EPA v. JAF OIL COMPANY, INC.; PETER E. JOLLY; STRATEGIC INVESTMENTS

Case summary

ON SEPTEMBER 30, 1993, REGION IV REFERRED TO DOJ A PROPOSED ACTION TO ENFORCE THE TERMS OF AN ADMINISTRATIVE ORDER ISSUED PURSUANT TO THE SAFE DRINKING WATER ACT FOR VIOLATIONS OF THE UNDERGROUND INJECTION CONTROL (UIC) REGULATIONS. THE ORDER WAS ISSUED IN 1992 AGAINST JAF OIL COMPANY, INC., AN INDEPENDENT OIL PRODUCER BASED IN CALIFORNIA BUT DOING BUSINESS IN KENTUCKY. JAF OWNS AND OPERATES 89 INJECTION WELLS IN KENTUCKY, WHICH INJECT BRINE FOR THE ENHANCE RECOVERY OF OIL. THE ACTION SEEKS TO OBTAIN COMPLIANCE AND PENALTIES FROM JAF AND FROM ITS PRESIDENT AND PRINCIPAL OWNER, PETER E. JOLLY. THE AO WAS ISSUED JANUARY 9, 1992, AND BECAME EFFECTIVE FEBRUARY 8, 1992. BECAUSE JAF DID NOT REQUEST A HEARING OR APPEAL THE ISSUANCE OF THE AO WITHING THE STATUTORY PERIODS, THE TERMS OF THE AO SHOULD NOT BE OPEN TO QUESTIONS. JAF HAS NOT COMPLIED WITH ANY TERMS OF THE AO, WHICH REQUIRE: (1) MEETING FINANCIAL RESPONSIBILITY REQUIREMENTS; (2) PROPERLY TESTING WELLS FOR MECHANICAL INTEGRITY; (3) FILING REQUIRED REPORTS; (4) MONITORING CERTAIN WELLS; AND (5) PROVIDING EPA WITH THE FRACTURE PRESSURE DATA RELEVANT FOR ITS OPERATIONS. THE MAXIMUM STATUTORY PENALTY CALCULABLE FOR THE VIOLATIONS EXCEEDS SEVERAL BILLION DOLLARS. THE ACTION PROPOSES PURSUING JOLLY INDIVIDUALLY AS WELL AS THE CORPORATION. JOLLY IS THE PRESIDENT OF THE CORPORATION, AND RESPONSIBLE FOR ALL ACTIONS AND OPERATIONS OF THE COMPANY, AND THEREFORE SHOULD BE PURSUED AS A RESPONSIBLE CORPORATE OFFIER. THE REGION ALSO PROPOSES PIERCING THE CORPORATE VEIL, BOTH AS A SHAM CORPORATION AND BECAUSE OF FRAUD OF THE AGENCY IN THE FORM OF INTENTIONAL MISREPRESENTATIONS MADE BY JOLLY REGARDING THE FINANCIAL STATUS OF THE COMPANY.

Defendants (3)

• JAF OIL CO., INC.Named in complaintNamed in settlement
• JOLLY, PETER E.Named in complaintNamed in settlement
• STRATEGIC INVESTMENTS, INC. OF NEVADANamed in complaintNamed in settlement

Facilities (1)

• JAF OIL CO INC

  9777 WILSHIRE BLVD, OWENSBORO, KY, 42301

  Registry ID: 110010584368

Statutes cited

• SDWA 1421 — UIC Regulations

Enforcement conclusions (1)

• JAF OIL COMPANY, INC.; PETER E. JOLLY; STRATEGIC INVESTMENTSentered 1999-04-19

  Primary law: SDWA

Timeline (6 milestones)

• 1992-01-01Enforcement Action Data Entered
• 1993-09-30Referred To Dept Of Justice
• 1995-09-01Complaint Filed With Court
• 1999-04-19Final Order Entered
• 1999-04-19Final Order Lodged
• 2004-09-30Enforcement Action Closed