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Middleton, Kontokosta Associates, Ltd. and Donald Middleton - Commissioner's Ruling, December 31, 1998

Commissioner's Ruling, December 31, 1998

50 Wolf Road
Albany, New York 12233-1010

In the Matter of the Alleged Violations of Articles 17 and 71 of the New York State Environmental Conservation Law ("ECL") and Title 6 of the Official Compilation of Codes, Rules & Regulations of the State of New York ("6NYCRR"),


d/b/a and/or a.k.a. MKA LTD.


individually and as Vice President


DEC File No. R1-6039



December 31, 1998


This is an appeal by the Department Staff from a Ruling of Administrative Law Judge (ALJ) Kevin Casutto dismissing the complaint in this enforcement case. The essence of the complaint is that Respondents, Donald Middleton and the environmental consulting firm of which he is a Vice President, violated 6 NYCRR §613.8 by failing to report the existence of petroleum contamination in soil at a specific location on Long Island (the "site") within two hours after obtaining knowledge of the contamination. The complaint demands payment of a $25,000 civil penalty.

Section 613.8 of 6 NYCRR provides in relevant part:

"Any person with knowledge of a spill, leak or discharge of petroleum must report the incident to the department within two hours of discovery. ..."

ALJ Casutto dismissed the complaint on the ground that the term "any person" as used in §613.8 must be interpreted as being limited to facility owners or operators. Respondents are neither owners nor operators. They are environmental consultants. Therefore, ALJ Casutto held that §613.8 does not apply to them.

The facts as presented in the unanswered complaint and in affidavits submitted with Respondents' motion to dismiss indicate that Respondent Middleton was present at the site in July 1997 when he observed dirt from soil borings made in the vicinity of a 3000 gallon underground storage tank by another independent environmental consulting firm. Mr. Middleton's affidavit further states that based on observation of the color and smell, it appeared to him that the soil was potentially contaminated. Mr. Middleton adds that he did not perform any lab tests on the dirt, and that in the absence of testing, he could not have actual knowledge of contamination, or knowledge of a spill, leak or discharge of petroleum. A brief filed on behalf of Respondents states that Mr. Middleton was acting as a favor at the request of a friend when he went to the site to observe the performance of a contractor hired to conduct soil borings at the site. A staff brief states that he was acting on behalf of a bank that held a mortgage on the property. It further appears that Mr Middleton is not a professional engineer, and therefore cannot claim that he is under a professional obligation not to disclose under the Code of Ethics for Engineers, assuming that the code was otherwise applicable under the circumstances. Nor is Mr Middleton an attorney, and therefore the attorney-client privilege could not be asserted as a basis for his non-disclosure.

This case therefore raises the question of the duty of a non-engineer, non-lawyer who is not the facility owner or operator to report under §613.8, and what sanction should be imposed in cases where a timely report is not given.

The ALJ's Ruling on the Law

In this appeal, I am constrained to disagree with the ALJ's interpretation of §613.8. The term "any person" in §613.8 should be given a broad, not limited or restrictive, interpretation. The term "any person" is intended to apply, not only to persons who are "owners" and "operators", but also to all other persons with knowledge of a spill, leak or discharge in order to implement the remedial and preventive purposes of the Petroleum Bulk Storage Code, of which §613.8 is a part. The rationale for requiring "any person" to report a spill or discharge to the Department within two hours is obviously to enable stoppage of ongoing contamination as quickly as possible after detection of a spill. For example, in the case of an ongoing gush of oil from an overturned tanker truck on the highway, an immediate report will enable a quick response in order to minimize environmental damage. The reporting duty is on everyone with knowledge of the spill.

The Legislature has provided ample authority for the Department to impose the duty to report in §613.8 on "any person with knowledge", and not only on a narrower class of persons, such as owners and operators. ECL §17-0303[3] provides for the adoption of rules with respect to the "filing of reports", and to effectuate Article 17's overall purpose, which is to protect waters of the State from pollution, including oil pollution from leaking tanks. Title 10 of Article 17, especially §17-1015, directs the Department to promulgate the State Petroleum Bulk Storage Code pursuant to §17-0303. The remedial and preventive purpose of these provisions has been found to fully justify exercise of broad regulatory powers by the Department in implementing Titles 3 and 10 Article 17 of the ECL. See Consolidated Edison v. DEC, 71 NY 2d 186 (1988). The ALJ's interpretation, which appears to rely heavily on §17-1743, is simply too narrow to effectuate the legislature's intent. Section 17-1743, which expressly requires prompt reporting of releases of petroleum and other liquid spills by owners and possessors of bulk liquids, does not negate a broad interpretation of the Commissioner's authority under §17-0303 and §17-1015. These are separate and independent legislative enactments. The ALJ's interpretation which reads §17-1743 as narrowing the scope of 6 NYCRR §613.8 ignores the fact that the cited statutory authority for Part 613 is not §17-1743, but is §17-0303[3] and Title 10 of Article 17. (See citation at the heading of Part 613 in 6 NYCRR). Additionally, the contention that §17-1743 narrows the scope of § 613.8 is undercut by ECL §17-0303[1], which excludes the Title of which §17-1743 is a part from the broad rulemaking scope of §17-0303[3] and §17-1015. In sum, it is not appropriate to limit the term "any person' in §613.8 to owners and operators. The ALJ's ruling on the law is rejected.

Further Proceedings

Given the above determination, this case must be remanded for further proceedings. While I am unable to agree with the ALJ's legal result, I add that this case is still at a preliminary stage. No answer to the complaint has been filed, and there has not yet been an opportunity for clear development of the facts on the record. Staff's claim of entitlement to the relief sought will need to be fully justified. Granting the relief staff seeks in whole or even in part would arguably tend to chill relationships between environmental consultants and their clients. On the other hand, the importance of the Department obtaining prompt reports on spills, leaks and discharges of petroleum cannot be disparaged. These competing factors need to be taken into account in this proceeding. It appears from the complaint that Respondent did in fact reveal the presence of contamination to the Department, but did so two months instead of two hours after obtaining knowledge of the spill. Whether the delay resulted in actual harm and the priority assigned to the spill by staff would seem to be relevant, at least as to the determination of any penalty. Facts as to whether and why the owner, operator and/or other environmental consultant did or did not report the contamination may be germane.

Issues such as these may need to be developed prior to the final disposition of this case.


Respondents' motion to dismiss the complaint is denied. This proceeding is remanded to ALJ Casutto for further proceedings consistent with this decision.

For the New York State Department of Environmental Conservation

By: John P. Cahill, Commissioner

Albany, New York
December 31, 1998

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