Fishel v. Westinghouse Electric Corp.

No. 85-0216 (M.D. Pa. December 12, 1986)

The court holds that the imposition of a $10,000 civil penalty against one codefendant found in violation of the Resource Conservation and Recovery Act (RCRA) and the Federal Water Pollution Control Act (FWPCA) is reasonable taking into account the factors enumerated in the Environmental Protection Agency's (EPA's) Civil Penalty Policy (Policy), but declines to award the plaintiffs attorneys fees under RCRA and the FWPCA. The court holds that attorneys fees are not yet appropriate because there is no final order in the action, pending the resolution of common law claims, and because the plaintiffs have not achieved some degree of success on the merits under FWPCA or become a substantially prevailing party under RCRA. The court holds that, with respect to the one codefendant found in violation of FWPCA and RCRA, some civil penalty must be imposed, and that a $10,000 penalty is sufficient to serve the goal of deterrence and to remove the codefendant's economic benefit from noncompliance. The court holds that the maximum penalty under the EPA Policy is not necessary, taking into account the codefendant's cooperation with governmental authorities prior to the initiation of the lawsuit. The court notes, however, that the penalty amount may be reduced if the codefendant makes a sufficient evidentiary showing of an inability to pay.

[Related opinions appear at 16 ELR 20001 and 20634.]

Counsel for Plaintiffs
Albert J. Slap, Rex F. Brien
Slap, Williams & Cuker
Suite 960, One Franklin Plaza, Philadelphia PA 19102
(215) 557-0099

Counsel for Defendants
Terry R. Bossert
McNees, Wallace & Nurick
100 Pine St., P.O. Box 1166, Harrisburg PA 17108
(717) 232-8000

[17 ELR 20465]

Caldwell, J.:

Memorandum

Plaintiffs have moved for civil penalties and an award of attorney's fees against defendant, Frederick Shealer. This is an action based upon Shealer's disposal of chemical wastes in the Gettysburg, Pennsylvania area during an approximate ten year period. Shealer hauled waste for defendant, Westinghouse Electric Co., and other companies, to four sites in the area. The wastes eventually contaminated plaintiffs' properties and well water. Plaintiffs are neighbors of the Westinghouse plant site and the disposal areas. The complaint was founded on common law claims as well as the Resource Conservation and Recovery Act of 1976 (RCRA), 42 U.S.C. § 6901 et seq., the Clean Water Act of 1977 (CWA), 42 U.S.C. § 1251 et seq., and the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA), 42 U.S.C. § 6901 et seq.

The request for attorney's fees is predicated upon provisions found in the RCRA and the CWA. Both statutory sections authorize an award of attorney's fees when "appropriate." See 42 U.S.C. § 6972(e) and 33 U.S.C. § 1365(d). We decline to award fees. First, no final order has been issued in this action and both statutes require a final order before a District Court may award attorney's fees. Second, plaintiffs at this time have not, in our view, achieved "some degree of success on the merits" as required by CWA or, to use the specific language of RCRA, have become "substantially prevailing part[ies]." (brackets added). See Utah International Inc. v. Department of the Interior, 643 F. Supp. 810 (D. Utah 1986) (quoting Ruckelshaus v. Sierra Club, 463 U.S. 680, 103 S. Ct. 3274, 77 L. Ed. 2d 938 [13 ELR 20664] (1983)). Plaintiffs have established defendants' violations of these Acts but nothing more. See Fishel v. Westinghouse Electric Corp., 640 F. Supp. 442 [16 ELR 20634] (M.D. Pa. 1986). Finally, Bradley v. School Board of Richmond, 416 U.S. 696, 94 S. Ct. 2006, 40 L. Ed. 2d 476 (1974), cited by plaintiffs to support their claim that attorney's fees can be awarded before this litigation is concluded, is distinguishable. Accordingly, attorney's fees will be denied at this time.

Turning to the request for civil penalties, we believe, as the parties do, that the "Environmental Protection Agency Civil Penalty Policy," dated Feb. 16, 1984, 41 Envt' Rep. 2991 (EPA Policy), provides appropriate factors in considering the imposition of a civil penalty. See Chesapeake Bay Foundation v. Gwaltney 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).

Shealer has been determined to be in violation of RCRA and CWA. See Fishel, supra. CWA provides for penalties up to $10,000 per day for a violation of that Act, see 33 U.S.C. § 1319(d), and RCRA provides for penalties up to $25,000 per day for a violation. See 42 U.S.C. § 6928(g). Using factors set forth in the EPA Policy, plaintiffs assert that an appropriate civil penalty would be $100,000 and defendant claims that a maximum appropriate penalty would be $500.

The EPA Policy sets forth the following factors to be used in determining an appropriate civil penalty. First, there is the goal of not only deterrence of the violator but of others as well. The deterrence factor includes a "benefit component" and a "gravity component" to insure that the economic benefit of non-compliance with environmental laws is removed and that the violator is actually placed in a worse position than if he had been in compliance. Second, the regulated community must be treated fairly and equitably. Consideration of this factor should take into account, among other things, the violator's: (1) degree of willfulness and/or negligence; (2) history of non-compliance; (3) ability to pay; and (4) degree of cooperation. Third, there is the goal of swift resolution of environmental problems. Penalties will be reduced if the violator moves to correct problems quickly before litigation.

We believe that some penalty must be imposed here. Shealer has escaped monetary responsibility for the environmental problems he helped create over a number of years except for $500 he paid Westinghouse in settlement of a separate lawsuit brought by Westinghouse against him. Westinghouse has accepted the lion's share of the financial burden. Also, while we acknowledge that there is only a very slim chance that Shealer will ever go into the environmental waste hauling business again, we believe that it would not serve the goals of deterring others and of equitable treatment of the regulated community not to impose a meaningful penalty upon Shealer. In any event, Shealer's current business may have profited from his unlawful past practices. On the other hand, we think the record reflects that, although this lawsuit and another by Westinghouse, were eventually brought against Shealer, he had cooperated with governmental authorities when they contacted him prior to institution of the lawsuits.

We will not concern ourselves with the specific number of days defendant was in violation of both Acts. We do not intend to impose a penalty anywhere near the statutory maximum provided by those laws. Under the circumstances of this case, we believe a $10,000 fine is appropriate.¹

The only unsettled question remaining is Shealer's financial ability to pay this fine. The EPA Policy notes that the EPA "will generally not request penalties that are clearly beyond the means of the violator," 41 Env't Rep. at 3002. Shealer has not provided us with any evidentiary material concerning his current income or his present financial condition. We recognize that his failure to have done so already would justify no further inquiry on our part since he has the burden of proving the fine should be less than the statutory [17 ELR 20466] maximum. See Chesapeake Bay Foundation, 791 F.2d 304 [16 ELR 20636] (4th Cir. 1986). Nevertheless, if Shealer files a motion for reconsideration of our determination on grounds of financial hardship, supported by evidentiary material, we will reconsider the amount of the fine.

Order

AND NOW, this 12th day of December, 1986, upon consideration of plaintiffs' motion for civil penalties and attorney's fees, it is ordered that:

1. Plaintiffs' request for attorney's fees is denied.

2. A civil penalty, pursuant to 42 U.S.C. § 6928(g) and 33 U.S.C. § 1319(d), is imposed upon defendant, Frederick Shealer, in the amount of $10,000 dollars.

3. Defendant Shealer may seek reconsideration of this order by filing, within twenty (20) days of the date of this order, a motion accompanied by evidentiary material concerning his financial condition and ability to pay. Thereafter, further briefing shall be in accordance with local rules 401.6 and 401.7.

1. We reject defendants' due process objection to the imposition of civil penalties and any objections based upon the statute of limitations period set forth in 28 U.S.C. § 2462 since at least one violation of either Act has occurred within the limitations period.