light of our pronouncements in Spang, we do not believe a reduction for the justice factor is appropriate in this case. As we stated in Spang, the justice factor “vests the Agency with broad discretion to reduce the penalty when the other adjustment factors prove insufficient or inappropriate to achieve justice." Id. at 249 (emphasis in original). We also stated that "use of the justice factor should be far from routine, since application of the other adjustment factors normally produces a penalty that is fair and just.” Id. at 250–51. Thus, it is clear that the justice factor comes into play only where application of the other adjustment factors has not resulted in a "fair and just" penalty. If, and only if, despite application of the other adjustment factors, an assessed penalty is so disproportionate to the violations at issue as to be manifestly unjust, should a presiding officer apply the justice factor to recognize environmentally beneficial projects. Here, we are affirming the Presiding Officer's decision to grant Catalina the full benefit of the “cooperation component” of the “attitude” factor over the objection of the Region. We also are affirming the decision to give Catalina the full benefit of the "compliance" component reduction, again over the Region's objection, and which even the Presiding Officer viewed as "more problematic." See Initial Decision at 33. Having given Catalina the full benefit of the "attitude" adjustment factor, as well as a 25% downward adjustment for the delisting of acetone, we believe that the resulting penalty of $108,792 is “fair and just” for Catalina's seven violations of section 313 reporting requirements. Based upon our review of the penalty that would be imposed in the absence of applying the justice factor, the evidence in the record, and the serious nature of the violations, we do not find that "the circumstances are such that a reasonable person would easily agree that not giving some form of credit would be a manifest injustice." See Spang, 6 E.A.D. at 250. Accordingly, we reverse the Presiding Officer's decision to adjust the penalty downward $69,000 for "such other matters as justice may require."19 19 The record before us reflects that Catalina presented, and the Presiding Officer considered, three allegedly "environmentally beneficial projects" as the bases for applying the justice factor. Catalina claimed that the substitution of DBE for acetone in cleaning processes, the elimination of anti-fouling paint, and the adoption of brushable gel coat procedures were environmentally beneficial projects warranting penalty reductions under the justice factor. Although we find that applying the justice factor here is not warranted since the penalty is fair and just in the absence of a downward adjustment for this factor, we Continued III. CONCLUSION For the foregoing reasons, we reverse, in part, the Initial Decision and order Catalina to pay a penalty of $108,792 by mailing or delivering a certified or cashier's check payable to the Treasurer of the United States to the following address within 60 days of the date of receipt of this order: So ordered. Regional Hearing Clerk U.S. EPA, Region IX Office of Regional Counsel, RC-2-1 Pittsburgh, PA 15251-6863 nonetheless point out that there are real questions as to the extent to which the elimination of anti-fouling paint and the adoption of brushable gel coating even merit consideration as environmentally beneficial projects under Spang. For example, with respect to the elimination of anti-fouling paint use, Mr. Douglas conceded that unspecified chemicals in the paint were below threshold levels triggering section 313 reporting requirements. The Presiding Officer, in attempting to find a nexus between Catalina's proffered project and the violations at issue, noted that, “[t]hese activities directly relate to the chemicals involved in the violations, a fact emphasized in Spang.” Initial Decision at 37. We question this conclusion with respect to the anti-fouling bottom paint since there is no evidence in the record that the paint contained either acetone or styrene-the chemicals triggering the violations in this case. As for the brushable gel coating activities, the record is not clear with respect to the extent and duration of Catalina's program. As we stated in Spang, "what is relevant is a respondent's past acts and expenditures." Spang, 6 E.A.D. at 250 (emphasis in original). Here, the costs and benefits of the project are largely speculative and described as future costs and benefits. For example, Mr. Douglas testified, “I think we'll look at an annual reduction in styrene emissions over the coming year of between 15 to 20 percent.” See Tr. at 115 (emphasis added). Spang also instructs that, “if an incomplete project is sufficiently underway, such that its ability to produce environmental benefits is not speculative, there may be sufficient ground for considering the expenditures made on a project to that point." Spang, 6 E.A.D. at 250-51 (emphasis added). Here, however, the Presiding Officer improperly considered the speculative and prospective costs and benefits of a brushable gel coating program that, at the time of the hearing, had been in place for only four months and covered only 30% of Catalina's gel coating activities. See Tr. at 115. IN RE ROGER ANTKIEWICZ FIFRA Appeal Nos. 97-11 & 97-12 FINAL DECISION Decided March 26, 1999 Syllabus Roger Antkiewicz is president of a pesticide supply business in southeastern Michigan known as "Pest Elimination Products of America, Inc." ("PEPA”). PEPA stocks a variety of pesticides for sale to the public. PEPA purchased a ready-to-use chlorpyrifos insecticide, called "Chem-Tox Do It Yourself Pest Control," from Chem-Tox, Inc. of McHenry, Illinois. One practice followed by PEPA was to pour this product into pressurized spray tanks of the kind used by professional exterminators, affixing to the tanks its own private "PEPA New Residual Spray" labels. It then gave or delivered the product to its customers. The parties dispute whether the product was poured into tanks only after it was sold to the customer. Some customers, such as Country Style Bakery of Chesterfield Township, Michigan, had sales/service arrangements whereby PEPA delivered New Residual Spray to them on a monthly basis. Customers purchased the pesticide but not the pressurized spray tanks. Instead, customers paid a security deposit for each spray tank, refundable upon return of the tank in good working order. In return, PEPA agreed to repair or replace malfunctioning tanks for the life of the sales/service agreement. On September 1, 1994, Region V of the U.S. Environmental Protection Agency (“EPA") issued a Stop Sale, Use, or Removal Order (“SSURO") prohibiting all further sale, use, shipment, or delivery of New Residual Spray by PEPA. PEPA thereafter substituted a different product, manufactured by Bonide Chemical Company, to fill its New Residual Spray orders. The new product, called "Bonide Home Pest Control Ready-to-Use," contained, according to Roger Antkiewicz, the same active ingredient-chlorpyrifos—as New Residual Spray. PEPA stated that it left the New Residual Spray labels on the pressurized spray tanks because the company was uncomfortable with the notion that the tanks should bear no label. Roger Antkiewicz felt that the instructions for use and antidotal measures were similar enough between New Residual Spray and Home Pest Control Ready-to-Use to provide protection to his product's users should accidental ingestion or improper con tact occur. PEPA also sold another insecticide manufactured by Bonide Chemical Company, called Bonide Diazinon 12.5%E. This product, a concentrate, bore a registered label with the phrase "DO NOT USE IN THE HOME" prominently displayed in three different places the yellow right-side panel, the red center panel, and in a pamphlet hanging from & PEST ELIMINATION PRODUCTS OF AMERICA, INC. the container neck. On August 17 and September 15, 1995, PEPA sold Bonide Diazinon 12.5%E to Foxfire Farms. The jugs containing the pesticide had "DO NOT USE IN THE HOME" on the yellow side panel crossed out with black marker, while the other two instances of the phrase were unaltered. In addition, PEPA offered eight jugs of the pesticide for sale on February 21, 1995, again with the phrase on the yellow side panel, but not those on the center panel or pamphlet, crossed out. Complainant EPA Region V filed an amended complaint on April 3, 1996, charging Roger Antkiewicz and PEPA, Respondents, with seven violations (in six counts) of the Federal Insecticide, Fungicide, and Rodenticide Act (“FIFRA”). In Count I, Complainant charged Respondents with the unlawful sale or distribution of New Residual Spray, an unregistered pesticide. In Count II, Complainant alleged that Respondents engaged in the unlawful "production” which includes repackaging and relabeling of New Residual Spray at "establishments" that were not registered as required under FIFRA. In Count III, Complainant claimed that Respondents sold an unregistered pesticide (New Residual Spray) to Country Style Bakery on or about February 29, 1995. Count IV alleged that, on two occasions, Respondents sold Bonide Diazinon 12.5%E to Foxfire Farms with the phrase “DO NOT USE IN THE HOME” on the yellow side panel crossed out with black marker. In so doing, Respondents purportedly made claims for the product that were substantially different from the claims made in conjunction with the product's registration. In Count V, Complainant similarly alleged that Respondents offered to sell eight jugs of Bonide Diazinon 12.5%E with that phrase crossed out, thereby making substantially different claims. Finally, Count VI charged Respondents with the unlawful sale on February 29, 1995, of New Residual Spray to Country Style Bakery in violation of the SSURO and FIFRA. In the proceedings below, Administrative Law Judge Andrew S. Pearlstein ("Presiding Officer") found Respondents liable for Count I and assessed a $3,500 penalty therefor. The Presiding Officer then dismissed Counts II through VI. Region V timely appealed the dismissal of these counts. Held: The Board reverses the Presiding Officer's dismissal of Count II. Under FIFRA, it is unlawful for any person to "produce" any pesticide unless the “establishment” in which the pesticide is produced is registered with EPA. “Produce” means, among other things, to repackage or relabel, and “establishment" means “any place where a pesticide is produced, or held, for distribution or sale." The Presiding Officer held that Respondents sold pesticides before repackaging them and thus escaped becoming a “producer" that must register its pesticide-producing establishments. The Board finds that Respondents repackaged and relabeled (i.e., produced) pesticides at their facilities and then gave those pesticides to customers for their use or delivered them to the customers' premises. As such, Respondents “distributed” pesticides they had “produced” in their facilities. Accordingly, Respondents were obliged to comply with the establishment registration requirements of FIFRA. Their failure to so comply is a violation of FIFRA as alleged in Count II. The Board affirms the Presiding Officer's dismissal of Counts III and VI, which involve Respondents' alleged sale of New Residual Spray to Country Style Bakery on February 29, 1995, in violation of FIFRA and the SSURO. The complaint characterized New Residual Spray as being supplied to Respondents by Chem-Tox, Inc. Respondents, however, plausibly argued that they had replaced the Chem-Tox product with Bonide Chemical Company's Home Pest Control Ready-to-Use, another chlorpyrifos insecticide. The Region contended that Respondents held supplemental registrations for neither the Chem-Tox nor the Bonide product, so Respondents' argument could not defeat an allegation that they had sold an unregistered pesticide. The Board, however, finds that, as written, the complaint specifically linked the identity of New Residual Spray to a particular supplier (Chem-Tox), thus defining the scope of the violation alleged. With the allegations in the complaint so defined, the Presiding Officer did not err in dismissing these counts in the absence of a preponderance of evidence establishing that the chemical sold to Country Style Bakery was indeed the Chem-Tox chemical. Finally, the Board affirms the Presiding Officer's dismissal of Counts IV and V. Respondents sold and offered to sell Bonide Diazinon 12.5%E with one of three occurrences of the phrase "DO NOT USE IN THE HOME" crossed out with black marker. Complainant alleged that in so doing, Respondents implicitly claimed the product is effective for use in the home, in contravention to the implicit registered claim that the product is not effective for use indoors. The Board holds that, when viewed as a whole, Bonide Diazinon 12.5%E's labeling cannot reasonably be construed as making an implied “claim” that the product should be used in the home. The label plainly states, in two other places, “DO NOT USE IN THE HOME.” Under the circumstances of this case, the crossing out of one instance of a phrase repeated three times on the label does not equate to the making of a claim. While the label may send conflicting signals, it would likely cause confusion rather than assure a customer that indoor use is appropriate. In accordance with these findings, the Board assesses a total penalty of $7,000 ($3,500 for Count I and $3,500 for Count II) against Respondents on a joint and several basis. Before Environmental Appeals Judges Ronald L. McCallum, Edward E. Reich, and Kathie A. Stein.' Opinion of the Board by Judge Reich, in which Judge Stein joined. Judge McCallum joined in the Board's judgment and filed a separate concurring opinion: Complainant EPA Region V appeals the Initial Decision of Administrative Law Judge Andrew S. Pearlstein ("Presiding Officer") in this enforcement action under the Federal Insecticide, Fungicide, and Rodenticide Act ("FIFRA" or "Act"), 7 U.S.C. §§ 136-136y. In the proceedings below, Region V charged Respondents Roger Antkiewicz and Pest Elimination Products of America, Inc. (“PEPA") with seven violations of FIFRA (in six counts) and proposed an administrative penalty of $29,500. The Presiding Officer found Respondents jointly and severally liable on one of the counts: selling an unregistered pesticide in violation of FIFRA § 12(a)(1)(A), 7 U.S.C. § 136j(a)(1)(A), and assessed a $3,500 penalty. The Presiding Officer dismissed the five other counts.2 The Board's November 20, 1998 decision in this case is replaced and superseded by today's reissued Final Decision. The November 20th decision henceforth has no precedential value in this or any other case. 2 Respondents had also filed an appeal asking the Board to overturn the Presiding Officer's sole finding of liability against them. Their appeal was untimely filed, and the Board dismissed it on that ground. Respondents later filed a motion for reconsideration of the dismissal, which the Board took under advisement. Continued |