Polo Development, Inc., AIM Georgia, LLC, and Joseph Zdrilich (Board decision, July 26, 2016)

Plain-English summary

Polo Development, Inc., AIM Georgia, LLC, and Joseph Zdrilich asked the Environmental Appeals Board for a second extension of time to appeal an Initial Decision and Order entered on December 1, 2015. The Board denied the request because the respondents did not show a demonstrable error in the earlier order or special circumstances that justified another late appeal. The Board also concluded that the request was untimely as a motion for reconsideration and dismissed the appeal.

Decision snapshot

• Cited authorities: 40 C.F.R. §§ 22.7, 22.30, and 22.32; 40 C.F.R. § 22.16(b); 40 C.F.R. § 22.1(c)
• Outcome: The second request to file an untimely appeal was denied, and the appeal was dismissed.
• Key point: A party's prior counsel problems and later change of counsel did not establish special circumstances for accepting a second late appeal.

Full text (EPA EAB public release)

F I L E D

JUL 26 2016

Clerk, Environmental Appeals Board
INITIALS [illegible]

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

In re:

Polo Development, Inc., AIM Georgia, LLC,
and Joseph Zdrilich

CWA Appeal No. 16-02

Docket No. CWA-05-2013-0003

ORDER DISMISSING APPEAL

In May 2016, Polo Development, Inc., AIM Georgia, LLC, and Mr. Joseph Zdrilich

(“Respondents”) filed a Motion for Extension of Time to appeal an Initial Decision and Order

entered against them on December 1, 2015. In their Motion, Respondents acknowledge that any

appeal now is untimely, and so request that the Board grant them leave to file – out of time – a

notice of appeal and brief in support.

This is Respondents’ second request to appeal the Initial Decision and Order. The

Environmental Appeals Board (“Board”) denied the first request filed by Respondents’ prior

counsel on January 13, 2016, as untimely. In re Polo Dev., Inc., CWA Appeal No. 16-01 (EAB

Mar. 17, 2016), 17 E.A.D. ____ (“Order”). The Board further elected not to exercise its authority

to review the Initial Decision and Order on its own initiative pursuant to 40 C.F.R. § 22.30(b).

The Board now denies this second request to file an untimely appeal by Respondents’ new

counsel. First, Respondents fail to show any demonstrable error in the Order denying

Respondents’ first request. Second, Respondents otherwise fail to demonstrate special

circumstances to warrant the Board’s granting their second request to accept an untimely appeal.

In its Order denying the first request, the Board noted that it may accept late-filed appeals

when “special circumstances” justify the untimeliness. Id. at 3 (citing 40 C.F.R. § 22.7(b), which

allows the Board to relax a filing deadline “on its own initiative,” and Board precedents requiring

a showing of special circumstances to allow a late-filed appeal). However, the Board found

there that special circumstances did not exist. Instead, the evidence established that

Respondents’ prior counsel was served with the Initial Decision and Order, that Respondents’

prior counsel received the Initial Decision and Order at least two weeks before the appeal

deadline, and that Respondents’ prior counsel did not exercise due diligence in monitoring the

docket of the enforcement proceedings below. The Board concluded that all of these factors

weighed against finding special circumstances. Id. at 3-5.

Respondents’ second request to file an untimely appeal likewise lacks merit. First, if

viewed as a motion for reconsideration of the Order denying the first request, the motion is

untimely. 40 C.F.R. § 22.32 (party must file motion for reconsideration within 10 days of

service of an order). And Respondents fail to show that the Board made a demonstrable error,

such as a mistake on a material point of law or fact, based on the record then before it. See In re

Pyramid Chem. Co., RCRA (3008) Appeal No. 03-03, at 2 (EAB Nov. 8, 2004) (Order Denying

Motion for Reconsideration); see also In re Town of Newmarket, NPDES Appeal No. 12-05,

at 1-2 (EAB Jan. 7, 2014) (Order Denying Motion for Reconsideration) (collecting Board

precedent describing the standard for reconsideration).

Second, as a motion to file an untimely appeal, Respondents again fail to demonstrate

special circumstances warranting the late filing in May 2016, some four months after the appeal

deadline in 40 C.F.R. § 22.30(a). In their Motion, Respondents state that they were unaware that

their prior counsel: (i) had been subject to bar proceedings resulting in counsel’s suspension from

the practice of law; and (ii) had failed to take the necessary steps to perfect an appeal.

Respondents further state that they recently engaged new counsel, who needed time to review the

case file and prepare the necessary appeal papers. Motion at 1.

Respondents’ arguments regarding their prior counsel do not demonstrate special

circumstances. Under well-established Board precedent, “‘the failings of a client’s attorney [do]

not excuse compliance with the Consolidated Rules.’” Order at 4 (quoting In re Pyramid Chem.

Co., 11 E.A.D. 657, 665, 667 (EAB 2004); citing In re Burrell, 15 E.A.D. 679, 688-89 (EAB

2012); In re Jiffy Builders, 8 E.A.D. 315, 317-21 (EAB 1999); In re Detroit Plastic Molding Co.,

3 E.A.D. 103, 105-06 (CJO 1990)).

And even if the Board excused Respondents’ lateness because of prior counsel’s actions,

it cannot excuse the additional delay of Respondents’ new counsel. Respondents engaged new

counsel at least as early as April 14, 2016, more than one month before Respondents, through

their new counsel, filed the second request to file an untimely appeal. See Entry of Appearance

for Combined Respondents’ Substitute Counsel, CWA Appeal No. 16-01 (Apr. 14, 2016). EPA

Region 5 asserts, and Respondents do not deny, that new counsel was in fact engaged as early as

March 18, 2016, one day after the Board issued its Order denying the first request. See

Complainant’s Opposition to Respondents’ Motion at 3. Yet Respondents provide no

explanation for new counsel’s (at least) one-month delay in filing the second request or need for

yet more time to prepare a brief.

In Reply, Respondents argue that the Board should apply to this second request a more

lenient “excusable neglect” standard, citing as support the U.S. Supreme Court decision in

Pioneer Investment Services Co. v. Brunswick Associates Ltd. Partnership, 507 U.S. 380 (1993).

In Pioneer, the Supreme Court addressed the federal courts’ “excusable neglect” standard for

late-filed pleadings, a standard based on specific language in federal procedural rules for

bankruptcy, district, and appellate court proceedings.

As an initial matter, the Board need not consider this new argument because

Respondents raise it for the first time in their Reply. 40 C.F.R. § 22.16(b) (replies “shall be

limited to issues raised in the response”).

In any event, the Board is not bound by the federal courts’ procedural rules. In re

Chempace Corp., 9 E.A.D. 119, 135 n.22 (EAB 2000); see also Vt. Yankee Nuclear Power Corp.

v. Nat. Res. Def Council, Inc., 435 U.S. 519, 543-44 (1978) (“Absent constitutional constraints

or extremely compelling circumstances the administrative agencies should be free to fashion

their own rules of procedure to pursue methods of inquiry capable of permitting them to

discharge their multitudinous duties”). The Board does have the discretion to consider federal

court decisions on similar procedural rules to inform the Board’s interpretation of its

administrative rules. See, e.g., In re Lazarus, Inc., 7 E.A.D. 318, 330 & n.25 (EAB 1997); see

also Chempace, 9 E.A.D. at 135 n.22. The Board also has the discretion not to do so. See In re

Zaclon Inc., 7 E.A.D. 482, 490 n.7 (EAB 1998).

But here, the federal rules’ “excusable neglect” standard is simply inapposite. That

standard finds no counterpart in part 22 rules for late-filed pleadings. So, it is simply not

pertinent to the Board’s interpretation of EPA regulations as requiring a showing under

40 C.F.R. § 22.7(b) of “special circumstances” to allow a late-filed appeal. See also 40 C.F.R.

§ 22.1(c) (granting the Board discretion to resolve questions arising in appeals under 40 C.F.R.

part 22 that the regulations do not specifically address).

Indeed, the pre-1999 version of 40 C.F.R. § 22.7(b) had allowed an untimely motion

for extension of time if a party could show the delay was the result of “excusable neglect.” See

40 C.F.R. § 22.07(b) (1998). But EPA amended 40 C.F.R. part 22 in 1999, removing that

provision. In doing so, EPA rejected a comment to include language in part 22 allowing a late-

filed motion because it “may encourage untimeliness, and thereby adversely affect the Agency’s

efforts to make administrative proceedings more efficient.” 64 Fed. Reg. 40,138, 40,148

(July 23, 1999). This regulatory change to 40 C.F.R. part 22 thus serves to reinforce the Board’s

precedents to accept late-filed appeals only when special circumstances justify the untimeliness.

For all of these reasons, the Board denies Respondents’ Motion for Extension of Time

and dismisses this appeal.

So ordered.¹

ENVIRONMENTAL APPEALS BOARD

Dated: 7/26/2016

By: [signature]
Mary Beth Ward
Environmental Appeals Judge

¹ The panel deciding this matter is comprised of Environmental Appeals Judges Mary
Beth Ward, Mary Kay Lynch, and Kathie A. Stein.

CERTIFICATE OF SERVICE

I hereby certify that copies of the foregoing Order Dismissing Appeal in the matter of
Polo Development, Inc., AIM Georgia, LLC, and Joseph Zdrilich, CWA Appeal No. 16-02, were
sent to the following persons in the manner indicated:

By Facsimile and First Class U.S. Mail:

Mark A. Hanni, Esq.
839 Southwestern Run
Youngstown, Ohio 44514-4688
tel: 330-726-7777
fax: 330-726-7779

By Facsimile and EPA Pouch Mail:

Richard J. Clarizio, Esq.
U.S. Environmental Protection Agency, Region 5
Office of Regional Counsel (C-14J)
77 West Jackson Boulevard
Chicago, Illinois 60604
tel: 312-886-0559
fax: 312-582-5889

Date: JUL 26 2016

[signature]
Annette Duncan
Secretary