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Howard, Robert - Order, May 30, 2000

Order, May 30, 2000


In the Matter


the Alleged Violations of the Navigation Law and Article 17 of the Environmental Conservation Law





DEC Case No. R4-2080-98-08


  1. The New York State Department of Environmental Conservation (DEC or Department) staff has moved for an order without hearing pursuant to § 622.12 of Title 6 of the New York Compilation of Codes, Rules and Regulations (6 NYCRR) before Administrative Law Judge (ALJ) Helene Goldberger.
  2. The attached ruling by ALJ Goldberger is adopted as my decision in this matter concerning violations of a 1993 Consent Order and Article 17 of the Environmental Conservation Law (ECL) §§ 17-0501 and 17-0803, Navigation Law §§ 173 and 176, 6 NYCRR § 751.1(a), and Part 703 of 6 NYCRR based upon the respondent's failure to timely install a remediation system that addresses the petroleum contamination at property located at 1722-1732 Western Avenue, Albany, New York and by discharging pollutants in excess of applicable groundwater standards at the site.
  3. As stated in the attached ruling, respondent has not denied his failure to comply with the 1993 Consent Order or the applicable law and regulations and he has failed to present any material facts in response to staff's motion that would create issues of triable fact.
  4. The 1993 Consent Order provided for stipulated penalties of $500 per day for the first five days a milestone in the schedule of compliance contained in the Order was missed, $500 per day for days 5-15, and $1000 per day for each day beyond day 15. ECL § 71-1929 provides for a maximum penalty of twenty-five thousand dollars per day for each violation of titles 1 through 11 and title 19 of Article 17 and the implementing regulations. Staff requested a penalty of $75,000 based upon considerations of economic benefit, the respondent's failure to timely comply with repeated requests by the Department, and the terms of the Consent Order. The ALJ concurred with staff regarding the serious nature of respondent's violations but lessened the recommended penalty to $50,000 based upon respondent Howard's demonstration of having spent more than that amount on his unsuccessful attempts to abate the petroleum contamination.
  5. I find that $50,000 should be assessed in this case as recommended by the ALJ. The ALJ makes clear that there was minimal contamination in 1993 when Respondent signed the Consent Order. Thereafter, the contamination became worse due to Respondent's delay in installing a decontamination system. Time lapsed before it was found that the decontamination system never worked, although approved by Staff, and the contamination grew larger. A second decontamination system was installed, not approved by Staff, and it also failed to decontaminate the site. No economic benefit accrued to Respondent; the facts indicate he expended more than $50,000 in addressing the contamination. Accordingly, the $50,000 penalty based on his failure to timely address the contamination and to comply with the Consent Orders, is appropriate under the circumstances here.
  1. Respondent Robert Howard is found to have violated the terms of the 1993 Consent Order, ECL §§ 17-0501 and 17-0803, Navigation Law §§ 173 and 176, 6 NYCRR § 751.1(a), and Part 703 of 6 NYCRR by failing to install a remediation system in a timely fashion to abate the petroleum contamination on his property and by allowing the continued discharge of pollutants in excess of groundwater standards.
  2. Respondent is liable for a penalty of fifty thousand dollars ($50,000) which is to be paid to the Department within thirty (30) days of the date of this Order.
  3. The provisions, terms, and conditions of this Order and the attached ruling shall bind the respondent, his agents, servants, employees, successors, and assigns and all persons, firms, and corporations acting for or on behalf of the respondent.
  4. All communications between the respondent and the Department with respect to this matter shall be made to the Department's Region 4 Director, 1150 Westcott Road, Schenectady, New York 12306.

For the New York State Department
of Environmental Conservation
John P. Cahill, Commissioner

Dated: Albany, New York
May 30, 2000

TO: Michael P. Ginley, Esq.
Ginley & Gottman, P.C.
63 Putnam Street
Saratoga Springs, New York 12886

David Keehn, Assistant Regional Attorney
NYSDEC - Region 4
1150 Westcott Road
Schenectady, New York 12306


In the Matter


the Alleged Violations of the Navigation Law and Article 17
of the Ruling of the Environmental Conservation Law




Administrative Law Judge on Staff's Motion for
Order Without Hearing

DEC Case No.


By notice of motion dated October 29, 1999, Region 4 staff of the Department of Environmental Conservation (DEC or Department) sought an order without hearing against respondent Robert Howard concerning alleged violations of the Navigation Law (NL) and Article 17 of the Environmental Conservation Law (ECL) at property formerly owned by Mr. Howard at 1722-1732 Western Avenue, Albany, New York. In support of its motion, staff submitted an affirmation of Assistant Regional Attorney David Keehn and affidavits of Environmental Engineer William Blain, Environmental Engineering Technician Thomas Sperbeck, Program Specialist William Christensen, and Environmental Engineer Keith Goertz with accompanying exhibits. After service of this motion, in order to attempt to negotiate a settlement, the parties requested an extension of time for the respondent to submit a reply. On or about March 20, staff informed me that the parties were not able to settle and the respondent agreed to submit responsive papers by March 24, 2000.

On March 27, 2000, this office received respondent's submission by his counsel, Michael Ginley, consisting of an attorney's affirmation in opposition to staff's motion and the supporting affidavits of respondent Howard, Martin Rowan, a principal of Rowan Environmental Services, and George Courtney, a former employee of Applied GeoEnvironmental Services, Inc. (AGS) along with accompanying exhibits. Based upon questions raised by the papers submitted by counsel, I scheduled oral argument on this motion on April 12, 2000. David Keehn, Assistant Regional Attorney and Michael Ginley, Esq. appeared on behalf of the staff and the respondent, respectively, in room 451 of 50 Wolf Road at 10 a.m. The argument was recorded stenographically. To complete the record on this motion, Mr. Keehn agreed to provide Department precedent concerning the penalties requested in this manner. Mr. Ginley agreed to submit support for his client's position that he has already expended over $75,000 on the remediation of the site. Staff submitted a letter dated April 19, 2000 containing a summary of administrative orders and judicial opinions involving the Department's use of penalties in oil spill and other types of cases. Attorney Ginley, by letter dated April 14 requested that I grant the respondent until May 3 to provide the financial information. The transcript was received on April 27, 2000. On May 1, 2000, this office received respondent's financial documentation and this submission closed the record on the staff's motion. Based upon this record, I determined to recommend that the Commissioner grant staff's motion.

Staff's Position

Staff alleges that the respondent Howard owned the property on Western Avenue in 1988 when the Department staff was alerted that a 4000 gallon underground petroleum storage tank on respondent's property failed a tightness test. At that time, DEC affiant William Blain performed an inspection of the property and observed that there was some petroleum contamination. In 1991 and in 1993, the respondent entered into two consent orders with the Department resulting from his failure to tightness test or to close the storage tanks and to investigate and remediate the petroleum contamination at the site, respectively. In the current proceeding, staff maintains that respondent failed to timely install a properly functioning remediation system as required by the 1993 consent order resulting in the spread of the contaminated plume onto neighboring property and continued exceedences of groundwater quality standards. The Department has entered into a stipulation dated September 15, 1999 with Amerada Hess, the owner of the property prior to Mr. Howard, in which Hess has agreed to carry out the remediation of the property. However, based upon its view that the respondent maintains liability for failing to adhere to the terms of the 1993 consent order, resulting in further environmental degradation, the staff seeks a penalty of $75,000 from the respondent in addition to a summary order finding respondent Howard liable for the cited violations of the 1993 Consent Order, the Navigation Law, the ECL and the implementing regulations.

At the outset of the oral argument on staff's motion, Mr. Keehn moved to strike statements in the affidavit of respondent Howard that alluded to prior settlement discussions. While I declined to strike any language, I did note that revelation of settlement terms would not be determinative in this decision.

Respondent's Position

Respondent Howard maintains that having failed to consult with an attorney or environmental engineer at the time he entered into the 1993 consent order, he did not understand the import of his actions. Subsequent to this agreement, he retained the services of AGS to carry out the investigation and remediation requirements of the order. Respondent argues that AGS, as an independent contractor, had full responsibility for these tasks and Howard relied upon the company to complete them in a timely and appropriate manner. Based upon the affidavits of Howard and former AGS employee George Courtney, the respondent maintains that due to some failures of communication among DEC staff, AGS, and the respondent, there were delays in implementation of the order. Respondent argues that these failures were his fault and to the extent anyone is to blame, it is AGS. However, because the Department had not commenced this administrative enforcement proceeding against the respondent until now, Howard argues that it is too late, under the applicable statute of limitations, to seek recourse against AGS.

The respondent, through Martin Rowan, the environmental consultant retained by Howard subsequent to AGS, provides that the system approved by DEC staff for remediating the site was never intended to stem the groundwater contamination caused by the petroleum spill. In addition, Rowan argues that the system he installed for the respondent was consistent with the Department's Technical and Operational Guidance Series (TOGS) and fully capable of addressing the contamination migration. Mr. Rowan maintains that because DEC staff directed that the system be shut down, he never had a chance to demonstrate that it was working properly. With respect to staff's allegations that the respondent violated groundwater standards, he cites the TOGS as authority for exemption from these standards when the system he installed is used.

The respondent argues throughout his opposition to staff's motion that the penalty staff seeks is excessive and that since Hess Amerada is committed to clean up the site, it is also unrelated to any purpose that is set forth in the Department's Civil Penalty Policy. He argues that it is illogical to have required only a penalty of $4500 based upon a finding of liability in 1993 and now require a penalty of $75,000 for what he terms only minor violations of the consent order. Mr. Howard maintains that he has already spent over $75,000 in remediation of the site and related costs and therefore, has not obtained any economic benefit from his actions related to cleanup of the site. The financial documentation submitted by the respondent indicates that he has spent approximately $71,026.18 on costs related to tank removal, investigation, plan preparation, system design and installation, monitoring and other actions related to the underground tanks and the resulting contamination. The respondent has submitted documentation of an additional $13,783.50 in costs associated with payment of penalties and attorneys fees. In addition, through his counsel, respondent contends that while unable to locate all the receipts, additional monies were spent on actions related to the site in the 1980's.

Findings of Fact

  1. Respondent Robert Howard formerly owned property containing a petroleum bulk storage facility located at 1722-1732 Western Avenue, Albany, New York beginning in 1988. Prior to Mr. Howard's ownership of this property, Amerada Hess Corporation operated the site as a gasoline station.
  2. On March 10, 1988, Petrotite, a tank testing company, performed tightness testing on the five underground petroleum storage tanks at the facility on the Western Avenue property. Of the five 25-year-old tanks, four showed leakage including a 4,000-gallon tank that showed a gross leak. Later that month, DEC environmental engineer William Blain visited the site and observed a moderate level of contamination there. Based upon these observations, while noting no "imminent threat", engineer Blain informed the respondent in letters dated April 12, 1988 and July 30, 1988, that investigation and remediation of the site were needed.
  3. On or about September 1, 1991, respondent Howard applied to the Department to register the five underground storage tanks he maintained on his property. This form indicates that the tanks were in service, contained leaded and unleaded gasoline, and that Mr. Howard was the owner. This application also notes that two of the tanks had capacities of 3000 gallons each, one tank had a capacity of 2000 gallons, one tank had a 4000-gallon capacity and one had capacity for 8000 gallons.
  4. Respondent Howard entered into a consent order with the Department dated October 23, 1991 that required him to pay DEC six thousand dollars and to perform tightness testing.
  5. On December 2, 1991, DEC environmental engineering technician Thomas Sperbeck observed the tanks that had been excavated from the site, including the 2000-gallon tank that contained several holes in its end plate. While he did not examine the remaining tanks carefully for holes, he did observe that they had extensive corrosion and pitting. At this time, Mr. Sperbeck also observed approximately 2 to 3 inches of petroleum floating in one of the monitoring wells on the site, an indication that the tanks had been continuing to discharge petroleum since Mr. Blain's inspection.
  6. As a result of these conditions at the site, respondent Howard entered into a second Order on Consent with the Department that required him to pay a civil penalty in the amount of $10,000, of which $5,500 would remain suspended as long as the respondent complied with the terms of the Order. The Order also set forth a schedule of stipulated penalties in the event that Mr. Howard failed to comply with its terms.(1) The schedule of compliance contained in the Order required that within 15 days of DEC's execution of the Order (June 3, 1993), the respondent was to submit a plan for investigation of the site and to address the origin and location of any petroleum contamination and the extent of any surface, subsurface and/or groundwater contamination. The schedule also required that within 30 days of the effective date of the Order, the respondent was to submit to DEC a complete site assessment of the facility with a proposal setting forth remediation alternatives. Among other things, the schedule required that the respondent implement the plans within seven days of DEC's approval of them and that specified parameters for the discharge of groundwater pollutants be met.
  7. On or about August 3, 1993, DEC Division of Environmental Remediation program specialist William Christensen telephoned George Courtney of AGS to notify him that AGS's plan for active subsoil vent/vapor extraction (SVE) at the site was acceptable to the Department.
  8. By letter dated November 19, 1993, AGS employee George E. Courtney III notified Mr. Christensen that AGS was ready to proceed with the work at the site. The respondent had leased the site during the summer and early fall, but the building was vacant as of the date of this letter. The system was not installed until June 1994.
  9. For several years, Department staff did not receive any groundwater monitoring data or system operational information from the respondent to indicate whether the implementation of this plan was successful in remediating the site and whether the petroleum plume had been stemmed. As a result of correspondence in 1996 between AGS and Department staff, staff determined that the consultant had not performed any monitoring of the system or collected any groundwater data since it was installed. By letter dated March 27, 1996, Mr. Christensen notified the respondent that the Department had not received a progress report concerning the site. In this letter, Mr. Christensen specified that the result of air emission sampling and monitoring well sampling had to be submitted to the Department within twenty-one days. By letter dated April 9, 1996, Mr. Courtney responded by stating that the monitoring well sampling had been performed and the results would be available in two weeks. By letter dated May 6, 1996, Mr. Courtney advised Mr. Christensen that he had received no communication for the past several years concerning the site other than the verbal approval to install the SVE system.
  10. In a meeting on May 30, 1996 between Department staff and Mr. Howard, staff advised respondent that he was to perform regular monitoring to verify that equipment intended to remediate the site was operating. The staff called for the installation of additional monitoring wells and regular sampling of them. Staff also suggested installation of additional equipment to address the continued contamination. These requirements were confirmed in a letter dated May 31, 1996 to Mr. Howard from Engineer Goertz.
  11. On September 9-10, 1996, Environmental Assessment and Remediations (EAR), a new consultant retained by the respondent, conducted a site investigation at these premises and installed additional monitoring points to determine the extent of contamination. Sampling results from these monitoring points revealed that contaminated groundwater had migrated eastward away from the source area, onto neighboring property.
  12. Based upon the EAR Site Investigation Report of September 1996, DEC Environmental Engineer Keith D. Goertz wrote to respondent Howard in a letter dated November 21, 1996. In this letter, Engineer Goertz set forth requirements for remediation of the site, delineation and containment of the plume, and monitoring. Mr. Goertz advised Mr. Howard to submit a work plan by December 2, 1996 so that the remedial system could be installed as soon as possible.
  13. By letter dated November 24, 1997, Regional Spill Investigator William Christensen informed Mr. Howard that sampling results for the new system had not been received by Department staff and that respondent was in violation of the Consent Order.
  14. In the fall of 1998, Mr. Martin Rowan of Rowan Environmental Services (Rowan) sent to Mr. Geortz for his review a proposed plan to address the continued contamination. By letter dated November 13, 1998, Engineer Goertz wrote to Mr. Rowan regarding a proposed work schedule to address the location and functioning of monitoring wells, sampling points, and recovery wells. In addition, Mr. Goertz provided that the remedial system was to be upgraded to meet discharge standards set forth in an attachment to the letter by no later than November 30, 1998. Additional directions for testing and monitoring of the remedial system were also set forth in this letter. Mr. Geortz also stated that additional technology would be needed in conjunction with the system in place to effectuate remediation. He stated his disagreement with other proposed treatment plans proposed by Mr. Rowan but expressed his intent to review them if sent to the Department. Goertz says in his affidavit that the system Mr. Rowan installed was never approved; but in the November 13, 1998 letter it appears that staff is seeking additional measures but does not state disapproval of the measures that were already taken.
  15. In a report dated March 31, 1999, Rowan stated that nine sampling points were being used for site monitoring and there were three on-site recovery wells. The report describes some problems with the system that required replacement of equipment and at times, shut down of the system. Sampling results from March 1999 indicated that there were continuing exceedances of the various parameters set forth in the 1993 Consent Order. Sample results that were submitted to Mr. Goertz by Mr. Rowan in April 1999 also indicate that discharges from the remediation system continued to exceed the parameters set forth in the 1993 Order. Based upon these sample results, Mr. Goertz directed that the system be shut down after the collection of samples on April 1, 1999. Additional results submitted by Rowan to DEC staff in July 1999 continued to show contamination of the groundwater at the site by exceedances of the standards for toluene, xylene, benzene and ethyl benzene.


Grounds for Order Without Hearing

The staff has moved for an order without hearing and this relief is governed by 6 NYCRR § 622.12. The regulations state that "[a] contested motion for order without hearing will be granted if, upon all the papers and proof filed, the cause of action or defense is established sufficiently to warrant granting summary judgment under the CPLR in favor of any party." 6 NYCRR § 622.12(d). "The motion must be denied ... if any party shows the existence of substantive disputes of facts sufficient to require a hearing." 6 NYCRR § 622.12(e). Summary judgment, under the CPLR, is appropriate when no genuine, triable issue of material fact exists between the parties and the movant is entitled to judgment as a matter of law. CPLR § 3213(b); Friends of Animals v. Association of Fur Mfgrs., 46 NY2d 1065, 1067 (1979).

Staff alleges in its motion that respondent has violated a 1993 Consent Order that required remediation of petroleum at his facility based upon a Schedule of Compliance contained within the Order; he has exceeded water quality standards pursuant to 6 NYCRR Part 703; he has violated Navigation Law § 173 which prohibits the discharge of petroleum and NL § 176 which requires timely containment and cleanup of discharged petroleum; he has also violated ECL § 17-0501 which prohibits the discharge of organic or inorganic matter into the waters of the State when such discharge would cause or contribute to a contravention of water quality standards; and 6 NYCRR 751.1(a) and ECL § 17-0803 which prohibit discharge of any pollutant other than as prescribed by a State Pollutant Discharge Elimination System (SDPES) permit.

Status of Consent Orders

The respondent does not contest that he entered into the 1993 Consent Order that required him to pay penalties and perform certain duties to remediate the contamination that was located on the site. The courts have determined that consent orders are tantamount to contracts and therefore, bind the parties who have executed them. See, State v. Walkill, 170 AD2d 8, 10 (3d Dep't 1991); United States v. ITT Continental Baking Co., 426 US 223, 236-237 (1975); United States v. Armour & Co., 402 US 673, 681-682 (1971). In essence, respondent claims that he was naive regarding DEC proceedings and therefore entered into the Order without full knowledge. But, the respondent does not claim he was or is now incompetent. Rather, it appears from the papers submitted and from oral argument, that he is in the business of real estate and therefore, was in a better position than many to understand the import of petroleum contamination, its consequences, and the demands of an agreement, specifically, the Consent Order in question. To the extent that problems arose and he required additional time, he was in the best position to ascertain that situation and call it to the Department's attention. Rather, it seems from his conduct and his arguments, he chose to ignore his responsibilities and attempt to let others "take care of it."

There appears to be a dispute over how and when the Department staff communicated its approval for the initial remediation plan causing the delay in implementation. Apparently, the staff advised the respondent's consultant who claims to have been ignorant of any applicable schedule of compliance. It would be unusual for the Department to require a cleanup plan without an such schedule. Also, since Department employee Christensen did call AGS regarding approval of the system, it was clear that DEC was involved and this was not merely the respondent's unilateral determination to take action. Based upon the inclination of petroleum to move and contaminate, time should have been of the essence in any case. But assuming the consultant, AGS, was unaware of a deadline, given the terms of the Consent Order, the respondent should have made sure that his contractors conformed to its terms. After all, it was respondent Howard and not AGS or Rowan that was bound by the Order's terms.

Respondent Howard complains that because DEC waited so long to bring this administrative enforcement proceeding, he cannot pursue AGS for its mistakes. It appears from the record that has been produced on this motion that staff, over a period of nine years, attempted to get compliance from the respondent - through consent orders, meetings, correspondence, and now, finally this proceeding. While one could argue that it would have been preferable for staff to take firmer action sooner, the respondent was made aware over this entire period of staff's desire to gain a successful clean-up. To the extent he was not, it was because he chose to delegate responsibility when it was not appropriate to do so. Furthermore, the government cannot be estopped from carrying out its legislated duties as it is here. See, Parkview Associates v. City of New York, 71 NY2d 274, 288 (1988). And, even though respondent was aware of the contamination issues, he chose to rent the facility out in August 1993, resulting in further delay of implementation.


There is no statute of limitations applicable to administrative proceedings and the Court of Appeals has determined that the equitable defense of laches also does not apply. Cortlandt Home v. Axelrod, 66 NY2d 169 (1985). The court found that the passing of time alone does not mean that a hearing was not afforded "within a reasonable time" as required by the State Administrative Procedures Act (SAPA) § 301(1). Rather, the court set out criteria for determining whether an administrative delay has caused prejudice to a party. These are whether the "delay has significantly and irreparably handicapped a . . . party in mounting a defense"; "the causal relationship between the conduct of the agency and the . . . delay"; the responsibility of the "private party . . . for the administrative delay"; and, the public interest at issue. Here, on all counts, the delay cannot be found to be one that has caused prejudice to respondent Howard. Based upon the affidavits the respondent has obtained, he has the ability to reconstruct the facts from his perspective and lapse of time has not harmed him in his defense except to the extent that he has been responsible for delay in site cleanup.

The Department staff's efforts to gain compliance from the respondent is in part responsible for the delay in commencing these proceedings. At least initially, this was clearly in the interest of both parties - to seek a resolution that would not demand a hearing and all of its attendant resources. Thus, principally, the respondent is responsible for the delay of these proceedings because he was aware of the staff's efforts over the years to gain compliance. At any time, if he determined that he did not find the staff's methods appropriate, he could have declined to proceed further and requested a hearing. Finally, there is clearly an important public interest at stake here - that of ensuring that those responsible execute a cleanup of petroleum contamination to prevent groundwater pollution.

Exceedence of Groundwater Standards

Respondent, through his affiant, Rowan, argues that the system installed without the approval of the Department staff was done so on the basis of Rowan's past experience working for DEC. Without disputing that he did not receive approval of implementation of this system, Rowan states that this system should work if given a chance to do so. And, he says, to the extent that the groundwater discharge standards set forth in the Consent Order were exceeded, they were inapplicable by virtue of information he gleaned from the Technical and Operational Guidance Series (TOGS) 2.1.2. Specifically, this document provides that the groundwater standards do not have to be met when underground injection/recirculation (UIR) is used to remediate groundwater if, inter alia, the injection is into a "contained" area. This is not the case in this instance. Moreover, this defense does not defeat the staff's claims regarding the respondent's failure to comply with the Consent Order. In addition, Assistant Regional Attorney Keehn noted at oral argument that TOGS 2.1.1 requires approval of such a system in advance of gaining any exemption from these water quality standards. And, to repeat what was stated earlier, the Consent Order acts as a contract binding the respondent to its terms. Thus, the standards set forth therein were those applicable and if the respondent wanted relief from them, he should have sought a modification pursuant to Section XVI of the Order.

Respondent's Responsibility for Contamination

Respondent now argues that he should not be held responsible for penalties associated with the contamination of this site because it was Amerada Hess and not he who caused the contamination. As pointed out by Assistant Regional Attorney Keehn at argument, the Third Department has found that landowners are dischargers within the purview of Navigation Law § 172(8). But it must also be reiterated that the respondent willingly entered into the Consent Order that placed him in the position of being responsible for the cleanup. To the extent that his claims regarding responsibility had merit, he should have raised them at the time that the contamination was first discovered. White v. Regan, 171 AD2d 197 (3d Dep't 1995). It was at that time that staff noted the contamination was minimal. And, since he admitted liability, appropriately, as the new owner of the facility, he was now in the best position to mitigate the contamination that was present. Because he did not act quickly and effectively, the contamination became greater. Certainly, based upon his actions and omissions, he can no longer be considered an innocent landowner as his conduct gave rise to the current circumstances.


The staff contends that its request for $75,000 in penalty is reasonable because that sum is only a small percentage of what the Department is owed based upon the stipulated penalties provided for in the 1993 Order. In addition, pursuant to ECL § 71-1929, violation of titles 1 through 11 and 19 of Article 17 or the rules, regulations, order or determinations of the commissioner promulgated thereto shall subject a respondent to a penalty of up to $25,000 per day.(2) And, it is apparent that calculations based upon the number of days in violation of Article 17 would result in penalties much greater than the sum requested by staff.

The Department's 1990 Civil Penalty Policy requires that several factors be assessed in determining a penalty. Among these are the gravity of the violation and the economic benefits of non-compliance. These factors are intended to result in a penalty that will effectuate a policy of punishment and deterrence. According to the policy, the factors to consider in determining gravity are: (a) potential harm and actual damage caused by the violations; and (b) relative importance of the type of violations in the context of the Department's overall regulatory scheme. Respondent's violations did result in environmental harm based upon the spread of the petroleum and groundwater contamination. And, clearly, based upon the statutes in question, the Legislature places much weight on the importance of preventing such pollution and in ensuring that there is appropriate cleanup. See, ECL § 17-0501 and Article 12 of the Navigation Law.

The policy also sets forth factors to be used to adjust the gravity component:

  1. culpability,
  2. violator cooperation,
  3. history of non-compliance,
  4. ability to pay, and
  5. unique factors.

Here, the staff has repeatedly sought cooperation from the respondent to effectuate an appropriate and timely cleanup of the site. The respondent has already entered into two consent orders with DEC and thus, has a prior history of violations. There has been no demonstration by the respondent of an inability to pay. Respondent argues that Hess is now bound to clean up the site and he has already spent over $80,000 in remediation and related costs.(3) Again, respondent agreed to the penalties assessed on the Consent Order and never asked for more time or a change in the requirements. Moreover, as noted by staff at oral argument, the 1990 Civil Penalty Policy specifically states that it will not consider the actions of independent contractors as mitigation of penalties.

The Civil Penalty Policy, cited to by both parties, requires that all monetary penalty calculations begin with the potential statutory maximum dollar amount which could be assessed. Based upon a strict interpretation of the respondent's delay in installing the first system, his many exceedances of the groundwater standards, the stipulated penalties in the Consent Order and the $25,000 per day set out in ECL § 71-1929, it is clear that the maximum penalty would be many times the $75,000 requested by staff. There are certain factors that support a lesser than maximum penalty. There is no question that respondent was late in implementation of the first SVE system. It is unlikely that staff would be seeking penalties now if that system had been successful in addressing all the contamination at the site. As noted by affiant Rowan and by staff at oral argument, this system, while approved by the Department, was not effective in stemming the flow of contaminated groundwater. The Consent Order did not set forth any requirements for monitoring and although staff states that this is standard operating procedure, it should have been spelled out in the Order. Obviously, the failure to get prompt monitoring results did delay the staff and the respondent from recognizing that further measures were needed. Ultimately, this was respondent's responsibility and he did eventually take additional steps to further remedy the pollution by hiring a second consultant and installing another system. Staff states that it did not approve this system, but it was installed in 1996 and yet, there was no action take by staff to address the continuing problems until recently.(4) Thus, the respondent did take steps, late and ineffective to comply with the order and to address the contamination.

Staff cites a number of cases to support its request for the $75,000 penalty. In many of these cases, the penalty assessed was much less than this amount although the violations appeared to be less serious as well. See, e.g., Tiffany Petroleum, Inc. (Commissioner's Order April 22, 1993) ($3500 for failure to timely remediate and install secondary containment); MSR Productions, Inc. (Commissioner's Order September 24, 1993) ($3000 for violation of a prior consent order - construction and operation of a source without permits). In Harter and Harvey Sand and Gravel, Inc. (Commissioner's Order January 24, 1995), the Commissioner found that respondents had violated a prior consent order by failing to reclaim lands at a mine site and assessed a $75,000 penalty, that included a suspended sum from the prior order as well as a large reclamation bond. However, this respondent just refused to comply with the consent order requirements and similarly, in Frank Popolizio and Pasquale Ragozzino (Commissioner's Order, September 11, 1998), the respondents never even submitted a plan for remediation and thus, were fined $47,250 and $7000 for violation of a previous consent order.

The cases cited by staff where much larger penalties were exacted - Matter of Oil Co, Inc. (Commissioner's Order, July 9, 1998) ($3,499,680.00 fine where a major onshore storage facility [MOSF] had no permits and had committed a host of violations related to petroleum storage and spills) and Morgan Oil Terminals Corp. (Commissioners Order, October 17, 1994) - appear to involve much more recalcitrant respondents and a greater number of violations. In State of New York v. Super Value Inc., 257 AD2d 708 (3d Dep't 1999), appeal denied, 93 NY2d 815 (1999), the Appellate Division affirmed a jury's finding that a $157,000 penalty was justified where the defendant had failed to take prompt steps to remedy contamination by removing tanks (the defendant continued to pump gasoline for several months instead) and by ignoring the State's demand that monitoring wells be installed.

Here, with respect to cooperation, while the respondent is liable for the violations and was not prompt in addressing them, there is no evidence of a determination on his part not to comply. Rather, the system DEC approved and which respondent installed late, was not sufficient to remediate the problem. Further efforts have also proved inadequate. Based upon the Department's policy to deter such violations and the environmental harm that has occurred, the respondent should be held accountable for these failures particularly because his delays contributed to the spread of the contamination. Considering that staff labeled this respondent at oral argument "the worst spill violator in the history of DEC's Region 4," one cannot help but question why staff took so many years to make sure that appropriate measures were instituted and/or to take timely enforcement action. The impression that is given is that while contamination was noted and staff coaxed respondent along the way to address it, there was inconsistency in direction and in ensuring that solutions to this difficult problem were found. The sum of $75,000 does not seem excessive if one considers the amount of penalties that could be exacted by a calculation of the stipulated penalties set forth in the Consent Order. However, the respondent does not appear to have reaped any environmental benefit based upon the approximately $60,000 he spent on attempts to remediate the site.(5) And, while in its motion papers, staff emphasizes the year delay in implementation of the first system, it is really the continued groundwater contamination that drives this proceeding. Respondent did not ignore the Department; rather, he was slow to respond and the results were not effective.

Without a significant penalty, the respondent and/or others may feel similarly tempted to shirk responsibility to adhere to Department orders to clean up petroleum contamination or to delay such efforts knowing that in the end there will be minimal consequences. Therefore, a significant penalty is appropriate. I find that based upon what could be assessed the mitigating factors have already been considered by staff and thus, I recommend a penalty of $50,000 (based upon a maximum penalty of $25,000 for one day for two violations pursuant to ECL § 71-1929 - exceeding groundwater standards and violating the 1993 Order). While the staff cites other statutes and regulations, several are redundant. Part 703, ECL § 17-0501, 6 NYCRR § 751.1(a), ECL § 17-0803, and NL § 173 address discharge of any pollutant including the prohibition of discharge of petroleum in excess of standards or as prescribed in a SPDES permit or order. NL § 176 requires timely containment and cleanup of discharged petroleum and therefore would be a separate violation.


The respondent has failed to put forward any material issue of fact to defeat staff's motion. Clearly, he violated the Consent Order by which he was bound by failing to implement a remediation in a timely and effective manner and by allowing the contamination to continue and spread. He also has not presented any facts that would counter the staff's presentation that he has violated ECL §§ 71-0501, 17-0803, Navigation Law §§ 173 and 176, 6 NYCRR Part 703 and 6 NYCRR § 751.1(a). As discussed above, I have not found his defenses meritorious nor sufficient to warrant a hearing. With respect to the penalty requested by staff, based upon the nature of the violations and the mitigating factor of respondent's insufficient efforts to abate the contamination, I find $50,000 an appropriate sum.

For the New York State Department
of Environmental Conservation
Helene G. Goldberger
Administrative Law Judge

Dated: Albany, New York
May 17, 2000

TO: Michael P. Ginley, Esq.
Ginley & Gottman, P.C.
63 Putnam Street
Saratoga Springs, New York 12886

David Keehn, Assistant Regional Attorney
NYSDEC - Region 4
1150 Westcott Road
Schenectady, New York 12306

1 The stipulated penalties contained in the order are $100 per day for the first 5 days a milestone in the order is missed, $500 per day for days 5-15, and $1000 per day for each day beyond day 15 that there is a violation of the order.

2 The staff also cites to §§ 192 and 200 of the Navigation Law which provides for the same penalties. However, these penalties must be sought in a court of competent jurisdiction.

3 This sum is reduced when attorneys fees, penalties and sums associated with tank removal are excluded. However, it appears from the respondent's documentation that a substantial amount has been expended.

4 The parties provided conflicting information on when this second system was installed. November 24, 1997 correspondence from Christensen to Howard refers to a "new system" and at oral argument, counsel for respondent indicated that this system was installed in 1996. Yet, staff provided in its April 19 submission that the system did not begin operation until 1998. In either case, staff's correspondence did not indicate that the system should not have been installed. Rather, Mr. Goertz's letter of November 13, 1998 indicates that additional measures are needed.

5 In coming up with this figure, I have not considered costs associated with tank removal, attorneys fees, or penalties.

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