U.S. v. American Nat. Can Co.

• Decision Date: 31 July 2000
• Docket Number: No. 98 C 5133.,98 C 5133.
• Citation: 126 F.Supp.2d 521
• Parties: UNITED STATES of America v. AMERICAN NATIONAL CAN CO., Defendant.
• Court: U.S. District Court — Northern District of Illinois

126 F.Supp.2d 521

UNITED STATES of America v. AMERICAN NATIONAL CAN CO., Defendant.

No. 98 C 5133.

United States District Court, N.D. Illinois, Eastern Division.

July 31, 2000.

Kurt N. Lindland, U.S. Attorney's Office, Chicago, IL, for plaintiff.

Joseph Vincent Karaganis, Alan Bruce White, John William Kalich, Barbara A. Magel, Christopher William Newcomb, Karaganis & White, Ltd., Chicago, IL, for defendant.

MEMORANDUM OPINION AND ORDER

MORAN, Senior District Judge.

The government brings this action on behalf of the Environmental Protection Agency (EPA) against American National Can Company (ANC), alleging violations of the Clean Air Act (CAA), 42 U.S.C. § 7401, et seq., and federal asbestos regulations, 40 C.F.R. § 61.140 et seq. The government claims that for a period of at least several months scavengers stripped and removed asbestos from pipes and other components in an effort to salvage metal at a vacant building owned by ANC. The government argues that this activity constituted a "renovation," as that term is defined by the asbestos regulations, triggering federally-mandated notice and work practice standards related to the handling of asbestos during renovation. The government claims that ANC failed to adhere to those requirements and therefore is strictly liable for civil penalties.

ANC has moved for summary judgment with respect to all five counts of the complaint. The government has filed its own motion for summary judgment, but briefing on that motion is not yet complete. We have advised the parties that we will resolve ANC's motion first and then proceed to accept further briefs on the government's motion, if necessary. For the reasons set forth below, we grant ANC's motion and therefore need not address the government's motion.

BACKGROUND

I. Regulatory Framework

We begin with a brief summary of the federal regulations at play in this lawsuit. Section 112 of the CAA authorizes the EPA to publish a list of hazardous air pollutants and to establish national emission standards for each such pollutant. 42 U.S.C. § 7412. These standards are known as the National Emission Standards for Hazardous Air Pollutants (NESHAPs). Asbestos was one of the first pollutants designated as hazardous under the CAA and, in 1973, the EPA promulgated a NESHAP for asbestos. 38 Fed.Reg. 8820 (1973). The first iteration of the asbestos NESHAP included requirements and standards governing the removal or stripping of friable (i.e., dry) asbestos materials prior to the demolition of a building. Id. In 1975, the asbestos NESHAP was expanded to govern the handling of asbestos during renovation in addition to demolition. 40 Fed.Reg. 48293 (1975). The asbestos NESHAP was amended and repromulgated in 1984 and again, most recently, in 1990. See 49 Fed.Reg. 13658 (1984); 55 Fed.Reg. 48406 (1990). The current form of the asbestos NESHAP is found at 40 C.F.R. § 61.140 et seq.

Specifically with respect to renovation, the asbestos NESHAP requires that owners provide prior notification and meet certain work practice standards when a jurisdictional amount of friable asbestos material is disturbed during renovation of a facility. 40 C.F.R. § 61.145. The current regulation defines "renovation" as follows:

"Renovation" means altering a facility or one or more facility components in any way, including the stripping or removal of [asbestos] from a facility component. Operations in which load bearing structural members are wrecked or taken out are demolitions.

40 C.F.R. § 61.141. The asbestos NESHAP states that an owner must give prior notice to the EPA before undertaking a renovation. 40 C.F.R. § 61.145(b). Moreover, the asbestos NESHAP's work practice standards require that the owner remove friable asbestos from a facility before initiating any renovation activity that would disturb such materials, 40 C.F.R. § 61.145(c)(1), and further require that the owner adequately wet the asbestos during renovation and ensure that the asbestos remains wet until it is collected and removed from the facility. 40 C.F.R. § 61.145(c)(3), (c)(6)(i).

Failure to comply with the requirements set out in the asbestos NESHAP constitutes a violation of Section 112 of the CAA. 42 U.S.C. § 7412(i)(3)(A). Pursuant to Section 113 of the CAA, 42 U.S.C. § 7413(b), the EPA is authorized to seek civil penalties against an owner who has not complied with the asbestos NESHAP and fine that owner up to $25,000 per day for its infraction. These federal regulations animate the government's lawsuit against ANC: the government claims that ANC engaged in a renovation without complying with the work practice standards contained in the asbestos NESHAP and therefore is liable for civil penalties amounting to over $1.4 million.

II. Factual Background

This regulatory backdrop sets the stage for the events that spawned this litigation. In March 1993, ANC decided to cease operations at a can manufacturing facility it owned in Chicago. The facility housed pipes and other components tainted with asbestos. ANC vacated the building in March 1993, and turned off alarm systems and water service to the building by August 1993. ANC intended to demolish the facility and in the meantime hired a security company to patrol the vacant building and its surrounding property. Despite the security, unauthorized scavengers accessed the building and removed salvageable material. In the course of their salvage operations, the scavengers also disturbed friable asbestos materials contained in the building.

The EPA became aware of potential violations of the asbestos NESHAP at ANC's vacant building and sent an inspector to the facility in May 1994. The government alleges that the EPA inspector discovered substantial amounts of stripped and removed friable asbestos materials in the vacant building. On June 29, 1994, the EPA issued a proposed administrative order requiring ANC to secure the facility so that scavengers would not continue to access the building and disturb asbestos. On August 8, 1994, the EPA issued a final administrative order mandating that ANC comply with the asbestos NESHAP and secure its facility from scavengers. Immediately upon execution of the final order, ANC engaged an asbestos removal company to clean up the disturbed asbestos from its vacant building. This work was completed by August 19, 1994. According to the government, scavengers continued to access the facility and disturb asbestos after this date. ANC disputes this factual contention. ANC ultimately demolished the building in May 1995.

On August 19, 1998, the government filed a five-count complaint against ANC based on the above-described events. Counts I-III allege that ANC violated the CAA by renovating its facility without adhering to the asbestos NESHAP's work practice standards related to the handling of asbestos during renovation. Specifically, the government alleges that friable asbestos was not removed from the facility prior to the unauthorized scavenging (Count I), that the asbestos was not wetted while it was being disturbed by the scavengers (Count II), and that the asbestos disturbed by the scavengers was not kept wet until collected for disposal (Count III). Count IV alleges that the notice of demolition issued by ANC prior to demolishing the facility in 1995 was deficient. Count V alleges that ANC violated the August 8, 1994, administrative order because scavengers continued to access the building and disturb asbestos after that order was issued. ANC moves for summary judgment with respect to Counts I-III, based on the straightforward argument that unauthorized scavenging does not constitute a renovation as that term is defined in the asbestos NESHAP. ANC challenges Count IV on the grounds that the notice of demolition was sufficient, and claims that Count V should be rejected because the EPA did not have the authority to issue the administrative order in the first place. We agree with ANC's assessment of the case.

DISCUSSION

I. Summary Judgment Standard

Pursuant to Rule 56 of the Federal Rules of Civil Procedure, summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c); see Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). In considering a motion for summary judgment a court must "construe all facts in the light most favorable to the non-moving party and draw all reasonable inferences in favor of that party." Skorup v. Modern Door Corp., 153 F.3d 512, 514 (7th Cir. 1998); see Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A genuine issue of material fact exists if there is sufficient evidence for a reasonable factfinder to decide the issue in favor of the non-moving party on the particular issue. Eiland v. Trinity Hosp., 150 F.3d 747, 750 (7th Cir. 1998). The "mere existence of some alleged factual dispute between the parties," however, will not defeat summary judgment. Anderson, 477 U.S. at 247, 106 S.Ct. 2505.

II. Renovation

Counts I-III and, to some extent Count V, turn on whether the scavenging activity that occurred at ANC's facility constitutes a renovation, as that term is defined under the asbestos NESHAP.¹ The parties are at odds on this critical issue. Admitting that its position is a novel one, the government claims that the term "renovation" does, and always has, encompassed unauthorized scavenging. ANC relies on the language, regulatory history, and enforcement practice of the asbestos NESHAP to argue that the term "renovation" cannot be construed to include unauthorized scavenging. Thus, we face a question of regulatory interpretation.

We begin with a short review of the relevant legal principles. Generally, courts defer to an agency's construction of the...