EPA v. FEDERATED METALS

Case summary

THE FACILITY SELECTED THE LETTER OF CREDIT ALTERNATIVE AS ITS MEANS OF PROVING ADEQUATE FINANCIAL ASSURANCE FOR CLO- SURE. WHILE THE FACILITY OBTAINED THE LETTER OF CREDIT IN THE PROPER AMOUNT, IT FAILED TO TIMELY FILE THE PROOF WITH THE STATE AS REGULATIONS REQUIRE AND TO UPDATE ITS CLOSURE COST ESTIMATES. THE PENALTY ASSESSED WAS $7550 AND THE PAR- TIES AGREED TO SETTLE THE CASE FOR $6000. A DRAFT CAFO HAS BEEN EXECUTED BY THE FACILITY. A FULLY EXECUTED CAFO IS EX- PECTED TO BE FILED WITH THE ADMINISTRATIVE LAW JUDE BY MID- FEBRUARY. IDENTITY OF DEFENDANT: FEDERATED METALS CORP. (FMC), A NEW YORK CORP. DOING BUSINESS AT 2230 INDIANAPOLIS' BLVD., WHITING, INDIANA. LEGAL BASIS FOR PROPOSED ACTION: SECT 3008 OF THE RE- SOURCE CONSERVATION AND RECOVERY ACT OF 1976, AS AMENDED, 42 USC 6901 ER SEQ. ALLEGED VIOLATIONS: FMC HAS FAILED TO COMPLY WITH THE CAFO ENTERED ON FEB. 1, 1989. SPECIFICALLY, FMC HAS FAILED TO DOCUMENT COMPLIANCE WITH INSURANCE AND FINANCIAL ASSU- RANCE REGULATIONS. IN ADDITION, FMC HAS VIOLATED LIABILITY INSURANCE REQUIREMENTS NOT CONTAINED IN THE CAFO. PROPOSED RELIEF: THE RELIEF USEPA SEEKS IN THIS ACTION IS THREEFOLD: 1) AN INJUNCTION REQUIRING FMC TO SUBMIT DOCU MENTATION OF COMPLIANCE WITH THE INDIANA REGULATIONS CITED WITH THE CAFO; 2) COMPLIANCE WITH INDIANA LIABILITY INSU- RANCE REGULATIONS NOT CITED IN THE CAFO; 3) AN INJUNCTION REQUIRING CORRECTIVE ACTION TO ADDRESS RELEASE OF HAZARDOUS SUBSTANCES; AND 4) CIVIL PENALTIES IN THE AMOUNT OF $229, 716 FOR CAFO VIOLATIONS AND LONGSTANDING VIOLATIONS OF INDI- ANA LIABILITY INSURANCE REGULATIONS. SIGNIFICANT ISSUES PRESENTED: THE FILING OF A CIVIL AC- TION TO ENFORCE THE CAFO WILL SEND A CLEAR MESSAGE TO THE REGULATED COMMUNITY THAT USEPA DEMANDS COMPLIANCE WITH ITS ADMINISTRATIVE ORDERS. OWNERS AND OPERATORS OF FACILITIES THAT ARE NO LONGER IN PRODUCTION, BUT WHICH CONTINUE TO STORE OR DISPOSE OF HAZARDOUS WASTES, WILL BE PUT ON NOTICE THAT THEIR VIOLATIONS OF RCRA WILL NOT BE OVERLOOKED. RECENT CONTACTS WITH DEFENDANT: ON MAY 10, 1989, AFTER SEVERAL TELEPHONE CONVERSATIONS WITH BARRY L. MALTER, ATTY FOR FMC, USEPA RECEIVED CORRESPONDENCE INDICATING THAT FMC WAS UNABLE TO OBTAIN LIABILITY INSURANCE AND THAT ASARCO, FEDERATED'S PARENT CO., HAS DECIDED NOT TO PROVIDE A CORPO- RATE GUARANTEE BECAUSE THE CAPITAL COMMITMENT WAS UNWARRANT- ED BY THE CIRCUMSTANCES. UPON RECEIPT OF THE LETTER IN A FOLLOWUP TELEPHONE CONVERSATION, ATTY MALTER WAS ADVISED THAT HIS CLIENT WAS NOT IN COMPLIANCE WITH THE CAFO AND THAT IF THE NONCOMPLIANCE CONTINUED THE AGENCY WOULD SEEK JUDI- CIAL ENFORCEMENT.

Defendants (1)

• FEDERATED METALSNamed in complaintNamed in settlement

Facilities (1)

• SAXON METALS COMPANY

  2230 INDIANAPOLIS BLVD., WHITING, IN, 46394

  Registry ID: 110001129859

Statutes cited

• RCRA 3008H — Interim Status Corrective Action Order
• RCRA 3008A — Compliance Order: Injunctive & Penalty

Enforcement conclusions (1)

• FEDERATED METALS CORPentered 1992-11-17

  Primary law: RCRA

  Federal penalty: $675,000

Timeline (6 milestones)

• 1989-12-06Enforcement Action Data Entered
• 1990-03-27Referred To Dept Of Justice
• 1990-10-16Complaint Filed With Court
• 1992-11-17Final Order Lodged
• 1992-11-17Final Order Entered
• 1992-11-17Concluded