ELR Citation: ELR 21540
No(s). 91-55160 (9th Cir. Sep 24, 1992)

The court holds that a district court properly found a paint manufacturer liable for violating the Clean Air Act limits on volatile organic compounds by selling noncomplying paint and for refusing to comply with U.S. Environmental Protection Agency (EPA) information requests, but the district court did not adequately consider the necessary factors in determining the civil penalty. The court initially holds that the defendant had ample opportunity to challenge EPA's approval of California's Clean Air Act state implementation plan (SIP), and the district court properly struck the defendant's related affirmative defenses, counterclaims, and third-party claims. The district court also properly dismissed the defendant's estoppel claims and defenses for failure to state a claim. Any promise EPA made not to exercise its enforcement discretion against paint manufacturers who came into compliance by a date certain does not apply, because the defendant did not halt the sale of noncomplying paint by that date and did not raise its estoppel argument in a timely manner. The court then holds that the defendant violated the Clean Air Act by selling or offering for sale noncomplying paint. The defendant expressly testified that noncomplying paint was offered for sale, and a party may not recant sworn testimony in order to defeat a summary judgment motion. The court next holds that the defendant violated the Clean Air Act by refusing to comply with EPA's information requests, because the defendant never provided the information requested by EPA but admitted that information was available when EPA requested it. Further, the defendant understood that EPA would waive the requirements of its second information request only if the defendant stopped selling noncomplying paint by a date certain, but the defendant continued to sell noncomplying paint after that date. In a footnote, the court observes that the defendant did not raise the argument that EPA lacked authority to require the submission of sales data in a timely manner.

Addressing the civil penalty award, the court holds that the district court properly considered certain factors for assessing civil penalties under §113(e) of the Clean Air Act, but failed to adequately consider other §113(e) factors. The court holds that the district court properly considered the defendant's full compliance history, the duration of the violation, the payment of penalties previously assessed, and the defendant's economic benefit of noncompliance, but the district court did not properly consider the penalty's economic impact in relation to the size of the defendant's business, the defendant's good-faith efforts to comply, and the number of gallons of paint offered for sale and its impact on the seriousness of the violation. Examining the district court's consideration of nonstatutory factors, the court holds that the effect of EPA's inaction on proposed SIP revisions raises a question of fact that precludes summary judgment, but the defendant's post-judgment arguments based on detrimental reliance and the unusual and perplexing nature of the regulatory scheme are meritless. Finally, the court holds that the defendant's post-judgment arguments were not raised in a timely manner.

[Briefs in this appeal are digested at ELR PEND. LIT. 66208.]

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

Counsel for Defendant
William Smiland
Donnelly, Clark, Chase & Smiland
601 W. 5th St., 12th Fl., Los Angeles CA 90071
(213) 891-1010

Tang and Hall, Circuit Judges, and Walker,^* District Judge.