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Stokes Waste Paper Co., Inc., - Order, September 24, 2015

Order, September 24, 2015

STATE OF NEW YORK
DEPARTMENT OF ENVIRONMENTAL CONSERVATION
_____________________________________________

In the Matter of the Alleged Violation of Article 27 of
the Environmental Conservation Law (ECL) of the State
of New York and Part 360 of the Official Compilation of
Codes, Rules and Regulations of the State of New York
(6 NYCRR), and the Terms and Conditions of
NYSDEC Permit #2-6401-00001/00001,

-by-

STOKES WASTE PAPER CO., INC.,

Respondent.

ORDER

DEC Case No. CO 2-20150519-01

________________________________________________

This administrative enforcement proceeding concerns the alleged failure of respondent Stokes Waste Paper Co., Inc. (respondent) to pay the annual environmental monitor fee for fiscal year 2015-2016, in accordance with the terms and conditions of respondent's Part 360 Permit No. 2-6401-00001/00001 (Part 360 permit), ECL article 27 and the requirements of 6 NYCRR

§ 360-1.11(a)(2)(iii), for its solid waste management facility located at 17-25 Van Street, Staten Island, New York (facility). According to staff of the New York State Department of Environmental Conservation (Department), respondent was overdue in paying its annual environmental monitor fee for fiscal year 2015-2016 in the amount of seven thousand one hundred dollars ($7,100). In this proceeding, Department staff also requested a civil penalty in the amount of twenty-five thousand dollars ($25,000) for respondent's failure to pay the environmental monitor fee.

At its facility, respondent is authorized to accept construction and demolition debris subject to the terms and conditions in its Department-issued permit. Respondent's permit was issued effective October 18, 2011 and, pursuant to permit special condition 36, respondent is required to submit annual environmental monitor fees to the Department ( see Exhibit 5, Permit, at 1, & 6, special condition 36[d]).

In accordance with 6 NYCRR 622.3(a)(3), staff commenced this proceeding by service upon respondent of a notice of hearing and complaint dated June 17, 2015. The matter was assigned to Administrative Law Judge (ALJ) D. Scott Bassinson.

Respondent failed to file an answer to the complaint and failed to appear for the adjudicatory hearing scheduled in the matter for September 1, 2015, as directed in the notice of hearing. Pursuant to 6 NYCRR 622.4(a), respondent's time to serve an answer has expired, and has not been extended by Department staff. At the hearing, counsel for staff made an oral motion for a default judgment pursuant to 6 NYCRR 622.15 and submitted several documents in support of the motion and a proposed order. ALJ Bassinson prepared the attached summary report, which I adopt subject to my comments below.

In its complaint, Department staff alleges that respondent failed to comply with its Part 360 permit, which requires respondent to submit annual environmental monitor fees to the Department ( see Exhibit 1, Complaint, at par 7). Staff alleges that respondent failed to submit payment for the annual environmental monitor fee for fiscal year 2015-2016 ( see id. par 15 and par 16). Department staff also alleges that respondent violated 6 NYCRR 360-1.11, which establishes various requirements governing the funding of and payment for an environmental monitoring position ( see 6 NYCRR 360-1.11[a][2][i]-[iv]). Subparagraph (iii) of 6 NYCRR 360-1.11(a)(2) provides that, within thirty (30) calendar days after receipt of written notice from the Department that payment is due, the owner or operator of the facility shall forward the amount due to the Department.[1]

Because respondent failed to file an answer to the complaint and failed to appear at the adjudicatory hearing, staff is entitled to a default judgment pursuant to 6 NCYRR 622.15 with respect to its claim that respondent, by failing to submit its annual environmental monitor fee for fiscal year 2015-2016, was in violation of its Part 360 permit and 6 NYCRR 360-1.11(a)(2)(iii.)[2]

I agree with the ALJ that Department staff has (i) satisfied the requirements of 6 NYCRR 622.15(b)(1)-(3) with respect to default; and (ii) submitted proof of facts sufficient to support staff's claim ( see Summary Report at 4; see also Matter of Queen City Recycle Center, Inc. , Decision and Order of the Commissioner, December 12, 2013, at 3 [requiring submission in default judgment motions of proof of facts constituting the claim charged]).

Given the foregoing, I grant staff's motion for a default judgment, and hold that respondent has violated its Part 360 permit and 6 NYCRR 360-1.11(a)(2)(iii) by failing to submit its annual environmental monitor fee for fiscal year 2015-2016.

I also agree with the ALJ with respect to staff's request for a civil penalty ( see Summary Report at 5-6). Respondent in this matter committed the same violation for fiscal year 2014-2015. Pursuant to the consent order resolving that prior violation, respondent paid a civil penalty of five thousand dollars ($5,000) in addition to the outstanding monitor fees ( see Exhibit 6). The record here establishes that, just a few months after the consent order in that prior case became effective, respondent committed the same violation with respect to the environmental monitor fee for fiscal year 2015-2016. Environmental monitor fiscal obligations must be met on a timely basis to insure an effective monitoring program and compliance with the applicable legal requirements to protect public health and safety and the environment ( see , e.g. , Exhibit 2, Affidavit of Shawn Vitas sworn to June 15, 2015, at unnumbered page 3). In light of the facility's prior violation and its failure to meet its fiscal year 2015-2016 obligation, the imposition of a significant civil penalty is warranted. Accordingly, under the circumstances of this case, I find that a civil penalty in the amount of twenty-five thousand dollars ($25,000), as requested by Department staff and recommended by the ALJ, is authorized and appropriate.

NOW, THEREFORE, having considered this matter and being duly advised, it is ORDERED that:

I. Department staff's motion for a default judgment pursuant to 6 NYCRR 622.15 is granted and, based upon the documentary proof submitted in support of the motion for default judgment, respondent Stokes Waste Paper Co., Inc. is adjudged to have violated the terms and conditions of its Part 360 Permit No. 2-6401-00001/00001 and 6 NYCRR § 360-1.11(a)(2)(iii) by failing to pay the annual environmental monitor fee for fiscal year 2015-2016 for the facility that it owns and operates at 17-25 Van Street, Staten Island, New York.

II. Respondent Stokes Waste Paper Co., Inc..

A. shall, within thirty (30) days of service of this order upon it, pay the past due annual environmental monitor fee for fiscal year 2015-2016 in the amount of seven thousand one hundred dollars ($7,100). Payment shall be made in the form of a certified check, cashier's check or money order made payable to the New York State Department of Environmental Conservation.

B. is, in addition, assessed a civil penalty in the amount of twenty-five thousand dollars ($25,000), which respondent is to pay within thirty (30) days of service of this order upon it. Payment shall be made in the form of a certified check, cashier's check or money order made payable to the New York State Department of Environmental Conservation.

III. The payment of the past due annual environmental monitor fee ($7,100), as well as payment of the civil penalty ($25,000), shall both be sent to the attention of Elissa Armater at the following address:

Office of General Counsel
New York State Department of Environmental Conservation
625 Broadway, 14th Floor
Albany, New York 12233-1500
Attn: Elissa Armater

IV. Any questions or other correspondence regarding this order shall be addressed to Jennifer Andaloro, Esq., at the following address:

Office of General Counsel
New York State Department of Environmental Conservation
625 Broadway, 14th Floor
Albany, New York 12233-1500 Attn: Jennifer Andaloro, Esq.

V. The provisions, terms and conditions of this order shall bind respondent Stokes Waste Paper Co., Inc., and its agents, successors and assigns, in any and all capacities.

For the New York State Department
of Environmental Conservation

/s/
By: _____________________
Marc Gerstman
Acting Commissioner

Dated: Albany, New York
September 24, 2015

[1] The invoice for the fee, which is dated February 20, 2015, states that the fee is due by March 22, 2015 ( see Hearing Exhibit 4). The facility's permit, however, states that payment must be made "within 30 days after the Permittee's receipt of a bill" ( see Exhibit 5 [Permit], at special condition 36 [d][emphasis added]); see also 6 NYCRR 360-1.11[a][iii][payment due thirty (30) calendar days after receipt]. Accounting for the time associated with mail delivery and the anticipated receipt of the invoice by respondent on a date later than February 20, the fee would have been due at a March date somewhat after March 22. As of the date of staff's notice of hearing and complaint (June 17, 2015), no payment had been received ( see Exhibit 1).

[2] As noted by the ALJ ( see Summary Report at 4, n 1), staff's papers cite the general section of 6 NYCRR 360-1.11, rather than the specific provision, 6 NYCRR 360-1.11(a)(2)(iii). Department staff has been advised to include in pleadings the particular subsection(s), paragraph(s) and subparagraph(s) at issue ( see Matter of Queen City Recycle Center, Inc. , Decision and Order of the Commissioner, December 12, 2013, at 2 n 6). I reiterate that expectation here.

STATE OF NEW YORK
DEPARTMENT OF ENVIRONMENTAL CONSERVATION
_____________________________________________

In the Matter of the Alleged Violation of Article 27 of

the Environmental Conservation Law ("ECL") of the State
of New York and Part 360 of the Official Compilation of
Codes, Rules and Regulations of the State of New York
("6 NYCRR"), and the Terms and Conditions of
NYSDEC Permit #2-6401-00001/00001,

-by-

STOKES WASTE PAPER CO., INC.,

Respondent.

SUMMARY REPORT

DEC Case No. CO 2-20150519-01

_______________________________________________

Staff of the New York State Department of Environmental Conservation ("Department") served respondent Stokes Waste Paper Co., Inc. ("respondent") with a notice of hearing and complaint, dated June 17, 2015, alleging that respondent violated ECL article 27, 6 NYCRR § 360-1.11, and the terms of its solid waste permit, by failing to pay the annual environmental monitor fee for fiscal year 2015-2016 for the solid waste management facility that respondent operates at 17-25 Van Street, Staten Island, New York ("facility"). The complaint requests that the Commissioner issue an order: (i) finding that respondent committed the violation alleged in the complaint; (ii) directing respondent to submit the annual environmental monitor fee in the amount of $7,100; (iii) assessing a civil penalty of $25,000; and (iv) granting such other relief as the Commissioner may deem appropriate.

Service of the notice of hearing and complaint was made by certified mail on June 17, 2015, and was complete on June 22, 2015, upon receipt by respondent. See 6 NYCRR § 622.3(a)(3); see also Affidavit of Shawn Vitas, sworn to June 16, 2015 ("Vitas Aff."), Exhibit ("Ex.") 2. Respondent failed to file an answer to the complaint, and failed to appear for the hearing scheduled for September 1, 2015.

As stated in the notice of hearing, a hearing was scheduled for September 1, 2015 at 11:00 a.m., at the Department's Region 2 offices located in Long Island City, New York. The undersigned Administrative Law Judge ("ALJ") of the Department's Office of Hearings and Mediation Services was present to preside at the hearing at the time and location set forth in the notice of hearing. Department staff was represented by John Nehila, Esq., Associate Attorney, Region 2. No one appeared on behalf of respondent. Department staff was prepared to proceed to hearing, and staff witness Mahmoud Assi, Environmental Engineer in the Department's Region 2 office, was also present.

Mr. Nehila, on behalf of Department staff, made an oral motion pursuant to 6 NYCRR § 622.15 for a default judgment against respondent for failure to file an answer and failure to appear at the hearing. Mr. Nehila submitted six documents in support of staff's oral motion for a default judgment, which are identified as exhibits herein. Staff has also submitted a proposed order, as required by 6 NYCRR § 622.15(b)(3).

Applicable Regulatory Provisions

§ 360-1.11 Permit provisions

(a)Mitigation of adverse impacts. (1) The provisions of each permit issued pursuant to this Part must assure, to the extent practicable, that the permitted activity will pose no significant adverse impact on public health, safety or welfare, the environment or natural resources, and that the activity will comply with the requirements identified in this Subpart and the applicable Subpart pertaining to such a facility, and with other applicable laws and regulations. To provide such assurance, the department may impose conditions on such a permit, including but not limited to or exemplified by the following: ... monitoring (including the imposition of on-site environmental monitors) ...

(2) In the case of on-site environmental monitors, funding shall be established with the department as follows:

(ii) The on-site environmental monitoring payment sum shall be subject to quarterly revision by the department. Quarterly payments shall be made by the owner or operator for as long as the facility is subject to department regulations.

(iii) Within 30 calendar days after receipt of written notice from the department that payment is due, the owner or operator of the facility shall forward the amount due the department indicating which facility this amount is coming from. Payments are to be in advance of the period in which they will be expended.

(iv) In the event that the owner or operator of the facility fails to submit any of the environmental monitoring payments by the required submission dates, such owner or operator shall immediately cease acceptance of any and all solid waste of any kind at the facility and shall commence closure of the facility in accordance with the requirements of this Part and any permit or order to which the owner or operator is subject. Such cessation of waste acceptance shall be automatic, with the necessity of prior hearing or judicial review.

Findings of Fact

1. Respondent Stokes Waste Paper Co., Inc. ("respondent") owns and operates a solid waste management facility which is located at 17-25 Van Street, Staten Island, New York ("facility"). See Complaint, Ex. 1, at ¶ 7; Permit No. 2-6401-00001/00001, Ex. 5, at 1.

2. The Department issued DEC Permit No. 2-6401-00001/00001 ("permit") to respondent to operate the facility, effective October 18, 2011. See Ex. 5.

3. Pursuant to the permit, respondent was required to fund environmental monitoring activities related to the operation of the facility. The permit requires that the environmental monitor fee be paid within 30 days after the receipt of a bill from the Department, and that failure to make a required environmental monitor payment is a violation of the permit. See Permit Special Condition No. 36(d), Ex. 5, at 6.

4. Shawn Vitas is an Associate Accountant in the Revenue Accounting Unit of the Department's Division of Management and Budget, located at the Department's central offices in Albany, New York. He has been employed by the Department since 2002. His duties include statewide billing of, and tracking of payments from facilities that are required to maintain an account for annual environmental monitor fees with the Department. Among other duties, he maintains a list of permittees required to pay annual environmental monitor fees. See Affidavit of Shawn Vitas, sworn to June 16, 2015 ("Vitas Aff."), Ex. 2, at first unnumbered page.

5. Department staff sent to respondent a cover letter and an invoice for environmental monitoring at the facility, dated February 20, 2015. According to the invoice, the environmental monitor fee was for the period April 1, 2015 through March 31, 2016. The invoice stated that the fee of $7,100 was due March 22, 2015. See Ex. 4.

6. As a result of respondent's failure to pay the annual environmental monitor fee identified in the invoice sent to respondent, staff sent a Notice of Violation ("NOV") to respondent on April 28, 2015 for non-payment of the annual environmental monitor fee. Respondent failed to respond to the NOV. See Vitas Aff., Ex. 2, at second unnumbered page; Complaint, Ex. 1, at ¶ 17.

7. Respondent has failed to pay the environmental monitor fee identified in the invoice sent to respondent. See Vitas Aff., Ex. 2, at second unnumbered page; Complaint, Ex. 1, at ¶¶ 16, 18.

8. Staff served on respondent, by certified mail return receipt requested, the notice of hearing and complaint dated June 17, 2015. See Affidavit of Service of Elissa Armater, sworn to August 17, 2015, attaching copies of United States Postal Service ("USPS") delivery record and recipient's signature. (The Armater Affidavit and attached USPS document are attached to the Vitas Affidavit).

9. The notice of hearing stated that respondent was required to serve an answer to the complaint no later than August 1, 2015, and that failure to timely file an answer would result in a default and a waiver of respondent's right to a hearing. See Notice of Hearing, Ex. 1. The notice of hearing stated further that a hearing would be convened at the Department's Regional Office in Long Island City, New York on September 1, 2015, and that failure to appear at the hearing would constitute a default and a waiver of respondent's right to a hearing, and that an order may be issued against respondent upon a finding of default. See id.

10. Respondent failed to file an answer to the complaint, and failed to appear for the hearing scheduled for September 1, 2015, as directed in the notice of hearing. See Hearing Record.

Discussion

Liability - Conclusions of Law

Staff has submitted (i) proof of service on respondent of the notice of hearing and complaint; (ii) proof of respondent's failure to answer and failure to appear; and (iii) a proposed order. Staff has therefore satisfied the requirements of 6 NYCRR § 622.15(b)(1)-(3).

In addition, staff has submitted proof of facts sufficient to support staff's claim. See Matter of Queen City Recycle Center, Inc. , Decision and Order of the Commissioner, December 12, 2013 (" Queen City "), at 3 (requiring submission in all default judgment motions of proof of facts constituting the claim charged). The record establishes that (i) respondent was required to pay annual environmental monitor fees pursuant to the terms of its permit, as well as 6 NYCRR § 360-1.11(a)(2)(iii)[1]; (ii) staff sent respondent an invoice for payment of the annual environmental monitor fee for 2015-2016; and (iii) respondent did not pay the annual environmental monitor fee for 2015-2016. The foregoing establishes that respondent has violated 6 NYCRR § 360-1.11(a)(2)(iii) and the terms of Permit No. 2-6401-00001/00001.

Given the foregoing, I recommend that the Commissioner grant staff's motion for a default judgment.

Past Due Annual Environmental Monitor Fee

In the complaint, staff seeks an order requiring respondent to remit the past due annual environmental monitor fee in the amount of $7,100. See Complaint, Ex. 1, at Wherefore Clause ¶ II. The record establishes that respondent is required by the terms of its permit to pay such fee, that respondent was sent an invoice for the amount of $7,100, and that respondent has not paid the fee. I recommend that the Commissioner grant staff's request, and issue an order requiring respondent to pay the past due annual environmental monitor fee of $7,100.

Civil Penalty

ECL § 71-2703 provides that any person who violates any of the provisions of, or who fails to perform any duty imposed by, title 3 or 7 of ECL article 27 or any rule or regulation thereunder, or any term or condition of a permit issued pursuant to title 3 or 7 of ECL article 27, shall be liable for a civil penalty not to exceed seven thousand five hundred dollars ($7,500) for each violation and an additional penalty of not more than one thousand five hundred dollars ($1,500) for each day during which such violation continues.

The environmental monitoring program helps to prevent adverse environmental impacts associated with the improper handling of solid waste. See Queen City , at 4; see also Vitas Aff., Ex. 2, at third unnumbered page. "Failure to pay a required environmental monitor fee on a timely basis impairs the operation of the monitoring program and the Department's efforts to ensure facility compliance with applicable statutory, regulatory and permit requirements." Queen City , at 4; see also Vitas Aff., Ex. 2, at third unnumbered page.

In addition to requesting that the Commissioner order respondent to pay the outstanding fee, staff has requested that the Commissioner issue an order assessing against respondent a civil penalty in the amount of twenty-five thousand dollars ($25,000). In addition to the affidavit of staff Associate Accountant Shawn Vitas, staff has submitted a Penalty Calculation sheet, which reflects staff's calculation of the maximum statutory penalty that could be assessed here, as well as a calculation of the penalty it seeks in this matter. See Ex. 3. According to staff, the maximum statutory penalty pursuant to ECL § 71-2703 is $124,500, calculated as follows: $7,500 (for the initial violation) + $117,000 ($1,500 x 78 days the number of days from the start of the next monitor period, April 1, 2015, to the date of the notice of hearing and complaint, June 17, 2015).

Staff has calculated the civil penalty of $25,000 it seeks in this case as follows: $7,500 (base penalty) + $17,500 (which staff states is "less than 20% of the total per day violation not including the initial $7500"). See Ex. 3. Staff also states that its calculation was made "in accordance with OGC #8 Solid Waste Enforcement Policy 2 (11/17/2010). Irrespective of the version of OGC 8 used by staff, the penalty proposed by staff is much lower than the statutory maximum.

1 In the complaint in this matter, staff alleged that respondent violated the general regulation, 6 NYCRR § 360-1.11, but did not cite specifically the subparagraph of the section requiring payment of the monitor fee, section 360-1.11(a)(2)(iii). See Complaint ¶ 19. The complaint in Queen City contained the same general citation to section 360-1.11. See Queen City, at 2, n. 6. The Commissioner stated that "[w]here, as here, a section is comprised of a number of subsections, paragraphs, or subparagraphs, staff should designate the particular subsection(s), paragraph(s) and subparagraph(s) at issue." Id. (emphasis added). Staff should comply with the Commissioner's language regarding citing the specific provision alleged to be violated - here, 6 NYCRR § 360-1.11(a)(2)(iii).

2 OGC 8 is a Department guidance memorandum that provides, among other things, a detailed discussion of penalty considerations for solid waste management facilities, and includes an appendix which provides a chart that sets forth a penalty range guide for determination of the gravity component of a penalty. The chart in the appendix of the version of OGC 8 cited by staff contained misprints in the headings, and the Commissioner directed that staff revise OGC 8. See Queen City, at 4 n. 10; see also Matter of Dalcamo, Order of the Commissioner, December 17, 2013, at 6 n. 7. Staff revised OGC 8 effective July 14, 2015, after commencement of this proceeding. See http://www.dec.ny.gov/regulations/68439.html. Irrespective of the version of OGC 8 used by staff, the penalty proposed by staff is much lower than the statutory maximum.

Documents Submitted by Staff in Support of Motion for Default Judgment

Matter of Stokes Waste Paper Co., Inc.

September 1, 2015 - Region 2, 1 Hunter's Point Plaza 47-40 21st Street Long Island City, NY

DEC Case No. 2-20150519-01 - Edirol File No. 020208081741

September 1, 2015 - Region 2, 1 Hunter's Point Plaza 47-40 21st Street Long Island City, NY
Document/Exhibit No. Description
1 Notice of Hearing, Complaint, Statement of Readiness, all dated June 17, 2015.
2 Affidavit of Shawn Vitas in Support of Notice of Hearing and Complaint, sworn to June 16, 2015, attaching Affidavit of Service of Elissa Armater and USPS receipt containing signature of recipient.
3 Staff penalty calculation sheet.
4 Cover letter and invoice dated February 20, 2015 regarding environmental monitor fee for period April 1, 2015 through March 31, 2016.
5 October 18, 2011 cover letter to respondent attaching DEC Permit No. 2-6401-00001/00001.
6 Order on Consent, DEC Case No. CO 2-20141007-01.
7 Proposed Order.
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