of this decision and will not be repeated here.
Such practices, including Respondent's failure to insure safe
management of the contents of the drums and tanks, significantly
increased the likelihood of the release of hazardous substances into
the environment, thereby creating a major potential for harm to the
health and welfare to the local community. Moreover, Respondent's
failure to comply with these requirements seriously negated the
primary objective of the RCRA program, i.e., to assure that hazardous
waste management practices are conducted in a manner which reduces the
need for corrective action at a future date RCRA § 1003(a)(4) and (5),
42 U.S.C. § 6902 (a)(4) and (5). This violation is considered to be
-------
serious in nature.
Count IX-Violation of 25 Pa Code § 267.11 (25 Pa. Code §
75.311)-Failure to Provide Financial Assurance for Closure of the
Facility-An assessment of $9,000, is appropriate. The testimony at the
hearing indicates that the failure to comply with the financial
assurance requirements may result in a facility not having the
resources to properly close the facility and prevent discharge of
hazardous wastes (Tr. 273). Such a facility is potentially a Superfund
site and imposes on limited public funds to respond to such threats to
human health and the environment (CX-13 at 16). This constitutes a
moderately serious violation given EPA's conclusion that Respondent's
non-compliance created a moderate potential for harm to human health
and the environment. Respondent has admitted that it completely failed
to comply with this requirement by filing a bond with the PADEP.
2. Good Faith Efforts to Comply
With regard to the mitigating factor of good faith efforts to comply,
the evidence demonstrates that Respondent did undertake, at least with
respect to allegations pertaining to Counts II and VIII, some minimal
efforts which provide a basis for adjusting the penalty determination
downward. In so holding, the undersigned departs from the recommended
penalty which allowed no adjustment for this statutory factor.
Having concluded that Drums 2-4 were not found to be in violation
until April 9,1996, the good faith efforts undertaken by Respondent
to remedy the handling and storage of drums are deemed to have
occurred prior to the agency detecting the violation, and thus were
not in conflict with the RCRA penalty policy (CX-13 at 33).
The evidence demonstrates that Respondent had taken steps to replace
the tops on several of the drums sampled in April 1996. When asked
about the condition of the seven drums he took samples from, Inspector
Jones stated "....Some of the drums didn't have tops. I should say
this, that when I came back the second time in April, these drums had
plastic caps placed on them, which they did not have in the first
inspection" (Tr. 78; CX-14 at para. 58-59). Photographs contained in
CX-4, photos 19-24, further show that most of the sampled drums had
metal tops, and despite the presence of rust, some were not in as poor
condition as Jones indicated.
The evidence also indicates that some attempt was made by Respondent
to rearrange and mark some drums for identification. At the onset of
the April 1996 inspection, Respondent's chemical engineer, Mr. Sode,
provided Inspector Jones with an inventory list for the drums (Tr.
71 ).(11) Although Inspector Jones could not identify the drums from
the inventory sheet, he failed to ask for assistance. PADEP Inspector
Bouch confirmed that there was "some sort" of marking system on some
of the drums, which contained "chicken scratch" numbers (Tr. 139-142).
Respondent asserted that the absence of a readable marking system was
attributable to heavy rain and snow during the previous winter which
resulted in a wearing off of previous markings. Mr. Sode, however, was
able to demonstrate through photographs introduced at the hearing, how
the marking system worked for at least a portion of the drums
contained on the partial inventory list (Tr. 374-377; RX-13,
-------
photo-18).
The evidence further shows, and Inspector Jones confirmed, that some
of the drums had been repacked and moved (Tr. 116-117). The evidence
also illustrates that Respondent had sampled the drums in the summer
of 1995 (Tr. 139,159). In addition, interactions between base
solutions and acid solutions were unlikely as drums containing these
respective materials were stored in different locations at the
facility (Tr. 211-212).
Respondent's willingness to come into compliance is noted in its
letter of June 14,1996, in response to the PADEP listing of numerous
violations of the SWMA. In order to comply with the PADEP regulations,
Respondent offered to remove all materials from the facility's
previous paint production processes, repackage all materials from
drums showing signs of wear, apply for and adhere to all permit
regulations affecting its operations, develop or update pollution
prevention, spill contingency and emergency action plans and empty and
close the USTs on the property (RX-26). As of November 19,1996, at a
cost of $30,000, Bil-Dry had removed the material in the USTs and 150
drums had been removed and disposed of and a further 110 drums were
awaiting analysis pending disposal (Tr. 37; RX-18,19, 20, 21, 23,
CX-19-b). By the end of November 1996, all of the drums which were the
subject of the Complaint (Drums 2-5) had been disposed of (Tr.
426-429). (12)
Such evidence demonstrates that Respondent, with respect to the
violations alleged for storage and handling of the drums, made a
minimal good faith effort to comply with the statutory and regulatory
requirements. Therefore, a minor downward adjustment of 10% of the
assessed penalty is warranted, as applicable, for both Count II and
Count VIII.
Summation of Penalty Assessment
For the above-stated reasons, Respondent is assessed a total civil
penalty of $103,400 as calculated below:
Count I-— $20,000
Count II-— $13,500 ($15,000 less $1,500= 10% good faith adjustment)
Count III— $15,000
Count IV- $15,000
Count V—- $1,000
Count VI- $15,000
Count VII- $1,400
Count VIII- $13,500 ($15,000 less $1,500= 10% good faith adjustment)
Count IX— $ 9,000
$103,400 TOTAL CIVIL PENALTY ASSESSMENT
In addition to application of the statutory criteria, this assessment
is calculated having considered the factors set forth in the RCRA
Penalty Policy. Any departure from the penalty policy is duly noted in
the above-discussion.
VI. CONCLUSIONS OF LAW
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1.	The provisions and requirements of the authorized Pennsylvania
Hazardous Waste Management Program, 25 Pa. Code § 72.259 et. seq., are
directly enforceable by the Complainant in the action at bar pursuant
to RCRA § 3008(a), 42 U.S.C. § 6928(a).
2.	Respondent, Bil-Dry Corporation, is a "person" as defined by 25 Pa.
Code § 75.260(a).
3.	Respondent's facility located at 5525 Grays Avenue, Philadelphia,
Pennsylvania, is a hazardous waste management (HWM) facility as
defined by 25 Pa. Code § 75.260(a).
4.	Respondent is the "owner" and "operator" of the HWM facility
located at 5525 Grays Avenue, Philadelphia, Pennsylvania, since 1985,
as defined by 25 Pa. Code § 75.260(a).
5.	Tanks A-C and Drums 2-4 located at Respondent's facility and their
contents were discarded and/or abandoned by Respondent, were not
beneficially used, recycled or reclaimed by Respondent, and therefore,
were "solid waste" as defined by 25 Pa. Code § 75.260(a).
6.	The content of Tanks A-C and Drums 2-4 exhibited the
characteristics of "hazardous waste" and, therefore, were "hazardous
waste" as defined by 25 Pa. Code § 75.261(b)(1).
7.	Respondent was the "generator" of the contents of Tanks A-C and
Drums 2-4, as defined by 25 Pa. Code § 75.260(a) and 40 C.F.R. §
260.10.
8.	The tanks and drums at issue and their contents were stored,
managed, and disposed of by Respondent as its HWM facility from 1985
until 1996.
9.	As the owner and operator of a HWM facility at which "hazardous
wastes" were managed, stored and disposed of in Tanks A-C and Drums
2-4, Respondent was required to comply with the requirements of RCRA
Subtitle C, 42 U.S.C. § 6921-6939e, and the federal HWM regulations,
40 C.F.R. Parts 260-271, and the authorized Pennsylvania HWM
regulations, 25 Pa. Code § 75.259 et. seq.
10.	Respondent violated 25 Pa. Code § 75.270(a) by accumulating
hazardous waste on its HWM facility in the aforesaid tanks and drums
without a permit or interim status, and without having satisfied the
conditions for the 90 day accumulation generator exemption provided by
25 Pa. Code § 75.262(g). Respondent is therefore liable under Count I
of the Complaint.
11.	Respondent violated 25 Pa. Code § 75.262(b) by failing to perform
hazardous waste determinations on the contents of the aforesaid tanks
and drums on its HWM facility. Respondent is therefore liable under
Count II of the Complaint.
12.	Respondent violated 40 C.F.R. § 268.7(a) by failing to determine
if the wastes contained in the aforesaid tanks and drums were Land
Disposal Restricted (LDR) wastes. Respondent is therefore liable under
-------
Count III of the Complaint.
13.	Respondent violated 40 C.F.R. § 268.50(a)(1)and (2), 40 C.F.R. §
262.34(a)(1)(l)and (ii), 40 C.F.R. Sections §§ 265.171, 265.173,
265.193, and 265.197, by storing hazardous waste restricted from land
disposal (LDR) wastes in the aforesaid tanks and drums for purposes
other than the accumulation of such quantities as necessary to
facilitate proper recovery, treatment or disposal, improperly managing
the LDR wastes in the aforesaid tanks and drums, by not labeling and
marking each drum and tank with its accumulation commencement date or
description of its contents, not managing the contents of the drums in
good condition, not insuring that the drums and tanks were closed
except when necessary to add or remove waste, not labeling each drum
or tank with the words "hazardous waste", not maintaining sufficient
information as to the contents of the drums and tanks as part of the
operating record of its facility, and not insuring that the drums and
tanks had secondary containment systems. Respondent is therefore
liable under Count IV of the Complaint.
14.	Respondent violated 25 Pa. Code § 75.265(e)(2) by failing to
develop a written schedule of inspections for and perform such
inspections at its HWM facility. Respondent is therefore liable under
Count V of the Complaint.
15.	Respondent violated 25 Pa. Code § 75.265(o)(2) by not developing
and maintaining a written closure plan for its HWM facility.
Respondent is therefore liable under Count VI of the Complaint.
16.	Respondent violated 25 Pa. Code § 75.265(p)(2), (3), and (4) by
failing to have and adjusting a written cost estimate for closure of
its HWM facility. Respondent is therefore liable under Count VII of
the Complaint.
17.	Respondent violated 25 Pa. Code § 75.265(q)(1), (3) and (10) by
failing to manage the contents of the drums in containers in good
condition, failing to keep the drums closed except during those times
when wastes were added to or removed from the drums, and failing to
have a containment system capable of collecting and holding spills,
leaks, and precipitation. Respondent is therefore liable under Count
VIII of the Complaint.
18.	Respondent violated 25 Pa. Code §267.11 (25 Pa. Code § 75.311) by
failing to file a bond payable to PADEP or file another form of
evidence of financial responsibility for its HWM facility. Respondent
is therefore liable under Count IX of the Complaint.
19.	Respondent being found liable under Counts I through IX of the
Complaint, RCRA § 3008(g), 42 U.S.C. § 6928(g), authorizes the
assessment of a civil penalty against Respondent for its actions.
20.	The recommended penalty of $231,800 was inappropriately calculated
by the Agency in accordance with RCRA § 3008(a) (3) and the October
1990 RCRA Penalty Policy as EPA failed to meet its burden of proof
under § 22.24 of the Consolidated Rules of Practice to show that all
the violations at issue occurred as of the December 11,1995,
inspection. With respect to Drums 2-4, said violations are found to
-------
occur as of April 9,1996, which repudiates the 120 day "multi-day"
component of the penalty calculation. Having also concluded that Drum
No. 5 contained material beneficially used by Respondent, and thus was
not a solid waste, a downward adjustment is warranted.
21.	The recommended penalty is therefore inappropriate in light of the
nature, extent and magnitude of Respondent's violations. An
appropriate penalty is therefore based on RCRA § 3008(a)(3),
considering 1) the statutory criteria of seriousness of the violation;
and 2) Respondent's good faith effort to comply, which result in a 10%
downward adjustment for Counts II and VIII.
22.	Respondent is determined to be able to pay a total penalty in the
amount of $103,400, without suffering an undue financial hardship.
Respondent's "inability to pay" argument is without merit and does not
warrant a downward adjustment.
23.	Assessment of a penalty of $103,400 is necessary to deter future
non-compliance by Respondent and other members of the regulated
community, and will further the goals and objectives of the
Environmental Justice Initiative.
Accordingly, it is held that Bil-Dry corporation, violated each of the
nine counts contained in the Complaint. A civil penalty totaling
$103,400 is therefore assessed.
Respondent shall pay the civil penalty within 60 days of the date of
this order. Payment may be made by mailing, or presenting, a cashier's
check or certified check made payable to the Treasurer of the United
States of America, U.S. Environmental Protection Agency, Region 3
Regional Hearing Clerk, P.O. Box 360515, Pittsburgh, PA. 15251.(13)
Stephen J. McGuire
Administrative Law Judge
Date:	
1.	Hereinafter, references to the official record in this case shall
be typically cited as follows: Official Hearing Transcript, page 114
(Tr. 114); Complainant's Exhibit 12 (CX-12); Respondent's Exhibit 2
(RX-2); Finding of Fact No. 10 (FOF 10).
2.	Pennsylvania; Final Authorization of State Hazardous Waste
Management Program, 51 Fed. Reg. 1791 (1986).
3.	"...The Agency consequently views with skepticism situations where
secondary materials are ostensibly used and reused but the generator
or recycler is unable to document how, where, and in what volumes the
materials are being used and reused. The absence of such records in
these situations consequently is evidence of sham recycling....
....A final indication of sham use is if the secondary materials are
not handled in a manner consistent with their use as raw
materials....Thus, if secondary materials are stored or handled in a
manner that does not guard against significant economic loss (i.e.,
-------
the secondary materials are stored in leaking surface impoundments, or
are lost through fires or explosions), there is a strong suggestion
that the activity is not legitimate recycling."
50 Fed. Reg. 614 (January 4,1985).
4.	Mr. Rodgers testified that he had directed Mr. Sode to mark the
drums in question sometime in June of 1995 (Tr. 445). However, during
the subsequent December 1995 inspection, the facility manager, Mr.
Mazza, clearly noted that Respondent had no documents or information
concerning the drums or the identity of their contents (EX. C-3).
5.	The testimony of Mr. Jones acknowledged that Mr. Mazza had told him
that "some of the drums had been used," without specific reference to
Drums 2-5 (Tr. 117). Similarly, Mr. Mazza informed PADEP Inspector
Bouch that drums had been sampled by Respondent's chemical engineer
during the summer of 1995, again without reference to Drums 2-5 (Tr.
139,159).
6.	A material must register a pH of less than or equal to 2 (acidic),
or greater than or equal to 12.5 (caustic) in order to be considered
"hazardous" for the characteristic of corrosivity.
7.	Respondent does allege error in EPA's corrosivity analysis.
Specifically, it questions the two pH tests conducted which in one
instance demonstrates a non-hazardous pH reading of 11.8 (Tr.
196-197), and the unreliability of pH paper (in lieu of electronic pH
analysis), which Mr. Barron initially stated did not allow for the
rounding of pH to the tenth of a point (Tr. 188). However, on redirect
Mr. Barron testified that the 11.8 reading was performed using an
initial pH paper test, but that for precise measurements, he
subsequently used the electronic pH meter (Tr. 197), which
demonstrated readings on each of two tests above the 12.5 corrosive
limit (Tr. 201-203). Respondent's assertion of error is therefore
unsubstantiated.
8.	Respondent's test analysis as illustrated in photographs R-13,
photos 24-27, were made in April 1997, a full year after the second
EPA inspection. Such time variables certainly raise issues of
potential degradation, as samples change over time, despite the fact
that such impact is uncertain (Tr. 175-176,181).
9.	In Rybond, the EAB noted that "none of the violations posed a risk
of serious harm either to public health or the environment". 1996 RCRA
LEXIS 6 at *55. Moreover, the instant case does not involve the
allocation of liability as was the case in Rybond.
10.	EPA, in calculating the proposed penalty, offered no explanation
as to why the multi-day duration period of 120 days was closed as of
April 10, 1996. Other then representing the date of the EPA's second
inspection, it has no bearing on Respondent having abated the
violations alleged. By EPA's own argument, Respondent had not
mitigated any of the violations as a result of its good faith efforts
to comply. As noted, it was not until November 1996, that Respondent
had disposed of the drums at issue (FOF 31). The proposed penalty is
thus of little assistance in determining an appropriate penalty in
-------
this case as the basis for the multi-day component is insufficiently
explained and is without proper foundation.
11.	Mr. Sode testified that the inventory list was only a partial
listing of the drums located at Bil-Dry's facility and did not include
all the materials stored at the plant (Tr. 371).
12.	In Zalcon Incorporated, Docket No. RCRA-V-W-92-R-9 (Initial
Decision on Remand, p. 20), June 30, 1998, the ALJ held "while the
penalty policy precludes consideration of good faith efforts to
achieve compliance after the violation is called to the violator's
attention, § 3008(a)(3) of the Act contains no such limitation and,
for the reason noted, I am not constrained by the penalty policy."
Here, although the undersigned has considered Bil-Dry's post
notification efforts to comply, any adjustment for good faith is
primarily based on its pre-April 1996, efforts to improve storage and
handling of the drums in issue.
13.	Unless this decision is appealed to the Environmental Appeals
Board in accordance with 40 C.F.R. § 22.30, or unless the Board elects
to review this decision sua sponte, it will become the final order of
the Board.
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Title: Attorney work product Author: United States Accession Number: 921185759
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Find Items About: Attorney work product (1); United States. (8,265,744)
Title: Attorney work product.
Corp Author(s): United States.: Region IV. ; Environmental Protection Agency.; author.
Year: 2001-
Description: volumes ; 30 cm
Language: English
Accession No: OCLC: 921185759
Report No: EPA 950-R-01-009
SUBJECT(S)
Descriptor: Confidential communications -- Lawyers -- United States.
Confidential communications -- Lawyers.
Geographic: United States.
Identifier: Attorney work product.
Note(s): Report: EPA 950-R-01-009
Material Type: Government publication (gpb); National government publication (ngp)
Document Type: Serial
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Entry: 20150915
Update: 20160125
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