Air-A-Plane Corp. v. North Carolina Dept. of Environment, Health and Natural Resources

• Decision Date: 07 March 1995
• Docket Number: No. 9410SC480,AIR-A-PLANE,9410SC480
• Citation: 118 N.C.App. 118,454 S.E.2d 297
• Parties: CORPORATION, Petitioner, v. NORTH CAROLINA DEPARTMENT OF ENVIRONMENT, HEALTH AND NATURAL RESOURCES, Respondent.
• Court: North Carolina Court of Appeals

Page 297

454 S.E.2d 297

118 N.C.App. 118

AIR-A-PLANE CORPORATION, Petitioner, v. NORTH CAROLINA DEPARTMENT OF ENVIRONMENT, HEALTH AND NATURAL RESOURCES, Respondent.

No. 9410SC480.

Court of Appeals of North Carolina.

March 7, 1995.

Carol M. Schiller, Raleigh, for petitioner-appellant.

Atty. Gen. Michael F. Easley, by Asst. Atty. Gen. Judith Robb Bullock, for respondent-appellee.

GREENE, Judge.

Air-A-Plane Corporation (petitioner) appeals from an order signed and filed on 28 February 1994 in Wake County Superior Court, affirming the decision of the North Carolina Department of Environment, Health and Natural Resources (DEHNR) which upheld the issuance of a compliance order and $225,000.00 administrative penalty by the Solid Waste Management Division of DEHNR (the Division) against petitioner for violating 40 C.F.R. § 262.11.

Petitioner, a Virginia corporation with its main plant in Norfolk, Virginia, operates a plant in Elm City, Wilson County, North Carolina, which assembles air support systems, such as air conditioners, as ground support equipment for aircraft. On 31 May 1991, William L. Meyer (Mr. Meyer), Director of the Division, issued a compliance order with an administrative penalty for $225,000.00 (the Order) against petitioner for violating 40 C.F.R. § 262.11, part of the federal Resource Conservation and Recovery Act (RCRA), codified at 15A N.C.A.C. 13A.0007, which provides that a "person who generates a solid waste, as defined in 40 CFR 262.2, must determine if that waste is a hazardous waste using the following method":

(a) He should first determine if the waste is excluded from regulation under 40 CFR 261.4.

(b) He must then determine if the waste is listed as a hazardous waste in subpart D of 40 CFR part 261.

(c) For purposes of compliance with 40 CFR part 268, or if the waste is not listed in subpart D of 40 CFR part 261, the generator must then determine whether the waste is identified in subpart C of 40 CFR part 261 by either:

(1) Testing the waste according to the methods set forth in subpart C of 40 CFR part 261, or according to an equivalent method approved by the Administrator under 40 CFR 260.21; or

(2) Applying knowledge of the hazard characteristic of the waste in light of the materials or the processes used.

40 C.F.R. § 262.11. The Order stated petitioner violated 40 C.F.R. § 262.11 "in that it did not determine if its waste is a hazardous waste." The penalty period was from 7 February 1991 until 18 March 1991, and the penalty was calculated at $5,000.00 per day plus a base penalty of $25,000.00. An informal conference between petitioner and the Division was held on 4 April 1991, but the Order was not changed. Petitioner contested the Order and filed a request for an administrative hearing with the Office of Administrative Hearings (OAH) on 3 July 1991. The Administrative Law Judge (ALJ) limited the hearing to whether DEHNR erred in determining petitioner had not made a waste determination required by 40 C.F.R. § 262.11 as of 7 February 1991 and continuing through 18 March 1991 and limited testimony to those events that occurred during the penalty period from 7 February 1991 to 18 March 1991.

The evidence is as follows: On 7 February 1991, Larry David Perry (Mr. Perry), a compliance supervisor for DEHNR, and Mike Williford (Mr. Williford), a waste management specialist for DEHNR, met with David M. Shank (Mr. Shank), petitioner's Elm City plant manager, for an on-site visit and an investigation of a complaint that petitioner's plant site had approximately 150 to 160 abandoned and leaking drums on it. Some of the drums, which were shipped from petitioner's Virginia facility, were leaking, some were corroding and were not completely closed, some were bulging, material had run down the side of a drum, yellow material had leaked in front of and underneath a wooden pallet on which some of the drums were stored, one drum was labeled SOLV/H20, one drum was labeled with a DOT flammable label, and the remaining drums were not labeled. Mr. Shank informed Mr. Williford and Mr. Perry that he did not know what was in all the drums, but to the best of his knowledge, the kinds of materials that would be in the drums were paint thinners, paint residues, lubricating oils, engine oils, hydraulic oils, and similar materials. Mr. Perry and Mr. Williford informed Mr. Shank petitioner needed to do a chemical analysis on the contents of the drums and send the results to DEHNR because they "had to have laboratory analysis or some information to identify this material." Petitioner did not provide DEHNR with any information regarding the waste analysis of the drums between 7 February 1991 and 18 March 1991 and had not done a waste determination under 40 C.F.R. § 262.11 as of 4 April 1991, the date of the informal conference.

William Shepheard (Mr. Shepheard), the executive chief operating officer of petitioner, testified he "just knew" its industrial wastes were nonhazardous because DuPont and Sherwin Williams told him the components of the paints were nonhazardous; however, he admitted he might have received other paints and paint thinners from Exxon or "a house of similar nature." He also stated that because petitioner used recycled drums, any labels on the drums might not be what the drums contained. Mr. Shepheard testified he informed DEHNR at the 4 April 1991 informal conference about the nature of petitioner's business and that its wastes were nonhazardous; however, no one told DEHNR petitioner's wastes were nonhazardous prior to 7 February 1991 because petitioner "[was]n't required to do it and [petitioner] did not do it."

Although Mr. Meyer was not present at the 7 February 1991 inspection, he reviewed the entire file on petitioner and spoke to his staff before deciding the amount of penalty to impose. He considered the mandatory factors to use in assessing a penalty such as the degree and extent of harm, the cost of rectifying the damage, past compliance history, any good faith efforts on the part of petitioner, whether other organisms were potentially threatened, and the potential threat to environmental media such as groundwater, surface water and soil. Mr. Meyer testified that the Environmental Protection Agency (EPA) drafted a policy which North Carolina adopted to determine whether violations were major or minor. Mr. Meyer testified this policy is only a guidance and "the statutes and rules" prevail.

In assessing the amount of the penalty, Mr. Meyer considered the violation to be major and a "continuing violation for forty days and a penalty of five thousand dollars ($5,000.00) per day was used for this forty-day noncompliance period, in addition to the initial penalty matrix, which was twenty five thousand dollars ($25,000.00)." Mr. Meyer testified he signed the Order on 31 May 1991, and that the enforcement meeting with his staff probably took place sometime in May of 1991.

DEHNR, in its final decision which adopted the ALJ's recommended decision, upheld the $225,000.00 penalty assessed against petitioner. DEHNR, in addition to finding there were approximately 150 to 160 drums at the Elm City plant, some leaking, some corroding, some bulging, most not labeled, but one labeled flammable, made the following relevant findings of fact:

23. Between February 7, 1991, the date of the initial inspection, and March 18, 1991, the closing date of the penalty period, neither Mr. Shank nor anyone else from Air-A-Plane provided Mr. Williford with any information regarding the waste analysis of the [approximately 150 to 160] drums at the site.

24. There is no evidence that any representative from the Petitioner provided any representative of the Respondent with specific information regarding the contents of the drums during the penalty period.

....

36. Mr. Meyer concluded that Air-A-Plane exhibited a total lack of knowledge as to what should have been done to identify the waste material and, therefore, there was a substantial (major) degree of non-compliance and deviation from the regulations.

37. Mr. Meyer decided that the violation was continuing in nature and he imposed a $5,000 daily penalty in addition to the $25,000 base penalty. The daily penalty ran from the date of the inspection, February 7, 1991 through March 18, 1991, the day after the penalty was computed.

....

39. If Mr. Meyer had been provided with information prior to the penalty assessment that the material in the drums was not hazardous waste, this information would not have affected the imposition of or the amount of the penalty.

DEHNR concluded petitioner had produced a solid waste and failed to make a waste determination as required by 40 C.F.R. § 262.11, and DEHNR had properly followed statutory and regulatory guidelines in assessing the penalty.

Petitioner filed a petition for judicial review pursuant to Chapter 150B of the North Carolina General Statutes to Wake County Superior Court. By order filed 28 February 1994, the trial court, after "having fully reviewed [DEHNR]'s Findings of Fact, Conclusions of Law and Decision, the entire administrative record and the Petition for judicial review and having considered the brief and oral argument," affirmed the final contested case decision of DEHNR.

While our review of DEHNR's decision is limited to petitioner's assignments of error to the superior court's order, Watson v. N.C. Real Estate Comm'n, Inc., 87 N.C.App. 637, 640, 362 S.E.2d 294, 296 (1987), cert. denied, 321 N.C. 746, 365 S.E.2d 296 (1988), review is further limited by the issues raised in the petition for judicial review made to the superior court. Issues not raised in the petition for judicial review cannot be asserted as a basis in this Court for reversing the agency's decision. Furthermore, any issue properly raised but not discussed in the brief to this Court is deemed abandoned. N.C.R.App.P. 28.

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Petitioner's petition for judicial review, assignments of error to the superior court...