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Comm=
issioner,
Indiana Department of Environmental Management, Complainant,
v.
Bake=
r Oil
Company, d/b/a Johnny Hall-Mar, Inc.,
UST
Facility No. 8407,
Paol=
i,
2011=
OEA
106, (09-S-E-4308)
[2011 OEA 106, pag=
e 106
begins]
OFFICIAL SHORT CIT=
ATION
NAME: When referring 2011 OEA 106 this case site a=
s
Baker Oil Company, 2011 OEA 106.
TOPICS:
leaking underground storage tank (LUST)
underground storage tank (UST)
legal entity
Secretary of State
suspected petroleum release
petroleum spill
Initial Site Characterization (ISC)
hose leak
petroleum staining
concrete
asphalt
Violation Letter
Release Investigation and Confirmation Steps
corrosion protection
cathodically protected tank
impressed current records
broken equipment records
automatic tank gauge and leak detection
line leak detection
Notice of Violation
Agreed Order
Notice and Order of the Commissioner
Civil Penalty Policy, Doc. 99-0002-NPD
UST/LUST Civil Penalty Policy, Doc. 99-0001-NPD
inability to pay
Notice of Bankruptcy
pro se litigants
major extent of deviation
major potential for harm
days of noncompliance
base civil penalty
aggravating factors
mitigating factors
329 IAC 9-2-1
329 IAC 9-3-1(b)(1), (2)
329 IAC 9-3.1-2, (3)
329 IAC 9-3.1-4(b)(7)
329 IAC 9-4-1
329 IAC 9-4-3(2)
329 IAC 9-4-4
329 IAC 9-5-2
329 IAC 9-5-5.1(a)
329 IAC 9-7-5(2)
I.C. § 13-23-1-2
I.C. § 13-23-14-2, -3
PRESIDING
JUDGE:
Mary
L. Davidsen
PARTY
REPRESENTATIVES:
IDEM: &=
nbsp; Justin
D. Barrett, Esq.
Respondent: John M. Baker and=
Stacy
Baker, pro se
ORDER
ISSUED:
August
26, 2011
INDEX
CATEGORY:
Land
FURTHER
CASE ACTIVITY:
[none]
[2011 OEA 106, pag=
e 107
begins]
STATE OF
 = ; &n= bsp;  = ; ) = OF ENVIRONMENTAL ADJUDICATION
IN
THE MATTER OF:  =
; &n=
bsp;  =
; &n=
bsp; )
&=
nbsp; &nbs=
p; &=
nbsp; &nbs=
p; &=
nbsp; &nbs=
p; =
) &=
nbsp; &nbs=
p; &=
nbsp; &nbs=
p;
COMMISSIONER, INDIANA DEPARTMENT OF )
ENVIRONMENTAL MANAGEMENT, &= nbsp; )<= o:p>
Case Nos. 2006-15985-S, 2006-16478-S<=
span
style=3D'mso-tab-count:2'> &=
nbsp; )
Complainant, &=
nbsp; &nbs=
p; &=
nbsp; &nbs=
p; =
)
 =
; &n=
bsp;  =
; &n=
bsp;  =
; &n=
bsp;  =
; ) &=
nbsp;
 =
; v. &=
nbsp; &nbs=
p; &=
nbsp; &nbs=
p; &=
nbsp; &nbs=
p; ) &=
nbsp; Cause
No. 09-S-E-4308
 =
; &n=
bsp;  =
; &n=
bsp;  =
; &n=
bsp;  =
; ) &=
nbsp; &nbs=
p; &=
nbsp; &nbs=
p; =
BAKER OIL COMPANY, d/b/a &=
nbsp; &nbs=
p; )
JOHNNY HALL-MAR, INC., &=
nbsp; &nbs=
p; &=
nbsp; )
UST Facility No. 8407 &=
nbsp; &nbs=
p; &=
nbsp; &nbs=
p; )
PAOLI,
Respondent &=
nbsp; &nbs=
p; &=
nbsp; &nbs=
p; &=
nbsp; )
F=
INDINGS
OF FACT, CONCLUSIONS OF LAW and FINAL ORDER
<= o:p>
=
This
matter came before the Office of Environmental Adjudication (“OEAR=
21;
or “Court”) on final hearing as to whether
<= o:p>
F=
INDINGS
OF FACT
=
1. &n=
bsp;
At
all times noted in this Final Order, Respondent Baker Oil Company, d/b/a Jo=
hnny
Hall-Mar, Inc. (“Baker Oil” or “Respondent”) operat=
ed
underground storage tank systems at gas station facilities, including the
facility which is the subject of this administrative cause. This case concerns underground sto=
rage
tank (UST) facility I.D. number 8407 located at
[2011 OEA 106, pag=
e 108
begins]
=
2. &n=
bsp;
As
part of his job duties, Indiana Department of Environmental Management
(“IDEM”) Office of Land Quality/Leaking Underground Storage Tank
Section Project Manager Douglas Bartz inspected Respondent’s Site whe=
n a
petroleum spill was reported to IDEM by Orange
=
3. &n=
bsp;
On
March 25, 2002, April 23, 2003, and February 8, 2006, Project Manager Bartz
sent letters to Baker Oil requesting that Baker Oil perform an Initial Site
Characterization (“ISC”) of the Site, and perform other specifi=
ed
measures, in order to bring the Site into compliance with applicable UST
regulations. IDEM Exs. 5, 6, 7.
These letters were sent via certified mail, and were received by Bak=
er
Oil.
=
4. &n=
bsp;
On
July 15, 2006, as part of his job duties, IDEM Emergency Response Section
Inspector Mike Sutton responded to a petroleum spill report based on a
complaint made to IDEM by Orange County Emergency Management. IDEM
Ex. 8.
=
5. &n=
bsp;
Baker
Oil did not dispute that a spill occurred, but presented testimony that it =
was
a small surface spill caused by a pinhole-sized leak in a hose, and was thus
not required to be reported. Baker Oil stated that some curb wall and facil=
ity
staining was due to mold, not petroleum product. Baker Oil also presented
opinion testimony that underground free product is present in Paoli, but th=
at
Baker Oil is not the source.
Inspector Sutton’s testimony provided substantial evidence that
the Site’s concrete drive and nearby asphalt street had a significant
amount of petroleum staining. IDEM Exs. 12A – 12F; Baker Oil E=
x. E. Photographs of the Site showed tha=
t the
asphalt was degrading from long-term exposure to hydrocarbons in free produ=
ct
(released) petroleum.
=
6. &n=
bsp;
On
July 20, 2006, as part of his job duties, IDEM Office of Land Quality/LUST
Section Chief Craig Schroer issued a Violation Letter to Respondents for th=
eir
failure to report a confirmed release within 24 hours of release confirmati=
on,
as well as noting pending violations, and opportunities to remedy the failu=
res
by submitting an Initial Abatement Measures Report and a Free Product Remov=
al
Report. IDEM Ex. 9. The
Violation Letter further addressed failure to conduct and report an ISC wit=
hin
30 days of receipt of the Violation Letter.
=
7. &n=
bsp;
Baker
Oil did not respond to the July 20, 2006 letter, nor did it submit reports =
of
the petroleum release as required in 329 IAC 9-4-1 and 329 IAC 9-5-2, which=
is
specified as a violation of 329 IAC 9-3-1(b)(2). Baker Oil did not confirm the susp=
ected
petroleum release as required in 329 IAC 9-4-1, which is specified as a
violation of 329 IAC 9-5-5.1(a). &nbs=
p;
[2011 OEA 106, pag=
e 109
begins]
=
8. &n=
bsp;
On
July 24, 2006, Project Manager Bartz’ Release Investigation and
Confirmation Steps letter to Baker Oil summarized Inspector Sutton’s
findings, and reiterated a respondent’s statutory obligations for
suspected UST releases. IDEM Ex. 10=
. Baker Oil received IDEM’s
certified letter on July 27, 2006. <=
/span>
=
9. &n=
bsp;
Project
Manager Bartz presented factors, including the Site’s topography and
sub-pavement petroleum seepage, which establish, by substantial evidence, t=
hat
the Site is a LUST Site.
=
10. =
Site inspections w=
ere
conducted on November 29, 2005, March 9, 2006, May 31, 2006 and July 19, 20=
06
by IDEM Office of Land Quality/Compliance and Response Branch Inspector Jos=
eph
Stapinski. IDEM Exs. 13, 14, 15, 16.
11. =
Stacy Baker’=
s Proposed
Findings of Fact, Conclusions of Law and Order state that its records were
maintained in notebooks at
a.&n= bsp;  = ; Baker Oil failed to install appropriate corrosion protection and maintain impressed current records for the UST system as described in 329 IAC 9-3.1-2(3) and 329 IAC 9-3.1-2, in violation of 329 IAC 9-2-1(1)(B);
b.&n= bsp;  = ; Baker Oil failed to submit appropriate corrosion protection and maintain impressed current records for the UST system, as described in 329 IAC 9-3-1(b)(12);
c.&n= bsp;  = ; Baker Oil did not maintain records of repairs and broken equipment (hoses, etc.), as described in 329 IAC 9-3.1-4(b)(7);
d.&n= bsp;  = ; Baker Oil failed to maintain automatic tank gauge a= nd leak detection, as addressed in 329 IAC 9-7-4(4); and
e.&n= bsp;  = ; Baker Oil failed to maintain line leak detection, as described in 329 IAC 9-7-5(2).
<= o:p>
12.&=
nbsp;
On September 7, 2007, Section Chief Schroer issued a
Violation Letter which Baker Oil received via certified mail on September 1=
4,
2007. IDEM Ex. 11. The
September 7, 2007 Violation Letter noted that Baker Oil did not respond to =
the
July 20, 2006 Violation Letter, and informed Baker Oil that continued
noncompliance would result a referral of the case to IDEM’s Office of
Enforcement.
<= o:p>
13.&= nbsp; Baker Oil stated that it was in compliance, and responded to IDEM’s request. Baker Oil’s testimony also disputed specific inspection dates,= but was controverted by records presented into evidence.
<= o:p>
14.&=
nbsp;
On July 27, 2007, IDEM issued Baker Oil a Notice of
Violation (“NOV”) per I.C. § 13-30-3-3; Baker Oil received=
the
NOV via certified mail on July 30, 2007.&n=
bsp;
IDEM Ex. 18. The NOV cited Baker Oil for eight
violations: 329 IAC 9-2-1(1)(=
B),
329 9-3-1(b)(12), 329 IAC 9-3-1(b)(2), 329 IAC 9-3.1-4(b)(7), 329 IAC 9-4-3=
(2),
329 IAC 9-5-5.1(a), 329 IAC 9-7-4(4) and 329 IAC 9-7-5(2).
<= o:p>
[2011 OEA 106, pag=
e 110
begins]
<= o:p>
15.&= nbsp; Inspector Stapinski’s September 4, 2008 Site inspection provided substantial evidence that the Baker Oil Site continued = in noncompliance. IDEM Ex. 17.
<= o:p>
16.&=
nbsp;
The parties did not enter into an Agreed Order. On September 10, 2009, IDEM issued=
Baker
Oil a Notice and Order of the Commissioner of the Department of Environment=
al
Management (“Commissioner’s Order” or “CO”).<=
span
style=3D'mso-spacerun:yes'> IDEM
Exs. 1, 2. The CO required
Baker Oil to comply with applicable UST regulations and to take appropriate
compliance actions, such as permanently closing the UST system, performing =
an
Initial Site Characterization Plan (“ISC”), and implementing a
Corrective Action Plan (“CAP”).
<= o:p>
17.&= nbsp; In its April 9, 2010 Proposed Findings of Fact, Conclusions of Law and Final Order, IDEM stated that its civil penalty calculations were made per IDEM’s Civil Penalty Policy Non-rule Policy Document (Doc. 99-0002-NPD)[1] and the UST/LUST Civil Penalty Policy (Doc. 99-0001-NPD) for the eight viol= ations, and determined that conditions at the Site created a major potential for ha= rm of petroleum spills and major deviations from UST regulations. IDEM’s civil penalty calcula= tions further considered Baker Oil’s struggling financial situation in miti= gating its calculation. IDEM identif= ied aggravating factors of its multiple attempts over several years to cooperate with Baker Oil to bring the Site into compliance, the continuous noncomplia= nce, the number of years which have elapsed since IDEM first discovered the violations, and the economic benefit Baker Oil enjoyed by not bringing the = Site into compliance. &n= bsp;
<= o:p>
18.&= nbsp; IDEM’s civil penalty calculation seems to be based on attributing one tank for the Site, although four were registered. In her Proposed Findings, Stacy = Baker states that a leaking tank no longer contains product, although no evidence= was presented that any tank was closed in compliance with applicable regulation= s.
<= o:p>
19.&= nbsp; In seeking to lower or eliminate assessment of a ci= vil penalty, Respondent Baker Oil presented substantial evidence that tragic personal family and business matters affected its ability to pay, and that = it had no ability to pay. At the= final hearing setting, Stacy Baker stated that Baker Oil had filed a Chapter 7 bankruptcy.
<= o:p>
20.&= nbsp; Baker Oil did not provide IDEM or the Court further evidence of its inability to pay the civil penalties, such as tax returns or corporate financial statements.
<= o:p>
21.&= nbsp; This cause is the subject of Respondent Baker Oil’s timely October 6, 2009 Petition for Administrative Review of the Commissioner’s Order. T= he matter proceeded to Final Hearing on March 18, 2010.
<= o:p>
[2011 OEA 106, pag=
e 111
begins]
<= o:p>
22.&=
nbsp;
Final hearing was conducted on March 18, 2010. Witnesses were sworn and evidence =
was
presented. During the course =
of this
proceeding, IDEM was represented by legal counsel Justin D. Barrett, Esq. Baker Oil’s representation w=
as
provided by Stacy Baker, who did not have legal counsel.
<= o:p>
23.&= nbsp; During the Final Hearing, Baker Oil witness Stacy B= aker stated that Respondent had filed Bankruptcy, and repeatedly noted that a no= tice of the bankruptcy filing was to be received imminently. On March 15, 2010, the Court recei= ved a Suggestion of Bankruptcy filing (Chapter 7) of January 21, 2010 from legal counsel for Stacy Baker, which Suggestion was the subject of IDEM’s Motion to Strike as filed after the evidentiary record closed in this cause. On April 8, 2010, the = Court issued a scheduling order providing until April 16, 2010 for the parties to submit a memorandum of law on Court’s authority to proceed with this Cause, in light of March 15, 2= 010 Notice of Suggestion of Bankruptcy of Stacy Baker. The parties did not file further documents addressing the Suggestion. The Court did not receive any further filings or documents concerning the Suggestion, such any of the Petition schedules, a notice that this matt= er was listed on the Bankruptcy petition, any Motions or Orders concerning the Automatic Stay, nor further disposition of the bankruptcy.
C=
ONCLUSIONS
OF LAW
1. =
&nb=
sp; =
&nb=
sp; =
The Indiana Department of Environmental Management
(“IDEM”) is authorized to implement and enforce specified
2. =
&nb=
sp; =
&nb=
sp; =
Without an order from a bankruptcy court of compete=
nt
jurisdiction to the contrary, the Suggestion of Stacy Baker’s Chapter=
7
Bankruptcy does not limit this Court’s jurisdiction over Baker Oil.
3. = &nb= sp; = &nb= sp; = This is a Final Order issued pursuant to I.C. § 4-21.4-3-27. Findings of Fact= that may be construed as Conclusions of Law and Conclusions of Law that may be c= onstrued as Findings of Fact are so deemed.
4. =
&nb=
sp; =
&nb=
sp; =
This Court must apply a de novo standard of
review to this proceeding when determining the facts at issue.
[2011 OEA 106, pag=
e 112
begins]
5. =
&nb=
sp; =
&nb=
sp; =
OEA is required to base its factual findings on
substantial evidence. Huffman v. Office of Envtl. Adjud., 811 N.E.2d
806, 809 (Ind. 2004)(appeal of OEA review of NPDES permit); see also
I.C. § 4-21.5-3-27(d).
“Standard of proof generally has been described as a continuum
with levels ranging from a "preponderance of the evidence test" t=
o a
"beyond a reasonable doubt" test. The "clear and convincing
evidence" test is the intermediate standard, although many varying
descriptions may be associated with the definition of this intermediate
test.” Matter of
6. =
&nb=
sp; =
&nb=
sp; =
During this proceeding, Baker Oil was not represent=
ed
by legal counsel, sometimes referred to as proceeding pro se. “While a party may decide to
proceed without legal representation, “[i]t is well established that =
pro
se litigants are held to the same standard as are licensed lawyers. Goosens
v. Goosens, 829 N.E.2d 36, 43 (
7. = &nb= sp; = &nb= sp; = 329 IAC 9-2-1(1)(B) provides that in order to preve= nt releases due to structural failure, corrosion or spills and overflows for as long as the UST system is used to store regulated substances, all owners and operators of new UST systems shall meet the following requirements: Each tank must be properly designe= d and constructed, and any portion underground that routinely contains product mu= st be protected from corrosion as specified as follows: The tank is constructed of steel a= nd cathodically protected. A cathodically protected tank must be inspected and tested periodically as st= ated in 329 IAC 9-3.1-2(3). Impres= sed current records are required to be maintained. 329 IAC 9-3.1-2. By substantial evidence, Baker Oil failed to install the appropriate corrosion protection and maintain impress= ed current records for the UST systems as required in 329 IAC 9-3.1-2(3) and 3= 29 IAC 9-3.1-2, in violation of 329 IAC 9-2-1(1)(B).
8. = &nb= sp; = &nb= sp; = 329 IAC 9-3-1(b)(12) requires UST owners and operat= ors to submit the following to IDEM: documentation of operation and maintenance of corrosion protection equipment under 329 IAC 9-3.1-2; the results of post-installation cathodic protection: (A) test for a ga= lvanic cathodic protection system; and (B) inspection for an impressed current cathodic protection system, all to be submitted within 30 days after the te= st or inspection is completed for a new UST system and an upgraded UST system. By substantial eviden= ce, Baker Oil failed to submit the appropriate corrosion protection and maintain impressed current records for the UST systems as required in 329 IAC 9-3.1-= 2, in violation of 329 IAC 9-2-1(1)(B).
[2011 OEA 106, pag=
e 113
begins]
9. = &nb= sp; = &nb= sp; = 329 IAC 9-3-1(b)(2) requires UST owners and operato= rs to submit to IDEM reports of all releases, including (A) suspected releases under 329 IAC 9-4-1, (B) spills and overflows under 329 IAC 9-4-4, and (C) confirmed releases under 329 IAC 9-5-2.&nb= sp; By substantial evidence, Baker Oil failed to submit reports of relea= ses required under 329 IAC 9-4-1, 329 IAC 9-4-4 and 329 IAC 9-5-2, in violation= of 329 IAC 9-3-1(b)(2).
10. = &nb= sp; = &nb= sp; = 329 IAC 9-3.1-4(b)(7) requires UST owners and opera= tors to maintain operating records of each repair for the remaining operating li= fe of the UST system, which records demonstrate compliance with this requirement. Maintenance must= be documented, but is not required to be submitted to IDEM. By substantial evidence, Baker Oil failed to maintain records of repairs and broken equipment, such as hoses, = in violation of 329 IAC 9-3.1-4(b)(7).
11. = &nb= sp; = &nb= sp; = 329 IAC 9-4-3(2) requires UST owners and operators, unless corrective action is initiated per 329 IAC 9-5, to immediately investigate and confirm all suspected releases of regulated substances requiring reporting under sec. 1 of the rule within seven days using the following steps or another procedure approved by the IDEM Commissioner: The owner and operator shall measu= re for the presence of a release when the contaminant is most likely to be present= at the UST Site. In selecting sa= mple types, sample locations, and measurement methods, the owner and operator sh= all consider the nature of the stored substance, the type of initial alarm or c= ause for suspicion, the type of backfill, the depth of groundwater, and other factors appropriate for identifying the presence and source of the releases= . The owner and operator shall comple= te one of the following: (A) if the = test results for the excavation zone or the underground storage site indicate th= at a release has occurred, the owner and operator shall begin corrective action = per 329 IAC 9-5; (B) if the test results do not indicate that a release has occurred, then further investigation is not required. By substantial evidence, Baker Oil failed to confirm a suspected release per 329 IAC 9-4-1, in violation of 329 IAC 9-4-3(2).
12. = &nb= sp; = &nb= sp; = 329 IAC 9-5-5.1(a), in accord with I.C. § 13-12-3-2, requires UST owners and operators to assemble information about = the Site and nature of the release, including information gained while confirmi= ng the release or completing initial response and abatement measures stated in= the rule’s sections 2 and 3.2. By substantial evidence, Baker Oil failed to submit the initial response information, in violation of 329 IAC 9-5-5.1(a).
13. = &nb= sp; = &nb= sp; = 329 IAC 9-7-4(4) requires that equipment for automa= tic tank gauging that tests for the loss of product and conducts inventory cont= rol must meet the following requirements: (A) the automatic product level monitor test can detect a two-tenths (0.2) gallon per hour leak rate from any portion of the tank that routinely contains product; (B) inventory control, or another test of equivalent performance, is conducted per rule subdivision (1). By substantial evidence, Baker Oil failed to maintain automatic tank gauge and leak protection, in violation of 329 IAC 9-7-4(4).
14. = &nb= sp; = &nb= sp; = 329 IAC 9-7-5(2) requires periodic line tightness t= est of piping, and must be able to detect a one-tenth (0.1) gallon per hour leak rate and one and one-half (1 1/2) times the operating pressure. By substantial evidence, Baker Oil failed to maintain line leak detection, in violation of 329 IAC 9-7-5(2).= p>
[2011 OEA 106, pag=
e 114
begins]
15.&= nbsp; &nbs= p; &= nbsp; &nbs= p; &= nbsp; IDEM met its the burden of showing, by substantial evidence, that Baker Oil is liable for civil penalties at the Site for the following:
(a) =
failing to install=
the appropriate
corrosion protection and maintain impressed current records for the UST sys=
tems
as required in 329 IAC 9-3.1-2(3) and 329 IAC 9-3.1-2, in violation of 329 =
IAC
9-2-1(1)(B).
(b) =
failing to submit =
the
appropriate corrosion protection and maintain impressed current records for=
the
UST systems as required in 329 IAC 9-3.1-2, in violation of 329 IAC
9-2-1(1)(B).
(c) =
failing to submit
reports of releases required under 329 IAC 9-4-1, 329 IAC 9-4-4 and 329 IAC
9-5-2, in violation of 329 IAC 9-3-1(b)(2).
(d) =
failing to maintain
records of repairs and broken equipment, such as hoses, in violation of 329=
IAC
9-3.1-4(b)(7).
(e) =
failing to confirm=
a
suspected release per 329 IAC 9-4-1, in violation of 329 IAC 9-4-3(2).
(f) &=
nbsp;
failing
to submit the initial response information, in violation of 329 IAC 9-5-5.1=
(a).
(g) =
failing to maintain
automatic tank gauge and leak protection, in violation of 329 IAC 9-7-4(4).=
(h) =
failing to maintai=
n line
leak detection, in violation of 329 IAC 9-7-5(2).
16. &=
nbsp;
Respondent
Baker Oil is subject to civil penalties for violating 17. &=
nbsp;
IDEM’s
Civil Penalty Policy Non-rule Policy Document (Doc. 99-0002-NPD)[2]
and the UST/LUST Civil Penalty Policy (Doc. 99-0001-NPD), are reasonable means of determining the civil penalty because =
they
allows for predictable, consistent and fair calculation of penalties. =
Commissioner, Ind. Dep’t of
Envt’l Mgmt. v. Carson Stripping, Inc. and Carson Laser, Inc., 2004 OEA 14, 26, citing Ind. Dep’t of Envt’l Mgmt. v. Schnippel Construc=
tion,
Inc., 778 N.E.2d 407, 416 (Ind. Ct. App. 2002), trans. den. (affirming an administrative law judge’s pena=
lty
calculation because the calculation was based on IDEM’s written penal=
ty
policy). The two policies are
applied together in violation cases involving UST/LUST matters. Commissioner,
Ind. Dep’t of Envt’l Mgmt. v. McClure Oil Corp., 2009 OEA 1=
26,
129. UST civil penalty
calculations are based on a review of each involved underground storage tank
for each day of violation. I.C. § 13-23-14-2, -3. The civil penalty sought by=
IDEM
was based on Baker Oil’s major deviations from the rules and major ri=
sk
for the
[2011 OEA 106, pag=
e 115
begins]
potential harm, on=
the
fact that the violations were documented over multiple inspections. Per the UST/LUST Penalty Policy, S=
ec.
II, violations continuing for longer than 365 days to a day for each year.<=
span
style=3D'mso-spacerun:yes'> In this instance, the violations w=
ere
first noted on March 11, 2002, and evidence was last presented to the Court=
at
Final Hearing on March 18, 2010, for a total of eight (8) years, constituti=
ng
eight violation “days”.
s. P, R. The total civil penalty of $39,400
penalty sought by IDEM did not result in a penalty exceeding the statutory
maximum of $10,000 per tank per day. =
18. &=
nbsp;
The
record in this cause contains substantial evidence for the Court to apply t=
he
Civil Penalty Policies to determine the appropriate penalty in this
matter. According to the poli=
cies,
a civil penalty is calculated by “(1) determining a base civil penalty
dependent on the severity and duration of the violation, (2) adjusting the
penalty for special factors and circumstances, and (3) considering the econ=
omic
benefit of noncompliance.” The base civil penalty is calculated taking
into account two factors: (1) the potential for harm and (2) the extent of
deviation.
19. &=
nbsp;
The
policies state that the potential for harm may be determined by considering
“the likelihood and degree of exposure of person or the environment to
pollution” or “the degree of adverse effect of noncompliance on
statutory or regulatory purposes or procedures for implementing the
program.” There are sev=
eral
factors that may be considered in determining the likelihood of exposure. These are the toxicity and amount =
of the
pollutant, the sensitivity of the human population or environment exposed to
the pollutant, the amount of time exposure occurs, and the size of the
violator. OEA allocation of
potential for harm, for extent of deviation, and for the matrix range point=
, is
fact-sensitive. For example, =
in McClure Oil, 2009 OEA 126, a petroleum release from an UST was deemed a min=
or
potential for harm, based on lack of evidence that the release had migrated
off-site. In Landers, 2009 OEA 109, violations based on a large quantity of
construction waste were deemed to constitute a moderate extent of deviation,
and the penalty was selected from middle of the matrix range. In Scherb, 2006 OEA 16, violations based on a manure spill from a confined feeding
operation into a stream resulted in moderate/moderate, and the lowest matrix
amount was selected. In IDEM v. Great Barrier Insulation Co.=
i>, 2005 OEA 57, violations based on
asbestos containment on removal with a low possibility of human or
environmental contact and little adverse effect to the program, the Court
selected minor potential for harm and a minor deviation, with the lowest po=
int
in the matrix applied.
20. &=
nbsp;
For
the violations of 329 IAC 9-2-1(1)(B), 329 9-3-1(b)(12), 329 IAC 9-3-1(b)(2=
),
329 IAC 9-3.1-4(b)(7), 329 IAC 9-4-3(2), 329 IAC 9-5-5.1(a), 329 IAC 9-7-4(=
4)
and 329 IAC 9-7-5(2) at the Site, the potential for h=
arm is
major. Much of the system sub=
ject
to monitoring is not within view, as it is either underground or is
covered. Without required per=
iodic
monitoring, reporting and annual testing, the only releases which would
reasonably be detected would be from emergency or catastrophic causes. Equipment problems or more routine
equipment failures would not be detected, allowing for releases of fuel
products which would cause harm to the environment. By substantial evidence, the UST s=
ystem
has leaked. Twice, Orange Cou=
nty
Emergency Management and IDEM responded to releases. The potential for harm in the even=
t of a
release is significant, as the Site is in a populated area. The lack of documentation from per=
iodic
testing and reporting, in and of itself, creates no likelihood of exposure =
to
harmful substances, but noncompliance with the testing and
[2011 OEA 106, pag=
e 116
begins]
reporting requirem=
ent
eliminates a reasonable opportunity for Respondent Baker Oil or IDEM to
determine whether equipment is operating properly or failing, and to respond
appropriately.
21. &=
nbsp;
The
extent of deviation for the violations of is major. Required monitoring and reporting =
was
either not done, not made available to IDEM as required, and not corrected =
over
time. From UST tank and line
testing to routine maintenance and suspected release reporting, no evidence=
was
presented that Respondent Baker Oil complied with the regulations, over a
period of eight years. During=
the
eight years, no evidence was presented that Baker Oil attempted to communic=
ate
about Site conditions, or bring them into compliance. Respondent Baker Oil made the
economic decision not to comply.
The applicable requirements for performing and reporting required
monitoring and testing contain no exception for the Court to apply. Little or no documentation was ava=
ilable
at the Site. Deficiencies wer=
e not
cured during the litigation of this case.&=
nbsp;
The extent of deviation from 329 IAC 9-2-1(1)(B), 329 9-3-1(b)(12), =
329
IAC 9-3-1(b)(2), 329 IAC 9-3.1-4(b)(7), 329 IAC 9-4-3(2), 329 IAC 9-5-5.1(a=
),
329 IAC 9-7-4(4) and 329 IAC 9-7-5(2) is major.
22. &=
nbsp;
According
to the Civil Penalty Policy, a value for each tank is selected from a selec=
ted
cell “is left to the judgment of enforcement staff and is based on the
individual circumstances of each case.” On de
novo review of a case before the OEA, such judgment is to be exercised =
by
the presiding environmental law judge (“ELJ”), to determine the
base penalty. In this case, t=
he
circumstances show that Respondent Baker Oil’s experience in the fiel=
d of
gas station/UST facility operations and numerous contacts with IDEM should =
have
apprised it of the required testing and documentation deficiencies for the
facility. The Court recognize=
s that
Respondent Baker Oil’s resources were limited due to various distress=
ing
business and personal family challenges during the pendency of this case. In this case, Respondent Baker Oil=
elected
to make business decisions which gave greater support to its investments th=
an
to expenditures required for compliance with environmental regulations
protective of the environment, public health and safety. Therefore, the ELJ fin=
ds
that the low end of the range for a UST violation of major potential for ha=
rm
and major extent of deviation (“Major/Major”) is appropriate,
resulting in a penalty of Ten Thousand Dollars ($10,000.00) per violation d=
ay
at the Site.
23. &=
nbsp;
The
next step in civil penalty calculation is a determination of the days of
noncompliance. IDEM investiga=
tions
provide substantial evidence that violations were observed from March 11, 2=
002,
and evidence was presented that the Site was still in noncompliance as of t=
he
March 18, 2010 final hearing, a period extending beyond 365 days. Therefore, by substantial evidence,
noncompliance extended beyond 365 days for each of the eight violations.
[2011 OEA 106, pag=
e 117
begins]
24. &=
nbsp;
Substantial
evidence did not support a finding that the violations did or did not apply=
to
more than one tank, although the facility was registered for four tanks.
25. &=
nbsp;
The
base civil penalty value may be adjusted by aggravating or mitigating
factors. The mitigating facto=
r of
“Quick Settlement” did not occur, as Respondent Baker Oil did n=
ot
execute a settlement in this case. <=
/span>Although
the parties urge the ELJ to find aggravating or mitigating factors to consi=
der,
substantial evidence does not support the factors presented to the ELJ. The types of evidence of economic
benefit, or of inability to pay, contemplated in the civil penalty policies
provide a more reliable analytical base than the assertions offered by the
parties. Neither party presen=
ted
substantial evidence of economic benefit, inability to pay or aggravating or
mitigating factors. For lack =
of
substantial evidence, the Court finds no further adjustment to the base civ=
il
penalty. 26. &=
nbsp;
Respondent
Baker Oil Company, d/b/a Johnny Hall-Mar, Inc., with a gas station at 303 E=
ast
Main Street, Paoli, Orange County, Indiana is assessed a total civil penalt=
y of
Eighty Thousand Dollars ($80,000) for failure to install appropriate corros=
ion
protection and maintain impressed system records, for failure to submit such
records and release reports, for failure to maintain records of repairs and
broken equipment, for failure to confirm a suspected release, for failure to
submit initial release response information, for failure to maintain automa=
tic
tank gauge and leak detection, and for failure to maintain line leak detect=
ion,
all in violation of 329 IAC 9-2-1(1)(B), 329 9-3-1(b)(12), 329 IAC 9-3-1(b)=
(2),
329 IAC 9-3.1-4(b)(7), 329 IAC 9-4-3(2), 329 IAC 9-5-5.1(a), 329 IAC 9-7-4(=
4)
and 329 IAC 9-7-5(2), as adopted per I.C. § 13-23-1-2, and the Septemb=
er
10, 2009 Commissioner’s Order is sustained in all other respects. =
27. &=
nbsp;
In
its Proposed Findings of Fact, Conclusions of Law and Order, IDEM further
sought specific actions to take place at the Site. The Court finds good cause for
imposition of the following remedies sought by IDEM: a. =
Respondent shall
permanently close the UST system as follows: 1. close the UST syst=
ems
within sixty (60) days in accordance with the requirements of 329 IAC 9-6-1
through 329 IAC 9-6-4, including the applicable requirements for corrective
action under 329 IAC 9-5-1 through 9-5-8; and 2. Submit a UST Closu=
re
Report in accordance with 329 IAC 9-6-2.5 within thirty (30) days of closing
the UST system; b. Within sixty (60) =
days,
Respondent shall comply with 329 IAC 9-5-5.1. Specifically, Respondent
shall submit an Initial Site Characterization Plan ("ISCP") to ID=
EM
setting forth in detail the actions Respondent shall take to complete and
submit an Initial Site Characterization ("ISC") that meets the
requirements of 329 IAC 9-5-5.1. The ISCP shall be subject to review,
modification and approval by IDEM. The ISCP must be approved by IDEM
prior to implementation. In the event IDEM determines [2011 OEA 106, pag=
e 118
begins] that the ISCP subm=
itted
by Respondent is deficient or otherwise unacceptable, Respondent shall revi=
se
and resubmit the ISCP to IDEM in accordance with IDEM's notice. Upon
notification of deficiencies in the ISCP, Respondent shall have fifteen (15)
days to revise and resubmit an ISCP to IDEM which addresses the
deficiencies. After three (3) submissions of the ISCP by Respondent, =
IDEM
may modify and approve any such ISCP and Respondent must implement the ISCP=
as
modified by IDEM. The approved ISCP shall be incorporated into this O=
rder
and shall be deemed an enforceable part thereof. c. =
Within thirty (30)=
days
of IDEM ISCP approval, Respondent shall implement the approved ISCP in
accordance with the schedule contained therein and submit the results of the
ISC to IDEM. Respondent shall submit and implement additional ISC pla=
ns
at IDEM's request if IDEM determines that further site investigation is nee=
ded
to adequately delineate the extent of contamination. d. Respondent shall, =
within
sixty (60) days of receiving written notice from IDEM, submit a Further Site
Investigation Plan ("FSIP") to IDEM setting forth in detail the
actions Respondent shall take to complete and submit a Further Site
Investigation ("FSI") that meets the requirements of 329 IAC
9-5-6. The FSIP shall be subject to review, modification and approval=
by
IDEM. The FSIP must be approved by IDEM prior to implementation. =
; In
the event IDEM determines that the FSIP submitted by Respondent is deficien=
t or
otherwise unacceptable, Respondent shall revise and resubmit the FSIP to ID=
EM
in accordance with IDEM's notice. Upon notification of deficiencies in
the FSIP, Respondent shall have fifteen (15) days to revise and resubmit a =
FSIP
to IDEM which addresses the deficiencies. After three (3) submissions=
of
the FSIP by Respondent, IDEM may modify and approve any such FSIP and
Respondent must implement the FSIP as modified by IDEM. The approved =
FSIP
shall be incorporated into this Order and shall be deemed an enforceable pa=
rt
thereof. e. =
Upon IDEM approval=
of
the FSIP, Respondent shall implement the approved FSIP in accordance with t=
he
schedule contained therein and submit the results of the FSI to IDEM.
Respondent shall submit and implement additional FSI plans at IDEM's reques=
t if
IDEM determines that further site investigation is needed to adequately
delineate the extent of contamination. f. =
Respondent
shall, within sixty (60) days of receiving written notice from IDEM, submit=
a
Corrective Action Plan ("CAP") as described in 329 IAC 9-5-7.&nbs=
p;
Respondent shall utilize IDEM's UST Branch Guidance Manual October 1994 upd=
ate
to develop the CAP. The CAP shall be subject to review, modification =
and
approval by IDEM. In the event IDEM determines that the CAP submitted=
by
Respondent is deficient or otherwise unacceptable, Respondent shall revise =
and
resubmit the CAP to IDEM in accordance with IDEM's notice. Upon
notification of deficiencies in the CAP, Respondent shall have fifteen (15)
days to revise and resubmit a CAP to IDEM which addresses the
deficiencies. After three (3) submissions of the CAP by Respondent, I=
DEM
may modify and approve any such CAP and Respondent must implement the CAP a=
s modified
by IDEM. The approved [2011 OEA 106, pag=
e 119
begins] CAP shall be
incorporated into this Order and shall be deemed an enforceable part thereo=
f. g. =
Upon IDEM approval=
of
the CAP, Respondent shall implement the approved CAP in accordance with the=
schedule
contained therein. h. =
Respondent shall a=
pply
for and obtain all necessary permits pertaining to testing and remediation
on-site and off-site prior to any remediation activities being performed. i. =
Respondent
shall permit an agent of IDEM to view and inspect the activities performed
pursuant to the approved FSIP and/or CAP. In order to facilitate such=
an
inspection, Respondent shall notify IDEM's Leaking Underground Storage Tank
Section at least seven (7) days prior to any scheduled activities. j. =
All
submittals required by this Order, unless notified otherwise in writing, sh=
all
be made in accordance with the directions contained by the Notice and Order=
of
the Commissioner of the Indiana Department of Environmental Management. FINAL ORDER For
all of the foregoing reasons, IT IS THEREFORE ORDERED, ADJUDGED AND DECR=
EED
that the Respondent, Baker Oil Company, d/b/a Johnny Hall-Mar, Inc., for a =
gas
station at 303 East Main Street, Paoli, Orange County, Indiana, violated 329
IAC 9-2-1(1)(B), 329 9-3-1(b)(12), 329 IAC 9-3-1(b)(2), 329 IAC 9-3.1-4(b)(=
7),
329 IAC 9-4-3(2), 329 IAC 9-5-5.1(a), 329 IAC 9-7-4(4) and 329 IAC
9-7-5(2). Respondent, Baker O=
il
Company, d/b/a Johnny Hall-Mar, Inc., is subject to civil penalties of Eigh=
ty
Thousand Dollars ($80,000) for violating a. =
Respondent shall p=
ermanently
close the UST system as follows: 1. close the UST syst=
ems
within sixty (60) days in accordance with the requirements of 329 IAC 9-6-1
through 329 IAC 9-6-4, including the applicable requirements for corrective
action under 329 IAC 9-5-1 through 9-5-8; and 2. Submit a UST Closu=
re
Report in accordance with 329 IAC 9-6-2.5 within thirty (30) days of closing
the UST system; b. Within sixty (60) =
days,
Respondent shall comply with 329 IAC 9-5-5.1. Specifically, Respondent
shall submit an Initial Site Characterization Plan ("ISCP") to ID=
EM
setting forth in detail the actions Respondent shall take to complete and
submit an Initial Site Characterization ("ISC") that meets the
requirements of 329 IAC 9-5-5.1. The ISCP shall be subject to review,
modification and approval by IDEM. The ISCP must be approved by IDEM
prior to implementation. In the event IDEM determines that the ISCP
submitted by Respondent is deficient or otherwise unacceptable, Respondent
shall revise and resubmit the ISCP to IDEM in accordance with IDEM's
notice. Upon notification of [2011 OEA 106, pag=
e 120
begins] deficiencies in the
ISCP, Respondent shall have fifteen (15) days to revise and resubmit an ISC=
P to
IDEM which addresses the deficiencies. After three (3) submissions of=
the
ISCP by Respondent, IDEM may modify and approve any such ISCP and Respondent
must implement the ISCP as modified by IDEM. The approved ISCP shall =
be
incorporated into this Order and shall be deemed an enforceable part thereo=
f. c. =
Within thirty (30)=
days
of IDEM ISCP approval, Respondent shall implement the approved ISCP in
accordance with the schedule contained therein and submit the results of the
ISC to IDEM. Respondent shall submit and implement additional ISC pla=
ns
at IDEM's request if IDEM determines that further site investigation is nee=
ded
to adequately delineate the extent of contamination. d. Respondent shall, =
within
sixty (60) days of receiving written notice from IDEM, submit a Further Site
Investigation Plan ("FSIP") to IDEM setting forth in detail the
actions Respondent shall take to complete and submit a Further Site
Investigation ("FSI") that meets the requirements of 329 IAC
9-5-6. The FSIP shall be subject to review, modification and approval=
by
IDEM. The FSIP must be approved by IDEM prior to implementation. =
; In
the event IDEM determines that the FSIP submitted by Respondent is deficien=
t or
otherwise unacceptable, Respondent shall revise and resubmit the FSIP to ID=
EM
in accordance with IDEM's notice. Upon notification of deficiencies in
the FSIP, Respondent shall have fifteen (15) days to revise and resubmit a =
FSIP
to IDEM which addresses the deficiencies. After three (3) submissions=
of
the FSIP by Respondent, IDEM may modify and approve any such FSIP and
Respondent must implement the FSIP as modified by IDEM. The approved =
FSIP
shall be incorporated into this Order and shall be deemed an enforceable pa=
rt
thereof. e. =
Upon IDEM approval=
of
the FSIP, Respondent shall implement the approved FSIP in accordance with t=
he
schedule contained therein and submit the results of the FSI to IDEM.
Respondent shall submit and implement additional FSI plans at IDEM's reques=
t if
IDEM determines that further site investigation is needed to adequately
delineate the extent of contamination. f. =
Respondent
shall, within sixty (60) days of receiving written notice from IDEM, submit=
a
Corrective Action Plan ("CAP") as described in 329 IAC 9-5-7.&nbs=
p;
Respondent shall utilize IDEM's UST Branch Guidance Manual October 1994 upd=
ate
to develop the CAP. The CAP shall be subject to review, modification =
and
approval by IDEM. In the event IDEM determines that the CAP submitted=
by
Respondent is deficient or otherwise unacceptable, Respondent shall revise =
and
resubmit the CAP to IDEM in accordance with IDEM's notice. Upon notif=
ication
of deficiencies in the CAP, Respondent shall have fifteen (15) days to revi=
se
and resubmit a CAP to IDEM which addresses the deficiencies. After th=
ree
(3) submissions of the CAP by Respondent, IDEM may modify and approve any s=
uch
CAP and Respondent must implement the CAP as modified by IDEM. The
approved CAP shall be incorporated into this Order and shall be deemed an
enforceable part thereof. [2011 OEA 106, pag=
e 121
begins] g. =
Upon IDEM approval=
of the
CAP, Respondent shall implement the approved CAP in accordance with the
schedule contained therein. h. =
Respondent shall a=
pply
for and obtain all necessary permits pertaining to testing and remediation
on-site and off-site prior to any remediation activities being performed. i. =
Respondent
shall permit an agent of IDEM to view and inspect the activities performed
pursuant to the approved FSIP and/or CAP. In order to facilitate such=
an
inspection, Respondent shall notify IDEM's Leaking Underground Storage Tank
Section at least seven (7) days prior to any scheduled activities. j. =
All
submittals required by this Order, unless notified otherwise in writing, sh=
all
be made in accordance with the directions contained by the Notice and Order=
of
the Commissioner of the Indiana Department of Environmental Management. =
You
are further notified that pursuant to provisions of I.C. § 4-21.5-7-5, the Office of Environmental
Adjudication serves as the ultimate authority in administrative review of d=
ecisions
of the Commissioner of the Indiana Department of Environmental Management.<=
span
style=3D'mso-spacerun:yes'> A party is eligible to seek Judici=
al
Review of this Final Order as stated in applicable provisions of I.C. §
4-21.5, et seq. Pursuant to I.C. § 4-21.5-5-5=
, a
Petition for Judicial Review of this Final Order is timely only if it is fi=
led
with a civil court of competent jurisdiction within thirty (30) days after =
the
date this notice is served.
IT
IS SO ORDERED in
=
&nb=
sp; =
&nb=
sp; =
&nb=
sp; =
Hon.
Mary L. Davidsen
Chief Environmenta=
l Law
Judge
[2011 OEA 106: end=
of
decision]
=
2011
OEA 106 in .doc format
=
2011
OEA 106 in .pdf format
&=
nbsp;
[1] IDEM’s Civil Penalty Policy, ID No. Enforcement 99-0002-NPD, and its UST/LUST Civil Penalty Policy ID No. Enforcement 99-0001-NPD, IDEM Ex. R, were both originally a= dopted on April 5, 1999 in accordance with I.C.&n= bsp; § 13-14-1-11.5. A= s both apply to the violations in this cause, they will be referred to collectivel= y as the “civil penalty policies”.&= nbsp;
[2] IDEM’s Civil Penalty Policy, ID No. Enforcement 99-0002-NPD, and its UST/LUST Civil Penalty Policy ID No. Enforcement 99-0001-NPD, were both originally adopted on April 5, 1999 in accordance with I.C. § 13-14-1-11.5. As both apply t= o the violations in this cause, they will be referred to collectively as the “civil penalty policies”.
|
|
Comm=
issioner,
Indiana Department of Environmental Management, Complainant,
v.
Bake=
r Oil Company,
d/b/a Johnny Hall-Mar, Inc.,
UST
Facility No. 8407,
Paol=
i,
2011=
OEA
106, (09-S-E-4308)