[Federal Register Volume 83, Number 96 (Thursday, May 17, 2018)]
[Notices]
[Pages 22974-22976]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-10568]


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ENVIRONMENTAL PROTECTION AGENCY

[CWA-05-2016-0015; FRL-9978-10-OARM]


Order Denying Petition To Set Aside Consent Agreement and 
Proposed Final Order

AGENCY: Office of Administrative Law Judges, Environmental Protection 
Agency (EPA).

ACTION: Notice of order denying petition to set aside consent agreement 
and proposed final order.

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SUMMARY: In accordance with section 311(b)(6)(C)(iii) of the Clean 
Water Act (CWA or Act), notice is hereby given that an Order Denying 
Petition to Set Aside Consent Agreement and Proposed Final Order has 
been issued in the matter styled as In the Matter of BP Products North 
America Inc., Docket No. CWA-05-2016-0015. This document serves to 
notify the public of the denial of the Petition to Set Aside Consent 
Agreement and Proposed Final Order filed in the matter and explain the 
reasons for such denial.

ADDRESSES: To access and review documents filed in the matter that is 
the subject of this document, please visit https://yosemite.epa.gov/oarm/alj/alj_web_docket.nsf/Dockets/CWA-05-2016-0015.

FOR FURTHER INFORMATION CONTACT: Jennifer Almase, Attorney-Advisor, 
Office of Administrative Law Judges (1900R), Environmental Protection 
Agency, 1200 Pennsylvania Ave. NW; telephone number: (202) 564-6255 
(main) or (202) 564-1170 (direct); fax number: (202) 565-0044; email 
address: [email protected].

SUPPLEMENTARY INFORMATION:

I. Legal Authority

    Section 311(b)(6)(A) of the CWA empowers EPA to assess a class I or 
class II administrative civil penalty against any owner, operator, or 
person in charge of any onshore facility from which oil or a hazardous 
substance is discharged in violation of section 311(b)(3), or who fails 
or refuses to comply with any regulation issued under section 311(j) to 
which that owner, operator, or person in charge is subject (33 U.S.C. 
1321(b)(6)(A)). However, before issuing an order assessing a class II 
civil penalty under section 311(b)(6), EPA is required by the CWA and 
the Consolidated Rules of Practice Governing the Administrative 
Assessment of Civil Penalties and the Revocation/Termination or 
Suspension of Permits (Rules of Practice) to provide public notice of 
and reasonable

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opportunity to comment on the proposed issuance of such order (33 
U.S.C. 1321(b)(6)(C)(i); 40 CFR 22.45(b)(1)).
    Any person who comments on the proposed assessment of a class II 
civil penalty under section 311(b)(6) is then entitled to receive 
notice of any hearing held under section 311(b)(6) of the CWA and at 
such hearing is entitled to a reasonable opportunity to be heard and to 
present evidence (33 U.S.C. 1321(b)(6)(C)(ii); 40 CFR 22.45(c)(1)). If 
no hearing is held before issuance of an order assessing a class II 
civil penalty under section 311(b)(6) of the CWA, such as where the 
administrative penalty action in question is settled pursuant to a 
consent agreement and final order, any person who commented on the 
proposed assessment may petition to set aside the order on the basis 
that material evidence was not considered and to hold a hearing on the 
penalty (33 U.S.C. 1321(b)(6)(C)(iii); 40 CFR 22.45(c)(4)(ii)).
    The CWA requires that if the evidence presented by the petitioner 
in support of the petition is material and was not considered in the 
issuance of the order, the Administrator shall immediately set aside 
such order and provide a hearing in accordance with section 
311(b)(6)(B)(ii) (33 U.S.C. 1321(b)(6)(C)(iii)). Conversely, if the 
Administrator denies a hearing, the Administrator shall provide to the 
petitioner, and publish in the Federal Register, notice of and reasons 
for such denial. Id.
    Pursuant to section 311 of the CWA, the authority to decide 
petitions by commenters to set aside final orders entered without a 
hearing and provide copies and/or notice of the decision has been 
delegated to Regional Administrators in administrative penalty actions 
brought by regional offices of EPA. Administrator's Delegation of 
Authority 2-52A (accessible at: http://intranet.epa.gov/ohr/rmpolicy/ads/dm/2-52A.pdf). The Rules of Practice require that where a commenter 
petitions to set aside a consent agreement and final order in an 
administrative penalty action brought by a regional office of EPA, the 
Regional Administrator shall assign a Petition Officer to consider and 
rule on the petition (40 CFR 22.45(c)(4)(iii)). Upon review of the 
petition and any response filed by the complainant, the Petition 
Officer shall then make written findings as to (A) the extent to which 
the petition states an issue relevant and material to the issuance of 
the consent agreement and proposed final order; (B) whether the 
complainant adequately considered and responded to the petition; and 
(C) whether resolution of the proceeding by the parties is appropriate 
without a hearing (40 CFR 22.45(c)(4)(v)).
    If the Petition Officer finds that a hearing is appropriate, the 
Presiding Officer shall order that the consent agreement and proposed 
final order be set aside and establish a schedule for a hearing (40 CFR 
22.45(c)(4)(vi)). Conversely, if the Petition Officer finds that 
resolution of the proceeding without a hearing is appropriate, the 
Petition Officer shall issue an order denying the petition and stating 
reasons for the denial (40 CFR 22.45(c)(4)(vii)). The Petition Officer 
shall then file the order with the Regional Hearing Clerk, serve copies 
of the on the parties and the commenter, and provide public notice of 
the order. Id.

II. Procedural Background

    In May of 2016, the Director of the Superfund Division of EPA's 
Region 5 (Complainant) and BP Products North America Inc. (Respondent) 
executed a Consent Agreement and Final Order (CAFO) in the matter 
styled as In the Matter of BP Products North America Inc., Docket No. 
CWA-05-2016-0015.\1\ The CAFO sought to simultaneously commence and 
conclude an administrative penalty action under section 
311(b)(6)(A)(ii) of the CWA against Respondent for alleged violations 
related to a discharge of oil from Respondent's petroleum refinery 
located at 2815 Indianapolis Boulevard in Whiting, Indiana (Facility), 
into Lake Michigan on March 24, 2014. Under the terms of the CAFO, 
Respondent admitted the jurisdictional allegations set forth in the 
CAFO but neither admitted nor denied the factual allegations and 
alleged violations. Nevertheless, Respondent waived its right to a 
hearing or to otherwise contest the CAFO, and agreed to pay a civil 
penalty in the amount of $151,899.
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    \1\ While titled ``Consent Agreement and Final Order,'' a final 
order was not actually included with the CAFO filed with this 
Tribunal. It is the execution of a final order by Region 5's 
Regional Administrator, and its subsequent filing with the Regional 
Hearing Clerk at Region 5, that will effectuate the parties' Consent 
Agreement and conclude the proceeding.
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    On or about June 1, 2016, EPA provided public notice of its intent 
to file the proposed CAFO and accept public comments thereon. Carlotta 
Blake-King, Carolyn A. Marsh, Debra Michaud, and Patricia Walter 
(Petitioners) timely filed comments on the proposed CAFO (Comments). 
Complainant subsequently prepared a Response to Comments Regarding 
Proposed CAFO (Response to Comments), which indicated that EPA would 
not be altering the proposed CAFO. The Response to Comments was mailed 
to Petitioners, together with a copy of the proposed CAFO, on or about 
January 17, 2017, and each Petitioner received the materials by January 
30, 2017. On or about February 24, 2017, Petitioners timely filed a 
joint petition seeking to set aside the proposed CAFO and have a public 
hearing held thereon (Petition).
    A Request to Assign Petition Officer (Request) was issued by Region 
5's Acting Regional Administrator on May 17, 2017, and served on 
Petitioners on May 30, 2017. In the Request, the Acting Regional 
Administrator stated that after considering the issues raised in the 
Petition, Complainant had decided not to withdraw the CAFO. 
Accordingly, the Acting Regional Administrator requested assignment of 
an Administrative Law Judge to consider and rule on the Petition 
pursuant to Sec.  22.45(c)(4)(iii) of the Rules of Practice, 40 CFR 
22.45(c)(4)(iii). By Order dated June 16, 2017, the undersigned was 
designated to preside over this matter, and Complainant was directed to 
file a response to the Petition. Complainant filed its Response to 
Petition to Set Aside Consent Agreement and Proposed Final Order 
(Response to Petition) on July 13, 2017.\2\
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    \2\ Richard C. Karl, who executed the CAFO as Region 5's 
Director of the Superfund Division, seemingly left that position by 
the time the Acting Regional Administrator issued the Request to 
Assign Petition Officer. In the Request, the Acting Regional 
Administrator noted that Complainant, the Acting Superfund Division 
Director, had decided not to withdraw the CAFO. Subsequently, 
Margaret M. Guerriero, as the Acting Director of Region 5's 
Superfund Division, submitted the Response to Petition.
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III. Denial of Petitioners' Petition

    On May 8, 2018, the undersigned issued an Order Denying Petition to 
Set Aside Consent Agreement and Proposed Final Order (Order). Therein, 
the undersigned denied the Petition without the need for a hearing on 
the basis that Petitioners had failed to present any relevant and 
material evidence that had not been adequately considered and responded 
to by Complainant.
    Specifically, Petitioners raised issues that the undersigned 
grouped into four categories.\3\ First, Petitioners argued that the 
alleged violations warranted the assessment of the maximum penalty of 
$187,500 allowed under the applicable law, suggesting that Complainant 
failed

[[Page 22976]]

in its penalty calculation to consider material evidence regarding the 
magnitude of the violations to the local community. Petitioners cited, 
among other considerations, that Lake Michigan is a source of drinking 
water for residents of the City of Chicago and surrounding region and 
that the March 24, 2014 discharge of oil from the Facility into Lake 
Michigan occurred only a few miles from the structures operating in 
Lake Michigan to collect that drinking water. Petitioners further 
argued that the violations were part of a broader environmental crisis 
perpetuated by Respondent. The undersigned determined that while 
Complainant did not provide a detailed explanation of how the civil 
penalty assessed in the proposed CAFO had been calculated, and in 
particular an account of how the environmental impact of the alleged 
violations on the community, if any, was considered, it had considered 
and responded to Petitioners' arguments in its Response to Comments and 
Response to Petition. The undersigned further found that Petitioners 
had produced no evidence to support their position or rebut 
Complainant's position that it had properly implemented the applicable 
policy governing its calculation and negotiation of the penalty 
assessed in the proposed CAFO. The undersigned concluded that 
Petitioners had not met the burden of demonstrating that the matters 
they raised with respect to the assessment of a higher penalty 
constituted material and relevant evidence that Complainant failed to 
consider in agreeing to the proposed CAFO. Thus, Petitioners' claim in 
this regard was denied.
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    \3\ Petitioners described the arguments set forth in the 
Petition as additions to the Comments they had previously submitted 
to EPA in response to the public notice of EPA's intent to file the 
proposed CAFO. Accordingly, the undersigned considered the arguments 
raised by Petitioners in both the Petition and the Comments.
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    Second, Petitioners urged that an additional fine of $100,000 be 
levied against Respondent for its purported culture of indifference 
towards health and safety, which, according to Petitioners, was evident 
from the violations Respondent has committed and the ineffective 
responses it has undertaken over many years. In considering this issue, 
the undersigned first noted that EPA is limited to imposing the maximum 
penalty permitted under applicable law for the violations alleged and 
determining the penalty based on the statutory factors and that 
Petitioners failed to cite any legal authority allowing EPA to impose a 
fine beyond the maximum statutory penalty. The undersigned then noted 
that Petitioners also failed to offer any argument or evidence 
rebutting Complainant's position that it had properly implemented the 
applicable policy governing its calculation and negotiation of the 
penalty assessed in the proposed CAFO, which takes the statutory 
penalty factors into account. Accordingly, the undersigned found that 
with respect to this issue, Petitioners did not present any fact or 
argument relevant and material to the proposed CAFO that was not 
already considered by Complainant. Thus, the claim was denied.
    Third, Petitioners urged that a Supplemental Environmental Project 
(SEP) be incorporated into the proposed CAFO for local projects and 
that local residents be included in the projects. In association with 
those requests, Petitioners questioned the manner in which funds for 
SEPs were distributed by EPA and the Department of Justice and asserted 
that residents had not been included in projects occurring in the Lake 
George Branch of the Indiana Harbor Ship Canal. The undersigned found 
that as Complainant had stated in its Response to Comments and Response 
to Petition, EPA lacks the legal authority to demand a SEP or control 
the distribution of civil penalty funds. The undersigned concluded that 
given this lack of authority, the issues raised by Petitioners with 
regard to a SEP were immaterial to the issuance of the proposed CAFO. 
Thus, this claim was denied.
    Fourth, Petitioners urged that an independent advisory committee 
and environmental monitoring program for Respondent's wastewater 
treatment plant be created. Petitioners then questioned Respondent's 
community outreach activities, which Complainant had referenced in its 
Response to Comments. The undersigned found that as argued by 
Complainant in its Response to Petition, EPA lacks the legal authority 
under section 311(b)(6) of the CWA to establish advisory committees or 
environmental monitoring programs or compel Respondent to engage in 
outreach activities. The undersigned concluded that given the absence 
of any material and relevant issue not considered by Complainant with 
respect to the course of action requested by Petitioners, their claim 
in this regard was also denied.
    Having found that Petitioners failed to present any relevant and 
material evidence that had not been adequately considered and responded 
to by Complainant in agreeing to the proposed CAFO, the undersigned 
then addressed Petitioners' requests for a public hearing in their 
Comments and Petition. Noting that Petitioners appeared to seek a 
public forum, at least in part, for the parties to explain the meaning 
of the proposed CAFO to the public, the undersigned observed that 
section 311(b)(6)(B)(ii) of the CWA and the Rules of Practice provide, 
not for a meeting of that nature, but rather a hearing at which 
evidence is presented for the purpose of determining whether 
Complainant met its burden of proving that Respondent committed the 
violations as alleged and that the proposed penalty is appropriate 
based on applicable law and policy. The undersigned noted that 
Petitioners did not specifically identify any testimonial or 
documentary evidence that they would present at any such hearing. The 
undersigned further noted that Petitioners did not offer in either 
their Comments or the Petition any relevant and material evidence or 
arguments that had not already been adequately addressed by 
Complainant. For these reasons, the undersigned found that resolution 
of the proceeding by the parties would be appropriate without a 
hearing.
    The undersigned thus issued the Order Denying Petition to Set Aside 
Consent Agreement and Proposed Final Order.

    Dated: May 8, 2018.
Susan L. Biro,
Chief Administrative Law Judge.
[FR Doc. 2018-10568 Filed 5-16-18; 8:45 am]
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