U.S. v. Power Engineering Co.

• Decision Date: 10 June 1998
• Docket Number: Civil Action No. 97-B-1654.
• Citation: 10 F.Supp.2d 1145
• Parties: UNITED STATES of America, Plaintiff, v. POWER ENGINEERING COMPANY, Redoubt, Ltd., and Richard J. Lilienthal, Defendants/Third Party Plaintiffs, v. Jack LILIENTHAL, Third Party Defendant.
• Court: U.S. District Court — District of Colorado

Page 1145

10 F.Supp.2d 1145

UNITED STATES of America, Plaintiff, v. POWER ENGINEERING COMPANY, Redoubt, Ltd., and Richard J. Lilienthal, Defendants/Third Party Plaintiffs, v. Jack LILIENTHAL, Third Party Defendant.

Civil Action No. 97-B-1654.

United States District Court, D. Colorado.

June 10, 1998.

John N. Moscato, Environmental Enforcement Section, Environment & Natl. Resources Div., U.S. Dept. of Justice, Denver, CO, Linda A. Surbaugh, Assistant U.S. Attorney, Denver, CO, Thomas E. Sitz, Enforcement Attorney, U.S. Environmental Protection Agency, Region VIII, Denver, CO, for Plaintiff.

John R. McBride, John J. Zodrow, Zodrow, et al., P.C., Denver, CO, for Defendants.

MEMORANDUM OPINION AND ORDER

BABCOCK, District Judge.

Plaintiff, the United States of America (the "United States"), acting on behalf of the United States Environmental Protection Agency (the "EPA"), pursuant to Fed. R.Civ.P. 65 and section 3008(a)(1) of the Resource Conservation and Recovery Act of 1976 ("RCRA"), as amended, 42 U.S.C. § 6928(a)(1) (1994 & Supp.1997), seeks a preliminary injunction directing the defendants, Power Engineering Company ("PEC"), Redoubt, Ltd. ("Redoubt"), and Richard Lilienthal ("Lilienthal"), to comply with state regulations adopted by the Colorado Department of Public Health and Environment (the "CDPHE"), found at 6 COLO. CODE REGS. 1007-3 § 266. These regulations require owners and operators of all hazardous waste facilities to document that they have secured the resources required to close their facilities in an appropriate and safe manner, and to pay third-party claims that may arise from its operations.

The United States commenced this action on August 1, 1997, alleging eight claims: (1) treatment of hazardous waste without a permit or interim status; (2) disposal of hazardous waste without a permit or interim status; (3) shipment of hazardous waste to an unpermitted facility; (4) improper container management; (5) storage of hazardous waste without a permit or interim status; (6) failure to provide employee training; (7) failure to have a hazardous waste contingency plan; and (8) illegal operations (failure to have a groundwater monitoring program, failure to have a closure plan, failure to minimize releases of hazardous waste, and failure to obtain and provide financial assurances for closure and post-closure). The United States also alleges that Power Engineering has failed to comply with CDPHE's Administrative Compliance Order.

As discussed on the record, this is an "overfile" action, indicating that the EPA is displeased with the manner in which the CDPHE has sought enforcement of federal and state regulations. The United States, therefore, at the request of the EPA, exercises its authority to seek defendants' compliance with Colorado hazardous waste regulations. Subject matter jurisdiction exists pursuant to 28 U.S.C. § 1331 (1994) and venue is proper pursuant to 28 U.S.C. §§ 1391(b), 1391(c), and 1395(a). A hearing was held beginning May 11, 1998. Based on the evidence presented and for the reasons set forth below, I grant the United States' motion for preliminary injunction.

I. STATUTORY AND REGULATORY GUIDELINES

RCRA is a comprehensive environmental statute designed to protect the public health and environment by ensuring the proper handling of solid and hazardous wastes. 42 U.S.C. § 6902(a). RCRA regulates the generation, treatment, storage, transportation, and disposal of solid and hazardous wastes. See 42 U.S.C. §§ 6922-6925. This comprehensive regulatory scheme is frequently described as "cradle-to-grave" oversight. See Sierra Club v. United States Dept. of Energy, 770 F.Supp. 578, 579 (D.Colo.1991); see also H.R.Rep. No. 96-1016, at 17 (1980), reprinted in 1980 U.S.C.C.A.N. 6119, 6120.

Hazardous waste is tracked and regulated from the point of generation, through storage, transportation, and treatment, and to the point of ultimate disposal. The intent of this regulatory scheme is to minimize the potential for public health and environmental problems resulting from improper management of hazardous waste. The potential for public health and environmental problems, including hazards associated with fire, explosion, direct contact, and contamination of air, surface water, and groundwater resulting from inadequate management is well-documented. See, e.g., H.R.Rep. No. 94-1491, at 17-24 (1976), reprinted in 1980 U.S.C.C.A.N. 6238, 6254-6261 (documenting hazardous waste tragedies in several states).

Owners and operators of hazardous waste facilities must establish and maintain financial assurances for proper closure and, if necessary, post-closure care of the facility, as well as liability insurance for bodily injury and property damage to third parties resulting from sudden and accidental occurrences at the facility. 6 COLO. CODE REGS. 1007-3 § 266; 40 C.F.R. § 265. These financial responsibility requirements ensure that funds are available for proper closure and, if necessary, post-closure care of the facility.

As enacted in 1976, RCRA required two types of hazardous waste facilities to provide financial assurances: (1) those with final operating permits; and (2) those with "interim status" that had applied for final operating permits. Congress deemed it impractical to halt all hazardous waste activity pending the issuance of permits. Congress, therefore, created interim status, allowing the EPA to treat existing facilities with pending permit applications as having been issued a permit. 42 U.S.C. § 6925(e)(1); United States v. T & S Brass and Bronze Works, Inc., 681 F.Supp. 314, 316 (D.S.C.) aff'd in part, vacated in part, 865 F.2d 1261 (4th Cir.1988).

A facility in existence on November 19, 1980 could obtain interim status by notifying the EPA of its activities and submitting a Part A permit application. 42 U.S.C. § 6925(e)(1); 40 C.F.R. §§ 265.1(b), 270.10(e). The Part A application contains information concerning the nature of the applicant's business, a scale drawing, photographs and a topographic map of the facility, a description of its hazardous waste management processes and the design capacity of these processes, a specification of the types and quantities of hazardous wastes processed, stored, or disposed of at the facility, as well as information regarding permits or construction approvals. 40 C.F.R. § 270.14. A facility operating pursuant to interim status is limited to the types of wastes and procedures specified in the Part A application and the facility must comply with the operating standards of 40 C.F.R. § 265, which include the provision of financial assurances.

In 1984, primarily because of widespread industry noncompliance, Congress amended RCRA to provide that all interim status facilities would lose their interim status unless they certified by November 8, 1985, that they complied with all applicable groundwater monitoring and financial responsibility requirements. Hazardous and Solid Waste Amendments of 1984, P.L. No. 98-616, 98 Stat. 3221, codified at 42 U.S.C. § 6925(e)(2) (Supp. II 1984). Upon losing interim status, the facility must have immediately ceased its hazardous waste management operations and, within fifteen days, submitted a closure plan for approval by the state or the EPA. 42 U.S.C. § 6925(a); 40 C.F.R. § 265.112(d)(3)(i). The facility must have begun final closure within ninety days of approval of that closure plan and achieved closure within 18 days of approval of the closure plan, unless the state or the EPA allowed an extension of the closure period. 40 C.F.R. § 265.113.

Closure of a hazardous waste facility must be performed in a manner that:

(a) Minimizes the need for further maintenance, and

(b) Controls, minimizes or eliminates, to the extent necessary to protect human health and the environment, post-closure escape of hazardous waste, hazardous constituents, leachate, contaminated run-off, or hazardous waste decomposition products to the ground or surface waters or to the atmosphere, and

(c) Complies with the closure requirements of [other regulations promulgated under RCRA].

40 C.F.R. § 265.111. Even after closure has been completed, the owner or operator may be required to maintain post-closure care of the facility for a period of thirty years. 40 C.F.R. § 265.117. Thus, RCRA provides for extensive regulation of a hazardous waste facility long after the facility has stopped operating. See American Iron & Steel Institute v. U.S. EPA, 886 F.2d 390, 393 (D.C.Cir. 1989) ("While invariably described as a `cradle-to-grave' system, [RCRA] in fact reaches ... well beyond the grave.").

In an effort to secure enforcement of RCRA's provisions to the fullest extent possible, Congress conferred enforcement power upon the EPA, as well as federally authorized state agencies and United States citizens. RCRA allows states to implement their own programs in lieu of the federal program if the state's program is "equivalent to" and "consistent with" the federal program and provides for "adequate enforcement of compliance." 42 U.S.C. § 6926(b).

The EPA delegated to the State of Colorado authorization to operate a federally authorized hazardous waste program. See, generally, 49 Fed.Reg. 41036 (Oct. 19, 1984); 54 Fed.Reg. 20847 (May 15, 1989); 56 Fed.Reg. 21601 (May 10, 1991). Colorado has promulgated regulations, pursuant to the Colorado Hazardous Waste Management Act ("CHWMA"), C.R.S. § 25-15-302(2) and (3), that specifically govern generators of hazardous waste and the operation and maintenance of hazardous waste treatment, storage, and disposal facilities. 6 COLO. CODE REGS. 1007-3 §§ 262, 264-268. Any action taken by the State of Colorado pursuant to its federally authorized hazardous waste program "shall have the same force and effect as action taken by the [EPA]." 42 U.S.C. § 6926(d).

The EPA, however, retains the right to bring enforcement actions compelling compliance with Colorado's hazardous waste regulations. 42 U.S.C. §§ 6928, 6934...