VersaCold Corporation (Board decision, August 14, 2007)

Plain-English summary

VersaCold Corporation operated refrigerated warehouse facilities in the United States, including facilities in Darien, Wisconsin and Lynden, Washington. The Consent Agreement addressed alleged failures to prepare and implement spill prevention and stormwater plans, install adequate secondary containment, obtain a required cooling-water permit, and submit a no-exposure certification. VersaCold certified that it discovered and disclosed the violations through its environmental audit and corrected them. EPA alleged an economic benefit of $6,431 and agreed to that amount as the settlement penalty after applying the Audit Policy's gravity reduction.

Decision snapshot

• Cited authorities: Clean Water Act §§ 301(a), 309, 311, and 402; 40 C.F.R. §§ 13.11, 22.18, 110.1, 110.3, 112.2, 112.3, 112.7, 122.1, 122.2, and 122.26.
• Outcome: Settled. The Consent Agreement was approved and incorporated into the Final Order, with a $6,431 civil penalty.
• Key point: EPA credited the company's self-disclosure and corrective action under the Audit Policy, while recovering the economic benefit attributed to the alleged violations.

Full text (EPA EAB public release)

                                                                        f,llrdn
                                                                             ir--st.- 41
         BEFORE THE ENVIRONMENTAL APPEALS BOARD                   tliill
     UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                     WASHINGTON, D.C.                           f"ru:'L', I'Jl
                                                               L__- , - l    hldais/B0ard
                                                                   Envir0rineiial
                                                               Clerk,

IN THE MATTER OF - --aA=L
t\triALs
VersaCold
Corporation
21l5 Commissioner
Street Docket No.CWA-HQ-2005-8002
Vancouver,
BC V5L 1A6

                    Respondent

                                 FINAL ORDER

   WhereasComplainant,                         Protection Agency.and
                    theUnited States Environmental

Respondent,
VersaCold Corporation, by counsel,have
the Partiesherein,represented

consented
to the entryof this Final Order,andagreeto complywith the Consent

Agreementsignedby the partiesandincorporated
herein;and

   WhereasEPA causeda Noticefor PublicCommenton the proposedissuanceof

this Final Orderto be publishedin the FederalRegisteror _, asrequiredby

                                            thepublicnoticeandcomment

theClean Water Act $ 311(bX6),33 U.S.C. § 1321(b)(6),

periodrequiredhasclosed,andno commentshavebeenreceived;

                                                      by referenceinto
   The Consent Agreementis herebyapprovedandincorporated

                           areherebyorderedto complywith the terms of the

this Final Order. The Respondents

Consent Agreement,effectiveimmediately,

so ORDERED. .,/-^
(-'-'-- ,.- // //
o,, \c( [---.:-
Dare:S/r'//O7
EnvironmenialAppeals Judge
Environmental
AppealsBoard
US EPA

                            UNITED STATES
                   ENVIRONMENTAL PROTECTION AGENCY

              BEFORE THE ENVIRONMENTAL APPEALS BOARD

INl'HE MATTEROF

VersaCold Corporation Docket No. CWA-HQ-2005-8002
Street
2l l5 Commissioner
BC V5L IAG
Vancouver.

                   Respondent

                                  CONSENTAGREEMENT

                                     L PreliminaryStatement

A. Complainant, the United States Environmental Protection Agency(EPA) andVersaCold Corporation (VersaCold), havingconsented Agreement
to the terms ofthis Consent
(Agieement),andbeforethetakingof anytestirnonyandwithoutthe adjudicationof issuesof law or iact herein,agreeto complywith the termsofthis AgreementandattachedproposedFinal Orderherebyincorporated by reference.

B. In April 2005,pursuant for Self-Policing
to EPA's Policyon Incentives (Audit Policy),
65 Fed,Reg.19,618(April 11,2000),Respondent to
its initialvoluntarydisclosure
submitted
EPA regardingpotentialviolationsof:

   l. Clean Water Act (CWA)$ 311,33 U.S.C. §  1321;and

  2 . C W A $ 3 0 1 , 3 3U . S . C$. 1 3 1 1 .

C. Respondent continuedto submitadditionalandperiodicdisclosures for the abovestatutes.
haveresultedin a final list ofdisclosedviolations,whicharethe subjectof this
Suchdisclosures
Agreement.

                                           Il..lurisdiction

A. Thepartiesagreeto the commencement andconclusionof this causeof actionby issuanceof this Agreement,asprescribedby EPA's Consolidated RulesofPracticeGoverning rheAdministrative Assessment 40 C.F.R.Pu122,andmorespecifically
of Civil Penalties, by
40 c.F.R.$ 22.18(b).

B. Respondent agrees that Complainanthasthejurisdiction to bring an administrativeaction, baseduponthe factswhich Respondentsdisclosed,for theseviolations andfor the assessmentof civil penalties
pursuant
to CWA § 311,33U.S.C. § 1321andCWA § 309,33 U.S.C. § 1319.

C. Respondent herebywaivesits right to requestajudicial or administrativehearingon any issueoflaw or fact setforth in this Agreementandits right to appealthe proposedFinal Order accompanlngthis Agreement.

D. For purposesofthis proceeding, RespondentsadmitthatEPA hasjurisdictionoverthe subjectmatterwhich is the basisof this Agreement.

E. Respondentneitheradmitsnor deniesthe conclusionsof law asset forth in this Agreement.

                                III. Statementsof Fact

A, Respondent is VersaCold Corporation,a refrigeratedwarehousecompany,incorporatedin Vancouver,British Colurnbia,Canada.Respondentowns and/oroperatesfacilities in the United States.

B. Pursuanto the EPA's Audit Policy, Respondent herebycertifies and warrantsastrue the factsreferencedin this Section,and EPA acceptsRespondent'scertification. As such, Respondentspecificallycertifiesto the following factsuponwhich this Agreementis based:

          l. the violations were discoveredthroughan audit or througha compliance
          managementsystemreflecting duediligencein preventing,detectingaad
          correctingviolations;

          2. theviolationswerediscovered
                                       voluntarily;

          3. theinitial violationsweredisclosedto EPA promptlyandin writing;
          subsequent  disclosures werealsopromptandin writing;

          4. theviolationsweredisclosedprior to commencement   of an agencyinspection
          or investigation,
                          noticeofa citizensuit,filing ofa complaintby a third party,
          reportingof theviolationsby a "whistleblower" employee,or imminent
          discoveryby a regulatoryagency;

          5. the violationshavebeencorrectedandtheRespondent         is, to thebestof its
          knowledgeandbelief,in tulI compliancewith the CwA $ 311(iX1XC),,          33 U.S.C.
          $ 1321(iXlXC),   andthe CWA   $ 301.,33 U.S.C.   $ l3l1  and  the  implementing
          regulations,with respecto the violations set forth in this Agreement;

          6. appropriatestepshavebeentakento preventa recurrenceofthe violations;

          7. the specificviolations(or closelyrelatedviolations),identified


         in this Agreement,havenot occurredwithin threeyearsof the dateofdisclosure
         identified in ParagraphsI(B) and(C) above,at the samefacilities that arethe
         subjectofthis Agreernent,andhavenot occurredwithin five yearsofthe dateof
         disclosureidentified in PmagraphI(B) and (C) above,aspart of a pattem at
         multiplefacilitiesownedor operatedby theRespondent.For thepurposesof
         subparagraph   7, a violationis:

                (a) any violation of federal,state,or tocal environmentalaw identified in
                ajudicial or administrativeorder,consentagreementor order,complaint,
                or noticeofviolation, convictionor pleaagreement;   or

                (b) any act or omissionfor which the regulatedentity haspreviously
                receivedpenaltymitigation from EPA or a stateor local agency;
                Respondent hasno knowledgethat violations other than thosecoveredin
                this Agreement(or closely relatedviolations),haveoccurredwithin the
                pasttlree yearsat the samefacilities; nor arethe specificviolations that
                methe subjectof this Agreementpart ofa pattemofviolationsby the
                entity's parontorganizationwhich haveoccunedover the pastfive years;

         8. the violations havenot resultedin seriousactualharm nor presentedan
         imminent andsubstantialendangerment     to humanhealthor the environmentand
         theydid not violatethe specifictermsofanyjudicial or administrative Final
         Orderor Agreement;and

         9. Respondent hascooperatedasrequestedby EPA.

                              IV. Conclusions
                                            of Law

CWA - Snill Preventionand Countermeasure
(SPCC)

A. For purposesof this Agreement,Respondent is a personwithin the meaningof CWA
$ 311(aX7), 33 U.S.C. § 1321(a)(7),
and40 C.F.R. § 112.2,andis theowneror operator,as
definedby CWA § 311(aX6), 33 U.S.C. § 1321(a)(6), g
and40 C.F.R. 112.2,of two (2)
facilities,locatedat GenevaLakes,W8876CountyHighwayX, Darien,Wisconsin53114-0039 andVersaColdCascade, 406 SecondStreet,Lynden,Washington98264.

B. Theregulationsal 40C.F.R. § 1l2.3through$ ll2.T,whichimplement$311(iX1XC)of the CWA, 33 U.S.C. § 1321(jxlXC), setforth procedures, methodsandrequirements to prcvent the dischargeofoil from non-hansportation-related
facilities into or upontlre navigablewatersof
the United Statesandadjoining shorelinesin suchquantitiesthat by regulationhavebeen

determinedmay be harmful to the public healthor welfme or environmentof the United States by ownersor operatorswho areengagedin drilling, producing,gathering,storing,processing, refining,transferring,
distributingor consumingoil or oil products.

C. 40 C.F.R. § 112.3(a)requiresownersandoperatorsof onshoreandoffshorefacilitiesthat havedischarged be expectedto dischargeoil in
or, dueto their location,couldreasonably
harmful quantitiesinto or uponthe navigablewatersofthe United Statesor adjoining shorelines, to preparea Spill PreventionControl andCounterneasure(SPCC)Plan.

D. Respondent is engagedin storing or consumingoi1or oil pmductsat its two (2) facilities, describedin IV.A, in quantitiesthat "may beharmful,"asdefinedby 40 C.F.R. § 110.3.

E. Two (2) of Respondent's facilities,describedin IV.A, areonshorefaciiitieswithiu the
of
meaning $ 311(a)(10) of theCWA, 33U.S.C. § 1321(a)(10) and40 C.F.R. § 112.2,which, dueto their location,could reasonablybe expectedto dischargeoil to a navigablewater of the UnitedStates(asdefinedby $ 502(7)of the CWA, 33 U.S.C. § 1362(7),and40 C.F.R. § 110.1) or its adjoiningshorelinethatmay either(l) violateapplicablewaterqualitystandards or (2) causea film or sheenor discoloration ofthe surfaceofthe wateror adjoiningshorelines or cause a sludgeor emulsionto be depositedbeneaththe surfaceofthe water or upon adjoining shorelines.

F. Basedon the above,andpursuant to $ 311(i)(1)(C)andits implementingregulations, Respondents of40 C.F.R. § I 12.3through$ 112.7,at its two (2)
aresubjecto therequirements
facilitieslistedin IV.A.

G. For purposesofthis Agreernent,Complainant herebystatesand allegesthat, basedon the information suppliedby Respondentto EPA, Respondent hasviolatedthe CWA at its two (2) facilitiesidentifiedin IV.A by failing to prepareandimplementan SPCCPlan,asrequiredby CWA § 31l(ix1XC),33 U.S.C. § 1321(iX1XC), foundat
andtheregulations
40 C.F.R. § 112.3through$ 112.7.

H. For purposesofthis Agreement,Complainant herebystatesandallegesthat,basedon the information suppliedby Respondentto EPA, Respondent hasviolated the CWA at its VersaCold Cascadefacility in Lynden,Washingtonby failing to install adequatesecondarycontainment,as requiredby CWA § 3l I(jXIXC), 33U.S.C. § l32l(jXIXC), andtheregulations foundat 40 C.F.R. § 112.3throughg 112.7.

CWA - National PollutantDischareeElimination System(NPDES)

A. Section402(a)of the CWA, 33 U.S.C. § 1342(a),providesthatthe Administratorof EPA may issuepermitsunderthe National PollutantDischargeElimination System(NPDES)progarn for thedischargeofpollutantsffom point sourcesto watersofthe UnitedStates.Any such dischargeis subjectto the specifictermsandconditionsprescribedin the applicablepermit.

B. For purposesof this Agreement,
Respondent is a person,asdefinedby $ 502(5)ofthe
CWA, 33 U.S.C. § 1362(5), and40 C.F.R. § 122.2.

C. For purposesof this Agreement,Respondent is an owneror operator,as definedby 40 C.F.R. § 122.2of its GenevaLakesandVersaColdCascade facilities.

D. At all relevanttimes, the GenevaLakesandVersaColdCascadefacilities arepoint sources subjectto dischargesofpollutants in its stom water,to the receivingwaters,which arewatersof the UnitedStates,asde{inedby g 502of the CWA, 33 U.S.C. § 1362,and40 C.F.R. § 122.2.

E. Section301(a)of the CWA, 33 U.S.C. § 1311(a)prohibitsthe dischargeof anypollutant fiom a point sourceto watersof the United Statesexceptin compliancewith, amongother things,a NPDESpermitissuedpursuant to Section402 of the CWA,33 U.S.C. § 1342.

F. Section402(p)of th€CWA, 33 U.S.C. § 1342(p), and40 C.F.R. § $ 122.1and122.26 provide that facilities that havestormwaterdischargesassociatedwith industrial activity are point sourcesubjecto NPDESpermittingrequirements under$ 402(a)of the CWA, 33 U.S.C.
$13a2(a).

G. Under40 C.F.R. § 122.26(b)(14), the followingcategoryof facilitiesareamongthose considered to be engagingin industrialactivityfor purposes
of $ 402(p)ofthe CWA,
33 U.S.C. § 1342(p),and40 C.F.R. § 122.26(bxl4xxi): Refrigerated Warehousing andStorage facilities (SlC Code4222).

H. Pwsuanto $$ a0Z(a)and402(p)of the CWA, 33 U.S.C.gg l3a2(a)and(p), the Wisconsin Departmentof Natural Resourcesissueda GeneralPermit (PermitNo. WI-0044938-5)which authorizesstormwater dischargesassociatedwith industrial activitiesto watersofthe United States(including dischargesto or throughmunicipal separatestorn water sewersystems),but only in accordance with the conditionsof the permit. The GeneralPermit requiresthe permittee to, amongotherthings, developand implementa Storm WaterPollution PreventionPlan C'SWPPP").A SWPPPsetsout measures to reduceandeliminatethe dischargeof contaminated stormwater. GeneralPermitsarenot requiredwhen a facility can showo'noexposure"of industrial activities andmaterialsto stormwater. Facilitiesmust submit a "no exposure certification"to qualifyfor this exclusion.

I. Respondent's NPDESpermits,and/orthe applicableregulatoryprovisions,asdescribed above,for its GenevaLakes facility, includerequirementsto prepareandimplementa SWPPP. Basedon informationprovidedby the Respondent,Respondentfailed to prepareand implement a SWPPPat its GenevaLakesfacility, in violationof $ 301(a)of the CWA,33 U.S.C. § l31l(a).

J. Respondent's NPDESpermit,and/orthe applicableregulatoryprovisions,asdescribed above,for its GenevaLakesfacility, includesrequirementsto obtain a permit for discharging non-contactcooling water to a surfacewater. Basedon information providedby Respondent, Respondentfailed to obtain a permit or submita Notice of Intent to discharge,in violation of
$301(a)of the CwA, 33 U.S.C.91311(a).

K. Respondent's NPDESpermit,and/orthe applicableregulatoryprovisions,asdescribed above,for its VersaColdCascade,
Washingtonfacility,includesrequirementsto submita No
ExposureCertificationto theWashingtonDepartmentof Ecology.Basedon information providedby Respondent,Respondentfailed to submita No ExposureCertification,in violation of $301(a)of the CWA, 33 U.S.C. § 1311(a)andtheregulationsfoundat 40 C.F.R.
$ 122.26(9)(l)(ii)

                                    V. Civil Penaltv

A. EPA agrees,baseduponthe factsandinformation submittedby Respondentandupon Respondent'scertification hereinto the veracity ofthis information,that Respondent has satisfiedall ofthe conditionssetforth in the Audit Policyandtherebyqualifiesfor a 100% reductionofthe gravity componentofthe civil penalty. Complainantallegesthat the gravity componentof thecivil penaltyis $139,000.Of thatpenalty,$23,000is attributableto CWA § 311O violationsand$116,000is attributable to CWA g 402violations.EPA alleges that this gravity componentis assessable againstRespondentfor the violations that a.rethe basis of this Agreernent.

B. Underthe Audit Policy,EPA hasdiscretionto assess a penaltyequivalentto the economic benefitRespondentgainedasa result of its noncompliance.Basedon information providedby Respondentand useof the EconomicBenefit ("BEN") computermodel,EPA hasdetermined that Respondentobtainedan economicbenefrtof $6,431 as a resultof its noncompliancein this matter. Of this amount,$6,431 is attributableto the CWA § 3I I O violations. Accordingly, the civil penaltyagreeduponby the partiesfor settlement purposesis $6,431.

                                VI. Termsof Settlement

A. Respondentagreesto pay SIX THOUSAND, FOUR HUNDRED AND THIRTY-ONE DOLLARS ($6,431),in satisfaction
of the civil penalty.

B. In paynentof the civil penaltyrelatedto the CWA violations,Respondents shall,within thirty (30) daysof issuanceof the Final Order,forward a cashier'sor certifled check,in the amountof SD( THOUSAND,FOURHIINDRED AND THIRTY-ONEDOLLARS,($6,431), madepayableto the"Oil Spill Liability TrustFund"to:

                     Commander,National Pollution FundsCenter
                             UnitedStatesCoastGuard
                     BallstonCommonOfficeBuildingSuite1000
                              4200WilsonBoulevard
                               Arlingtoq V422203

The checkshouldindicatethatit is for In re: VersaCold Corporation,
Docket No. CWA-HQ-
2005-8002.

Altematively, Respondent shall pay SIX THOUSAND, FOUR HUNDRED AND THIRTY- ONE DOLLARS,($6,431),by wire transferwith a notationof "VersaCold Corporation,Docket No. CWA-HQ-2005-8002" by usingthe followinginstructions:

                 Bank'sABA Number:       021030004TreasNYC
                 CoastGuardBeneficiaryNumber: 69O25702
                 Type/Subtype
                            Code:             1 00 0

C. Respondent shallforwmdcopiesofthesechecksor evidenceof wire transferto EPA, within five (5) daysofpayrnent,to the attentionof:

                 BethCavalier
                 SpecialLitigationandProjectsDivision(2248-4)
                 Office of Enforcementand ComplianceAssurance
                 U.S. EnvironmentalProtection Agency
                 1200Pennsylvania  Ave, N.W.
                 Ariel RiosBuilding,Room3l 19A
                 Washington, DC 20460

D. Respondent's obligationunderthis Agreementshallendwhenit haspaidthe civil penalties asrequiredby this Agreementandthe Final Order,andin accordance with SectionVI(B), and compliedwith its obligationsunderSectionVI(C), in this Agreement.

E. For the purposesof stateand federalincometaxation,Respondent shall not be entitled,and agreesnot to attempt,to claim a deductionfor any civil penaltypaymentmadepursuant to the Final Order. Any attemptby Respondenlto deductany suchpaymentsshall constitutea violation of the Agreernent.

F. Pursuantto 31 U.S.C. § 3717,EPA is entitledto assess interestandpenaltieson debtsowed to the UnitedStatesanda chargeto coverthe costofprocessingandhandlinga delinquentclaim. Interestwill thereforebegin to accrueon the civil penaltyfrom the dateof entry of the Final Order,if the penaltyis not paid by the daterequired. Interestwill be assessed
at the rate of the
UnitedStatesTreasurytax andloanratein accordance with 40 C.F.R. § 13.11.A chargewill be assessed to coverthe costsof debtcollection,includingprocessing andhandlingcostsand attomeyfees. In addition,a penaltychargeoftwelve (12) percentper year compounded annuallywillbe assessed on anyportion of the debt that remainsdelinquentmore thanninety (90) daysafterpaymentis due.

                                 VII. PublicNotice

A. The partiesacknowledgethat the settlementportionsof this Agreementwhich pertainto the CWA violationsare,pursuant to CWA § 311(bX6XCXi),33 U.S.C. § 1321(bX6XCXi),

subjecto publicnoticeandcommentrequirements.ShouldEPA receivecommentsregarding the issuanceof the Final Orderassessingthe civil penaltyagreedto in SectionVI, EPA shall forwardsuchcommentsto Respondent within ten (10) daysofthe receiptof thepublic comments.

B. As part of this Agreement,andin satisfaction of therequirementsof the Audit Policy, Respondent hascertified to certainmaterialfacts. The partiesagreethat shouldEPA receive, throughpublic commentsor in any way, information that provesor dernonstrates that these materialfacts areother than ascertified by Respondent,the portion of this Agreementpertaining to the affectedfacility or facilities,includingmitigationof theproposedpenalty,may be voided, ot this entire agreementmay be declarednull andvoid at EPA's electionprior to the issuanceof the final order,andEPA may proceedwith an enforcementaction.

C. ThepartiesagreethattheRespondent pteservesall ofits rightsshouldthis Agreementbe voided in whole or in part. The partiesfurther agreethat Respondent'sobligationsunderthis Agreementwill ceaseshouldthis Agreementbe rejectedby the Environmental AppealsBoard (EAB).

                      VIIL Reservationof Rights and Settlement

A. This Agreementandthe Final Order,when issuedby the EAB, anduponpaymentby Respondent of civil penaltiesin accordance with SectionVI shallresolveonly thecivil claims specifiedin this Agreementand shall constitutea final andcompletesettlernentofall federal civil andadministrativeclaims andcausesof action arising llom the violations specifiedin this Agreement.Nothing in this Agreementandthe Final Ordershall be construedto limit the authorityofEPA and,/orthe United Statesto undertakeany action againstRespondent,in responseto any conditionwhich EPA or the United Statesdeterminesmay presentan imminent and substantialendangerment to the public health,welfare, or the environment.Fufthermore, issuance ofthe Final Orderdoesnot constitutea waiverby EPA and/ortheUnitedStatesof its right to bring an enforcementaction,eithercivil or criminal, againstRespondentfor any other violation of any federalor statestatute,regulationor permit.

                                  lX. OtherMatters

A. Eachparty shall bearits own costsandattorneyfeesin this matter.

B. Theprovisionsof this Agreementandthe Final Order,whenissuedby theEAB, shallapply to andbe binding on the Complainant, andthe Respondent,aswell asRespondent'soffrcers, agents,successors andassigns.Any changein ownershipor corporatestatusof the Respondent including but not limited to, any transferofassetsor real or personalpropertyshal1not alter Respondent's responsibilitiesunderthis Agreement,includingtheobligationto pay the civil poralty referredto in SectionVI.

C. Nothingin this AgreementshallrelieveRespondent of thedutyto complywith all applicableprovisionsof the CWA or otherfederalstateor local lawsor statutes, nor shallit restrictEPA's authorityto seekcompiiancewith anyapplicablelaws,nor shallit be construedto
of, anyissuerelatedto anyfederal,stateor localpermit.
be a ruling on, or a determination

D. Exceptasprovidedin SectionVII(C), Respondent waivesanyrightsit mayhaveto contest the allegationscontainedhereinandtheirright to appealtheproposedFinal Orderaccompanying this Agreementby reference.

E. The undersigned ofeachpartyto this Agreementcertifythat eachis duly
representatives
authorizedby thepartywhomhe representsto enterinto thesetermsandbind thal partyto it.

FOR Respondent: FORCornplainant:

                              a                                      t/ilq
                                            A. Kaplan                Date
                           1.;'tTT. Director, Special   gation and
                                     ProjectsDivision
                                     Ofhceof RegulatoryEnfbrcement
                                     U. S. Environmental
                                                      Protection Agency


                        CERTIFICATE OFSERVICE

I herebycertify that the Final Order in the Matter of VersaColdCorporation,Docket No. CWA-HQ-2005-8002, were sentto the following personsin the manner indicated:

By Certified Mail: Suellaley
SeniorVice Presidentfor Human Resources
and Risk Management
VersaColdGroup, Head Office
2115Commissioner Street
Vancouver,BC V5L 1A6

Dated: AUG 21 2007
etteDuncan