ELR Citation: ELR 20932
No(s). 88-6681 (E.D. Pa. Sep 27, 1990)

The court generally grants the government's motions for summary judgment on an oil company's alleged violations of the benzene regulations under the Clean Air Act. After the Environmental Protection Agency (EPA) expressly delegated enforcement authority under the Clean Air Act to a Pennsylvania state agency, the state agency and defendant negotiated an agreement that released defendant from liability for alleged violations that occurred before 1987 in return for paying a substantial fine. Subsequently, EPA filed suit against defendant alleging violations of the benzene national emission standard for hazardous air pollutants. The court first holds that EPA has standing to bring this enforcement action despite its delegation of primary enforcement authority to the state agency. The express language of the regulation delegating enforcement authority to the state agency reserves the power to continue enforcement of the Clean Air Act where EPA deems necessary to carry out the purposes of the Act. The court next holds that EPA did not waive its right to sue defendant when the state agency executed a general liability release during negotiations with defendant. It was unreasonable for defendant to think that EPA, without EPA's express affirmation, could be bound by the general release just because language in the release provided that it was binding on the "delegators" of the state agency's power. Moreover, defendant was not entitled to rely on its interpretation of the delegation regulation to assume that the state agency had the authority to bind EPA, since EPA did not convey that message to defendant and defendant had a duty to ask EPA if it agreed to the general release. Additionally, because it was unreasonable for defendant to assume that the state agency had the authority to bind EPA to the terms of the release, it is equally unreasonable under principles of agency to bind EPA for the actions of the state agency. The court next holds that because the general release is not binding on EPA, the principles of res judicata and collateral estoppel are not available to defendant in arguing against EPA's present action.

The court next holds that EPA's withdrawal of a containment system compliance order involving a system that EPA is not citing as an alleged violation in this suit does not waive EPA's right to sue for alleged violations. The court also holds that EPA's delay of four years before bringing suit against the defendant does not work a waiver of EPA's right to sue defendant now. Although the court refuses to decide whether a delay of four years is sufficient basis for a defense of laches, the court holds that the public should not be punished for any alleged negligence by EPA in its enforcement efforts, since the public policy of preserving public rights, revenues, and property from injury and loss would be impeded. Moreover, the court holds that defendant's equitable estoppel defense is ineffective. The fact that EPA did not pursue this case for four years is not an affirmative misrepresentation on which EPA had reason to believe the defendant would rely.

Turning to substantive issues, the court grants EPA's summary judgment motions as to the violations that defendant agrees occurred, but denies summary judgment as to the remaining issues. Specifically, the court holds that issues of fact remain as to whether defendant's failure to repair benzene leaks was eligible for exception, since defendant's failure to repair the leaks may have been because repairs were technically infeasible. EPA may not rely on the inference that, because defendant has not proffered any explanations as to the feasibility of the repairs, the repairs were feasible. Similarly, the court holds that merely because defendant's reports do not mention required monitoring data, the court cannot infer that defendant was not monitoring its pumps.

Counsel for Plaintiff
Susan Dean Bricklin
Office of the U.S. Attorney
3301 U.S. Courthouse, Independence Mall W., 601 Market St., Philadelphia PA 19106
(215) 597-1716

Counsel for Defendant
Philip J. Katauskas
Pepper, Hamilton & Scheetz
3000 Two Logan Sq., 18th & Arch Sts., Philadelphia PA 19103-2799
(215) 981-4000