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State v. Dayton Malleable, Inc.

Citation: 10 ELR 20677
No. No. 78-694, 13 ERC 2189/(Ohio Ct. C.P., 10/10/1979)

A trial judge assesses a $493,500 civil penalty against Dayton Malleable, Inc. (DMI) for five admitted violations of a national pollutant discharge elimination system (NPDES) permit issued pursuant to the Federal Water Pollution Control Act. The company was sued by the State of Ohio for violating § 6111.07(A) of the Ohio Revised Code in failing to meet scheduled deadlines for construction of waste water treatment facilities at its Ironton, Ohio plant, which caused dissolved iron discharges into the Ohio River in excess of permitted levels over a period of 714 days. The court first finds that impossibility and substantial compliance are invalid defenses since intent is not a necessary element of violations of police regulations. Applying the United States Environmental Protection Agency's guidelines for assessing noncompliance penalties, the court determines that a fine of $50 per day should be levied to reflect the environmental damage done by defendant's discharges. The court holds that the impossibility of quantifying the harm to health and the environment from DMI's violations does not bar the assessment of such a penalty. In computing the economic benefit accruing to DMI as a result of noncompliance, the court uses the company's actual rate of return on equity to reach a figure of $8,000. The court does not allow DMI to deduct money spent rehabilitating old facilities for use pending completion of the new plant since compliance with the NPDES limitations would have rendered such expenditures unnecessary. Noting the company's lack of diligence in reaching compliance, the court fines it $750 per day for "recalcitrance." Finally, the court lessens the total penalty of $578,000 by $84,500 due to the existence of extenuating circumstances that were beyond DMI's control. Concluding that the final total of $493,500 plus costs is not excessive for as large a company as DMI, the court observes that if the penalty is to serve deterrent and exemplary functions, it must be assessed in proportion to the profits of the parent company rather than those of the division being challenged in a particular suit.

Counsel for Plaintiff
William J. Brown, Attorney General; Martha E. Horvitz, E. Dennis Muchnicki, Ass't Attorney General, Environmental Law Section
30 E. Broad St., Columbus OH 43215
(614) 466-3376

Counsel for Defendant
Charles P. Freiburger, Richard F. Taps
Bricker, Evatt, Barton & Eckler
100 E. Broad St., Columbus OH 43215
(614) 227-2300