DIVISION NOTICE OF APPEAL

Transcription

1 DIVISION i - ~ IN THE MATTER OF: - ( RAWHIDE TRAILERS, INC., BONANZA TRAILER, INC. APPEAL FROM A DECISION OF THE ARKANSAS COMMISSION I ON POLLUTION CONTROL AND ECOLOGY Administrative Docket No NOTICE OF APPEAL The Arkansas Dept. of Environmental Quality ("ADEQ") appeals from a decision of the Arkansas Pollution Control and Ecology Commission ("APC&EC" or "Commission") in the above captioned matter on October 27, On this date, APC&EC rejected ADEQ's assessment of civil penalties against Rawhide Trailers, Inc.1 Bonanza Trailer, Inc. ("Rawhide/Bonanza") for violations of the Arkansas Water and Air Pollution Control Act, Ark. Code Ann et seq., and the Arkansas Hazardous Waste Management Act, Ark. Code Ann et seq. and then, APC&EC imposed its own civil penalties in contravention of Ark. Code Ann. $ (c)(3)(c)(ii) and improperly held that the failure to obtain a permit is not a "continuing violation". ADEQ respectfully submits that the decision of APC&EC is not supported by substantial evidence, is contrary to applicable law, is derived from unlawful procedure, and is arbitrary and capricious. I. JURISDICTION AND PARTIES 1. Jurisdiction for this appeal lies with this Court under Ark. Code Ann. $ and as RawhideIBonanza, the business involved in this matter, is located in Faulkner County. 2. Pursuant to Ark. Code Ann. $ , the executive head of the ADEQ is the Director of ADEQ. All of the personnel of ADEQ are employed by and serve at the pleasure of the Director. The Director is the executive officer and active administrator of all pollution control activities. Furthermore, pursuant to Ark. Code Ann. $ and , ADEQ has the power and duty to enforce all laws, rules and regulations relating to hazardous waste management and air pollution control. As a party aggrieved by the

2 decision of APC&EC, the Department is a proper party to this appeal. Ark. Code Ann. fj fj (c) (4) and Pursuant to Ark. Code Ann. fj , APC&EC promulgates regulations governing administrative procedures for contesting ADEQ actions, and in the case of administrative enforcement actions, providing the right to appeal a decision rendered by the Director of ADEQ before an administrative hearing officer that is an agent of APC&EC. By a majority vote of its quorum, APC&EC is authorized to affirm, reverse and dismiss, or reverse and remand the director's decision. 11. STATEMENT OF THE CASE 4. On October 24, 2005, the Director of ADEQ issued a Notice of Violation against RawhideBonanza alleging that: 1) Rawhide/Bonanza owned an operated a livestock trailer manufacturing facility located at 89 Pilgrim Rest Road, Wooster, Faulkner County, Arkansas; 2) Rawhidemonanza formerly operated under the name of Bonanza Trailer at a location on Highway 65 South in Faulkner County, Arkansas; 3) an ADEQ inspection of Rawhide Bonanza on December 12, 2003, revealed that RawhideBonanza was operating a paint and pinstriping booth for livestock trailers using paint and solvents containing volatile organic compounds (VOCs) and hazardous air pollutants; 4) RawhideBonanza installed and operated a minor source facility at both locations without first obtaining appropriate air permits, in violation of Ark. Code Ann. fj O(2) and APC&EC Regulation ; 5) RawhideBonanza submitted an incomplete minor source permit application to ADEQ on May 17, 2004 which indicated that the emissions that it's Wooster facility produced required an ADEQ air permit; 6) an inspection by the hazardous waste division of ADEQ on May 17, 2004 revealed that RawhideBonanza was generating hazardous waste and not labeling it or transporting in the manner required by APC&EC Regulation 23; and 7) a May 27, 2004 sampling investigation revealed the presence of VOCYs in soil samples collected at the Wooster location. For these violations the Director of ADEQ assessed a civil penalty in the amount of $130,000 against Rawhidemonanza.

3 5. Rawhide1 Bonanza contested the allegations contained in the Notice of Violation and requested a hearing before APC&EC in accordance with APC&EC Regulation On the day the adjudicatory hearing commenced, April 10, 2006, RawhideIBonanza stipulated that the facts recited in Paragraph 4 above were not in dispute. The remaining issues in dispute before the APC&EC were the method by which ADEQ assessed a civil penalty against RawhidelBonanza and the amount of the civil penalty. 7. Pursuant to Act 1057 of 1991, ADEQ is authorized to assess civil penalties in an amount not to exceed $25,000 per day for violations of the Arkansas Hazardous Waste Management Act, Ark. Code Ann et seq. and civil penalties in an amount not to exceed $10,000 per day for violations of the Arkansas Water and Air Pollution Control Act, Ark. Code Ann et seq. 8. Arkansas Pollution Control and Ecology Commission Regulation No.7 sets out the factors to be considered by ADEQ in assessing a civil penalty. In determining a civil penalty, ADEQ is required to consider ten factors (a through j), which may increase or decrease the amount of the penalty. (a) The seriousness of the noncompliance and its effect upon the environment, including the degree of potential or actual risk or harm to the public health caused by the violation. (b) Whether the cause of the noncompliance was an unavoidable accident. (c) The violator's cooperativeness and expeditious efforts to correct the violation. (d) The history of a violator in taking all reasonable steps or procedures necessary or appropriate to correct any noncompliance. (e) The violator's history of previous documented violations regardless of whether or not any administrative, civil, or criminal proceeding was commenced therefore. (f) Whether the cause of the violation was an intentional act or omission on the part of the violator.

4 (g) (h) (i) Whether the noncompliance has resulted in economic benefit or pecuniary gain to the violator, including but not limited to cost avoidance. Whether the pursuit and the execution of the enforcement action has resulted in unusual or extraordinary costs to the Department or the public. Whether any part of the noncompliance is attributable to the action or inaction of the state government. 6) Whether the violator has delayed corrective action. This regulation also allows ADEQ to develop and utilize formulas for the calculation of penalties. 9. During the hearing there was extensive testimony from ADEQ staff that the Regulation 7 factors were considered when civil penalties were assessed in this matter and further, that an agency formula had been applied to assess the penalties as authorized by the regulation. 10. The administrative hearing officer issued a Recommended Decision on July 25, 2006, stating that RawhideBonanza violated the law and each regulation set forth in the Notice of Violation. However, he reduced the total penalties assessed by ADEQ fiom $130,000 to $25, ADEQ then filed a request for APC&EC review and oral argument. 12. Pursuant to APC&EC Regulation 8, APC&EC review is a de novo review of the record compiled by the administrative hearing officer. Section (a) of Regulation No. 8. The record consists of the Director's decision, all pleadings, motions, and interlocutory rulings, exhibits introduced at the hearing, transcripts of the hearing, and the Recommended Decision. Section (b) of Regulation No. 8. APC&EC's decision constitutes final agency action for purposes of appeal. 13. Attorneys representing ADEQ and Rawhidemonanza appeared before APC&EC on October 27,2006 to present oral arguments. 14. Eight members of APC&EC were present in person. A quorum was not established as Ark. Code Ann (f)(2) requires. Nine members of APC&EC must be present in person to constitute a quorum to transact business. APC&EC decided to connect a member by telephone and proceed with hearing the oral arguments. At the conclusion of the oral arguments and discussion between the APC&EC members in

5 attendance with the administrative hearing officer, APC&EC voted by a 5-4 vote to affirm the Recommended Decision DEFICIENCIES IN THE ADMINSTRATIVE FINDINGS AND CONCLUSIONS 15. In the Recommended Decision, the administrative hearing officer stated that a $30,000 civil penalty assessed against RawhideIBonanza by the air division of ADEQ was "excessive and unreasonable". Recommended Decision at page 14. He concluded that it was "not until July 7, 2004, that ADEQ notified the company that a violation existed for operating without a permit". Id. The hearing officer further concluded that "there is no evidence the violation continued for two years. ADEQ presented no evidence that it inspected the facility on a daily basis during the two-year period to confirm RawhideBonanza was operating each day, seven days a week If ADEQ is going to impose a penalty for each day of a violation, it must prove the violation occurred each day". Id. 16. With no explanation of how he calculated civil penalties, the administrative hearing officer concluded the penalty "for operating the Wooster facility without an air permit is $6,000." Id. at Likewise, without explaining his method for assessing a penalty, the administrative hearing officer determined that RawhideiBonanza violated AF'C&EC Regulation 23 $ (a)(l) by failing to determine if their waste was hazardous waste and APC&EC Regulation 23 $ (a)(3), by failing to label containers of hazardous waste, but again he reduced the penalties assessed by ADEQ from $25,000 for each infraction to $5,500 for each infraction. Id. at The administrative healing officer concluded that RawhideiBonanza transported a drum of hazardous waste without having a permit in violation of APC&EC Regulation 23 $ ADEQ calculated a civil penalty of $25,363 against RawhideA3onanza for this violation. Id. at 26. The hearing officer deemed the penalty "excessive" and reduced the amount to $1,000. Id. As before, the administrative hearing officer does not state why or how he determined the civil penalty he recommended APC&EC adopt for this violation.

6 19. The administrative hearing officer determined that RawhideIBonanza mismanaged its hazardous waste and harmed the environment in violation of APC&EC Regulation 23 and agreed with ADEQ that this is a serious violation. Id. at 27. Inexplicably, he then reduced the $25,000 penalty assessed by ADEQ for this violation to $7,500. IV. ASSIGNMENTS OF ERROR 20. The administrative hearing officer exceeded his authority by assessing civil penalties. The general assembly unequivocally vested the right to assess civil penalties for violations of the State's environmental laws solely in the Director of ADEQ pursuant to Act 1057 of This authority has not been granted to APC&EC or its hearing officer. Ark. Code Ann allows the administrative hearing officer to advise APC&EC on matters of law, but does not authorize the hearing officer to substitute an amount the hearing officer prefers for the penalty in the Notice of Violation. The decision of the Director was to impose a civil penalty of $1 30,000 against RawhideIBonanza. The administrative hearing officer has no authority to reduce the civil penalty to $25, Similarly, APC&EC exceeded its authority by adopting the Recommended Decision of the administrative hearing officer as the decision incorporates the civil penalties he assessed. APC&EC may disagree with a determination of the Director of ADEQ, but it is limited by Ark. Code Ann (c)(3)(c)(i) to affirm, reverse and dismiss, or reverse and remand the Director's decision. 22. As a matter of law, APC&EC erred by concluding that there was no evidence that RawhideIBonanza operated without a permit for two years, that is, APC&EC concluded that there was no evidence of a continuing violation. Case law does not support the Commission's conclusion. In contrast, case law stands for the proposition that the failure to obtain a permit constitutes a continuing violation. See Gwaltney v. Chesapeake Bay Foundation, Inc., 484 U.S. 49, 69 (1987) (Scalia J., concurring) (A company which violates an effluent standard or limitation remains in violation until it implements remedial measures that clearly eliminate the cause of the violation.), Carr v. Alta Verde Industries, Inc, 931 F.2d 1055, 1062 (5th Cir.1991) (Court held that a discharger operating without a permit "remains in a continuing state

7 of violation until it either obtains a permit or no longer meets the definition of a point source."), Molokai Chamber of Commerce v. Kukui (Molokai), Inc., 891 F. Supp. 1389, 1400 (D. Haw. 1995) (Court held that failure to get a permit is a continuing violation which continues until company obtains permit coverage and complies with permit requirements.) 23. Similarly, the facts presented at the hearing do not support the Commission's conclusion that there was no evidence of a continuing violation. Rawhide stipulated that "RawhideIBonanza has installed and operated a minor source facility at the Conway location and subsequently at the Wooster location without first obtaining appropriate air permits, in violation of A.C.A. $ (2) and Section of Arkansas Pollution Control and Ecology Commission Regulation 19." Joint Exhibit 1 at page 3. V. CONCLUSION AND PRAYER FOR RELIEF THEREFORE, ADEQ respectfully request this Court to reverse and vacate APC&EC's decision in it entirety as the action of APC&EC actions was in violation of APC&ECYs statutory authority, not supported by substantial evidence of record, and arbitrary and capricious. ADEQ further requests that this appeal be docketed, the record be provided by the APC&EC pursuant to Ark. Code Ann. $ , that written briefs be ordered by this Court and oral argument be heard on this matter. By: ~ljkabeth Anne Weinstein Ark. Bar NO Attorney for Arkansas Department of Environmental Quality P.O. Box 8913 Little Rock, Arkansas (501)