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Cumberland Farms, Inc. v. Florida Dep't of Envtl. Protection

ELR Citation: 27 ELR 21201
Nos. 96-2371, 116 F.3d 16/44 ERC 2113/(1st Cir., 06/19/1997)

The court holds that an underground storage tank (UST) owner violated Florida's financial responsibility law and regulations during its reorganization in bankruptcy and that a $200,000 fine imposed by the bankruptcy court for that violation should be given administrative expense priority status. The court first holds that the UST owner's failure to file an affidavit of financial responsibility cannot be waived. The UST owner seems to argue that the gravamen of the financial responsibility test is that an UST owner or operator have a net worth of $10 million and that the test should be deemed waived in this case because the UST owner has a net worth of at least $10.2 million. The gravamen of the offense, however, is the timely filing by the UST owner of the required financial reports to the Florida Department of Environmental Protection. The UST owner failed to do this. The court next holds that there is no compelling basis for reducing the fine, which is considerably less than the maximum of $647 million that could have been assessed against the UST owner. The failure to file in this case was either willful or grossly negligent. Finally, the court holds that the bankruptcy court did not err in giving the fine administrative expense priority, because this was a postpetition claim incurred during the operation of the UST owner's business while it was under Chapter 11.

Counsel for Appellant
Barbara D. Gilmore
Sullivan & Worcester
One Post Office Sq., Boston MA 02109
(617) 338-2800

Counsel for Appellee
Jonathan H. Alden
Florida Department of Environmental Protection
3900 Commonwealth Blvd., Mail Station 35, Tallahassee FL 32399
(904) 488-9314