Enforcement Action Summary FY 2006 - August

August 7, 2006

Region 5 files Consent Agreement and Final Order in Page & Hill Forest Products Inc., RCRA matter

On July 25, 2006, EPA issued a Consent Agreement and Final Order (CAFO) under RCRA Section 3008(a) resolving claims for civil penalties for violations of the authorized Minnesota RCRA drip pad requirements for interim status facilities. The CAFO simultaneously commences and concludes EPA’s action for violations of requirements for maintaining written descriptions of jobs and the amount of training for each position at the facility related to hazardous waste management, obtaining and keeping a written assessment of the drip pad received and certified by an independent qualified registered professional engineer, having a curb or berm around the perimeter of the drip pad, maintaining records sufficient to document that all treated wood is held on the drip pad following treatment until drippage ceases, documenting the date and time of drip pad cleaning and cleaning procedures, and recording weekly inspections. Under the CAFO, Page & Hill Forest Products, Inc. (Page) is paying a penalty of $5,000 over five years, based on ability to pay. Page is also placing a curb or berm around the drip pad; submitting a written assessment of the drip pad reviewed and certified by an independent qualified registered professional engineer; maintaining on-site and available for inspection a written job description and description of the type and amount of training, documentation that wood is kept on the drip pad until drippage ceases, and documentation of weekly inspection; and ceasing all storage of hazardous waste except storage in accordance with generator conditions for the hazardous waste license exemption at Minn. Rule 7045.0292. The CAFO resolves only Page’s liability for federal civil penalties for the violations alleged, and conditions the effect of that settlement upon the accuracy of the information submitted.

Contact: Maria Gonzalez, ORC, primary contact, (312) 886-6630 and Robert Smith, ORC, additional contact, (312) 886-7568

U.S. Court of Appeals for the Federal Circuit enters Judgment for United States on Taking Claim

On August 9, 2006, the United States Court of Appeals for the Federal Circuit issued an opinion requiring the lower Court to dismiss the taking claim that had been filed against the government. The Appellate Court found that the plaintiff, John R. Sand and Gravel Company, had not filed its claim within the applicable statute of limitation. The Appellate Court ordered the case remanded to the lower Court for dismissal of the complaint. Thus, the plaintiff was awarded no damages or attorney fees.

The Metamora Landfill Superfund Site is located in Lapeer County, Michigan. The landfill began operations in 1955 as a privately owned, unregulated open dump utilized by residents of the Village of Metamora. The operator, Russell Parrish, began illegally accepting drums of liquid industrial wastes during the mid-1960s. This continued through the 1970s. At no point was it ever licensed to accept liquid industrial wastes.

In 1969, the Plaintiff, John R. Sand & Gravel Company, entered into a 50-year lease with Parrish which granted it the exclusive right to mine sand and gravel on the Parrish property. At the time plaintiff entered into the lease, the landfill was in existence and operating as a landfill.

In September 1984, the Site was placed on the NPL. A RI/FS was conducted and two RODs were issued: one requiring the excavation and disposal of more than 30,000 drums at the Site, and the second requiring the remediation of contaminated groundwater and the closure and capping of the landfill. Both of these RODs were implemented by the PRPs. In the area covered by the landfill cap, EPA required that institutional controls be put in place to preclude activities, including mining, that could disturb the cap.

In June 2002, Plaintiff filed a complaint alleging that the environmental remediation of the site that excluded Plaintiff from a portion of the site caused a physical taking of a portion of its sand and gravel mining lease. The United States filed several pre-trial motions, one which was for summary judgment based on the statute of limitation. The lower Court found that the taking claim was timely filed and denied the motion.

After a trial on liability, the lower Court ruled in the United States' favor that there was no taking and thus awarded the plaintiff no damages or attorney fees. The lower Court's decision stated that the plaintiff lacked a compensable property interest because it took the mining lease subject to the existence of the landfill and allowed the landfill to continue to operate in an area that was subject to the lease. The lower Court also went on to rule that any mining in the area of the landfill cap could impact the existing groundwater remediation and endangering the public health and safety, thereby creating a public nuisance. Since the mining would be a public nuisance, preventing the plaintiff from mining would not be a compensable interest.

On appeal, the United States did not brief the issue of the statute of limitation. The Appellate Court, however, in a 2-1 decision, based on an amicus brief filed by the PRP group doing the work at the Site and sua sponte, considered the issue of the applicable statute of limitation. The Appellate Court disagreed with the lower Court and found that the taking claim had accrued more than six years prior to the filing of the complaint. Thus, the taking claim was time barred. The Appellate Court vacated the lower Court’s decision and remanded the case with instruction that the lower Court dismiss the plaintiff’s complaint.

Interestingly, the dissenting opinion, while finding that the taking claim was timely filed, stated it would have affirmed the lower Court ruling that there was no taking because the plaintiff took its mining lease subject to the existing landfill.

Contact: Peter Felitti, ORC, (312) 886-5114

Region 5 signs a Consent Agreement and Final Order with Ashland Inc., Calumet City, Il

On July 27, 2006 Region 5 signed a Consent Agreement and Final Order (CAFO) with Ashland Inc. (Ashland) that both initiates and fully resolves the Finding of Violation (FOV) issued to Ashland on August 24, 2005 for violations of 40 C.F.R. Part 63, subpart OOO, which included failure to conduct weekly visual inspections for pumps and agitators in light liquid service and failure to follow heat exchange system hazardous air pollutant (HAP) sampling requirements. Representatives from EPA and Ashland met in October 2005 to discuss the FOV. EPA planned to file a complaint for $117,000. The parties, however, reached a settlement in which the Ashland proposes to perform a Supplemental Environmental Project (SEP) which consists of installing and maintaining nine existing pumps with nine sealess pumps at Ashland’s Calumet City facility. The sealess pumps will reduce emissions of a mixture of volatile organic matter (VOM) and HAP by 114 pounds per year. This emission reduction makes this a beneficial SEP. The cost of the SEP is estimated at $154,200. In consideration of Ashland’s cooperation, attitude, SEP and other factors as justice may require, Region 5 agreed to reduce the civil penalty to $60,000 in settlement of the case.

Contact: Cathleen Martwick, ORC, primary contact 312-886-7166; Joseph Ulfig, additional contact 312-353-8205.

Bad River Band of Lake Superior Tribe of Chippewa Indians CWA 303/401 Treatment as State Application

On March 1, 2006, the Bad River Band of Lake Superior Tribe of Chippewa Indians (BRB) submitted an application to the Region for treatment in a similar manner as a State (TAS) under Sections 303, 401 and 518 of the Clean Water Act (CWA) for purposes of administering water quality standards. Approval of the application would allow BRB to adopt, review, and revise water quality standards pursuant to Section 303(c) of the CWA and to certify that discharges comply with those water quality standards pursuant to Section 401 of the CWA for all surface waters within BRB’s Reservation. The Region has now deemed the BRB application to be complete, and will be seeking comment from the State of Wisconsin on jurisdictional aspects of the application. The public will also be notified of this application via a press release and an ad in a local newspaper. This is the second active TAS application Region 5 currently has been asked to review for a Wisconsin tribe.

The Bad River reservation is located in northwestern Wisconsin and is one of the largest in the state. It includes portions of Lake Superior's shoreline as well as many rivers and streams, as well as large areas of wetlands, most significantly the Kakagon/Bad River Sloughs, which is an area where much of the tribe's wild rice grows. The reservation was established by Treaty of 1854. The reservation encompasses roughly 125,000 acres, with about 27,000 acres (about 21%) held in fee by non-members. The remaining lands are roughly divided into 58,000 acres held in trust for the Band; about 17,500 acres owned in fee by the Band or by Band members; and about 3,000 acres owned by municipalities or agencies. The Band had submitted a draft application in the late 1990s and has been developing the application for the past several years.

Contacts: Barbara Wester, ORC, (312) 353-8514 and Rodger Field, ORC, (312) 353-8243

August 14 , 2006

Judge Friedman of Eastern District of Michigan Orders Status Conference in the Clean Water Act Case U.S. v. Rapanos, et al.

 On August 16, 2006, Judge Friedman of the Eastern District of Michigan ordered a status conference to be held on November 2, 2006 in the Clean Water Act, Section 404 (wetlands) case United States v. John A. Rapanos, et al. (E.D.MI) Civil Action No. 94-CV-70788DT. The case was remanded to the district court by the United States Court of Appeals for the Sixth Circuit on August 2, 2006 for further proceedings consistent with a prior ruling of the United States Supreme Court. The matter was returned to the Sixth Circuit by the Supreme Court on June 19, 2006 in a decision vacating the prior judgment of the appellate court and remanding the matter for further proceedings. See John A. Rapanos, et ux., et al. v United States (No.04-1034).

Contact: John Steketee, Region 5 ORC, (312) 886-0558

United States Files Complaint Against A. Finkl & Sons Co. and Lodges Consent Decree Resolving Violations of the Clean Air Act in Chicago, Illinois

On August 9, 2006, the United States filed a complaint against A. Finkl & Sons Co. alleging violations of the Clean Air Act in the United States District Court for the Northern District of Illinois, Civil Action No. 06 C 4297. On August 11, 2006 the United States lodged a consent decree resolving the alleged violations. A. Finkl manufactures steel ingots and various types of steel forgings in two electric arc furnaces (EAFs) at its facility located at 2011 Southport Avenue in Chicago, Illinois. A. Finkl replaced the transformers used to power both EAFs with more powerful transformers in 1989 and 1997. The United States contends that the replacement of the transformers increased the maximum hourly emission rate of particulate matter from the EAFs. The complaint alleges that A. Finkl undertook modifications of the EAFs without complying with the New Source Performance Standards (NSPS) “Standards for Electric Arc Furnaces and Argon-Oxygen Decarburization Vessels Constructed After August 17, 1983” at Subpart AAa of 40 C.F.R. Part 60, operated the EAFs without having a valid Clean Air Act Title V operating permit that incorporated these NSPS requirements and failed to obtain operating permits for the modifications in violation Illinois State Implementation Plan.

The consent decree requires A. Finkl to pay a civil penalty of $75,000, to fulfill certain compliance requirements, and to perform two Supplemental Environmental Projects (SEPs). The compliance requirements in the consent decree obligate A. Finkl to comply with all applicable requirements of the NSPS for electric arc furnaces at Subpart AAa of 40 C.F.R. Part 60, including emission standards, monitoring requirements, operational and equipment standards, maintenance requirements, and recordkeeping and reporting requirements. The consent decree also requires A. Finkl to conduct performance tests to demonstrate compliance with the emission limitations in the NSPS. In addition, A. Finkl will submit an application for an amendment to its Title V permit which includes compliance with the emission limitations and other requirements of the NSPS. The consent decree also requires A. Finkl to spend $620,000 to perform the following two SEPs: 1) A. Finkl will install low NO x (nitrogen oxide) burners on one of its gas fired furnaces resulting in an estimated reduction in NO x emissions of five tons per year at a cost of at least $545,000; and 2) A. Finkl will enter into a contract for $75,000 with the City of Chicago to retrofit 34 vehicles owned by the City with diesel oxidation catalysts.

Primary contact: Christine Liszewski, (312) 886-4670, additional contact: Brian Dickens, (312) 886-6073

EPA Settles Section 1018 Lead-Based Paint Case in Minnesota

On August 3, 2006, the Environmental Protection Agency, the Department of Housing and Urban Development, and the U.S. Attorney’s Office for the District of Minnesota lodged a consent decree with a Minneapolis landlord, Steven J. Meldahl, the owner of SJM Properties, for violating reporting and recordkeeping requirements regarding the disclosure of lead-based paint information. Meldahl has agreed to address all lead-based paint hazards in the 34 Minneapolis rental homes he owns and manages. In addition to making his rental units lead safe, Meldahl will pay a civil penalty of $5,000 for violating Section 1018 of the Lead-Based Paint Hazard Reduction Act of 1992 and its implementing regulations at 40 C.F.R. Section 745, Subpart F (“Lead Disclosure Rule”).

Following HUD’s inspection, EPA issued an administrative subpoena to SJM Properties for copies of all lease agreements. In reviewing the subpoena response, HUD and EPA discovered that Meldahl had purchased and was using non-compliant lead disclosure forms from an outside entity.

This settlement is the sixth consent decree in Minnesota that requires landlords to abate all lead hazards in their rental units. Pursuant to the six consent decrees, nearly 5,000 rental units in Minneapolis and St. Paul will be made lead safe for tenants. Moreover, the landlords involved in these six settlements have paid civil penalties as well as provided over $170,000 for local children’s health projects, including funding a mobile lead poisoning screening vehicle called the "Leady Eddie Van." The "Leady Eddie Van" is now fully equipped and being used to screen children for lead poisoning throughout Minnesota.

In 2001, HUD launched a comprehensive investigation of landlord compliance of the Department’s Lead Disclosure Rule in Minneapolis. The Residential Lead-Based Paint Hazard Reduction Act of 1992 and the Lead Disclosure Rule require home sellers and landlords of housing built before 1978 to provide each purchaser or tenant with a lead information pamphlet, any available information and/or reports concerning lead-based paint or lead-based paint hazards in the property, and a Lead Warning Statement to be signed by the parties. Sellers must also provide purchasers with an opportunity to conduct a lead-based paint inspection and/or risk assessment at the purchaser's expense.

Eliminating lead-based paint hazards in older low-income housing is essential if childhood lead poisoning is to be eradicated. Lead exposure causes reduced IQ, learning disabilities, developmental delays, reduced height, poorer hearing, and a host of other health problems in young children. Many of these effects are thought to be irreversible. In later years, lead-poisoned children are much more likely to drop out of school, become juvenile delinquents and engage in criminal and other anti-social behavior. As reported in the New England Journal of Medicine, researchers found that even at low levels, lead exposure in children can significantly impact IQ and even delay puberty in young girls.

At higher levels, lead can damage a child's kidneys and central nervous system and cause anemia, coma, convulsions and even death. According to the Centers for Disease Control and Prevention (“CDC”), about 310,000 of the nation's 20 million children under the age of six have blood lead levels high enough to impair their ability to think, concentrate and learn.

According to CDC estimates, the percentage of children with elevated blood lead levels has been cut by two-thirds since the early 1990s, although the prevalence of childhood lead poisoning in low-income, older housing without federal assistance remains high. HUD estimates that the number of houses with lead paint has declined from 64 million in 1990 to 38 million in 2000. About 24 million homes have significant lead-based paint hazards.

Contacts: Mary McAuliffe, ORC, primary contact 312-886-6237; Scott Cooper, additional contact 312-886-1332

EPA Issues Unilateral Administrative Order Under RCRA Section 3013 to Samuel Schott and Schott Metal Products Company, Akron, Ohio

On August 3, 2006, the Director of Region 5’s Waste, Pesticides and Toxics Division signed a RCRA § 3013 unilateral administrative order (UAO) directed to Samuel Schott and Schott Metal Products Company requiring sampling and monitoring at Schott Metals’s facility in Akron, Ohio. This gesture followed EPA’s offer of a consent instrument for the work to be performed; the respondents proposed and then cancelled several negotiation sessions during the period of the offer.

Schott Metal Products operates a vehicle products manufacturing facility in Akron, Ohio. Samuel Schott is its principal officer, and owns several of the parcels on which the facility is situated. The facility is in a residential area, and homes in the area use groundwater wells for drinking water. Schott Metals’ operations result in three waste streams: steel scrap, degreasing wastes containing trichloroethylene, and paint sludges containing toluene and xylene. Following visits to the facility and sampling in 1988, Ohio EPA concluded that soils at the facility were contaminated with trichloroethylene (TCE), toluene and xylene. Ohio EPA also concluded that there were three unpermitted solid waste management units, including a waste disposal unit where paint sludges and cleaning wastes were simply dumped on the ground, a drum storage area where drums containing TCE sludge were staged pending disposal, and an area beneath a stack at a spray painting booth where paint waste sludges accumulated.

Following a grand jury proceeding in 1988, Schott was indicted in Ohio state court for illegal disposal of hazardous waste. Samuel Schott pleaded guilty to a criminal endangerment charge and Schott Metal Products pleaded guilty to unlawfully and recklessly disposing of hazardous waste. This was followed by an almost sixteen-year effort to bring Schott Metals into compliance with Ohio’s RCRA program closure requirements. These efforts included entry of a 1990 Consent Order between Schott and the State of Ohio calling for submittal and implementation of a closure plan and a groundwater monitoring plan; after Schott failed to comply with the Order, Ohio commenced civil contempt proceedings. Schott thereafter submitted a series of plans and pursued administrative appeals of Ohio’s determinations regarding them, engaged in negotiations with Ohio to resolve the appeals, and then failed to comply with the agreements reached. As of 2005, Schott had submitted a proposed soil sampling and analysis plan which Ohio EPA determined to be grossly deficient. Upon concluding that Schott would not make good faith efforts to comply with the most recent settlement agreement, Ohio referred the matter to EPA Region 5. Region 5 offered a consent agreement to Schott and Schott Metals in March 2006, but the offer expired after counsel for Schott repeatedly proposed and then unilaterally cancelled dates for negotiating the consent order’s terms.

Contact: Tom M. Williams, 312-886-0814; Program contact: Tammy Moore, 312-886-6181.

Western District of Michigan enters Consent Decree resolving violations of the Clean Air Act by S.D. Warren Company

On August 9, 2006, the Western District of Michigan entered a Consent Decree resolving Clean Air Act violations by S.D. Warren Company, d/b/a SAAPI Fine Paper North America (SAPPI) at SAPPI’s kraft pulp mill in Muskegon, Michigan. Specifically, the Complaint in the matter alleged that SAPPI failed to comply with the New Source Performance Standards (NSPS) for Kraft Pulp Mills at 40 C.F.R. Part 60, Subpart BB, and the Prevention of Significant Deterioration (PSD) regulations at 40 C.F.R. § 52.21 relating to the emissions of sulfur dioxide, nitrogen oxide, and carbon monoxide from its recovery furnace. Prior to resolving this matter, SAPPI deactivated its recovery furnace. Under the terms of the Consent Decree, if SAPPI re-activates the recovery furnace, SAAPI must consider the recovery furnace as a new source and comply with NSPS and PSD permitting requirements for such sources. In addition, SAPPI will pay a civil penalty of $586,106.

Contact: Cynthia King, Region 5 ORC, (312) 886-6831.

August 21, 2006

Region 5 Files a Combined Complaint and Consent Agreement with United Phosphorous, Inc.

Region 5 initiated prefiling discussions on this matter in July, 2006. The proposed penalty was $13,000. In August 2006,Region 5 filed a combined complaint and consent agreement with United Phosphorous to settle violations of Section 12(a)(1)(E) and 12(a)(2)(N) of FIFRA, 7 U.S.C. §§ 136j(a)(1)(E), 136j(a)(2)(N) and 40 C.F.R. §156.10(a). Specifically, United Phosphorous failed to file a report (a Notice of Arrival (NOA)) for the import shipment of one of its pesticides, as required by Sections 17(c) and (e) of FIFRA, 7 U.S.C. §§ 136o(c) and 136o(e) and 19 C.F.R. § 12.112 and distributed or sold a pesticide product that was misbranded because there were no labels affixed to any of the 160 / 100 kilogram fiberboard drums of the pesticide in question. United Phosphorous has agreed to pay a civil penalty of $13,000.

Contact: Nidhi O’Meara, primary contact 312-886-0568; Claudia Niess, additional contact 312-886-7598.

EPA Settles Secondary Aluminum Hazardous Air Pollutant Cases with Remelt Services, Inc. and Beck Aluminum Corporation.

On August 17, 2006, Region 5’s Regional Administrator signed consent agreement and final orders for Remelt Services, Inc., Cleveland, Ohio, and Beck Aluminum Corporation, Mayfield Heights, Ohio to resolve administrative complaints filed against the companies for violations of the secondary aluminum national air standards for hazardous air pollutants. These violations occurred at a facility located in Cleveland, Ohio which was operating under the name of Remelt Services, Inc. The secondary aluminum standards regulate the emissions of dioxin and furans from the secondary aluminum industrial sector. Administrative complaints were filed on September 28, 2005, and April 11, 2006, against Remelt Services, Inc., and Beck Aluminum Corporation, respectively. The alleged violations which occurred at the Cleveland, Ohio facility include a failure to install an afterburner control device temperature monitoring system and data logger for at least 16 months past the March 20, 2003, deadline specified in the regulations; a failure to submit an operation maintenance and malfunction plan for the facility for at least 17 months past the March 20, 2003, deadline; and a failure to consistently maintain an afterburner minimum operating temperature of 1,600 degrees Fahrenheit specified by the regulations for the period of September 2004 through May 2005. With respect to Beck Aluminum Corporation, the complaint filed against it alleged that it had operator liability under the Clean Air Act for violations which occurred at the Cleveland, Ohio facility beginning in September 2003, when it initiated management and control of the facility. The complaints proposed administrative penalties of $119,822 and $145,926 against Remelt Services, Inc., and Beck Aluminum Corporation, respectively. In December 2005, secondary aluminum operations ceased at the Cleveland, Ohio facility, and Remelt Services, Inc. filed a certificate of dissolution with the Ohio Secretary of State. Under the settlements with EPA, Remelt Services, Inc. and Beck Aluminum Corporation will pay $10,000 and $70,000 penalties, respectively.

Primary contact, Mark Palermo: (312) 886-6082 or Erik Olson (312) 8866-6829.

Region 5 files Consent Agreement and Final Order with Von Roll America, Inc., East Liverpool, Ohio

On August 17, 2006, Region 5 and Von Roll America, Inc., (Von Roll) entered into a Consent Agreement and Final Order (CAFO) resolving U.S. EPA’s claims alleging that Von Roll violated the Toxic Substances Control Act (TSCA) 15 U.S.C. § 2601, et seq. The CAFO resolves Von Roll’s self-disclosed violation of the TSCA polychlorinated biphenyl (PCB) rule at 40 C.F.R. § 761.60 which requires that liquid PCBs at concentrations greater than 50 ppm be disposed of in an incinerator which complies with 40 C.F.R. § 761.70 or a chemical waste landfill which complies with 40 C.F.R. § 761.75. Specifically, from March 21, 2005, to March 30, 2005, Von Roll disposed of PCB-contaminated liquid waste from storage tank ST-13 by sending that PCB-contaminated liquid waste to its hazardous waste incinerator, where the PCB-contaminated liquid was incinerated. Von Roll was unaware that its storage tank ST-13 contained PCBs at concentrations up to 198 ppm, which had been inadvertently delivered to Von Roll in a load of “aqueous waste” that was not manifested as containing PCBs. The Von Roll America, Inc., incinerator is not approved by the U.S. EPA for the disposal of PCBs, as required by 40 C.F.R. § 761.70 or 761.75. Von Roll's failure to dispose of PCBs at concentrations of 50 ppm or greater in an incinerator which complies with 40 C.F.R. § 761.70 or a chemical waste landfill which complies with 40 C.F.R. § 761.75 constitutes a violation of 40 C.F.R. § 761.60 and Section 15 of TSCA, 15 U.S.C. § 2614. In settlement, Von Roll agrees to pay a civil penalty in the amount of $23,375.

Contact: Jeffrey A. Cahn, primary contact 312-886-6670; Kenneth Zolnierczyk, additional contact 312-353-9687.

On Interlocutory Appeal, Seventh Circuit Court of Appeals Affirms Application of “Total Annual Emissions” Test in United States v. Cinergy Corp. New Source Review Litigation

On August 17, 2006, a three-judge panel of the U.S. Court of Appeals for the Seventh Circuit affirmed an August 29, 2005, decision of the U.S. District Court for the Southern District of Indiana denying a motion for partial summary judgment brought by Cinergy Corporation in litigation brought pursuant to the Clean Air Act. In its unsuccessful motion and in its argument to the Court of Appeals, Cinergy had argued that the requirement of a permit application did not reach physical modifications not resulting in an increase in the hourly emissions rate. In an opinion by Judge Posner, the Court rejected this argument, and observed that by reaching a contrary result in United States v. Duke Energy, the 4 th Circuit Court of Appeals had “stepped out of bounds.” United States v. Cinergy Corp., Case No. 06-1224 (7 th Cir. July 17, 2006), slip op. at 7. The case thus continues a conflict among federal judicial circuits, but is consistent with the D.C. Circuit Court of Appeals’ decision in New York v. EPA, 413 F.3d 3 (D.C. Cir. 2005)(per curiam).

Cinergy Corporation operates several coal-fired electric power generating stations in Ohio and Indiana. In 1999, the United States commenced an action against Cinergy and its predecessors, Cincinnati Gas & Electric and PSI Energy, alleging among other things that the defendants had undertaken major physical changes of certain generating plants without first obtaining permits required for the prevention of significant deterioration of air quality. As of the completion of discovery, the United States and the intervening plaintiffs alleged violations of the Clean Air Act at six of Cinergy’s generating stations: the Beckjord and Miami Fort Stations near Cincinnati, Ohio, the Cayuga Station near Cayuga, Indiana, the Wabash River Station near Terre Haute, Indiana, the Gibson Station near Princeton, Indiana, and the Gallagher Station near Louisville, Kentucky. At certain electric generating units at each of these stations, the plaintiffs alleged, the major physical changes Cinergy or its predecessors engaged in resulted in a significant net increase in emissions, triggering the requirement of a permit under 40 CFR 52.21.

The parties filed cross-motions for summary judgment on the issue of calculation of emissions, and in their motion, Cinergy and the other defendants argued in essence (among other things) that because Congress amended the Clean Air Act’s Prevention of Significant Deterioration provisions to incorporate the earlier NSPS definition of “modification,” and because the regulatory definition of “modification” in the provisions implementing NSPS was “any physical or operational change to an existing facility which results in an increase in the emissions rate . . .expressed as kg/hr,” 40 CFR 60.14(a) and (b), the regulations implementing the PSD and non-attainment NSR provisions must also be read to contemplate an hourly rate test. The District Court denied their motion and granted the United States’ motion, and in so doing re-affirmed an earlier holding in United States v. Southern Indiana Gas & Electric Co., 2002 WL 16298 (S.D. Ind. July 18, 2002) and expressly rejected the 4 th Circuit’s reasoning in Duke. It subsequently granted defendants’ motion for leave to take an interlocutory appeal. On February 14, 2006, the Court of Appeals agreed to hear Cinergy’s appeal, and oral argument was held June 2, 2006.

Contrary to Cinergy’s argument that calculating actual emissions using “actual operating hours” under 40 CFR 52.21(b)(21)(ii) means “an ‘emissions increase’ is found only if the hourly rate of emissions increases as a result of physical change,” the court remarked that the “actual operating hours”  “ . . .is more naturally read to mean the total number of hours that the plant is in operation.” Slip op. at 4. Further, according to the court, Cinergy’s interpretation would give a utility company facing a choice between a physical change that increased the hourly emissions rate and one that enabled an increase in the number of hours of operation an incentive to follow the latter course even if it would produce a higher annual level of emissions, because it would elude the permit requirement, and enable the company to increase the plant’s output without having to invest in preventing the enhanced output from generating increased pollution. Id. at 4-5.

Addressing Cinergy’s principal argument that Congress required that the EPA’s regulation define “modification” as a change in the hourly emissions rate, the court stated that since the regulation “did not define it so, this seems an attack on the validity of the regulation rather than an argument about its meaning,” and thus beyond a regional circuit court’s jurisdiction to resolve. Id. at 6. In any event, the court continued, the argument is unconvincing, being based on a false premise. Contrary to Cinergy’s position, words can have different meanings within the same statute, and while there may be a natural presumption that identical words used in the same statute are intended to have the same meaning, the presumption is not rigid; they may be used in one sense in one part of a statute and another sense in another. That, the court continued, is certainly the case with a vague word like “modification,” and “all the more when the statutory provisions that contain the word were enacted by different Congresses for different purposes.” Id. at 7-8 (citations omitted). The more recent PSD provisions of the Act were directed towards a more modern approach of limiting pollution rather than technology, and so “it is equally natural to interpret ‘modification’ in that part more broadly in order to prevent opening a loophole that would allow pollution to soar unregulated.” Id. at 8 (citations omitted). Further, vague statutory terms in regulatory statutes can operate as delegations to the regulatory agency in question and here, the question of whether an hourly rate of emissions or some other rate was appropriate was left to EPA.

Meanwhile, the U.S. Supreme Court has granted certiorari in the Duke Energy matter.

Region 5 Contacts: Gaylene Vasaturo, (312) 886-1811; Ignacio Arrazola (312) 886-7152; Tom Williams, (312) 886-0814; Charles Mikalian, (312) 886-2262; Crissy Pellegrin, (312) 353-5263; Timothy Thurlow, (312) 886-6623. OECA Contacts: David Schnare, (202) 564-4183; Edward Messina, (202) 564-1191; Meredith Miller, (202) 564-4184.

Region 5 Files a Combined Complaint and Consent Agreement with EQ Detroit, Inc. in Wayne, Michigan

Region 5 initiated prefiling discussions on this matter in June, 2006. The proposed penalty was $11,400. On August 22, 2006,Region 5 filed a combined complaint and consent agreement with the Respondent to settle violations of Section 3002 of RCRA, 42 U.S.C. § 6922. Specifically, the Respondent failed to submit an accurate annual report pursuant to 40 C.F.R. § 262.54(a)(4) because it failed to report the correct amount of hazardous waste shipped to one consignee and failed to report any amount of hazardous waste shipped to another consignee. During settlement discussions, the Respondent agreed to pay a civil penalty of $10,400.

Contact: Nidhi O'Meara, primary contact 312-886-0568; Will Damico, additional contact 312-353-8207.

August 28, 2006

Company President And Company Plead Guilty to Making Illegal Discharges To The Sewer System And A Hazardous Waste Violation; United States v. Melvin Tatman And Multi-Service, Inc.

On August 30, 2006, Melvin Tatman and Multi-Service, Inc. (MSI) pled guilty to four charges of illegally discharging industrial wastewater into the Dayton sewer system and for a hazardous waste violation. Mr. Tatman is the owner and President of MSI, an Ohio corporation, which is a textile cleaning facility in Dayton, Ohio. The industrial laundering operation at the facility produces wastewater that includes heavy metals, waste oil, and organic chemicals. The Information alleged that Mr. Tatman and MSI knowingly discharged wastewater with a pH below 5.0 into the Dayton sewer system in the first count, that Mr. Tatman and MSI negligently discharged ignitable wastewater into the Dayton sewer system in the second count, and that Mr. Tatman and MSI negligently bypassed the pretreatment system associated with the industrial laundering operation at MSI’s facility in Dayton. In the last count, the Information alleged that MSI knowingly caused 3,500 gallons of ignitable hazardous waste to be transported without a manifest. This case was investigated, in a joint investigation, by the Ohio Bureau of Criminal Identification and Investigation, the Ohio Environmental Protection Agency, the City of Dayton, and the U.S. EPA CID, all members of the Southwest Ohio Environmental Crimes Task Force. Sentencing is scheduled for December 8, 2006.

Contact:  Brad Beeson 440-250-1761

Region Settles Ammonia Release Reporting Case Under CERCLA and EPCRA Against Associated Milk Producers, Inc., New Ulm, Minnesota

On, August 14, 2006, Region 5 filed a Consent Agreement and Final Order (CAFO) resolving an administrative penalty action against Associated Milk Producers, Inc. (Associated Milk) at its New Ulm, Minnesota facility. The administrative complaint in the matter alleged that Associated Milk violated CERCLA Section 103(a) of the Comprehensive Environmental Response Compensation and Liability Act (CERCLA) and the Emergency Planning & Community Right to Know Act (EPCRA) Section 304(c) reporting requirements for a release of ammonia that occurred at the facility on December 1, 2004.

Section 103(a) of CERCLA, 42 U.S.C. § 9603(a), requires immediate notification to the National Response Center (NRC) of a release of a hazardous substance in an amount equal to or greater than the reportable quantity (RQ). Section 304(c) of EPCRA, 42 U.S.C. § 11004(c), requires written follow-up notice of a release to the State Emergency Response Commission (SERC) as soon as practicable.

On December 1, 2004, Associated Milk’s facility had a fire which extensively damaged the facility, and resulted in the release of approximately 3,800 pounds of ammonia. Ammonia is a CERCLA “hazardous substance,” and an EPCRA “extremely hazardous substance,” with a RQ of 100 pounds. Associated Milk did not notify the NRC of the release for about 5 hours and 43 minutes after it began, and did not provide written follow up to the SERC until 80 days after the fire.

On January 6, 2006, EPA filed a 2-count administrative complaint for the violations at issue, proposing a CERCLA penalty amount of $32,500 and an EPCRA penalty amount of $55,900 (for a total civil penalty amount of $88,400). Associated Milk was co-operative and entered into negotiations which culminated in agreement on the terms of the CAFO. In order to prevent or reduce future releases of ammonia, the facility has installed mechanical control devices. Associated Milk provided information which demonstrated that even though approximately 3,800 pounds of ammonia was released from storage tanks at the facility during the fire, much of the ammonia was consumed in the fire and fire-fighting water. The EPA concluded that it could not prove that ammonia left the facility boundaries, as relevant to the EPCRA count, above the reportable quantity, and therefore decided not to pursue a penalty for the EPCRA count. In the settlement reflected in the CAFO, based on the facts of the situation producing the release, the cooperation and good faith negotiations by Associated Milk throughout the investigation and settlement process, and pursuant to the CERCLA and EPCRA Enforcement Response Policy, the EPA mitigated the penalty to $20,000.

Contact: Andre Daugavietis, Associate Regional Counsel, 312-886-6663.

On August 28, 2006, the Federal District Court (N.D. IL-W.Div.) granted the United States unopposed Motion to Enter a Cost Recovery Consent Decree Concerning Source Area 7 of the Southeast Rockford Groundwater Contamination Superfund Site. U.S. v. Glen Ekberg, No. 01-CV-50457.

The court issued a minute order in a Superfund cost recovery case (Section 107 of the Comprehensive Environmental Response Compensation and Liability Act). The United States and the current owner, Mr. Glen Ekberg, of a primary portion of Source Area 7 of the Southeast Rockford Groundwater Contamination (SER) Superfund Site negotiated a Consent Decree for payment by Mr. Ekberg of $1,231,125.00 to U.S. EPA, access for U.S. EPA (and Illinois EPA and their recognized contractors) in the performance of the Remedial Design and Remedial Action at Source Area 7 of the SER Site, acceptance of restrictions on use of groundwater and of certain portions of Ekberg’s property, and due care and cooperation with U.S. EPA and Illinois EPA. In return, Mr. Eckberg has received contribution protection and covenants not to sue from U.S. EPA for past costs and future costs related to Source Area 7 of the Site.

The SER Superfund Site is an approximately 7.5 square mile area located in Rockford, Illinois. The site boundaries are defined by the presence of a contaminant plume (composed of VOCs, PAHs, xylene, metals and other hazardous substances) in the groundwater that exceeds 10 parts per billion. After extensive groundwater monitoring, study and analysis, a June 2002 Record of Decision (ROD) was issued. The ROD identifies 4 principal Source Areas of contamination, 4, 7, 9/10 and 11. The present litigation concerns only Source Area 7, considered the primary source of contamination for the site. The defendant in the present matter, Mr. Glen Ekberg, owns a significant portion of Source Area 7. Mr. Ekberg refused to previously settle with the federal and state governments. He has also presented obstacles and delays to access for state and federal EPA personnel and their contractors, seeking to begin Post ROD RD/RA work at Source Area 7. Region 5 referred the case against Mr. Ekberg for cost recovery (of approximately $120,000 past costs at Source Area 7 and future remedial costs for Source Area 7). Future response costs are estimated to be approximately $2.5 million dollars. In December 2005, the federal court denied the parties cross-motions for summary judgment, and directed the parties to seek settlement through mediation. In May 2006, the parties achieved a settlement in principle. A Consent Decree was lodged with the court in June 2006. The 30-day federal register notice period closed without public comment on August 11, 2006.

Contacts: Thomas Turner, Multi-Media Branch I, Section IV 312-886-6613, Russ Hart, RPM Remedial Branch, SF Div. 312-886-4844.