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United States v. Power Eng'g Co.

ELR Citation: 28 ELR 21325
Nos. 97-B-1654, 10 F. Supp. 2d 1145/46 ERC 1938/(D. Colo., 06/10/1998) Preliminary injunction to comply with state regulations

The court orders a metal refinishing facility to provide $3.5 million in financial assurances under a Colorado regulation that requires owners and operators of hazardous waste facilities to secure necessary resources for the proper closure and remediation of their facilities. The court first holds that the facility is not operating in compliance with Colorado's regulations, and, thus, is not exempt from financial assurance requirements. The evidence shows that the facility currently disposes hazardous wastes without a permit or interim status and without providing financial assurances.

The court then holds that the government may require financial assurances for prior acts of treatment, storage, and disposal of hazardous wastes. The Resource Conservation and Recovery Act (RCRA) gives the U.S. Environmental Protection Agency and Colorado broad authority to establish financial responsibility standards and does not preclude, expressly or impliedly, the requirement or financial assurances for past conduct. The recent discovery of the facility's previous unauthorized activities does not relieve the facility from their legal obligation to provide financial assurances. To hold otherwise would be contrary to the expressed intent of Congress, the clear language of applicable regulations, and public policy. To reward the facility's past evasion of RCRA would encourage similar conduct by others.

The court next holds that the failure to provide immediate financial assurances would cause irreparable harm to the public. Because, the facility has conceded multiple past RCRA violations, failed to commence substantive remediation, ignored state compliance orders, and threatened bankruptcy, there is a threat that the public will have to subsidize remediation and proper closure of the facility. The court then holds that the extent to which the facility may be injured by providing financial assurances is less than the injury to the United States, the public health, and the environment if an injunction does not issue. The court also holds that the government has shown a likelihood of success on the merits by compelling evidence. The facility is legally obligated to provide financial assurances because it is currently operating as a treatment, storage, and disposal facility (TSDF). Even if the facility was not a TSDF, it would be required to provide financial assurances for its past acts of treatment, storage, and disposal of hazardous waste. Further, the refinisher's injury of providing financial assurances was less than the injury to the United States, the public health, and the environment. Moreover, the United States proved a likelihood of success on the merits, because as a current and past operator of a TSDF, the refinisher is obligated to provide financial assurances for its current and past acts of hazardous waste treatment, storage, and disposal. And financial assurances clearly further the public interest by providing for proper remediation of the refinisher's facility.

Counsel for Plaintiff
John N. Moscato
Environment and Natural Resources Division
U.S. Department of Justice
999 18th St., Ste. 945-N, Denver CO 80202
(303) 294-1000

Counsel for Defendants
John J. Zodrow
Zodrow et al.
Independence Plaza
1050 17th St., Ste. 1700, Denver CO 80265
(303) 572-0243