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U.S. v. Martin

United States District Court, N.D. Illinois, Eastern Division
Jul 24, 2000
No. 99 C 1130 (N.D. Ill. Jul. 24, 2000)

Summary

In Martin, the court granted the Government's motion for summary judgment and held that the defendant's failure to take any action for 607 days after the information request deadline was per se unreasonable.

Summary of this case from U.S. v. Ponderosa Fibres of America, Inc.

Opinion

No. 99 C 1130

July 24, 2000


MEMORANDUM OPINION AND ORDER


The United States of America ("Government"), acting on behalf of the United States Environmental Protection Agency ("EPA"), brings suit against Gordon Martin ("Martin") under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 ("CERCLA"), 42 U.S.C. § 9601 et seq., as amended by the Superfund Amendments and Reauthorization Act of 1986, Pub L. No. 99-499, 100 Stat. 1613 (1986). The Government urges the Court to direct Martin to respond to outstanding requests for information issued under section 104(e) of CBRCLA in connection with the EPA's investigation of the Estech General Chemical Company Site. The Government also seeks the imposition of civil penalties against Martin for his delayed and incomplete response to the information request. Before this court is the Government's motion for summary judgement. For the reasons discussed herein, the Government's motion is granted.

I. Factual Background

Martin was the sole beneficiary of a land trust that formerly held the legal title to property occupied by the Estech General Chemical Company, in Calumet City, Illinois ("Estech Site" or "Site"). Martin was also the president and sole shareholder of the of the now-dissolved G.M. Wrecking Co., Inc., a demolition contracting business. Between 1989 and 1996, the EPA investigated the Estech Site. The investigation revealed that significant concentration of metals — including lead, semi-volatile compounds, and polychiorinated biphenyls ("PCBs") — had been released at the Site. The EPA reported that these materials presented a direct contact threat to persons entering the Site and an environmental threat to the neighboring Grand Calumet River.

Martin proffers the affidavit of his own expert witness, who contradicts the EPA's findings. However, the expert's conclusions are wholly unsupported and ambiguous. As such, they cannot and do not create a contested issue of fact. The court's refusal to assign any weight Martin's expert's affidavit is discussed in detail in Part II.A of this opinion.

In January 1997, the EPA issued "General Notice of Potential Liability" letters to Martin and G.M. Wrecking Co., Inc., among others, with respect to the Estech Site. The notice informed Martin that he was a potentially responsible party under CERCLA based on his former ownership of the Estech Site and his disposal activities at the Site. On August 15, 1997, the EPA mailed an Information Request to Martin pursuant to Section 104(e) of CERCLA, 42 U.S.C. § 9604(e). The request sought information pertaining to ownership, control and activities conducted on the Estech Site. The request directed Martin to provide a "complete and truthful response" to its questions within ten (10) days of [Martin's] receipt of th[e] letter." Martin received the request on or about August 21, 1997. He failed to respond to the request by the August 31, 1997 deadline.

On October 29, 1997, the EPA mailed a letter ("Violation Notice") to Martin informing him that he was in violation of Section 104(e). Although the Violation Notice was delivered to the same address to which the Information Request had been sent, the notice was returned as undeliverable. On or about February 26, 1998, an EPA investigator hand-delivered the Violation Notice to Martin's office.

In March 1998, the EPA regional counsel communicated with William Suriano ("Suriano"), Martin's attorney. Suriano said that Martin was preparing a response to the Information Request. On April 28, 1998, the EPA regional counsel wrote a letter to Suriano stating that the EPA had not yet received any response from Martin and that Martin was in violation of Section 104(e). On February 19, 1999, the Government filed suit against Martin, seeking to compel him to respond to the August 15, 1997 Information Request. The Government also sought the imposition of civil penalties against Martin. On April 30, 1999, Martin, for the first time, provided the EPA with some information responsive to the Information Request.

However, the Government still seeks additional information from Martin. Specifically, the Government seeks from Martin a copy of the land trust file and information regarding Martin's current financial status. The EPA's attempts to work with Martin, through his attorney, to secure complete responses to the Section 104(e) request have failed. In an April 30, 1999 response to the Information Request, Martin stated that he would make the land trust file available to the Government for inspection and copying "as soon as he receive[d] it." About two weeks later, EPA investigators were informed by a representative of the First National Bank of Illinois that the trust file was available. In early August 1999, Suriano stated that he thought that George Gilley ("Gilley"), also Martin's attorney, had delivered the trust file to the EPA. On August 10, 1999, the United States Attorney's Office informed Suriano that the EPA had not received the land trust file.

In addition to the land trust file, the Information Request sought copies of Martin's personal tax returns for the years 1992-1997. In the April 30, 1999 response, Martin stated that he had not filed personal tax returns since 1995. He indicated on that date that the delinquent tax returns would be completed within two to three weeks. The EPA has not received such returns.

On July 6, 1999, the U.S. Attorney's Office sent Martin, via his attorney, a Financial Statement Form ("FSF"). The FSF included a certificate requiring the signor to attest that she had completely and accurately disclosed information about her income and assets. Martin was directed to complete and return the FSF by July 19, 1999. On August 17, 1999, the U.S. Attorney's office received the FSF, but it was signed by Carolyn Martin, rather than Gordon Martin. The FSF submitted by Carolyn Martin purported to set forth information regarding Gordon Martin's finances. Specifically, it stated that he had a monthly average income of $5,000 as well as ownership of real estate property and construction equipment including 40 to 50 tractors and trailers.

The Financial Statement Form stated in relevant part: With knowledge of the penalties for false statements provided by Title 18, United States Code, Section 1001 (a fine and/or imprisonment) and with knowledge that this financial statement is submitted by me to affect action by the United States Department of Justice, I hereby certify that the above statement is true and that it is a complete statement of all my income and assets, real and personal, whether held in my name or by any other.

Martin owns G.M. Brick, Inc., a brick reclamation business. In G.M. Brick's 1997 federal tax return, the company indicated gross revenues of $196,091. Of that amount, $113,799 was expended on salaries and wages. Ultimately, the company registered a loss, for tax purposes, of $7,291 for 1997. Martin also works for G.M. Demolition, a wrecking company owned by his sons. In addition, Carolyn Martin owns Thornton Leasing Corporation which rents construction equipment. In 1997, G.M. Brick loaned $51,821.00 to G.M. Demolition. In 1997, Thornton Leasing loaned G.M. Demolition a total of $130,000.

Subject matter jurisdiction exists under Sections 106, 107(a) and 113(b) of CERCLA, 42 U.S.C. § 9606, 9607(a) and 9613(b), and pursuant to 28 U.S.C. § 1331, 1345, and 1355. Venue is proper in this district under Section 113(b) of CERCLA, 42 U.S.C. § 9613(b). Venue is also proper under 28 U.S.C. § 1391 because the threatened or actual releases of hazardous substances occurred in this judicial district.

II. Analysis

Section 104(e) of CERCLA, 42 U.S.C. § 9604(e). grants the EPA broad information gathering authority. The statute enables the EPA to gather information and documents from individuals who may have relevant information about the presence of about hazardous wastes on a site under investigation. In the absence of voluntary compliance, the Attorney General may

Section 104(e) provides that the EPA:

May require any person who has or may have information relevant to any of the following to furnish, upon reasonable notice, information or documents relating to such matter: (A) The identification, nature, and quantity of materials which have been generated, treated, stored, or disposed of at a vessel or facility or transported to a vessel or facility. (B) The nature or extent of a release or threatened release of a hazardous substance or pollutant or contaminant at or from a vessel or facility. (C) Information relating to the ability of a person to pay for or to perform a cleanup.
42 U.S.C. § 9604(e)(2).

institute a civil action to compel a response to an Information Request issued under Section 104(e). 42 U.S.C. § 9604(e)(5)(B)(ii). The court may also assess civil penalties against any person who "unreasonably fails to comply" with a section 104(e) request. Id. In the instant case, the Government urges the court to direct Martin to respond to the Government's outstanding requests for information and to impose civil penalties against him for each day of noncompliance.

A. Equitable Relief

On August 15, 1997, the EPA mailed an Information Request to Martin pursuant to Section 104(e) of CERCLA, 42 U.S.C. § 9604(e). The request sought information pertaining to ownership, control and activities conducted on the Estech Site, to which Martin formerly held legal title, Martin was directed to provide a response to the Information Request within ten days of his receipt of the letter. Martin, however, failed to respond by the August 31, 1997 deadline. Instead, Martin's first overture of compliance came on April 30, 1999, 607 days past the due date. Even then, Martin only partially satisfied his duty to provide responsive information. The Government still has not received a copy of Martin's land trust file and information regarding Martin's current financial status. The Government now asks the court to enjoin Martin to provide the requested information.

Martin raises a single challenge to the validity of the August 21, 1997 Information Request. Before the EPA issues a Section 104(e) request, the agency must have a "reasonable basis to believe that there may be a release or threat of release of a hazardous substance or pollutant or contaminant" at a site under investigation. 42 U.S.C. § 9604(e)(1). From 1989 through 1996, the EPA conducted several studies of the Estech Site and identified the presence of hazardous materials on the Site. Martin, however, argues that the EPA did not have the requisite reasonable basis.

In an effort to defeat summary judgment, Martin questions the Government's finding of hazardous wastes on the Site. To support his contention that the EPA did not have a reasonable basis for issuing the Information Request, Martin produces the affidavit of Mary Jo Williams, an environmental consultant, who contradicts (in uncertain terms, as will be discussed), the Government's finding of hazardous wastes on the Estech Site. The substance of Williams' affidavit states:

3. I am familiar with the site involved in this litigation (the "Site"). I have examined the Site, reviewed documents, including some test results related to the Site, and interviewed personnel associated with the Site. 4. Based upon my investigation, I have concluded that the principal materials dumped on the Site were shredder fluff and demolition debris. 5. I have reviewed the Statement of Charles Gebien submitted in support of a Motion for Summary Judgement in this case. Mr. Gebien's statement refers to the results of certain studies that found hazardous levels of lead and LCGs on the Site. I have also reviewed those studies. 6. According to the EPA's own documentation, the test procedures used to sample and analyze shredder fluff often yield false high results for lead an PCBs. This documentation consists of approximately 500 pages. I had a copy of this document, but recently moved my office. ln the move, the document was misplaced, and I cannot now locate it. Nevertheless, the substance of this document is referenced in the EPA publication Identification, Characterization. Classification and Utilization of Automotive shredder Residue. Due to the length of this document, I have not attached a copy. 7. The EPA used the sampling procedure or methodology that often yielded false high results. It is my opinion that if the appropriate procedure or methodology had been used the results would have shown that the levels of PCBs and lead would have been substantially lower. The overall evaluation would probably have shown that the levels of contaminants on the Site did not constitute an eminent hazard. Additional sampling and testing done by the US-EPA methodology developer for shredder fluff would be needed to confirm this.

Williams' statements are insufficient to create a genuine issue for trial. Although Rule 705 of the Federal Rules of Evidence allows experts to present naked opinions, "[a]dmissibility does not imply utility."Mid-State Fertilizer Co. v Exchange Nat'l Bank of Chicago, 877 F.2d 1333, 1339 (7th Cir. 1989). Rule 56(e) of the Rules of Civil Procedure, which governs summary judgement motions, requires an affidavit to overcome a higher hurdle than just admissibility; rather, the affidavit must ""set forth facts and by implication in the case of experts . . . a process of reasoning beginning from a firm foundation." Id. (citing American Key Corp, . v. Cole Nat'l Corp., 762 F.2d 1569, 1579-80 (11th Cir. 1985)).

Accordingly, in Mid-State the Seventh Circuit disregarded an expert's contradictory affidavit where he "presented nothing but conclusions — no facts, no hint of an inferential process, no discussion of hypotheses considered and rejected." 877 F.2d at 1339-40. See also Richardson v. Richardson-Merrell, Inc., 857 F.2d 823, 829-32 (D.C. Cir. 1988) (holding that an expert's declaration, "full of assertion but empty of facts and reasons," will not withstand summary judgment because the judge must "look behind [the expert's] ultimate conclusions . . . and analyze the adequacy of its foundation") (quoted in Mid-State, 877 F.2d at 1339); United States v. Various Slot Machines on Guam, 658 P.2d 697, 700 (9th Cir. 1981) (observing that "in the context of a motion for summary judgment, an expert must back up his opinion with specific facts"). The affidavit under scrutiny in Mid-State looked much like that produced by Williams — no meat, just bare bone assertions. See 877 F.2d at 1338-39 (setting forth body of affidavit). Williams recites no facts and offers no foundation to undergird her conclusions. In fact, she disavows any obligation to support her declarations with facts and data. Instead, she claims that she conveniently "misplaced" the relevant documents and she offers to spare the court the burden of reviewing lengthy documents. Williams' unsubstantiated conclusions are of little, if any, use to the court in deciding this motion. Put differently, they are insufficient to defeat summary judgement.

The Seventh Circuit insisted:

It will not do to say that it must all be left to the skill of experts. Expertise is a rational process and a rational process implies expressed reasons for judgment. An opinion has a significance proportioned to the sources that sustain it. An expert who supplies nothing but a bottom line supplies nothing of value to the judicial process.
877 F.2d at 1338.

Even if the court were to take Williams' statements as true, they are too equivocal to establish an issue for trial. Williams fails take a definitive stance in her affidavit. Instead, all of her assertions are couched in a shroud of vagueness. She critiques the EPA for using sampling procedures that "often" yielded false high results. Had the appropriate methodology been employed, she suggests, the EPA's findings would have reflected a "substantially lower" level of contaminants at the Site. She concludes that properly-conducted tests would "probably" have shown that the Site did not constitute an eminent hazard. But, she retreats, "additional sampling and testing . . . would be needed to confirm" her theory. See Williams Affid. ¶ 7.

The court is left to wonder. . . . How often is "often?" Is it often enough to cast doubt on the reliability of the Government's studies, or as often as false positives will turn up in any scientifically sound study? Williams concedes that "appropriate" (in what way?) sampling procedures would have found the presence of lead and PCBs on the Site, albeit a "substantially lower" amount of such contaminants. How much is "substantially lower?" Would a "substantially lower" amount render the Site safe? Ah, but the answer to that is "probably," although further tests "would be needed to confirm" even that indeterminate conclusion. Williams' ambiguity only raises questions about her competence. It does not raise questions about the validity of the Government's findings. Most importantly, Williams' affidavit does nothing to undermine the "reasonable basis" for the Government's belief in the contamination of the Estech Site.

The "reasonable basis" standard presents a low threshold as a predicate to the exercise of the EPA's section 104(e) powers. By the plain terms of the statute, there need not be an actual release of a hazardous substance, nor an actual threat of release. 42 U.S.C. § 9604(e)(1) Rather, there need be only a "reasonable basis to believe" that there "may be," that is, that there is the potential for, a "threat of a release."

In his affidavit, Charles Gebien ("Gebien"), the EPA On-Scene Coordinator involved in the coordination and development of an enforcement response to the alleged contamination of the Estech Sit; set forth, in detail, the results of numerous environmental studies conducted at the Site. The studies revealed that significant concentrations of metals, including lead, semivolatile compounds, and PCBs had been released at the Estech Site, resulting in an environmental hazard. Not only did the EPA have a reasonable basis to believe that there may be a threat of a release of hazardous substances at the Estech Site, the agency actually discovered hazardous materials on the site. The Government has amply satisfied Section 104(e)'s "undemanding standard."United States v. Fisher, 864 F.2d 434, 438 (7th Cir. 1988).

Detailed data supports the Government's conclusion that hazardous wastes were present on the Estech Site. Gebien's affidavit states, in part:

U.S. EPA has relied on a number of studies conducted at the Estech Site in proceeding with the removal action. During February 1989, U.S. EPA performed a Screening Site Inspection (SSI) at the Estech Site and collected six fill/soil samples from on-site locations. The SSI report identified the presence of halogenated hydrocarbons, aromatics, phenols, polyaromatics, hydrocarbons (PAHs), polychiorinated biphenyls (PCBs), pesticides, and heavy metals in the site fill/soil. This report indicated a potential for a direct contact threat with hazardous substances for persons entering the site, and a high potential for the Grand Calumet River to be affected by he substances at the site. U.S. EPA performed an Expanded Site Inspection (ESI) at the Estech Site on July 20 and 21, 1993. Results indicated that the area of affected fill/soil contains releases of 20 semi-volatile organics, pesticides, 2 PCBs, and 11 inorganic analytes in concentrations ranging from 0.076 to 17, 000 p.m. . . . Finally, on October 30, 1996, U.S. EPA performed a site removal assessment at the Estech Site. Four samples were collected from exposed fill materials. Total lead concentrations were detected at concentrations ranging from 27.4 mg/kg to 5, 730 mg/kg. Two of the exposed fill samples exceeded the RCRA [Resource, Conservation, and Recovery Act] toxicity characteristic level (TCLP) for lead at 5.9 mg/l and 9.7 mg/l, rendering the fill material a RCRA hazardous waste. PCBs were detected in all four samples with total concentrations ranging from 15 mg/kg to 300 mg/kg. The U.S. EPA removal action level for PCBs, which is triggered at 50 mg/kg, was exceeded in three of the four samples. . . .

Govt's Exh. 2 at ¶ 3.

An administrative agency's request for information will be enforced where: (1) the investigation is within the agency's authority; (2) the request is not too indefinite; and (3) the information requested is relevant to legislative purposes. See EEOC v. A.E. Staley Mfg. Co., 711 F.2d 780, 783 (7th Cir. 1983); United States of American v. Pretty Products, Inc., 780 F. Supp. 1488, 1506 (S.D. Ohio 1991) (employing these factors in context of section 104(e) request). The court finds that the Information Request received by Martin on August 21, 1997 satisfied each of these three elements.

The EPA's investigation of the Estech Site and the Information Request issuing thereunder properly fell within the purview of the EPA's authority. As discussed, the EPA had a "reasonable basis" for believing that the Estech Site was contaminated as a predicate to the issuance of the request. The EPA was authorized by Congress to require any person who had or may have had information relevant to the agency's investigation to furnish requested information or documents upon reasonable notice. See 42 U.S.C. § 9604(e)(2); n. 3 supra. Martin, a former owner and operator of the Estech Site, was an appropriate target of the investigation.

Additionally, the scope of the request — which asked questions relating to the "identification, nature, and quantity" of hazardous substances present at the Site as well as specifics regarding Martin's "ability to pay for or to perform a cleanup" — was narrowly tailored and authorized by statute. See 42 U.S.C. § 9604(e)(2); n. 3supra. Martin was given ten days to comply with the Information Request, adequate to constitute "reasonable notice." Moreover, the EPA sought the requested information to assist in the agency's attempt to identify responsible parties and to facilitate its investigation and clean-up of a potentially hazardous waste site. As such, the Information Request was consonant with the legislative purpose of CERCLA. See Pretty Products, 780 F. Supp. at 1506.

The information request suffered no defects — it was properly authorized, limited in scope, and in furtherance of Congressional intent Similarly, the request was not arbitrary and capricious, it was not an abuse of the EPA's discretion, and it was not otherwise contrary to law. The court finds that equitable enforcement of the Information Request is warranted. See 42 U.S.C. § 9604(e)(5)(B)(ii).

The Government asks that this court direct Martin to respond to the EPA's outstanding requests for the land trust file and Martin's current financial information. Martin, however, contends that he has already complied with the requests. He claims that he has provided the EPA with access to Craig Labus, the accountant who prepares the tax returns for himself, Carolyn Martin, G.M. Brick, and Thornton Leasing, (companies owned by him and Carolyn Martin, respectively). Labus, in turn, was instructed to provide the EPA with full access to Martin's financial information. Moreover, Martin executed an authorization permitting the Government access to his tax returns, as did Carolyn Martin. Martin's actions, however, were nothing but hollow overtures at compliance. Martin admits that neither he nor Carolyn Martin have filed personal state or federal tax returns since 1995. Thus, despite "access" to these sources, the Government was bound to come up empty in its efforts to obtain information about Martin's current financial status.

In an April 30, 1999 letter to the EPA, Martin indicated that his delinquent tax returns would be completed within two to three weeks. The Government still has not received any such documents.

Martin also seeks to establish that he complied with the request for financial information because Carolyn Martin, who purportedly is the most knowledgeable about the financial affairs of the "household," filled out and signed the Financial Statement Form on behalf of Gordon Martin. In an effort to secure information about Martin's current financial status, the U.S. Attorney's Office sent Martin, via his attorney, a FSF which requested information about Martin's current income from employment, businesses, investments, real estate, etc., and his current expenses. The form stated that the undersigned would be subject to penalties for false statements. When the Government received back the completed form, it contained Carolyn Martin's signature instead of Gordon Martin's signature.

Martin asserts that he and Carolyn Martin's marriage was dissolved in 1971. However, the Government points out that in 1992, Gordon and Carolyn Martin filed a joint tax return and that in 1993, 1994, and 1995, they identified themselves as "married filing separately."

A form signed exclusively by Carolyn Martin is, as a matter of law, an inadequate stand-in for Martin's compliance. Financial information about a potentially responsible party as defined by CERCLA is critical to the EPA's ability to determine whether a party will be able to pay for the cost of cleanups. Presumably, Carolyn Martin was acting as Martin's agent when she completed the form with his consent and on his behalf. Martin should have no problem signing the FSF himself and personally attesting to its veracity. Martin is ordered to provide the EPA with a completed copy of the Financial Statement Form signed by himself.

With respect to the land trust file, Martin points out that the Government is aware of the bank that serves as trustee for the Illinois Land Trust which held legal title to the Estech Site. By statute, however, Martin is required to (1) "provide access" to the EPA so that the agency may "inspect and copy" the requested documents, or (2) "copy and furnish" to the Government the relevant documents himself. 42 U.S.C. § 9604(e)(2). Merely "identifying" the place holding the relevant documents does not satisfy Martin's legal duty. Instead, Martin must provide meaningful access — namely, he must execute a written directive ordering the First National Bank of Illinois, which has been identified as the trustee of the land trust, to provide to the Government access to all documents pertaining to the land trust in its possession.

B. Penalty

Martin admits that he received timely notice of the Information Request. He also admits that he missed the ten-day deadline set forth in the request. Although Martin and his attorney received multiple warnings from the Government about the consequences of his failure to comply with the request, it is undisputed that he failed to take action until April 30, 1999 — approximately six weeks after the filing of this lawsuit and 607 days after the August 30, 1999 due date. The Government seeks a civil penalty of a minimum of $1,000 per day for each day of Martin's non-compliance.

Pursuant to Section 104(e)(5), a civil penalty may be assessed against any individual "who unreasonably fails to comply" with a Section 104(e) request for information. 42 U.S.C. § 9604(e)(5)(B)(ii). Congress intended to impose a strict liability standard for violations of CERCLA.See United States v. Crown Roll Leaf, 19 Envtl. L. Rep. 20262, 20264 (D. N.J. 1988) ("Crown I") (citing United States v. Price, 577 F. Supp. 1103, 1114 (D. N.J. 1983)). Accordingly, the Government need not demonstrate that the defendant intended to act unreasonably, only that he in fact did act unreasonably. See United States v. Barkman, 784 F. Supp. 1181, 11 86 n. 3 (E.D. Pa. 1992). Once the Government establishes its case by a fair preponderance of the evidence, the defendant may rebut the government's case by proffering an affirmative defense. Id.

In Barkman, 784 F. Supp. at 1190, the court held that the defendant's "delay of over 700 days in answering completely the Information Requests of the EPA constitute, by virtue of the duration itself, an unreasonable delay." Similarly, this court finds that the 607 day delay presented in the instant case is per se unreasonable. The unreasonableness of Martin s excessive delay is exacerbated by the fact that to this day, Martin has not responded to the Government's outstanding requests for information.

The courts may assess a penalty not to exceed $27,500 for each day of Martin's non-compliance. Id. See also Federal Civil Penalties Inflation Adjustment Act of 1990, as amended by the Debt Collection Improvement Act of 1996, 31 U.S.C. § 3701 note and corresponding regulations, 62 Fed. Reg. 13, 514, 13.515 (Mar. 20, 1997) (raising the $25,000 cap set forth in 42 U.S.C. § 9604(e)(5)(B)(ii)). In establishing the appropriate amount of penalty, the court should consider: (1) the good or bad faith of the defendant; (2) the injury to the public; (3) the defendant's ability to pay; (4) the desire to eliminate the benefit derived by the violation; and (5) the necessity of vindicating the authority of the enforcing agency. See United States v. Crown Roll Leaf, Inc., 20 Envtl. L. Rep. 20297, 20300 (D. N.J. 1989) ("Crown II") (citing United States v. Reader's Digest Ass'n, Inc., 662 F.2d 955, 967-68 (3d Cir. 1981)). The determination of the amount of the civil penalty is committed to the informed discretion of the court.Id.

Like injunctive relief, civil penalties may be imposed only where there is a showing that "there [wa]s a reasonable basis to believe that there may be a release or threat of a release of a hazardous substance or pollutant or contaminant." 42 U.S.C. § 9604(e)(5)(A). As discussed above, the Government has satisfied this showing.

Each of the above factors supports the imposition of a significant civil penalty against Martin. First of all, the record demonstrates that Martin acted in bad faith. Despite repeated warnings from the EPA, as well as the Government's ongoing efforts to work with Martin and his attorney, Martin refused to respond to the Information Request. After waiting for a year and a half for Martin's response, the Government resorted to filing a lawsuit against Martin. Apparently, the lawsuit was an effective threat, but not effective enough, as Martin still has not provided all of the requested documents.

Martin maintains that he acted in good faith because he produced 14 large boxes containing the requested materials to the EPA — only, he mistakenly supplied the information to the state EPA, not the federal EPA. Martin claims that he then informed his attorney that he complied wit the US-EPA's requests. When he received the multiple notices of his section 104(e) violation, Martin explains, he dismissed them as "bureaucratic mix-ups."

Martin's argument does not undermine the Government's entitlement to civil penalties. After all, notwithstanding the absurdity of Martin's argument, his alleged "confusion" does not render his delayed response reasonable. The request sent out by the EPA was printed on letterhead containing the US-EPA's address. The body of the Information Request also set forth an address to which recipients were directed to respond. Martin's alleged disregard of these clear indications was clearly unreasonable. In addition, it was patently unreasonable for Martin to dismiss the multiple warnings he received from the EPA and the U.S. Attorneys' Office about his failure to comply. Martin could have easily contacted the relevant office to confirm that a "bureaucratic mix-up" had occurred, yet he failed to take this simple step.

At the very latest, Martin must have known that he had not complied with the request when the EPA's Associate Regional Counsel personally contacted Martin's attorney on March 3, 1998; yet even at this juncture, it took Martin an additional thirteen months to submit any information. Martin's excessive delay (not to mention his still incomplete response) to the Government's requests evidences his bad faith. See Crown II, 20 Envtl. L. Rep. at 20300 (concluding that the defendant acted in bad faith by failing to respond in a timely or complete manner).

Second, Martin's unreasonable delay injured or had the potential to injure the public. See Crown II, 20 Envtl. L. Rep. at 20301 (noting that a court need not find that an actual injury to the public has occurred, but only that a potential injury might occur) (citing Reader's Digest 662 F.2d at 969). Martin's actions delayed the Government's investigation into and subsequent clean-up efforts of the hazardous substances at the Estech Site. In turn, the public was denied full disclosure of the facts pertaining to the direct contact and environmental threats posed by the Estech Site.

Third, the court finds that Martin should be penalized for the benefit he derived from his violation. "The potential benefit to [the defendant] from failing to respond is measured both in the savings of time and money needed to respond and in the potential savings to (the defendant] in evading liability by not providing information which may show it is liable for the costs of cleaning up the [contaminated] site." Crown II, 20 Envtl. L. Rep. at 20301.

Fourth, it is paramount that the EPA's authority be vindicated. Without the ability to gather information and documents, the EPA would be handicapped in its ability to enforce CERCLA. See United States v. Charles George Trucking, Co., 823 F.2d 685, 689 (1st Cir. 1987).

The efficacy of any regulatory program depends on the sanctions imposed in individual cases. If these sanctions are set too low, potential violators may be insufficiently motivated to minimize the social harm resulting from their behavior, or society may be under compensated for the harm that does occur.
Reader's Digest, 662 F.2d at 967 n. 16 (quoted in Crown II, 20 Envtl. L. Rep. at 20301). See also United States v. Envtl Waste Control Inc., 710 F. Supp. 1172, 1244 (N.D. Ind. 1989), aff'd, 917 F.2d 327 (7th Cir. 1990) (observing that a civil penalty should "provide a meaningful deterrence without being overly punitive"). Assessing a significant penalty against Martin will deter him and others from making light of the EPA's investigatory authority.

Lastly, the court considers Martin's ability to pay. Despite Martin's efforts to muddy the waters concerning his financial status, the court finds that he is able to pay a substantial penalty. Carolyn Martin's signed Financial Statement Form discloses an average monthly income of $5,000 for Martin. The FSF also attests to Martin's ownership of real estate property and construction equipment including 40 to 50 tractors and trailers. The record also suggests that Martin has resources beyond the income reported by Carolyn Martin in the Financial Statement Form. Martin owns G.M. Brick, a brick reclamation business which Martin claims is no longer actively engaged in business. Even though the company posted a loss of $7,291 on its 1997 federal tax return, the company realized a gross profit of $196,091,$113,799 of which was spent on salaries and wages. In addition, G.M. Brick has made significant loans to G.M. Demolition, a wrecking company owned by Martin's sons. As recently as 1997, G.M. Brick loaned $51,821 to G.M. Demolition.

1997 was the last year in which tax returns for G.M. Brick were filed.

Martin insists that he cannot afford more than a nominal fee. Although Martin's financial disclosures are vague, the court will not let him escape his deserved penalty. Accord In the Matter of LaBarge, Inc., No. CWA-VII-91-W-0078, 1997 EPA AU Lexis 6, at 10 (EPA Mar. 26, 1997) (assuming that defendant could afford the amount proposed by the plaintiff where defendant declined to provide current financial information in action brought under the Clean Water Act, 33 U.S.C. § 1131(a) and 1317(d)); 40 C.F.R. § 22.19 (directing the administrative agency to "infer that the information (withheld by a party] would be adverse to th[at] party" where the party fails to comply with its statutory duty to exchange information). Although the court declines to accept the Government's proposed penalty of $1,000 a day, the court finds that a daily penalty of $75 falls within Martin's financial capacity while, at the same time, serving as a substantial deterrence. See Barkman, 784 F. Supp. at 1190 (assessing penalty of $55 a day for 700 days of delay where defendant had "a cash flow problem [but) substantial assets"). The $75 a day penalty will be assessed for each of the 607 days that the Government was forced to wait for Martin's initial disclosures to the Information Request, amounting to an aggregate penalty of $45,525.00. In addition, Martin shall pay $75 per day to account for each day of his failure to respond to the Government's outstanding requests. This additional daily penalty, which commences on April 30, 1999, shall accrue until the Government is in receipt of the requested documents, but it shall exclude the period during which this court ordered a stay of the briefing schedule — August 24, 1999 through October 25, 1999. Martin is directed to submit to the EPA the land trust file and a financial statement form signed by him within 14 days of the issuance of this opinion. For every day of delay past that deadline, Martin's penalty shall be increased to $1,000 per day.

III. Conclusion

For the foregoing reasons, the Government's motion for summary judgment is granted. Pursuant to 42 U.S.C. § 9604(e)(5)(B), Martin is liable for a civil penalty of $75 per day for each of the 607 days of his unreasonable delay in responding to the EPA's request information, plus each day of his failure to respond to the Government's outstanding requests. This daily penalty shall accrue until the Government is in receipt of the requested documents, but it shall exclude the period during which this court ordered a stay of the briefing schedule — August 24, 1999 through October 25, 1999. Martin is hereby ordered to provide to the EPA access to the land trust files and a completed Financial Statement Form signed by him within 14 days of the issuance of this order. For every day of Martin's noncompliance of the 14 day deadline, his penalty shall be increased to $1,000 per day.


Summaries of

U.S. v. Martin

United States District Court, N.D. Illinois, Eastern Division
Jul 24, 2000
No. 99 C 1130 (N.D. Ill. Jul. 24, 2000)

In Martin, the court granted the Government's motion for summary judgment and held that the defendant's failure to take any action for 607 days after the information request deadline was per se unreasonable.

Summary of this case from U.S. v. Ponderosa Fibres of America, Inc.
Case details for

U.S. v. Martin

Case Details

Full title:UNITED STATES OF AMERICA, Plaintiff, v. GORDON MARTIN, Defendant

Court:United States District Court, N.D. Illinois, Eastern Division

Date published: Jul 24, 2000

Citations

No. 99 C 1130 (N.D. Ill. Jul. 24, 2000)

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