State, ex rel. Brown v. Dayton Malleable, Inc., 81-1134

• Decision Date: 04 August 1982
• Docket Number: No. 81-1134,81-1134
• Citation: 1 OBR 185,438 N.E.2d 120,1 Ohio St.3d 151
• Parties: , 1 O.B.R. 185, 12 Envtl. L. Rep. 21,146 The STATE, ex rel. BROWN, Atty. Gen., Appellant and Appellee, v. DAYTON MALLEABLE, INC., Appellee and Appellant.
• Court: Ohio Supreme Court

Page 151

1 Ohio St.3d 151

438 N.E.2d 120, 1 O.B.R. 185, 12 Envtl. L. Rep. 21,146

The STATE, ex rel. BROWN, Atty. Gen., Appellant and Appellee, v. DAYTON MALLEABLE, INC., Appellee and Appellant.

No. 81-1134.

Supreme Court of Ohio.

Aug. 4, 1982.

Syllabus by the Court

1. Schedules of compliance are terms or conditions of National Pollutant Discharge Elimination System permits issued by the Director of Environmental Protection. (R.C. 6111.03[J], applied.)

2. A court may assess a civil penalty against a person who violates or fails to perform a duty imposed by a schedule of compliance. (R.C. 6111.07 and 6111.09, applied.)

Dayton Malleable, Inc. ("DMI"), operates its Ironton Division in Ironton, Ohio, and manufactures malleable iron castings. The Ironton Division had caused pollution of the Ohio River by discharging industrial wastes in violation of R.C. Chapter 6111.

On and effective September 2, 1975, the Ohio Environmental Protection Agency ("OEPA") issued a National Pollutant Discharge Elimination System ("NPDES") permit. ¹ This permit: (1) authorized discharge of certain amounts of pollutants into the Ohio River; (2) required DMI to construct water treatment facilities to bring its discharge within established limits; and (3) included a schedule of compliance stating dates for initiating and completing various stages of the project.

It is stipulated that DMI timely submitted its plans on April 1, 1976, and OEPA approved those plans on September 15, 1976. Yet, it is also stipulated that DMI failed to comply with other aspects of the schedule of compliance. Construction did not begin on September 2, 1976, or end on May 2, 1977, as required. At one location, outfall 001, DMI began construction in April 1978 and completed it on October 17, 1978. At another location, outfall 004, construction began in April 1977 and finished in July 1977.

Under the permit, DMI was to achieve final compliance with effluent limitations by July 1, 1977, but failed to do so until November 1978 at outfall 001 and March 1978 at outfall 004. DMI likewise did not submit to OEPA the required progress reports within 14 days of the September 2, 1976, May 2, 1977, and July 1, 1977, deadlines. Both DMI and the state agree that the pollutants discharged at outfall 001 were in excess of those allowed under the permit on 13 different dates and on three different dates at outfall 004.

On March 24, 1978, the Attorney General of Ohio filed this action in the Court of Common Pleas on behalf of the state, seeking a civil penalty for DMI's failure to comply with the permit and an injunction requiring DMI to comply. The cause was tried to the court on January 3, 1979. Because the parties agreed that DMI was in full compliance by November 1978, the trial court dismissed the state's request for an injunction as moot.

At trial, the only issue was whether a penalty would be proper and, if so, in what amount. The court admitted evidence of DMI's financial condition over objection. DMI, however, introduced evidence intended to mitigate the amount of penalty assessed.

The trial court issued an opinion, 13 ERC 2189, ² and assessed a civil penalty of $493,500. The court used the civil penalty policy of the United States Environmental Protection Agency ("USEPA"), BNA Environment Reporter, April 21, 1978, at pages 2011 et seq., as a guideline for reaching this conclusion. The parties agreed that the USEPA policy was the proper standard. The court found that the amount necessary to redress the harm or risk of harm to public health or the environment resulting from DMI's polluting in excess of the amount allowed under its permit was $34,150 ($50 per day for 683 days). The economic benefit from polluting for DMI was $8,000. Noting that DMI made "little, if any, effort" to meet its construction deadline under the schedule of compliance, the court assessed a penalty of $535,500 for "recalcitrance and indifference" ($750 per day for 714 days). The court concluded that the basic penalty was $578,000.

In light of the USEPA policy, however, the court considered several mitigating factors which were beyond DMI's control. For example, for 98 days a strike at the Ironton Division from November 1, 1977, to February 6, 1978, prevented delivery of equipment and entry of the plant by some workers. The trial court allowed a partial credit of $500 per day, totaling $49,000, because this strike would not have delayed completion if DMI had followed the schedule of compliance. The court also permitted a $13,000 credit ($250 per day for 52 days) because the harsh winter of 1978 delayed work at outfall 001 from February 7, 1978, through March 31, 1978. DMI also received a partial credit of $250 per day, totaling $22,500, for equipment delivery delays which overlapped both the strike and the weather delays. The court allowed this credit while noting that DMI did not promptly order the equipment.

After setting off $84,500 in credits against the basic penalty of $578,000, the trial court concluded that the total penalty should be $493,500. The court then determined that this penalty would not harm DMI to such an extent as to put it out of business but would be large enough to deter further violations by DMI. The judgment, therefore, was a civil penalty in the amount of $493,500, plus costs, in favor of the state.

The Court of Appeals reversed the judgment of the trial court as to the number of days of violation and remanded the case to the trial court for recalculation of that number. Upon the state's motion for reconsideration, the Court of Appeals stated that DMI's failure to meet deadlines in the schedule of compliance was not a violation of a term or condition in its permit under R.C. Chapter 6111. Therefore, the court reasoned, it was error to assess a penalty for delays occurring before the July 1, 1977, compliance date. Both the state and DMI appealed.

The cause is now before this court pursuant to the allowance of motions to certify the record.

Bricker & Eckler, Gerald L. Draper, Marshall L. Lerner and Richard T. Taps, Columbus, for appellee and appellant.

William J. Brown, Atty. Gen., Martha E. Horvitz and E. Dennis Muchnicki, Asst. Attys. Gen., for appellant and appellee.

LOCHER, Justice.

Each party raises a distinct issue. The state argues that the Court of Appeals erred by holding that the schedule of compliance is not an enforceable term or condition of the NPDES permit. DMI contends that the trial court erred by admitting evidence pertaining to DMI's financial condition. We agree with the state that a schedule of compliance is an enforceable term or condition of an NPDES permit. Otherwise, we affirm the Court of Appeals.

I.

R.C. Chapter 6111 embodies the response of the General Assembly to the Federal Water Pollution Control Act Amendments of 1972. See R.C. 6111.01(L); Section 1342(b), Title 33, U.S.Code. The goal of the federal Act is "eliminating 'the discharge of pollutants into the navigable waters,' 33 U.S.C., Section 1251(a)(1) * * *." EPA v. National Crushed Stone Assn. (1980), 449 U.S. 64, 69, 101 S.Ct. 295, 300, 66 L.Ed.2d 268. ³

Ohio's participation in this effort includes the power of the Director of Environmental Protection ("director") to: "Issue, revoke, modify, or deny permits for the discharge of sewage, industrial waste, or other wastes into the waters of the state, and for the installation or modification of disposal systems or any parts thereof in compliance with all requirements of the 'Federal Water Pollution Control Act' and mandatory regulations adopted thereunder, and set terms and conditions of permits, including schedules of compliance, where necessary." (Emphasis added.) R.C. 6111.03(J). R.C. 6111.01(K) defines a "schedule of compliance" as "a schedule of remedial measures including an enforceable sequence of actions or operations leading to compliance with standards and rules adopted under sections 6111.041 and 6111.042 of the Revised Code or compliance with terms and conditions of permits set under division (J) of section 6111.03 of the Revised Code."

The trial court noted that DMI had admitted violations of R.C. Chapter 6111. "No person shall violate or fail to perform any duty imposed by sections 6111.01 to 6111.08 of the Revised Code, or violate any order, rule, or term or condition of a permit issued by the director of environmental protection pursuant to such sections. Each day of violation is a separate offense." R.C. 6111.07(A). R.C. 6111.09 establishes a range of penalties for violations and provides, in part: "Any person who violates section 6111.07 of the Revised Code shall pay a civil penalty of not more than ten thousand dollars per day of violation, to be paid into the state treasury to the credit of the general revenue fund. * * * Any action under this section is a civil action * * *." The Court of Appeals, however, determined that these provisions were not a sufficient basis for assessing a penalty. That court concluded, in its decision on the state's motion for reconsideration, that the schedule of compliance was in the nature of an "agreement" between the director and DMI, not a term or condition of the permit. In light of the ability of the director to revoke or modify the permit, R.C. 6111.03(J), the Court of Appeals reasoned that a "strict construction" of the penalty provisions of R.C. Chapter 6111 would prohibit imposing "a penalty for delay in the performance of steps in the schedule of compliance." We disagree.

I A.

"Where the language of a statute is plain and unambiguous and conveys a clear and definite meaning there is no occasion for resorting to rules of statutory interpretation. An unambiguous statute is to be applied, not interpreted." Sears v. Weimer (1944), 143 Ohio St. 312, 55 N.E.2d 413 , paragraph five of the syllabus, quoted with approval in State v. American Dynamic Agency (1982), 70 Ohio St.2d 41, 45, 434 N.E.2d 735 . See, also, R.C. 1.49. R.C. 6111.03(J) clearly empowers the...