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In re City of Wilkes-Barre

Case Number:CAA Appeal No. 06-03
ELR Citation:37 ELR 41312


Region III (Region) of the United States Environmental Protection Agency appeals from an Initial Decision issued by Administmtive Law Judge (AIJ) Spencer T. Nissen on November 14, 2006. The Region initiated this enforcement action against the Respondents, City of Wilkes-Bane (the City), A.R. Popple, Inc. (Popple) and Wyoming S. & P., Inc. (Wyoming), based on alleged violations of the Clean Air Act (CAA), 42 U.S.C. §§7401-7671q, in connection with the 2002 demolition of a steam heat plant in Wilkes-Barre, Pennsylvania. Specifically, the Region alleged that the Respondents violated the CAA's National Emission Standard for Hazardous Air Pollutants (NESHAP) for asbestos by: (l) failing to provide adequate notice of the demolition (Count I); (2) failing to keep regulated asbeslos-containing material (RACM) adequately wet until treated or contained in preparation for disposal (Count II); (3) failing to have a trained supervisor present during the demolition activities (Count III); and (4) failing to dispose of all waste material containing asbestos as soon as practical (Count lV). Relying on the Agency's civil penalty policies relevant to asbestos demolition, the Region proposed a total penalty of $36,850 to be assessed jointly against the Respondents.

In the above-referenced Initial Decision, the ALJ dismissed Count I but concluded that the Region had proven the violations in Counts II, III, and IV. The ALJ disrnissed Count III as to Wyoming, finding that only Popple and the City should be held liable for this count. All three Respondents, however, were held liable for Counts II and IV. The ALJ did not impose a joint penalty as proposed, but instead allocated the penalty among the Respondents. For Count II, the ALJ assessed against Wyoming a penalty that was 20% of the Region's proposed penalty for this count; Popple and the City each were assessed an amount that was 33% of the proposed penalty. For Count III, the ALJ assessed Popple and the City each a penalty that was 33% of the penalty proposed by the Region for this count. For Count IV, the ALJ assessed Wyoming and Popple each an amount that was 20% of the penalty proposed by the Region, and assessed a 33% share against the City. The total penalty ultimately assessed was $25,884 which was $8,216 less than the amount proposed by the Region for these three counts ($34,100). The ALJ did not provide an explanation for the reduced total penalty.

Region III appeals the ALJ's penalty assessment on the grounds that the ALJ failed to provide sufficient justification for assessing a total penalty for Counts II, III, and IV that was less than the one proposed by the Region, which was derived using the applicable penalty policies. The Region requests that the Environmental Appeals Board (Board) remand the case for further explanation of the rationale for the ALJ's penalty assessments. None of the Respondents filed a response to the Region's appeal brief, nor has any Respondant crossed-appealed.

Held: The ALJ erred in assessing, without explanation, a penalty for the violations that was lower than the proposed penalty, which was derived from Agency penalty policies, The Board detemines that the reduced penalty is the result of the ALJ's method of allocation, more particularly the ALJ's decision to allocate the penalty among the Respondents rather than assess a joint penalty. However, both the General CAA Penalty Policy and the Asbestos Penalty Policy set forth proposed penalty amounts that are specifically intended to yield a penalty figure for the case as a whole. The relevant penalty policies explain that civil violations of the CAA are strict liability violations and the govemment's interest is in recovering an appropriate penalty based on the facts of the violation, not based on the relative fault of the individual defendants. The guidance further provides that, in cases involving multiple violators, the violators can "allocate among themselves as they wish." Thus, the Board finds that the ALJ's allocation contravened relevant penalty policies, without adequate reason. Accordingly, the Board overtums the ALJ's civil penalty assessment.

Although ordinarily, in cases where a penalty is not adequately explained, the remedy is to remand to the ALJ for further explanation, the Board does not do so in this case. In the interest of resolving this case expeditiously, the Board opts to examine the penalty assessment de novo and assesses a total penalty of $34,100 for Counts II, III and IV. The penalties for Counts II and IV are assessed jointly against all three Respondents. The penalty for Count III is assessed jointly against the City and Popple.