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Ten Mile River Holding, Ltd., MAC Sand and Gravel, Inc. and Aldo Colella - Order, August 11, 1994

Order, August 11, 1994

STATE OF NEW YORK : DEPARTMENT OF ENVIRONMENTAL CONSERVATION

In the Matter of the Alleged
Violations of Articles 15, 23 and
71 of the Environmental Conservation
Law of the State of New York (ECL),
and Parts 422 and 423 of Title 6 of
the Official Compilation of Codes,
Rules and Regulations of the State
of New York (6NYCRR) by

TEN MILE RIVER HOLDING, LTD.,
M.A.C. SAND AND GRAVEL, INC. and
ALDO COLELLA

RESPONDENTS

ORDER
REDETERMINING
CIVIL PENALTIES
R3-1405/8704

WHEREAS:

  1. Pursuant to Notices of Hearing and Complaints dated March 1, 1991, and Amended Complaints dated April 17, 1991, Administrative Law Judge (ALJ) Judith Kaufman Bentley conducted an administrative enforcement hearing to consider whether the Respondents, Ten Mile River Holding, Ltd. (TMR), M.A.C. Sand and Gravel, Inc. (MAC), and Aldo Colella, violated provisions of ECL Article 15 (Water Resources), Article 17 (Water Pollution Control), Article 23 (Mineral Resources) and Article 71, Section 13 (Enforcement of ECL Article 23) as well as provisions in 6 NYCRR Part 422 (Mine Land-Use Plan) and Part 423 (Reclamation Bond).
  2. After reviewing the record of the administrative hearing and ALJ Bentley's Hearing Report, then Commissioner, Thomas C. Jorling, issued an administrative Order dated September 28, 1992.
  3. In the Order, Commissioner Jorling concluded that the Respondents violated the ECL and implementing regulations. The Commissioner assessed a civil penalty of $1,000,000 jointly and severally against all the Respondents, and an addition civil penalty of $500,000 against TMR. The September 28, 1992 Order also directed TMR to post a reclamation bond and to prepare an approvable reclamation plan according to the criteria in ECL Article 23 and 6 NYCRR Part 422.
  4. Pursuant to CPLR Article 78, the Respondents appealed Commissioner Jorling's September 28, 1992 administrative Order. In an Order dated January 13, 1994, the New York State Appellate Division, Third Department, concluded there was substantial evidence to support all charges, except for the charges that the Respondents abandoned the mining site for two separate periods. Furthermore, the Court determined that only TMR, as the "applicant," could be held liable for the reclamation violations.
  5. The Court directed the Commissioner to redetermine the civil penalties assessed against the Respondents consistent with the Court's findings.
  6. The Parties to the administrative enforcement proceeding were provided an opportunity to comment about how to redetermine the civil penalties for the violations sustained by the Court's January 13, 1994 Order. Respondents MAC and Colella were represented by Michael F. Dennis, Esq., Respondent TMR was represented by Laura Zeisel, Esq. and the Department Staff was represented by Katherine Hudson, Esq., Assistant Regional Attorney.
  7. ALJ Daniel P. O'Connell was assigned to review the Parties' comments and to prepare a Hearing Report with recommendations to the Commissioner about how to redetermine the civil penalties consistent with the Court's decision.
  8. Consistent with an Order of the New York State Appellate Division, Third Department, dated January 13, 1994, I have redetermined the civil penalties assessed against the Respondents, Ten Mile River Holding, Ltd. (TMR), M.A.C. Sand and Gravel, Inc. (MAC) and Aldo Colella, in the captioned matter.
  9. The facts and conclusions sustained by the Court's review of the Hearing Report prepared by Administrative Law Judge Judith Kaufman Bentley are the basis for the redetermination of the civil penalties.
  10. Furthermore, I adopt the penalty allocation scheme provided in ALJ Bentley's Hearing Report with the minor modification recommended by ALJ O'Connell as discussed in the attached Hearing Report.

NOW, THEREFORE, having redetermined the civil penalties in this matter consistent with the Order of the New York State Appellate Division, Third Department, dated January 13, 1994, it is ORDERED that:

  1. The Respondents, Ten Mile River Holding, Ltd., M.A.C. Sand and Gravel, Inc., and Aldo Colella, are assessed a joint and several civil penalty of Thirty-four thousand three hundred Dollars ($34,300) for mining at two different locations outside the areas authorized by the 1982 permit over a 94 day period in violation of the terms of the 1982 permit conditions, ECL §23-2713(4) and 6 NYCRR §422.1(a).
  2. The Respondents are assessed a joint and several civil penalty of Five hundred Dollars ($500) for relocating a haul road without getting prior approval from the Department in violation of the terms of the 1982 permit conditions, ECL §23-2713(4) and 6 NYCRR §422.1(a).
  3. The Respondent, Ten Mile River Holding, Ltd., is assessed a civil penalty of Three hundred fifty-two thousand two hundred Dollars ($352,200) for failing to post an adequate reclamation bond over a 2346 day period in violation of ECL §23-2717, and 6 NYCRR §§423.1 and 423.2(c).
  4. The Respondent, Ten Mile River Holding, Ltd., is assessed a civil penalty of Two hundred ninety thousand five hundred fifty Dollars ($290,550) for not reclaiming the mining site concurrent with mining operations, and for not building sedimentation collection areas and berms over a 1933 day period in violation of the terms of the 1982 permit conditions, ECL §23-2713(4) and 6 NYCRR §422.1(a).
  5. The Respondents are jointly and severally assessed a civil penalty of Fourteen thousand Dollars ($14,000) for digging a ditch to divert water from the mining area to the Ten Mile River on two dates in October 1987 without a SPDES permit from the Department in violation of ECL §§17-0501 and 17-0803.
  6. The Respondents are jointly and severally assessed a civil penalty of Fourteen thousand Dollars ($14,000) for disturbing the banks of the Ten Mile River on four days without a permit from the Department in violation of ECL §15-0501.
  7. The total redetermined civil penalties assessed in the amounts of Sixty-two thousand eight hundred Dollars ($62,800) against all the Respondents, jointly and severally, and the additional Six hundred forty-two thousand seven hundred fifty Dollars ($642,750) against Ten Mile River Holding, Ltd., shall be payable to the Department of Environmental Conservation within ninety (90) days after service of a conformed copy of this Order upon the Respondents.
  8. The Respondent, Ten Mile River Holding, Ltd., shall follow provisions III and IV of Commissioner Jorling's Order dated September 28, 1992 in this matter.
  9. All communications between the Respondents and the Department concerning this Order and the September 28, 1992 administrative Order shall be made to the Department's Region 3 Director, NYSDEC - Region 3, 21 South Putt Corners Road, New Paltz, New York 12561-1696.
  10. The provisions, terms and conditions of this Order shall bind the Respondents, their agents, servants, employees, successors and assigns, and all persons, firms and corporations acting for or on behalf of the Respondents.

NEW YORK STATE DEPARTMENT OF
ENVIRONMENTAL CONSERVATION
LANGDON MARSH, COMMISSIONER

/s/

Dated: Albany, New York
August 11, 1994

To: Ten Mile River Holding, Ltd. via Certified Mail
Ten Mile River Farms
Sand Hill Road
Dover Plains, New York 12522

Laura Zeisel, Esq. via Certified Mail
169 Main Street
P.O. Box 9
New Paltz, New York 12561

Aldo Colella via Certified Mail
228 Broadway
Carle Place, New York 11514

MAC Sand and Gravel, Inc. via Certified Mail
228 Broadway
Carle Place, New York 11514

Michael Dennis, Esq. via Certified Mail
145 Sycamore Drive
East Hills, New York 11576

Katherine Hudson, Esq.
Assistant Regional Attorney
NYSDEC - Region 3
21 South Putt Corners Road
New Paltz, New York 12561-1696. STATE OF NEW YORK

DEPARTMENT OF ENVIRONMENTAL CONSERVATION
50 Wolf Road
Albany, New York 12233-1550

In the Matter

- of -

In the Matter of the Alleged Violations of Articles 15, 23 and 71 of
the Environmental Conservation Law of the State of New York (ECL),
and Parts 422 and 423 of Title 6 of the Official Compilation of Codes,
Rules and Regulations of the State of New York (6NYCRR)

- by -

TEN MILE RIVER HOLDING, LTD.,
M.A.C. SAND AND GRAVEL, INC. and
ALDO COLELLA

RESPONDENTS

DEC No. R3-1405/8704

REPORT

- by -

/s/
Daniel P. O'Connell
Administrative Law Judge

SUMMARY

In an administrative Order dated September 28, 1992, the Commissioner assessed a $1,000,000 civil penalty jointly and severally against the Respondents, Ten Mile River Holding, Ltd. (TMR), M.A.C. Sand and Gravel, Inc., and Aldo Colella, and an additional $500,000 civil penalty individually against TMR. Pursuant to CPLR Article 78, the Respondents challenged the Commissioner's Order. In an Order dated January 13, 1994, the New York State Appellate Division, Third Department, directed the Commissioner to redetermine the civil penalties. The Parties to the administrative hearing had an opportunity to comment on how the Commissioner should redetermine the civil penalties. Consistent with the Court's determination, this Report recommends a redetermined civil penalty of $62,800 assessed jointly and severally against all Respondents, and an additional civil penalty of $642,750 assessed individually against TMR.

SUMMARY OF ADMINISTRATIVE AND COURT PROCEEDINGS

Pursuant to Notices of Hearing and Complaints dated March 1, 1991, and Amended Complaints dated April 17, 1991, Administrative Law Judge (ALJ) Judith Kaufman Bentley conducted an administrative enforcement hearing to consider whether the Respondents, Ten Mile River Holding, Ltd. (TMR), M.A.C. Sand and Gravel, Inc. (MAC), and Aldo Colella, violated provisions of ECL Article 15 (Water Resources), Article 17 (Water Pollution Control), Article 23 (Mineral Resources) and Article 71, Section 13 (Enforcement of ECL Article 23) as well as provisions in 6 NYCRR Part 422 (Mine Land-Use Plan) and Part 423 (Reclamation Bond). After reviewing the record of the administrative hearing and ALJ Bentley's Hearing Report, then Commissioner, Thomas C. Jorling, issued an administrative Order dated September 28, 1992.

In the Order, Commissioner Jorling concluded that the Respondents violated the ECL and implementing regulations. The Commissioner assessed a civil penalty of $1,000,000 jointly and severally against all the Respondents, and an addition civil penalty of $500,000 against TMR. The September 28, 1992 Order also directed TMR to post a reclamation bond and to prepare an approvable reclamation plan according to the criteria in ECL Article 23 and 6 NYCRR Part 422. Appendix A of this Report is a copy of Commissioner Jorling's September 28, 1992 Order and the Hearing Report prepared by ALJ Bentley.

Pursuant to CPLR Article 78, the Respondents appealed Commissioner Jorling's September 28, 1992 administrative Order. In an Order dated January 13, 1994, the New York State Appellate Division, Third Department, concluded there was substantial evidence to support all charges, except for the charges that the Respondents abandoned the mining site for two separate periods. Furthermore, the Court determined that only TMR, as the "applicant," could be held liable for the reclamation violations where the Commissioner originally had found all Respondents jointly and severally liable. The Court directed the Commissioner to redetermine the civil penalties assessed against the Respondents consistent with the Court's findings. Appendix B of this Report is a copy of the Court's Order dated January 13, 1994.

The Parties to the administrative enforcement proceeding had an opportunity to comment about how to redetermine the civil penalties for the violations sustained by the Court's January 13, 1994 Order. With a cover letter dated May 25, 1994, Michael F. Dennis, Esq., filed a Memorandum on the Imposition of Penalties for Respondents MAC and Aldo Colella. In a letter dated May 26, 1994, Katherine Hudson, Esq., Assistant Regional Attorney, filed comments on behalf of the Region 3 Department Staff. By letter dated May 27, 1994, Laura Zeisel, Esq., submitted arguments for TMR.

In a letter dated June 7, 1994, Ms. Zeisel filed a reply to the Department's arguments. Mr. Dennis replied to the Department's arguments in a letter dated June 8, 1994. Ms. Hudson replied to the Respondents' arguments in a letter dated June 8, 1994. The Office of Hearings received all replies by June 9, 1994.

ALJ Daniel P. O'Connell was assigned to review the Parties' comments and to prepare this Report with recommendations to the Commissioner about how to redetermine the civil penalties consistent with the Court's decision.

The Parties' Positions

MAC and Colella asserted that the one million dollar civil penalty assessed against them in the September 28, 1994 administrative Order was Draconian and unjust. According to MAC and Colella, the Commissioner should redetermine the civil penalties de novo and consider additional mitigating factors. For example, MAC and Colella contended they were not responsible for any of the violations, and concluded that the Commissioner should not assess any civil penalties against them. In addition, the Respondents asserted that MAC has been out of business for some years, and that Colella is not able to pay any civil penalties.

TMR concurred with MAC and Colella's approach to redetermining the civil penalties. Additionally, TMR acknowledged that Commissioner Jorling had individually assessed TMR about one-third of the possible statutory maximum civil penalty for the abandonment charge. Accordingly, TMR argued the Commissioner should reduce the $500,000 civil penalties individually assessed against it by at least one third.

The Department argued that the redetermined civil penalties should be the original civil penalty less the civil penalty associated with the two separate abandonment charges. According to the Department, the civil penalty associated with the abandonment charges was about 29% of the possible statutory maximum civil penalty. The Department argued that the Commissioner should reduce the $1,000,000 civil penalty jointly and severally assessed against all Respondents to $880,000, and the $500,000 civil penalty assessed individually against TMR to $340,000.

DISCUSSION

The Parties proposed two different ways to redetermine the civil penalties. The Respondents argued for a de novo review of the civil penalties that should include reevaluating of the record and finding additional facts about circumstances that would mitigate the civil penalties originally assessed against them. The Department argued that ALJ Bentley's Hearing Report provided an allocation scheme based on a percentage of the possible statutory maximum civil penalties for each violation.

The Respondents' argument that the Commissioner should redetermine the civil penalties based on a de novo reevaluation of the record and additional fact finding about possible mitigating circumstances is misplaced. The Respondents had a hearing. The Court reviewed the record of that hearing and the Commissioner's final decision.

The Court's determination does not require a new trial, or reopening the record of the hearing for additional fact finding. The Court's review established the facts for this case. The Court did not state that the civil penalties originally assessed by the Commissioner were unsupported by the record or disproportionate to the offenses. The purpose of the remand is to develop and to apportion out a civil penalty using the findings that the Court sustained.

A careful review of the record of the administrative hearing shows that ALJ Bentley provided an allocation scheme in her Hearing Report. The allocation scheme in the Hearing Report relied on the guidance provided in the Commissioner's Civil Penalty Policy to determine what percentage of the possible statutory maximum civil penalties for each violation should be assessed. By adopting ALJ Bentley's Hearing Report, the Commissioner accepted this allocation scheme when he assessed the civil penalties in his September 28, 1992 Order. The Court did not disturb any of the findings made by ALJ Bentley regarding the factors identified in the Civil Penalty Policy and the allocation scheme discussed in the Hearing Report. Consistent with the original intent of ALJ Bentley and the Commissioner, the redetermined the civil penalties recommended in this Report are based on the allocation scheme provided in the Hearing Report.

The Allocation Scheme

The allocation scheme discussed in ALJ Bentley's Hearing Report includes the following steps. First, ALJ Bentley calculated the possible statutory maximum civil penalty for each violation. After weighing the factors identified in the Civil Penalty Policy (dated June 20, 1990), that were relevant to this case, ALJ Bentley then multiplied the possible statutory maximum civil penalty for each violation by a specific percentage (i.e., a multiplier) to obtain the recommended civil penalty for that particular violation.

Where all Respondents were found to be liable, ALJ Bentley determined that the multiplier was 70% of the possible statutory maximum civil penalty for each violation. The sum of these civil penalties was about $1,000,000. With respect to the additional civil penalties assessed individually against TMR, ALJ Bentley determined that the multiplier was 30% of the possible statutory maximum civil penalty for each of those violations. The sum of these civil penalties was about $500,000. (See Hearing Report, page 16.)

Using the multipliers identified in ALJ Bentley's Hearing Report, Table 1 summarizes how the original civil penalties for each violation were apportioned.

Table 1: Apportionment of the Original Civil Penalties based
on a Percentage of the Possible Statutory Maximum
Civil Penalty for Each Violation.
Violations Maximum Possible Civil Penalty Civil Penalties assessed Jointly and Severally (70% of Max.) Civil Penalties assess Individually against TMR (30% of Max.)
Abandonment Violation (821 days) $411,500 $288,050 $0.00
Abandonment Violation (1094 days) $548,000 $0.00 $164,400
Mining Outside the Permitted Area $49,000 $34,300 $0.00
Relocating the Haul Road without the Department's Authorization $1,000 $700 $0.00
Posting an Inadequate Reclamation Bond $1,174,000 $0.00 $352,200
Reclamation Violations (Berms and Sedimentation Areas) $968,500 $677,950 $0.00
Article 17 Violations $20,000 $14,000 $0.00
Article 15 Violations $20,000 $14,000 $0.00
Totals $3,192,000.00 $1,028,930.00 $516,570.00

The Commissioner's Civil Penalty Policy

A significant element of the allocation scheme is the multiplier. As indicated above, ALJ Bentley determined the multipliers after weighing the factors identified in the Civil Penalty Policy that were relevant to this case. The guidance provided in the Civil Penalty Policy outlines a rationale for calculating the civil penalty for each violation based on the relative significance of the violations, and any aggravating or mitigating circumstances associated with the individual violations.

The Civil Penalty Policy lists factors that are relevant to determining the appropriate civil penalties. The policy document divides these factors into two components: the benefit component, and the gravity component. According to the policy document, the benefit component is the economic benefit gained by a Respondent from delayed compliance or from noncompliance. The gravity component is further subdivided and includes the Respondents' level of culpability and cooperation, the relative importance of the type of violation to the regulatory scheme, and any potential or actual environmental harm.

With respect to the gravity component, the Civil Penalty Policy identifies other relevant factors to be considered when determining the proper civil penalty. One such factor includes the Respondents' ability to pay civil penalties. The Court did not disturb ALJ Bentley's finding about there being no evidence to show that the Respondents are unable to pay civil penalties. The Commissioner should not consider MAC and Colella's claim, as stated in their reply dated June 8, 1994, that they are not able to pay civil penalties. As stated above, the remand does not require a new trial or additional fact finding. Rather, the Commissioner should apportion the redetermined civil penalties based on the existing findings sustained by the Court's review.

Furthermore, the Court did not disturb ALJ Bentley's finding that the Respondents' argument about the bank or the Department being required to notify them of when the reclamation bond expired was without merit. The Court did not disturb ALJ Bentley's conclusion that the burden is on the permit holder to insure that the bond or other surety remains in effect (6 NYCRR §423.2).

The Redetermined Civil Penalties

A. The Abandonment Charges

Originally, the Commissioner had concluded that the Respondents violated ECL §71-1305 by abandoning the mining site for 821 days, and that TMR had abandoned the mining site during a separate 1094 day period. the Court's January 13, 1994 Order, however, did not sustain the conclusion that the Respondents violated ECL §71-1305 by abandoning the mining site during two separate periods. The Court dismissed these charges and the civil penalties associated with them.

ECL §71-1307 authorizes civil penalties for violations of ECL Article 23 and its implementing regulations in the amount of $1,000 for each violation plus $500 for each additional day the violations continue. The possible statutory maximum civil penalty for the 821 day abandonment charge is $411,500 (p. 15 of the Hearing Report). Using the 70% multiplier, the civil penalty associated with the 821 day abandonment charge, therefore, would be at least $288,050.

Similarly, the possible statutory maximum civil penalty for the 1094 day abandonment charge is $548,000 (p. 15 of the Hearing Report). Using the 30% multiplier, the civil penalty associated with 1094 abandonment charge would be at least $164,400. Based on the Court's determination and the allocation scheme used by Commissioner Jorling to assess the original civil penalties, the total redetermined civil penalties recommended below have been reduced accordingly.

B. Mining Outside the Permitted Area

The January 13, 1994 Order upheld the conclusion that the Respondents violated ECL §23-2713(4) and 6 NYCRR §422.1(a) by mining outside the area authorized by the 1982 permit at two separate locations over a total period of 94 days. One location was outside the permitted limits of Pit No. 3, and the other was in the one hundred year flood plain of the Ten Mile River.

ECL §71-1307 authorizes civil penalties for violations of ECL Article 23 and its implementing regulations in the amount of $1,000 for each violation plus $500 for each additional day the violations continue. In the Hearing Report (p. 15), the calculation for the maximum possible civil penalty for these violations was based on 92 days. However, the Court did not disturb ALJ Bentley's conclusion that these violations continued for a total of 94 days (p. 19). For these violations, therefore, the possible statutory maximum civil penalty is $49,000 [($1,000 x 2 violations - Pit No. 3 and the flood plain) + ($500 per day x 94 days)].

The redetermined civil penalty for the violations associated with mining outside the permitted areas must address two concerns. The first concern centers on who is liable. The Court's January 13, 1994 Order characterized these violations as acts of commission. Referencing the applicable case law, the Court concluded that "Colella is liable on the basis of his personal involvement, and MAC is liable as his employer." Based on this conclusion, the Court held "there is no basis to disturb the imposition of joint and several liability" (January 13, 1994 Order p. 6). The Court, therefore, has determined that MAC and Colella are liable for these violations.

The second concern is deciding whether the record supports using the 70% multiplier to redetermine the civil penalty. Based the following factors, the 70% multiplier is reasonable, and the Commissioner should rely on the multiplier to redetermine the proper civil penalty for the violations associated with mining outside the permitted areas.

As indicated above, ALJ Bentley derived the multiplier by weighing the factors identified in the Civil Penalty Policy that were relevant to this case. The Civil Penalty Policy states that the civil penalty should recover the Respondents' total economic benefit. The Court did not disturb ALJ Bentley's findings that the Respondents obtained a significant economic benefit through actual sales of sand, gravel and top soil taken from unpermitted areas. ALJ Bentley found that the Respondents removed about 136,000 cubic yards of material from the unpermitted area adjacent to Pit 3, and estimated that this material could have been sold off-site for about $476,000.

Although it is not necessary to show the Respondents' culpability to prove their liability, the Civil Penalty Policy also recognizes that the level of knowledge that the Respondents had about whether their actions violated the ECL is a relevant factor in determining the proper civil penalties. The Court did not disturb ALJ Bentley's finding that the Respondents' acts were knowing and intentional. For example, the Hearing Report found that the Respondents repeatedly disregarded the explicit and unambiguous terms of the 1982 mining permit. Even after being warned by numerous Department employees of the violations, the Respondents continued to commit violations by repeatedly mining in the unpermitted area in the vicinity of Pit 3 for 94 days.

Given the Respondents' significant economic benefit and because the Respondents knowingly and intentionally committed these violations, the Commissioner should apply the 70% multiplier to the possible statutory maximum civil penalty. Accordingly, the Commissioner should assess a joint and several civil penalty of $34,300. The civil penalty for mining outside the permitted area at two separate locations should be apportioned as follows: $1,000 for each of the two violations (subtotal $2,000) with the balance ($32,300) divided evenly over the 94 days that the violations continued.

C. The Unauthorized Haul Road

The January 13, 1994 Order upheld the conclusion that the Respondents violated ECL §23-2713(4) and 6 NYCRR §422.1(a) by relocating a haul road at the mining site without the Department's approval. ECL §71-1307 provides for a maximum civil penalty of $1,000.

In terms of who is liable, the Court also characterized this violation as an act of commission. Accordingly, the Respondents are jointly and severally liable for violating ECL §23-2713(4) and 6 NYCRR §422.1(a) by relocating a haul road at the mining site without the Department's approval.

On comparison, this violation is not as significant as the previously sustained violations. Accordingly, the Commissioner should not apply the 70% multiplier in this instance. Rather, the Commissioner should assess, a joint and several civil penalty of $500.

D. Inadequate Reclamation Bond

The Court upheld the conclusion that TMR violated ECL §23-2717, and 6 NYCRR §§423.1 and 423.2(c) by failing to post an adequate reclamation bond. This violation continued for over 2346 days.

ECL §71-1307 provides for civil penalties for violations of ECL Article 23 and its implementing regulations in the amount of $1,000 for the violation plus $500 for each additional day the violation continues. In the Hearing Report (p. 15), the calculation for the possible statutory maximum civil penalty was based on two violations continuing for a total of 2344 days. However, ALJ Bentley concluded there was one violation that continued for 2346 days (p. 19). For the purposes of redetermining the civil penalty, therefore, the possible statutory maximum civil penalty for TMR's failure to post an adequate reclamation bond is $1,174,000 [($1,000 per violation + ($500 per day x 2346 days)].

The Commissioner should consider the following factors in deciding whether to apply the 30% multiplier to the maximum possible civil penalty for TMR's failure to post an adequate reclamation bond. First, there is a high degree of culpability. The Court did not disturb ALJ Bentley's finding that TMR intentionally disregarded several letters sent by the Department that told TMR about its responsibility to post an adequate reclamation bond.

Second, the Court did not disturb ALJ Bentley's conclusion that TMR's failure to post an adequate reclamation bond was important to the regulatory scheme, and not a just minor paperwork violation. TMR's actions violated one of the principal goals of the Mined Land Reclamation Law to insure that the lands affected by mining are properly reclaimed [ECL §23-2703(1)]. ALJ Bentley found that although a bond in the amount of $90,000 was posted, the cost of reclaiming the affected acreage would be $750,000. If TMR does not reclaim the mining site, the Department could be forced to commence legal action against TMR and attempt to attach the bond [ECL §23-2715(6)].

Accordingly, the Commissioner should apply the 30% multiplier to the possible statutory maximum civil penalty, and assess TMR a civil penalty of $352,200 for failing to post an adequate reclamation bond. The Commissioner should apportion $1,000 of the recommended civil penalty for this violation with the balance ($351,200) divided evenly over the 2346 days that the violation continued.

E. Reclamation

With respect to the alleged reclamation violations, the Court upheld the following violations. Reclamation was not concurrent with mining, and the requirements of the reclamation plan which included building sedimentation collection areas and berms were not met. Although the Commissioner had originally found that all Respondents were jointly and severally liable for these two separate violations, the Court determined that only TMR, as the "applicant," could be held liable. The reclamation violations [See ECL §23-2713(4) and 6 NYCRR §422.1(a)] continued for a total of 1933 days.

ECL §71-1307 provides for civil penalties for violations of ECL Article 23 and its implementing regulations in the amount of $1,000 for each violation plus $500 for each additional day the violations continue. In the Hearing Report (p. 15), the calculation for the possible statutory maximum civil penalty for this violation was based on three separate violations continuing over 1931 days. One of the violations included in this calculation was the relocated haul road. However, the civil penalty for the haul road has already been determined above. Furthermore, the Court did not disturb ALJ Bentley's conclusion that the remaining two violations about failing to reclaim the mining site and failing to build berms continued for a total of 1933 days (p. 19), rather than 1931 days. For the purpose of redetermining the civil penalty for these violations, therefore, the possible statutory maximum is $968,500 [($1,000 x 2 violations) + ($500 per day x 1933 days)].

Since the Commissioner originally concluded that all Respondents were liable for these violations, the 70% multiplier had been applied to the possible statutory maximum civil penalty for the reclamation violations. According to Table 1, this amount would have been $677,950. Since the Court determined that only TMR is liable for these violations, it is necessary to redetermine the civil penalty based on the 30% multiplier to be consistent with the original allocation scheme.

The following factors show that the Commissioner should use the 30% multiplier to redetermine the civil penalties for the reclamation violations. First, the Court did not disturb ALJ Bentley's findings that TMR gained an economic benefit in the form of avoided costs from delaying reclamation and by not constructing sedimentation areas and berms.

Second, the Court did not disturb ALJ Bentley's finding that TMR had not cooperated with the Department subsequent to the instant charges. According to the Hearing Report, TMR continued to claim a right to mine by stating it would be reclaiming the mining site, despite the Department's position that TMR did not have an approved reclamation plan in effect.

Third, these reclamation violations are significant in terms of the Department's regulatory scheme. TMR had an obligation under the terms of the 1982 mining permit to reclaim the site concurrently with mining operations and to construct sedimentation areas and berms.

Finally, TMR's actions resulted in actual environmental harm to the mining site and to the Ten Mile River. The Court did not disturb ALJ Bentley's finding that the lack of sedimentation areas and berms resulted in a great deal of topsoil being lost from the mining site. Consequently, the agricultural productivity of the site has been reduced or eliminated due to the removal of this topsoil. Since the 1930's, the site had previously supported crop production.

ALJ Bentley also determined that actual harm occurred to the Ten Mile River at various times when unprotected areas of topsoil, sand and gravel washed into the river. This increased the turbidity of the river which in turn affected trout feeding and habitat, and other aquatic biota. TMR's actions diminished the river's capacity as a good fishery and recreational resource.

Similar to mining in unpermitted areas, these reclamation violations are serious. Accordingly, the Commissioner should apply the 30% multiplier and assess TMR a civil penalty of $290,550 for not reclaiming the mining site concurrent with mining operations, and for not building sedimentation areas and berms. For these violations, the Commissioner should apportion $1,000 of the recommended civil penalty for not reclaiming the mining site and $1,000 of the recommended civil penalty for not constructing sedimentation areas and berms (subtotal $2,000). The balance ($288,550) should be divided evenly over the 1933 days that these two violations continued.

F. Violations of ECL Article 17

The Court's January 13, 1994 Order upheld the conclusion that the Respondents violated ECL §§17-0501 and 17-0803 by diverting water from the mining area to the Ten Mile River without getting a SPDES permit from the Department. These illegal discharges occurred on two dates in October 1987.

ECL §71-1929(1) provides for civil penalties in the amount of $10,000 for each violation. For these two illegal discharges, the possible statutory maximum civil penalty is $20,000 ($10,000 x 2 violations).

The Court characterized the Article 17 violations as acts of commission. Accordingly, the Respondents are jointly and severally liable for violating ECL §§17-0501 and 17-0803 by diverting water from the mining area to the river without a SPDES permit.

With respect to determining the proper amount of the civil penalty, the Commissioner should recognize that the Court sustained ALJ Bentley's finding that the Respondents' actions resulted in actual environmental damage. The sediment discharged into the Ten Mile River negatively affected trout spawning and other aquatic species.

Accordingly, the Commissioner should apply the 70% multiplier to the possible statutory maximum civil penalty. For discharging pollutants into the Ten Mile River without a SPDES permit on two separate dates in October 1987, the Commissioner should assess a joint and several civil penalty of $7,000 for each violation. The total civil penalty for these two violations, therefore, should be $14,000.

G. Stream Disturbance

The Court upheld the conclusion that the Respondents violated ECL §15-0501 by disturbing the banks of the Ten Mile River without a permit from the Department. Although the Respondents disturbed the riverbanks on several separate occasions, the Department sought civil penalties for four days.

ECL §71-1107(1) provides for a civil penalty of not more than $5,000 for each violation of ECL Article 15. Therefore, the possible statutory maximum civil penalty is $20,000 ($5,000 x 4 violations).

With respect to the question of liability, the Court determined that the Respondents are jointly and severally liable for this act of commission.

In determining whether to apply the 70% multiplier for these violations, the Commissioner should consider the following factors. First, the Court did not disturb ALJ Bentley's finding that the Article 15 violations were intentional. Some Article 15 violations occurred in the spring of 1988 after MAC's employee had been convicted in February 1988 for a violation that occurred in 1987. Other Article 15 violations continued in 1989 after the Department warned the Respondents in 1987.

Furthermore, the Court upheld ALJ Bentley's finding that the Respondents' actions had a potential environmental impact. With respect to the Article 15 violations, the Respondents' actions created "back water conditions" that could increase flooding upstream and degrade water quality downstream. These conditions would be serious because Ten Mile River is a C(t) stream, and is a valuable recreational resource.

For disturbing the banks of the Ten Mile River on four separate occasions without a permit, the Commissioner should apply the 70% multiplier and assess the Respondents a joint and several civil penalty of $3,500 for each violation. The total civil penalty for these four violations, therefore, should be $14,000.

Summary of Redetermined Civil Penalties

Table 2 summarizes the redetermined civil penalties based on the above review of the allocation scheme originally described in ALJ Bentley's Hearing Report.

Table 2: Redetermined Civil Penalties
Violations Maximum Possible Civil Penalty Civil Penalties assessed Jointly and Severally Civil Penalties assess Individually against TMR
Mining Outside the Permitted Area $49,000 $34,300 $0.00
Relocating the Haul Road without the Department's Authorization $1,000 $500 $0.00
Posting an Inadequate Reclamation Bond $1,174,000 $0.00 $352,200
Reclamation Violations (Berms and Sedimentation Areas) $968,500 $0.00 $290,550
Article 17 Violations $20,000 $14,000 $0.00
Article 15 Violations $20,000 $14,000 $0.00
Totals $2,232,500.00 $62,800.00 $642,750.00

The civil penalties associated with the abandonment charges have been eliminated. Consequently, the total of the maximum possible civil penalty is reduced from $3,192,000 to $2,232,500. [See Table 1].

In addition, the Court's January 13, 1994 Order affected the distribution of the redetermined civil penalties among the Respondents. Although the Commissioner originally had found all Respondents liable for the reclamation violations and applied the 70% multiplier, the Court determined that only TMR could be responsible for the reclamation violations and the civil penalty associated with them. Based on the Court's determination, the 30% multiplier should be applied to the maximum possible civil penalty for the reclamation violations to be consistent with the original allocation scheme.

RECOMMENDATIONS

The Commissioner should assess the following redetermined civil penalties:

  1. A civil penalty of $34,300 jointly and severally against all the Respondents for mining outside the permitted area at two separate locations;
  2. A civil penalty of $500 jointly and severally against all the Respondents for relocating the haul road without obtaining authorization from the Department;
  3. A civil penalty of $352,200 individually against TMR for failing to post an adequate reclamation bond;
  4. A civil penalty of $290,550 individually against TMR for not reclaiming the mining site concurrent with mining operations, and for not building sedimentation areas and berms;
  5. A civil penalty of $14,000 jointly and severally against all the Respondents for discharging pollutants into the Ten Mile River without a SPDES permit on two separate dates in October 1987; and
  6. A civil penalty of $14,000 jointly and severally against all the Respondents for disturbing the banks of the Ten Mile River on four separate occasions without a permit.
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