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Tiffany Petroleum - Order, April 22, 1993

Order, April 22, 1993

STATE OF NEW YORK : DEPARTMENT OF ENVIRONMENTAL CONSERVATION

In the Matter of Alleged Violations
of Environmental Conservation Law
of the State of New York (ECL)
Article 17 and Title 6 of the Official
Compilation of Codes, Rules and
Regulations of the State of
New York (6 NYCRR) Part 613 by

ORDER
DEC CASE No.
R4-1274-91-11

TIFFANY PETROLEUM, INC. RESPONDENT

WHEREAS:

  1. This order is issued in reference to the Motion for Summary Order filed by the Department in the captioned proceeding. The attached Report submitted by Administrative Law Judge Daniel P. O'Connell with respect to that motion is accepted subject to my comments below.
  2. A motion for summary order should be granted if, upon review of all the papers and proof submitted, it is concluded the cause of action or a defense thereto is established as a matter of law [6 NYCRR 662.10(c) and CPLR 3212(b)]. Granting summary order does not deny the Respondent its right to a hearing where the record demonstrates there is no triable issue of fact relevant to the outcome of the case.
  3. ECL 17-1001 addresses the need to prevent contamination of the State's lands and waters by imposing safeguards when storing and handling petroleum products. Owners and operators of petroleum bulk storage facilities, such as the Respondent, must install leak detection and containment systems that conform with the State's petroleum bulk storage code (ECL 17-1005 and 17-1015).
  4. After an oil spill occurred at the Respondent's Facility in October 1991, the Respondent entered into an Order on Consent dated February 24, 1992 (DEC case no. R4-1274-91-11). As required by the Compliance Schedule attached to the Order on Consent, the Respondent submitted a design for a secondary containment system which the Department approved on March 12, 1992. Though the Compliance Schedule required the Respondent to begin installing the approved secondary containment system by April 1, 1992, the Department's inspection of the Site on October 15, 1992 showed the Respondent had not yet begun to install the secondary containment system.
  5. The Respondent presented no proof to refute the foregoing findings. The Respondent did not file a request to change the Compliance Schedule or any other terms of the Order on Consent. Neither myself nor the Region 4 Director, as my designee, has changed the terms of the subject Order on Consent. I conclude there are not disputed facts requiring further adjudication, and Summary Order is granted.
  6. Based on the foregoing findings, I find the Respondent violated the terms of the Order on Consent dated February 24, 1992 by not installing the secondary containment system in a timely manner.
  7. There are no substantial fact disputes concerning the factors that need to be assessed in determining the appropriate relief in this case. In granting such relief, I have considered the circumstances of this matter as they are developed in the record and discussed in the attached Report.

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

  1. The Department's request for Summary Order pursuant to 6 NYCRR 622.10 is granted.
  2. The Respondent's failure to install the secondary containment system by June 1, 1992 is a violation of the terms of the Order on Consent dated February 24, 1991.
  3. For the aforementioned violation, the Respondent, Tiffany Petroleum, Inc., is assessed a civil penalty of Three thousand five hundred Dollars ($3,500). The full amount of the assessed civil penalty shall be due and payable to the Department within 60 days after service of a conformed copy of this Order upon the Respondent.
  4. Under the supervision of the Department Staff, the Respondent shall complete the remediation of the October 1991 spill as soon as weather permits.
  5. Within ten days after the Department Staff determines the Site has been adequately remediated, the Respondent shall provide the Department Staff with an estimate of how long it will take to install the approved secondary containment system.
  6. Immediately after providing the estimated time needed to install the secondary containment system, the Respondent shall install the secondary containment system within the estimated time.
  7. All other terms of the Order on Consent dated February 24, 1992 shall remain in effect and unchanged except as noted above.
  8. All communications between the Respondent and the Department concerning this Order shall be made to the Department's Region 4 Director, NYSDEC, 2176 Guilderland Avenue, Schenectady, New York 12306.
  9. The provisions, terms and conditions of this Order shall bind the Respondent, its officers, directors, agents, servants, employees, successors and assigns and all persons, firms and corporations acting for or on behalf of the Respondent.

NEW YORK STATE DEPARTMENT OF
ENVIRONMENTAL CONSERVATION
THOMAS C. JORLING, COMMISSIONER
____________/s/____________

Dated: Albany, New York
April 22, 1993

via Certified Mail
To: Marcelle Leveillee
President
Tiffany Petroleum, Inc.
Route 20, Box 665
Delanson, New York 12053

Richard E. Rowlands, Esq., via Certified Mail
Crane & MacKrell
80 State Street
Albany, New York 12207

David H. Keehn, Esq.
Assistant Regional Attorney
NYSDEC-Region 4
2176 Guilderland Avenue
Schenectady, New York 12306

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

In the Matter

- of -

Alleged Violations of Environmental Conservation Law of the State
of New York Article 17 and Title 6 of the Official Compilation of
Codes, Rules and Regulations of the State of New York NYCRR) Part 613

by

TIFFANY PETROLEUM, INC.

Route 20, Box 665

Delanson, New York 12053

RESPONDENT

DEC No.

R4-1274-91-11

HEARING REPORT

- by -

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

SUMMARY

With service of a Notice of Hearing and Complaint dated January 29, 1993 on Tiffany Petroleum, Inc. (the Respondent), the Region 4 Staff of the Department of Environmental Conservation (the Department) moved for Summary Order pursuant to 6 NYCRR 622.10. The Respondent operates a petroleum bulk storage facility in Delanson, Schenectady County (the Facility). The Department submitted proof showing the Respondent did not install a secondary containment system at the Facility in violation of an Order on Consent dated February 24, 1992 (Case No. R4-1274-91-11) A copy of the February 1992 Order on Consent is attached to this Hearing Report as Appendix A.. The Respondent's answering papers did not identify any factual disputes requiring adjudication. This Hearing Report recommends granting the Department's Motion for Summary Order.

PROCEEDINGS

With a cover letter dated January 29, 1993, David H. Keehn, Esq., Assistant Regional Attorney, Region 4, served the Department's Notice of Hearing, the Complaint and the Motion for Summary Order on the Respondent. Included with the Department's motion were affidavits from the Department's Region 4 Staff: Josephine Peconie, Secretary; Thomas Sperbeck, Environmental Engineer Technician II and Mark Klotz, Environmental Engineer II. Attached to Ms. Peconie's affidavit was a copy of the Consent Order dated February 24, 1992 (Case No. R4-1274-91-11).

With a cover letter dated February 26, 1993, Tiffany Petroleum, Inc. by its attorney Richard E. Rowlands, Esq. from the law firm of Crane and MacKrell, Albany, NY submitted two affidavits opposing the Department's Motion for Summary Order. These affidavits were made by Marcelle Leveillee, President, Tiffany Petroleum, Inc. and J. George Longworth, President, Longworth Environmental, Inc.

The Department submitted a response to the Respondent's affidavits opposing the Motion for Summary Order with a cover letter dated March 4, 1993. On that date, the record of the proceeding closed.

THE DEPARTMENT'S POSITION

The Department alleged the Respondent did not install a secondary containment system around one of the petroleum bulk storage tanks at the Facility by June 1, 1992 in violation of the Order on Consent dated February 24, 1992 (Case No. R4-1274-91-11).

For failing to comply with the Order on Consent, the Department requested a civil penalty of $3,500. The Department also seeks an Order from the Commissioner directing the Respondent to install the secondary containment system by July 1, 1993, and allowing the Department Staff access to the Respondent's Facility to assure the Respondent properly installs the secondary containment system.

THE RESPONDENT'S POSITION

The Respondent opposed the Department's Motion for Summary Order. In its affidavits, the Respondent presented factual information about the October 16, 1991 spill at the Facility. The Respondent also explained that Tiffany Petroleum, Inc. did not willfully violate the February 1992 Order on Consent by failing to install the secondary containment system. The Respondent presented factual information about how remediation of the Site after the spill has been delayed, and that additional remediation is necessary before the secondary containment system can be installed.

MOTION FOR SUMMARY ORDER

Pursuant to 622.10 of Title 6, the Commissioner shall grant a Motion for Summary Order if the filings submitted by the Parties sufficiently establish the cause of action or the defense that would warrant the granting of Summary Judgement under the Civil Practice Law and Rules. The Commissioner must deny the Motion for Summary Order if the Respondent shows facts sufficient to require a hearing on any issue of fact. However, the existence of a triable issue of fact associated with relief, such as the amount of civil penalty, does not prevent granting the Motion.

The only relevant liability issue is whether the Respondent installed the secondary containment system at its Facility. The Respondent did not challenge the Department's proof of the inspection that showed the Respondent had not installed the secondary containment system as of October 1992. The Respondent did not show the terms of the Order on Consent dated February 24, 1992 (Case No. R4-1274-91-11) had changed. There are no triable issues of fact about the Respondent's liability. Consequently, the Commissioner should grant the Department's Motion for Summary Order.

FINDINGS OF FACT

  1. Tiffany Petroleum, Inc. operates a petroleum bulk storage facility on NYS Route 20 in Delanson, Schenectady County (the Facility).
  2. On February 24, 1992, the Respondent entered into an Order on Consent (DEC case no. R4-1274-91-11) with the Department after an oil spill occurred at the Facility in October 1991.
  3. As required by the Compliance Schedule attached to the previously identified Order on Consent, the Respondent submitted a design for a secondary containment system to the Department. The Department approved the design on March 12, 1992.
  4. The Compliance Schedule required the Respondent to begin installing the approved secondary containment system by April 1, 1992 and to complete the installation by June 1, 1992.
  5. By October 15, 1992, the Respondent had not installed the secondary containment system.
  6. The terms of the Order on Consent dated February 24, 1992 and the attached Compliance Schedule remain in effect.
  7. As of February 26, 1993, remediation of the Site from the October 1991 spill was not complete.

DISCUSSION

The October 16, 1991 Spill

In its affidavits, the Respondent presented factual information about the cause of the October 16, 1991 spill at the Facility. Though the Department did not contest any of this information, the cause of the spill is irrelevant because it is not at issue in this action. The Respondent waived his right to a hearing on issues associated with the cause of the October 1991 spill when it signed the February 1992 Order on Consent. Consequently, there are no Findings of Fact about the cause of the October 1991 spill.

Liability

The Respondent must operate the Facility in a manner consistent with the requirements of Environmental Conservation Law of the State of New York (ECL) Article 17, Title 10. ECL 17-1001 addresses the need to prevent contamination of the State's lands and waters by imposing safeguards for storing and handling petroleum products. Owners and operators of petroleum bulk storage facilities must install leak detection and containment systems that conform with the State's petroleum bulk storage code (ECL 17-1005 and 17-1015).

In the papers supporting the Motion for Summary Order, the Department offered a copy of the Order on Consent dated February 24, 1992. The Respondent did not contest the Compliance Schedule requiring the Respondent to begin installing the approved secondary containment system at the Facility by April 1, 1992 and to complete the installation by June 1, 1992. The Respondent did not challenge the Department's proof of the inspection of the Facility on October 15, 1992. On that date, Thomas Sperbeck from the Department Staff observed the Respondent had not installed the secondary containment system. The Respondent did not prove the date in the Compliance Schedule for completing the installation of the secondary containment system was changed to a date later than June 1, 1992. Consequently, the Respondent did not comply with the terms of the Order on Consent.

Civil Penalty

In pertinent part, ECL 71-1929 states violations of "any duty imposed by titles 1 through 11 and title 19 of article 17, or rules, regulations, orders or determinations of the commissioner promulgated thereto ... shall be liable to a penalty of not to exceed twenty-five thousand dollars per day for each violation ..." The Order on Consent dated February 24, 1992 (Case No. R4-1274-91-11) was promulgated pursuant to ECL Article 17, Title 10 by the Region 4 Director as the Commissioner's designee. The Commissioner, therefore, has the authority to assess the civil penalties authorized by ECL 71-1929 for violations of the Order on Consent.

Relying on the Commissioner's Civil Penalty Enforcement Guidance Memorandum dated June 20, 1990, the Department requested a civil penalty of $3,500. The Department argued the Respondent received an economic benefit from not installing the secondary containment system, and explained how to calculate the Respondent's economic benefit. The Respondent did not object to the Department's argument or present evidence to disprove the Department's economic benefit calculation.

As a mitigating factor, the Respondent contended it did not willfully violate the February 1992 Order on Consent. The Commissioner's civil penalty policy acknowledges that a respondent's intent may be a relevant factor in determining the proper civil penalty. In this case, however, the Respondent's intent, or lack thereof, is not a relevant mitigating factor. The Department did not identify, and therefore did not rely on, the Respondent's intent as a factor in determining the requested civil penalty.

Remediation of the Site after the October 1991 spill was delayed, and additional remediation is necessary before installing the secondary containment system. These circumstances are not mitigating factors because installing the secondary containment system was not contingent upon finishing the remediation. Consequently, the Respondent had a responsibility either to complete the remediation in time to meet the time frames established in the Compliance Schedule, or to extend the time frames by obtaining a modification of the Compliance Schedule. The Respondent did neither.

The Order on Consent included a $25,000 civil penalty of which $22,000 was suspended if the Respondent complied with the Order on Consent. Furthermore, ECL 71-1929 authorizes a maximum civil penalty of $25,000 for violating ECL Article 17, Title 10 (Control of the Bulk Storage of Petroleum) and orders promulgated thereto. The requested civil penalty of $3,500 is substantially less than both the suspended portion of the civil penalty in the Order on Consent and the authorized maximum civil penalty. This substantial difference alone provides an adequate basis for the Department's request. Therefore, the recommended civil penalty is $3,500.

Remediation

In its Motion for Summary Order, the Department requested an Order from the Commissioner directing the Respondent to install the secondary containment system at the Facility by July 1, 1993. The Department also requested an Order granting the Department Staff authority to enter and inspect the Respondent's facility to determine whether the Respondent properly installs the secondary containment system.

In its affidavits, the Respondent stated it would install the approved secondary containment system immediately. However, the Respondent wants assurances from the Department that any further remediation of the October 1991 spill would not require the Respondent to damage the newly installed secondary containment system.

The Order on Consent requires the Respondent to install the approved secondary containment system. As of February 26, 1993, however, remediation of the Site from the October 1991 spill is not complete. The Respondent's failure to remediate the October 1991 oil spill as of February 1993 is shocking and contradicts the legislative intent of the ECL Article 17, Title 10 to protect the State's water and land resources. Accordingly, it should be the Respondent's first and immediate priority to complete the remediation of the October 1991 spill under the supervision of the Department Staff. Then, within ten days after the Department determines the Site has been adequately remediated, the Respondent should begin to install the secondary containment system.

Paragraph VII of the Order on Consent expressly authorizes the Department Staff to enter and inspect the Respondent's facility to determine whether the Respondent properly installs the secondary containment system. The Respondent is bound by this condition.

CONCLUSIONS

  1. There are no issues of fact requiring adjudication about the Respondent's liability or the relief sought by the Department.
  2. By failing to install the secondary containment system at the Facility by June 1, 1992, the Respondent did not comply with the terms of the Order on Consent dated February 24, 1992 (Case No. R4-1274-91-11).
  3. The Respondent is subject to the civil penalties authorized by ECL 71-1929 for violating the Order on Consent.
  4. The Respondent is bound by the original terms of the previously identified Order on Consent.

RECOMMENDATIONS

  1. The Commissioner should grant the Department's request for Summary Order pursuant to 6 NYCRR 622.10, and affirm the violation alleged in the Complaint about the Respondent's failure to install the secondary containment system by June 1, 1992.
  2. The Commissioner should assess the Respondent, Tiffany Petroleum, Inc., a civil penalty of $3,500 for violating the February 24, 1992 Order on Consent.
  3. Under the supervision of the Department Staff, the Respondent should complete the remediation of the October 1991 spill as soon as the weather permits. Within ten days after the Department Staff determines the Site has been adequately remediated, the Respondent should provide the Department Staff with an estimate of how long it will take to install the secondary containment system. The Respondent should install the secondary containment system within the estimated time.
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