UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
BEFORE THE ADMINISTRATOR
IN THE MATTER OF ) ) ) PETRO WEST, INC. ) Docket No. II-RCRA-95-0306 ) ) Respondent )
ORDER DENYING COMPLAINANT'S MOTION FOR DEFAULT ON
LIABILITY AND GRANTING RESPONDENT'S MOTION TO ACCEPT
LATE-FILED PREHEARING EXCHANGE
On November 4, 1997, Complainant filed a Motion for Entry of a Default Order On Liability against the Respondent, Petro West, Inc., in this proceeding under Section 3008 of the Solid Waste Disposal Act, as amended (42 U.S.C. 6928). The Motion was filed pursuant to Section 22.17 of the Rules of Practice and related to the failure of the Respondent to file a prehearing exchange pursuant to the undersigned ALJ's prehearing Order of July 23, 1997. The prehearing order had set an October 24, 1997, deadline for the filing of either Respondent's prehearing exchange or a statement that it intended to forgo the presentation answering evidence.
In response, Respondent, on November 10, 1997, filed a Motion Requesting an Extension of Time to comply with the prehearing order. On November 13, 1997, the undersigned issued an Order granting Respondent's request for an extension and holding Complainant's Motion For Default On Liability in abeyance. Respondent was given to December 15, 1997, to file its prehearing exchange.
On December 19, 1997, Complainant moved that its underlying Motion For Default on Liability be granted as Respondent had once again failed to comply with the prehearing order of the ALJ by failing to file its prehearing exchange. Thereafter, on December 29, 1997, Respondent filed its prehearing exchange requesting that it be accepted as late-filed for good cause shown.
As a result of the above chronology, the parties requested a teleconference with the undersigned ALJ, which was conducted on January 7, 1998. During this teleconference, the parties were asked to make arguments in support of their outstanding motions.
Although Complainant had sought an order on its Motion For Default under Part 22.17(b) of the Rules of Practice, it intended that such order only address the liability phase of the proceeding and agreed to conduct an evidentiary hearing in the penalty phase of the litigation in April, 1998.(1) Moreover, Complainant's initial Motion For Default was based exclusively on Respondent's failure to comply with the prehearing order of the ALJ.
As the issue of liability became the theme of the teleconference, the discussion focused on Respondent's defenses to liability, i.e., lack of knowledge of applicable regulations; history of compliance; and good faith efforts to comply once it became aware of RCRA requirements for used oil transporting and processing. Complainant sought to rebut these arguments citing inter alia, the strict liability component of the RCRA statute. As a result of these arguments, the undersigned made a preliminary ruling granting Complainant's Motion For Default.
On January 8, 1998, Respondent faxed the undersigned a request that no order on default be entered, and raised alleged meritorious defenses to the issue of liability. On January 9, 1998, Complainant faxed a Memorandum in Opposition to Respondent's Motion Requesting That the Court Not Enter Its Default Order. Complainant again provided argument in support of a default order, but only as to Respondent's liability.
Upon further consideration, and in the name of fundamental fairness to the Respondent, the undersigned declines to grant Complainant's Motion For Default, either as presented, or sua sponte. Section 22.17(c) mandates that any order granting default include findings and conclusions on all material issues, including penalty. Complainant's good faith attempt to secure judgment on liability only is properly the subject of a Motion for Accelerated Decision, pursuant to 40 C.F.R. Section 22.20(a), which authorizes the ALJ to render an accelerated decision as to all or any part of the proceeding.
Respondent's failure to comply with numerous prehearing orders and the resulting confusion generated in this proceeding, has not only tested the patience of the court, but in other circumstances, might well have resulted in the granting of a motion favorable to EPA. However, despite Respondent's dilatory conduct, no showing of prejudice against the Complainant has been made as a result of Respondent's late-filed prehearing exchange.
Pursuant to 40 C.F.R. Section 22.17(d) of the Rules of Practice, the undersigned sets aside his preliminary default ruling, and DENIES Complainant's Motion For Default based on Respondent's late-filed prehearing exchange. Concomitantly, Respondent's Motion To Accept Its Prehearing Exchange is GRANTED.
An evidentiary hearing on both liability and the penalty phase of this litigation will be set for April of 1998. As instructed in the January 7, 1998, teleconference, the parties are to notify the undersigned of the exact date and location of such hearing. As further instructed, the parties will reduce to writing any understandings or agreements regarding the presentation or admission of any evidence, or any stipulations appropriate for the conduct of this proceeding.
Stephen J. McGuire
Administrative Law Judge
Date: January 9, 1998
1. In support of its initial Motion For Entry of Default Order On Liability, dated November 4, 1997, Complainant had attached a draft Order for the ALJ's signature which on p. 10 likewise indicates EPA's intention that a "hearing on penalties" be held.