2016 Negotiation Competition


The State Bar of California Environmental Law Section 2016 Environmental Negotiation Competition was held on March 18, 2016 at the UCLA School of Law. This document includes the shared fact patterns for the first two rounds as well as the confidential instructions for each team. 

Round 1 addressed an administrative action by the Environmental Protection Agency for potential violations of the Resource Conservation and Recovery Act (RCRA) at Jefferson State University, a major university in the State of Jefferson.   In Round 2, the United States Department of Justice and a permitted disposal facility attempted to resolve a civil enforcement action for alleged RCRA violations.   The final round, which involved a citizen enforcement action under RCRA, is not included.  The contestants were also provided an edited copy of the RCRA Civil Penalty Policy, which is not included here; the full text of the Policy is available on EPA’s web site.

This published version is reformatted from the original version.  This version also includes some limited textual edits based on the competition experience.  Please direct any questions about the problem to michaelhingerty@gmail.com.

Round 1

United States Environmental Protection Agency, Region XI v. Jefferson State University at Fremont, Docket No. RCRA XI-0015-0034

 Because of growing concerns about the proper management of hazardous wastes at biotech and other research facilities, the United States Environmental Protection Agency (EPA) identified inspection of these facilities as one of its formal enforcement priorities for Fiscal Year 2013-2014.  Working with the states in their regions, each EPA region identified a number of facilities targeted for inspection and enforcement. Most inspections (and follow-up enforcement actions) would be conducted by the states authorized for federal hazardous waste programs, but in certain circumstances EPA could either participate in the inspections, or assume the lead.

EPA Region XI, working with the Department of Hazardous Waste (DHW) for the State of Jefferson, identified five high priority facilities in the state.  EPA and DHW selected the facilities for inspection after reviewing information in enforcement and program databases, such as RCRIS and ECHO. One of the facilities targeted for inspection was the Biotech Research Center (BRC) located on the Fremont campus of Jefferson State University.

BRC is an internationally renowned research and teaching hospital, engaged in a wide range of significant research projects, including biotechnology.  Jefferson State University at Fremont (popularly known as JSU-Fremont) is one of five campuses in the JSU system and is among the most prestigious public universities in the country.

Because the JSUs are state universities, DHW and EPA agreed that EPA would take the lead for this inspection, thereby helping avoid any possible appearance of a conflict of interest. Not only is the University largely funded by the state, both the head of DHW and the Governor are supportive JSU-Fremont alumni.

The JSU-Fremont Environmental Management Department (EMD) routinely manages large quantities of hazardous waste generated during the wide range of University activities at the large JSU-Fremont campus. Hazardous wastes are generated not only in the laboratories and research facilities, but in other areas as well, such as the art and theater departments. In addition, the campus generates hazardous waste from maintenance activities each month. For the most part, these wastes include such items as used paints, cleaning solutions, spent batteries and light bulbs, but they also include medical and chemical wastes from teaching and research.

Under applicable regulations, generators may accumulate small quantities of hazardous waste at or near the point of generation for a limited time, before the hazardous wastes must be managed elsewhere. Each of the major departments has such an area for accumulating the hazardous wastes. Staff from the campus EMD pick up the hazardous wastes from the satellite accumulation areas according to a regular schedule (in some cases weekly).

The EMD manages a Hazardous Waste Storage Facility where hazardous wastes are collected from satellite accumulation areas throughout the campus, and consolidated for off-site disposal.  Because of the large volume of hazardous wastes, JSU-Fremont is classified as a Large Quantity Generator of hazardous wastes, so that it is subject to a wide range of hazardous waste management requirements under Jefferson and federal law.  These requirements include the following:

  • Hazardous wastes must be properly labeled as hazardous waste and include the date the hazardous waste was generated (accumulation start date).
  • Hazardous waste must be stored in a closed container that meets regulatory requirements, e.g., either in a drum or other container in good condition.
  • Hazardous waste must be shipped off-site to a treatment, storage or disposal facility within 90 days of the date of generation.
  • Incompatible wastes may not be stored in close proximity.
  • The facility is required to maintain a contingency plan to minimize hazards from any unplanned release of hazardous waste. The contingency plan includes contact information for emergency coordinators, as well as a list of emergency equipment.

On Nov. 1, 2014, a few weeks before the scheduled inspection, a member of the JSU- Fremont Environmental Management Department accidentally overturned a mini- cart carrying an assortment of wastes from the Art Department’s satellite accumulation area to the campus Hazardous Waste Storage Facility.  The wastes included ignitable wastes (such as spent paint thinners), lead-contaminated sand from the sculpture foundry, and a variety of containers of used pastels and other pigments (many of which would contain hazardous constituents such as cadmium and lead).1  The spill occurred near idyllic Pathfinder Creek, which flows through the middle of the campus. Pathfinder Creek has been the subject of recent restoration efforts and has begun to support a small salmon population. While none of the waste entered the Creek, the spilled paint thinners created an odor that persisted for several days and resulted in considerable press in the campus newspaper. EPA included a review of the facts associated with this incident as part of the inspection planning.

Over a period of three days in mid-November, 2014, EPA conducted an inspection of all solid and hazardous waste management areas at BRC and the larger JSU-Fremont campus.  Among other areas, EPA inspected the Hazardous Waste Storage Facility and the satellite accumulation areas at the Chemistry Department and Art Department. EPA also conducted a review of records required to be maintained on- site.

During the inspection, EPA found that the Chemistry Department had a satellite accumulation area with a small quantity of hazardous waste, but that it also had a separate storage area where substantial quantities of chemicals were being stored. The Chemistry Department called this the Reuse Room, and it had over 100 containers of partially full chemical containers. Several boxes of nearly empty containers were stacked in the corner; the boxes were stained, suggesting that some of the contents had leaked. A metal cabinet contained another several dozen smaller containers of chemicals; in some cases the lids were sealed due to corrosion or crystallization. Many of the containers in the Reuse Room were in poor condition.

The chemicals in the metal cabinet in the Reuse Room included picric acid,2 which can be highly explosive.  EPA determined that the chemicals posed an imminent threat and a Superfund removal team was called to dispose of the chemicals in the vault. The Superfund removal team inventoried the material in the Reuse Room and disposed of it as hazardous waste. During the exit interview at the close of the inspection, EPA inspectors expressed considerable alarm at the manner in which the Reuse Room had been managed.

In the months following the inspection, EPA sent out two information requests to obtain further information about waste handling practices at BRC and JSU-Fremont. EPA also obtained analyses of waste samples it had taken during the inspection.

Along with the Inspection Report, EPA sent JSU Chancellor Barbara Crockett a formal Notice of Violation (NOV) informing her that EPA was prepared to bring an enforcement action against JSU-Fremont for the violations outlined in the inspection report.

EPA’s Final Inspection Report detailed the following findings and potential violations of federally enforceable State of Jefferson hazardous waste regulations:3

  1. Illegal disposal of hazardous waste – the spill of hazardous waste along Pathfinder Creek on Nov. 1.

  2. Storage of hazardous waste without a permit.   EPA determined that the Reuse Room constituted an illegal hazardous waste management facility.

    The NOV characterized this violation as Storage of Hazardous Waste without a Permit. EPA’s Superfund removal team had completed an inventory and characterization of the chemicals prior to disposal and concluded there were 54 different chemicals in the Reuse Room, presenting a wide range of hazards.  Almost all of the chemicals contained constituents or had characteristics that would require their classification as hazardous wastes when disposed.  Many of the chemicals were toxic.

    EPA’s NOV noted that JSU-Fremont had challenged EPA’s classification of the materials as wastes because Chemistry Department staff said they intended to reuse them in the laboratories.  EPA’s NOV stated that many of the chemicals were over a year past their expiration date, rendering them of little value for laboratory use. The expiration date for some toxic chemicals had occurred 400 days before the inspection and Superfund removal action. The NOV also noted that the condition of the picric acid containers was so poor, that any attempt to open the containers could itself be dangerous.

    The NOV states that the violation continued for at least 400 days (using the expiration date as the start date for the violation).

  3. Violation of hazardous waste management requirements.

    Missing accumulation start date on labels on two drums of hazardous waste in the Hazardous Waste Storage Facility.

    At the Hazardous Waste Storage Facility, EPA noted that the labels on two drums of hazardous waste (out of twenty-six drums total) were missing accumulation start dates. The contents of the drums were later determined to be lead contaminated paint residue.

  4. Failure to file exception report.

    EPA’s review of JSU-Fremont’s files showed an incident in which JSU-Fremont had failed to file an exception report in a timely manner.

    Each large quantity generator such as JSU-Fremont arranges for transport of a hazardous waste to another treatment, storage or disposal (TSD) facility accompanied by a hazardous waste manifest which clearly states the waste being shipped and the destination facility.  The destination facility is supposed to send the generator a copy of the manifest when it is received. If the generator does not receive the copy, it is required to file an exception report with the EPA (or authorized State.) Under 40 CFR § 262.42(a)(2), large quantity generators of hazardous waste (such as JSU-Fremont) are required to file an exception report within 45 days whenever they do not receive confirmation of receipt of hazardous waste from the facility designated to receive hazardous waste.

    According to EPA’s paperwork review, on six occasions in the past year, JSU- Fremont did not receive a copy of the manifest from the designated facility. JSU-Fremont’s EMD Director filed an exception report on five of those occasions, but failed to do so for one of them.  In those cases in which JSU- Fremont followed up, the error was a paperwork error by the receiving facility.

    Whereas subsequent investigation has confirmed that the shipment did arrive at Belair Disposal Faciity, where it was treated and disposed, the follow-up only occurred after EPA’s inspection.  Under the regulations, EPA should have been notified 45 days after the shipment; in this case, there was a delay of an additional 61 days when the report was not filed. (JSU-Fremont eventually filed the report after the inspection.)

  5. Contingency Plan violation.

    Under 40 CFR § 265.52(d) the facility’s contingency plan is required to include the home and business phone number of each emergency coordinator.  At the time of the Nov. 1 spill, the driver called the emergency coordinator but discovered that the phone number in the contingency plan was no longer correct as the lead emergency coordinator had recently moved. The coordinator was contacted through his cell phone, which was also in the contingency plan.

Chancellor Crockett had been informed of the inspection and Superfund removal when they occurred and was prepared to respond to a critical report. In consultation with the Jefferson Attorney General, she had agreed to hire outside counsel to respond to the Inspection Report. The law firm of Kracov and Wilkins (K&W), whose clients include biotech and other laboratories, as well as industry groups such as the Western States Biotech Association (WSBA), has agreed to represent JSU on a pro bono basis. (K&W’s managing partner, and the head of their environmental compliance group, is -- not coincidentally -- active with the JSU-Fremont alumni association.)

Preliminary discussions between K&W and EPA attorneys have assured K&W that EPA enforcement staff are prepared to resolve the violations in an administrative settlement agreement and have not yet referred the matter to the Department of Justice for civil prosecution. However, civil action remains a possibility.

The University would prefer to resolve the allegations under an administrative settlement. Under the terms of an administrative settlement agreement, the University may resolve civil penalty liability without “admitting or denying” that it is responsible for a violation.

RCRA Civil Penalty Policy4

 As expected, EPA has confirmed that it intends to apply the RCRA Civil Penalty Policy to determine any settlement penalty.  K&W counsel, who have negotiated with EPA in other actions, are prepared to apply that Policy as well. They understand that Regional staff are bound to apply it and that any variation from the Penalty Policy requires elevation within the Agency. K&W counsel have experience negotiating penalties under the Policy, but on occasion have needed to elevate an issue to EPA Headquarters in an effort to obtain a better outcome. However, efforts to elevate an issue to a national office can result in delays, and Chancellor Crockett is anxious to put this case behind her as soon as possible.

Under the RCRA Civil Penalty Policy, EPA determines hazardous waste penalties in a stepwise fashion:

  • EPA first characterizes each violation according to the potential for harm and extent of deviation from the regulatory requirement. The Policy includes a matrix under which a monetary range is provided for minor, moderate, and major potential for harm and minor, moderate and major extent of deviation. An egregious violation that presents a substantial risk of harm to the public or environment will be classed as a “major/major” violation with a penalty range in the highest range.  The Penalty Policy considers not only harm to the public or the environment, but whether the violation has an adverse effect on implementing the program.

    Potential for Harm Extent of Deviation from Requirement
    Major Moderate Minor
    Major $27,500
    $16,499 to
    Moderate $12,099
    Minor $3,299

    Example: Under this chart, a violation that presents a major deviation from the requirement, but presents only a minor potential for harm would be assessed a penalty from $1,650 to $3,299.

  • Each day that a violation continues is potentially subject to a penalty, but the RCRA Penalty Policy provides EPA Regions some flexibility in assessing so- called “multi-day” penalties. The Policy provides a separate matrix for these penalties, which provide substantially lower penalties for succeeding days in which the same violation continues (e.g., succeeding days in which hazardous waste is stored in a damaged container). Regional staff are directed to apply – at least – the multi-day matrix for more serious (e.g., major/major violations) violations and have discretion to forgo multi-day penalties completely for relatively minor violations that do not have an environmental or public health consequence, even if the violations continue for multiple days.

    Multi-Day Matrix of Minimum Daily Penalties (in Dollars)
    The dollar figure to be multiplied by the number of days of violation
    Potential for Harm Extent of Deviation from Requirement
    Major Moderate Minor
    Major $5,500


    Moderate $2,420
    Minor $660
    $ 110

    Example: If the violation in the prior example (minor potential for harm/major extent of deviation) continued for an additional ten days, enforcement personnel might seek an additional $110 to $660 per day, or $1,110 to $6,600 in addition to the base penalty of $1,650 to $3,299. Because the violation presented only a minor potential for harm, enforcement personnel have the discretion to not seek a multi- day penalty. Depending on how personnel evaluate the violation, a penalty calculated using the multi-day penalty matirix under the policy could be as low as
    $1,650 (without multi-days) or as much as $9, 899 ($3,299 + ($660 x 10 days)).

    The Policy mandates that enforcement personnel should – except in unusual circumstances – always seek multi-day penalty for violations that have a major potential for harm and present either a moderate or major extent of violation. Where a violation continues for a long period, enforcement personnel have the discretion to waive multi-days after day 180, even for major violations.

    Nothing in the Policy, however, precludes enforcement personnel from seeking the full statutory penalty of $27,500 per day.

  • EPA includes the economic benefit of noncompliance (e.g., avoided training costs, disposal costs, etc.).

  • Finally, the Penalty Policy provides for a range of adjustments to the nonQ economic benefit portion of the penalty for a range of factors, such as good faith efforts to comply, history of noncompliance, etc.

Penalty mitigation includes mitigation due to a performance of a Supplemental Environmental Project (SEP). However, the SEP Policy provides that “Penalty mitigation for performance of a SEP is considered only after all other appropriate mitigation factors in the applicable penalty policies have been applied and a bottom-line settlement penalty determined.

The initial round of negotiations will not consider possible SEPs or economic benefit, but will focus on developing an agreed upon settlement penalty.  

*          *          *           *           *           *

The parties are meeting at a conference room at EPA Region XI’s Office of Regional Counsel. While EPA, as host, should begin the meeting by welcoming JSU’s representatives, either party may initiate the substantive negotiations.

Both sides are represented by experienced counsel who understand that the final penalty will depend upon the full range of factors in the Penalty Policy, including adjustments for good faith, cooperation, etc.

Round 1 -- - Confidential Instructions for JSU-Fremont

United States Environmental Protection Agency, Region XI v. Jefferson State University at Fremont, Docket No. RCRA XI-0015-0034

 Following receipt of the Notice of Violation, Chancellor Crockett requested an internal meeting of JSU-Fremont’s Environmental Health and Safety Officer (EHSO), and the heads of the Chemistry Department, the Maintenance Department and BRC.

Not surprisingly, Chancellor Crockett would prefer that the University not pay any penalty.  As a public institution of higher learning, she believes that the University should not be subject to the same requirements as other regulated entities, such as oil refineries and chemical manufacturers. In discussions with counsel, however, she understands that the University will likely need to pay some kind of penalty, and that it could be substantial.

She would like the penalty to be as low as possible, preferably below $100,000. However, she is trusting counsel’s judgment and has preliminarily authorized them to agree to as much as $300,000. She may be willing to go higher; if the parties will not be able to settle below this amount, she has asked for a follow-up meeting to hear the team’s recommendation.

  1. Disposal

    The EHSO believes that this should not have been included as a violation. The spill was quickly cleaned up and little hazardous waste actually released into the environment.

    As a one-time event, involving a small quantity of hazardous waste, the EHSO believes that the spill presented only a minor potential for harm. The fact that the spill occurred during an on-campus transfer meant that one of her staff was present and able to provide an immediate response.

    Given the many instances of transporting hazardous waste across campus, with only this one spill, she believes that the spill was only a minor deviation from the requirements. As a minor/minor violation under the Policy, she wants to argue that the penalty should be somewhere between $110 and $549, and that counsel should argue for a penalty on the low end.  K&W’s attorneys have advised that EPA will likely push for a much higher classification for the penalty and will be reluctant to agree to classify the spill as a minor/minor violation.

  2. Illegal Storage

    The head of the Chemistry Department reported that many of her professors and research assistants were livid about EPA’s tactics in removing the chemicals in the Reuse Room.  They explained that limited budgets made it imperative that the Department maintain supplies of the chemicals needed for instructional purposes as well as research. Many of the chemicals in the Reuse Room were intended to be reused.

    The faculty members do concede, however, that the room contained a number of containers of potentially hazardous materials that probably could not be reused, including the containers that contained picric acid. The chemicals would “eventually” be removed to the satellite accumulation area for disposal by EMD, but cleaning out the Reuse Room had not been a high priority for the faculty, with other demands, including teaching and research. The Chemistry Department had not upgraded its inventory system since the late 1990’s, and it was admittedly less efficient than the management of supplies at some private universities.

    K&W plans to argue for a low penalty for this count. As many of the chemicals could, in fact, have been reused, they want to argue that the amount of material that could have been classified as waste was relatively low. It is K&W’s view that EPA over- reacted in requiring that the entire Reuse Room be emptied.

    Because the Reuse Room had been used in this manner for some time, K&W expect EPA to seek multi-day penalties, which have the potential to greatly increase any overall penalty. EPA’s Inspection Report suggested as much, by identifying the expiration date as a possible date when unused chemicals became hazardous waste.

    K&W does not expect EPA to agree that the violation presented only a minor potential for harm, given the fact that it deemed the conditions in the Reuse Room sufficiently serious to call for the Superfund removal team. However, K&W believes it has a chance to convince EPA that the situation presented only a moderate potential for harm. Personnel using the Reuse Room were all highly trained, knowledgeable faculty or research assistants.

    K&W plans to argue that the material could not be classified as hazardous waste until one of the trained professionals utilizing the room had made a determination that the material could no longer be used. The informed decision of a qualified professional familiar with the chemical and its uses in the laboratory should have more weight than the snap judgment of an EPA inspector or Superfund on-scene- coordinator who directed disposal of all of the material in the Reuse Room. They have advised JSU-Fremont that this may be a risky argument if they needed to litigate it, but that it may have some traction in negotiation.

    K&W wants to avoid classification of the violation as one that would compel EPA to seek multi-day penalties, such as a major/major or major/moderate violation. If they can persuade EPA that the violation is -- at worst -- one presenting a major potential for harm but only a minor extent of violation, they may be able to agree to a penalty in the $12,100 to $16,499 range for major/minor violations, without multi-days. However, even with classification as a major/minor violation, multi-days could be quite high depending on the duration, as multi-days are between $605 and $3300 for each day. As such, the multi-day penalties could add as much as $108,295 to $590,700 to the penalty.

    If K&W can persuade EPA to classify the violation as one presenting a moderate potential for harm, the penalty could be much lower.

  3. Management Standards

    The EHSO believes that the two drums with missing hazardous waste accumulation start dates had been stored in the Facility approximately 30 days, when JSU completed a large lead paint abatement project on the old gym. The hazardous waste in the drums appears to be from that project. They also believe the drums would likely not have been stored much longer than that in any event. The last off-site shipment occurred shortly before the lead cleanup wastes were delivered to the Hazardous Waste Storage Facility; if they had been present at the time of the shipment, the deficiency would have been identified at that time.

    The EMD does not believe that a high penalty should be assessed. The other 24 drums at the Facility at the time of the inspection were properly marked. Even though the drums did not have an accumulation start date, the deficiency would likely have been picked up during one of the regular off-site shipments. In most cases, all of the hazardous waste in the Facility is shipped off-site at the time of one of the regularly scheduled shipments. Because these shipments occur regularly, there is very little likelihood that the drums with missing start dates would have been stored longer than 90 days.

    K&W is prepared to argue that this violation should be classified as presenting only a minor threat of harm. Since all of the other 24 drums were marked, they believe the omission of the labels on only two drums should be minor/minor and that an appropriate penalty should be from the bottom of the cell, for $110.

  4. Exception Reports

    The EHSO does not believe this violation warrants a high penalty either, and also views it as minor/minor.  Subsequent investigation demonstrated the shipment was received at the designated facility, so that no actual harm occurred.  The EHSO views the violation as presenting only a minor violation as she had filed exception reports for the other five shipments for which she did not receive written confirmation of receipt.

    K&W is prepared to argue this position, but has cautioned that EPA looks at the risk of harm, not necessarily the actual harm.

  5. Contingency Plan

    K&W understands that EPA will often include all violations in an administrative complaint, but does not believe that this violation should be viewed as significant. JSU-Fremont had corrected the omission prior to the inspection and at the time of the spill event, the emergency coordinator was contacted through his cell phone. The EHSO is annoyed that this is even identified as a viola

Round 1 -- - Confidential Instructions for EPA

United States Environmental Protection Agency, Region XI v. Jefferson State University at   Fremont, Docket No. RCRA XI-0015-0034

EPA Region XI Enforcement Division Director Moore has instructed the negotiation team to push for the highest possible penalty for the violations at JSU-Fremont.  A high profile resolution of the case will send a strong message to other universities and research facilities that they need to ensure that they store used chemicals and other hazardous wastes properly. She is particularly concerned about the materials such as picric acid, which can cause an explosion in a building when students are present.

Equally important to Director Moore is including a significant SEP in this agreement. Because JSU-Fremont is a public institution with significant intellectual and creative resources, she believes it will be capable of proposing and implementing an innovative and significant SEP. To some degree, however, the ability to negotiate a substantial SEP will be constrained if the penalty is not itself substantial.

Prior to meeting with JSU-Fremont’s counsel, the enforcement team met to review the counts and the proposed negotiation approach. As the case is included in a national enforcement initiative, the Office of Enforcement and Compliance Assurance (OECA) will need to concur on the settlement. While OECA is deferring to the Region on the specific penalty approach, OECA has indicated a target penalty of
$500,000 and a bottom line of $200,000.  If the negotiating team cannot reach agreement on a penalty higher than $200,000, OECA would favor initiating a formal administrative enforcement action (absent compelling new facts or arguments by JSU-Fremont).

  1. Illegal Disposal

    EPA’s Water Division Director has advised that a significant penalty should be sought for the one-time release near Pathfinder Creek. After a major restoration effort, Pathfinder Creek is once again supporting a small run of salmon. While the spill did not enter the creek, it occurred in close proximity, and some of the materials released could have been poisonous to young salmon fry.

    The enforcement team favors a high penalty for this, but only as a one day violation. A major/major violation would be subject to a penalty of $22,000-$27,500. Even though some residue remained, the team does not see this incident as presenting a good case to pursue on a theory that each day any residue remains constitutes a continuing disposal. However, the fact that the spill occurred near a sensitive ecosystem warrants a high penalty because of the risk of harm, even if the harm did not occur.

  2. Illegal Storage

    Everyone agreed that the most egregious violation was the management of the Reuse Room. The situation had persisted for years. Picric acid is potentially explosive, and many of the containers of picric acid were in very poor condition, with dry salts encrusted on the exterior of the containers.

    The imminent threat of explosion, with the possibility that many students and staff could have been injured or killed, clearly presents the highest possible threat to human health or the environment. In addition, the fact that JSU-Fremont had not identified this unit as a satellite accumulation area in prior reports was “harm to the program.” Since JSU-Fremont had not reported this unit, it had never been inspected, and was not included in the list of satellite accumulation areas serviced by the Environmental Management Department.

    Enforcement Division Director Moore wants the team to obtain a penalty in the major/major matrix and to assess multi-day penalties for a continuing violation. She is encouraging the team to seek a penalty for a longer period, perhaps seeking multi- day penalties beginning with the expiration date for acetone, which occurred 400 days before the inspection and Superfund removal action.

    EPA’s Superfund Division Director Calfee has also supported an aggressive penalty approach. She is unhappy about putting her emergency response team at risk in having to clean up the chemicals in the Reuse Room.

    A penalty from the high end of the major/major cell, that included multi-days up until day 180,5 would be just over a $1 million ($984,500 ($5500 x 179 days) + $27,500 = $1, 012, 000).

    A penalty from the same matrix, at the low end, would be $218,900 ($196,000 ($1100 x 179 days) + $22,000).

    While Enforcement Division Director Moore favors a penalty from the major/major cell, she can agree to a penalty in the major/moderate range, with penalties continuing for at least 180 days.  The low end of the major/moderate cell (with the additional 179 days of multi-days from the low end of that cell) would total

  3. Management standards – drums missing accumulation start date

    While no environmental harm ensued, marking of drums as hazardous waste with the accumulation start date is a cornerstone of generator management of hazardous waste. Proper shipment of hazardous waste off-site within 90 days helps prevent dangerous stockpiling of hazardous waste at generator facilities. Failure to mark drums prevents the inspectors from properly assessing whether timely off-site shipment is occurring and arguably presents a substantial harm to the implementation of the regulatory program.

    Evidence suggests that the drums had been stored improperly marked for about 30 days. Because of the importance of the labeling requirement, enforcement staff believe it potentially has a “substantial” adverse impact on the program. Since neither drum had the accumulation start date, the drums were in major non- compliance.

    If the violation is major/major, the penalty would come from the $22,000-$27,500 cell, and would carry multi-day penalties from $1,100 to $5,500 per day.  Under this classification, the penalty could range from $53,900 (($1100 x 29 days= $31,900) + $22,000) to $159,500 (($5500 x 29 days= $159,500) + $27,500).  Since two drums were involved, a per drum count would double the potential penalty.

    Enforcement Division Director Moore encourages the enforcement team to argue that multi-day penalties are appropriate for this count. However, she does not believe that it would be necessary to classify the count as major/major if the negotiation team believes that JSU-Fremont’s counsel can make a persuasive case for a different analysis. She agrees that the number of non-compliant drums represented only a small percentage of the overall hazardous waste at the facility and that the accumulation area was generally well managed.

  4. Exception Reports

    EPA considers filing of exception reports an important safeguard in the “cradle to grave” tracking system for management of hazardous waste. It places responsibility on the generator to ensure that the hazardous waste meets its destination for proper disposal.

    While the hazardous waste in this instance did not pose a significant threat itself, JSU-Fremont generates a wide range of hazardous wastes, which present a range of potential environmental concerns.      EPA’s enforcement staff took this potentially greater risk of harm into account in determining an appropriate penalty for the failure to file a report.

    EPA enforcement staff have also considered application of multi-day penalties for the violation.  Each day that the generator delays in filing an exception report increases the risk that an errant shipment of hazardous waste will be mishandled.

    EPA also considers this violation as presenting harm to the program. Failure to file an exception report prevents EPA (or an authorized State) from conducting follow- up.

    Enforcement staff believe that a case can be made that the failure to file an exception report presents a major potential for harm.  Since JSU-Fremont never filed this report, there was a complete failure in this one instance, which would arguably represent a major extent of violation.  A major/major violation would be subject to a penalty of $22,000-$27,500. If multi-days were added due to the additional 60 days of delay at the major/major level, the penalty could be increased by $1100 to $5500 per day, for a total penalty of anywhere from $88,000 ($22,000 + ($1100 x 60 days = $66,000) to $357,500 ($27,500 + ($5500 x 60 days = $330,000).

    Enforcement Director Moore has informed staff that she would be amenable to a lower characterization, including a minor extent of deviation, taking into account that JSU-Fremont had appropriately filed reports on five other occasions, and only failed this one time.  She has indicated that she would be supportive of a lower penalty for this count, without multi-days, provided the overall facility penalty was sufficiently high.

  5. Contingency Plan

    EPA’s On-Scene-Coordinator, who conducted the removal action at the Reuse Room, participated in the discussion of the violations at JSU-Fremont and expressed his view that this violation should not be minimized as a merely technical violation.

    While the JSU-Fremont emergency coordinator was contacted on his cell phone, it is important that all contact information be included in the contingency plan. While the circumstances of the spill did not present a major threat, the University handles such a wide range of chemicals that the incident could have been much more serious and could have presented a much more significant threat of harm.

Round 2

United States v. Belair Environmental Services

 Following up on the exception reports filed by JSU-Fremont, EPA sent information requests to the Belair Disposal Facility, one of six hazardous waste management facilities operated by Belair Inc.

The Belair Disposal Facility is a major treatment, storage and disposal facility for management of hazardous waste and has a permit to operate from the State of Jefferson.  Belair is located in rural Serra County, a largely agricultural area in Jefferson.  Local residents are primarily Hispanic, and the median income is below the national poverty line. Most residents work in some capacity in agriculture, which is dominated by large farms and ranches. The nearest town is Sawyer, which serves as the business center for the agricultural region.  Many residents have expressed concern about the proximity of the hazardous waste facility and believe that it should be closed.

During EPA’s follow up, some of Belair’s responses regarding the treatment of hazardous wastes from JSU and other clients raised questions about Belair’s compliance with the regulations governing treatment of hazardous wastes prior to disposal.

As detailed below, EPA determined that Belair was disposing of certain hazardous wastes without meeting applicable treatment standards due to a recurring laboratory error. EPA concluded that both the disposal and the laboratory error were violations of Belair’s permit. EPA concluded that the laboratory error was due to the use of improperly calibrated equipment. The permit specifies that all confirmation analyses of treatment residues must be conducted on properly calibrated equipment, so that the incorrect analyses violated the permit.

EPA referred the violations to the United States Department of Justice (DOJ) for civil action. The DOJ notified Belair of its intent to file and has scheduled settlement discussions with Belair’s counsel, Kracov and Wilkins (K&W).

The subject of the settlement discussions will be the penalty for the violations and the injunctive relief to ensure that the violations do not recur.

Under federal and State law (and the permit’s express terms), all hazardous wastes disposed must be treated to meet land disposal treatment standards “to minimize short- and long-term threats to human health and the environment.” RCRA section

3004(m).6    For many hazardous wastes, compliance with numeric standards contained in 40 CFR Part 268 determines whether or not the treated waste may be land disposed.7

EPA concluded that Belair’s laboratory was understating the concentration of metals in treatment residues so that certain metals-bearing hazardous wastes were not meeting the numeric standards in Part 268.  The laboratory error was most pronounced with lead-containing wastes.  As a result of the laboratory error, EPA has determined that Belair was disposing of lead-contaminated wastes without meeting the treatment standards.

Prior to land disposal, hazardous wastes that have lead as a constituent must be treated so that the concentration of the lead – using the Toxicity Characteristic Leaching Procedure (TCLP)8  --  is 0.69 parts per million for a wastewater and 0.75 parts per million for non-wastewaters.

Belair was treating and disposing of a wide range of lead-containing hazardous wastes. The majority of the lead-containing hazardous wastes were identified as characteristic hazardous waste D008. D008 is the hazardous waste code that applies to any hazardous waste which measures greater than 5 parts per million (or 5 mg/l) of lead using the Toxicity Characteristic Leaching Procedure (TCLP), the same test used to determine the effectiveness of treatment.  The D008 hazardous wastes being treated and disposed at Belair included lead-contaminated soils from federal and State Superfund sites, as well as lead-contaminated residues from lead paint abatement projects, such as the lead paint abatement project at JSU-Fremont.

Belair also was treating and disposing of other lead-containing hazardous wastes from industrial sources, including hazardous wastes from the petroleum refining industry.  These so-called listed hazardous wastes included hazardous waste codes K048, K049, K051 and K0529 from the petroleum industry. While these types of hazardous waste would typically contain greater than 5 parts per million (or 5 mg/l) TCLP concentrations (and would therefore be coded D008 in addition to the K series code), these listed hazardous wastes and their treatment residues would be classified as hazardous wastes irrespective of the specific TCLP concentration.

The land disposal restriction standards of 0.69 ppm (wastewater) and 0.75 ppm (nonwastewater) would apply to both D008 and listed hazardous wastes such as K048, et al.

During a six month period, EPA documented that Belair treated lead-containing hazardous wastes on numerous occasions. Belair’s method of treating lead- containing hazardous waste is a stabilization or fixation technology, similar to encasing the hazardous wastes in concrete.  Belair uses a single disposal cell for disposal of all hazardous waste residues that are treated in this manner, so the treated lead-containing hazardous wastes are all disposed in the same cell. As certain of the K listed wastes contained other constituents, the treatment recipe for these wastes differed somewhat from the treatment for hazardous wastes classified as only D008.

On 14 occasions when Belair treated lead containing hazardous wastes, EPA determined that the treatment residue failed to meet the TCLP standards for land disposal due to laboratory error. Belair’s confirmation sampling indicated that the hazardous wastes met the standard of 0.75 ppm, but on each occasion, EPA determined that the lab misstated the concentration of lead. The margin of error for testing is 0.5 ppm (plus or minus). The following chart provides specific information for each event:

Date of treatment (all were non- wastewaters)

Hazardous waste code

TCLP residue concentration (according to Belair) in ppm

TCLP residue concentration (according to EPA) in ppm

Jan. 15, 2015




Jan. 20, 2015




Feb. 3, 2015

D008, K049



Feb. 17, 2015




March 2, 2015




March 18, 2015




March 11, 2015

D008, K049, K051



April 4, 2015




April 21, 2015




May 1, 2015

D008, K049, K051



May 13, 2015




May 30, 2015




June 12, 2015

D008, K049, K051



June 27, 201510




EPA issued its Inspection Report to Belair on Nov. 30, 2015.  The Inspection Report cited two potential violations for each of the 14 incidents: (1) failure to comply with permit conditions requiring use of properly calibrated equipment for all required confirmation sampling and (2) violation of the permit condition prohibiting land disposal of hazardous waste without complying with land treatment standards.

In preliminary discussions, DOJ has informed K&W that it intends to seek a penalty for each disposal event in violation of the land disposal restrictions and for each associated lab error. For the period identified in the inspection report, this would include 14 separate events. DOJ has also informed K&W that EPA believes that the problem extends beyond the six month period. A review of facility records shows that Belair has been treating D008 hazardous waste about twice a month for the past five years (the extent of the statute of limitations).

DOJ has informed Belair’s counsel from K&W that DOJ intends to apply the EPA RCRA Penalty Policy to resolution of the violations but reserves the right to seek the statutory maximum per day per violation in the event the parties are unable to reach a settlement.

At the statutory maximum of $27,500 per violation, the total for 14 events would be
$385,000 per violation, or $770,000 for both the lab error and disposal.  If the case expands to other possible incidents, the total could be much greater.

EPA expects Belair to address the laboratory problems in a comprehensive manner and DOJ has informed Belair that DOJ expects to include compliance conditions to ensure that the violations will not recur. One approach would be to require that Belair stop using its onsite laboratory for confirmation of treatment residues and rely upon a certified independent laboratory.  EPA has also suggested that Belair conduct a thorough third party review of its laboratory and other sampling results for the past three years to determine if there have been other previously undetected violations.

In its response to the EPA Inspection Report, Belair has asserted that the laboratory issue is fairly recent and is a result of a recalibration of its spectrometer which occurred June 1, 2014, when the vendor for Belair’s laboratory equipment, LabChecker, had conducted a routine review and calibration of Belair’s equipment. Even if the problem impacted all of the D008 treatment events from that point on to the end of 2015, it would have only affected 10 additional events. At this time, neither Belair nor EPA can confirm that these events also resulted in disposal of inadequately treated hazardous waste.

Attorneys for Belair and DOJ are meeting to discuss settlement. The issues for resolution are the penalty to be paid and the injunctive relief.  Injunctive relief will be focused on the laboratory; EPA technical staff have agreed that it would be impracticable to attempt to excavate the wastes already disposed.

The meeting is occurring at DOJ’s offices. While DOJ, as host, should welcome Belair’s counsel to the session, either party may initiate the substantive negotiations.

Round 2 -- Confidential Instructions for Belair

United States v. Belair Environmental Services

 Belair does not believe that the alleged violations warrant judicial action but does not expect EPA and DOJ to agree to drop the case or resolve it as an administrative action. Belair wants to minimize the impact of the case to its public reputation and minimize the costs of any compliance actions. Belair is particularly concerned about the possibility of being required to use an outside laboratory to conduct confirmation sampling to confirm that it is properly treating its hazardous waste.

Belair also believes that the error is as much the fault of LabChecker as its own laboratory. Belair had relied upon LabChecker to provide the level of expertise that its own in-house laboratory arguably lacked. Belair had been having turnover in its laboratory and had expressly requested that LabChecker perform the necessary equipment calibration and validation.

Belair is also concerned about the possibility of a more extensive review of prior treatment events. Ever since the LabChecker laboratory review and equipment recalibration, Belair had discovered that it was able to conduct seemingly adequate treatment of metals-containing hazardous wastes – not just D008 and other lead (Pb) containing wastes – using an adjusted, somewhat less expensive formula. A member of Belair’s treatment specialist team had reported this savings, but no one in management had followed up.  A follow-up inquiry could have detected the laboratory error.

Belair’s attorneys have developed a number of potential arguments for minimizing the possible penalty.  They plan to argue that inasmuch as all of the hazardous waste at issue had been treated, and disposed in a permitted landfill cell, the threat to public health and the environment was negligible. This would support an argument for minor potential for harm.

At this point there is no clear evidence that any other hazardous waste received at the facility was disposed without adequate treatment (although Belair’s laboratory staff concede that it is certainly possible).  Since the overwhelming volume of hazardous waste was properly treated, Belair would like to argue that the violation constitutes a minor extent of deviation. Similarly, the extent by which the residue exceeded the treatment standard was arguably minimal, particularly when the hazardous waste being treated also included other listed hazardous wastes.

EPA’s test results are within the margin of error for the K-series wastes. Belair would like to argue that these incidents should not be included as violations. In addition, the June 27, 2015, treated waste was re-treated prior to disposal. Belair also believes that this incident should not be included.

Belair believes that any penalty should be reduced in deference to its obvious good faith efforts to comply. Belair’s lab results show that all of the hazardous wastes had been treated to meet the appropriate standard. Belair’s position is that while the laboratory was in error, Belair was not intentionally disposing of inadequately treated hazardous wastes.

Belair has directed its attorneys to try to minimize the penalty insofar as possible. It would like to limit any agreed upon penalty to the specific violations in the Inspection Report. It does not want to pay any additional penalty for “possible” violations outside the six month period detailed in the report or for other hazardous wastes.

Belair would also like to limit any injunctive relief. Belair believes any problems with the laboratory have likely been corrected already as a result of modifications it undertook following receipt of EPA’s Inspection Report.  However, if necessary, it is willing to agree to some minimal additional laboratory review or other compliance costs, such as:

  • Additional training for the laboratory staff at a cost of $10,000.

  • An independent review of current training and laboratory practices to demonstrate compliance at a cost of $50,000. This would likely take six months to complete and would be much more comprehensive than the LabChecker review.

Belair has investigated some additional options involving off-site testing, but would prefer not to offer those if possible. Off-site analysis of the treatment residue for lead (Pb) containing hazardous waste could add $5000/month (or
$60,000/annually) to the cost of managing this hazardous waste.  If off-site sampling is required for all metals-containing hazardous wastes, it could add $15,000/month (or $180,000/annually) to its operating costs.

In addition, the treated hazardous waste would need to be staged while Belair waited for the confirmation results to be completed.  This might create issues with capacity and could cause Belair to turn away business.  Alternatively, Belair might be compelled to construct an expanded staging area to ensure capacity. While it is not possible to quantify this risk, it is a concern to Belair’s CEO, Sandy Halberstadt. CEO Halberstadt has authorized the negotiation team to agree to some limited off-site testing but it would need to be limited to no more than one year.

CEO Halberstadt would like the case to be settled quickly, at minimal cost. She would rather devote her budget to tax deductible business expenses (i.e., compliance tasks) rather than penalties. A rough rule of thumb is that she would be willing to treat every $2 of compliance tasks as roughly comparable to $1 in penalties.     She has asked the negotiation team to try to keep the overall costs below
$250,000 net, taking this $2/$1 tradeoff into account.

As such, she would be willing to approve a combination of penalty amounts and compliance costs consistent with this chart without further authorization:


Compliance costs











If the team cannot conclude a deal within these parameters, but can get close to something along these lines, she is willing to hear a recommendation and a deal might still be possible.    While she feels very strongly that the violations are minor, she would like to place the investigation and enforcement actions behind her as soon as possible.  Her instinct is that a prolonged investigation might raise additional issues that would be detrimental to the company’s image.

Round 2 -- Confidential Instructions for DOJ

United States v. Belair Environmental Services

 EPA is encouraging DOJ to seek a high penalty and require enforceable conditions to ensure that the violations are not repeated.  EPA has informed DOJ that it considers the case nationally significant. The land disposal restrictions are an important element of the overall regulatory structure that minimizes the threat to groundwater and other resources.  EPA is also concerned that Belair’s laboratory errors may be more prevalent than suspected; the penalty and compliance tasks should send a message to other in-house laboratories about the need to ensure that equipment and staff are capable of providing good data. EPA also takes very seriously the community concerns regarding the facility.

EPA technical staff suspect that the problem at Belair is more widespread than the lead (Pb) treatment alone. Technical staff speculate that the calibration error likely impacted treatment of other waste codes as well; however, reviewing the records is resource-intensive and the technical staff with necessary expertise are limited and have other responsibilities. DOJ has a budget for litigation support which would allow for a more thorough review of past treatment records, but this expenditure will not be necessary if a settlement can be reached.

While the draft complaint only seeks a penalty for the specific instances identified in the complaint, EPA technical staff have provided their opinion that Belair violated its permit condition every time that it used improperly calibrated equipment, which occurred on an almost daily basis. They characterize Belair as “lucky” that the only clearly provable instances of land disposal violations relate to the lead (Pb) contaminated wastes.

EPA technical staff’s preferred option is for Belair to send all of its confirmation sampling off-site for testing or at least all of the confirmation sampling for treatment of hazardous wastes with a hazardous constituent that is a metal.  Technical staff agree, however, that there are a range of less expensive approaches that would provide sufficient assurance that the violation would not recur.

In discussions with DOJ, EPA has informed the negotiation team that the target penalty should be somewhere around $200,000-$250,000. There is flexibility to go lower than this range if the compliance commitments are strong and verifiable.

The Penalty Policy considers not only harm to the public or the environment, but whether the violation has an adverse effect on implementing the program. The hazardous waste regulatory program requires that EPA and key actors in hazardous waste management rely upon sound science in making decisions. Failure to conduct analyses utilizing appropriate equipment and laboratory protocols results in inaccurate data and decision4making.  Doubts regarding the science underlying

decision-making undercut the integrity of the entire program. As such, the laboratory violations present a greater potential for harm (within the meaning of the Penalty Policy) than the actual disposal of inadequately treated hazardous waste.

The government’s initial evaluations of the two counts are as follows:

  1. Permit condition violation (laboratory error)

    The violation presents a major potential for harm to implementing the program. Belair operates one of the major hazardous waste facilities in the Region and should be expected to be fully compliant in all aspects of its operation. Hazardous waste management decisions depend upon the results of seemingly objective scientific decisionmaking.

    None of the analyses of lead (Pb) containing wastes accurately determined the concentration. There may be some basis for discriminating among specific events, but in general, technical staff favor categorizing the overall violation as presenting a major extent of deviation, or at least moderate. Even though the investigation has only identified a discrete number of events that led to unlawful disposal, technical staff theorize that the evidence suggests that the laboratory routinely conducted analyses that failed to comply with the laboratory protocols expressly referenced in the permit.

    With a categorization of the violations as major potential for harm, major extent of deviation, the per incident violation would be $22,000 to $27,500 per incident, or a total of $308,000 to $385,000 for all 14 incidents.

    With a categorization of the violations as major potential for harm, moderate extent of deviation, the per incident violation would be $16,500 to $21,900 per incident, or a total of $231,000 to $306,600.

  2. Land disposal

    While some enforcement staff favor categorization of the penalty for land disposal as presenting a major harm to the environment as well as major harm to the integrity of the program, the consensus is that this may be hard to justify since the exceedances of the treatment standards were not great and all of the wastes were disposed of in an engineered landfill with similarly treated hazardous waste.

    While EPA enforcement staff have advised DOJ that a case could be made for major extent of deviation since none of the D008 and other treatment residues from lead (Pb) containing hazardous wastes met the treatment standard, the D008 and other lead (Pb) containing wastes represent only a fraction of the hazardous wastes that are treated and land disposed at Belair. Accordingly, the extent of deviation might be classified as moderate or even minor. However, that approach is not preferred.

    If the violation is classified as presenting a moderate potential for harm and moderate extent of deviation, the penalty range per occurrence would be $5500 to $8799, or $77,000 to $123,186 total for 14 violations.

    If the violation is classified as presenting a moderate potential for harm and a minor extent of deviation, the penalty range would be $3300 to $5499 or $46,200 to $76,986 total for 14 violations.

    DOJ is prepared to hear Belair’s proposals for compliance tasks or injunctive relief. EPA has informed DOJ that there is a wide range of options for assuring that treatment residues are properly analyzed. Given community skepticism about the facility, however, EPA would prefer that the compliance commitments are transparent and verifiable. One option is to provide for some period of off-site confirmation sampling.

    DOJ is prepared to adjust the penalties to a limited degree if the compliance commitments warrant it. For example, EPA has informed DOJ that penalty amounts from the lower end of the appropriate penalty range would be more supportable if Belair is agreeing to strong compliance tasks.


1 For a broader discussion of the types of hazardous waste that might be generated at a University art department, see, e.g., http://rehs.rutgers.edu/pdf_files/art_wst_mgmt.pdf (Rutgers Art and Theater Hazardous Waste Management). Back

2 Stanford link on picric acid: https://web.stanford.edu/dept/EHS/prod/researchlab/lab/safety_sheets/08Q 069.pdf Back

3 Because Jefferson is an authorized state under federal hazardous waste law, EPA enforces the State’s regulations, which are at least as stringent as federal regulations. Back

4 Since the Policy was published, EPA has adjusted all of the penalties upward to account for inflation. For purposes of the Negotiation, however, the parties should apply the amounts in the Penalty Policy, as published. Back

5 The 180 day time frame is used as the Penalty Policy treats multi-day penalties as discretionary after day 180, even for major/major violations. Back

6 Section 3004(m) was part of the Hazardous and Solid Waste Amendments of 1984, which included a range of new requirements intended to address Congressional concern regarding the risks from land disposal of hazardous wastes. Back

7 Some classes of hazardous wastes (not at issue in this case) are subject to a technology-specific treatment standard, rather than numeric standards. Back

8 The TCLP is a test that measures the concentration in an extract of the waste, not the waste itself. Back

9 These include leaded tank bottoms (K052), which were originally listed based on lead content specifically, and dissolved air flotation float (K048) and slop oil emulsion solids (K049), listed due to hexavalent chromium as well as lead. Back

10 The June 27, 2015 exceedance was detected before the treated waste had been disposed. This hazardous waste was re-treated prior to disposal using the treatment recipe that had been used for K series wastes. EPA agreed that the treated waste met the standard after treatment. Back