As we reported last year, the U.S. EPA has stepped up its enforcement activity under the risk management provisions of the Clean Air Act (“CAA”), Section 112(r), focusing on both the Risk Management Plan (“RMP”) program rules and the General Duty Clause (“GDC”). The RMP requirements help prevent accidental releases of substances that can cause serious harm to the public and environment from short-term exposures and also help reduce the severity of releases that do occur.  Background on these programs is available in our prior article.

EPA had historically received a fair amount of criticism, both internally through its Office of Inspector General (see March 28, 2012March 21, 2013, and April 28, 2014 reports) and externally through various interest groups, as a result of sporadic and somewhat clumsy efforts to enforce RMP and GDC requirements. The agency has responded vigorously, and in recent months there has been a substantial increase in enforcement activity in this area. Beveridge & Diamond has been involved in enforcement responses on many cases in this area in the past several years.

This article focuses on a few significant enforcement actions brought recently by EPA Region 1, which has not historically devoted significant efforts to risk management enforcement but is now joining other EPA regions by becoming more active in this area. The first case highlights a parallel prosecution in which EPA appears to have referred part of a case for criminal enforcement and retained the rest of the case for administrative disposition, and the second case involves a more traditional administrative enforcement.

Parallel Prosecution

A criminal action by the U.S. Department of Justice (“DOJ”) and an administrative action by EPA Region 1 were recently resolved against Mann Distribution, LLC (“Mann”) for violations of CAA § 112(r).  Both actions refer back to a June 2009 EPA compliance inspection of Mann’s chemical distribution, packaging, and warehousing facility in Warwick, Rhode Island.  At that time, EPA inspectors determined that approximately 46,000 pounds of hydrofluoric acid were being stored on site. 

The enforcement activity arising from the 2009 inspection was unusual. The case split into criminal and civil administrative components: EPA issued a Notice of Violation, Administrative Order, and Reporting Requirement in August 2009, and then DOJ pursued a criminal case against Mann for failing to develop and implement a Risk Management Plan under CAA § 112(r)(7). Based on several other inspections and events from 2009 through early 2014, EPA later pursued additional civil administrative remedies for alleged violations of the GDC under CAA § 112(r)(1) and some unrelated hazardous waste management issues.

In the DOJ criminal enforcement case, Mann pled guilty this Spring to violating CAA § 112(r)(7) for failing to develop and implement a Risk Management Plan when it stored more than the threshold quantity of 1,000 pounds of hydrofluoric acid at its facility.  See U.S. v. Mann Distribution, LLC, 1:15-cr-00029-ML-LDA (D. R.I. 2015) On May 6, 2015, the U.S. District Court of Rhode Island sentenced the company to a $200,000 fine, placed it on probation for a term of three years, and required the company to publish a public apology within 30 days.  As part of the plea agreement with the DOJ, Mann also agreed to comply with the requirements of the related Administrative Order on Consent (“AOC”) it entered into with EPA Region 1 in March 2015.  See In the Matter of Mann Distribution LLC and 3134 Post LLC, CAA-01-2015-0029 (Mar. 13, 2015).

In the EPA Region 1 civil administrative enforcement case, which concluded with the execution of the AOC, EPA started with the June 2009 inspection, and then conducted a series of additional inspections through 2013, and also evaluated two unrelated release events. One of those events involved a chemical reaction triggered by the combination of incompatible chemicals in a container, and the other event involved a 200-gallon spill of sulfuric acid, of which five gallons entered Apponguag Cove. 

EPA alleged multiple violations of the GDC based on the 2013 inspection findings in addition to hazardous waste violations under RCRA.  The agency alleged that Mann failed to design and maintain a safe facility in violation of the GDC by, among other reasons, storing chemicals without an operational fire suppression system; failing to timely inspect the fire alarm system; and storing incompatible chemicals in close proximity to one another.  EPA also alleged that Mann failed to minimize the consequences of releases and jeopardized the health and safety of employees, in violation of the GDC, in part by failing to timely alert emergency responders of the sulfuric acid spill; and failing to provide secondary containment for the sulfuric acid.  Under the AOC, Mann is required to take corrective action under a compliance schedule and is subject to stipulated penalties for any further noncompliance.

Administrative Enforcement

A compliance inspection was also the basis of an EPA Region 1 enforcement action against Precise Packaging, LLC’s (“Precise”) liquid and aerosol filling facility located in Fall River, Massachusetts.  Much like Mann, Precise allegedly failed to document and implement an RMP for several years after first exceeding the regulatory thresholds for several regulated substances.  Precise stores and processes more than 25,000 pounds of 1,1 difluoroethane, propane, butane and isobutane and their mixtures.  These flammable gasses are all covered under the RMP program.  

An inspection conducted by EPA in April 2013 resulted in a determination that the facility did not have an RMP and certain other safety procedures in place.  A reinspection by EPA six months later found that the facility still did not have a completed RMP and had not put all previously identified safety measures in place.  EPA issued an Administrative Compliance Order in July 2014 directing the facility to complete and implement all aspects of the RMP program, at an estimated total compliance cost of $118,000.  A Consent Agreement and Final Order (“CAFO”) issued April 2015 resolved Precise’s penalty liability for the alleged violations.  Precise agreed to pay a $57,369 civil penalty and implement a supplemental environmental project (“SEP”) worth $147,625.  As part of the SEP, Precise has agreed to purchase emergency response and planning equipment for the City of Fall River.  This equipment will enhance the Fire Department’s ability to respond to and prepare for emergencies involving hazardous chemicals.  The CAFO notes that Precise recently participated in and performed satisfactorily in a chemical response “table-top exercise” with the City’s Fire Department. 

EPA Region 1 is stepping up its enforcement response to risk management program issues that it identifies from inspections and from release incidents, and – consistent with the national trend - facilities in Region 1 will likely see a continued enforcement focus in this area.  Consequently, companies managing materials regulated under Section 112(r) of the Clean Air Act should pay close attention to RMP applicability requirements. and to identifying hazards and implementing appropriate measures to reduce the likelihood and consequences of releases.