Durfee v. Ocean State Steel, Inc.

• Decision Date: 26 January 1994
• Docket Number: No. 93-507-A,93-507-A
• Parties: Louise DURFEE, in her capacity as Director of the Rhode Island Department of Environmental Management, v. OCEAN STATE STEEL, INC. ppeal.
• Court: Rhode Island Supreme Court

Page 698

636 A.2d 698

Louise DURFEE, in her capacity as Director of the Rhode Island Department of Environmental Management, v. OCEAN STATE STEEL, INC.

No. 93-507-Appeal.

Supreme Court of Rhode Island.

Jan. 26, 1994.

Claude Cote, Dept. of Environmental Management, Mark Wallace Siegars, Dept. of Environmental Management, for plaintiff.

Dennis Esposito, W. James McKay, David Wollin, Ocean State Steel, Thomas V. Moses, RI Dept. of Economic Development, Providence, for defendant.

Deming E. Sherman, Blackstone Park Improvement Ass'n., Ralph J. Perrotta, East Providence Coalition/C Care of RI, Providence, William C. Maaia, East Providence School Committee, East Providence, amicus curiae.

OPINION

MURRAY, Justice.

This case comes before us on the appeal of the defendant, Ocean State Steel, Inc. (Ocean State), an East Providence-based steel-manufacturing plant, from a Superior Court order finding it in contempt of a prior court order entered into by consent of both Ocean State and the Rhode Island Department of Environmental Management (DEM).

The facts that give rise to this dispute involve a consent agreement signed by the parties. The factors that led to the drafting of that agreement are as follows: In December 1989 DEM notified Ocean State of its air-pollution violations. In January 1990 Ocean State submitted a plan to DEM that called for a program to remediate emissions, including the installation of certain air-pollution-control equipment. In April 1990 Ocean State notified DEM that the air-pollution-control equipment would be installed and operational by June 1990. During May 1990 Ocean State informed DEM that it was unlikely that the air-pollution-control equipment would be operational until July 1990. Subsequently DEM issued a notice of violation to Ocean State, ordering it to achieve compliance with certain state pollution-control regulations by installing and making operational the air-pollution-control equipment by June 30, 1990.

In July 1990 DEM and Ocean State executed an administrative consent agreement in which Ocean State agreed to comply with specific state pollution-control regulations by having the air-pollution-control equipment operational by July 31, 1990. The agreement stated in pertinent part that

"[i]f the air pollution control equipment is not operational by 31 July 1990 Ocean State shall cease operations that contribute to violations of Regulations 1, 3, and 7 until the air pollution control equipment is operational and in compliance with said regulations. " (Emphasis added.)

In November 1990 DEM filed a complaint and request for injunctive relief against Ocean State to enforce the terms of the consent agreement. The complaint asserted that Ocean State had failed to install numerous pollution-control devices and had been emitting air contaminants from its East Providence location since November 1989. The DEM contended that these emissions violated the Rhode Island Clean Air Act, G.L.1956 (1989 Reenactment) chapter 23 of title 23, and the Rhode Island Department of Environmental Management Division of Air and Hazardous Materials Air Pollution Control Regulations 1, 3, and 7 (regulations) promulgated pursuant to the Rhode Island Clean Air Act. ¹

The consent agreement was amended and adopted by the court in December 1990. That order provided in part that "[n]othing in this order [absent certain modifications of air-pollution-control equipment installation dates] shall alter and change the rights, duties and obligations of the parties arising under the administrative [c]onsent [a]greement." The order was further amended in July 1991 and January 1992. The final amended order, entered on January 7, 1992, provided that the two previous orders entered by the Superior Court on December 6, 1990, and July 22, 1991, "remain in full force and effect."

The final order also required (1) that DEM issue an air-pollution-control permit (permit) to Ocean State, (2) that Ocean State install all pollution-control equipment by August 15, 1992, (3) that if Ocean State failed to comply with the regulations or the terms of the permit, it was required to implement additional measures as outlined in an attached exhibit and submit a proposed schedule for the implementation of those measures, and (4) that Ocean State install an air-pollution monitoring station and allow DEM access to the station. An approval letter from DEM was attached to the order along with a list of permit conditions and emission limitations. These air-pollution-control permit conditions and limitations were separated into five distinct categories: (1) operating conditions and emission limitations (establishing opacity, production, particle emission, and gas-temperature limitations), (2) monitoring requirements (establishing monitoring requirements for specific air-pollution-control equipment), (3) record keeping and reporting (directing Ocean State to forward at least three different types of monthly air-pollution monitoring reports to DEM), (4) stack testing (directing Ocean State to stack-test with the appropriate notification, approval, and observation of the stack-testing procedure by DEM), and (5) other requirements (outlining specific guidelines for the implementation and the operation of other miscellaneous pollution-control equipment). Our review of this addendum shows that Ocean State incurred very clear and specific responsibilities.

Ocean State did not comply with the final amended order, and in June 1993 DEM filed a petition to adjudge Ocean State in contempt. The DEM alleged that Ocean State had failed to comply with the final amended order, the regulations, and the terms of the permit. The DEM sought (1) a temporary injunction ordering a cessation of all steel production, (2) immediate compliance by Ocean State with the consent order, the Rhode Island Clean Air Act, and the regulations, and (3) miscellaneous fines and attorney's fees.

At the outset we note that our review is limited to what occurred during the contempt hearing and therefore we do not specifically review any prior proceeding. The testimony at the July 1993 contempt hearing revealed the following: Terry Tuchon, an employee in the Division of Air Resources of DEM, testified that Ocean State was in violation of the opacity limitations as set forth in the permit, approximately sixty times from January to April 1993. Douglas McVay (McVay), a supervising engineer for DEM, testified that Ocean State had not performed the mandated "stake testing" as required by the permit. ² McVay further testified that Ocean State had also failed to complete other pollution-monitoring activities and failed to submit timely reports to DEM as required by the permit.

McVay stated that the steel production process generates approximately thirty-nine pounds of steel dust for every ton of steel that is produced. In the air-pollution-control permit, Ocean State represented that its equipment would capture approximately thirty-eight pounds of the steel dust produced. In actuality, however, the equipment was collecting only twenty pounds of steel dust per ton of steel produced. The unfiltered remainder was being released into the atmosphere. McVay calculated that approximately 600,000 tons of steel dust had been emitted into the atmosphere between August and December 1992.

Ferguson Porter (Porter), president of Ocean State, testified that Ocean State expended $900,000 on emission-caption equipment. He admitted that he was disappointed with the filtering and performance capabilities of the emission-caption equipment. Porter stated that without any prompting from DEM, Ocean State attempted modifications to increase the capabilities of the emission-caption equipment. Porter testified that Ocean State chose not to perform the required stake testing because Ocean State realized that it would have failed.

Porter admitted that during a June 1993 meeting with DEM, the purpose of which was to bring Ocean State into compliance with the consent order, alternatives to ceasing operations were discussed. The DEM had suggested the possibility of allowing Ocean State to operate using one furnace instead of the usual two furnaces that Ocean State utilized in the steel-production process. A discussion also ensued regarding the possibility of Ocean State's paying significant monetary fines in lieu of ceasing operations.

The trial justice found that although Ocean State had expended a significant amount of money trying to meet the requirements of the consent order, those efforts fell "far short" of what was expected by DEM. The trial justice noted that Ocean State failed to self-monitor its pollution-control activity. He stated that the court could "reasonably infer" that certain air-quality reports were willfully withheld from DEM. The trial justice paid particular attention to the testimony explaining the steel-dust-collecting equipment. He noted that Ocean State's pollution-control equipment collected only approximately 50 percent of the steel dust produced in the production process, commenting that "[t]hat constitutes substantial non-compliance [sic ]" with the consent agreement. Ocean State had represented that its pollution-control equipment would capture approximately 97 percent of the steel dust emitted during the production process. The trial justice specifically noted that "[o]ne does not me[e]t the requirements of the consent agreement by installing monitors. The monitors are suppose[d] to perform to a certain capacity. That is what the permit says. That is the purpose of having them put in there to protect the workers and protect the environment and to protect the surrounding properties."

The trial justice focused on the fact that there was a substantial amount of evidence supporting the premise that the parties were well aware that it had been over two years since the final consent order was entered. During those two years Ocean State had not achieved compliance. He noted that the...