Titan Wheel Corporation v. United States Environmental Protection Agency, No. 4:02-cv-40352 (S.D.Iowa 11/10/2003), No. 4:02-cv-40352.

CourtUnited States District Courts. 8th Circuit. United States State District Court of Southern District of Iowa
Writing for the CourtJames E. Gritzner
Decision Date10 November 2003
Docket NumberNo. 4:02-cv-40352.

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No. 4:02-cv-40352.
United States District Court for the Southern District of Iowa, Central Division.
Filed November 10, 2003.


This matter comes before the Court on cross motions for summary judgment (Clerk's Nos. 12 and 17). Plaintiff Titan Wheel Corporation of Iowa ("Titan") appeals the final decision of the Environmental Appeals Board ("EAB") which upheld a $150,289 penalty imposed on Titan for violations of the Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq. ("RCRA"). Defendant United States Environmental Protection Agency ("EPA") counterclaims for enforcement of the penalty plus interest and costs.


This Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1337 which affords the district court "original jurisdiction of any civil action or proceeding arising under any Act of Congress regulating commerce or protecting trade and commerce against restraints and monopolies . . . ." 28 U.S.C. § 1337 (2000).

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The Resource Conservation and Recovery Act "RCRA" was enacted to provide a "comprehensive environmental statute that governs the treatment, storage, and disposal of solid and hazardous waste." Meghrig v. KFC W., Inc., 516 U.S. 479, 483 (1996). RCRA's primary purpose is to "reduce the generation of hazardous waste and to ensure the proper treatment, storage, and disposal of that waste which is nonetheless generated, `so as to minimize the present and future threat to human health and the environment.'" Id. (quoting 42 U.S.C. § 6902(b)). RCRA's enforcement provision "empowers the EPA to regulate hazardous wastes from cradle to grave." City of Chicago v. Envtl. Defense Fund, 511 U.S. 328, 331 (1994).

RCRA authorizes the EPA to promulgate requirements and standards applicable to owners and operators of facilities that generate, store, and dispose of hazardous waste. 42 U.S.C. §§ 6922, 6924, 6925 (2000). In addition, RCRA prohibits the treatment, storage, or disposal of hazardous waste without either a permit or "interim status."1 Id. § 6925(a),(e).

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A facility which generates in excess of 1000 kilograms of hazardous waste per month ("large quantity generator")2 may accumulate hazardous waste on-site for up to ninety days without a permit or interim status. 40 C.F.R. § 262.34(a). However, a large quantity generator that exceeds the ninety-day limit must comply with RCRA's hazardous waste management regulations. Id. § 262.34(b). Those regulations require, inter alia, that the owners and operators provide training for the facility's personnel to ensure compliance. See id. § 265.16(a)(1), (b)-(e). The regulations also require the owners and operators to have a contingency plan for the facility "designed to minimize hazards to human health or the environment from fires, explosions, or any unplanned" release of hazardous waste. Id. § 265.51(a). RCRA authorizes the assessment of a civil penalty for violations. 42 U.S.C. § 6928.

Although RCRA is a comprehensive federal environmental statute, it does not preempt state regulation of solid waste. Rather, RCRA permits states to seek EPA approval to administer and enforce their own hazardous waste programs ("authorized states") in lieu of the federal program. See 42 U.S.C. § 6926(b) (2000) ("Any State which seeks to administer and enforce a hazardous waste program pursuant to this subchapter may develop and . . . submit to the Administrator an application . . . for authorization of such program. . . . Such State is authorized to carry out such program

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in lieu of the Federal program . . . ."). However, in states like Iowa which are not authorized to facilitate their own program, the EPA regulates hazardous waste under RCRA.


Since July of 1988, Titan has leased and operated a steel wheel manufacturing facility in Walcott, Iowa ("Facility"). The Facility generates solid hazardous waste as defined by 40 C.F.R. § 260.10.3 In April 1996, Titan identified itself as a generator of hazardous waste by submitting a notification of hazardous waste activity to the EPA. Titan did not have an RCRA permit or interim status to operate as a treatment, storage, and disposal facility. At all pertinent times, Titan generated in excess of 1000 kilograms of hazardous waste per month and was subject to the requirements of a large quantity generator under RCRA. On February 10-11, 1998, the EPA conducted an RCRA compliance inspection at the Facility and found several violations.

On September 17, 1998, based on the violations discovered during the February inspection, the EPA filed a three-count Complaint and Compliance Order ("CCO") against Titan alleging (1) storage of containers of hazardous waste in excess of ninety

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days on eight different occasions;4 (2) failure to develop or implement a personnel training program; and (3) failure to maintain a contingency plan. The EPA proposed a civil penalty of $153,209.5 The CCO also ordered Titan to develop and implement a closure plan for hazardous waste container storage units and financial assurance statement ("closure plan"). Titan challenged the CCO through the administrative process.

On April 28, 1999, the parties filed pre-hearing briefs and exchanged witness and exhibit lists. During the pre-hearing exchange, Titan submitted exhibits showing the penalties assessed by the EPA and by state agencies in other hazardous waste violation cases.

On November 24, 1999, the EPA filed an amended complaint reducing the proposed penalties for each of the three counts for a total proposed penalty of $150,289.

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On the same day, the parties filed a Joint Statement of Facts ("Joint Statement") waiving their right to an administrative hearing and submitted the case on written briefs. In the Joint Statement, Titan conceded liability for the violations but challenged the proposed penalty as excessive.

On December 1, 1999, the EPA filed a motion to exclude certain pre-hearing exhibits submitted by Titan. The exhibits at issue were submitted to illustrate that the EPA assessed more severe penalties than those assessed by Missouri's authorized agency. The EPA argued the exhibits were irrelevant, immaterial, and of little or no probative value and were not admissible.6 Titan resisted the motion, arguing RCRA's Penalty Policy required uniform application of penalties for similar violations and the exhibits illustrated the EPA's failure to adhere to that policy. Titan argued the exhibits also demonstrated that penalties assessed by the Missouri agency were substantially lower than penalties the EPA proposed for similar violations.

On December 13, 2000, Administrative Law Judge William B. Moran ("ALJ") granted EPA's motion to strike. He reasoned that "even if it could be demonstrated that penalty determinations for similar violations varied widely between state and EPA

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enforcement actions, such disparities are not relevant. Only wide disparities for similar penalties imposed by a particular enforcement agency can, theoretically, be subject to the claim that a proposed penalty is arbitrary or an abuse of discretion." ALJ's Initial Decision (Pl.'s App. at 42). The ALJ went on to remark that even if Titan's propositions regarding uniformity of penalties were correct, it is equally plausible that in the name of uniformity, the states should be required to adjust their proposed penalties upward to be consistent with those sought by the EPA. Id. Furthermore, the ALJ found it was insufficient for Titan to simply make assertions regarding inconsistent penalties and point generally to hundreds of pages of documents for the Court to sort through in order to sustain Titan's assertions. Id. "To defeat a motion to exclude documents, a respondent must point to the particular documents, and the pages within those documents, and then show an identity of facts and circumstances in those cases with the core facts in the case in litigation to demonstrate such an abuse of discretion in the penalty being proposed." Id. at 42-43. The ALJ concluded, "in this instance the evidence [Titan] has presented of penalties sought in completely separate actions cannot be admitted as evidence to show a disparity between the proposed penalty in the instant matter and those in other matters, as such information does not have significant probative value and has no bearing on the determination of a penalty in the case at hand." Id. at 45.

The parties filed their post-hearing briefs on January 29, 2001. Therein, the EPA repeated its demand for penalties and a closure plan. When the parties submitted their post-hearing reply briefs on February 12, 2001, Titan submitted evidence allegedly

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showing that the EPA agreed to allow Titan to develop and submit a soil assessment work plan in lieu of a closure plan.7

On February 13, 2001, the EPA moved to strike the exhibits Titan submitted with its post-hearing reply brief, arguing Titan failed to submit the exhibits during the prehearing information exchange and had not shown good cause for failing to submit them at that time. Titan resisted the motion, arguing the exhibits demonstrate Titan's "good faith" efforts and were pertinent in calculating RCRA's gravity-based penalty assessment.

The ALJ's Initial Decision was rendered on May 4, 2001. Therein, the ALJ granted the EPA's motion to strike the post-hearing exhibits as untimely and irrelevant. The ALJ went on to adopt the EPA's proposed penalties and ordered Titan to pay $150,289 within thirty days. The ALJ further ordered Titan to comply with all actions listed in the CCO according to the timetable set forth therein.

On June 7, 2001, Titan appealed the ALJ's decision to the EAB arguing the ALJ erred (1) by striking the pre-hearing evidence regarding penalty assessments in other cases and...

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