San Pedro Forklift, Inc. (Board decision, April 22, 2013)
In re San Pedro Forklift, Inc. (EAB CWA Appeal No. 12-02): Liability affirmed in part and $7,200 penalty assessed
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Plain-English summary
San Pedro Forklift operated a transloading and equipment facility in Long Beach, California. EPA alleged that the company discharged storm water associated with industrial activity without a permit, failed to apply for a permit, and failed to develop and implement required storm-water plans. The Board held that the evidence did not establish a vehicle maintenance shop, but did establish an equipment cleaning operation and three unpermitted storm-water discharges in 2007. It assessed a $7,200 civil administrative penalty, declined to impose a separate penalty for failure to apply for a permit, and found that EPA did not prove the planning violations.
Decision snapshot
- Cited authorities: 33 U.S.C. §§ 1308, 1311, 1318, 1319, 1342, and 1362; 40 C.F.R. §§ 19.4, 22.24, 22.30, 22.31, 122.2, 122.21, 122.26, 122.41, and 123.25
- Outcome: Liability was established for three unpermitted storm-water discharges and a $7,200 penalty was assessed; the other theories were rejected or not separately penalized.
- Key point: The storm-water regulations cover recurring or intermittent equipment-cleaning activity conducted as part of a facility's business process, but the proof must still establish the regulatory elements.
Full text (EPA EAB public release)
838 ENVIRONMENTAL ADMINISTRATIVE DECISIONS
IN RE SAN PEDRO FORKLIFT, INC.
CWA Appeal No. 12-02
FINAL DECISION AND ORDER
Decided April 22, 2013
Syllabus
Region 9 (“Region”) of the United States Environmental Protection Agency (“EPA”
or “Agency”) appeals from Administrative Law Judge Barbara A. Gunning’s (“ALJ”) Initial Decision in In re San Pedro Forklift, Docket No. CWA-09-2009-0006, issued January 27, 2012. The decision dismissed a complaint the Region had filed against San Pedro Forklift, Inc. (“San Pedro”) of Long Beach, California, alleging the following three counts of viola- tion of the Clean Water Act’s (“CWA”) storm water program: (1) unlawful discharges of “storm water associated with industrial activity” to waters of the United States without a CWA permit authorizing the discharges, in violation of CWA § 301(a), 33 U.S.C.
§ 1311(a), and 40 C.F.R. § 122.26(b)(14)(viii); (2) failure to apply for a CWA permit prior to commencing industrial activities, in violation of CWA § 308(a), 33 U.S.C. § 1318(a), and 40 C.F.R. § 122.21; and (3) failure to develop and implement a storm water pollution prevention plan and a storm water monitoring plan prior to commencing industrial activi- ties, in violation of the State of California’s general permit for industrial storm water discharges.
After a six-day evidentiary hearing, the ALJ held that the Region failed to prove that
San Pedro was regulated under 40 C.F.R. § 122.26(b)(14)(viii) as a “transportation facility” having a “vehicle maintenance shop” and/or “equipment cleaning operations.” Storm water discharges from such facilities are considered “discharges associated with industrial activ- ity” and lawfully may occur only in accordance with a permit issued under section 402(p) of the CWA, 33 U.S.C. § 1342(p), which San Pedro did not have in the period alleged in the complaint. Accordingly, the ALJ dismissed the complaint for lack of regulatory jurisdiction.
On appeal, the Region asks the Environmental Appeals Board (“Board”) to reverse
and remand the Initial Decision, claiming that the ALJ erred by dismissing the complaint on the basis of an unreasonably narrow interpretation of the term, “associated with indus- trial activity,” and the related terms, “vehicle maintenance shop” and “equipment cleaning operations.” San Pedro argues that the ALJ did not err and asks the Board to affirm the Initial Decision.
Held: The ALJ erred in defining the regulatory terms, “vehicle maintenance shop”
and “equipment cleaning operations,” too narrowly and inconsistent with the purpose and intent of the CWA, the storm water regulations, and the Agency’s own interpretation of the regulations, as expressed in the preamble to those rules and Agency guidance documents. The Board holds that the term, “vehicle maintenance shop,” in the storm water regulations refers to a nontransient area or location that is designated for use for vehicle maintenance
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or in which vehicle maintenance is conducted on a regular or repeated basis, including intermittently or sporadically. The Board holds further that the term, “equipment cleaning operations,” in the storm water regulations refers to cleaning of industrial equipment any- where on a facility’s site pursuant to a business process or practice for equipment clean- ing. The Board rejects as overbroad the Region’s interpretation that evidence of any on-site vehicle maintenance or equipment cleaning activities alone can establish the required ele- ments of “vehicle maintenance shop” or “equipment cleaning operations,” respectively.
With respect to Count 1, after evaluating all the evidence in the administrative re-
cord and applying the interpretive standards set forth above, the Board affirms the ALJ’s finding that the Region failed to prove that San Pedro had a vehicle maintenance shop on its premises, but reverses her finding that the Region failed to prove that San Pedro con- ducted equipment cleaning operations at its facility. The Board holds that the evidence establishes that San Pedro conducted an equipment cleaning operation on May 17, 2007, pursuant to the company’s cleaning practices, and subsequently discharged storm water associated with industrial activity without a permit on three days within the period of viola- tion alleged in the complaint. The Board assesses an administrative penalty of $7,200 for these CWA violations.
With respect to Count 2, the Board holds that on the facts of this case, it would not
impose a separate penalty for failing to apply for a permit prior to commencing industrial activity, even if it were to conclude it had authority to do so. Accordingly, the Board rules that it need not resolve the underlying legal question of whether failure to apply for a permit is a violation of section 308(a) of the CWA.
Finally, with respect to Count 3, the Board holds that the Region did not prove by a
preponderance of the evidence that San Pedro failed to develop and implement a storm water pollution prevention plan and a storm water monitoring plan within the alleged pe- riod of violation.
Before Environmental Appeals Judges Leslye M. Fraser,
Catherine R. McCabe, and Kathie A. Stein.
Opinion of the Board by Judge Leslye M. Fraser, in which Judge
Stein joined. Judge McCabe joined in the Board’s opinion as to all parts except Part VII.B.1.a, for which she filed a separate dissenting opinion:
I. STATEMENT OF THE CASE
Region 9 (“Region”) of the United States Environmental Protection Agency
(“EPA” or “Agency”) seeks reversal and remand of Administrative Law Judge Barbara A. Gunning’s (“ALJ”) Initial Decision in In re San Pedro Forklift, Docket No. CWA-09-2009-0006, issued January 27, 2012. The decision dismissed a com- plaint that the Region had filed against San Pedro Forklift, Inc. (“San Pedro”) of Long Beach, California, alleging three counts of violation of the Clean Water Act’s (“CWA” or “Act”) storm water program.
Count 1 alleged that on at least fifty-seven occasions between October 1,
2004, and December 24, 2007, San Pedro violated section 301(a) of the CWA,
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33 U.S.C. § 1311(a), and EPA’s storm water regulations governing discharges as- sociated with industrial activity, 40 C.F.R. § 122.26(b)(14), by discharging pollu- tants into waters of the United States without a CWA permit. Count 2 alleged that San Pedro violated section 308(a) of the CWA, 33 U.S.C. § 1318(a), and 40 C.F.R. § 122.21, by failing to apply for a CWA permit prior to commencing industrial activities. Count 3 alleged that San Pedro violated the State of Califor- nia’s general permit for industrial storm water discharges by failing to develop and implement a storm water pollutant prevention plan (“SWPPP”) and a storm water monitoring program plan prior to commencing industrial activities. The Re- gion alleged that the nature, circumstances, extent, and gravity of the violations were “significant,” and thus it sought assessment of a civil administrative penalty of $177,500 against San Pedro.1
The ALJ held that liability for the allegations in the complaint would not
attach unless the Region proved by a preponderance of the evidence that San Pe- dro was regulated under 40 C.F.R. § 122.26(b)(14)(viii) as a “transportation facil- ity” having: (a) one of certain specified Standard Industrial Classification (“SIC”) codes; and (b) a “vehicle maintenance shop” and/or “equipment cleaning opera- tions.” Storm water discharges from facilities with these characteristics are con- sidered “discharges associated with industrial activity” and are subject to CWA permit requirements. The ALJ assumed without deciding that the SIC code re- quirement was fulfilled, but she found that the Region failed to carry its burden of proving that San Pedro had either a “vehicle maintenance shop” or “equipment cleaning operations.” Consequently, the ALJ held that San Pedro was not liable as charged and dismissed the complaint for lack of regulatory jurisdiction under 40 C.F.R. § 122.26(b)(14)(viii).
On appeal to the Environmental Appeals Board (“Board”), the Region
claims the ALJ erred by dismissing the complaint on the basis of an unreasonably narrow interpretation of the term, “associated with industrial activity.” It argues that in the course of analyzing whether the evidence indicated that San Pedro had a “vehicle maintenance shop” or “equipment cleaning operations” at its facility, the ALJ created an array of “narrative standards” by which to assess that evidence. The Region asserts that these “narrative standards” are not supported by the regu- lations, the regulatory history, or Agency guidance, and that their inherent nar- rowness and ambiguity will cause implementation and policy problems for EPA. The Region therefore asks the Board to reverse the ALJ’s Initial Decision and remand the case for a new evaluation of liability and appropriate penalty that is consistent with the storm water program.
1 After the evidentiary hearing in this case (discussed in Part V below), the Region reduced the
penalty amount sought to $120,000. EPA Region 9’s Brief in Support of Complainant’s Proposed Findings of Fact and Conclusions of Law at 55 (filed May 20, 2011) (“R9 Post-Hearing Br.”).
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For the reasons explained below, the Board affirms the ALJ’s decision in
part and reverses it in part.
II. ISSUE ON APPEAL
The question presented in this appeal is whether the ALJ erred in dismissing
the complaint for lack of regulatory jurisdiction under 40 C.F.R.
§ 122.26(b)(14)(viii), based on her finding that the Region failed to prove, by a preponderance of the evidence, that San Pedro Forklift operated a “vehicle main- tenance shop” or conducted “equipment cleaning operations” and thus was re- quired to obtain a storm water discharge permit.
III. SUMMARY OF DECISION
The Board concludes:
(1) The ALJ erred in defining the regulatory terms “vehicle maintenance shop”
and “equipment cleaning operations” too narrowly and inconsistent with the
purpose and intent of the CWA, the storm water regulations, and the
Agency’s own interpretation of the regulations, as expressed in the preamble
to those rules and Agency guidance documents.
(2) San Pedro is liable for discharging storm water associated with industrial
activity without a permit on three separate occasions, for which the Board
assesses a penalty of $7,200.
(3) On the facts of this case, the Board would not impose a separate penalty for
failing to apply for a permit prior to commencing industrial activity even if
the Board were to conclude it had authority to do so; thus, the Board need
not resolve the underlying legal question of whether failure to apply for a
permit is a violation of section 308(a) of the CWA; and
(4) The Region did not prove by a preponderance of the evidence that San Pe-
dro failed to develop and implement a Storm Water Pollution Prevention
Plan and a storm water monitoring plan within the alleged period of
violation.
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IV. JURISDICTION AND STANDARD OF REVIEW
The Board has jurisdiction to adjudicate this Class II administrative penalty
appeal2 under section 309(g)(2)(B) of the CWA, 33 U.S.C. § 1319(g)(2)(B), and sections 22.1(a)(6) and 22.30(a) of the Agency’s Consolidated Rules of Practice, 40 C.F.R. part 22. The Board reviews an administrative law judge’s factual and legal conclusions on a de novo basis. 40 C.F.R. § 22.30(f) (the Board shall “adopt, modify, or set aside” the ALJ’s findings of fact and conclusions of law or exercise of discretion); see Administrative Procedure Act § 8(b), 5 U.S.C. § 557(b) (“[o]n appeal from or review of the initial decision, the agency has all the powers [that] it would have in making the initial decision except as it may limit the issues on notice or by rule”). In so doing, the Board typically will grant deference to an administrative law judge’s determinations regarding witness credibility and the judge’s factual findings based thereon. See, e.g., In re Euclid of Va., Inc., 13 E.A.D. 616, 673-75 (EAB), appeal voluntarily dismissed, No. 08-1088 (D.D.C. Oct. 21, 2008); In re Cutler, 11 E.A.D. 622, 640-41 (EAB 2004); In re City of Salisbury, 10 E.A.D. 263, 276, 293-96 (EAB 2002). All matters in contro- versy must be established by a preponderance of the evidence. 40 C.F.R.
§ 22.24(b); see, e.g., In re Mayes, 12 E.A.D. 54, 62, 87-88 (EAB 2005), aff’d, No. 3:05-CV-478, 2008 WL 65178 (E.D. Tenn. Jan. 4, 2008); In re Phoenix Con- str. Servs., 11 E.A.D. 379, 404 (EAB 2004); In re Britton Constr. Co., 8 E.A.D. 261, 274 (EAB 1999).
V. FACTUAL AND PROCEDURAL HISTORY
For more than a decade, San Pedro Forklift has leased a nearly three-acre
tract of land in Long Beach, California, from the Port of Los Angeles. Adminis- trative Hearing Transcript (“Tr.”) at 287, 327-28; Complainant’s Exhibits (“CX”) 35, 37. Most of the property is covered by a paved, impervious surface, with a covered loading dock situated along the eastern edge of the tract. The load- ing dock is flanked by two warehouses and backed by a railroad line that runs north and south. Tr. at 93; CX 11 figs. 1-2, at 5-6. San Pedro has conducted a variety of activities at the site over the years, including, primarily, the “transload- ing” (i.e., transferring) of goods from one mode of transportation (such as ocean shipping containers) to another (such as tractor-trailers), for export and import. Tr. at 194-95, 1413-24, 1911, 1916-18, 2168-70; see CX 12, 33, 35. The company uses forklifts, a truck, yard goats (a form of small rig or truck), and other equip-
2 For violations set forth in CWA § 309(g)(1), the CWA establishes two classes of administra-
tive penalties: Class I, which may not exceed $10,000 per day, up to a maximum penalty of $25,000, and Class II, which may not exceed $10,000 per day, up to a maximum penalty of $125,000. CWA
§§ 309(g)(2)(A)-(B), 33 U.S.C. §§ 1319(g)(2)(A)-(B). These numbers have been adjusted upward to
$11,000/$32,500 for Class I and $11,000/$157,500 for Class II, due to inflation. See 40 C.F.R. § 19.4 tbl. 1 (list of revised penalties).
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ment and machinery to conduct its transloading operations. CX 12, at 7. San Pe- dro also fumigates shipments of fruit, vegetables, flowers, and other produce at the site, under the supervision of the United States Department of Agriculture (“USDA”). Tr. at 1911-41; CX 12, at 4.
Two storm drains are situated near the southern boundary of the property.
These drains divert storm water that flows across the facility’s surfaces into the City of Los Angeles’ municipal separate storm sewer system, which discharges approximately 1,000 feet west into the Dominguez Channel. Tr. at 538, 541-42, 554, 658; CX 11, at 3, 7. That channel drains directly into Los Angeles Harbor and San Pedro Bay and ultimately into the Pacific Ocean. Tr. at 732-34; CX 53, fig. 2-7, at 2-28.
In 2004, EPA commenced a national priorities initiative that targeted ports
as an area of focus for storm water enforcement. San Pedro, a port tenant, fell within the scope of this initiative, and Region 9 inspected the facility on May 17, 2007, and again on August 18, 2009. After each inspection, the Region issued an administrative compliance order, directing San Pedro to take specific actions to come into compliance with the CWA. See CX 28-29 (compliance orders). After the May 2007 inspection, San Pedro filed a notice of intent to be covered under the State of California’s general industrial storm water permit, and, on Decem- ber 24, 2007, San Pedro received authorization to discharge industrial storm water in accordance with that permit. See State of California Water Resources Control Board, Water Quality Order No. 97-03-DWQ, [NPDES] General Permit No. CAS000001, Waste Discharge Requirements for Discharges of Storm Water Associated with Industrial Activities (CX 27); Letter from State of California Water Resources Control Board to San Pedro Forklift, Inc. (Dec. 24, 2007) (CX 4) (authorizing San Pedro to discharge industrial storm water in accordance with the general permit). San Pedro also prepared a SWPPP and a storm water monitoring plan, both finalized on January 23, 2008, and took other site clean-up and containment measures in response to EPA’s orders.3 See Frog Environmental,
3 Both before the ALJ and in this appeal, San Pedro has argued that “it was not and is not
required to have a storm water permit” because:
[San Pedro] conducts no activities that come within the regulatory juris-
diction of the EPA under the [CWA]. Moreover, the SIC Code most ap-
plicable to [the company’s] operations (no. 4213) does not require a
Storm Water Permit under the Act. Nevertheless, and solely out of a
desire to avoid the costs and undue consumption of time that this litiga-
tion has required, [San Pedro], without any legal obligation to do so,
filed [a Notice of Intent] and promulgated a storm water program.
Respondent’s Brief at 2 (filed June 20, 2012) (“San Pedro Resp. Br.”); see also Respondent’s Brief in Support of Findings of Fact and Conclusions of Law at 1 (filed May 26, 2011) (“San Pedro Post-Hearing Br.”).
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Inc., San Pedro Forklift, Inc., Storm Water Pollution Prevention Plan (Jan. 23, 2008) (CX 12) (SWPPP and monitoring plan); Letter from John. C. Glaser, Glaser, Tonsich & Associates LLP, to Mike Massey, Regional Counsel, EPA Re- gion 9, at 3-4 (Dec. 12, 2007) (CX 31) (describing best management practices implemented on site); Letter from John C. Glaser, Glaser, Tonsich & Associates LLP, to Mike Massey, Esq. & Rick Sakow, EPA Region 9 (Feb. 7, 2008) (CX 35) (site photographs).
On September 29, 2009, finding San Pedro to still not be in compliance
with the Act or the general permit, the Region filed an administrative complaint against the company, alleging three counts of violation of the CWA: (1) dis- charges of pollutants to waters of the United States without a permit; (2) failure to apply for a permit prior to commencing industrial activity; and (3) failure to de- velop and implement a SWPPP and a storm water monitoring program, as re- quired by the storm water permit. See Compl. ¶¶ 28-48, at 6-9. In the complaint, the Region made no specific allegations about San Pedro having a “vehicle main- tenance shop” or “equipment cleaning operations” on its premises.4 The Region did allege, however, that storm water runoff from the facility contained “‘pollu- tants,’ including industrial waste,” which the facility unlawfully discharged into waters of the United States on fifty-seven days within the period of violation.5 Id.
¶¶ 32-36, at 7. “Given the condition of the facility,” the Region continued, “EPA believes it is likely that storm water discharges from this facility contained oil and metals.” Id. ¶ 51, at 10. The Region proposed a penalty of $177,500 for the al- leged violations. Id. ¶ 53, at 10. On November 13, 2009, San Pedro filed an an- swer denying the allegations in the complaint, denying that a permit was required for its operations, and requesting an administrative hearing.
The ALJ presided over a six-day hearing in the case, from January 24
through 29, 2011, at which the parties presented witnesses and documentary evi- dence. Ms. Amy Miller, EPA’s lead storm water inspector, testified that during the May 2007 inspection, she observed large trucks and forklifts on the property, forklifts moving goods between the loading dock and the trucks, and goods being stored in the main paved yard area. Tr. at 93, 131, 243. She also found two fifty-five-gallon blue metal drums sitting on wooden pallets in the northeastern portion of the facility. One drum was coated almost completely with a black oily
4 Instead, the Region alleged, among other things, that during EPA’s May 2007 inspection of
San Pedro’s facility, the inspectors “observed sources of pollutants (oil and batteries, 55-gallon drums, obsolete equipment stored outdoors with no cover or containment) exposed to storm water, poor housekeeping (trash in the yard) and large pavement stains, indicating prior spills that were not prop- erly addressed.” Compl. ¶ 23, at 5.
5 In its post-hearing brief, the Region reduced the number of days of violation to 49 days based
on its expert’s modeling data and rainfall data collected at Long Beach’s Daugherty Field Airport, which is located near the San Pedro facility. R9 Post-Hearing Br. at 22-23.
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substance that exuded a petrochemical odor of some kind, and dark stains were present on the wall behind that drum and on the pallet and concrete underneath the drum. Tr. at 95-96, 107-09; CX 14, photo 7. The other drum was compara- tively clean, but, unlike the coated drum, the clean drum had a large pump on its lid. Tr. at 110-12, 298-99; CX 14, photo 6. Ms. Miller testified that several smaller buckets or containers near each blue drum also appeared to contain petro- leum products of some kind, and several containers near the clean drum had spouts, presumably for pouring. Tr. at 96, 107, 110-11, 146-47, 301; CX 14, photos 6-7. She also testified that the area generally smelled like oil. Tr. at 95-96, 107-08. Ms. Miller did not offer any direct evidence regarding how these materi- als were used (e.g., such as in what equipment or in which vehicles) at the San Pedro facility. See Tr. at 88-263, 409-525; Initial Decision (“Init. Dec.”) at 23.
In addition, Ms. Miller testified that she found piles of metal poles and other
scrap metal items, a large automobile-type battery on a pallet, painting equipment, stacks of baled plastic, uncovered trash and debris of various kinds, and pavement stains (of the type typically caused by oil or fluid leaks from motor vehicles) scat- tered all over the facility grounds. Tr. at 114-17, 120-23, 131-32, 349; CX 14, photos 3-5, 10. She also testified that when she arrived for the May 2007 inspec- tion, she saw a man hosing off a forklift parked on the loading dock, using what appeared to be a garden hose to rinse the forklift’s exterior. Tr. at 118-19, 131-32, 231-33, 236-37, 2222-23, 2236-38, 2241-42. She later saw men using brooms to push the washwater off both sides of the loading dock.6 Tr. at 119, 132, 2229, 2236; see CX 14, photo 8. Finally, Ms. Miller testified that during the Au- gust 2009 inspection, she found more than two dozen large tires stacked by the northwestern perimeter fence.7 E.g., Tr. at 443-45; CX 16, photo 14. Ms. Miller stated that her collective observations from both inspections led her to believe that San Pedro was conducting maintenance at the facility. Tr. at 242, 255, 431.
The Region also introduced San Pedro’s SWPPP, which the company final-
ized in early 2008 (i.e., after the Count 1 period of violation identified in the Region’s 2009 complaint). The SWPPP stated that San Pedro stored diesel fuel, engine oil, hydraulic fluid, transmission fluid, coolant, bromide, and propane on site and that these materials were “necessary” for San Pedro’s daily operations.
6 Mr. Renato Balov, San Pedro’s co-owner and Chief Operations Officer, testified at the hear-
ing that the water on the loading dock was condensation outflow from an adjacent produce container, and that no washing of a forklift had occurred. Tr. at 1979-88. Despite San Pedro’s arguments to the contrary, see San Pedro Resp. Br. at 22-27, the Board finds that the ALJ clearly stated in her Initial Decision that she found San Pedro’s arguments “unpersuasive,” and instead found Ms. Miller’s testi- mony regarding her observations to be “credible.” Init. Dec. at 36-37; see id. at 32 n.21.
7 Mr. Balov testified at the hearing that the tires were not used for vehicles, but to secure
tarpaulin covers during fumigation activities, pursuant to a requirement in the USDA’s treatment man- ual. See Tr. at 1970-72, 2015-16, 2139. The Region did not offer any further evidence to support its contention that the tires were used for vehicle maintenance.
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SWPPP at 8 (“Significant Materials List”). The SWPPP also identified the fork- lifts, yard goats, truck, and other machinery and equipment necessary for San Pe- dro’s operations as “Operational Equipment.” Id. at 7. In a list of “Existing Non- structural [Best Management Practices]” for that equipment, the SWPPP reported that “[a]ll Operational Equipment is well maintained by an outside company,” and that “Operational Equipment is inspected on a regular basis for fluid leaks or drips and repaired immediately if necessary.” Id. at 18. Mr. Terry Balog, a technical professional retained by San Pedro to prepare and implement the SWPPP, testi- fied that he had never observed any outside company visiting San Pedro’s facility to maintain the operational equipment, but that “the forklift maintenance more than likely would be done on-site.” Tr. at 1884, 1887.
On cross-examination, San Pedro’s attorneys asked Ms. Miller whether she
observed a “vehicle maintenance facility” on the premises, and they repeatedly pressed her to identify the specific locations on the site where she found the vari- ous purported indicia of maintenance activity. See, e.g., Tr. at 348-52, 409-26, 441-56, 460-62. Ms. Miller responded by stating that she saw evidence that vehi- cles were being maintained at the facility, and that “it does not matter” where on the facility evidence of vehicle maintenance is observed, in terms of determining whether a facility is required to obtain a storm water permit. See, e.g., Tr. at 242, 351, 502-03. Additionally, Ms. Miller admitted that she did not know whether the forklifts were maintained on site, nor did she know from which vehicle or equip- ment the battery she observed on a pallet had been taken. Tr. at 244-45, 254-55.
Mr. Mark Bulot, an expert witness for San Pedro, testified that he had ques-
tioned the company’s owners about “what they did in operating and maintaining their forklifts.” Tr. at 1611. They told him that “[b]asically, there is occasional topping off of hydraulic fluid and occasionally washing, you know, hosing off the dust,” and “that’s [pretty much] it.” Id. Mr. Anthony Severini, another expert wit- ness for San Pedro, testified that San Pedro’s owners told him a third-party com- pany periodically came on-site to conduct minor forklift maintenance, such as changing or topping off hydraulic oil, engine oil, and fuel, and then removed the used fluids from the site. Tr. at 1427-31. He also testified that San Pedro’s owners had told him that the facility’s operations “have been, essentially, unchanged for a decade.” Tr. at 1433. In addition, Mr. Renato Balov, one of San Pedro’s owners, testified that the forklifts were fueled on-site with propane gas. Tr. at 2181-82.
With respect to equipment cleaning, the SWPPP also states that:
The outside surfaces of the Trucks, Trailers, and Contain-
ers are cleaned regularly in order to minimize or eliminate
any contact between operational fluids and storm water.
* * *
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The outside surfaces of the machinery and equipment are
cleaned regularly in order to minimize or eliminate any
contact between operational fluids and storm water.
SWPPP at 15, 18 (emphasis added). Upon cross-examination, Mr. Balov stated that contrary to the statements in the SWPPP, San Pedro did not clean trucks, trailers, or containers at the site, and if San Pedro did need to clean any of the operational equipment, it would rely on third parties for help. Tr. at 2119, 2122-23, 2125, 2181.
After a period of post-hearing briefing, the ALJ issued her Initial Decision
on January 27, 2012, finding that the Region had failed to establish San Pedro’s liability by a preponderance of the evidence, and accordingly dismissed the com- plaint. Init. Dec. at 29-31, 38-39. The ALJ assessed all of the evidence presented and held that it “supported the conclusion that [San Pedro] was conducting occa- sional activities that might properly be termed maintenance of vehicles and equip- ment. Nevertheless, the overall evidence adduced at hearing does not meet the definition of ‘vehicle maintenance shop.’” Id. at 29. The ALJ also ruled that the Region had not established that San Pedro “was engaged in equipment cleaning operations that would trigger the jurisdiction of 40 C.F.R. § 122.26(b)(14)(viii).” Id. at 37.
In so ruling, the ALJ examined the plain meaning of the regulatory lan-
guage and consulted a dictionary to determine the ordinary meaning of “shop” and “operations.” Id. at 20, 31-32. She noted that “[g]iven the inclusion of [these] word[s], it is impossible to ignore that the regulation clearly contemplates that vehicle maintenance activities occur in the context of a ‘shop,’” and “that equip- ment washing activities must rise to the level of a business ‘operation’ before trig- gering the coverage of Paragraph (viii).” Id. at 20, 32. The ALJ held that the inclu- sion of the words, “shop” and “operations,” narrows the scope of the regulatory language, and that without them, the terms, “vehicle maintenance” and “equipment cleaning,” would have a “significantly broader reach.” Id.
The ALJ further found that the “record contains no evidence of a discrete
structure used for the purpose of vehicle maintenance, nor was there sufficient evidence that [San Pedro] was engaged in an industrial establishment for the pur- pose of maintaining or repairing vehicles.” Id. at 30. She also stated that “[w]hile it is conceivable that [] the requirement for a maintenance ‘shop’ could be met by the presence of a sufficient volume, level, and concentration of outdoor repair activity, such facts [were] not present in the record before [her],” and that the “reference to volume is critical as it indicates EPA’s focus on operationally rele- vant activities.” Id. She also noted that even if forklifts were considered “vehicles” for purposes of the regulations, San Pedro “did not maintain a vehicle fleet or engage in the type of daily maintenance activities that would customarily require the presence of a dedicated maintenance shop.” Id. at 31 n.19.
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With respect to the Region’s claim that San Pedro was engaged in equip-
ment cleaning operations that would trigger the jurisdiction of 40 C.F.R.
§ 122.26(b)(14)(viii), the ALJ held that despite Ms. Miller’s credible testimony regarding seeing a man rinsing a forklift on the loading dock, and despite the statements in the SWPPP:
Neither of these sets of facts, independently or taken to-
gether, rise to the level of “equipment cleaning opera-
tions.” The term “equipment cleaning operations” con-
notes a systematic process or “operation” that has a
distinct commercial or organizational, though not neces-
sarily profit-relevant, purpose for the regulated entity.
* * * The regulations, when read in their entirety, con-
template regulation of sustained or organized operations,
not one-off or incidental events. An “operation” is more
than periodically wiping dirt off the surface of a trailer
and it is more than occasionally hosing off the exterior of
a forklift. Rather, these latter activities are akin to individ-
ual car washing.
Init. Dec. at 37. The ALJ also found that the Region “was unable to establish that any outside entity performed regular cleaning operations at San Pedro Forklift.” Id. at 35.
On April 27, 2012, the Region filed an appeal of the Initial Decision with
the Board, seeking a remand. See Appellant’s Appeal Brief (“R9 Appeal Br.”). On June 20, 2012, San Pedro filed a response to the Region’s appeal. See Respon- dent’s Brief (“San Pedro Resp. Br.”). The Region subsequently filed a reply to San Pedro’s response, and the Board requested supplemental briefing. The parties sub- mitted their supplemental briefs on September 28, 2012, and October 12, 2012, respectively. See Appellant’s Supplemental Brief (“R9 Suppl. Br.”); Respondent’s Reply to Appellant’s Supplemental Brief (“San Pedro Suppl. Br.”). The case now stands ready for decision by the Board.
VI. STATUTORY AND REGULATORY HISTORY
A. The Statute and Legislative History: Congress’ Intent
Section 301(a) of the CWA prohibits any person from discharging any pol-
lutant from a point source to the waters of the United States, unless such dis- charge complies with specified provisions of the CWA. CWA §§ 301(a), 502, 33 U.S.C. §§ 1311(a), 1362. One such provision is section 402, 33 U.S.C. § 1342, which establishes the National Pollutant Discharge Elimination System
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(“NPDES”) permitting program. EPA or an authorized state may issue NPDES permits to water pollution sources, provided the sources fulfill all applicable re- quirements of the Act.8 The NPDES program initially targeted industrial and mu- nicipal dischargers, but as time advanced and those sources became better con- trolled, Congress expanded the program to include other sources of water pollution. In 1987, Congress added section 402(p) to the statute, to begin address- ing some of the most serious water pollution problems caused by storm water runoff. See Water Quality Act of 1987, Pub. L. No. 100-4, tit. IV, § 405, 101 Stat. 7, 69-71 (Feb. 4, 1987) (codified at 33 U.S.C. § 1342(p)).
Among other things, section 402(p) requires that entities with storm water
discharges “associated with industrial activity” must obtain NPDES permits for those discharges. CWA § 402(p)(2)(B), (3)(A), 33 U.S.C. § 1342(p)(2)(B), (3)(A). The statutory record mostly is silent as to the meaning of the term “associ- ated with industrial activity,” with neither the statute itself nor relevant congres- sional reports in the legislative record speaking to the issue. See CWA §§ 402(p), 502, 33 U.S.C. §§ 1342(p), 1362; see, e.g., H.R. Rep. No. 99-1004 (1986); S. Rep. No. 99-50 (1985); H.R. Rep. No. 99-189 (1985). The congressional de- bates, however, provide the following interpretive instruction, repeated nearly verbatim by four members of Congress over a two-year period:
It is important * * * to clarify that a discharge is “associ-
ated with industrial activity” if it is directly related to
manufacturing, processing, or raw materials storage areas
at an industrial plant. Discharges [that] do not meet this
definition include those discharges associated with park-
ing lots and administrative and employee buildings.
132 Cong. Rec. 31,964 (1986) (statement of Rep. Gene Snyder); accord id. at 31,968 (statement of Rep. James Rowland); 133 Cong. Rec. 985 (1987) (state- ment of Rep. John Hammerschmidt); 133 Cong. Rec. 991-92 (1987) (statement of Rep. Arlan Stangeland).
8 NPDES permits may be issued to individual dischargers or as general permits that apply to
groups of similar dischargers. See 40 C.F.R. §§ 122.26(c)(1), .28. A general permit also may be issued by an EPA-approved state NPDES program, pursuant to CWA § 402(b), 33 U.S.C. § 1342(b), and 40 C.F.R. § 123.25. In 1973 and 1989, EPA authorized the State of California to implement elements of the federal NPDES program within state boundaries. See Approval of California’s Revisions to the State [NPDES] Program, 54 Fed. Reg. 40,664, 40,664-65 (Oct. 3, 1989). San Pedro applied for cover- age under the California Statewide Storm Water General Permit on or about December 12, 2007, see CX 31, at 2, which the State granted on December 24, 2007. CX 4; see CX 27 (general permit). San Pedro reports that it filed a Notice of Termination to remove itself from coverage under the California General Permit, which the State granted on April 7, 2011. San Pedro Resp. Br. at 3.
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B. The Regulations and Regulatory History: EPA’s Interpretation of Congress’ Intent
In 1990, EPA promulgated regulations to begin implementing sec-
tion 402(p). See National Pollutant Discharge Elimination System Permit Appli- cation Regulations for Storm Water Discharges, 55 Fed. Reg. 47,990, 48,062-75 (Nov. 16, 1990) (codified in various sections of 40 C.F.R. pts. 122, 123, 124). In so doing, the Agency chose to define the term, “storm water discharge associated with industrial activity,” in part by “adopting the language used in the legislative history” (quoted above) and “supplementing it with a description of various types of areas that are directly related to an industrial process.” Id. at 48,007 (emphasis added). Thus, in the “Definitions” portion of section 122.26, the regulations pro- vide the following:
Storm water discharge associated with industrial activity
means the discharge from any conveyance that is used for
collecting and conveying storm water and that is directly
related to manufacturing, processing[,] or raw materials
storage areas at an industrial plant. * * *
For the categories of industries identified in this section,
the term includes, but is not limited to, storm water dis-
charges from industrial plant yards; immediate access
roads and rail lines used or traveled by carriers of raw
materials, manufactured products, waste material, or
by-products used or created by the facility; material han-
dling sites; refuse sites; sites used for the application or
disposal of process waste waters * * * ; sites used for the
storage and maintenance of material handling equipment;
sites used for residual treatment, storage, or disposal;
shipping and receiving areas; manufacturing buildings;
storage areas (including tank farms) for raw materials,
and intermediate and final products; and areas where in-
dustrial activity has taken place in the past and significant
materials remain and are exposed to storm water.
For the purposes of this paragraph, material handling ac-
tivities include storage, loading and unloading, transporta-
tion, or conveyance of any raw material, intermediate
product, final product, by-product, or waste product.
The term [storm water discharge associated with indus-
trial activity] excludes areas located on plant lands sepa-
rate from the plant’s industrial activities, such as office
buildings and accompanying parking lots[,] as long as the
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drainage from the excluded areas is not mixed with storm
water drained from the above-described areas.
40 C.F.R. § 122.26(b)(14) (paragraph breaks added).
After this general introduction, the Agency lists eleven specific categories
of facilities it considers engaged in “industrial activity.” See id.
§ 122.26(b)(14)(i)-(xi). The category of relevance in the present case is set forth in subsection (b)(14)(viii), as follows:
Transportation facilities classified as Standard Industrial
Classifications 40, 41, 42 (except 4221-25), 43, 44, 45,
and 5171 [that] have vehicle maintenance shops, equip-
ment cleaning operations, or airport deicing operations.
Only those portions of the facility that are either involved
in vehicle maintenance (including vehicle rehabilitation,
mechanical repairs, painting, fueling, and lubrication),
equipment cleaning operations, airport deicing operations,
or [that] are otherwise identified under
paragraphs (b)(14)(i)-(vii) or (ix)-(xi) of this section are
associated with industrial activity.
Id. § 122.26(b)(14)(viii).
The regulations do not include definitions for the regulatory terms, “vehicle
maintenance shop” and “equipment cleaning operations.” EPA did prepare, how- ever, a detailed preamble to the final storm water rules that provided information on the regulations and EPA’s intended meaning of many of its provisions. See 55 Fed. Reg. at 47,990-48,062; see also 54 Fed. Reg. 49,416, 49,430-32 (pro- posed Dec. 7, 1988). In a section addressing the regulatory term, “storm water discharges associated with industrial activity,” the Agency elaborated on the scope of the statutory term, “associated with industrial activity,” set forth in CWA sec- tion 402(p). 55 Fed. Reg. at 48,007-15. As a foundational interpretive principle, the Agency referenced the congressional statements that a storm water discharge is so “associated” if it is “directly related to manufacturing, processing[,] or raw materials storage areas at an industrial plant.” Id. at 48,007 (citing legislative his- tory). The Agency then built upon that principle by describing specific types of areas that are directly related to an industrial process, stating:
Today’s rule clarifies the regulatory definition of “associ-
ated with industrial activity” by adopting the language
used in the legislative history and supplementing it with a
description of various types of areas that are directly re-
lated to an industrial process (e.g., industrial plant yards,
immediate access roads and rail lines, drainage ponds,
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852 ENVIRONMENTAL ADMINISTRATIVE DECISIONS
material handling sites, sites used for the application or
disposal of process waters, sites used for the storage and
maintenance of material handling equipment, and known
sites that are presently or have been used in the past for
residual treatment, storage, or disposal).
Id. at 48,007 (emphasis added); see id. at 48,065 (codified at 40 C.F.R.
§ 122.26(b)(14)) (repeating, in modified form, this nonexhaustive listing of vari- ous types of areas deemed “associated with industrial activity” and thus requiring permits for storm water discharges therefrom).
The preamble also provided responses to specific questions stakeholders
had raised during the comment period on the proposed rule. In one relevant exam- ple, numerous commenters had argued that covered (roofed) maintenance facili- ties should be excluded from the regulation because they purportedly do not pose a storm water problem. Id. at 48,009. EPA disagreed, observing that such facili- ties “will invariably have points of access and egress, and frequently will have outside areas where parts are stored and disposed of. Such areas are locations where oil, grease, solvents[,] and other materials associated with maintenance ac- tivities will accumulate,” and thus they are considered “associated with industrial activity.” Id. (emphasis added).
In another example, commenters argued that road or railroad drainage
within a facility should be excluded from the regulation. Id. EPA again disagreed, explaining that “[a]ccess roads and rail lines * * * are areas that are likely to accumulate extraneous material from raw materials, intermediate products[,] and finished products that are used or transported within, or to and from, the facility. These areas will also be repositories for pollutants such as oil and grease from machinery and vehicles using these areas. As such they are related to the indus- trial activity at facilities.” Id. (emphasis added). The Agency explicitly limited the regulation, however, to cover only those access roads and rail lines “used or trav- eled by carriers of raw materials, manufactured products, waste material, or by-products used or created by the facility.” Id.
With respect to transportation facilities specifically, EPA provided the fol-
lowing information in the preamble:
Only those portions of the facility that are either involved
in vehicle maintenance (including vehicle rehabilitation,
mechanical repairs, painting, fueling, and lubrication),
equipment cleaning operations, or [that] are identified in
another subcategory of facilities under EPA’s definition of
storm water discharges associated with industrial activity
[are regulated]. One commenter requested clarification of
the term[] “vehicle maintenance.” Vehicle maintenance re-
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fers to the rehabilitation, mechanical repairing, painting,
fueling, and lubricating of instrumentalities of transporta-
tion located at the described facilities. EPA is declining to
write this definition into the regulation however since “ve-
hicle maintenance” should not cause confusion as a de-
scriptive term.
One commenter wanted railroad tracks where rail cars are
set aside for minor repairs excluded from regulation. In
response, if the activity involves any of the above activi-
ties then a permit application is required. Train yards
where repairs are undertaken are associated with indus-
trial activity. Train yards generally have trains [that], in
and of themselves, can be classified as heavy industrial
equipment. Trains, concentrated in train yards, are diesel
fueled, lubricated, and repaired in volumes that connote
industrial activity, rather than retail or commercial
activity.
One commenter argued that if gasoline stations are not
considered for permitting, then all transportation facilities
should be exempt. EPA disagrees with the thrust of this
comment. Transportation facilities such as bus depots,
train yards, taxi stations, and airports are generally larger
than individual repair shops, and generally engage in
heavier more expansive forms of industrial activity. In
keeping with Congressional intent to cover all industrial
facilities, permit applications from such facilities are
appropriate.
Id. at 48,013-14 (first paragraph break inserted) (emphasis added).
C. Long-standing Agency Guidance Provides Further Information Regarding EPA’s Interpretation of Its Storm Water Regulations
After EPA promulgated the 1990 regulations, it issued several guidance
documents that responded to commonly raised questions and/or provided infor- mation about the scope of the storm water program. In 1992-1993, the Agency issued two volumes of question-and-answer documents to explain the then-new program. See Office of Water, U.S. EPA, EPA Doc. No. 833-F-93-002, NPDES Storm Water Program, Question and Answer Document Volume 1 (Mar. 1992)
[hereinafter Q&A Vol. 1]; Office of Water, U.S. EPA, EPA Doc. No. 833-F-93-002B, NPDES Storm Water Program, Question and Answer Docu- ment Volume 2 (July 1993) [hereinafter Q&A Vol. 2]. In 1995, the Agency sub- mitted a report to Congress on the storm water program, which included an ap-
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pendix that contained industry descriptions organized by industry sector. See Office of Water, U.S. EPA, EPA Doc. No. 833-K-94-002, Storm Water Dis- charges Potentially Addressed by Phase II of the [NPDES] Storm Water Pro- gram: Report to Congress (Mar. 1995) [hereinafter 1995 Report to Congress]. And in 2006, the Agency issued a series of industrial storm water “fact sheets,” also organized by industry sector. See, e.g., Office of Water, U.S. EPA, EPA Doc. No. 833-F-06-031, Industrial Stormwater Fact Sheet Series, Sector P: Motor Freight Transportation (Dec. 2006) [hereinafter Motor Freight Fact Sheet].
These documents contain various examples that indicate the Agency’s intent
in implementing the industrial storm water program. For instance, in answer to a question whether a vehicle maintenance shop or an equipment cleaning facility must apply for an NPDES permit, the Agency responded in the affirmative, pro- vided the facility has one of the relevant transportation SIC codes. The Agency clarified, however, that “[o]nly the vehicle maintenance (including vehicle reha- bilitation, mechanical repairs, painting, fueling, and lubrication) and equipment cleaning areas (such as truck washing areas) must be addressed in the [permit] application.” Q&A Vol. 1 ¶ 22, at 9 (emphasis added). Such areas include “storage areas of materials used in vehicle maintenance or equipment cleaning operations and holding yards or parking lots used to store vehicles awaiting maintenance,” because those sites are also considered areas “associated with industrial activity.” Q&A Vol. 2 ¶ 23, at 9; accord Q&A Vol. 1 ¶ 34, at 12 (parking lots associated with vehicle maintenance shops are regulated, as their use to store vehicles prior to maintenance is considered “a component of the vehicle maintenance activity”); 1995 Report to Congress app. E, at E-36, -38. For widespread facilities, such as railroads, EPA stated that repairs in locations outside the designated maintenance areas are not regulated as “vehicle maintenance,” because “[o]nly nontransient ve- hicle maintenance shops are included in the transportation category.” Q&A Vol. 1
¶ 32, at 12.
The Agency also explained that the term “equipment cleaning operations”
includes “areas where the following types of activities take place: vehicle exterior wash down, interior trailer washouts, tank washouts, and rinsing of transfer equip- ment.” 1995 Report to Congress app. E, at E-36, -38; Motor Freight Fact Sheet at 2. Moreover, storage areas for materials used in equipment cleaning operations also must be permitted, as they are deemed “associated with industrial activity.” Q&A Vol. 2, ¶ 23, at 9. Finally, the Agency provided an explanation of the term, “airport deicing operations,” stating that “[a]irports or airline companies must ap- ply for a storm water discharge permit for locations where deicing chemicals are applied. This includes, but is not limited to, runways, taxiways, ramps, and areas used for the deicing of airplanes.” Q&A Vol. 1 ¶ 29, at 11.
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VII. ANALYSIS
The pivotal issue presented in this appeal is whether the ALJ erred in dis-
missing the complaint for lack of regulatory jurisdiction under 40 C.F.R.
§ 122.26(b)(14)(viii), based on her finding that the Region failed to prove by a preponderance of the evidence that San Pedro Forklift operated a “vehicle mainte- nance shop” or conducted “equipment cleaning operations” and thus was required to obtain a storm water discharge permit. The resolution of this issue involves two questions of regulatory interpretation: what is a “vehicle maintenance shop,” and what are “equipment cleaning operations”? In Part VII.A below, the Board inter- prets and clarifies what these terms mean, based on the statute, regulatory history, and EPA’s past interpretations provided in the preamble to the final rule and sub- sequent guidance documents.
A. The Board Finds That the ALJ Erred in Interpreting the Regulatory Terms, “Vehicle Maintenance Shop” and “Equipment Cleaning Operations”
As the Board has explained in previous cases, “[w]hen construing an admin-
istrative regulation, the normal tenets of statutory construction are generally ap- plied.” In re Bil-Dry Corp., 9 E.A.D. 575, 595 (EAB 2001) (citing Black & Decker Corp. v. Comm’r, 986 F.2d 60, 65 (4th Cir. 1993)). “The plain meaning of words is ordinarily the guide to the definition of a regulatory term.” Id. (citing T.S. v. Bd. of Educ., 10 F.3d 87, 89 (2d Cir. 1993)). “Additionally, the regulation must, of course, be ‘interpreted so as to harmonize with and further and not to conflict with the objective of the statute it implements.’” Id. (quoting Emery Min- ing Corp. v. Sec’y of Labor, 744 F.2d 1411, 1414 (10th Cir. 1984)). Moreover, in interpreting a regulation, the Board examines not just the provision at issue, but the entire regulation. In re U.S. Army, Fort Wainwright Cent. Heating & Power Plant, 11 E.A.D. 126, 141 (EAB 2003) (“‘[t]he meaning – or ambiguity – of cer- tain words or phrases may only become evident when placed in context’”) (quot- ing FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 132 (2000)); see In re Harpoon P’ship, 12 E.A.D. 182, 195-96 (EAB 2005), appeal dismissed, No. 05-2806 (7th Cir. Aug. 24, 2005); cf. Nat’l Bank of Or. v. Indep. Ins. Agents of Am., Inc., 508 U.S. 439, 455 (1993) (“‘[i]n expounding a statute, we must not be guided by a single sentence or member of a sentence, but look to the provisions of the whole law’”) (quoting United States v. Heirs of Boisdore, 49 U.S. (8 How.) 113, 122 (1849)). Moreover, just as legislative history can be helpful in interpret- ing a statute, regulatory history, such as preamble statements, assists the Board in interpreting regulations. See In re Friedman, 11 E.A.D. 302, 328 (EAB 2004), aff’d, No. 2:04-CV-00517-WBS-DAD (E.D. Cal. Feb. 25, 2005). Last, the Board gives greater deference to a position when it is supported by Agency rulings, statements, and opinions that have been consistent over time. See In re Howmet Corp., 13 E.A.D. 272 (EAB 2007), aff’d, 656 F. Supp. 2d 167 (D.D.C. 2009); In re Lazarus, Inc., 7 E.A.D. 318, 352-53 (EAB 1997).
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In a case where, as here, the regulations are silent on the meaning of the
terms, “vehicle maintenance shop” and “equipment cleaning operations,” and where the federal courts have not spoken on the subject, the Board looks first to the plain meaning of the regulatory text, then considers the regulations as a whole, the regulatory history, and the Agency’s post-promulgation guidance documents on the topic. See, e.g., Howmet, 13 E.A.D. at 293-303; In re Clarksburg Casket Co., 8 E.A.D. 496, 502-04 (EAB 1999). The Board concludes that the ALJ’s inter- pretations of these terms are unduly narrow, while the Region’s interpretation of these terms is overbroad, for the reasons explained below.
1. The Regulatory Terms, “Vehicle Maintenance Shop” and
“Equipment Cleaning Operations,” Must Be Read as a Whole
The Board agrees with the ALJ that this case turns on the application of the
“‘ancient and sound rule of construction that each word in a statute should, if pos- sible, be given effect’ and ‘[a]n interpretation that needlessly renders some words superfluous is suspect,’” and that this interpretive principle also applies to con- struction of regulations. Init. Dec. at 19-20 (quoting Crandon v. United States, 494 U.S. 152, 171 (1990) (Scalia, J., concurring), and citing United States v. Nor- dic Village, Inc., 503 U.S. 30, 36 (1992); Solis v. Summit Contractors, Inc., 558 F.3d 815, 823-24 (8th Cir. 2009); Sekula v. FDIC, 39 F.3d 448, 454 (3d Cir. 1994)). The ALJ rightly invoked these basic principles of interpretation to attempt to give meaning to the word, “shop,” used in the regulatory term, “vehicle mainte- nance shop,” and to the word, “operations,” used in the regulatory term, “equip- ment cleaning operations.”
As noted in Part VI.B above, for the category of “transportation facilities,”
EPA separated out for storm water regulation those facilities it considered to be engaging in “industrial activity.” Such facilities must have one or more specified SIC codes, and must have “vehicle maintenance shops, equipment cleaning opera- tions, or airport deicing operations.” 40 C.F.R. § 122.26(b)(14)(viii). As used in section 122.26(b)(14)(viii), the words, “shop” and “operations,” are nouns pre- ceded by the compound adjectives, “vehicle maintenance” and “equipment clean- ing,” respectively. Each complete term must be read as a whole to give full mean- ing to the words selected by EPA in implementing the statute. See, e.g., In re Deseret Power Elec. Coop., 14 E.A.D. 212, 233 n.25 (EAB 2008); In re Cardinal
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FG Co., 12 E.A.D. 153, 173-74 (EAB 2005); In re Mayes, 12 E.A.D. 54, 91 (EAB 2005), aff’d, No. 3:05-CV-478, 2008 WL 65178 (E.D. Tenn. Jan. 4, 2008).
2. The ALJ Erred in Interpreting “Vehicle Maintenance Shop”
a. The Plain Meaning of “Shop” Is Illustrative, But Does Not
Provide Clear Guidance for the Purpose of Interpreting
the Full Regulatory Term
Given that the storm water regulations do not define the term, “vehicle
maintenance shop,” the ALJ appropriately commenced her analysis with an at- tempt to determine whether that phrase has a plain meaning. The Initial Decision states that:
Given the inclusion of [the word “shop”], it is impossible
to ignore that the regulation clearly contemplates that ve-
hicle maintenance activities occur in the context of a
“shop.” Indeed, it is the inclusion of the noun “shops” [sic]
that narrows the scope of the regulatory language. Absent
the word “shops” the phrase “vehicle maintenance” would
have a significantly broader reach.
Init. Dec. at 20. The Board agrees with this observation.
To determine the meaning of the word “shop,” the ALJ turned to the
dictionary:
The noun “shops” is defined in its singular form as “a
building or room stocked with merchandise for sale” or, in
the context of repairs, “a commercial establishment for the
making of repairing of goods or machinery.”
Id. (quoting Webster’s Third New International Dictionary 2101 (2002)). The ALJ further noted that “[c]ommon synonyms of the word ‘shop’ include a workshop, studio, atelier, factory, plant, works, or mill.” Id. at 20 n.13 (citing The Random House Thesaurus College Edition 645 (1987)).
Additional dictionary definitions of the word “shop” indicate that it can have
a broader meaning than the structure-oriented meaning suggested by the defini- tions chosen by the ALJ. For example, alternative definitions include the follow- ing phrases: “a center of operations”; “functional activity”; “a business establish- ment: place of employment”; and “a gathering place: center of activity.” Webster’s Third New International Dictionary 2101 (1993) [hereinafter Webster’s]. None of these dictionary definitions of “shop,” however, provides a sufficiently clear and singular meaning of the term to enable the Board to determine conclusively what
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constitutes a “vehicle maintenance shop” within the meaning of the storm water regulations. Therefore, the Board must turn to the regulations as a whole, the reg- ulatory history (including guidance provided in the preamble to the regulations), and subsequently issued Agency interpretations to make that determination.
b. “Vehicle Maintenance Shop” Refers to a Nontransient Area
or Location That Is Designated for Use for Vehicle
Maintenance or in Which Vehicle Maintenance Is
Conducted on a Regular or Repeated Basis, Including
Intermittently or Sporadically
Taken together, the regulations, regulatory history, and long-standing
Agency guidance indicate that the term “vehicle maintenance shop” should be construed as referring to a nontransient location or area at a transportation facil- ity’s site that is designated for use for vehicle maintenance or in which vehicle maintenance is conducted on a regular or repeated basis, including intermittently or sporadically. As discussed above, the examples provided in the preamble to the final rule and in the Agency’s guidance documents on this rule demonstrate that the Agency was concerned with regulating areas on which contaminants may be deposited and may accumulate over time, thereby posing a risk that storm water flowing across those areas will carry the contaminants from the facility into the waters of the United States. See, e.g., Q&A Vol. 1 ¶ 32, at 12 (“[o]nly nontran- sient vehicle maintenance shops are included in the transportation category”).
The physical size and other physical characteristics of the area (e.g., cov-
ered versus open to the elements) appear to be irrelevant, as the Agency included responses to comments in several contexts explaining that storm water permits are required regardless of these factors. See, e.g., 55 Fed. Reg. at 48,009 (covered and uncovered maintenance facilities alike are regulated); id. at 48,009-10 (storage areas of any size, whether covered or uncovered, are associated with industrial activity); id. at 48,012-13 (all landfills that receive industrial waste are regulated, regardless of size, as the size of the facility “will not dictate what type of waste is exposed to the elements”). The fact that certain maintenance activities might be “minor” rather than “major” in scope also is irrelevant, as the Agency indicated that storm water permits are required if any repairs, even minor ones, occur in the designated areas. See id. at 48,013 (even “minor repairs” to railroad cars on tracks set aside for such repairs trigger the NPDES permitting requirements, because the volume of trains (i.e., heavy industrial equipment) being repaired in such train yards “connote industrial activity”).
The examples cited in the preamble to the regulations and the Agency’s gui-
dance reflect the Agency’s concern that regular or repeated use of an area for vehicle maintenance raises the possibility that the site could become a “re- positor[y] for pollutants such as oil and grease from machinery or vehicles,” and thus that pollutants might “accumulate” there over time, posing a storm
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water-related risk to the environment. See id. at 48,009. Railroad cars, for in- stance, are set aside for minor repairs in track “yards,” where they are “concen- trated,” and where they are “diesel fueled, lubricated, and repaired in volumes that connote industrial activity, rather than retail or commercial activity.” Id. at 48,013. Marinas “rent boat slips, store boats, and generally perform a range of other marine services including boat cleaning and incidental boat repair.”9 Q&A Vol. 1
¶ 37, at 13. If (and only if) they are “involved in vehicle (boat) maintenance activ- ities (including vehicle rehabilitation, mechanical repairs, painting, fueling, and lubrication) or equipment cleaning operations, those portions of the facility” so involved “are considered to be associated with industrial activity” and must be permitted. Id. Airlines send numerous airplanes to passenger and cargo terminals, to carry planeloads of people and cargo, and thus the aprons adjacent to the termi- nals, upon which minor airplane maintenance may be conducted, are in frequent if not continuous use. See 1995 Report to Congress app. E, at E-43. Finally, the “nonretail fueling operation” of a transportation facility (SIC codes 40 through 45) at which “no other maintenance activities” take place suggests repeated refueling of the trucks, cars, boats, railroad engines, airplanes, and other instrumentalities of transportation specifically used within these SIC categories to achieve the busi- ness purposes of the facilities. See Q&A Vol. 1 ¶ 35, at 12; see, e.g., Q&A Vol. 2
¶¶ 24-25, at 9 (fueling of tanker trucks used to transport petroleum products to/from petroleum bulk storage facility is “routine vehicle maintenance” that is “associated with industrial activity”).
Read in context, and with legislative intent in mind, these examples contem-
plate the existence of repeated or regular vehicle maintenance activity at a non- transient area or location at a facility, even if minor, and even if intermittent or sporadic. That this is so is conceded by the Region itself, which responded to a Board question about pollutant accumulation by claiming, “it is the on-site loca- tion that is relevant, because that indicates repeated or regular activity, not only or always pollutant accumulation.”10 R9 Suppl. Br. at 17. In sum, to establish the existence of a vehicle maintenance shop on a transportation facility, the Agency has to prove by a preponderance of the evidence that there is a nontransient area or location that is designated for vehicle maintenance or where vehicle mainte- nance is conducted on a regular or repeated basis, including intermittently or sporadically.
9 This example arose in response to a question whether a marina must apply for an NPDES
permit if it operates a retail fueling operation but no vehicle maintenance or equipment cleaning activi- ties are conducted onsite. The Agency responded, “The retail sale of fuel alone at marinas, without any other vehicle maintenance or equipment cleaning operations, is not considered to be grounds for cov- erage under the storm water regulations.” Q&A Vol. 1 ¶ 37, at 13.
10 The Board agrees that pollutant accumulation is not necessary, but it can be an indicia of the
existence of a vehicle maintenance shop.
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c. The ALJ’s Interpretation Is Unduly Narrow and
Inconsistent with the Purpose of the Statute and
Regulations
In her Initial Decision, the ALJ found that in order to establish the presence
of a “vehicle maintenance shop,” the Region must: demonstrate the presence of a “discrete structure used for the purpose of vehicle maintenance”; or demonstrate that San Pedro “was engaged in an industrial establishment for the purpose of maintaining or repairing vehicles”; or show “the presence of a sufficient volume, level, and concentration of outdoor repair activity”; or provide evidence that San Pedro “maintain[ed] a vehicle fleet or engage[d] in the type of daily maintenance activities that would customarily require the presence of a dedicated maintenance shop.” Init. Dec. at 30, 31 n.19 (emphases added). The Board finds that this inter- pretation is unduly narrow and inconsistent with the purpose and intent of the statute and the storm water regulations. Moreover, it fails to provide a clear stan- dard for determining when a storm water permit is required at a transportation facility.
The presence of a “discrete structure used for the purpose of vehicle mainte-
nance” certainly would be a strong indicator establishing the regulatory element of a “vehicle maintenance shop.” However, the absence of a structure is not conclu- sive as to the question of whether a respondent has a vehicle maintenance shop requiring a permit. As described above, the preamble to the regulations explained that maintenance facilities “frequently will have outside areas where parts are stored and disposed of,” and “[s]uch areas are locations where oil, grease, sol- vents[,] and other materials associated with maintenance activities will accumu- late,” and thus are “associated with industrial activity.” 55 Fed. Reg. at 48,009. The regulatory history also establishes that uncovered vehicle maintenance shops, not just “discrete structure[s],” also are subject to regulation.
The ALJ’s suggested alternate test of whether San Pedro “was engaged in an
industrial establishment for the purpose of maintaining or repairing vehicles” is also too narrow, to the extent that it suggests that the Region was required to establish that the entire or main purpose of San Pedro’s facility was the mainte- nance or repair of vehicles. The language of the regulation makes plain that the permit requirement applies to a facility whose main purpose is “transportation” (as is the case here),11 if some part of that facility is used for a vehicle maintenance shop, equipment cleaning operations, or airport deicing operations.
The Board agrees with the ALJ’s third suggestion that “conceivabl[y],
-
-
- the requirement for a maintenance ‘shop’ could be met by the presence of a
11 Specifically, the transportation activity involved in this case is the “transloading of freight.”
-
See supra Part V.
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sufficient volume, level, and concentration of outdoor repair activity,” but this simply is an example of what could demonstrate the presence of a vehicle mainte- nance shop; it does not define what this regulatory term means generally. Moreo- ver, the ALJ does not specify or even attempt to describe what “level, volume, and concentration” of maintenance activity would be “sufficient” to establish the pres- ence of a “shop.” Lastly, the ALJ’s inference that the Region needed to demon- strate that San Pedro “maintain[ed] a vehicle fleet” or engaged in “daily mainte- nance activities that would customarily require the presence of a dedicated maintenance shop” is not supported by the plain language of the regulations or the regulatory history, and is too narrow in scope.
d. The Board Rejects the Region’s Interpretation That
Evidence of Any On-Site Vehicle Maintenance Activities
Can Establish the Required Element of “Vehicle
Maintenance Shop”
The Region argues on appeal that “the term ‘vehicle maintenance shop’ re-
fers to the on-site location where vehicle maintenance activities take place.” R9 Appeal Br. at 2.12 The Board finds this argument overbroad and inconsistent with the language of the regulatory provision that requires a storm water permit only for “transportation facilities [within certain SIC codes that] have vehicle maintenance shops, equipment cleaning operations, or airport deicing operations.” As the ALJ correctly pointed out, the Region’s interpretation, taken literally, could read the word “shop” out of the regulations, and could mean that any single in- stance of vehicle maintenance activity occurring anywhere on the facility would trigger the storm water permit requirement. The regulation’s inclusion of the word “shop” strongly indicates that more is required.13 In at least one instance, the Re- gion appeared to recognize this point, when it responded to the Board’s question about the applicability to this case of the statement in EPA’s 1992 guidance docu- ment that “[o]nly nontransient vehicle maintenance shops are included in the
12 See also R9 Appeal Br. at 15 (“the existence of on-site vehicle maintenance activities at
[covered] transportation facilities * * * is enough to trigger permit coverage”); id. at 23 (“discrete structures where maintenance activities take place, as well as any other locations at a transportation facility where such activities take place, are subject to permitting”); id. at 26 (“[a shop] is simply a location where vehicle maintenance occurs”); R9 Suppl. Br. at 13 (“[w]hether the facility has a vehicle maintenance shop * * * is simply established through the presence of on-site vehicle maintenance”); Tr. at 502-03 (testimony of Ms. Miller, the Region’s inspector, that “it does not matter” where on the facility evidence of vehicle maintenance is observed, in terms of determining whether a facility is required to obtain a storm water permit).
13 Further, as discussed in Part VI.A above, the legislative history for the statutory provision
indicates that Congress intended to require permit coverage only for the areas on an industrial facility that are directly related to industrial activity and not to include other areas, such as parking lots on which occasional acts of vehicle maintenance may take place. As explained above, the Agency specifi- cally endorsed and adopted this legislative history when it issued the regulations.
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transportation category.” Q&A Vol. 1 ¶ 32, at 12. Although the Region incorrectly believed that this example was not applicable to the facts of this case, it replied:
While not explicit in Q&A Volume 1, it is unlikely that
repairs along a railroad system would repeatedly occur at
the same location. However, if a railroad operator estab-
lished a non-transient location for maintenance along the
railroad system, such a facility would be a train yard and
would trigger a requirement for a permit application.
Thus, it is unlikely that such random locations would be
“repositories” for pollutants, and are [sic] therefore do
not trigger permit application requirements.
R9 Suppl. Br. at 12 (emphasis added) (footnote moved to text and internal cita- tions omitted).
3. The ALJ Erred in Interpreting “Equipment Cleaning Operations”
a. The ALJ’s Interpretation Is Unduly Narrow and
Inconsistent with the Purpose of the Statute and
Regulations
As noted earlier, the storm water regulations also do not define the term,
“equipment cleaning operations”; thus, the ALJ again appropriately commenced her analysis with an attempt to determine whether that phrase has a plain mean- ing. The Initial Decision states that the verb “clean” is defined as:
“[T]o make clean or free of dirt or any foreign or offen-
sive matter[:] as * * * to wash with water and soap or
with any aqueous liquid medium * * * to bathe, brush, or
treat with an acid, alkaline, or organic agent, rub with an
oil or cream, or sponge or swab with a disinfectant for
removing undesired matter.”
Init. Dec. at 31 (quoting Webster’s at 419). The Initial Decision also relied on the following definition of the noun “operation”: “‘a business transaction [especially] when speculative * * * the whole process of planning for and operating a busi- ness or other organized unit * * * a phase of a business or of business activity.’” Id. at 31-32 (quoting Webster’s at 1581). The Board agrees that these plain lan- guage definitions are helpful to understanding the meaning of the regulatory term, “equipment cleaning operations.” One other definition pertinent to understanding the meaning of this regulatory term is the one for “equipment,” which in ordinary usage means “the implements (as machinery or tools) used in an operation or ac- tivity.” Webster’s at 768. While these definitions are helpful, they do not convey the full intent of what areas and activities the Agency intended to regulate as
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equipment cleaning operations. For that, the Board again turns to the storm water regulations as a whole, the regulatory history (including guidance provided in the preamble to the regulations), and subsequently issued Agency interpretations to make that determination.
b. The Term, “Equipment Cleaning Operations,” Refers to
Cleaning of Industrial Equipment Anywhere on a Facility’s
Site Pursuant to a Business Process or Practice
Taken together, the regulations, regulatory history, and Agency guidance
indicate that the term, “equipment cleaning operations,” should be construed as referring to those areas on a transportation facility’s site, whether nontransient or transient, in which equipment cleaning of any type, quantity, significance, or fre- quency is conducted pursuant to a business’ operations or practice. Establishing the presence of equipment cleaning operations can be express (e.g., a written equipment maintenance plan that includes cleaning) or implied (e.g., regular or repeated washing of vehicles after use or as they become dusty). Similarly, ques- tioning of facility employees or owners during an inspection as to what cleaning activities are performed, and introducing such evidence through testimony or affi- davits, also may establish the existence of equipment cleaning operations.14
As noted in Parts VI.B-.C above, the regulations, regulatory history, and
Agency guidance documents reveal a focus on an area on an industrial facility where equipment cleaning operations are conducted. For example, in the guidance documents, EPA states that “[o]nly the * * * equipment cleaning areas (such as truck washing areas) must be addressed in the [NPDES permit] application.” Q&A Doc. Vol. 1 ¶ 22, at 9. “Equipment cleaning operations include areas where the following types of activities take place: vehicle exterior wash down, interior trailer washouts, tank washouts, and rinsing of transfer equipment.” 1995 Report to Congress app. E, at E-36, -38; accord Motor Freight Fact Sheet at 2. Moreover, “storage areas of materials used in * * * equipment cleaning operations * * * are also considered areas associated with industrial activity,” and thus must be permitted. Q&A Vol. 2 ¶ 23, at 9.
According to the Region, EPA focused on “areas” in describing “equipment
cleaning operations” because it wanted to ensure that storm water controls are implemented for the locations where industrial activities of this particular kind take place. R9 Appeal Br. at 31. This view accords with the Agency’s guidance in another “operations” context – i.e., that of “airport deicing operations.” In its gui- dance document, EPA explains that for airport deicing operations, “[a]irports or airline companies must apply for a storm water discharge permit for locations
14 There are many ways in which the Region could demonstrate the presence of equipment
cleaning operations. The above-listed examples are illustrative only.
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where deicing chemicals are applied. This includes, but is not limited to, runways, taxiways, ramps, and areas used for the deicing of airplanes.” Q&A Vol. 1 ¶ 29, at 11 (emphasis added). Plainly, deicing operations are integral phases of air transportation, at least for airports located in cold and snowy climates. In winter, the operations are repeated or occur regularly in certain areas (such as at an air- line’s deicing station) and irregularly in other areas (such as on a far turn of a runway, where an airplane waits its turn to take off). Some instances of deicing even may occur in a very transient fashion, such as once on a taxiway, for in- stance, and never or rarely again in that same exact spot. Given this, the airport deicing example may be understood as suggesting that even sporadic deicing of an aircraft pursuant to the airport’s business operation or practice, wherever it oc- curs on an airport’s widespread grounds, will trigger the permitting requirements of the storm water rule.
This interpretation of the term, “airport deicing operations,” is different than
that of the railroad example provided in the Agency’s guidance, where the Agency stated that vehicle maintenance repairs along a railroad system (another wide- spread entity, mentioned in Part VI.C above) are not regulated as “vehicle mainte- nance,” because “[o]nly nontransient vehicle maintenance shops are included in the transportation category.” Id. ¶ 32, at 12. The difference between these two examples reflects the Agency’s use of different compound adjectives (“vehicle maintenance,” “equipment cleaning,” and “airport deicing”) and different operative nouns (“shop” and “operations”) for the three regulatory terms in 40 C.F.R.
§ 122.26(b)(14)(viii). EPA chose the word, “operations,” to serve as the object of the “airport deicing” and “equipment cleaning” activities it regulated as “industrial activity,” and chose a different word, “shop,” as the object of the “vehicle mainte- nance” activities it regulated as “industrial activity.” These word choices are not accidental, and the Board construes the storm water regulations in a way that hon- ors their differences. For these reasons, the Board finds the Agency’s guidance related to airport deicing operations to be more instructive as to the meaning it should give “equipment cleaning operations” than guidance related to “vehicle maintenance shop.”
Considering the common understanding of both “operations” and “shop,”
combined with more general principles in the regulatory record, leads the Board to conclude that the term “equipment cleaning operations,” should be construed in a manner similar to the term, “airport deicing operations.” That is, the storm water regulation’s permitting requirements apply to a facility that has equipment clean- ing operations on the site, even if the particular incidences are sporadic and/or not ever repeated in precisely the same place. The areas where equipment cleaning operations occur may include, or be adjacent to, storage areas for cleaning sup- plies and equipment, or they may have other indicia of cleaning activity in the vicinity, such as sinks, hoses, sloped surfaces or curbs to direct or contain wash water, solvent containers, detergents, eye wash kits, or concentrated areas of con-
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taminants that have been washed off.15 One key difference between “vehicle main- tenance shop” and “equipment cleaning operations” is that to be subject to the storm water regulations, the vehicle maintenance must occur in a nontransient area or location designated for vehicle maintenance or where vehicle maintenance is conducted on a regular or repeated basis, whereas equipment cleaning can oc- cur at any nontransient or transient location on the site once it has been demon- strated that the facility has established equipment cleaning operations.
In sum, to establish the existence of “equipment cleaning operations,” the
Agency has to prove by a preponderance of the evidence that a respondent has established a business process or practice for equipment cleaning and has con- ducted cleaning of equipment pursuant to that process or practice.
c. The ALJ’s Interpretation Is Unduly Narrow and
Inconsistent with the Purpose of the Statute and
Regulations
In her Initial Decision, the ALJ found that in order to establish the presence
of “equipment cleaning operations,” the Region must demonstrate the existence of “a systematic process or ‘operation’ that has a distinct commercial or organiza- tional, though not necessarily profit-relevant, purpose for the regulated entity.” Init. Dec. at 37. She held that such a “systematic process or ‘operation’” must con- sist of something more than “periodically wiping dirt off the surface of a trailer” or “occasionally hosing off the exterior of a forklift,” because the industrial storm water rules “contemplate regulation of sustained or organized operations, not one-off or incidental events.” Id. While the Board agrees with some aspects of the ALJ’s interpretation (e.g., one-off or incidental cleaning alone does not demon- strate that a permit is needed), the Board finds the ALJ’s overall interpretation to be unduly narrow and inconsistent with the purpose and intent of the statute and the storm water regulations. For example, the ALJ held that washing of a singular forklift was similar to individual car washing, which is exempt from the storm water regulations, and thus, the individual forklift washing also was exempt. See id. at 37-38. As stated above, once the Region has established there is a business process or practice related to equipment cleaning, any incident of cleaning pursu- ant to that process or practice would be subject to the permitting requirements of the storm water regulations.
15 Again, this list is for illustrative purposes only.
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d. The Board Rejects the Region’s Interpretation That
Evidence of Any On-Site Equipment Cleaning Alone Can
Establish the Required Element of “Equipment Cleaning
Operations”
The Region argues on appeal that equipment cleaning itself is the focus of
the Agency’s concern, not its systematic or organizational aspects. R9 Appeal Br. at 29. It also argues that “transportation facilities [that] engage in equipment cleaning, regardless of volume, are subject to the definition.” Id. at 33. While the Board agrees that volume of cleaning is not a criterion, as stated previously, to find jurisdiction under this element of the storm water regulations, the Region needs to establish both the presence of a business process or practice related to equipment cleaning at the site, and cleaning of equipment pursuant to that process or practice.
B. The Evidence Establishes That San Pedro Is a Regulated Entity Under 40 C.F.R. § 122.26(b)(14)(viii) and Is Liable for Violating the CWA
At this juncture, the Board has the authority to remand the case to the ALJ
for a reevaluation of CWA liability and assessment of penalty, as appropriate. 40 C.F.R. § 22.30(c). The Board has opted not to remand this case, however, for several reasons, including the recent retirement from federal service of the presid- ing ALJ in this case, the voluminous record related to the facts underlying Counts 1 and 3 of the complaint with which a new ALJ would have to become familiar resulting in more time before a final decision is reached, and the need to bring the case to resolution as expeditiously as possible. Accordingly, the Board now turns to the questions of liability and appropriate penalty.
1. The Region Has the Burden of Establishing Liability
Under the Consolidated Rules of Practice that govern this proceeding, the
complainant has the burden of presenting a prima facie case of violation, and the respondent has the burden of presenting evidence to rebut the prima facie case. 40 C.F.R. § 22.24(a). The complainant has the ultimate burden of persuasion that the violations occurred as alleged in the complaint. Id.; In re City of Salisbury, 10 E.A.D. 263, 277-78, 289 (EAB 2002); In re New Waterbury, Ltd., 5 E.A.D. 529, 536-37 n.16, 542-43 (EAB 1994). Each matter in controversy must be de- cided upon a preponderance of the evidence. 40 C.F.R. § 22.24(b).
In the present case, the elements that must be pled to establish a prima facie
case of violation of CWA sections 301(a) and 402(p) and 40 C.F.R.
§ 122.26(b)(14)(viii) include allegations that San Pedro is a “transportation facil- ity” with: (a) one (or more) of SIC Codes 40xx through 45xx (except 4221-4225); (b) a “vehicle maintenance shop” and/or “equipment cleaning operations”; and
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(3) discharges of pollutants from a point source to waters of the United States during the alleged period of violation (i.e., October 1, 2004, to December 24, 2007). A prima facie case is deemed made where the complainant presents evi- dence of sufficient quality and quantity on each of the requisite elements that, if not rebutted, the trier of fact would “infer the fact at issue and rule in [the com- plainant’s] favor.” Black’s Law Dictionary 1805 (9th ed. 2009) (defining “prima facie case”); see Salisbury, 10 E.A.D. at 283-89 (discussing elements of prima facie case establishing bulk sewage sludge application violation); New Waterbury, 5 E.A.D. at 538-43 (discussing elements of prima facie case establishing appropri- ateness of proposed penalty under Toxic Substances Control Act). A “preponder- ance of the evidence” standard is deemed achieved by establishing a fact as “more likely than not.” In re Bricks, Inc., 11 E.A.D. 224, 226 (EAB 2003), aff’d, 426 F.3d 918 (7th Cir. 2007); In re Richner, 10 E.A.D. 617, 620 (EAB 2002); see also In re City of Marshall, 10 E.A.D. 173, 180 (EAB 2001) (“preponderance of the evidence” means “‘the greater weight of the evidence; superior evidentiary weight that, though not sufficient to free the mind wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to one side of the issue rather than the other’”) (quoting Black’s Law Dictionary 1201 (7th ed. 1999)).
In the proceedings before the ALJ, San Pedro classified itself under SIC
Code 4213, “Trucking, Except Local.” This SIC code falls within the regulated range for transportation facilities and San Pedro’s designation as such is not dis- puted on appeal. The Board therefore will accept it as an established fact16 and turn next to the question whether the Region proved, by a preponderance of the evidence, that San Pedro had a “vehicle maintenance shop” or “equipment clean- ing operations” during the alleged period of violation.
16 In the preamble to the 1990 storm water rules, EPA stated, “Industries will need to assess for
themselves whether they are covered by a listed SIC and submit an application accordingly.” 55 Fed. Reg. at 48,010. Given that San Pedro self-designated this SIC code, and based on the Board’s conclu- sion below that the company had equipment cleaning operations, the Board does not agree that San Pedro is not subject to the NPDES permitting requirements as it contends. See San Pedro Resp. Br. at 2-4. (The Board further notes that in a January 2008 letter to the Region, San Pedro stated that “[t]he primary business of San Pedro Forklift was and continues to be the transfer of fresh produce, frozen vegetables, alfalfa hay, and various dry goods from over-the-road trailers into ocean containers for export and import,” CX 33, at 1, providing further evidence that the company is within a covered transportation SIC code.) The fact that the California Regional Water Quality Control Board may have approved San Pedro’s Notice of Termination indicating San Pedro no longer intended to be covered by the terms of the general permit is not determinative, because in part, entities subject to the storm water regulations have a choice to be under the terms of the general NPDES permit or an individual NPDES permit. See supra note 8.
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a. The Region Did Not Establish by a Preponderance of the
Evidence That San Pedro Had a “Vehicle Maintenance
Shop” on Its Premises
In the complaint, the Region made no specific allegations about San Pedro
having a “vehicle maintenance shop” on its premises.17 Instead, the Region alleged that during EPA’s two inspections of San Pedro’s facility, the inspectors “observed sources of pollutants (oil and batteries, 55-gallon drums, obsolete equipment stored outdoors with no cover or containment) exposed to storm water, poor housekeeping (trash in the yard) and large pavement stains, indicating prior spills that were not properly addressed.” Compl. ¶¶ 23, 51, at 5, 10. To support these allegations, the Region introduced testimony, affidavits, photographs, and other materials at the evidentiary hearing.
The Region also introduced San Pedro’s SWPPP, which states that San Pe-
dro stored diesel fuel, engine oil, hydraulic fluid, transmission fluid, coolant, bro- mide, and propane on site and that these materials were “necessary” for San Pe- dro’s daily operations. SWPPP at 8 (“Significant Materials List”). The SWPPP also identified the forklifts, yard goats, truck, and other machinery and equipment necessary for San Pedro’s operations as “Operational Equipment.” Id. at 7. In a list of “Existing Non-Structural Best Management Practices,” the SWPPP reported that “[a]ll Operational Equipment is well maintained by an outside company,” and that “Operational Equipment is inspected on a regular basis for fluid leaks or drips and repaired immediately if necessary.” Id. at 18.
Other relevant evidence introduced at the hearing included testimony by
San Pedro’s technical consultants that indicated that “[b]asically, there is occa- sional topping off of hydraulic fluid and occasionally washing, you know, hosing off the dust,” Tr. at 1611, and that a third-party company periodically came on-site to conduct minor forklift maintenance, such as changing or topping off hydraulic oil, engine oil, and fuel, and then removed the used fluids from the site. Tr. at 1427-31. Mr. Balov testified that the forklifts were fueled on-site with propane gas.18 Tr. at 2181-82.
17 Though the complaint did not allege the existence of a “vehicle maintenance shop,” the par-
ties litigated the matter at the hearing. See, e.g., Tr. at 140-41, 242, 245, 348-52, 409-26, 441-56, 460-62, 502-03; see also San Pedro Resp. Br. at 21 (arguing that “it appears that the allegation that
[San Pedro] had a vehicle maintenance shop was concocted by [the Region] after the conclusion of the administrative hearing and raised for the first time in [the Region’s post-hearing brief] as an after- thought”). The Region did not file a motion to amend the complaint to conform to the evidence presented at the hearing, but the ALJ implicitly treated the complaint as so amended.
18 San Pedro contradicts Mr. Balov’s statement in its response to the Region’s appeal brief,
claiming that it “uses electrically powered forklifts to accomplish its transloading work, which are maintained by an outside contractor.” San Pedro Resp. Br. at 21 (emphasis added). This argument
Continued
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Importantly, the Region did not present evidence as to the existence of a
shop – i.e., a nontransient area or location at San Pedro’s site of any size, whether covered by a roof, surrounded by walls, or open to the elements, designated for vehicle maintenance or in which vehicle maintenance of any type, quantity, sig- nificance, or frequency is (or was) conducted. Presumably, this is because the Region’s inspector did not believe she needed to do so. At the hearing, San Pe- dro’s attorneys asked Ms. Miller whether she observed a “vehicle maintenance facility” on the premises, and she responded by repeatedly stating that she saw evidence that vehicles were being maintained at the facility. E.g., Tr. at 242, 351. San Pedro’s attorneys then repeatedly asked Ms. Miller to identify the locations on the site where she found the various purported indicia of maintenance activity. E.g., Tr. at 348-52, 409-26, 441-56, 460-62. She ultimately explained, on redirect, that “it does not matter” where on the facility evidence of vehicle maintenance is observed, in terms of determining whether a facility is required to obtain a storm water permit. See Tr. at 502-03. The Region appears to sanction this view, as even on appeal it resists identifying a specific “shop site,” instead essentially claiming that the entire facility constituted the shop site. See, e.g., R9 Appeal Br. at 26; R9 Suppl. Br. at 13 (asserting that “this facility has a non-transient maintenance shop,” but failing to identify the location of that “shop”), 16 (“[w]hether the facil- ity has a vehicle maintenance shop * * * is simply established through the pres- ence of on-site vehicle maintenance”). Additionally, Ms. Miller admitted that she did not know whether the forklifts were maintained on site, nor did she know from which vehicle or equipment the battery she observed on a pallet had been taken. Tr. at 244-45, 254-55. The Region also did not offer any direct evidence regarding when or how the various materials purportedly observed at the site (e.g., hydraulic fluid, diesel fuel, engine oil, and/or transmission fluid) were used
– i.e., there was no direct evidence such fluids were used in vehicles versus equip- ment. See Init. Dec. at 23. As only vehicle maintenance shops are regulated under this prong of the regulations, this information is important.
The ALJ assessed all of the evidence presented in this case and held that it
“supported the conclusion that [San Pedro] was conducting occasional activities that might properly be termed maintenance of vehicles and equipment. Neverthe- less, the overall evidence adduced at hearing does not meet the definition of ‘vehi- cle maintenance shop.’” Init. Dec. at 29. Although the record established that maintenance was occurring at the San Pedro facility, the Region failed to meet its burden of identifying a nontransient area or location where maintenance activities were conducted, other than to point to the entire facility as the maintenance site. A preponderance of the evidence, however, shows that at least some of the facility
(continued)
should have been raised before the ALJ at the hearing, not for the first time in a brief to the Board; however, given that the Board finds the Region did not establish the presence of a “shop,” the conten- tion is moot.
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was not, in fact, used for vehicle maintenance of any kind. Instead, it was used to transload goods, to stage goods for transloading, and to fumigate agricultural products. San Pedro rebutted many of the elements of the Region’s site-wide case, for instance explaining that the metal poles and tires Ms. Miller observed were used for the fumigation operations and thus were not discards from vehicle main- tenance; that the pavement stains scattered over the property were caused by fluid leaks from trucks temporarily parked in various places and thus were not spills from vehicle maintenance; and that the single battery Ms. Miller saw could have come from an employee’s car rather than industrial maintenance activities. See, e.g., Tr. at 254-55, 329, 350-52, 432-34, 440, 1194-95, 1926-37, 1971-72, 2007, 2139.
The Board therefore affirms the ALJ’s finding that the Region failed to
prove by a preponderance of the evidence that San Pedro had a “vehicle mainte- nance shop” on its premises during the alleged period of violation. In so holding, the Board is not concluding that there was or was not a vehicle maintenance shop at the San Pedro facility, but only that the Region failed to establish the existence of one. For example, the location where the blue barrels and small containers were clustered together could have been a candidate for further investigation as a “vehicle maintenance shop,” but the Region presented no definitive evidence, such as what substances actually were present in those containers, what the substances actually were used for, or what “vehicle” or “vehicles” actually were the subject of maintenance using the substances (if any). As a result, the Board has no basis to make a judgment as to whether any “vehicle maintenance” actually took place in the area immediately surrounding the blue barrels and small containers or whether the area was a place San Pedro designated and/or used as a “shop” for its mainte- nance activities. And even though the SWPPP states that maintenance occurs at the San Pedro facility, it does not identify a nontransient area or location where such activities are conducted. The Region’s evidence, taken as a whole, is only suggestive, not probative. It does not assist the Board in determining what “por- tions of the facility,” if any, were “associated with industrial activity” and thus should have been covered under an NPDES storm water permit. See 40 C.F.R.
§ 122.26(b)(14)(viii).
Importantly, although the Board is affirming the ALJ’s finding with respect
to vehicle maintenance shop, the Board is not affirming all of the bases underly- ing the ALJ’s decision. Specifically, to the extent her findings are inconsistent with the Board’s analysis in Part VII.A.2 above, they are overruled.19
19 For example, the ALJ opined that “[e]ven occasional fueling or engine fluid topping off does
not constitute a ‘vehicle maintenance shop.’” Init. Dec. at 24 n.17. As discussed in Part VII.A above, the Board agrees that a random maintenance act occurring outside the boundaries of a designated maintenance area does not transmute that area into a regulated “shop.” The “shop” must exist as a nontransient area or location at the facility site designated for vehicle maintenance or in which vehicle
Continued
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b. The Region Did Establish by a Preponderance of the
Evidence That San Pedro Had “Equipment Cleaning
Operations” on Its Premises
In the case of “equipment cleaning operations,” the outcome is different.
The complaint again lacks specific allegations that San Pedro had such operations on its premises. At the hearing, however, the Region introduced San Pedro’s SWPPP into evidence, which was signed and attested as “true, accurate, and com- plete” by Mr. Renato Balov, the company’s principal. SWPPP at 3. The SWPPP states that “Operational Equipment refers to our forklifts, yard goats * * * , truck, and other machinery and equipment necessary for operation.” Id. at 7 (emphasis added). The record also establishes that San Pedro used its forklifts to convey goods and materials around the facility, Tr. at 93, 131, 1424, and thus the forklifts can be considered a form of “transfer equipment,” as those words are generally understood. See Webster’s at 2426-27 (“transfer” means “to carry or take from one person or place to another”).
The SWPPP also includes the following as “Existing Nonstructural [Best
Management Practices]”: “The outside surfaces of the machinery and equipment are cleaned regularly in order to minimize or eliminate any contact between oper- ational fluids and storm water.” SWPPP at 18 (emphasis added). Mr. Bulot also testified that San Pedro’s owners said they “occasionally” hosed dust off the fork- lifts, Tr. at 1611, and Mr. Severini testified that San Pedro’s owners told him the site operations “have been, essentially, unchanged for a decade” Tr. at 1433; see supra Part V. As the SWPPP was submitted in 2008, the Board finds this to be probative evidence of equipment cleaning operations that likely were conducted during the period of violation cited in the complaint (2004-2007). Further, the record contains Ms. Miller’s eye-witness testimony that when she arrived for the May 2007 inspection, she saw a man hosing off a forklift parked on the loading dock, using what appeared to be a garden hose to rinse the forklift’s exterior. Tr. at 118-19, 131-32, 231-33, 236-37, 2222-23, 2236-38, 2241-42. She later saw men using brooms to push the washwater off both sides of the loading dock. Tr. at 119, 132, 2229, 2236; see CX 14, photo 8. The ALJ found Ms. Miller’s testi- mony to be credible on this point, despite numerous and sustained efforts by San
(continued)
maintenance occurs; a sole act of fueling or fluid topping does not conjure up a “shop” in the location where the singular action occurs. Nonetheless, once the existence of a nontransient vehicle mainte- nance area is established, any act of maintenance within that area, such as fueling or fluid topping-off, would be subject to regulation under § 122.26(b)(14)(viii). Similarly, the ALJ’s instructions that to demonstrate a vehicle maintenance shop, the Region would need to establish a certain “volume” of maintenance activity or “daily maintenance activities that would customarily require the presence of a dedicated maintenance shop,” Init. Dec. at 30-31 & n.19, are inconsistent with the Board’s interpreta- tion of the regulations.
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Pedro’s attorneys to undermine it. Init. Dec. at 37; see, e.g., Tr. at 231-39, 462-64, 870-77, 1240-41, 1978-88, 2164-65, 2221-42.
“Cleaning” means to wash “with any aqueous liquid medium,” such as water.
Webster’s at 419. In light of the evidence in the record, the Board finds that San Pedro’s forklifts are “equipment” within the meaning of sec- tion 122.26(b)(14)(viii), and that the observed spraying of the forklift on the load- ing dock with water constitutes “cleaning” under the regulatory provision. See 1995 Report to Congress app. E, at E-38 (“equipment cleaning operations” take place in areas where “rinsing of transfer equipment” occurs); Motor Freight Fact Sheet at 2 (same).
The Board also finds that Ms. Miller’s credible testimony, coupled with the
statements in the SWPPP and San Pedro’s expert testimonies, is probative evi- dence that equipment cleaning operations were continuing at San Pedro at the time of Ms. Miller’s May 2007 inspection, pursuant to the cleaning practices de- scribed in San Pedro’s SWPPP. The Board notes that this is particularly probative as the forklift was openly washed in the presence of the Region’s inspector.20 See In re City of Salisbury, 10 E.A.D. 263, 276, 293-96 (EAB 2002) (Board defers to ALJ’s reasoned analysis of witness credibility); accord In re Euclid of Va., Inc., 13 E.A.D. 616, 673-75 (EAB), appeal voluntarily dismissed, No. 08-1088 (D.D.C. Oct. 21, 2008).
In sum, the weight of the evidence establishes that San Pedro regularly or
occasionally cleaned its forklifts as a part of its equipment cleaning operations,
20 There was some dispute before the ALJ as to how much weight to give statements made by
San Pedro in its SWPPP, which the company prepared following the Region’s issuance of the first compliance order. See Init. Dec. at 33 & n.22. In her Initial Decision, the ALJ stated that “the reliabil- ity of the SWPPP is compromised by statements by [Mr. Balov] that [San Pedro] submitted the [notice of intent to be covered by a general permit] and prepared the SWPPP as a protective measure in response to a direct Administrative Order requiring compliance.” Id. at 33 n.22 (citing Tr. at 2033-35, 2038). The ALJ further suggested that information in the SWPPP may not be that probative, as it “could be viewed as an effort by [San Pedro] simply to meet the requirements and come into compli- ance.” Id. The Board does not agree that it is appropriate to allow a party to back away from statements it submits to a government agency (in this case, California) as part of a regulatory program. See In re City of Salisbury, 10 E.A.D. 263, 287-96 (EAB 2002) (rejecting City’s attempt to qualify its official Discharge Monitoring Reports as “atypical” due to laboratory error, where City failed to prove actual existence of lab error). To do so undermines the environmental program that expressly requires the submission of a SWPPP to protect the waters of the United States. In this case, San Pedro submitted the SWPPP as it deemed it appropriate to do so from a business perspective. Later, when the Region filed a complaint against it, San Pedro attempted to disavow the statements it had made in the SWPPP. See, e.g., Tr. at 2116-29. At minimum, the statements in the SWPPP, which Mr. Balov attested were “true, accurate, and complete,” with his awareness “that there are significant penalties for submitting false information, including the possibility of fines and imprisonment for knowing violations[,]” SWPPP at 3, should have been viewed as statements against interest and considered probative evi- dence of equipment cleaning at the San Pedro facility. See Salisbury, 10 E.A.D. at 274, 293-96.
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including by hosing the forklifts off with water, and that San Pedro specifically cleaned one forklift pursuant to this practice on May 17, 2007. Under the Board’s construction of the transportation facility regulations, set forth above, this evi- dence is sufficient to establish regulatory jurisdiction. See supra Part VII.A.3 (holding that once the Region has established the presence of equipment cleaning operations, any cleaning of relevant industry-related equipment pursuant to that business operation or practice triggers the permitting requirements under the in- dustrial storm water program). The ALJ erred in finding otherwise. Because the Board finds this element successfully established by a preponderance of the evi- dence, it turns next to an examination of the final elements of the Region’s prima facie case of violation for Counts 1, 2, and 3.
2. Count 1 Liability: Discharge of Pollutants into Waters of the
United States
To establish liability for Count 1, the Region must show, by a preponder-
ance of the evidence, that within the alleged period of time San Pedro did not have an NPDES permit (i.e., October 1, 2004, to December 24, 2007), the com- pany: (1) was a “person”; (2) that “discharged” storm water associated with indus- trial activity; (3) from a “point source”; (4) into “waters of the United States.” CWA §§ 301(a), 402(p), 502(7), 502(12), 33 U.S.C. §§ 1311(a), 1342(p), 1362(7), 1362(12); 40 C.F.R. § 122.26(b)(14). The evidence in the record estab- lishes that San Pedro Forklift was incorporated on November 24, 1987, and thus qualifies as a “person” under section 502(5) of the CWA, 33 U.S.C. § 1362(5). CX 1. The evidence also establishes that storm water running across San Pedro’s facility was diverted through two storm drains into the City of Los Angeles’s mu- nicipal separate storm sewer system (“LAMS4”), which discharged approximately 1,000 feet west of the drains into the Dominguez Channel Estuary. CX 11, at 1, 3; see CX 46 figs. 13-22, at 26-35 (unlined portion of Dominguez Channel below Vermont Avenue is an estuary). As a matter of law, both the storm drains and the LAMS4 outfall qualify as “point sources” within the meaning of CWA sec- tion 502(14), 33 U.S.C. § 1362(14). See 55 Fed. Reg. at 47,997 (categorizing dis- charges through MS4s as “point sources”); see also United States v. Ortiz, 427 F.3d 1278, 1281 (10th Cir. 2005) (holding that storm drains are point sources); San Francisco Baykeeper v. West Bay Sanitary Dist., 791 F. Supp. 2d 719, 754 (N.D. Cal. 2011) (that MS4s are “point sources” is undisputed).
Further, the evidence in the record establishes that the Dominguez Channel
Estuary is subject to the ebb and flow of the tide, as the Channel itself is a tribu- tary to the Los Angeles Harbor, San Pedro Bay, and ultimately the Pacific Ocean. See Tr. at 729-34, 775; California Regional Water Quality Control Board, Water Quality Control Plan, Los Angeles Region figs. 2-7, 2-8, 2-10, 2-21, at 2-28, 2-29, 2-31, 2-42 (June 13, 1994) (CX 53) (maps); Los Angeles Regional Water Quality Control Board, 2006 CWA Section 303(d) List 14 (June 28, 2007) (Suppl. CX 16). As such, the Dominguez Channel Estuary is a water of the United States.
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See 40 C.F.R. § 122.2 (“waters of the United States” include “all waters * * * subject to the ebb and flow of the tide,” as well as tributaries to waters used in interstate or foreign commerce, such as the Los Angeles Harbor).
Turning to the remaining question of whether San Pedro discharged storm
water associated with industrial activity without a permit, the Region introduced an urban hydrology expert, Mr. Craig Blett, who analyzed San Pedro’s facility using EPA’s Storm Water Management Model. Tr. at 535-45. That model uses site topography, precipitation rates, flow path dynamics, and other variables to identify the volume of storm water runoff from paved areas into storm sewers. See PG Environmental, LLC, San Pedro Forklift Storm Water Analysis (May 25, 2010) (CX 11) [hereinafter Storm Water Analysis]. The model showed that storms with rainfall in excess of 0.2 inches in a twenty-four-hour period would generate enough runoff to cause San Pedro to discharge storm water through the storm drains. Id. at 3; Tr. at 539, 541. It also showed that such storm events occurred forty-nine times during the alleged period of violation, September 29, 2004, to December 24, 2007. Storm Water Analysis at 3. San Pedro’s experts disagreed with Mr. Blett’s assessment of the size of the storm needed to generate a dis- charge, but they failed to offer any data or calculations to support their statements. See, e.g., Tr. at 1463, 1570-71. The weight of the evidence therefore establishes that there were forty-nine potential days of violation during the period the Region alleges in its complaint; however, the record does not establish when equipment cleaning commenced at the site during this period of time.
Specifically, while San Pedro’s SWPPP and expert testimony provide pro-
bative evidence that its business process or practice involved cleaning its equip- ment “regularly” and it “occasionally” hosed off its forklifts, and that such opera- tions “have been, essentially, unchanged for a decade,” Tr. at 1433, there is no probative evidence in the record before the Board that such “regular” or “occa- sional” cleaning occurred on or before September 29, 2004 (the beginning of the alleged period of violation) and May 17, 2007 (the date Ms. Miller observed a forklift being hosed off). Without evidence of when equipment cleaning com- menced pursuant to San Pedro’s equipment cleaning process or practice, the Board cannot presume that equipment cleaning activities causing potential dis- charges occurred at the time of, or prior to, all of the forty-nine rain days cited by the Region’s expert.21 To determine liability and an appropriate penalty based on this record, the Board determined the number of days there was sufficient rainfall
21 The Board is not concluding that no other equipment was cleaned at San Pedro during the
period of violation alleged in the complaint, just simply that based on the record before the Board, the Region only established the time of one incident of equipment cleaning pursuant to the cleaning prac- tices listed in the SWPPP. The Board also is not suggesting that only an inspector’s visual observation or other direct evidence can establish the time of equipment cleaning. For example, other evidence could include the testimony of employees on site, company records showing the time of incidents of equipment cleaning, and/or a schedule for cleaning of equipment that is followed regularly.
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on or after May 17, 2007 (the first known date of equipment cleaning). The Board finds that the Region established by a preponderance of the evidence that San Pedro violated section 301(a) of the CWA by discharging storm water from an industrial point source into the waters of the United States without a permit on three days during the alleged period of violation.22 See NOAA, Record of Clima- tological Observations: Long Beach Daugherty Field 25 (CX 13, at 25) (reporting 0.33 inches of rainfall on September 22, 2007, 0.41 inches on October 13, 2007, and 0.73 inches on December 18, 2007).
3. Count 2 Liability: Failure to Apply for NPDES Storm Water
Permit Coverage
In addition to alleging that San Pedro discharged pollutants into waters of
the United States without a permit (Count 1), the Region alleged in Count 2 that San Pedro also violated section 308(a) of the CWA, 33 U.S.C. § 1308(a), and 40 C.F.R. § 122.21, by failing to timely submit either a “Notice of Intent” to be covered under California’s general storm water permit or an application for an individual NPDES permit. There is no dispute of fact on this question. The record plainly establishes that San Pedro did not file either a general or individual permit application prior to its first established industrial discharge on September 22, 2007, and thereby violated the permit application regulations at 40 C.F.R.
§ 122.21. E.g., Answer to Administrative Compl. ¶¶ 14, 16, 21, at 4-5.
It is an unsettled question of law, however, whether such a violation of
EPA’s permit regulations also constitutes a violation of section 308(a) of the stat- ute, as alleged in the complaint. See Compl. ¶¶ 38-39, at 7-8. To date, the Board has not been required to address the question of whether failure to submit a timely permit application constitutes a violation of section 308(a). See, e.g., In re Service Oil, Inc., CWA Appeal No. 11-01, at 8 n.3 (EAB Dec. 7, 2011) (Final Decision and Order). The United States Court of Appeals for the Ninth Circuit (where the
22 San Pedro argues in its brief that the Region produced no evidence that pollutants actually
were discharged into the waters of the United States, and thus, it is impermissible to find a violation based on a potential or theoretical discharge. San Pedro Resp. Br. at 13-17. The Board disagrees. There is ample evidence in the record of the presence of surface pollutants at this site. See R9 Post-Hearing Br. at 23-28. Moreover, storm water discharges from covered facilities are consid- ered “to be ‘associated with industrial activity’ regardless of the actual exposure of these same materi- als or activities to storm water.” 55 Fed. Reg. at 48,008; see also NRDC v. EPA, 966 F.2d 1292, 1304 (9th Cir. 1992) (“the language ‘discharges associated with industrial activity’ is very broad” and “[t]he operative word is ‘associated’”; thus, “[i]t is not necessary that storm water be contaminated or come into direct contact with pollutants; only association with any type of industrial activity is necessary”). The storm water rule “requires all dischargers through municipal separate storm sewer systems [MS4s] to apply for an individual permit, apply as part of a group application, or seek coverage under a promulgated general permit for storm water discharges associated with industrial activity.” 55 Fed. Reg. at 48,006. As noted previously, San Pedro’s drains divert storm water from the facility’s surfaces into the City of Los Angeles’ MS4, which ultimately discharges into waters of the United States.
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Board’s decision in this matter will be heard if it is appealed) also has not ad- dressed this issue. However, since the Region’s filing of the complaint on Septem- ber 29, 2009, two other federal circuit courts have ruled that EPA lacks statutory authority to assess penalties for a failure to apply for an NPDES permit pursuant to section 308(a). See Nat’l Pork Producers Council v. EPA, 635 F.3d 738, 751-53 (5th Cir. 2011); Service Oil, Inc. v. EPA, 590 F.3d 545, 549-51 (8th Cir. 2009). The Region attempted to distinguish these decisions in its post-hearing brief to the ALJ. See R9 Post-Hearing Br. at 37-42. San Pedro responded to the Region’s ar- guments by contending that the ALJ should follow the Fifth and Eighth Circuit rulings on this issue. See San Pedro Reply to R9 Post-Hearing Br. at 11-13 (filed June 8, 2011).
The Board declines to decide this question at this time. Based on the facts of
this case, the Board is not willing to impose a separate penalty for Count 2. Ac- cordingly, the Board does not need to reach the unsettled question of whether failure to submit a timely permit application constitutes a violation of section 308(a).
4. Count 3 Liability: Failure to Comply with General Storm Water
Permit Requirements to Develop an Adequate SWPPP and
Monitoring Program
To establish liability for Count 3, the Region must show by a preponderance
of the evidence that San Pedro violated the terms of the storm water permit it obtained on December 24, 2007, by failing to develop and implement a SWPPP and a storm water monitoring program “when industrial activities [began].” Gen- eral Permit §§ A.1.a, B.1.a, at 11, 24. In its post-hearing brief to the ALJ, the Region correctly noted that “[a]ny permit noncompliance constitutes a violation of the [CWA] and is grounds for enforcement action.” R9 Post-Hearing Br. at 43 (citing 40 C.F.R. § 122.41(a) (duty to comply)); see CWA § 402(p)(3)(A), 33 U.S.C. § 1342(p)(3)(A) (“[p]ermits for discharges associated with industrial activity shall meet all applicable provisions” of CWA sections 402 and 301).
The complaint alleged that San Pedro allowed forty-six days to elapse be-
tween its securing authorization to be covered under California’s storm water gen- eral permit on December 24, 2007, and its providing to EPA the written SWPPP and storm water monitoring program documents on February 8, 2008. See Compl.
¶¶ 43-44, 47-48, at 8-9. The Region’s post-hearing brief, however, altered these allegations to acknowledge that San Pedro completed its development of the SWPPP and monitoring plan on January 23, 2008. R9 Post-Hearing Br. at 43, 45. Accordingly, the Region essentially alleged that the failure to develop the two documents only ran twenty-nine days, from December 24, 2007, to January 23, 2008, while the alleged failure to implement the SWPPP continued to extend for forty-six days, from December 24, 2007, to February 8, 2008. See id.
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The evidence in the record paints a different picture, however. It establishes
that the Region granted San Pedro an extension of time, until January 13, 2008, to submit to EPA its SWPPP and monitoring program plan. See E-mail from Rick Sakow, CWA Compliance Office, EPA Region 9, to John Glaser, Counsel for San Pedro Forklift, Inc. (Dec. 21, 2007) (CX 32). On January 18, 2008, San Pedro informed the Region that Frog Environmental, Inc., its storm water consultant, had completed the SWPPP and implemented best management practices set forth therein. See Letter from John C. Glaser, Glaser, Tonsich & Associates LLP, to Michael Sakow & Mike Massey, Esq., EPA Region 9, at 2 (Jan. 18, 2008) (CX 33). The Region subsequently telephoned San Pedro on February 4, 2008, to inform the company that its January 18th response was insufficient in certain par- ticulars. In the course of that conversation, the parties agreed that San Pedro would submit the SWPPP and other required documents to EPA with a postmark no later than February 8, 2008. See E-mail from Rick Sakow, CWA Compliance Office, EPA Region 9, to John Glaser, Counsel for San Pedro Forklift, Inc. (Feb. 4, 2008) (CX 34); Notes of Rick Sakow, EPA Region 9, from February 4, 2008 Telephone Conversation with John Glaser (CX 30).
On February 7, 2008, San Pedro mailed the SWPPP and other information
to EPA, including photographs showing clean-up and containment work it already had conducted at the facility. See Letter from John C. Glaser, Glaser, Tonsich & Associates LLP, to Mike Massey, Esq. & Rick Sakow, EPA Region 9 (Feb. 7, 2008) (CX 35). Evidence from mid-December 2007 suggests that much of this work began well before the permit issuance date, December 24, 2007. See, e.g., Letter from John. C. Glaser, Glaser, Tonsich & Associates LLP, to Mike Massey, Regional Counsel, EPA Region 9, at 3 (Dec. 12, 2007) (CX 31) (Response to Item No. 24) (“San Pedro Forklift implemented best management practices, eliminating and/or containing on-site liquid substances”); id. (Response to Item No. 25) (No- tice of Completion of Interim Measures, including implementation of Best Man- agement Practices); id. at 4 (Response to Item No. 27) (“San Pedro Forklift imple- mented Best Management Practices to contain spills and has installed cover and containment systems for the outdoor storage area to prevent discharges of pollu- tants through the storm drains”).
Based on the record before the Board, there is not a preponderance of the
evidence establishing that San Pedro allowed forty-six or even twenty-nine days to elapse before completing tasks required by its permit. Instead, the record shows that San Pedro was in frequent contact with EPA, that EPA granted the company several extensions of time, and that in the interim many clean-up and containment activities took place on the facility’s grounds. Accordingly, the Board finds that the administrative record does not establish San Pedro’s liability for the alleged
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violations set forth in Count 3 of the complaint, as amended by the Region’s post-hearing brief.
5. Conclusion on Liability
The Board therefore holds that the Region established by a preponderance
of the evidence that San Pedro unlawfully discharged storm water associated with industrial activity to waters of the United States on three days between May 17, 2007, and December 24, 2007.
VIII. PENALTY
Section 309(g)(2)(B) of the CWA and the Civil Monetary Penalty Inflation
Adjustment Rule at 40 C.F.R. part 19 authorize a maximum civil administrative penalty of $11,000 per day per violation, with a total maximum penalty of
$157,500.23 See CWA § 309(g)(1)(A), (2)(B), 33 U.S.C. § 1319(g)(1)(A), (2)(B); 40 C.F.R. § 19.4. To determine an appropriate penalty under the CWA, the Agency is required to take into account “the nature, circumstances, extent and gravity of the violation, or violations, and with respect to the violator, ability to pay, any prior history of such violations, the degree of culpability, economic ben- efit or savings (if any) resulting from the violation, and such other matters as justice may require.” CWA § 309(g)(3), 33 U.S.C. § 1319(g)(3) (emphasis added).
The CWA “prescribes no precise formula by which these factors must be
computed” or otherwise evaluated. In re Britton Constr. Co., 8 E.A.D. 261, 281, 278 (EAB 1999). Moreover, EPA has not issued civil penalty guidelines specific to the CWA to assist in formulating CWA penalties. Accordingly, “highly discre- tionary calculations that take into account multiple factors are necessary in order to set civil penalties under the [CWA].” Tull v. United States, 481 U.S. 412, 426-27 (1987); see In re Cutler, 11 E.A.D. 622, 645 (EAB 2004) (“judges may exercise discretion in calculating appropriate penalties and may depart from a pro- posed penalty based on an Agency policy if they explain their reasons for the departure”). The Board, however, did consider two general civil penalty guide- lines developed by the Agency for assistance in crafting penalties where, as here, no statute-specific guidance is available. See EPA General Enforcement Policy
GM-21, Policy on Civil Penalties 3-4 (Feb. 16, 1984) (CX 8) [hereinafter Gen- eral Policy]; EPA General Enforcement Policy #GM-22, A Framework for Stat- ute-Specific Approaches to Penalty Assessments: Implementing EPA’s Policy on
23 The Region’s proposal of $177,500 in the complaint as the maximum available penalty is
incorrect, as that figure applies only to violations that occur after January 12, 2009, i.e., beyond the period of violation alleged in this case. See 40 C.F.R. § 19.4 tbl. 1.
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Civil Penalties 17, 23-24 (Feb. 16, 1984) (CX 9) [hereinafter Penalty Framework].24
In this case, the ALJ did not rule on questions of penalty because she found
no regulatory jurisdiction and thus no CWA liability to penalize. The parties, however, thoroughly litigated penalty issues at the hearing and presented penalty arguments in their post-hearing briefs. See, e.g., Tr. at 718-1001, 1009-1305; R9 Post-Hearing Br. at 55-73; San Pedro Post-Hearing Br. at 13-16. The Board therefore has an adequate record upon which to draw to decide a penalty amount.
A. Economic Benefit or Savings
The recovery of any economic benefit that has accrued to a violator as a
result of its noncompliance with environmental laws is a critical component of the Agency’s civil penalty program. In re B.J. Carney Indus., Inc., 7 E.A.D. 171, 207 (EAB 1997), appeal dismissed as moot, 200 F.3d 1222 (9th Cir. 2000); see Gen- eral Policy at 3 (“it is Agency policy that penalties generally should, at a mini- mum, remove any significant economic benefits resulting from failing to comply with the law”); accord Policy Framework at 6. This is especially true in enforce- ment matters brought under environmental statutes, such as the CWA, where the statutory criteria require a consideration of the “economic benefit or savings (if any) resulting from the violation.” CWA § 309(g)(3), 33 U.S.C. § 1319(g)(3). Ec- onomic benefit is typically calculated as a measure of “delayed costs,” “avoided costs,” and/or the “benefit from competitive advantage gained through noncompli- ance.” Britton, 8 E.A.D. at 287; Penalty Framework at 6-11.
In the present case, the Region contracted with Mr. Jonathan Shefftz to cal-
culate the economic benefit, but ultimately the Region did not call Mr. Shefftz as a witness or successfully introduce other evidence of economic benefit in this case. See Tr. at 1112-26. As a result, the economic benefit report is not part of the
24 At the hearing before the ALJ, San Pedro objected to the Region’s use of these two guide-
lines to assist it in determining a recommended penalty on the basis that the company did not have adequate notice of them. See Tr. at 1018-28. The Board notes that these two documents are available on EPA’s website at www.epa.gov and provide “[a]n outline of the general process for the assessment of penalties,” and the Agency “urge[s] administrative law judges to impose penalties consistent with this policy.” General Policy at 1. The overarching goals of the penalty policies are “deterrence, fair and equitable treatment of the regulated community, and swift resolution of environmental problems.” Id. “Although [the policies do not] have the force of law, [they are] consistent with the congressional policy behind the [CWA].” SPIRG v. Hercules, Inc., 29 Env’t Rep. Cas. (BNA) 1417, 1418 (D.N.J. 1989); see also PIRG of N.J., Inc. v. Magnesium Elektron, Inc., 40 Env’t Rep. Cas. (BNA) 1917, 1927 (D.N.J. 1995) (“the EPA methodology [in the penalty policies] is an appropriate guide in assessing a penalty against defendant” in a CWA case).
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administrative record before the Board.25 The Board therefore finds no basis in the record for determining that San Pedro received a significant economic benefit from its noncompliance.26
B. The Nature, Circumstances, Extent, and Gravity of the Violations
There are a number of factors the Agency can consider to assess the nature,
circumstances, extent, and gravity of San Pedro’s violations, including actual or possible harm (whether and to what extent San Pedro’s activity actually resulted or was likely to result in an unpermitted discharge); the amount of pollutant; tox- icity of the pollutant; sensitivity of the environment; the length of time a violation continued; and the importance of the permitting requirements to achieving the goals of the CWA. See, e.g., Penalty Framework at 13-16. The Board finds that the three discharges of industrial storm water posed a risk of harm to the sensitive estuarine environment in the Dominguez Channel and beyond. Dr. Peter Kozelka, a chemist introduced by the Region as an expert witness, testified that a variety of pollutants such as metals (e.g., zinc, copper, lead, iron), oil and grease, polycyclic aromatic hydrocarbons (“PAHs”), and possibly polychlorinated biphenyls can be removed from forklifts during rinsing operations. Tr. at 796-97, 876-77. The evi- dence in the record indicates that some of these pollutants are possible or probable carcinogens, damaging marine organisms on the cellular level, while others in- hibit the growth and reproduction of a diverse array of marine life, including sea urchins and fish. Tr. at 797, 865-66, 876-78; see CX 47, 49. Other evidence indi- cates that sediment also can be removed during rinsing operations. Tr. at 1057-58. When discharged with industrial storm water into waters of the United States, sediment smothers fish eggs and triggers avoidance behaviors in fish, which have difficulty breathing and finding food in sediment-laden waters. See Tr. at 867-69.
The nature of these environmental harms are important in and of them-
selves, but that importance is magnified by the sensitivity of the environment at issue in this case. See Penalty Framework at 15. In 2006, EPA and the State of California designated the Dominguez Channel Estuary as “impaired” under sec- tion 303(d) of the CWA for copper, lead, zinc, sediment toxicity, benthic commu-
25 At the administrative hearing, the Region attempted to question Ms. Ellen Blake, the case
development officer, regarding Mr. Shefftz’s economic benefit report. See Tr. at 1011, 1114-25. San Pedro’s counsel objected to the report as lacking a foundation, and the ALJ ultimately sustained the objection. Tr. at 1121.
26 The Board notes that the costs of compliance for San Pedro would be comprised of the
permit application fee, and the costs associated with developing a SWPPP, implementing best manage- ment practices, and implementing its storm water monitoring plan, which San Pedro ultimately in- curred before the end of the period of violation that the Region alleged in its complaint. Accordingly, the Board believes that any economic benefit San Pedro realized by delaying these initial costs of compliance would be small, but does not have a basis in the record for determining them.
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nity effects,27 PAHs, and a number of other pollutants. CX 20, at 30; see Tr. at 1073-75; R9 Post-Hearing Br. at 63-64 & n.28. These designations indicate that the Estuary is incapable of fully supporting all of its designated uses, such as providing fish spawning habitat. CX 20, at 30; see Tr. at 754, 869, 1073-75. Moreover, the National Marine Fisheries Service classifies the Dominguez Chan- nel Estuary and Los Angeles Inner Harbor as “Essential Fish Habitat” for groundfish, including rockfish. Tr. at 1237; see CX 21-23. This evidence shows that it is more likely than not that the aquatic ecosystem into which San Pedro discharged its industrial storm water already is under considerable stress. San Pe- dro’s industrial storm water discharges actually resulted in, or were likely to result in, further harm to this sensitive watershed.
In terms of the harm to the regulatory program caused by San Pedro’s dis-
charges of industrial storm water without an NPDES permit, the Board and its predecessors have held that discharging without a permit or conducting other un- lawful activities may cause significant harm to the relevant regulatory program. See In re Phoenix Constr. Servs., 11 E.A.D. 379, 396-400 (EAB 2004) (collecting cases). The CWA permitting requirements “go to the very heart” of the storm water program, which cannot successfully function to “restore and maintain the chemical, physical, and biological integrity” of our Nation’s waters if the permit requirements, such as SWPPP preparation and implementation requirements, are disregarded or delayed. See id at 398-400 (failure to obtain permit prior to dis- charging pollutants into wetlands creates harm to CWA section 404 regulatory program); In re Everwood Treatment Co., 6 E.A.D. 589, 602-03, 605 (EAB 1996) (failure to obtain permit prior to disposing of hazardous waste creates harm to regulatory program under Resource Conservation and Recovery Act), aff’d, No. 96-1159-RV-M (S.D. Ala. Jan. 21, 1998). The purpose of obtaining an NPDES permit is to ensure careful consideration of the discharges’ environmental impacts and to impose on dischargers appropriate conditions to minimize or elim- inate harmful impacts. See, e.g., Kelly v. EPA, 203 F.3d 519, 522 (7th Cir. 2000) (“[t]he purpose of requiring federal approval beforehand is to prevent or minimize aquatic damage”); Phoenix Constr., 11 E.A.D. at 399 (“the obtaining of permits and the following of such conditions is critical to the basic purpose of * * * the CWA”).
Notably, the violations established by the Region total three days of dis-
charge, rather than the forty-nine days the Region used to calculate its proposed penalty of $120,000. A general rule of thumb is that “the longer a violation contin- ues uncorrected, the greater is the risk of harm.” Penalty Framework at 15. The lower number of discharge days that the Region actually proved in this case by a
27 Benthic communities consist of aquatic organisms, structural formations, and substrate lo-
cated at or near the bottom of water bodies that are periodically or permanently covered by water. E.g., 15 C.F.R. § 922.3; see Tr. at 751 (“worms, shellfish, [and] fish” are examples of benthic organisms).
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preponderance of the evidence warrants a less substantial penalty than the Region proposed. After carefully considering the range of penalties authorized under the CWA (up to $11,000 per day), and the nature, circumstances, extent, and gravity of the violations in this case, the Board assesses an initial penalty of $2,000 per day for the unpermitted industrial storm water discharges that occurred at San Pedro’s facility on three days in 2007, for a total of $6,000.
C. Ability to Pay, Prior History of Violations, Degree of Culpability, and Other Matters as Justice May Require
The Agency can use certain specific attributes of the violator (ability to pay,
prior history of violations, and degree of culpability), as well as other matters as justice may require either to increase or decrease an initial penalty. See, e.g., Pen- alty Framework at 17. In this case, the Board finds no basis to alter its initial penalty based on San Pedro’s inability to pay. A financial report in the record indicates that San Pedro’s 2009 sales volume exceeded one million dollars, CX 2, at 2-3, and San Pedro neither claimed it could not pay the penalty proposed by the Region, nor proffered any financial documentation to support such a claim. The Board also finds no basis to alter the penalty based on a prior history of violations, of which there is no evidence in the record before the Board, or for other matters as justice may require, of which there are none to the Board’s knowledge. See R9 Post-Hearing Br. at 70-71.
The last statutory penalty factor to consider is culpability. The Region ad-
justed its proposed penalty upward by a factor of twenty percent (20%) to reflect San Pedro’s degree of culpability. Id. at 71-74. The Region’s inspector testified that the Port of Los Angeles had provided written notice to San Pedro in June 2003 and May 2004 with information about the storm water program, stating that permit coverage might be required for San Pedro’s activities, and thus San Pedro “was aware or should have been aware of its permit obligations.” Id. at 72; see Tr. at 274-75, 279-81; Suppl. CX 2, 6. In its second letter to San Pedro, which the Port sent because San Pedro did not respond to the first letter, the Port specifically asked San Pedro to inform the Port if it believed it was not subject to the permit requirements. Suppl. CX 6. San Pedro did not respond to that letter, nor apply for coverage under the General Permit, until December 2007. See R9 Post-Hearing Br. at 72; CX 31 at 2. The Region also argued that San Pedro “is a sophisticated business, accustomed to regulation,” and thus the company should be assessed a substantial penalty increase for the culpable acts or omissions that resulted in it paying no heed to the storm water rules. R9 Post-Hearing Br. at 72. On cross-examination at the penalty phase of the hearing before the ALJ, San Pedro’s attorney repeatedly suggested through his questioning that San Pedro may not have sought a permit because San Pedro in good faith (and possibly relying on the advice of its counsel) believed it fell within an SIC code that was exempt from the storm water regulations. Tr. at 1271-90.
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The Board is persuaded that the Region is correct in these assessments, and
therefore adds a twenty percent increase to its initial penalty (i.e., $1,200) to re- present an additional penalty for San Pedro’s culpability. San Pedro knew or should have known of its permit obligations, and the Board does not find that the circumstances of this case or any inaccurate legal advice San Pedro may have received provide a justifiable basis for adjusting the culpability factor. To hold otherwise would encourage ignorance of the law and/or negligence to adequately follow up on directives intended to inform parties of their regulatory obligations.
D. Penalty Conclusion
In sum, after applying the statutory factors in CWA section 309(g)(3) to the
facts of this case, the Board assesses a civil administrative penalty of $7,200 against San Pedro for discharging storm water associated with industrial activity without an NPDES permit on three days in 2007.
IX. ORDER
Accordingly, the Board holds that San Pedro Forklift, Inc. unlawfully dis-
charged storm water associated with industrial activity to waters of the United States on three days between May 17, 2007, and December 24, 2007, and assesses a monetary penalty of $7,200 for those violations. Payment of the entire amount of the civil penalty is due within thirty (30) days of service of this Final Decision and Order, unless otherwise agreed to by the Region. Payment may be by certified or cashier’s check, payable to the Treasurer, United States of America, and for- warded to:
United States Environmental Protection Agency
Fines and Penalties
Cincinnati Finance Center
Post Office Box 979077
St. Louis, Missouri 63197-9000
A transmittal letter identifying the case name and the EPA docket number,
plus San Pedro’s full name and address, must accompany payment. 40 C.F.R.
§ 22.31(c). San Pedro must serve copies of the check or other instrument of pay- ment on the Regional Hearing Clerk and on the Region. If appropriate, the Region may modify the above-described payment instructions to allow for alternative methods of payment, including electronic payment operations. Failure to pay the penalty within the prescribed time may result in assessment of interest on the pen- alty. See 31 U.S.C. § 3717; 40 C.F.R. § 22.31(c).
So ordered.
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Judge McCabe, partially concurring and partially dissenting:
I concur in all aspects of the Board’s decision with the exception of the
conclusion in Part VII.B.1.a that the evidence fails to establish the existence of a vehicle maintenance shop at San Pedro’s facility by a preponderance of the evi- dence in this case.
I concur in the Board’s legal conclusion in Part VII.A.2.b that, to establish
the existence of a “vehicle maintenance shop” within the meaning of the storm water regulations, “the Agency has to prove by a preponderance of the evidence that there is a nontransient area or location that is designated for vehicle mainte- nance or where vehicle maintenance is conducted on a regular or repeated basis, including intermittently or sporadically.” However, I respectfully dissent from the Board’s conclusion in applying that standard to the facts established in the record in this case. In my view, the preponderance of the evidence in this case meets the articulated standard and establishes that San Pedro was conducting a vehicle maintenance shop at its facility.
San Pedro’s own expert witnesses, Mr. Bulot and Mr. Severini, testified that
San Pedro’s owners stated that a third-party company periodically came on-site to conduct minor forklift maintenance such as changing or topping off hydraulic oil, engine oil and fuel, then removed the used fluids from the site, Tr. at 1427-31, and that there was “occasional topping off of hydraulic fluid.” Tr. at 1611. This is supported by the evidence in the SWPPP, in which San Pedro acknowledges stor- ing diesel fuel, engine oil, hydraulic fluid, transmission fluid, and coolant on site, as materials necessary for daily operations. The impression that vehicle mainte- nance activities were being conducted on a regular or repeated basis on this site is further supported by the inspector’s observation of the two fifty-five-gallon metal drums sitting on pallets in the northeastern portion of the facility. The inspector noted that one of these drums was coated with a black oily substance exuding petrochemical odors, that there were dark stains (suggesting spillage) on the un- derlying pallet and concrete, and that the other drum was surrounded by smaller containers with spouts for pouring. See supra Part V.
The ALJ concluded that the evidence “supported the conclusion that [San
Pedro] was conducting occasional activities that might properly be termed mainte- nance of vehicles and equipment.”28 Init. Dec. at 29. I agree with this conclusion. Further, I believe that this evidence shows that maintenance of the forklifts was a
28 There appears to be no dispute that forklifts, used as a means of transloading goods at the
site, are “vehicles” within the common definition of that term. See Webster’s at 2538 (a “vehicle” is “a means of carrying or transporting something”). Forklifts can also be considered “equipment”within the common meaning of that term. Id. at 768 (“equipment” includes “the implements (as machinery or tools) used in an operation or activity”).
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repeated, if not a regular, activity at this facility. While the ALJ did not find the evidence sufficient to meet her definition of a “vehicle maintenance shop” (e.g., due to the lack of a discrete structure, or a sufficient volume, level and concentra- tion of outdoor repair activity), the Board has rejected that definition as overly narrow, as described in Part VII.A.2.c above.
The preponderance of the evidence in this case persuades me that the
Agency has made the demonstration required by the Board that there is a “non- transient area or location that is designated for vehicle maintenance or where ve- hicle maintenance is conducted on a regular or repeated basis, including intermit- tently or sporadically” at this facility. “Preponderance of the evidence” requires only that the fact-finder be persuaded that the proffered fact is more likely than not, based on the balance of the evidence offered by the parties. See Black’s Law Dictionary 1301 (9th ed. 2009) [hereinafter Black’s].29 The ALJ’s factual conclu- sion that the evidence demonstrates that “occasional” vehicle maintenance activity was taking place at this facility is well supported in the record, and it seems to me that “occasional” activity is sufficient to meet the Board’s standard, which ex- pressly includes “intermittent” or “sporadic” vehicle maintenance activities.
The Board’s decision requires that the Agency demonstrate specifically
where on the facility the “vehicle maintenance shop” activity is occurring, and finds that the Agency has failed to do so in this case. I do not disagree that the Agency must demonstrate that there is an “area or location” on the facility where this activity is taking place. While the Agency’s evidence of that location is admit- tedly thin in this case, the evidence persuades me that it is more likely than not that vehicle maintenance activity was taking place, at a minimum, in the north- eastern portion of the facility where the large drums and pouring containers were located. It is also possible that vehicle maintenance activities were conducted in other areas of the site, or even over much or most of the site, e.g., if hydraulic or transmission fluids were “topped off” (in the language of San Pedro’s owners) wherever the vehicles happened to be parked or stopped. That scenario would not be surprising, given the relatively small size of this industrial facility. However, the evidence provided is insufficient to persuade the Board to draw that conclusion.
29 “Preponderance of the evidence” is defined in Black’s Law Dictionary as:
The greater weight of the evidence * * * ; superior evidentiary weight
that, though not sufficient to free the mind wholly from all reasonable
doubt, is still sufficient to incline a fair and impartial mind to one side of
the issue rather than the other. This is the burden of proof in most civil
trials, in which the jury is instructed to find for the party that, on the
whole, has the stronger evidence, however slight the edge may be. –
Also termed preponderance of proof; balance of probability.
Black’s at 1301.
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The Agency would be well served in future cases to heed the Board’s direc-
tion to provide evidence as to the location of the vehicle maintenance activities that indicate the presence of a “vehicle maintenance shop.” It is not sufficient to state, as the Agency inspector did at the hearing in this case and as the Region appears to suggest on appeal, that “it does not matter” where vehicle maintenance activities take place on a facility. That overbroad view, taken to its extreme, could capture incidental, one-time acts of vehicle maintenance on private cars parked in an employee parking lot. Both Congress and the Agency have specified that this type of situation is not intended to be covered by the storm water program, as stated repeatedly in the regulatory and legislative history described in Part VI above. The evidence does not suggest that this case presents that type of situation. However, in order to prevent overbroad applications of the storm water regula- tions not intended by Congress or the Agency, it is important to pay attention to and respect the limitations reflected in the Agency’s selection of the particular terms used in the storm water regulations, including “vehicle maintenance shop,” as interpreted by the Board’s decision above.
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