Seaboard Foods LP (Board decision, August 21, 2006)

Plain-English summary

EPA's Office of Enforcement and Compliance Assurance submitted Seaboard Foods LP's Consent Agreement and Proposed Final Order for review and ratification. The agreement addressed potential liabilities under the Clean Air Act, CERCLA, and EPCRA as part of EPA's nationwide animal feeding operations initiative. The Environmental Appeals Board ratified the agreement, ordered Seaboard Foods to comply with its terms, and assessed a civil penalty whose amount was determined under paragraph 48 of the agreement. The order set a payment deadline of October 15, 2006, or 30 days after Seaboard Foods received an executed copy of the agreement, whichever was later. The agreement would become null and void on September 16, 2006, unless the United States lodged one or more proposed consent decrees resolving alleged violations at the company's farms.

Decision snapshot

• Cited authorities: 40 C.F.R. §§ 22.18(b)(3), 22.18(b), and 22.4(a); 42 U.S.C. §§ 7413, 9609, and 11045
• Outcome: The Consent Agreement was ratified, Seaboard Foods was ordered to comply, and the paragraph-48 civil penalty was assessed, subject to the order's September 16, 2006 condition.
• Key point: The EAB ratified the agreement but made it conditional on a federal consent decree resolving the company's other specified enforcement matters.

Full text (EPA EAB public release)

         BEFORE THE ENVIRONMENTAL APPEALS BOAR1
      UNITED STATES ENVIRONMENTAL PROTECTION
                    WASHINGTON, D C    ..

                                  1

In re: ) Consent Agreement and
) Final Order
Consent Agreement and Proposed ) CAA-HQ-2005-2682 Final Order for Animal Feeding ) CERCLA-HQ-2005-2682 Operations - Seaboard Foods LP ) EPCRA-HQ-2005-2682
)

                           FINAL ORDER

                      I.    BACKGROUND


 On August 16, 2006, the Environmental Appeals Board

("Board") received for review and ratification a Consent

Agreement and Proposed Final Order ("Agreement")' from the EPA's

Office of Enforcement and Compliance Assurance ("OECA", also

referred to as "Complainant") in accordance with 40 C.F.R.

§'22.18(b)(3)of the Consolidated Rules of Practice Governing the

Administrative Assessment of Civil Penalties and the

~evocation/Terminationor Suspension'of Permits, 40 C.F.R. pt. 22

   The same submittal also included for Board review an Agreement

with Foster Brothers Farm Inc.(Docket No. CAA-HQ-2005-2684,CERCLA-HQ- 2005-2684, EPCRA-HQ-2005-2684). See Memorandum from Granta Y. Nakayama on Consent Agreements and Proposed Final Orders for Animal Feeding Operations to Environmental Appeals Board (August 15, 2006). This Order only applies to Seaboard Foods LP (formerly Seaboard Foods LLC and Seaboard Farms, Inc.) (hereinafter referred to as "Respondent"). The Board issued an order ratifying the Agreement between OECA and Foster Brothers Farm Inc. on August 17, 2006. See Consent AgreemeAt and Proposed Final Order for Animal Feeding Operations - Foster Brothers Farm, Inc. (EAB, Aug. 17, 2006). ("Part 22").2 This Agreement is part of a large group of

proposed agreements EPA has received in response to a nationwide

offer EPA made to animal feeding operations ("AFOs") in the egg,

broiler, chicken, turkey, dairy, and swine industries that meet

the definition of an AFO under the Clean Water Act. See Animal

Feeding Operations Consent Agreement and Final Order, 70 Fed.

Reg. 4958, 4959 (Jan. 31, 2005).

 EPA offered AFOs the opportunity to sign consent agreements

to resolve potential liabilities under the Clean Air Act ("CAA"),

CAA § § 101-618, 42 U.S.C S S 7401-7671q, the Comprehensive

Environmental Response, Compensation, and Liability Act

(\CERCLAn),
CERCLA § § 101-405, 42 U.S.C. § § 9601-967, and the

Emergency Planning and Community Right-To-Know Act ("EPCRA"),

EPCRA § § 301-330, 42 U.S.C. § § 1101-11050. See Animal Feeding

Operations Consent Agreement and Final Order, 70 Fed. Reg. 4958

(Jan, 31, 2005); see also Animal Feeding Operations Consent

Agreement and Final Order, 70 Fed. Reg. 40016 (July 12, 2005).

 2
   According to section 22.18(b)( 3 1 , settlements or consent

agreements arising from proceedings commenced at EPA Headquarters need the Board's approval before becoming final Agency action. 40 C.F.R. 5 22.18 (b)(3) ("No settlement or consent agreement shall dispose of any proceeding under these Consolidated Rules of Practice without a final order from * * *, in a proceeding commenced at EPA Headquarters, the Environmental Appeals Board, ratifying the partiesr consent agreement."). See also id. 5 22.4(a) ("The Environmental Appeals Board * * * approves settlements of proceedings under these Consolidated Rules of Practice commenced at EPA Headquartersrr). 3

 Under the model agreement published in the January 31, 2005

Federal Register notice, participating AFOs will pay a civil

penalty based on the number and size of the farms and the number

of animals at each AFO covered by the Agreement, in accordance

with a table set forth therein. Participating AFOs would also

share responsibility for funding a two-year nationwide emissions

monitoring study aimed at the development of methodologies for

estimating emissions from AFOs, which in turn would be used to

determine participating companies' regulatory status and

compliance under the CAA, CERCLA, and EPCRA. As part of the

Agreements, the companies would receive a release and covenant

not to sue for potential civil violations of specified

requirements of these statutes that may have already occurred or

that may occur during the study period.

 The Agreement between OECA and Seaboard Foods L P ~(the

"Seaboard Foods Agreement") is one of two thousand five hundred

and sixty-eight final Agreements the Board has received for

review and ratification under this initiative. The first group

consisted of twenty Agreements, which, after careful

examination,' the Board ratified by Final Order dated January 27,

  See supra note 1.

   On November 18, 2005, after a preliminary examination of the

first group of Agreements and the supporting documentation OECA submitted, the Board issued an order identifying various areas that 2006. See Consent Agreements and Proposed Final Orders for

Animal Feeding Operations (EAB, Jan. 27, 2006). In its review of

the first twenty Agreements, the Board found that: (1) the

Agreements were administrative penalty orders subject to Board

review; (2) the Agreements did not violate the Clean Air Act or

Part 22; and (3) the penalty amounts set forth in the Agreements

followed the applicable statutory penalty criteria and any

deviations from EPA1s penalty policies were appropriately

explained. Id. 8-34.

 After the first group of twenty Agreements, the Board has

received additional groups of varying numbers of Agreements for

Board ratification. On April 17, 2006, the Board ratified the

needed clarification and requesting OECA to file a supplemental memorandum answering several questions. The Board also scheduled a hearing inviting OECA and any interested Respondents to address the areas identified in the order. See Order Scheduling Hearing and Requesting Supplemental Information (EAB, Nov. 18, 2005). On December 6, 2005, the Board received a joint request from various community and environmental groups (collectively referred to as "AIR"), seeking, among other things, to file a memorandum to respond to OECA1s supplemental brief and asking to participate at the hearing. By order dated December 8, 2005, the Board granted AIR the opportunity to participate at the hearing. See Order Granting Opportunity to Participate at Hearing and Allocating Time (EAB, Dec. 8, 2005). By a separate order, the Board allowed AIR to file a non-party brief. See Order Denying Motion for Leave to Intervene (EAB, Dec. 8, 2005).

 The Board held the hearing on December 13, 2005. OECA, counsel

for six of the Respondents, and AIR participated at the hearing. On December 20, 2005, AIR filed a non-party brief responding to OECA1s supplemental brief. On January 6, 2006, OECA and Respondents each filed a response brief to AIR'S non-party brief. Upon consideration of all responsive filings, the Board issued a Final Order on January 27, 2006, ratifying the Agreements. 5 second group of Agreements, consisting of seven hundred and two

Agreements. See Consent Agreements and Proposed Final Orders for

Animal Feeding Operations (EAB, Apr. 17, 2 0 0 6 ) . The third group,

consisting of two hundred eighty-six Agreements, was ratified on

May 5, 2 0 0 6 . See Consent Agreements and Proposed Final Orders

for Animal Feeding Operations (EAB, May 5, 2 0 0 6 ) . The fourth

group, consisting of one thousand two hundred and five

Agreements, was ratified by the Board on July 19, 2 0 0 6 . See

Consent Agreements and Proposed Final Orders for Animal Feeding

Operations (EAB, July 19, 2 0 0 6 ) . The fifth group, consisting of

three hundred and fifty-three Agreements, was ratified on August

7, 2 0 0 6 . See Consent Agreements and Proposed Final Orders for

Animal Feeding Operations (EAB, Aug. 7, 2 0 0 6 ) . Finally, as

previously noted, the Board issued an order ratifying the

Agreement between OECA and Foster Brothers Farm Inc. on August

17, 2 0 0 6 . See Consent Agreement and Proposed Final Order for

Animal Feeding Operations - Foster Brothers Farm, Inc.(EAB, Aug.

17, 2 0 0 6 ) . Thus the Board has ratified a total of two thousand

five hundred and sixty-seven Agreements. The discussion and

findings in these earlier orders apply with equal force to the

Seaboard Foods LP Agreement as well.

   In its transmittal memorandum, OECA represents that with the

one exception discussed below, the Seaboard Foods LP Agreement 6

is identical to the agreements previously ratified by the Board,

the model agreement published in the January 31, 2005 Federal

Register notice, and the sample Agreement attached to its

transmittal memorandum.' The transmittal memorandum further

states that each penalty assessed by the Seaboard Foods LP

Agreement is in accordance with the formula established in

Paragraph 48 of the model agreement.6

 The one unique feature of this Agreement arises from the

fact that, unlike other cases, EPA had previously issued an

administrative order under the Resource Conservation and Recovery

Act ("RCRA") and a Clean Air Act information request to the

Respondent involving its facilities. OECA notes that "OECA and

Seaboard have recently reached an agreement in principle on the

primary elements of a settlement of these claims, including both

civil penalty and injunctive relief."7 OECA further states that

  'Memorandum on Consent Agreements and Proposed Final Orders for

Animal Feeding Operations from Granta Y. Nakayama to Environmental Appeals Board (August 15, 2006) at 4.

       . 4-5. The Board has previously found that this paragraph
   ~ d at

is consistent with all applicable statutory penalty criteria and that any deviations from applicable penalty policies are appropriate. See Consent Agreements and Proposed Final Orders for Animal Feeding Operations (EAB, Jan. 27, 2006) at 25-34.

  7~emorandumon Consent Agreements and Proposed Final Orders for

Animal Feeding Operations from Granta Y. Nakayama to Environmental Appeals Board (August 15, 2006) at 2. 7

it plans to lodge one or more Consent Decrees resolving these

matters in federal district court(s) by September 15, 2006.'

 OECA indicates that it "has been clear with the company that

[it] would not seek approval of Seaboard's application unless and

until the company resolved all pending enforcement matters

against the company."? Therefore, the Seaboard Agreement

contains an amendment to the standard agreement that states that

"The Agreement shall be null and void in its entirety on

September 16, 2006, unless, prior to that date, the United States

lodges in federal district court one or more proposed Consent

Decrees that alone, or in combination, resolve alleged violations

of RCRA, Clean Air Act, Clean Water Act, CERCLA, and EPCRA at

Respondent's Farms." Amendment to the Consent Agreement and

Final Order (establishing a new paragraph 45a).1°

 Upon review, the Board hereby issues the following order.




  Id.

  'O~ttachmentE to Memorandum on Consent Agreements and Proposed

Final Orders for Animal Feeding Operations from Granta Y. Nakayama to Environmental Appeals Board (August 15, 2006). Attachment E also contains an amendment to paragraph 49 relative to the timing of the payment of the assessed penalty. 8

                     II.   F I N A L ORDER




 Pursuant to 40 C.F.R. § 22.18(b), the Board issues this

Final Order ratifying the Agreement executed by the Complainant

and Respondent. Complainant and Respondent have consented to the

entry of this Final Order and have agreed to comply with the

Agreement. It is hereby ORDERED that:

 1.   Respondent shall comply with all the terms of the

Agreement, incorporated herein by reference;

 2.   Nothing in the Agreement relieves Respondent from

otherwise complying with the applicable requirements set forth in

the CAA, CERCLA, and EPCRA;

 3.   Respondent is hereby assessed a civil penalty in the sum

of the amount determined by Paragraph 48 of the Agreement;

 4.   Respondent shall pay the assessed penalty by October 15,

2006 or by 30 calendar days from the date an executed copy of

this Agreement is received by Respondent, whichever is later.

Respondent shall forward a certified check or money order,

payable to the United States Treasurer, in the amount determined

by Paragraph 48 of the Agreement to:
 U.S. Environmental Protection Agency
(Washington, D.C. Hearing Clerk)
Docket No. [insert Respondent's case docket number]
P.O. Box 360277
Pittsburgh, PA 15251-6277

 The check or money order shall bear the notation of the name

of the Respondent and the appropriate case docket number. A

transmittal letter, indicating Respondent's name, complete

address, and the case docket number must accompany the payment.

Respondent shall file a copy of the check and the transmittal

letter by mailing the copies to:

      U.S. Mail Address
      Office of Hearing Clerk
      U.S. Environmental Protection Agency
      1200 Pennsylvania Avenue, N.W.
      MC 1900L
      Washington, D.C. 20460-0001


      Courier/FedEx Address
      U.S. EPA Office of the Hearing Clerk
      1099 14th Street, N.W.
      Suite 350, Franklin Court
      Washington, D.C. 20005


 5.   Failure to remit the civil penalty assessed under the

Agreement may subject the Respondent to civil action pursuant to

section 113 of the CAA, 42 U.S.C. 5 7413, section 109 of CERCLA,

42 U.S.C. § 9609, and/or section 325 of EPCRA, 42 U.S.C. § 11045,

to collect any unpaid portion of the monies owed, together with

the interest, handling charges, enforcement expenses, including 10 attorney fees and nonpayment penalties set forth in Paragraphs 51

and 52 of the Agreement;

    6. With respect to all requirements of the Agreement except

for those related to the assessment and payment of penalties in

Paragraphs 48-52, failure to comply with these other requirements

will void the releases and covenants not to sue granted by the

Agreement as provided for in Paragraph 37 of the Agreement;

    7.   Consistent with Paragraph 45a of the Agreement, the

Agreement shall be null and void in its entirety on September 16,

2006, unless, prior to that date, the United States lodges in

federal district court one or more proposed Consent Decrees that

alone, or in combination, resolve alleged violations of RCRA,

Clean Air Act, Clean Water Act, CERCLA, and EPCRA at Respondent's

Farms ;

    8.   Complainant is ordered to serve Respondent with a copy

of this Order. Complainant shall submit to the Board a

certificate of service confirming that such service has been

made.

 So ordered.

11
ENVIRONMENTAL APPEALS BOARD

 By :
      Edward E. Reich
 Environmental Appeals Judge

CERTIFICATE OF SERVICE

 I hereby certify that a copy of the foregoing Final Order in

the matter of Consent Agreement and Proposed Final Order for Animal Feeding Operations - Seaboard Farms LP, was sent to the following person in the manner indicated:

By Interoffice Mail
(and copy by facsimile) : Robert A. Kaplan
Bruce Fergusson
Tim Sullivan
Special Litigation & Projects
Division
Office of Civil Enforcement(2248-A)
U.S. Environmental Protection
Agency
1200 Pennsylvania Ave., NW
Washington, DC 20460
,

Dated: AUG 2 1 2006
Secretary