ELR Citation: ELR 20691
No(s). 93-2359 (6th Cir. Mar 27, 1995)

The court holds that a company that relines used brake shoes for use in heavy duty trucks violated Clean Air Act (CAA) §112, the asbestos national emission standards for hazardous air pollutants (NESHAP), and a U.S. Environmental Protection Agency (EPA) administrative order directing the company to eliminate asbestos emissions. The court first holds that the district court did not abuse its discretion in denying the company's request shortly before trial for leave to amend its amended answer to the U.S. government's complaint. The company sought to amend its complaint to reflect its contention that it falls under the asbestos NESHAP's exemption for businesses that primarily install asbestos-containing materials (ACMs) in motor vehicles, which allows such businesses to continue installing ACMs unregulated until 1995. The amendment would have allowed the company to deny rather than admit that it did not primarily install ACMs in motor vehicles. The court holds that the district court properly concluded that justice precluded amendment. The company's undue two-year delay in moving to amend its answer would have unfairly prejudiced the government. The government made its discovery requests in reliance on the company's admission that it was subject to regulation, and allowing the amendment would have required the government to undertake a new and expensive round of discovery to rebut the company's contention that it was exempt.

The court affirms the district court's holding that the company's rehabilitation of brake shoes constitutes "fabrication of friction products containing commercial asbestos" within the meaning of the CAA. The court holds that the district court did not define "processing" too broadly in finding that the company's operations came within the meaning of "processing" in the CAA's definition of "fabrication." A plain reading of the asbestos NESHAP's definition of "fabrication" is that it is not limited to specific types of processes, but entails any processing of a manufactured product containing commercial asbestos. The court also notes that evidence in the record supports the government's contention that the asbestos NESHAP was specifically amended to apply to brake relining operations, and full opportunity for notice and comment was provided for the friction product fabricating standards when EPA issued them in 1975. The court thus rejects the company's allegation that the regulation's terms were too broad to give it notice that its operations would be regulated. As a business dealing with asbestos, the company was under a duty to be aware of the published regulations and their interpretation.

The court holds that for purposes of determining the existence of a violation of the asbestos NESHAP, the regulation's definition of "visible emissions" requires only visible observation of emissions that contain asbestos particles, not visual observation of particulate asbestos material. The court affirms the district court's determination that a showing of visible emissions was plainly met in this case, because substantial evidence in the record supports this decision.

The court holds that the district court properly concluded that a penalty of $50,000 was sufficient to deter the company from allowing future violations and punish it for past violations. The district court made the requisite connection between the number of alleged violations and the penalties assessed for those violations. The court holds that the district court did not abuse its discretion in denying the company's motion for a new trial. The company asserted that it was entitled to a new trial because it based its entire trial strategy on an earlier ruling of the district court that required particles of asbestos to be visible to the naked eye for there to be a violation of the CAA. The court rejects the company claim that the district court "sandbagged" the company when it changed its ruling to require instead that the asbestos particles did not have to be observable by the naked eye. The evidence indicates the company was on notice of the district court's change in opinion regarding the definition of "visible emissions."

Counsel for Plaintiff
Andrew C. Mergen
Environment and Natural Resources Division
U.S. Department of Justice, Washington DC 20530
(202) 514-2000

Counsel for Defendant
Thomas J. Budzynski
43777 Groesbeck Dr., Mount Clemens MI 48043
(810) 463-5253

Before: JONES, CONTIE, and MILBURN, Circuit Judges.