OFFICIAL SHORT CITATION NAME: When referring to 2009 OEA X, cite this case as

Commissioner, Indiana Department of Environmental Management v.

McClure Oil Corporation, IDEM Case No. 2006-15863-S<= /p>

2009 OEA 126, (08-S-E-4109)

[2009 OEA 1= 26, page 126 begins]

OFFICIAL S= HORT CITATION NAME: When referring to 2009 OEA 126, cite this case as =

&nbs= p; McClure Oil Corporation, 2009 OEA 126.

Topics: &= nbsp;

Summary Judgment

underground storage tanks

enforcement

penalty

statue of limitations

continuing duty

genuine issue of material fact

release

investigation

confirmation

owner

operator

notice of violation

commissioner’s order

non-rule policy document

penalty policy

days of noncompliance

multiplier

Presiding Environmental Law Judge= :

Catherine Gibbs

Party representatives:

IDEM: &= nbsp; Denise Walker, Esq.

Petitioner: = ; Richard VanRheenen, Esq.; VanRheenen & Associates

Order issued:

September 22, 2009

Index category:

Land

PREVIOUS C= ASE ACTIVITY:

Non-final order preceding this final order:

&nbs= p; I= DEM v. McClure Oil Corporation, 2009 OEA 126nf in .doc format

&nbs= p; I= DEM v. McClure Oil Corporation, 2009 OEA 126nf in .pdf format

Further case activity:

Judicial Review

[2009 OEA 1= 26, page 127 begins]

STATE OF INDIANA &= nbsp; &nbs= p; &= nbsp; ) &= nbsp; &nbs= p; BEFORE THE INDIANA OFFICE OF

&n= bsp; = ; &n= bsp; = ; ) &= nbsp; &nbs= p; ENVIRONMENTAL ADJUDICATION

COUNTY OF MARION &= nbsp; )<= /p>

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&n= bsp; = ; &n= bsp; = ; &n= bsp; = ; )

COMMISSIONER, INDIANA DEP= ARTMENT )

OF ENVIRONMENTAL MANAGEME= NT, &= nbsp; )

<= /span>Complainant, &= nbsp; &nbs= p; &= nbsp; &nbs= p; )

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<= /span>v. &= nbsp; &nbs= p; &= nbsp; &nbs= p; &= nbsp; ) &= nbsp; CAUSE NO. 08-S-E-4109

&n= bsp; = ; &n= bsp; = ; &n= bsp; = ; )

MCCLURE OIL CORPORATION,<= span style=3D'mso-tab-count:3'> &= nbsp; &nbs= p; )

IDEM Case No. 2006-15863-= S &= nbsp; &nbs= p; = &= nbsp; )

<= /span>Respondent &= nbsp; &nbs= p; &= nbsp; &nbs= p; )

FINDINGS OF FACT, CONCLUSIONS OF LAW AND FINAL ORDER<= /u>

This matter having come b= efore the Court for the final hearing held on September 11, 2009, on McClure Oil Corporation’s Petition for Review of the Notice and Order of the Commissioner of the Indiana Department of Environmental Management and the Court, being duly advised, and having heard the evidence and read the recor= d, finds that judgment may be made upon the record and enters the following findings of fact, conclusions of law= and final order:

Findings of Fact

1.&n= bsp; McClure Oil Corporation (hereinafter the “Respondent”) owns and operates a gasoline station located at <= st1:address w:st=3D"on">530 Friend Way, Lebanon, Indiana (the “Site”). McClure = took ownership of the Site in May of 1993. There are eight (8) underground storage tanks (USTs) at the Site. The Site is located on approximate= ly 2 acres at I-65 and U.S. 32.

2.&n= bsp; The Indiana Department of Environmental Management (hereinafter “IDEM”) issued a Notice of Violation (“NOV”) dated October 20, 2006 to the Respondent. The Respondent and IDEM engaged in settlement negotiations, but were unable to reach an agreement.

3.&n= bsp; On April 22, 2008, IDEM issued the Notice and Order= of the Commissioner of the Indiana Department of Environmental Management (the “CO”) to the Respondent.

= 4.&n= bsp; The Respondent filed its Petition for Review on May= 8, 2008.

= 5.&n= bsp; The IDEM filed its Motion for Summary Judgment on December 9, 2008. Upon the co= nclusion of briefing, the presiding Environmental Law Judge (the “ELJ”) issued Findings of Fact, Conclusions of Law and Order on June 23, 2009.

<= span style=3D'mso-list:Ignore'>6.&n= bsp; The Findings of Fact entered by on June 23, 2009 are incorporated herein.

[2009 OEA 1= 26, page 128 begins]

<= span style=3D'mso-list:Ignore'>7.&n= bsp; The ELJ has determined that a release of petroleum = from underground storage tanks occurred at the Site in 1990 and 1992.

<= span style=3D'mso-list:Ignore'>8.&n= bsp; In 2003, the IDEM requested that the Respondent per= form an ISC in response to the releases that occurred in 1990 and 1992. The Respondent was not the owner o= f the Site at the time of the releases and had no information regarding the locat= ion, nature and/or the extent of the releases.&= nbsp; The IDEM was unable to locate any information regarding the releases other than the initial information recorded in IDEM’s Incident Report= ing Logs (Respondent’s Exhibit #1). These Logs contained information that supplied the date of the incid= ent and the Facility but no other information that would assist the Respondent = in responding to the specific release. The Respondent refused to conduct the ISC.

<= span style=3D'mso-list:Ignore'>9.&n= bsp; In November 2007, after the NOV had been issued, but before the CO was issued, the IDEM located more information regarding the extent and nature of the releases. This information was given to the Respondent shortly thereafter.

<= span style=3D'mso-list:Ignore'>10.&= nbsp; Thomas Newcomb, the IDEM Enforcement Case Manager for this Site, calculated the ci= vil penalty using the Penalty Policy for Underground Storage Tank/Leaking Underground Storage Tank Requirements[1] (the “UST/LUST Policy”). Mr. Newcomb determined that the appropriate penalty was $3,400 (three thousand and four hundred dollars)

= 11.&= nbsp; Mr. Newcomb based the penalty on a minor potential fo= r harm and a major extent of deviation.

= 12.&= nbsp; Mr. Newcomb averaged the penalties applicable to a mi= nor potential for harm/major extent of deviation violation. Mr. Newcomb testified that this was conducted in accordance with a written policy. The written policy was not introdu= ced into evidence nor was it produced to the Respondent during discovery.

= 13.&= nbsp; The base penalty amount was multiplied by 2, the Days= of Noncompliance Multiplier. The= Days of Noncompliance Multiplier is determined by the number of days that the Respondent was in violation. = In this matter, Mr. Newcomb determined that the Respondent was in violation mo= re than 365 days. =

Conclusions of Law=

1. The Office of Environmental Adjudication (“OEA”) has jurisdiction o= ver the decisions of the Commissioner of the IDEM and the parties to the controversy pursuant to I.C. § 4-21.5-7-3.

2.&n= bsp; Findings of Fact that may be construed as Conclusio= ns of Law and Conclusions of Law that may be construed as Findings of Fact are= so deemed.

[2009 OEA 1= 26, page 129 begins]

3.&n= bsp; This office must apply a “de novo” <= /i>standard of review to this proceeding when determining the facts at issue. Indiana<= /i> Dept. of Natural Resources v. United Refuse Co., Inc., 615 N.E.2d 100 (Ind. 1993). Findings of fact must = be based exclusively on the evidence presented to the ELJ, and deference to the agency’s initial factual determination is not allowed. Id.; I.C. § 4-21.5-3-27(d). “De novo review” means that:

all issues= are to be determined anew, based solely upon the evidence adduced at that heari= ng and independent of any previous findings.

Grisell v. = Consol. City of <= st1:City w:st=3D"on">Indianapolis, 425 N.E.2d 247 (Ind.C= t.App. 1981).

4.&n= bsp;     The only issues that remain are (1) the appropriate civil penalty, if any, and (2) the appropriate corrective action, if any. The IDEM has ordered the Responden= t to pay a civil penalty of $3,400 (three thousand, four hundred dollars) and to complete the ISC.

5.&n= bsp;     Mr. Newcomb used the sp= ecific guidance provided by the UST/LUST Policy to calculate the penalty in this matter. However, this policy = is described as “IDEM’s policy for determining penalties for violations of the 1998 UST Upgrade Requirements which go into effect Decemb= er 23, 1998”.[2] The Respondent argues that IDEM er= red in relying on this policy because the violations in this matter are not relate= d to the 1998 UST Upgrade Requirements. The ELJ concludes that this was not error. This policy was adopted in accorda= nce with I.C. § 13-14-1-= 11.5. While the description of the non-r= ule policy document appears to limit it to 1998 UST upgrade violations, the ter= ms of the UST/LUST Policy are not specific to only upgrade violations and can = be applied to any UST/LUST violation. In addition, Mr. Newcomb testified that = he regularly used this policy to determine the appropriate penalty in all UST/= LUST enforcement matters. As I.C. = § 13-23-14 limits penaltie= s for violations of UST/LUST regulations to $10,000 per day per underground stora= ge tank, such a policy specific to USTs is necessary because of the difference= in possible penalties between UST violations and general environmental violati= ons [3].

6.&n= bsp;     The UST/LUST Policy was based on IDEM’s gener= al Civil Penalty Policy[4] (the “General Policy”). This policy was adopted pursuant to I.C.= § 13-14-1-11.5 and may be = used as a nonrule policy document in accordance with this statute. Also, the Court of Appeals, in IDEM v. Schnip= pel Construction Inc., 778 N.E.2d 407 (Ind. Ct. Ap= p. 2002), approved of the ELJ’s use of the General Policy in calculating= the civil penalty. Therefore, it = is acceptable to use the General Policy as the basis for calculating a civil penalty.

[2009 OEA 1= 26, page 130 begins]

7.&n= bsp;     According to this policy, a civil penalty is calcul= ated by “(1) determining a base civil pen= alty dependent on the severity and duration of the violation, (2) adjusting the penalty for special factors and circumstances, and (3) considering the econ= omic benefit of noncompliance.” The base civil penalty is calculated taking into account two factors= : (1) the potential for harm and (2) = the extent of deviation.

=

8.&n= bsp;     The policy states that the potential for harm may be determined by considering “the likelihood and degree of exposure of persons or the environment to pollution” or “the degree of adve= rse effect of noncompliance on statutory or regulatory purposes or procedures f= or implementing the program”. There are several factors that may be considered in determining the likelihood of exposure. These= are the toxicity and amount of the pollutant, the sensitivity of the human population or environment exposed to the pollutant, the amount of time expo= sure occurs and the size of the violator.

9.&n= bsp;     The ELJ concludes that the potential for harm is minor. No evidence was presen= ted that the releases have migrated off-site.&= nbsp; No actual harm has occurred. It is obvious from the amount of time between the releases occurring= and the IDEM following up on the releases (over 11 years) that IDEM does not consider the potential for harm to be significant.

10.&= nbsp; The extent of deviation relates to the degree to wh= ich the requirement is violated. = In this case, the Respondent has failed to perform the ISC. However, given the amount of time between the releases and IDEM’s ISC request, the size of the Site, and the lack of any information regarding the initial releases makes the= Respondent’s reluctance to undertake an ISC understandable. However, as s= oon as the IDEM produced the information in 2007, the Respondent could no longer d= elay completing an ISC. The ELJ concludes that the extent of deviation is moderate.

11.&= nbsp; Mr. Newcomb selected the average penalty in the minor= /major matrix. However, he based this decision on a policy that was not produced either at the hearing or to the Respondent as part of discovery. Therefore, the use of this policy was improper and an error. As there is no justification for selecting a higher penalty, the base penalty is $800.

12.&= nbsp; In accordance with the UST/LUST policy, if the owner/operator is out of compliance for more than 365 days, the Days of Noncompliance Multiplier is 2. Technically, the Respondent has been out of compliance since it first acquired the Site (1993). The= re is no question that the Respondent has known that a release occurred at the Si= te since 2003 (the date that IDEM notified them of the obligation to conduct an ISC) or, at the very latest, 2007 when IDEM provided the more detailed information. The Respondent h= ad not completed an ISC as of the date of the hearing so more than 365 days have p= assed since the obligation to conduct an ISC began. The Days of Noncompliance Multipli= er is properly 2.

13.&= nbsp; The IDEM produced no evidence that either mitigating = or aggravating circumstances were considered or that it calculated any economic benefit.

14.&= nbsp; Therefore, the ELJ concludes after a “de novo review”, that the pr= oper penalty is $1,600 (one thousand, six hundred dollars).

Final Order

AND THE COURT, being duly advised, hereby ORDERS, ADJUDG= ES AND DECREES that the Respondent, McClure Oil Corporation is in violatio= n of 329 IAC 9-5-5.1 and is assessed a penalty of $1= ,600 (One thousand, six hundred dollars). This penalty shall be paid to the Environmental Management Special Fund in accordance with the directions contained by the Notice and Order of the Commissioner of the Indiana Depart= ment of Environmental Management. = In addition, the Respondent shall complete the Initial Site Characterization (= ISC) under the terms and conditions specified in the Notice and Order of the Commissioner of the Indiana Department of Environmental Management issued on April 22, 2008.

You are hereby furth= er notified that pursuant to provisions of I.C. § 4-21.5-7-5, the Office of Environmental Adjudication serves as the Ultimate Authority in the administrative review of decisions of the Commissioner of the Indiana Department of Environmental Management. This is a Final Order subject to Judicial Review consistent with applicable provisions of I.C. § 4-21.5. Pursuant to I.C. § 4-21.5-5-5, a Petition for Judicial Review of this Final Order is timely only if it is filed with a ci= vil court of competent jurisdiction within thirty (30) days after the date this notice is served.

IT IS SO ORDERED th= is 22nd day of September, 2009 in Indianapolis, IN.

Hon. Catherine Gibbs
Environmental Law Judg= e

[2009 OEA 126: end of decision]

=

2009 OEA 126 in .doc format

2009 OEA 126 in .pdf format

&n= bsp;