Continuing its multi-year enforcement initiative targeting facilities that fail to comply with ozone-depleting substances (ODS) leak detection and repair rules, EPA secured a $3.8 million federal district court settlement on July 8 against Bristol-Myers Squibb. The Environmental Protection Agency (EPA) has so far assessed $28.3 million in civil penalties, supplemental environmental projects, and injunctive remedies, and has issued more than seven hundred administrative subpoenas for ODS-related information.
EPA’s enforcement action resolved ODS-related Clean Air Act violations at over twenty Bristol- Myers Squibb facilities in the United States. The facilities used R-22—a regulated ODS—in comfort cooling, commercial, and industrial process refrigeration applications at these facilities. EPA alleged that the company failed to comply with the leak detection and repair rules promulgated under Title VI of the Clean Air Act in 1990. Any company that uses regulated ODS in comfort cooling, commercial, or industrial process applications should carefully confirm the status of its regulatory compliance in light of these ongoing, significant EPA enforcement actions.
What are the Clean Air Act rules regarding the use of ODS?
- Title VI of the Clean Air Act was enacted to implement the Montreal Protocol’s worldwide ban on production and use of certain ozone-depleting substances, as well as to regulate the disposal and recycling of ODS in industrial refrigeration equipment. EPA’s associated equipment leak detection and repair regulations at 40 C.F.R. Part 82—along with an ODS compliance manual— apply to industrial refrigeration equipment containing more than fifty pounds of a regulated ODS. Most manufacturing facilities—including chemical manufacturing, refining, pharmaceutical production, food services, and automobile assembly—have multiple refrigeration systems to which these regulatory requirements apply. And we have found that many facilities do not have a reliable equipment leak repair compliance program, and may face significant risk of noncompliance.
What enforcement actions has EPA taken so far?
- EPA headquarters in Washington, DC—as well as most of its regional offices—has issued over seven hundred administrative subpoenas under Section 114 of the Clean Air Act. These subpoenas request detailed information regarding the use of ODS, and leak detection and repair compliance at a wide variety of facilities. EPA typically uses information gathered through these subpoenas to develop an enforcement case.
- Notable enforcement actions include a $10.25 million settlement with Sara Lee (2003), a $4.5 million settlement with Air Liquide Corp. (2001), the $3.8 million settlement with Bristol- Myers Squibb (2008), a $3.5 million settlement with Meyer’s Bakeries (2000), a $1.35 million settlement against Archer-Daniels Midland (2006), and three settlements with Chicago-area supermarkets in the total amount of $985,000 (2004–2005). Other settlements include bakeries, universities, pharmaceutical companies, chemical companies, and pulp and paper companies.
How can a company manage its risk of noncompliance?
- The key to managing potential noncompliance is not to wait until EPA discovers the noncompliance for you. Our environmental lawyers have worked with many companies to conduct compliance audits that will allow a company to identify and correct any past noncompliance. To the extent that the past noncompliance is relatively minor, simply correcting the noncompliance may sufficiently “inoculate” the company against future EPA enforcement by allowing the company to demonstrate its proactive correction of noncompliance.
- For those times when a company discovers more serious past noncompliance, EPA has developed an audit and self-disclosure enforcement policy that provides incentives to companies that voluntarily discover and self-report noncompliance. Our environmental lawyers also have extensive experience managing the self-disclosure process, which if not handled correctly may result in the loss of the benefits of EPA’s policy.