ELR Citation: ELR 20035
No(s). S87-55 (N.D. Ind. Mar 29, 1989)

The court assesses a $2,778,000 civil penalty against the owners and operators of a landfill for violations of the Resource Conservation and Recovery Act (RCRA) and orders defendants to perform corrective action and permanently close the landfill. The court first holds that it has jurisdiction over the claims brought by the Environmental Protection Agency (EPA) and an environmental group. The court holds that it has jurisdiction over EPA's claim that the facility failed to comply with the groundwater monitoring and financial assurance provisions of the 1984 RCRA amendments and thus lost its interim status. Although Indiana is an authorized state under RCRA, it has no authority to enforce any provisions of the 1984 amendments. Further, RCRA §3008(a) empowers EPA to bring an enforcement action in an authorized state after notifying the state. Defendants' argument that EPA's enforcement action was improper because it was triggered by a federal contrary to a memorandum of agreement between EPA and Indiana is irrelevant, since a referral by a state is not required by RCRA. For the same reasons, the court holds that it has jurisdiction over EPA's claim that defendant failed to implement an adequate groundwater monitoring plan. Although this claim does not arise under the 1984 amendments and EPA thus does not have exclusive administrative jurisdiction, EPA's action was "timely and appropriate" pursuant to the memorandum of agreement between EPA and the state. The court holds that it has jurisdiction under RCRA §3008(h) to hear EPA's corrective action claim. The court holds that the environmental group's alleged failure to give notice to defendants or the state does not deprive the court of jurisdiction. Although the environmental group intervened in the case and such groups normally need not give notice before intervening, the environmental group's role in this case has been more like a citizen suit under §7002(a)(1)(A), which contains a 60-day notice requirement. However, §7002(b)(1)(A) provides that such notice is not required for claims involving hazardous waste. Further, defendants, the state, and EPA had adequate notice of the violations underlying the citizen group's claims. The court holds that even if the citizen group failed to satisfy a jurisdictional notice requirement, it would exercise its ancillary jurisdiction over its claims. The court holds that the doctrines of primary jurisdiction do not preclude consideration of the claims brought by EPA or the citizen group. The court holds that EPA and the citizen group are not estopped from pursuing their claims. Defendants failed to show that this case presents the same issues that were resolved in an earlier state administrative order. Although some of the issues are similar, EPA's claims relate to violations that allegedly occurred after the order was entered. Defendants have also failed to show that the state administrative order was a final decision on the merits or that EPA and the citizen group are bound by the earlier judgment to which they were not parties. The court holds that one of the individual defendants may be held liable under RCRA as an "operator" of the landfill, even though a corporate defendant also is an operator. It is possible that a facility can have more than one operator under RCRA. The individual defendant has been more involved in the landfill's day-to-day operation and finances than any other person and has personally guaranteed its leases and loans.

Turning to EPA's claims, the court first holds that the landfill lost its interim status on November 8, 1985. Defendants timely filed a certificate of compliance with applicable groundwater monitoring and financial responsibility requirements pursuant to RCRA §3005(e)(2). However, the court holds that the mere good-faith filing of a certificate does not satisfy RCRA; actual compliance is required. The court holds that the landfill's certificate was false because the landfill had insufficient insurance coverage as of November 8, 1985. That defendants have had sufficient insurance coverage since June 1986 is not relevant to a determination of liability. The court rejects defendants' argument that it had the requisite $8 million in aggregate insurance coverage. Defendants' policy contained a $6 million aggregate limit, and an endorsement to the policy did not affect the amount of coverage but merely required the insurer to issue the certificates attesting to defendants' compliance with RCRA's financial responsibility requirements. Coverage provided by two other policies was insufficient to meet the regulatory requirements. The court holds that EPA's interpretation that its regulations require a total coverage of $4 million per occurrence with an annual aggregate of $8 million is correct. The regulations in effect unambiguously required an owner or operator to have $1 million per occurrence and $2 million per year for sudden accidental coverage and $3 million per occurrence and $6 million per year for nonsudden accidental coverage. Although the regulations were subsequently amended to make specific reference to the $4 million/$8 million aggregate figures, the amendment was intended to clarify existing requirements. The prior regulations clearly required defendants to have that level of coverage. The fact that courts may no longer recognize a distinction between the two types of insurance did not relieve defendants of their regulatory obligation to carry both types of insurance. The court holds that EPA is not estopped from enforcing these regulations based on misinformation provided by EPA's RCRA hotline. The court holds that defendants' goodfaith effort to comply with the financial assurance regulations is not a defense, but may be considered at the remedy stage. The court holds that the landfill's certificate of compliance was false because its groundwater monitoring system was inadequate as of November 8, 1985. The landfill's transition from the mode of groundwater monitoring designed to detect potential problems to the assessment mode did not relieve it from the requirement that at least three downgradient wells be located at the limit of the waste management area. The system required of facilities in the assessment mode is more comprehensive than, not in lieu of, that required of facilities in the detection mode. A state administrative order and subsequent delay by the state in responding to defendants' proposed plan did not prevent defendants from complying with the groundwater monitoring regulations. That the landfill's monitoring wells may have been in the best locations to detect migrating wastes does not satisfy the minimum requirements in the regulations that four wells be placed at the limit of the waste management area. EPA properly identified the waste management area for purposes of placement of the wells. A well designated by defendants as the system's upgradient well was inadequate because it showed concentrations of hazardous constituents and was improperly sealed. The court holds that it previously established that defendants had violated the minimum technology requirements in RCRA §3004(o) by placing hazardous waste in unlined cells for several months. The court holds that the landfill's groundwater monitoring system failed to satisfy RCRA even by the time this trial began in 1988. The design, construction, and depth of the wells have prevented defendants from learning the extent and permeability of the uppermost aquifer. Defendants thus cannot accurately assess the groundwater flow's horizontal and vertical direction and velocity. The court holds that hazardous waste constituents have been released into the groundwater beneath the landfill and that corrective action is required. The court rejects defendants' argument that its self-monitoring data indicating groundwater contamination is unreliable.

The court next turns to claims raised by the citizens' group. The court holds that the group has not proven that hazardous waste constituents have left the landfill site through the groundwater, but has proven that hazardous waste constituents have been spread to surrounding areas by wind dispersal and surface water. Although testimony by the group's expert witness warrants an inference that contaminated groundwater has left the site, the group has failed to satisfy its burden of proof, since contamination has not been found in surrounding residential wells. However, the group presented sufficient evidence to prove that hazardous waste constituents, although in concentrations that may pose no immediate threat to human health, have left the landfill through the air and surface water. The court holds that defendants did not violate RCRA's regulations requiring procedures to minimize fire by allegedly accepting ignitable waste that caused a spontaneous ignition at the landfill. The court holds that the group has not shown that defendants improperly accepted free liquids in violation of RCRA §3004(c), negligently handled barrels of hazardous waste, or improperly accepted hazardous waste that was not listed on the accompanying manifests.

The court next addresses the remedies for defendants' RCRA violations. The court determines that the landfill must be closed immediately because it lost its interim status by failing to obtain the requisite insurance or to implement an adequate groundwater monitoring system. RCRA leaves the court with no discretion to impose a lesser sanction based on defendants' alleged good faith, and defendants' certification of compliance was not made in good faith. Further, defendants did not act in good faith in failing to install a minimally adequate groundwater monitoring system. The court also o orders defendants to undertake a corrective action plan to remedy the release of hazardous waste into the groundwater. The court determines that defendants must pay a $2,778,000 civil penalty under RCRA §3008(g). Defendants' violation of RCRA's loss of interim status provisions for more than three years was a serious infraction, as was the placement of hazardous waste in unlined cells through lateral expansion and the inadequacy of the present groundwater monitoring system. Turning to the calculation of the penalty, the court notes that the maximum penalty would be over $60 million, although this amount would be wholly punitive and far exceed any proper deterrent purpose. The court determines that defendants should be assessed a civil penalty of $2,000 per day for 1,389 days of violation. The court permanently enjoin defendants from operating a hazardous waste facility at the landfill site. Defendants have been given repeated opportunities to comply with RCRA, but have responded with delay and noncompliance. Finally, the court holds that the environmental group is entitled to attorney fees. Citizen's groups that intervene as of right under §113(i) of the Comprehensive Environmental Response, Compensation, and Liability Act are entitled to attorney fees. However, defendants are not required to establish a reserve to pay these costs.

[A prior decision is published at 19 ELR 20674.]

Counsel for Plaintiff
Robert H. Oakley, Frank Bentkover, Sam Boxerman
Land and Natural Resources Division
U.S. Department of Justice, P.O. Box 7611 Ben Franklin Station, Washington DC 20044
(202) 633-2000

Andrew A. Baker Jr., Ass't U.S. Attorney
Fourth Fl., Federal Bldg., 507 State St., Hammond IN 46320
(219) 937-5215

Counsel for Intervenor-Plaintiff
John C. Hamilton
419 W. Jefferson Blvd., P.O. Box 928, South Bend IN 46624
(219) 234-0041

Counsel for Defendants
George W. Pendygraft, George Plews
Pendygraft & Plews
1346 N. Delaware St., Indianapolis IN 46202-2415
(317) 637-0700