IN RE SCHOOLCRAFT CONSTRUCTION, INC.

CAA Appeal No. 98–3

FINAL DECISION

Decided July 7, 1999

Syllabus

This is an appeal by SchoolCraft Construction Company, Inc. (“SchoolCraft") from a Decision Following Remand dated June 23, 1998. This matter arises out of an administrative enforcement action filed against SchoolCraft by the Director of the Air and Radiation Division, U.S. Environmental Protection Agency Region V ("Region"). By the Decision Following Remand, the Presiding Officer held SchoolCraft liable for five violations of Clean Air Act (“CAA”) § 112, 42 U.S.C. § 7412, and assessed an aggregate penalty for those violations of $20,000.

Section 112 of the Clean Air Act lists asbestos as a “hazardous air pollutant" and requires the EPA to adopt emission standards for its control. Under this authority, the EPA has promulgated National Emission Standards for Hazardous Air Pollutants for asbestos (the "Asbestos NESHAP”), which imposes upon “owners” and “operators" of demolition or renovation activities certain notification requirements and work practice standards.

In June 1993, the Region filed a complaint (the "Complaint") against SchoolCraft and Seneca Asbestos Removal and Control, Inc. (“Seneca") for violations of the Asbestos NESHAP that allegedly occurred during a renovation project at the C.O. Cline Elementary School ("Cline Elementary"), which is owned by Centerville, Ohio City Schools ("Centerville"). The Complaint alleged five violations that are at issue in this appeal: Counts I and II—failure to provide timely written and telephone notice required by the Asbestos NESHAP that asbestos removal would begin on a date later than the date specified in the original notice of renovation; Counts III and IV-failure to adequately wet regulated asbestos-containing material (“RACM") being stripped from the facility and ensure that it remained wet until collected and contained or treated in preparation for disposal; and Count V-failure to post evidence of the on-site representative's training in the Asbestos NESHAP. The Complaint alleged that both SchoolCraft and Seneca were “operators” of the renovation project and were liable for the violations.

On January 2, 1997, the administrative law judge issued his Initial Decision in this matter dismissing the Complaint against SchoolCraft on the grounds that it was not an "owner" or "operator" within the meaning of the Asbestos NESHAP. The Region thereafter appealed to this Board and, in February 1998, the Board entered an order reversing the dismissal of the Complaint and remanding this matter for further proceedings. See In re SchoolCraft Constr., Inc., 7 E.A.D. 501 (EAB 1998) ( “SchoolCraft I').

On remand, a substitute administrative law judge was appointed, who issued his Decision Following Remand on June 23, 1998, holding SchoolCraft liable for the charged

violations and assessing a penalty of $20,000. SchoolCraft has now appealed. In this appeal, SchoolCraft raises issues regarding whether the Region established, by a preponderance of the evidence, that the violations occurred, and whether SchoolCraft should have been assessed penalties of $20,000 for the violations.

Held: (1) Regarding Counts I and II, the regulations clearly place the responsibility for providing the required telephone and written notice on "each" operator. Since SchoolCraft I held that SchoolCraft was an operator of the Cline Elementary renovation project and since SchoolCraft does not challenge the finding that the revised notices were not given at the required times, it therefore follows that SchoolCraft is liable for the failure to provide the telephone and written notices required by the regulations.

(2) Regarding Counts III and IV, it is not necessary for the Region to show that actual asbestos emissions occurred; the testimony of the Region's witness that he saw recently stripped, dry RACM was sufficient evidence to establish that the RACM was not adequately wet to prevent releases of asbestos particles. Also, SchoolCraft cannot rely upon Seneca's contractual agreement to perform the asbestos removal work to show that SchoolCraft should not be held liable for the failure to adequately wet RACM.

(3) SchoolCraft is liable for the violation charged in Count V because the on-site representative's training certification was not located on-site on the day of the inspection as required by the Asbestos NESHAP.

(4) The penalty assessed by the Presiding Officer is upheld. SchoolCraft has not shown that the Presiding Officer abused his discretion or committed any clear error in his analysis and the penalty assessed by the Presiding Officer falls within the range of penalties suggested by the applicable Agency penalty policy.

Before Environmental Appeals Judges Ronald L. McCallum, Edward E. Reich, and Kathie A. Stein.

Opinion of the Board by Judge Reich:

This is an appeal by SchoolCraft Construction Company, Inc. ("SchoolCraft”) from a Decision Following Remand dated June 23, 1998, entered in the above-captioned matter by Administrative Law Judge Edward J. Kuhlmann (the "Presiding Officer"). This matter arises out of an administrative enforcement action filed against SchoolCraft by the Director of the Air and Radiation Division, U.S. Environmental Protection Agency Region V ("Region"). By the Decision Following Remand, the Presiding Officer held SchoolCraft liable for five violations of Clean Air Act ("CAA") § 112, 42 U.S.C. § 7412, and assessed an aggregate penalty for those violations of $20,000.

The principal issues raised by SchoolCraft on appeal are whether the Region established, by a preponderance of the evidence, that the violations occurred, and whether SchoolCraft should have been assessed penalties of $20,000 for the violations. The Region has not filed its own appeal, but it does oppose SchoolCraft's appeal. For the reasons set forth below, we uphold the Presiding Officer's Decision Following Remand.

I. BACKGROUND

A. Statutory and Regulatory Background

Section 112(b)(1) of the Clean Air Act, 42 U.S.C. § 7412(b)(1), lists certain "hazardous air pollutants." Section 112(d) requires the Administrator of the United States Environmental Protection Agency (the "EPA" or "Agency") to adopt emission standards for each category of major sources and area sources' of each listed hazardous air pollutant. Such emission standards can include work practice standards. CAA § 112(d)(2). These emission standards are known as National Emission Standards for Hazardous Air Pollutants ("NESHAPS"). Asbestos is a listed hazardous air pollutant and the EPA has promulgated a NESHAP for asbestos (the “Asbestos NESHAP"), which is codified at 40 C.F.R. part 61, subpart M.

The Asbestos NESHAP imposes mandatory notification requirements. The regulations also impose work practice standards when, among other circumstances, a demolition or renovation activity involves removal of at least 260 linear feet of regulated asbestos-containing material (“RACM”)2 on pipes or at least 160 square feet of RACM on other components of the facility. 40 C.F.R. § 61.145(a). Where the applicable threshold for RACM has been met, section 61.145(b) sets forth specific requirements regarding notification to the EPA of renovation activity by the "owner" or “operator” of the activity. In particular, the Asbestos NESHAP requires that each owner or operator of a demolition or renovation activity provide to EPA

The terms "major source” and “area source" are defined at CAA § 112(a) (1) and (2). A "major source” is “any stationary source or group of stationary sources located within a contiguous area and under common control that emits or has the potential to emit considering controls, in the aggregate, 10 tons per year or more of any hazardous air pollutant or 25 tons per year or more of any combination of hazardous air pollutants.” Id. § 112(a)(1). An “area source” is “any stationary source of hazardous air pollutants that is not a major source." Id. § 112(a)(2).

2 The term RACM is defined by the regulations as follows:

Regulated asbestos-containing material (RACM) means (a) Friable asbestos material, (b) Category I nonfriable ACM that has become friable, (c) Category I nonfriable ACM that will be or has been subjected to sanding, grinding, cutting, or abrading, or (d) Category II nonfriable ACM that has a high probability of becoming or has become crumbled, pulverized or reduced to powder by the forces expected to act on the material in the course of demolition or renovation operations regulated by this subpart.

40 C.F.R. § 61.141.

before commencement of the asbestos activity written notice of the scheduled start date and, if the scheduled start date is changed, each owner or operator must provide to EPA, before the original start date, both telephone and written notice of the new start date. Id. § 61.145(b)(3)(iv)(A)(1), (2).

The Asbestos NESHAP, at section 61.145(c), also sets forth work practice standards that must be followed by owners and operators of the demolition or renovation activity where the applicable threshold amount of RACM has been met. In particular, at issue in this case are the requirements that each owner or operator “adequately wet the RACM during the stripping operation," 40 C.F.R. § 61.145(c)(3), “ensure that it remains wet until collected or treated in preparation for disposal," id. § 61.145(c)(6)(i), and post at the demolition or renovation site "[e]vidence that the required training [in the provisions of the Asbestos NESHAP] has been completed.” Id. § 61.145(c)(8).

B. Factual and Procedural Background

In 1989, SchoolCraft was hired by Centerville, Ohio City Schools ("Centerville") to prepare Centerville's asbestos management plan, pursuant to the Asbestos Hazard and Emergency Response Act ("AHERA"), 15 U.S.C. § 2641-2656. While preparing this plan, asbestos-containing materials were identified at the C.O. Cline Elementary School ("Cline Elementary"), as well as other school buildings owned by Centerville. Thereafter, Centerville decided to abate the asbestos at Cline Elementary and hired SchoolCraft to prepare the specifications for the abatement project.

Centerville used the specifications prepared by SchoolCraft to solicit bids for the Cline Elementary abatement project and, in consultation with SchoolCraft, selected Seneca Asbestos Removal and Control, Inc. ("Seneca") to perform the asbestos abatement work. Seneca was required by its contract with Centerville to comply with all project specifications and to comply with the Asbestos NESHAP, including but not limited to the applicable work practice and notification requirements. Under the project specifications, SchoolCraft was responsible for coordinating the various renovation activities at Cline Elementary, including the work of Seneca. The project specifications gave SchoolCraft substantial supervisory authority over the whole renovation project.

Seneca initially satisfied the notice requirement of the Asbestos NESHAP by informing EPA's delegate, the Regional Air Pollution Control

Agency ("RAPCA”),3 that the asbestos activity would begin on June 15, 1992, and end on August 7, 1992. However, when RAPCA inspector Jack D. Hemp went to Cline Elementary on June 16, 1992, to conduct an inspection, the work had not yet begun. On June 17, 1992, RAPCA received notification that the start date had been changed, and that the work would commence on June 17, 1992. A second inspection was thereafter conducted on June 30, 1992, by another RAPCA inspector, Jeffrey Adams.

In June 1993, the Region filed a complaint (the “Complaint”) against SchoolCraft and Seneca for violations of the Asbestos NESHAP that allegedly occurred during the renovation project at Cline Elementary. The Complaint alleged five violations that are at issue in this appeal: Count I-failure to provide notice by telephone before the original starting date for asbestos removal that asbestos removal would begin on a date later than the date specified in the original notice of renovation, in violation of 40 C.F.R. § 61.145(b)(3)(iv)(A)(1); Count II—failure to provide written notice before the original starting date for asbestos removal that asbestos removal would begin on a date later than the start date specified in the original notice of renovation, in violation of 40 C.F.R. § 61.145(b)(3)(iv)(A)(2); Count III-failure to adequately wet RACM being stripped from the facility, in violation of 40 C.F.R. § 61.145(c)(3); Count IV-failure to adequately wet all RACM and to ensure that it remained wet until collected and contained or treated in preparation for disposal, in violation of 40 C.F.R. § 61.145(c)(6)(i); and Count V-failure to post evidence of the on-site representative's training in the Asbestos NESHAP, in violation of 40 C.F.R. § 61.145(c)(8).

The Complaint alleged that both SchoolCraft and Seneca were "operators" of the renovation project and were liable for the violations. The Complaint proposed a civil penalty of $62,000 for the five alleged violations. However, the Complaint requested that only $20,000 of the proposed penalty be assessed against SchoolCraft for its role as operator (the Complaint requested that the remaining $42,000 of the proposed penalty be assessed against Seneca).

Administrative Law Judge Daniel M. Head (“ALJ Head") held an evidentiary hearing in September 1996, and on January 2, 1997, issued his

Pursuant to 40 C.F.R. § 61.04(b), EPA has delegated authority to implement and enforce the Asbestos NESHAP to state and local agencies in many locations. In Montgomery County, Ohio, where Cline Elementary is located, EPA has delegated the authority to implement and enforce the Asbestos NESHAP to a local air pollution control authority, the Regional Air Pollution Control Agency. Id. § 61.04(b)(KK)(vi).

The Complaint alleged nine counts. However, only the five counts identified above concerned work performed at Cline Elementary.