United States ex rel. EPA v. Hill Petroleum Co.

No. 85-0184 L (W.D. La. July 29, 1986)

The court rules that a violation of a quarterly average limitation of the Environmental Protection Agency's (EPA's) lead phasedown rule constitutes only a single day of violation under Clean Air Act § 211(d), which imposes a mandatory $10,000 per day civil penalty for violations of EPA's fuel additive regulations. The court first holds that EPA's interpretation that a violation of a quarterlyaverage constitutes 90 days of violation under § 211(d) is entitled to only minimal deference. Congress' failure to delegate to EPA the authority to interpret the meaning of § 211(d) weighs against deference to the agency. Moreover, a district court's authority to interpret the provision is at least as great as EPA's since § 211(d) authorizes the district courts, not EPA, to assess liability and impose penalties for violations of the lead phasedown regulations. The court rejects EPA's policy argument that in exchange for a more economical and convenient quarterly average reporting scheme, the refining industry implicitly accepted EPA's intepretation that a quarterly violation constitutes 90 days of violation. The Act's deterrence purpose cannot alone justify EPA's interpretation, since fairness to the industry must also be considered. EPA's consistent interpretation of § 211(d) in its enforcement actions deserves little weight because it did not have authority to bring these enforcement actions. Section 211(d)'s language that a violator is liable for "each and every day of the continuance of such violation," while suggesting that Congress intended that $10,000 be forfeited for each day the violation continued, does not further EPA's claim that a single quarterly violation constitutes 90 days of violation. Although an actual "day" of violation can never occur under the quarterly reporting scheme in EPA's lead phasedown regulations, the court infers that a quarterly average violation contains at least one day of violation and concludes that a $10,000 penalty can be imposed for a quarterly average violation. The court next distinguishes cases holding that violations of a monthly average permit limitation constituted 30 days of violations under the civil penalty provision of the Federal Water Pollution Control Act, which also provides for the assessment of a $10,000 penalty calculated per day of violation. In those cases, the courts were setting a potential maximum civil penalty, not a mandatory forfeiture as in Clean Air Act § 211(d).

Having concluded that EPA's interpretation merits minimal deference, the court turns to its own construction of § 211(d). While § 211(d) clearly authorizes a $10,000 mandatory penalty for each day on which a violation occurs or continues, there is no evidence from the statute or its legislative history that Congress intended to authorize the courts to impose a $900,000 penalty for each quarter in which a violation of a quarterly average has occurred. Since penal statutes are strictly construed and the imposition of a $900,000 fine for one violation of a quarterly average is excessive and unfair, the court concludes that § 211(d) does not authorize a mandatory forfeiture of $900,000 per quarterly violation when there is no proof that a daily violation has continued for 90 days.

Counsel for Plaintiff
James Robertson
Land and Natural Resources Division
Department of Justice, Washington DC 20530
(202) 633-4079

Alan Loeb
U.S. Environmental Protection Agency
401 M St. SW, Washington DC 20460
(202) 382-3231

Counsel for Defendant
Keith A. Rodriguez
P.O. Box 30420
Lafayette LA 70503
(318) 233-4413

[17 ELR 20457]

Duhe, J.:

Memorandum Ruling

Plaintiff, the United States of America ("United States"), moves for reconsideration of this court's March 6, 1986 judgment assessing an $80,000 civil penalty against defendant, Hill Petroleum Company ("Hill"). In the alternative, plaintiff seeks a vacation of judgment and leave to conduct additional discovery. The United States brought this action against Hill under § 211(d) of the Clean Air Act ("the Act" or "CAA"), 42 U.S.C. § 7545(d), seeking the assessment of civil penalties against Hill for alleged violations of Environmental Protection Agency ("EPA") regulations at 40 C.F.R. § 80 ("the lead phasedown regulations"), promulgated pursuant to § 211(c) of the Act, 42 U.S.C. § 7545(c). On March 6, 1986, finding that Hill had produced gasoline having excessive lead content in violation of the lead phasedown regulations during eight quarterly compliance periods, this court entered summary judgment in favor of plaintiff on the issue of liability, and, pursuant to § 211(d) of the Act, 42 U.S.C. § 7545(d), imposed a civil penalty of $80,000 for the violations.

Plaintiff does not take issue with this court's determination of liability, but, rather, challenges only the sufficiency of the $80,000 penalty. The issue raised by plaintiff's challenge is the proper construction of the civil penalty provision of the Clean Air Act, 42 U.S.C. § 7545(d), and its application to violations of EPA's lead phasedown regulations.

I. Background: The Regulatory Scheme

The Clean Air Act authorizes the EPA to regulate the quality and content of gasoline. Specifically, § 211(c)(1) of the Act, 42 U.S.C. § 7545(c)(1), authorizes the EPA Administrator to promulgate regulations to:

control or prohibit the manufacture, introduction into commerce, offering for sale, or sale of any fuel or fuel additive for use in a motor vehicle or motor vehicle engine (A) if in the judgment of the Administrator any emission product of such fuel or fuel additive causes, or contributes, to air pollution which may reasonably be anticipated to endanger the public health or welfare . . . .

Pursuant to this authority, on December 6, 1973, the EPA promulgated the lead phasedown regulations at 40 C.F.R. § 80. Section 80.20 of the regulations provides that gasoline refiners shall not, during any calendar quarter, produce leaded gasoline the average lead content of which exceeds the quarterly average limitations set forth in the regulations.

In order to monitor compliance with the lead content standards, the regulations require refiners to submit reports ("lead additive reports") to the EPA each quarter. See 40 C.F.R. § 80.20. These reports indicate the total grams of lead used in the production of gasoline at the refinery during a quarter and the total gallons of leaded gasoline produced at the refinery in the same quarter. Id. Compliance with the quarterly average limitations is determined by [17 ELR 20458] dividing the total grams of lead used in the quarter by the total gallons of leaded gasoline produced at the refinery in the same quarter.

Section 211(d) of the Act, 42 U.S.C. § 7545(d) provides:

Any person who violates . . . the regulations prescribed under subsection (c) of this section . . . shall forfeit and pay to the United States a civil penalty of $10,000 for each and every day of the continuance of such violation, which shall accrue to the United States and be recovered in a civil suit in the name of the United States, brought in the district where such person has his principal office or in any district in which he does business. The Administrator may, upon application therefor, remit or mitigate any forfeiture provided for in this subsection and he shall have authority to determine the facts upon all such applications.

II. Analysis

The sole issue for this court's determination is whether § 211(d)'s $10,000 per day mandatory¹ penalty for violations of the Clean Air Act, and the lead phasedown regulations promulgated thereunder, applies to each and every day of a quarterly compliance period in which the quarterly average limitation has been violated. The United States contends that it does, and argues that because the eight ninety-day quarters in which Hill was found in violation of its quarterly average limitation contained a total of 762 days, Hill should be assessed a statutory penalty of $7,620,000.

In its former memorandum ruling and order, this court rejected the United States' contention and held that because the lead additive reports proved no more than eight days of violation, Hill's civil penalty must be limited to $80,000. This court reasoned:

In its lead phasedown regulations . . . the EPA makes it impossible [for a district court] to determine whether a refinery is in violation of the lead content standards for more than one day of a 90-day reporting period . . . . The quarterly reports required by the regulations indicate only the average lead content of the gasoline produced by a refinery during the reporting period.

Plaintiff characterizes this court's finding as a conclusion that the EPA's regulatory mechanism "is defective by design" and argues that this court erred in reaching such a conclusion. Plaintiff contends that this court should have deferred to the EPA's interpretation of § 211(d) of the Act² as set forth in EPA's "Guidelines for the Administration of the Lead Phase-Down Regulations and Ban on the Use of MMT," 44 Fed. Reg. 58953, October 12, 1979) ("the Guidelines"). The Guidelines state:

The Act and the lead phase-down regulations provide that the penalty for non-compliance shall be $10,000 for each and every day of the continuance of such violation. However, the regulations also provide that the phase-down standards are quarterly (three-month periods) standards. . . . This period was established to accommodate the refinery industry's need for some reasonable period over which lead usage could be averaged so that short-term fluctuations in lead usage would not result in violations of the standards. Further, the monitoring requirements to assure compliance with the standard would be substantially complicated if the averaging period is reduced.

To be consistent with the standard any penalty assessment will be determined on the basis of quarterly averaging of lead usage at a refinery. Thus, using the maximum penalty per day of $10,000, the maximum penalty per refinery for a quarter in which the standard is exceeded would be $10,000 times the number of days in that quarter, or approximately $900,000 (i.e, $10,000/day X 90 days/quarter).

Id. at58954.

A. Deference

The threshold issue presented by this motion is, therefore, the degree of deference, if any, to be accorded the EPA's interpretation of § 211(d)'s penalty provision and its application to violations of the EPA's lead phasedown regulations.³ Citing National Wildlife Federation v. Gorsuch, 693 F.2d 156 [13 ELR 20015] (D.C. Cir. 1982) and Udall v. Tallman, 380 U.S. 1 (1965), the EPA suggests that because the Guidelines are an agency's interpretation of its own enabling statute they are entitled to great judicial deference. Though the Gorsuch court found that the agency interpretation involved in that case was due a great deal of deference, it explained that the deference to be given an agency interpretation varies greatly from case to case depending on the interplay of numerous factors. See Gorsuch, 693 F.2d at 166-70. Similarly, the jurisprudence reveals that the rule of great deference applied in Udall is not applicable in every case.

In determining the degree of deference to be given an agency's interpretation of a provision in its governing statute, a court must first examine the statute to determine whether Congress delegated to the agency the authority to elaborate the meaning of the statutory provision in question. Trailways, Inc. v. ICC, 727 F.2d 1284, 1288 (D.C. Cir. 1984) (citing National Wildlife Federation v. Gorsuch, 693 F.2d 156, 167 [13 ELR 20015] (D.C. Cir. 1982); Process Gas Consumers Group v. U.S. Dep't of Agriculture, 694 F.2d 778, 791 (D.C. Cir. 1982) (en banc), cert. denied, 461 U.S. 905 (1983)). Congress's failure to delegate the interpretive function to the agency counsels against deference to the agency's construction. Montana v. Clark, 749 F.2d 740, 746 (D.C. Cir. 1984), cert. denied, U.S. , 106 S. Ct. 246 (1985) (citing Trailways, Inc. v. ICC, 727 F.2d at 1288).

Congress did not explicitly delegate to the EPA the authority to elaborate the meaning of § 211(d), nor, apparently, did it confer on the agency such implicit authority. Though in § 211(c) Congress authorized the agency to promulgate regulations to protect human health and welfare, this is not evidence that Congress authorized the agency to either implement or interpret § 211(d)'s penalty provision. See Trailways, Inc. v. ICC, 727 F.2d at 1288 (though Congress intended the agency [ICC] to make particular public interest and other determinations under specific provisions of the statute, this did not indicate that Congress delegated the agency the authority to interpret the statutory directive at issue). Moreover, though § 211(d) contains no explicit delegation of the interpretive or "normelaborative" function, see id., it does confer on district courts, and not the EPA,⁴ the authority to assess liability and impose penalties for violations of the lead phasedown regulations. In re Transportation, Inc., No. CAA (211)-27 (1982).⁵ It follows that a district [17 ELR 20459] court's authority to interpret the meaning and scope of § 211(d) should be equal to, if not greater than, the EPA's. Nonetheless, the question remains as to how much weight, if any, this court should give the EPA's unauthorized interpretation of § 211(d).

In General Electric Co. v. Gilbert, 429 U.S. 125, 141 (1976), the Supreme Court held that the degree of deference to be afforded interpretative agency guidelines promulgated without specific statutory authority must be determined by an application of the formula set forth in Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944). In Skidmore, the Supreme Court held that

the rulings, interpretations and opinions of the Administrator under this Act, while not controlling upon the courts by reasons of their authority, do constitute a body of experience and informed judgment to which courts and litigants may properly resort for guidance. The weight of such a judgment in a particular case will depend upon the thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier and later pronouncements, and all those factors which give it power to persuade, if lacking power to control.

Skidmore, 323 U.S. at 140.⁶ This court finds that the Skidmore standard is the appropriate standard for determining the degree of deference to be given the EPA's interpretation of § 211(d).

B. The Skidmore Standard Applied to the EPA Guidelines

1. EPA's Policy Argument

The primary argument advanced by the United States in support of its interpretation of § 211(d) is a policy argument. The United States argues that the EPA adopted a quarterly average standard, as opposed to a gallon-by-gallon (or, this court notes, a daily maximum) lead content standard, for the economy and convenience of the refining industry. The government argues that in exchange for the EPA's compromise, industry implicitly waived its "right to argue to the district court that the statutory forfeiture does not apply to all the days in the quarter of violation." In support of its argument, the government stresses the irony of interpreting the EPA's efforts to accommodate the refining industry as working an unjustice against that industry.

Ironic as it might be, this court simply cannot accept the bare bones proposition, unsupported by any sort of evidence, that in exchange for a more convenient and less costly reporting schedule, the refining industry accepted the quid pro quo of a $900,000 per quarter, as opposed to $10,000 per day, forfeiture for a single quarterly violation. Plaintiff has presented no evidence that the industry acquiesced in such a deal, and the bargain is simply too unreasonable and too unfair to presume. Accordingly, this court finds plaintiff's first argument for its interpretation of § 211(d) unpersuasive.

2. Statutory Purpose

Plaintiff next argues that its interpretation of the Act is consistent with the Act's purpose of deterring industry from polluting illegally. The government maintains that unless $900,000, rather than $10,000, is imposed for a quarterly violation, industry will not be adequately deterred. As stated in the former memorandum ruling, though this court agrees that a $10,000 penalty is an insufficient deterrent to industry, the statutory goal of deterrence cannot alone justify upholding EPA's interpretation of § 211(d). If deterrence were the only factor Congress considered in fashioning penalties under the CAA, it could have mandated that a single quarterly, monthly, or weekly violation constituted grounds for imposing a one million dollar fine, or for closing the violating facility altogether. Fairness to industry, however, also was, and must be, considered. See, e.g., 42 U.S.C. § 7545(c)(2)(A) and (B).

3. Consistent Enforcement

Plaintiff next argues that because the EPA has consistently followed its Guidelines in the enforcement actions it has brought under the lead phasedown regulations, the interpretation of § 211(d) contained in those Guidelines should be given great weight. Though it is true that an agency's consistent construction of a statutory provision over an extended period should generally be given great weight, Skidmore, 323 U.S. at 140, it is well-settled that this proposition "must be tempered with the caveat that an agency may not bootstrap itself into an area in which it has no jurisdiction by repeatedly [exceeding] its statutory mandate." SEC v. Sloan, 436 U.S. 103, 119 (1978) (quoting TMC v. Seatrain Lines, Inc., 422 U.S. 726, 745 (1973)). As stated above, the EPA did not have the authority to bring enforcement actions and to administer penalty provisions under § 211(d) in the first place. The agency's consistent interpretation of § 211(d) in unauthorized enforcement actions pursuant to unauthorized guidelines is therefore lacking in persuasive power and deserves little weight.

4. Validity of EPA's Reasoning

Plaintiff next attempts to demonstrate the validity of the reasoning behind its interpretation of § 211(d) through the following argument:

The phrase "each and every day of the continuance of such violation" [in § 211(d)] shows that Congress did not intend to limit the application of § 211(d) to day-by-day penalties. Rather, § 211(d) embraces the concept of a continuing violation of the type EPA established by its adoption of a quarterly standard.

It is undoubtedly true that § 211(d)'s language indicates Congress's contemplation that a violation of the CAA could continue beyond a single day. The language further suggests that in the situation where a violation continues for more than one day, Congress wanted to ensure that $10,000 would be forfeited for each and every day the violation continued.⁷ Nonetheless, this court does not perceive how an acknowledgement that Congress embraced the concept of a continuing violation furthers plaintiff's argument that a single quarterly average violation presumptively constitutes ninety days of continuing violation.

In apparent anticipation of this court's difficulty with the reasoning behind the preceding argument, plaintiff attempts to illuminate the superior logic of presuming ninety days of violation by contrasting the illogic of interpreting the $10,000 penalty as applying to only one day of a ninety-day quarter:

The . . . interpretation . . . that the statutory penalty applies to only one day of the period, interprets EPA's regulations to say that there can only be one day of violation, the day upon which all elements of the violation are complete. The United States submits that such an interpretation is illogical, because it treats all events during a period as if they occurred on a single day. In fact, there is no day in which all the elements of the violation come into place; instead, the violation becomes complete at the moment of midnight at the close of the quarter. Thus, this theory is unsupported by logic, because there is no "day" which fits the description. For the court to apply this theory it would have to legislate a fictional day of violation.

As stated at the outset the task at hand is not interpreting the EPA's regulations, but rather § 211(d) of the CAA and its application to the regulations. In § 211(d), Congress spoke in terms of daily violations, not quarterly ones. Therefore it apparently did foresee limitations based on daily maximums — days "in which all the elements of the violation came into place." Consequently, it is not inherently illogical to interpret § 211(d) as contemplating a "day" of violation. Rather, it is the regulations' quarterly average method [17 ELR 20460] of computing violations, and not § 211(d), that creates the conceptual problem of determining a day of violation.⁸

As the United States argues, under these regulations no violation can exist until the last moment of the last day of a quarter. Not until that time can a quarterly average be calculated by dividing the total grams oflead used in the quarter by the total gallons of leaded gasoline produced at the refinery in the same quarter. See 40 C.F.R. § 80.20. The lead content in gasoline produced on every day of the quarter either contributes toward, or takes away from, the total amount of lead usage that ultimately constitutes a violation. Accordingly, not only is it impossible under this system to determine a "day" of violation, such a "day" does not even exist.

The impossibility of being able to determine a day of violation under EPA's regulations, however, makes it neither logical, nor fair, to infer that a quarterly violation constitutes ninety "days" of violation within Congress's intent. Moreover, though an actual "day" of violation can never occur under the lead phasedown regulations, as the former memorandum ruling indicated, this court is not above bending logic to infer that a quarterly average violation contains at least one "day" of violation. Accordingly, a $10,000 penalty may be imposed for a quarterly average violation.

5. Jurisprudence

In further support of its contention that the Guidelines are a logical and rational interpretation of § 211(d), the United States cites the cases of United States v. Amoco Oil Co., 580 F. Supp. 1042 [14 ELR 20533] (W.D. Mo. 1984) and Chesapeake Bay Foundation v. Gwaltney of Smithfield, Ltd., 611 F. Supp. 1542 [15 ELR 20663] (E.D. Va. 1985), aff'd, 791 F.2d 304 [16 ELR 20636] (4th Cir. 1986).⁹ The courts in both cases held that violations of a "monthly average" permit limitation constituted thirty days of violation under the civil penalty provisions of the Clean Water Act ("CWA"), 33 U.S.C. § 1319(d). Like § 211(d) of the CAA, § 1319(d) of the CWA provides for the assessment of a $10,000 civil penalty calculated per day of violation.¹⁰

a. Amoco

In Amoco the defendant argued that since the language of 33 U.S.C. § 1319(d) specifies that the assessment of a civil penalty shall "not exceed $10,000 per day of such violation," a violation could not be penalized unless it could be related to a specific, given day. The court characterized the defendant's argument as essentially a contention that the civil penalty provision of § 1319(d) could not be imposed unless the permit contained a "daily maximum" limitation for the effluent in question. Amoco, 580 F. Supp. at 1045.

The court rejected the argument on the basis of essentially four factors, the first two being express, and the latter two implied. The first two factors involved the court's construction of § 1319(d)'s language. The court found that the words "per day of such violation" in § 1319(d) indicated Congress's recognition that violations of the Act could be measured in a time period exceeding a single day. Amoco, 580 F. Supp. at 1045. The court then found that in light of the EPA's broad discretion in implementing the CWA's goals for eliminating water pollution, see 33 U.S.C. §§ 1311, 1342, section 1319(d)'s language that the penalty would be imposed for violations of any permit condition or limitation indicated that the imposition of § 1319(d)'s penalties would not be limited to violations of permit limitations expressed in terms of a "daily maximum." Id. The court thus concluded that 1) a "violation" under § 1319(d) may be something that is measured in more than a single day's period of time, and 2) where effluent discharge limits are set, for example, as a monthly average limitation, a violation necessarily encompasses all the days of the month. Id.

This court will not quibble with the Amoco court's conclusion that the CWA's language, like the CAA's, gives the EPA broad discretion to promulgate regulations providing for permit limitations based on time periods longer than a day. Nonetheless, it fails to understand how such a premise leads to the Amoco court's conclusion that a violation of that weekly, monthly or quarterly maximum necessarily encompasses all the days in the regulatory period. Compare discussion of plaintiff's analogous argument supra pp. 13-14 [17 ELR 20459]. This court finds that the Amoco court's unexplained leap in reasoning was supported by the consideration of two factors implicit in its decision.

First, the Amoco court believed that its options were limited to either imposing no penalty at all (because it is impossible to ascertain a daily violation in the absence of a daily discharge limitation), or declaring that a maximum fine of $300,000 could be imposed for the monthly violation. See 580 F. Supp. at 1045. The former option was clearly unacceptable. The latter option, however, was acceptable only because of the second implicit factor influencing the Amoco court's conclusion — the Amoco court recognized that it had only to determine the maximum potential penalty that could be imposed for the violation of a monthly average limitation.¹¹ It did not have to determine a mandatory forfeiture. See Amoco, 580 F. Supp. at 1048.

This court does not feel constrained by the first implicit factor influencing the Amoco court's decision, that is, the option of imposing no penalty as the only alternative to imposing a $900,000 penalty. As discussed above, rather than adopting the result that a strict adherence to the principles of logic would dictate, as did the Amoco court, this court relies on a less elegant rationale. If there has been a violation of a quarterly average, one can infer that there has been at least one day of violation in that quarter and a $10,000 penalty can be imposed for that violation. The unacceptable alternative of imposing no penalty therefore cannot persuade this court to adopt a $900,000 penalty.¹²

As this court is not constrained by the first implicit factor in the Amoco court's conclusion, it is not liberated by the second. Unlike § 1319(d) of the CAA, § 211(d)'s penalty provision does prescribe a mandatory forfeiture rather than a maximum limit for a discretionary fine. Because this court is convinced that the Amoco court's conclusion that a violation of a monthly average constitutes thirty days of violation turned not on § 1319(d)'s language and the inherent rationale of such a conclusion, but rather on a consideration of the comparative results that would follow from reaching that or the opposite conclusion, it finds the Amoco decision unpersuasive. Amoco's application in this case would produce drastic consequences that did not arise under § 1319(d).

b. Gwaltney

In Gwaltney, the district court followed Amoco, and the appellate court affirmed, adopting the district court's conclusion that "[i]t is difficult to imagine how the violation of a monthly limitation involves any number of days other than the number of days that month." 791 F.2d at 314. This court finds that the determinative factor in the Gwaltney holding, as it was in Amoco, was that rather than imposing a mandatory forfeiture, the court was setting a potential maximum civil penalty that could be imposed for a presumed thirty days of violation.¹³ The defendant in Gwaltney had presented [17 ELR 20461] a hypothetical to demonstrate the unfair result of the lower court's interpretation:¹⁴

A polluter calculates its monthly average on the basis of six monthly samples. On five of the six sample days, little or no effluent is discharged, and on the sixth, the discharge is so great that the monthly average limitation is exceeded for the month. There is thus only one identifiable day of excessive discharge; yet, the polluter is subject to a maximum penalty corresponding to thirty days of violation.

The court found that this hypothetical situation did not require it to reject the district court's method of setting the maximum penalty because "[t]he seeming unfairness of the situation in [the defendant's] hypothetical dissipates when one recalls that § 1319(d) serves only to set a maximum penalty." Gwaltney, 719 F.2d at 315. "[W]hile the court may set a large maximum penalty in such a case, it retains discretion to assess a penalty much smaller than the maximum, as the situation requires." Id. at n. 17.

The Gwaltney hypothetical, however, can be transposed to facts of this case to illustrate the unfairness that would result where the penalty is not a maximum discretionary penalty, but rather a mandatory forfeiture:

A polluter calculates its quarterly average on the basis of ninety days of gasoline production. On seventy of the ninety days, the lead content in the gasoline produced is negligible or zero, and on the other twenty days the lead content is so high that the monthly average limitation is exceeded for the month. There are therefore only twenty identifiable days of excessive lead content, yet the polluter is subject to a mandatory penalty corresponding to ninety days of violation.

If the Gwaltney result were applied to this situation, the court would have to impose a $900,000 penalty for only twenty days of violation, in violation of the statute's plain language. The court could only hope that the EPA would mitigate the amount forfeited upon finding that the EPA's violation in fact did not continue for ninety days. Because under 40 C.F.R. § 80.20's reporting requirements, industry has no reason to maintain records indicating the average lead content in gasoline produced on individual days, however, the EPA, or even the industry, may never learn the sanction was imposed illegally. Accordingly, this court finds Gwaltney no more persuasive than Amoco.

Having reached the end of the United States's arguments¹⁵ for the EPA's interpretation of § 211(d), this court has found only one — deference — persuasive.¹⁶ And, as explained above, the statutory goal of deference alone cannot justify what is otherwise an unjust and excessive penalty. Accordingly, under the Skidmore standard, this court finds that the EPA's Guidelines deserve minimal deference in this court's interpretation of § 211(d).

III. Interpreting § 211(d)

Having concluded that the EPA's interpretation of § 211(d) deserves minimal deference in this case, the court now turns to the fundamental task of statutory construction. The starting point for statutory construction, of course, is the language of the statutory provision in question. See Gorsuch, 693 F.2d at 170 (citing Watt v. Alaska, 451 U.S. 259, 265 [11 ELR 20378] (1981)). As espoused in the former memorandum ruling, this court finds that § 211(d) clearly authorizes it to impose a $10,000 mandatory penalty for each and every day on which a violation occurs or continues. Section 211(d) does not clearly authorize the court to impose the significantly stiffer penalty of $900,000 for each and every quarter in which a violation of a "monthly average" has occurred. Moreover, there is no evidence, in § 211(d)'s language, legislative history, or elsewhere, that Congress intended to give district courts such authority. Furthermore, there is no evidence in the CAA or its legislative history that Congress authorized district courts to presume that the violation of a quarterly average constituted ninety "days" of violation with the meaning of § 211(d). When Congress provided for a $10,000 per day penalty, it must have assumed that the EPA would create permit limitations commensurate with that penalty.

In the absence of clear statutory language or extrinsic evidence of Congress's intent regarding the proper construction of § 211(d), this court turns to principles of statutory construction for guidance. First, this court is persuaded by the principal that penal statutes are to be construed strictly:¹⁷

[O]ne "is not to be subjected to a penalty unless the words of the statute plainly impose it."

See Commissioner of Internal Revenue v. Acker, 361 U.S. 87, 91 (1959) (quoting Keppel v. Tiffin Savings Bank, 197 U.S. 356 (1905)). Accord Cason v. Texas, Inc., 621 F. Supp. 1518, 1523 (M.D. La. 1985). Though § 211(d) plainly imposes a penalty of $10,000 per day, it does not plainly impose a $900,000 penalty for a quarterly average violation. Accordingly, a defendant should not be subjected to a $900,000 per quarter penalty under § 211(d), unless ninety days of violation are proven.

Next, as did the courts in both Amoco and Gwaltney, this court will consider whether plaintiff's construction of the statute would lead to a fair result. Plaintiff correctly argues that the decision to lower or mitigate a forfeiture under § 211(d) is solely within the EPA's discretion, so that this court's finding that a particular fine is excessive or unfair may not affect its decision to impose that penalty. See 42 U.S.C. § 7545(d).¹⁸ The question presently before this court, however, is not the fairness of imposing a particular penalty that is clearly due under the statute — e.g., a $10,000 penalty for the violation of a daily maximum. Rather, the court faces the more fundamental issue of statutory interpretation. In other words, the immediate question is not, given that a $900,000 penalty is authorized, whether the imposition of the authorized penalty is fair in this case. Rather, it is whether § 211(d) can be interpreted as authorizing a $900,000 penalty per quarter of violation in the first place. Consequently, whether a particular construction of § 211(d) would produce an unfair result may be considered by the court in reaching its interpretation of § 211(d). See The Church of Holy Trinity v. United States, 143 U.S. 457, 511 (1892) (a statute should not be construed as producing an absurd or unjust result or one that Congress did not intend);¹⁹ U.S. v. Mendoza, 565 F.2d 1285 (5th Cir. [17 ELR 20462] 1978), on reh., 581 F.2d 89, cert. denied, 464 U.S. 1047 (1984); Virgin Islands v. Berry, 604 F.2d 221 (3d Cir. 1979).

This court finds that the imposition of a mandatory fine of $7,200,000 for eight violations of agency regulations is excessive and unfair. In the absence of plain language to the contrary, this court therefore concludes that § 211(d) does not authorize a mandatory forfeiture of $900,000 per quarterly violation when there is no proof that a daily violation has continued for ninety days. Accordingly, relying on the inference that a quarterly average violation contains at least one day of violation within the meaning of § 211(d), this court adheres to its conclusion in the former memorandum ruling and upholds the $80,000 penalty formerly ordered against defendant Hill Petroleum Company.

IV. Alternative Request For Time in Which to File Additional Discovery

Because the purpose of plaintiff's request for leave to conduct additional discovery is to procure evidence in support of a motion that has been denied both initially and on reconsideration, the request is denied.

Order

For the written reasons assigned in the Memorandum Ruling of this date,

IT IS ORDERED that plaintiff's motion for reconsideration, and in the alternative, request for leave to conduct additional discovery, is hereby DENIED.

1. In its former memorandum ruling, this court found that § 211(d)'s penalty was a mandatory forfeiture and that the Act does not give district courts the discretion to alter the amount of the penalty.

2. — and the lead phasedown regulations — see infra n. 3.

3. Plaintiff argues that the interpretation of the lead phasedown regulations, as well as § 211(d), is involved. The meaning, scope, or content of those regulations, however, or of § 211(c), the enabling statutory provision under which they were promulgated, is not at issue. Accordingly, though plaintiff's contentions that (1) an agency's construction of its own regulations should be upheld unless plainly erroneous or inconsistent with its enabling statute, e.g., Hoover & Bracken Energies, Inc. v. United States Dept. of Interior, 723 F.2d 1488, 1489 (10th Cir. 1983), cert. denied, __ U.S. __, 105 S. Ct. 93 (1984); Buttrey v. United States, 573 F. Supp. 283 [14 ELR 20152] (E.D. La. 1983), 2) the lead phasedown regulations have the force and effect of law because promulgated pursuant to specific statutory authority of § 211(c), e.g., Paul v. United States, 371 U.S. 245, 255 (1963); United States v. McDaniels, 355 F. Supp. 1082, 1085 (E.D. La. 1973), 3) so that this court cannot substitute its judgment as to the content of those regulations, United States v. St. Bernard Parish, 756 F.2d 1116, 1124 (5th Cir. 1985), cert. denied, U.S. , 106 S. Ct. 830 (1986), are undoubtedly accurate statements of the law, they are not apposite to the matter at hand. This court is not interpreting the EPA's regulations: it is interpreting § 211(d). See Chesapeake Bay Foundation v. Gwaltney of Smithfield, Ltd., 971 F.2d 304 [16 ELR 20636] (4th Cir. 1986); United States v. Amoco Oil Co., 580 F. Supp. 1042 [14 ELR 20533] (W.D. Mo. 1984).

Plaintiff's memorandum also suggests that plaintiff interprets this court's former ruling as questioning the propriety of the lead phasedown regulations themselves and the EPA's authority to promulgate such regulations. In neither its former ruling, nor here, however, does this court question the EPA's authority to make quarterly as opposed to daily compliance periods pursuant to § 211(c)'s broad delegation of authority. See 42 U.S.C. § 7545(c). Similarly, the court does not challenge the lead phasedown regulations as exceeding the scope of the EPA's statutory authority.

Moreover, this court does not question that violations of a quarterly average limitation constitute a violation of the Act for which § 211(d) requires a $10,000 per day mandatory forfeiture. This court's difficulty is only with the EPA's interpretation of § 211(d)'s $10,000 per day forfeiture provision as applicable to each and every day of a quarter in which a single violation of the quarterly average has occurred — an issue that neither the EPA's regulations, nor their enabling statutory provision, addresses.

4. The only authority § 211(d) gives the EPA is the authority to mitigate a penalty once it has been imposed. 42 U.S.C. § 7545(d).

5. The judicial officer in In re Transportation found that § 211(d)'s "plain language" that a penalty forfeited under its provisions "shall . . . be recovered in a civil suit in the name of the United States" conferred exclusive authority on the district courts to assess penalties due for violations of the Act and the regulations promulgated thereunder. See In re Transportation, slip. op. at 10. The officer therefore struck down EPA regulations setting up a procedure whereby the agency could assess and impose § 211(d) penalties.

6. Cf. Trailways, Inc. v. ICC, 727 F.2d 1284, 1288 (D.C. Cir. 1984) (once a court determines that an agency has been delegated no authority to interpret the meaning of a statutory directive, the court must independently resolve the question of the statute's content. Though "the agency's opinion on this point is useful," it is not controlling. Id.).

7. Though this court has neither been presented with or uncovered legislative history on the issue, it assumes that Congress's intent in using the language "each and every day of the continuance of such violation" was to ensure that if the agency promulgated regulations making a certain act, such as the use of a particular type of fuel additive in the refining process, a violation of the Act, that a penalty would be imposed for every day the substance was used, rather than only for the initial day of violation.

The problem of properly penalizing a continuing violation, or tort, is an old one. An example of this problem in traditional tort (nuisance) law is the situation where water has been intentionally directed from one piece of land to another. The law evolved to recognize that the tort created by the diversion does not occur only when the water is initially diverted, but is ongoing and continues as long as the diversion stays in effect.

8. The problem with the phasedown regulations in and of itself does not mean that the EPA violated its authority in promulgating rules incorporating a quarterly, rather than daily, compliance period. The EPA could have devised some method to determine daily violations within the quarterly reporting period. Even if this court considered the lead phasedown regulations to be in violation of EPA's statutory authority, however, that issue is not before the court and need not be determined.

9. These cases were cited originally in plaintiff's memorandum in support of its motion for summary judgment. Because this court did not specifically address these cases in its earlier ruling, at plaintiff's behest, it will do so now.

The appellate court's decision in the Gwaltney case had not been issued at the time plaintiff submitted its memorandum in support of this motion. Because the appellate court affirmed the district court, this court will discuss the former's opinion.

10. The $10,000 per day penalty in the CWA, however, is a maximum potential penalty, rather than a mandatory forfeiture. Section 1319(d) provides: "Any person that violates . . . any permit condition or limitation . . . shall be subject to a civil penalty not to exceed $10,000 per day of such violation" (emphasis added). See discussion infra pp. 19-21 [17 ELR 20460].

11. Section 1319(d) provides that a violation of the CWA subjects a person to a civil penalty "not to exceed $10,000 per day of such violation," 33 U.S.C. § 1319(d). Section 211(d) of the CAA by contrast, provides that any person who violates the Act "shall forfeit and pay . . . a civil penalty of $10,000 for each and every day of the continuance of such violation." 42 U.S.C. § 7545(d) (emphasis added).

12. Though, as discussed in the former memorandum ruling, this court recognizes that the meager penalty of $10,000 per quarter of violation is hardly an effective deterrent.

13. The parties' arguments and the court's purported reasoning were essentially the same in Gwaltney as they were in Amoco. The Gwaltney court reasoned that § 1319(d)'s language "speak[ing] in the terms of penalties per day of violation, rather than penalties per violation, . . . strongly suggests that where a violation is defined in terms of a time period longer than a day, the maximum penalty assessable for that violation should be defined in terms of the number of days in that time period." 791 F.2d at 314. This court finds that the quoted statutory language, like that in Amoco, see discussion supra pp. 18-19 [17 ELR 20460; and in § 211(d), see discussion supra pp. 13-14 ]17 ELR 20459[, suggests no more than that penalties should be imposed per day of violation; the language does not dispense with the necessity of proving the number of days on which the violation occurred.

The Gwaltney court also rejected the defendant's argument that a monthly violation should be treated as one day of violation. 719 F.2d at 313. As discussed above, this court agrees that it is conceptually improper to consider a monthly average violation as one day of violation. Nonetheless, fated only with proof of a single violation of a monthly average, this court finds it no more offensive to infer the occurrence of a single day of violation than to infer thirty days of violation. See discussion supra pp. 15-16 & 20 [17 ELR 20459-20460].

14. Several hypotheticals were discussed, but the others involved comparisons between the daily maximum and the monthly average limitations contained in the same permit — a comparison that cannot be made in this case.

15. Plaintiff also argues that in passing § 223 of the CAA Amendments of 1977, P.L. 95-95 (Aug. 7, 1977), added as subsection (g) to § 211 of the Act, Congress "in essence" ratified the EPA's adoption of a quarterly average standard of measurement, by setting out certain "average lead content standards" for temporary application to small refineries. The "average lead content standards" in § 223 are per gallon, not per quarter, and therefore do not suggest Congress's approval of quarterly average standards. See 42 U.S.C. § 7545(g)(2). Furthermore, the fact that Congress did not address the lead phasedown regulations' use of quarterly average limitations in the 1977 amendment does not necessarily indicate congressional approval of that standard of measurement. The silence definitely cannot be construed as congressional approval of the EPA's Guidelines for interpretation of § 211(d).

16. A final reason this court finds the EPA's Guidelines' interpretation of § 211(d) unpersuasive is that they too speak in terms of a maximum penalty per day. 44 Fed. Reg. at 58954. This suggests that in reaching its interpretation, the EPA also failed to recognize it was endorsing a mandatory $900,000 per quarter penalty.

17. This proposition was rejected by the district court in Chesapeake Bay Foundation v. Gwaltney of Smithfield, Ltd., 611 F. Supp. 1542 [15 ELR 20663] (E.D. Va. 1985). The Gwaltney court found:

Adherence to this proposition does not affect the Court's conclusion. The words of the statute authorize a penalty of up to $10,000 "per day of violation." Because a violation of a monthly limitation necessarily involves a violation over an entire month, the maximum penalty of $10,000 per day of the month is plainly within the words of the statute and therefore does not violate any principal of construction.

Id. at 1552 n. 12. The district court failed, however, to recognize that its determination that "violation of a monthly limitation necessarily involves a violation over an entire month" was an act of construction departing from the "plain meaning" rule.

18. If a mandatory penalty imposed by this court were excessive, the defendant would have the right to petition the EPA for a reduction. Id.

19. Though Holy Trinity contemplated the results that would follow from a literal construction of an apparently unambiguous statute, there is no reason that its rule should not apply in the construction of an unclear statute.