Force, Ernest - Order, September 30. 1993
Order, September 30, 1993
STATE OF NEW YORK : DEPARTMENT OF ENVIRONMENTAL CONSERVATION In the Matter of
the Proposed Revocation of a D.E.C. Waste Transporter Permit issued to
Ernest J. Force
Permit No. 1A-320
- Pursuant to the New York State Department of Environmental Conservation's ("NYSDEC's") Notice of Intent - Permit Revocation ("Notice") dated March 24, 1993; Permittee's response and request for hearing dated April 2, 1993; NYSDEC's confirmation of its Notice by letter dated April 20, 1993; and NYSDEC's Notice of Hearing dated May 4, 1993; a permit revocation hearing was held before Administrative Law Judge ("ALJ") Frank Montecalvo on Wednesday, June 9, 1993. NYSDEC appeared by Lori Riley, Esq., Regional Attorney. The Permittee, Ernest J. Force, appeared by John T. DiPalma, Esq.
- Upon review of the ALJ's Hearing Report (copy attached) and the record of this proceeding, I concur with its Findings of Fact, Conclusions of Law, and Recommendation.
- As analyzed in the Hearing Report, the Permittee's involvement in the New York Tire Recycling Company, Inc. and the New York Tire Processors, Inc. makes him personally liable for the violations cited by Department Staff. The record shows that the violations at the King's Park site are a significant threat to the environment and that the Permittee engaged in a pattern of non-compliance with the Environmental Conservation Law.
- I have also considered the fact that the Permittee has fully complied with his waste transporter permit. However, I find that compliance for this short period of time is insufficient to provide reasonable assurances about his fitness in light of the very serious continuing violations of the ECL that he, among others, was shown to be responsible for.
- Although the ECL violations that are the basis for Staff's request to revoke commenced prior to the issuance of the permit, the Permittee's failure to properly disclose his compliance history on the application form substantially impaired the Staff's ability to consider them at the time of permit processing. In addition, the King's Park violations have continued unabated since the time the permit was issued. Therefore, there is no impediment to considering them in this revocation action.
NOW, THEREFORE, have considered this matter, it is ORDERED that:
- Permittee Ernest J. Force's NYSDEC Waste Transporter Permit No. #1A-320 be, and is hereby, immediately revoked.
- All communications between Permittee and NYSDEC concerning this Order shall be made to the Director, New York State Department of Environmental Conservation, Region 1 Headquarters, SUNY Campus, Building 40, Stony Brook, NY 11790-2356.
For the New York State Department
of Environmental Conservation
By: THOMAS C. JORLING, COMMISSIONER
Dated: September 30, 1993
Albany, New York
TO: Ernest J. Force [VIA CERTIFIED MAIL W/RETURN RECEIPT]
611 Center Bay Drive
West Islip, NY 11795
John T. DiPalma, Esq.
390 Montauk Highway
West Islip, NY 11795
Lori Riley, Esq.
NYSDEC Regional Headquarters
SUNY Campus, Building 40
Stony Brook, NY 11790-2356
STATE OF NEW YORK
DEPARTMENT OF ENVIRONMENTAL CONSERVATION
Office of Hearings
50 Wolf Road
Albany, New York 12233-1550 In the Matter of
the Proposed Revocation of a D.E.C. Waste Transporter Permit issued to
Ernest J. Force
611 Center Bay Drive
West Islip, NY 11795
Permit No. 1A-320
Administrative Law Judge
Pursuant to a Notice of Intent - Permit Revocation ("Notice") dated March 24, 1993 (copy attached as Appendix A), the New York State Department of Environmental Conservation (the "Department" or "NYSDEC") Staff (the "Staff") initiated proceedings against Ernest J. Force, 611 Center Bay Drive, West Islip, NY 11795 (the "Permittee"), to revoke his NYSDEC Waste Transporter Permit, No. 1A-320.
Permittee replied to Staff's Notice by letter of counsel dated April 2, 1993 (copy attached as Appendix B), and requested a hearing.
Staff confirmed its Notice of Intent by letter dated April 20, 1993 (copy attached as Appendix C), and referred the matter to the NYSDEC Office of Hearings to schedule a hearing.
By Notice of Hearing dated May 4, 1993, the Permittee and Staff were advised of when and where the hearing on the proposed permit revocation would be convened (pursuant to 6 NYCRR 621.14 (e)(2) and 6 NYCRR Part 622).
In accordance with the Notice of Hearing, the adjudicatory hearing was convened before Administrative Law Judge ("ALJ") Frank Montecalvo at 10:00 AM, Wednesday, June 9, 1993 at NYSDEC Regional Headquarters, SUNY Campus, Building 40, Stony Brook, NY. Lori Riley, Esq., Regional Attorney, appeared on behalf of the Department Staff. John T. DiPalma, Esq., appeared on behalf of the Permittee, Ernest J. Force.
At Staff's request, the ALJ took notice of the Department's Record of Compliance Enforcement Guidance Memorandum which was issued February, 1993 (the "EGM"). Following opening statements, a brief adjournment was given to the parties to discuss possible stipulation on certain facts. When back on the record, the parties stipulated to facts stated by Ms. Riley. A copy of the transcript of Ms. Riley's statement of uncontested facts is attached hereto as Appendix D. Also, the parties stipulated to the admission of several exhibits into evidence. Staff thereupon rested its case.
The Permittee testified in his own behalf.
Staff called Joe Nowotny of the Town of Smithtown Department of Code Enforcement, and Environmental Conservation Officer Edward Kustyn as rebuttal witnesses.
Following closing statements, the hearing was concluded. The record was held open to receive citations to court cases from the Permittee and Staff (in response), and the hearing transcript. The ALJ closed the record August 16, 1993 upon his personal receipt of the transcript.
Summary of Staff's Position
The regulations at 6 NYCRR 621.14(a) set forth the grounds under which permits may be revoked, which include under paragraph 5 thereof, non-compliance with previously issued permit conditions, Orders of the Commissioner, provisions of the Environmental Conservation Law (ECL) or regulations of the Department related to the permitted activity. ECL 27-0305 is the operative section for waste transporter permits, and (9) thereunder states the basis for the Department suspending or revoking any permit issued thereunder, i.e., violation of that section, or the rules and regulations adopted to implement it or ECL Article 70. 6 NYCRR 364.4(a)(3) provides that the compliance history and reliability of the applicant are to be considered in determining to issue or deny a permit and that a waste transporter permit may be revoked based upon the unsuitability of the applicant under ECL 27-0913 It should be noted that ECL 27-0913 pertains to permits for treatment, storage, disposal or transportation of hazardous waste. . Under ECL 27-0913(3)(a), it states that one basis for revocation is that the permit holder or applicant has been determined in an administrative, civil or criminal proceeding to have violated any provision of Article 27, the condition of any permit issued thereunder, or any similar statute, regulation, order or permit condition of a federal or other state government agency. The EGM provides that a determination of violation of the ECL, related orders, Department regulations, or similar requirements of the federal or other state government or agency, which violation posed a significant potential threat to health or the environment or was part of a pattern of non-compliance, can provide the basis for the Department to exercise its discretion in revoking a permit.
Here, Mr. Force was a shareholder and officer of Windsor Associates, doing business as New York Tire Recycling, and in charge of its day-to-day operations at a site in Kings Park. There were violations of Part 360 and ECL Article 27 in the operation of the site, and now in the existence of 2.1 million tires landfilled at the site, waiting to be removed. In addition, a court order, issued October 2, 1990 for violations of similar statutes in the Town of Smithtown's Code, which required Mr. Force and others to remove the tires, has not been complied with. After the Kings Park site operations closed down, Mr. Force continued that type of business at a site in Deer Park, as a partner in New York Tire Recycling and in charge of day-to-day operations there. Criminal tickets were issued against Mr. Force involving these violations which remain unresolved.
Although the Part 364 waste transporter permit does not cover the storage / disposal / transfer station activities mentioned above, the permit is for transportation of waste tires, thus it is related to the same industry. Mr. Force's activities show a pattern of non-compliance regarding that industry. The Staff feel it is inappropriate for Mr. Force to have a permit. Mr. Force's non-compliance provides Staff with the basis to revoke his permit under 6 NYCRR 621.14 (a)(5), ECL 27-0305 and 6 NYCRR 364.4(a)(3).
Summary of Permittee's PositionThere is no issue regarding whether or not Mr. Force has complied with his waste transporter permit -- he has.
Mr. Force was one of three partners of Windsor Associates, doing business in Kings Park as New York Tire Recycling. He owned one third of the stock, thus was not a controlling or majority shareholder. He was physically present at the Kings Park site and in charge of the company's day-to-day operations there. Another person was business manager. At the time the company established itself in Kings Park (1988) there were no NYSDEC regulations which pertained to its operations. The company provided solid waste services that were needed on Long Island. An environmental consultant was hired to apply for permits. However, the company came to financial ruin in 1991, and is now closed. It was underfinanced to undertake compliance with Part 360. Both the company and Mr. Force were, and are, unable to obtain the financing needed to bring that facility into compliance.
The historical facts cited by NYSDEC Staff are irrelevant, particularly since Mr. Force was not the responsible company, although he was a partner.
Subsequent to the events now cited by NYSDEC Staff to support permit revocation, and with full disclosure, Mr. Force applied for and received the permit in question. Whether or not Mr. Force should have received the permit is not the subject of this proceeding. Rather, it is whether or not he should now lose the permit. Once issued, the permit becomes a property right. The permittee has to do something to violate it or forfeit it, to have it taken away. The permit was issued for waste transport, and Mr. Force has complied with those regulations in every detail.
Findings of Fact ("Findings")
- Mr. Force was an officer (either a Vice-President or the President) of Windsor Associates ("Windsor"), a New Jersey corporation doing business as New York Tire Recycling Company, Inc. ("NYTRC"). He was one of three partners, with one third of the shares, and 50% of the voting rights, of the corporation. He was responsible for day-to-day administration, planning, including site and equipment selection, and marketing and sales for NYTRC.
- NYTRC began operation in Kings Park, Smithtown, in December, 1987, prior to the revision of 6 NYCRR Part 360 (effective December, 1988), at a site on Old Northport Road (the "Kings Park site").
- The Kings Park site consisted of several acres which NYTRC rented from the Izzo family (the "landowner").
- NYTRC's business consisted of tire collection and recycling. The business had trucks which picked up old tires from tire dealers and municipalities (townships) in Nassau and Suffolk counties. The trucks brought the tires back to the Kings Park site for processing. About 25 percent of the tires either had their casings recovered for retreading, or were exported for resale in used tire markets. In general, these tires were removed from the area. Other tires were shredded (for "crumb rubber" or tire derived fuel) and/or stored at the site.
- Mr. Force was in charge of NYTRC's day-to-day operations at the Kings Park site, including overseeing the dispatcher, trucks, equipment and processing.
- NYTRC's revenues and operating income were derived from collection services (tipping fees), sorting (salvage and sale of "useable" tires) and dumping fees (x dollars per load brought to the site). In its first financial year of operation which ended on September 30, 1988 (9 months of operation), NYTRC had revenue of $255,000 on approximate sales of $500,000. Revenues for the 12 months ending September 30, 1989 were approximately $1,725,000 and operating income $560,000.
- NYTRC submitted an application on June 30, 1989 and also submitted other documents for a Part 360 permit for a tire recycling facility at the Kings Park site.
- Operations continued, and tires accumulated on the Kings Park site. Smithtown officials inspected the property, but, for a time, no summonses were issued.
- Sometime during October or November, 1989, the landowner decided that it wanted to sell half of the site, and consolidated the accumulated tires on the other half of the Kings Park site.
- The consolidation was followed by legal action by the Town of Smithtown against Mr. Force and others, individually and as officers of NYTRC and Windsor, NYTRC and Windsor, and the landowners, for running a junkyard at the Kings Park site without the required Town permits, and for maintaining a fire hazard there with the potential to contaminate drinking water of near by communities and potential to emit noxious fumes.
- On October 2, 1990, Judge Cannavo of the Suffolk County Supreme Court issued a preliminary injunction (the "October, 1990 Order") against Mr. Force, individually and as an officer of Windsor d/b/a NYTRC, as well as the other defendants. The October 1990 Order required the cessation of operations at the Kings Park site, no further acceptance of tires, the removal of the tires within 6 months of the order, provisions for emergency access lanes, and a 24-hour watchman.
- Mr. Force, with others (new investors, approximately 18 stockholders all together), commenced operations at a truck terminal at 377 Carll's Path, Deer Park, Town of Babylon, NY (the "Deer Park site") in November 1990 The record contains statements from Permittee indicating that NYTP commenced Deer Park operations in November 1990, but also contains statements that NYTRC operated there from November 1990 until March 1991, and NYTP operated there from March 1991 until July, 1991. as New York Tire Processors, Inc. ("NYTP").
- Mr. Force was NYTP's President, an 11% or 18% Mr. Force testified he owned 11% but in his application he said 18%. shareholder, and in charge of NYTP's operations at the Deer Park site. Mr. Clark Hower, Vice-President, was the administrative person.
- NYTP continued NYTRC's tire collection activities, and planned to take on the burden of completing the cleanup of the Kings Park site with the equipment which had been left there. New equipment was brought to the Deer Park site to process tires. Tires were delivered to the facility. Certain casings were recovered for retreading, and other tires were recovered for reuse. Some tires were recovered to be cut into door mats. Other tires were shredded at the site, eventually to be used as fuel.
- NYTRC operated the waste tire storage and recyclables handling facility at the Deer Park site from November, 1990, to March 25, 1991, without a permit.
- On November 28, 1990, tires were being processed at the Deer Park site. Tires were being taken out of trucks, placed on the floor and sorted. Mr. Thomas Iannone, a representative of NYTRC, indicated that some tires were to be scrapped, others to be put back on trucks. There were approximately 2,000 tires on the floor of the work area, 1,000 tires in a trailer, and a partially filled trailer with about 500 tires. Mr. Force was at the Deer Park site on said date.
- Over the 3 month period after NYTRC's operations were closed down at the Kings Park site, approximately 100,000 of the tires at that site were shredded by Mr. Force and members of the Izzo family, employing the shredder from the Deer Park site. This activity stopped when the shredder was repossessed.
- NYTP operated a waste tire storage and recyclables handling facility at the Deer Park Site from March 25, 1991 to June 6, 1991 without a permit.
- By summer 1991, NYTP failed.
- NYTRC's application for a Department permit for the King's Park site was withdrawn by letter of counsel dated July 26, 1991. Said letter indicated that both Windsor and NYTP were insolvent, had been closed, and were no longer operating in Suffolk County or New York State.
- The Kings Park site was essentially closed down (abandoned) in the summer of 1991, leaving approximately 2.1 million tires on the site. Those tires currently remain at the Kings Park site.
- In September, 1991, Mr. Force was issued 11 Appearance Tickets by ECO Kustyn charging him with operating a recycling facility without a permit for the months of November 1990 through July, 1991, and with storing more than 1000 tires without a permit on November 28, 1990 and May 24, 1991, at the Deer Park site. As of the hearing date, those tickets remained unresolved.
- Mr. Force applied for a DEC Waste Transporter Permit on or about July 8, 1992. In Part E of his application (the Personal Questionnaire), he stated that from October 1987 to March 1991 he had been a 33% owner and Vice-President of Windsor Associates d/b/a New York Tire Recycling; and that from March 1991 to July 1991 he had been an 18% stockholder and President of New York Tire Processors, Inc., Deer Park, NY. Mr. Force also indicated that there were no arrests, indictments or summonses (except for traffic infractions) pending against him; that he never applied anywhere for a license or permit to transport regulated waste material as an individual business, partnership or corporation in which he was a principal. Mr. Force apparently received a permit on or about September 1, 1992.
- As indicated on receipts placed into evidence in his behalf, Mr. Force delivered scrap tires to Casings, Inc. and/or Coletta Recycling Corp., on numerous occasions from September, 1992 through June, 1993.
- On December 2, 1992, NYSDEC issued to Mr. Force the Waste Transporter Permit in question, Permit #1A-320. According to its terms, said permit authorizes the transportation of whole waste tires to Coletta Recycling Corp., and to Casings, Inc. The permit has an expiration date of August 31, 1993.
- On or about January 27, 1993, NYTP, through its Vice President, Clark Hower, executed a Consent Order which admitted NYTP's violation of 6 NYCRR 360-13.1(b) (having stored more than 1,000 tires without a permit at the Deer Park site). This consent order was executed on behalf of NYSDEC on March 17, 1993.
- NYSDEC's "Notice of Intent - Permit Revocation" was issued March 24, 1993.
Conclusions of Law ("Conclusions")
- The Department has personal jurisdiction over Respondent. (This was uncontested).
Subject Matter Jurisdiction:
- The Department has subject matter jurisdiction over NYSDEC Waste Transporter Permit #1A-320. (This was uncontested).
Conclusions Relevant to the Proposed Permit Revocation:
- NYTRC failed to comply with Article 27 of the ECL and 6 NYCRR 360-13 in that it operated without a required permit and in non-compliance with the operational requirements of 360-13.3 and -13.4 at the Kings Park site. (This was stipulated).
- The 2.1 million tires left at the Kings Park site by NYTRC remain there in violation of Article 27 of the ECL and Part 360. (This was stipulated).
- The October, 1990 Order of Judge Cannavo (which ordered removal of the tires from the Kings Park site) has not to date been complied with by Mr. Force or any other party. (This was stipulated).
- NYTRC operated a waste tire storage and recyclables handling facility at the Deer Park site from November, 1990, to March 25, 1991 without permit in violation of ECL Article 27 and Part 360-12 and -13. (This was stipulated).
- NYTP operated a waste tire storage and recyclables handling facility at the Deer Park site from March 25, 1991 to June 6, 1991 without permit in violation of ECL Article 27 and Part 360-12 and -13. (This was stipulated)
- NYTP violated 6 NYCRR 360-13.1(b) by having stored more than 1,000 tires without a permit at the Deer Park site. (This was admitted by NYTP's Consent Order and uncontested by Permittee).
- Based on this record, the above violations were related to the permitted activity of transportation of waste tires.
Discussion: NYTRC's and NYTP's mode of operation was to use their own trucks to collect the waste tires (Findings 4 and 14), i.e., they transported the waste tires to their own facilities. This collection was a cause of the violations, because it brought in the tires on which the violations were based. The continuing violation at Kings Park (the 2.1 million tires which remain on the site), and the storage violations at Deer Park, would not have occurred had NYTRC/NYTP not collected tires at a rate faster than they were able to properly dispose of them.
- Because of his positions and responsibilities with Windsor d/b/a NYTRC and with NYTP, particularly his responsibility for the day-to-day operations of both the Kings Park and Deer Park sites, as recounted in Findings 1, 5, 12 and 13, Mr. Force could have controlled the flow of tires into the facilities. That he did not makes him responsible for the violations related above, including the continuing violation at the Kings Park site.
Discussion: See Commissioner's 6/18/93 Order in Matter of Edgar, et al., DEC No. R1-4855-92-01. "It is well established that a corporate officer may be held criminally liable for violations of statutes enacted to protect the public health, safety and welfare, where that officer had the authority and responsibility to prevent the violation (United States v. Park, 95 S.Ct. 1903 (1975); United States v. Dotterweich 64 S.Ct. 134 (1943)). The rationale for holding corporate officers criminally responsible is even more persuasive where only civil liability is involved (United States v. Hodges X-Ray, Inc., 759 F.2d 557 (CA 6th Cir, 1985))." The record here demonstrates that Mr. Force held such a position of authority and responsibility with respect to both NYTRC and NYTP, thus he may be held liable for their violations, including the continuing violation at the Kings Park site which NYTRC caused.
- The continuance of the ECL violation at the Kings Park site after the transporter permit was issued, plus the previous violations listed above, establish a pattern of non-compliance with the ECL that will allow the Department to revoke Mr. Force's Waste Transporter Permit under 6 NYCRR 624.14 (a)(5).
Discussion: Permittee noted his compliance with the ECL since obtaining his waste transporter permit, and questioned how the Department could go back to matters that predate the issuance of the permit to justify revocation now. Except for the continuing violation at Kings Park (which had persisted for some time before the permit was issued), Staff did not note any post-permit violations, nor did it contest Permittee's contention that he has complied with the terms of his permit. Staff argued, however, that the language of 621.14(a)(5) which authorizes revocation for non-compliance with the ECL was not limited to newly discovered non-compliance, thus past non-compliance could be considered.
If it were clear that Staff had actually considered past non-compliance, but issued the permit anyway, it would make sense to preclude Staff from asserting the same non-compliance now as the basis for revocation, absent some change in circumstance occurring after permit issuance. The agency cannot merely change its mind without appearing to be arbitrary (and without risking reversal in court). This does not appear to have been the case here, however.
In his application, Mr. Force did not indicate the existence of the summonses that were pending against him for alleged violations at the Deer Park site (Findings 22 and 23), thus there was no reason for persons reviewing the application to have taken them into account. NYTP did not admit its guilt with reference to the same violations until after the permit here was issued (see Finding 26). This proceeding was instituted shortly after NYSDEC signed that consent order (see Finding 27). Under these circumstances, it is appropriate to take those violations into account now. In addition, it is appropriate to take into account now the prior Kings Park violations, because they are part of a pattern of non-compliance (i.e., one transaction causing violations may not establish a "pattern" until viewed in context with others).
Consistent with the Department's Record of Compliance Enforcement Guidance Memorandum revised 2/93 ("EGM") at page 5, Mr. Force's Waste Transporter Permit should be revoked, because a pattern of non-compliance with the ECL has been established. Although the Department recognizes that violators can rehabilitate themselves, the violator must demonstrate that it can carry out activities in a responsible manner (EGM, page 1). Mr. Force's undisputed compliance with the terms of his permit since it was issued 9 months before the hearing could arguably be considered evidence of rehabilitation. Nevertheless, there is no evidence of even a token effort having been made since permit issuance to clean up the continuing violation at Kings Park. This apparent lack of concern over his responsibility to clean up the Kings Park site weighs against Mr. Force's compliance during a 9 month period.
A. Notice of Intent - Permit Revocation dated March 24, 1993
B. Permittee's reply dated April 2, 1993
C. Staff's confirmation of Notice of Intent by letter dated April 20, 1993
D. Statement of uncontested facts