In re John A. Biewer of Toledo, Inc., et al
U.S. EPA Region 5 (“Region”) appeals from two nearly identical sets of decisions issued in two separate enforcement matters, each involving a single violation of the Resource Conservation and Recovery Act (“RCRA”) as amended, 42 U.S.C. §§ 6901 to 6992k. The alleged violation involved the failure to comply with closure requirements governing drip pads at each of two wood treatment facilities. Each matter involved the same parent company, John A. Biewer Company, Inc. (“JAB Inc.”), and a closely-held subsidiary who was the owner of the respective facility: John A. Biewer of Ohio (“JAB Ohio”) and John A. Biewer of Toledo (“JAB Toledo”), respectively.
In each of these matters, the Administrative Law Judge (“ALJ”) issued an accelerated decision on liability, concluding that JAB Inc. was neither derivatively nor directly liable for the violations at either of the facilities. JAB Ohio and JAB Toledo each conceded liability for the violation at their respective facility, after which the ALJ ordered a hearing on the appropriateness of the penalty. The Region refused to participate in that ALJ-ordered hearing, arguing that there was no genuine issue of material fact at issue with respect to the penalty and that Respondents were not entitled to a hearing. Concluding that the Region had failed to present any evidence at the hearing on penalty, the ALJ awarded a penalty of zero in each matter.
On appeal, the Region asserts that the ALJ erred in determining that the parent company could not be held liable for the violations at each facility. The Region also asserts that the ALJ erred in awarding a zero penalty against JAB Toledo and JAB Ohio. The Respondents disagree and argue that, based on the conduct of counsel for the Region, they are entitled to an award of attorneys’ fees and costs.
Held: The Board concludes that a zero penalty against JAB Toledo and JAB Ohio is appropriate as a sanction in this case due to the Region’s refusal to present evidence of an appropriate penalty at the penalty hearing in violation of an ALJ order. The Consolidated Rules of Practice Governing the Assessment of Civil Penalties unquestionably provide the ALJ with the responsibility and the discretion to determine an appropriate civil penalty amount based on the evidence in the record, in accordance with any statutory penalty criteria, after taking into account applicable civil penalty guidance. The rules also provide the ALJ with the authority to conduct administrative hearings, examine witnesses, and to hear and decide questions of facts, law or discretion. The Board will not condone an Agency counsel’s refusal to produce evidence at a hearing on the appropriateness of a penalty when ordered to do so by the presiding officer. To do otherwise would undermine the duly delegated authority of the ALJ, as well as call into question the fairness and impartiality of administrative enforcement proceedings of the Agency. When a Region refuses to comply with an ALJ order to present evidence at a hearing on penalty, as occurred in these matters on appeal before the Board, both the ALJ and the Board have the authority and the discretion to award a zero penalty as a sanction. Thus, under the circumstances of these matters, the Board concludes a zero penalty is appropriate based on, and as a sanction for, Regional Counsel’s refusal to put on any evidence at the penalty hearing as ordered by the ALJ.