Many things can keep a vintner or brewer awake at night, but it’s probably safe to say that compliance with the federal Clean Air Act, the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) and Emergency Planning and Community Right-to-Know Act (EPCRA) probably are not anywhere near the top of the list. Perhaps that should change in light of the experience of a California winery that is now subject to a court order to pay a $330,000 environmental penalty and make $300,000 worth of facility improvements after an accidental release of anhydrous ammonia resulted in a worker fatality.

According to the complaint filed by the U.S. Environmental Protection Agency (EPA), a worker at a small winery in Sanger, California, tried to defrost an ammonia chiller and opened an oil valve instead of the hot gas valve, releasing 284 pounds of ammonia. The resulting gas cloud caused evacuation of the building, but one contract employee was overcome by the ammonia and died after other workers could not locate the necessary response equipment to rescue him.

The EPA alleged violations of the Clean Air Act, including:

  • Failure to submit a risk management plan to EPA,
  • Inaccurate maximum intended inventories,
  • Inaccurate codes and standards,
  • Failure to comply with good engineering practices,
  • Inadequate process hazard analysis,
  • Failure to have operating procedures to prevent exposure,
  • Failure to train and evaluate employees adequately,
  • Failure to conduct compliance audits,
  • Inadequate component labeling,
  • Failure to inspect and maintain mechanical integrity of equipment, and
  • Failure to prepare and implement an adequate emergency response plan.

The EPA also alleged violation of CERCLA for a 37-hour delay in notifying the National Response Center of the ammonia release and violation of EPCRA for the same delay in notifying the State Emergency Response Commission.

Although the incident happened in 2012, the EPA first filed the case in 2015. The winery denied the allegations but, after some procedural litigation, the winery’s attorney told Law360 that it made a “rational business decision” to settle because the civil enforcement process of the U.S. EPA and Department of Justice “simply overwhelmed [the winery’s] resources.” The Consent Decree, entered on January 29, provides for the winery to pay the $330,000 civil penalty in installments over two years. The winery is to spend the additional $300,000 to install and operate a computer control system for the anhydrous ammonia refrigeration system and make other corrections to the refrigeration equipment, including replacing gauges and monitors, completing a mechanical audit, and correcting written standard-operating procedures.

This is a good reminder that non-compliance with statutes such as the Clean Air Act and, in the event of a release, failure to make required notifications under CERCLA and EPCRA can have a substantial economic impact. The Clean Air Act violations can arise from the statute’s general duty of care applicable to all stationary sources to 1) identify hazards that may result from releases of a listed hazardous substance, such as anhydrous ammonia, 2) design and maintain a safe facility taking steps necessary to prevent releases, and 3) minimize the consequences of accidental releases that do occur. The ammonia refrigeration industry trade associations have issued standards for recognized and generally accepted good engineering practices, which the EPA uses when evaluating compliance with the Clean Air Act’s general duty obligation.

Furthermore, if a stationary source (such as a winery or brewery) has an extremely hazardous substance (such as anhydrous ammonia) present in quantities greater than 10,000 pounds, the Clean Air Act also requires preparation and implementation of a risk management plan to detect and prevent or minimize accidental releases and to provide a prompt emergency response to any such releases to protect human health and the environment. The EPA’s Risk Management Regulations, 40 C.F.R. Part 68, describe the specific requirements.

Finally, if there is a release both CERCLA and EPCRA require “immediate” notification to the National Response Center, the State Emergency Response Commission and the local emergency planning committee. Under the EPA’s penalty matrix for violations of these statutes, any notification more than 15 minutes after an owner or operator has knowledge of a release is not “immediate” notification and notice two or more hours after is assigned the highest level in the penalty matrix. While notification may be the last thing on a facility owner’s or operator’s mind in the event of an emergency response to a release, the two statutes can give rise to substantial penalties for delays in notification.