Lexington Container Company (Board decision, September 12, 2019)

Plain-English summary

Lexington Container Company sold food-grade, survival, and other containers from Kentucky. EPA alleged that between January 1, 2014, and June 1, 2016, the company sold, offered for sale, introduced into commerce, and imported 12,887 portable fuel containers that were not covered by an EPA certificate of conformity and did not meet the applicable labeling and emissions requirements. The company admitted EPA jurisdiction and the stipulated facts but neither admitted nor denied the alleged violations, and waived rights to contest them and appeal the Order. The EAB ratified the settlement, which required payment of a $110,000 civil penalty within 30 days and confirmed that the company had ceased the prohibited activities.

Decision snapshot

• Cited authorities: Clean Air Act §§ 111(e), 113(a)(3)(A), 113(d), and 183(e)(3), 42 U.S.C. §§ 7411(e), 7413(a)(3)(A), 7413(d), and 7511b(e)(3); 40 C.F.R. §§ 19.4, 22.4(a), 22.13(b), 22.18(b)-(c), 59.602, and 59.680
• Outcome: The Consent Agreement was ratified, a $110,000 civil penalty was due within 30 days, and Lexington Container Company was ordered to comply with the agreement.
• Key point: Importing and selling portable fuel containers without the required certification and labeling can lead to an EPA settlement and civil penalty.

Full text (EPA EAB public release, authorized Sofya fallback transcription)

F I L E D
Sep 12 2019
Clerk, Environmental Appeals Board
INITIALS ______
ENVIRONMENTAL APPEALS BOARD
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C.

                                           )
                                           )

In re: ) Docket No. CAA-HQ-2018-8378
Lexington Container Company )
)
)

                                    FINAL ORDER

   Pursuant to 40 C.F.R. § 22.18(b)-(c) of EPA’s Consolidated Rules of Practice, the

attached Consent Agreement resolving this matter is incorporated by reference into this Final

Order and is hereby ratified.

   The Respondent is ORDERED to comply with all terms of the Consent Agreement,

effective immediately.

   So ordered. 1




                                                 ENVIRONMENTAL APPEALS BOARD

Date: September 12, 2019 By: ________
Aaron P. Avila
Environmental Appeals Judge

1
The three-member panel deciding this matter is composed of Environmental Appeals Judges
Aaron P. Avila, Kathie A. Stein, and Mary Kay Lynch.

Page 2

                            CERTIFICATE OF SERVICE

   I certify that copies of the foregoing Consent Agreement and Final Order in the matter of

Lexington Container Company, Docket No. CAA-HQ-18-8378, were sent to the following
persons in the manner indicated:

By First Class Certified Mail / Return Receipt Requested

For Respondent Lexington Container Company
Basilio Giangeruso
Owner
Lexington Container Company
140 Dewey Drive
Nicholasville, KY 40356

By Interoffice Mail

For EPA Office of Civil Enforcement
Providence Spina
Office of Civil Enforcement
Office of Enforcement and Compliance Assurance
U.S. Environmental Protection Agency
1200 Pennsylvania Avenue, NW
Mail Code 2242A
William Jefferson Clinton South Federal Building, Room 2109A
Washington, DC 20460

Dated: ___
Sep 12 2019 _______
Eurika Durr
Clerk of the Board

Page 3

                                                                             "•.•. •PA, HE,ADQUARTEI•
                                                                                       AUG 2
                        BEFORE THE ENVIRONMENTAL APPEALS BOARD
                                                                            •.oAr•"
                    UNITED STATES ENVIRONMENTAL PROTECTION AGENC•'•1V•O'N•Z•'•rA15,a-t•-ALs
                                    WASHINGTON, D.C.

In the Matter of:

Lexington Container Company Docket No. CAA-HQ-18-8378
Jessamine County, Nicholasville, Kentucky

Respondent.

                                      CONSENT AGREEMENT

                                    A. PRELIMINARY STATEMENT

1. This is a civil administrative penalty assessment proceeding brought under Section l13(d) of the

   Clean Air Act (the "Act"), 42 U.S.C. § 7413(d), and Sections 22.13 and 22.18 of the Consolidated
   
   Rules of Practice Governing the Administrative Assessment of Civil Penalties and the
   
   Revocation/Termination or Suspension of Permits ("Consolidated Rules"), as codified at
   

   40 C.F.R. Part 22.

, Complainant is the United States Environmental Protection Agency (the "EPA"). On the EPA's

    behalf, Phillip A. Brooks, Director, Air Enforcement Division, Office of Civil Enforcement, Office of

    Enforcement and Compliance Assurance, is authorized by lawful delegation to institute and

    settle civil administrative penalty proceedings under Section 113(d) of the Act.

, Respondent is Lexington Container Company, a sole proprietorship doing business in the state of

    Kentucky. Respondent is a "person" as defined in Section 302(e) of the Act, 42 U.S.C. § 7602(e).

4° Complainant and Respondent, having agreed that settlement of this action is in the public

    interest, consent to the entry of this consent agreement ("Consent Agreement" or

    "Agreement") and the attached final order ("Final Order" or "Order') without adjudication of

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    any issues of law or fact herein, and Respondent agrees to comply with the terms of this

    Consent Agreement and Final Order.

5. By signing this Consent Agreement, Respondent certifies that it is in compliance with

   requirements of 40 C.F.R. Part 59, Subpart F, and that it has ceased all activities prohibited by
   

   that Subpart.
   /
   B. JURISDICTION

6. This Consent Agreement is entered into under Section 113(d) of the Act, as amended, 42 U.S.C.

   § 7413(d), and the Consolidated Rules, 40 C.F.R. Part 22. The alleged violations in this Consent
   

   Agreement are pursuant to Section 113(a)(3)(A).

7. The EPA may administratively assess a civil penalty if the penalty sought is less than $320,000

   for violations that occurred after December 6, 2013 through November 2, 2015, and less than

   $378,852 for violations that occurred after November 2, 2015 and are assessed a penalty on or

   after February 6, 2019. 42 U.S.C. § 7413(d)(1); 40 C.F.R. § 19.4. The statutory maximum penalty

   amount for administrative penalty orders has been adjusted over time as required by the

   Federal Civil Penalties Inflation Adjustment Act of 1990 (28 U.S.C. § 2461 note; Pub. L. 101-410),
   

   as amended by the Debt Collection Improvement Act of 1996, and most recently, by the Federal

   Civil Penalties Inflation Adjustment Act Improvement Act of 2015 (28 U.S.C. § 2461 note; Pub. L.

   114-74, Section 701).
   

8. The EPA and the United States Department of Justice jointly determined that this matter,

   although it involves alleged violations that occurred more than one year before the initiation of

   this proceeding, is appropriate for an administrative penalty assessment. 42 U.S.C. § 7413(d)(1).

9. The Environmental Appeals Board is authorized to ratify this Consent Agreement which

   memorializes a settlement between Complainant and Respondent. 40 C.F.R. § 22.4(a) and
   
   22.18(b).
   

Consent Agreement and Final Order, Docket CAA-HQ-18-8378 Page 2 of 12

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10. The issuance of this Consent Agreement and attached Final Order simultaneously commences

    and concludes this proceeding. 40 C.F.R. § 22.13(b).

                                        C. GOVERNING LAW
    

11. This proceeding arises under Part D of Title I of the Act, CAA §§ 171-193, 42 U.S.C. §§ 7501-7515,

    and the regulations promulgated thereunder. In pertinent part, these laws aim to reduce ozone

    in areas that do not meet the national ambient air quality standards for ozone, or

    "nonattainment areas."

12. As used in this Consent Agreement, the term "portable fuel container" or "PFC" means any

    reusable container designed and marketed (or otherwise intended) for use by consumers for

    receiving, transporting, storing, and dispensing gasoline, diesel fuel, or kerosene. For the

    purpose of this subpart, all utility jugs that are red, yellow, or blue in color are deemed portable

    fuel containers, regardless of how they are labeled or marketed. 40 C.F.R. § 59.680.

13. Under Section 183(e)(3) of the Act, 42 U.S.C. § 75lib(e)(3), EPA must identify and regulate

    categories of consumer or commercial products that account for at least 80 percent of volatile

    organic compound emissions from consumer or commercial products in ozone nonattainment

    areas.

14. On May 16, 2006, EPA added PFCs to the list of products that it would regulate under Section

    183(e). See 71 Fed. Reg. 28,320.
    

15. On February 26, 2007, EPA promulgated regulations for the Control of Evaporative Emissions

    from New and In-Use Portable Fuel Containers. See 40 C.F.R. Part 59 Subpart F ("Subpart F").

    Among other things, Subpart F establishes emission standards, labeling requirements, and

    procedures for obtaining a certificate of conformity. EPA issues a certificate of conformity to
    
    PFC manufacturers to certify that a particular line of PFCs with similar emission characteristics
    

    conforms to the requirements of Subpart F.

Consent Agreement and Final Order, Docket CAA-HQ-18-8378 Page 3 of 12

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16. Subpart F prohibits the sale, distribution, or importation of PFCs unless they are labeled, comply

    with the emissions standards and other Subpart F requirements, and are covered by an EPA

    certificate of conformity. 40 C.F.R. § 59.602.

17. Persons violating Subpart F are treated, for enforcement purposes, as having violated a

    requirement of Section 111(e) of the Act, 42 U.S.C. § 7411(e).

18. Persons violating Section 111(e) or rules promulgated under Section 183(e) are subject to a civil

    penalty of up to $37,500 for each violation that occurred after December 6, 2013, through

    November 2, 2015, and up to $47,357 for each violation that occurred after November 2, 2015

    and is administratively assessed a penalty on or after February 6, 2019. CAA § 113(d)(1), 42

    U.S.C. § 7413(d)(1); 40 C.F.R. § 19.4.

                                       D. STIPULATED FACTS
    

19. Respondent is located in Nicholasville, Kentucky and sells food grade containers, prepping

    supplies, survival supplies, and other items on its website,

    www.lexingtoncontainercompa ny.com.

20. Between January 1, 2012 and June 1, 2016, Respondent imported 20 liter, 10 liter, and 5 liter

    PFCs from Valpro Ltd and Swiss-Link Inc. that were not covered by a certificate of conformity

    issued under Subpart F.

21. Between January 1, 2014 and June 1, 2016, Respondent sold in the United States 12,887

    uncertified PFCs that Respondent had imported from Valpro Ltd. and Swiss-Link Inc.

22. On or about June 1, 2016, Respondent stopped offering uncertified PFCs for sale in the United

    States.

                                 E.   ALLEGED VIOLATIONS OF LAW
    

23. EPA alleges that between January 1, 2014 and June 1, 2016, Respondent sold, offered for sale,

    introduced into commerce, and imported 12,887 new PFCs manufactured after December 31,

Consent Agreement and Final Order, Docket CAA-HQ-18-8378 Page 4 of 12

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   2008, that were subject to Subpart F, but were not covered by a valid certificate of conformity,

   were not labeled as required by Subpart F, and did not comply with the requirements of Subpart

   F. In doing so, Respondent committed 12,887 violations of Subpart F and the Act.

                               F.   TERMS OF CONSENT AGREEMENT

24. For the purpose of this proceeding, as required by 40 C.F.R. § 22.28(b)(2), Respondent:

    (a) admits that the EPA has jurisdiction over the subject matter alleged in this Agreement;

    (b) admits to the stipulated facts stated above;

    (c) neither admits nor denies the alleged violations of law stated above;

    (d) consents to the assessment of a civil penalty as stated below;

    (e) consents to the issuance of any specified compliance or corrective action order;

    (f) consents to any conditions specified in this Agreement;

    (g) consents to any stated Permit Action;

    (h) waives any right to contest the alleged violations of law set forth in Section E of this

           Consent Agreement; and
    

    (i) waives its rights to appeal the Order accompanying this Agreement.

25. For the purpose of this proceeding, Respondent:

    (a) agrees that this Agreement states a claim upon which relief may be granted against

           Respondent;
    

    (b) acknowledges that this Agreement constitutes an enforcement action for purposes of

           considering Respondent's compliance history in any subsequent enforcement actions;
    

    (c) waives any and all remedies, claims for relief and otherwise available rights to

           administrative review that Respondent may have with respect to any issue of fact or law
    
           set forth in this Order, including any right of judicial review under Section 307(b)(2) of
    
           the Clean Air Act, 42 U.S.C. § 7607(b)(2);
    

Consent Agreement and Final Order, Docket CAA-HQ-18-8378 Page 5 of 12

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    (d)     consents to personal jurisdiction in any action to enforce this Agreement or Order, or

            both, in the United States District Court for the Eastern District of Kentucky; and

    (e)     waives any rights it may possess at law or in equity to challenge the authority of the EPA

            to bring a civil action in a United States District Court to compel compliance with the

            Agreement or Order, or both, and to seek an additional penalty for such noncompliance,

            and agrees that federal law shall govern in any such civil action.

26. Penalty P_a.yment. Respondent agrees to:

    (a)     pay the civil penalty of 3110,000 ("EPA Penalty") within 30 calendar days of the Effective
    
            Date of this Agreement.
    
    (b)     pay the EPA Penalty using any method, or combination of methods, provided on the
    
            website http://vc•\•w2.e a•_•. ov/financial/additional-inslructions-makin•_O_yments-
    
                 and identifying each and every payment with "Docket No. CAA-HQ-18-8378."
    
            Within 24 hours of payment of the EPA Penalty, send proof of payment to Providence
    
            Spina at 1200 Pennsylvania Ave NW, Mail Code 2201A, Washington, DC 20004 and
    
            [email protected] ("proof of payment" means, as applicable, a copy of the
    
            check, confirmation of credit card or debit card payment, confirmation of wire or
    
            automated clearinghouse transfer, and any other information required to demonstrate
    
           that payment has been made according to the EPA requirements, in the amount due,
    
            and identified with "Docket No. CAA-HQ-18-8378").
    

27. If Respondent fails to timely pay any portion of the penalty assessed under this Agreement, the

    EPA may:
    
    (a)     request the Attorney General to bring a civil action in an appropriate district court to
    
            recover: the amount assessed; interest at rates established pursuant to 26 U.S.C.
    

Consent Agreement and Final Order, Docket CAA-HQ-18-8378 Page 6 of 12

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             § 6621(a)(2); the United States' enforcement expenses; and a 10 percent quarterly

             nonpayment penalty, 42 U.S.C. § 7413(d)(5);

    (b)      refer the debt to a credit reporting agency or a collection agency, 42 U.S.C. § 7413(d)(5),

            40 C.F.R. §§ 13.13, 13.14, and 13.33;

    (c)      collect the debt by administrative offset (i.e., the withholding of money payable by the

             United States to, or held by the United States for, a person to satisfy the debt the

             person owes the Government), which includes, but is not limited to, referral to the

             Internal Revenue Service for offset against income tax refunds, 40 C.F.R. Part 13,

            Subparts C and H; and

    (d)      (i) suspend or revoke Respondent's licenses or other privileges, or (ii) suspend or

             disqualify Respondent from doing business with the EPA or engaging in programs the

             EPA sponsors or funds, 40 C.F.R. § 13.17.

28. The provisions of this Agreement shall apply to and be binding upon Respondent and its officers,

    directors, employees, agents, trustees, servants, authorized representatives, successors, and

    assigns. From the Effective Date of this Agreement until the completion of penalty payment

    obligations, as set out in Paragraph 26, Respondent must give written notice and a copy of this

    Agreement to any successors in interest prior to any transfer of ownership or control of any

    portion of or interest in the Respondent. Simultaneously with such notice, Respondent shall
    
    provide written notice of such transfer, assignment, or delegation to the EPA. In the event of
    

    any such transfer, assignment, or delegation, Respondent shall not be released from the

    obligations or liabilities of this Agreement unless the EPA has provided written approval of the

    release of said obligations or liabilities.
    

Consent Agreement and Final Order, Docket CAA-HQ-18-8378 Page 7 of 12

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29. By signing this Agreement, Respondent acknowledges that this Agreement and Order will be

    available to the public and agrees that this Agreement does not contain any confidential

    business information or personally identifiable information.
    

30. By signing this Agreement, the undersigned representative of Complainant and the undersigned

    representative of Respondent each certify that he or she is fully authorized to execute and enter
    

    into the terms and conditions of this Agreement and has the legal capacity to bind the party he

    or she represents to this Agreement.

31. By signing this Agreement, Respondent certifies that the information it has supplied concerning

    this matter was at the time of submission true, accurate, and complete for each such

    submission, response, and statement. Respondent acknowledges that there are significant

    penalties for submitting false or misleading information, including the possibility of fines and
    

    imprisonment for knowing submission of such information, under 28 U.S.C. § 1001.

32. Except as qualified by Paragraph 27, each party shall bear its own attorney's fees, costs, and

    disbursements incurred in this proceeding.

                G. EFFECT OF CONSENT AGREEMENT AND AI-I'ACHED FINAL ORDER
    

33. In accordance with 40 C.F.R. § 22.18(c), completion of the terms of this Consent Agreement and

    Final Order resolves only Respondent's liability for federal civil penalties for the violations and
    

    facts specifically alleged above.

    Penalties paid pursuant to this Agreement shall not be deductible for purposes of federal taxes.

    This Agreement constitutes the entire agreement and understanding of the parties and

    supersedes any prior agreements or understandings, whether written or oral, among the parties

    with respect to the subject matter hereof.

Consent Agreement and Final Order, Docket CAA-HQ-18-8378 Page 8 of 12

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36. The terms, conditions, and compliance requirements of this Agreement may not be modified or

    amended except upon the written agreement of both parties, and approval of Environmental

    Appeals Board.

37. Any violation of this Order may result in a civil judicial action for an injunction or civil penalties

    of up to $99,681 per day per violation, or both, as provided in Section 113(b)(2) of the Act,

    42 U.S.C. § 7413(b)(2), and 40 C.F.R. § 19.4, as well as criminal sanctions as provided in Section

    113(c) of the Act, 42 U.S.C. § 7413(c). The EPA may use any information submitted under this

    Order in an administrative, civil judicial, or criminal action.

38. Nothing in this Agreement shall relieve Respondent of the duty to comply with all applicable

    provisions of the Act and other federal, state, or local laws or statutes, nor shall it restrict the

    EPA's authority to seek compliance with any applicable laws or regulations, nor shall it be

    construed to be a ruling on, or determination of, any issue related to any federal, state, or local

    permit.

39. Nothing herein shall be construed to limit the power of the EPA to undertake any action against

    Respondent or any person in response to conditions that may present an imminent and

    substantial endangerment to the public health, welfare, or the environment.

40. The EPA reserves the right to revoke this Agreement and settlement penalty if and to the extent

    that the EPA finds, after signing this Agreement, that any information provided by Respondent

    was materially false or inaccurate at the time such information was provided to the EPA, and the

    EPA reserves the right to assess and collect any and all civil penalties for any violation described

    herein. The EPA shall give Respondent notice of its intent to revoke, which shall not be effective

    until received by Respondent in writing.

Consent Agreement and Final Order, Docket CAA-HQ-18-8378 Page 9 of 12

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                                        H. EFFECTIVE DATE

41. Respondent and Complainant agree to issuance of the attached Final Order. Upon filing, the EPA

    will transmit a copy of the filed Consent Agreement to the Respondent. This Consent Agreement

    and attached Final Order shall become effective after execution of the Final Order by the
    
    Environmental Appeals Board on the date of filing with the Hearing Clerk.
    

Consent Agreement and Final Order, Docket CAA-HQ-18-8378 Page 10 of 12

Page 13

The foregoing Consent Agreement In the Matter of Lexington Container Company, Docket No.
CAA-HQ-18-8378, is Hereby Stipulated, Agreed, and Approved for Entry.

FOR RESPONDENT:

Si• Date

Printed Name: •,at•i •'C• •..•_r,•_AJ •_•_-•e-•___7•.__•

Title: •••j__•_VZ.

Respondent's Federal Tax Identification Number: ,•-•=•- .•'^ (::)7,•

Consent Agreement and Final Order, Docket CAA-HQ-18-8378 Page 11 of 12

Page 14

The foregoing Consent Agreement In the Matter of Lexington Container Company, Docket No.
CAA-HQ-18-8378, is Hereby Stipulated, Agreed, and Approved for Entry.

FOR COMPLAINANT:

                                   Air Enforcement•ivision
                                   Office of Civil Enforcement
                                   Office of Enforcement and Compliance Assurance
                                   U.S. Environmental Protection Agency
                                   1200 Pennsylvania Ave. NW

DATE
•/i•sO:• e•Adviser
Office of Civil Enforcement
Office of Enforcement and Compliance Assurance
U.S. Environmental Protection Agency
1200 Pennsylvania Ave. NW
Washington, DC 20460-0001

Consent Agreement and Final Order, Docket CAA-HQ-18-8378 Page 12 of 12