Pepperell Associates

Read the official release (epa.gov)

Plain-English summary

Pepperell Associates asked the Environmental Appeals Board to reconsider its May 10, 2000 decision concerning oil discharges from the company's oil-handling facility. The Board rejected the motion because most arguments repeated issues already decided and did not show a demonstrable error of law or fact. It upheld its conclusions that the facility's storage-capacity and discharge-potential thresholds were independent, that oil migration through the sewer conduit and combined sewer overflow was reasonably foreseeable, and that installing an above-ground tank materially affected discharge potential. The Board also found a new constitutional and fair-notice argument waived because Pepperell could have raised it earlier, and denied the motion in full.

Decision snapshot

• Cited authorities: 40 C.F.R. § 124.91(i) and § 112.1
• Outcome: Pepperell's motion for reconsideration was denied, and its request to hold the earlier decision in abeyance was moot.
• Key point: Reconsideration is for correcting demonstrable errors, not for rearguing issues or raising arguments that could have been presented earlier.

Full text (EPA EAB public release)

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


                           )

In re: )
)
Pepperell Associates )
) CWA Appeal Nos. 99-1 & 99-2
)
Docket No. CWA 2-I-97-1088 )
)

          ORDER DENYING MOTION FOR RECONSIDERATION

In a Motion for Reconsideration (“Motion”) filed May 23,

2000, Petitioner Pepperell Associates (“Pepperell”) requests

reconsideration of the Environmental Appeals Board’s May 10,

2000 Final Decision (“Final Decision”) in the above-captioned

proceeding. Pepperell contends that reconsideration is

warranted because the Board erred by: (1) finding that it was

reasonably foreseeable that oil could migrate from the boiler

room floor to the sewer conduit below the company’s oil

handling facility (the “Facility”); (2) finding that the

“reasonably be expected to discharge” and “storage capacity”

thresholds determining Spill Prevention Control and

Countermeasure Plan (“SPCC”) jurisdiction should be treated

independently; (3) determining that the company’s installation

of a new above-ground storage tank materially affected the

Facility’s likelihood of discharging oil into a navigable

water; (4) determining that a discharge of oil from the
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Facility was reasonably foreseeable despite the fact that oil

traveled through a sewer conduit and combined sewer and

stormwater overflow (“CSO”) before reaching a navigable water;

and (5) unfairly and unconstitutionally using as a basis for

enhanced penalties under Count I a time period during which

the company lacked reasonable notice of its SPCC obligations.

Upon review of the Motion and the Region’s response brief

filed June 6, 2000, we deny Pepperell’s motion, for the

reasons provided below.

Under 40 C.F.R. § 124.91(i), motions for reconsideration

"must set forth the matters claimed to have been erroneously

decided and the nature of the alleged errors." Reconsid-

eration is generally reserved for cases in which the Board is

shown to have made a demonstrable error, such as a mistake of

law or fact. See In re Gary Development Co, RCRA (3008)

Appeal No. 96-2, at 2 (EAB, Sept. 18, 1996) (Order Denying

Motion for Reconsideration); In re Mayaguez Regional Sewage

Treatment Plant, NPDES Appeal No. 92-23, at 2 (EAB, Dec. 17,

1993) (Order Denying Reconsideration and Stay Pending Recon-

sideration or Appeal). The filing of a motion for reconsid-

eration “should not be regarded as an opportunity to reargue

the case in a more convincing fashion. It should only be used

to bring to the attention of [the Board] clearly erroneous
 3

factual or legal conclusions.” In re Southern Timber

Products, Inc., 3 E.A.D. 880, 889 (JO 1992). A party’s

failure to present its strongest case in the first instance

does not entitle it to a second chance in the form of a motion

to reconsider. See Publishers Resource, Inc. v. Walker-Davis

Publications, Inc., 762 F.2d 557, 561 (7th Cir. 1985)

(“Motions for reconsideration serve a limited function: to

correct manifest errors of law or fact or to present newly

discovered evidence. Such motions cannot in any case be

employed as a vehicle to introduce new evidence that could

have been adduced during the pendency of the [original]

motion. * * * Nor should a motion for reconsideration serve as

the occasion to tender new legal theories for the first

time.”) (citation omitted).

Upon review of the motion for reconsideration and the

Region’s response, we conclude that the Motion largely

consists of an attempt to reargue in more convincing fashion

points that we previously rejected in our Final Decision.

These arguments will not be considered. In addition,

Pepperell raises one new issue that is waived because the

company could have raised it previously. For these reasons,

Pepperell has failed to demonstrate that reconsideration of

the Final Decision is warranted.
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Reasonable Expectation of Oil Migrating from the Facility’s

Boiler Room to the Sewer Conduit

In its Motion, Pepperell disputes our finding that a

floor drain provided a direct connection between the boiler

room floor and the sewer conduit below, thus making the

migration of spilled oil to the sewer conduit reasonably

foreseeable. Motion at 2 n.2. In raising this argument,

Pepperell asserts that there was no “evidence to support a

finding of a direct drain connection,” Motion at 2, because we

misconstrued the testimony of Pepperell owner Robert Gladu

regarding this matter.

Pepperell is mistaken in its argument because the record

supports a finding that the boiler room drain provided a

direct pathway from the boiler room floor to the sewer conduit

below. In his testimony, Robert Gladu, when asked by his

counsel whether there was a direct connection between the

boiler room and sewer conduit, answered that the boiler room

drain provided such a connection. Hearing Transcript at 753.

What Pepperell appears to misconstrue as a lack of evidentiary

support for such a connection is our statement that the record

left uncertain whether or not Mr. Gladu actually knew of this

direct connection at the time of the oil spill. Final

Decision at 18. In any case, we determined that Mr. Gladu’s
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knowledge was not dispositive, because facility owners “should

be charged with knowledge of the functioning of common,

visible structures such as the boiler room floor drain.”

Final Decision at 18 n.10.

 Because Pepperell is incorrect in its arguments on this

point, we deny reconsideration on this issue.

Independence or Interdependence of “Reasonably Be Expected to

Discharge” and “Storage Capacity” Thresholds

 In its Motion, as in its earlier Petition for Review,

Pepperell argues that the Board erred when it held that the

“reasonably be expected to discharge” and “storage capacity”

thresholds established in 40 C.F.R. § 112.1 for determining

SPCC jurisdiction should be viewed independently. Motion at

3. Maintaining that these jurisdictional criteria should

instead be interdependent, Pepperell argues that when it

completed the disconnection of two underground storage tanks

on October 31, 1996, it concomitantly rendered the individual

tanks not reasonably likely to discharge oil and reduced the

Facility’s total storage capacity by the storage capacity of

the two tanks. Id. The upshot of the tanks’ disconnection,

claims the company, was a reduction in Facility storage

capacity to below the jurisdictional threshold, thus
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precluding the company’s SPCC liability as of October 31,

1996. Pepperell contends that our alleged error resulted in

finding a longer period of violation than warranted under

Count I of the amended complaint. Id.

 In our Final Decision, we stated that Pepperell’s above

interpretation of the two jurisdictional criteria was

“incompatible with a straightforward reading of the SPCC

regulations,” Final Decision at 21, which clearly supported

separate treatment of the two thresholds. Citing the

regulatory text, we emphasized that the “regulations are

premised on the storage capacity of facilities as a whole

rather than on individual units within facilities” and that

“facilities that have large storage capacity and a potential

for harmful discharge must have SPCC plans * * * irrespective

of the discharge potential of individual storage units within

the facility.” Id. at 21-22. Under this interpretation, we

concluded that the Pepperell’s disconnection of two

underground storage tanks did not terminate SPCC jurisdiction

over the Facility.

 In opposing our determination in its motion for

reconsideration, Pepperell repeats earlier arguments that we

previously rejected in our Final Decision. Because Pepperell

is seeking to reargue its case in more convincing fashion,
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without otherwise indicating in the Motion how we committed a

clear error of fact or law, the company is not entitled to

reconsideration on this point. Southern Timber Products, 3

E.A.D. at 889.

Reasonable Likelihood of Oil Discharging Into Navigable

Waterway Given the Fact that Oil Migrated to a Navigable Water

Via a Sewer Conduit and CSO

Pepperell challenges in two respects our determination

that a discharge of oil from the Facility into a navigable

waterway was reasonably foreseeable. First, contending that

the Facility’s locational and geographical features did not

make a discharge of oil foreseeable, the company states that

it was “the facility’s connection to a municipal sewer line --

not its geographical and locational aspects -– which allowed

the discharge to occur.” Motion at 5. In this regard, the

company states that employing the Board’s standard of

reasonable foreseeability, “any facility in the United States

that is connected to a municipal sewer line is required to

have an SPCC Plan if the facility has more than 42,000 gallons

worth of storage capacity and the municipal sewer line has a

CSO.” Id. Second, the company contends that the operation of

a CSO on the morning of the spill, allowing oil in the sewer
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conduit to enter a navigable waterway, was not reasonably

foreseeable. In support of this argument, Pepperell points to

the company owners’ lack of environmental expertise and the

routine discharge of raw sewage through a CSO not being

“something that an average business owner would know or even

suspect.” Id at 6.

In our Final Decision, we addressed and rejected these

same arguments. We explained that the fact that oil entered a

navigable water through a sewer conduit was a highly relevant

“geographic and locational” factor in determining the

Facility’s reasonable expectation of discharge because the

sewer conduit facilitated drainage to a navigable waterway.

Id. at 19. We also explained that the City of Lewiston had a

long-standing practice of discharging raw sewage into

navigable water through CSOs because of the City’s lack of

sewer lines, and that a reasonably alert oil facility owner in

Lewiston should have been aware of this fact and the

consequent need to take preventive measures. Id. at 19-20.1

1In its motion, Pepperell claims that there is no evidence

that the company owners actually knew about the existence of a
CSO prior to the oil spill. See Motion at 5 n.4. Although
our Final Decision was predicated on the view that the company
should have known about the existence of a CSO, thus making
Pepperell’s claim irrelevant, we note that the record appears
to cast doubt upon the company’s claim. The record indicates
that upon failing to trace the path of spilled oil within the
 9

Because Pepperell merely repeats earlier arguments on the

Facility’s foreseeability of discharge that we have previously

rejected and does not otherwise demonstrate in its Motion how

we committed a manifest error of fact or law, we deny

reconsideration of this issue. In re Southern Timber

Products, Inc., 3 E.A.D. at 889.

Impact of Installation of Above-Ground Storage Tank on

Likelihood of Facility to Discharge Oil

In its Motion, Pepperell disputes our finding that the

company’s installation of a new, state-of-the-art, above-

ground oil storage tank materially affected the Facility’s

potential to discharge oil into a navigable water, thus

requiring the Facility to submit an amended SPCC Plan. Motion

at 6-7. Pepperell contends that we erred by “using

generalizations” about the new tank’s potential to discharge

instead of making a “case-specific” finding that the new tank

posed a greater danger of discharge than the old tank. In

Facility, the company’s owners both went down to Gully Brook
to see if oil was discharging into that water body. Hearing
Transcript at 732-36 (Sawyer Testimony); Hearing Transcript at
802-03 (Gladu Testimony). The owners’ decision to check Gully
Brook for oil suggests their knowledge of the CSO, since Gully
Brook was the water body that received, via the CSO, overflow
from the sewer conduit. Stipulation No. 14.
 10

this respect, the company notes that “there is no credible”

evidence that the new tank posed a greater danger given its

“state-of-the art,” ”professionally engineered” features. Id.

In our Final Decision, we addressed and rejected

essentially identical arguments by Pepperell. There, we

decided that regardless of the tank’s alleged protective

features, the inherently greater environmental risks posed by

above-ground tanks in comparison with underground tanks –-

clearly reflected in the regulatory language –- supported

treating the installation of Pepperell’s new above ground tank

as a material change affecting the Facility’s potential to

discharge. Final Decision at 34.

Because the company is merely rearguing its case, and

does not otherwise explain in the Motion how our reasoning

contained a manifest error of fact or law, we deny

reconsideration of this issue. Southern Timber Products, 3

E.A.D. at 889.

Alleged Unconstitutionality and Unfairness in Finding

Pepperell Liable for Full Period Under Count I

In its Motion, Pepperell states that Agency violated the

Constitution and fundamental notions of fairness by imposing

on it liability and a penalty for a portion of Count I while
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failing to provide the company with reasonable notice on how

to comply with SPCC regulations. Motion at 3. Specifically,

the company argues that any penalty imposed for the time

period October 31, 1996 to July 14, 1997 -- during which time

the company allegedly sought to comply with the SPCC

regulations but without the benefit of reasonable notice of

its compliance obligations --is unconstitutional and unfair.

Id. In support of this argument, Pepperell notes that the

Agency had not developed any regulations giving the company

notice on how it could take underground storage tanks “out of

service” and thus achieve compliance.2 Furthermore, the

company relates that the company had requested the Agency’s

help in meeting its SPCC obligations, but that the “Agency

never responded to the Respondent’s good faith – albeit

unsophisticated -- attempt to come into compliance.” Id.

  Pepperell’s argument on lack of constitutionally required

notice is a new one. Because the company had the opportunity

to raise the argument below, it is waived. Therefore, we deny

reconsideration of this issue. See Publishers Resource, 762

F.2d at 561.

  2
 There was, of course, an alternative path to compliance

that Pepperell’s argument ignores –- submission of an SPCC
Plan for its underground tanks.
 For the foregoing reasons, Pepperell’s Motion is denied.3

So ordered.



                        ENVIRONMENTAL APPEALS BOARD

Dated: 6/28/00 /s/
Scott C. Fulton
Environmental Appeals Judge

3 Pepperell requests a stay of the “effective date of the

[Final Decision] while its [M]otion is under consideration.”
Motion at 7. We interpret the company’s request to mean that
the Board should hold the Final Decision in abeyance pending
disposition of the Motion. Since we are denying
reconsideration of the Final Decision, Pepperell’s request is
moot.
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                CERTIFICATE OF SERVICE


 I hereby certify that copies of the foregoing Order

Denying Motion for Reconsideration in the matter of Pepperell
Associates, CWA Appeal No. 99-21 & 99-2, were sent to the
following persons in the manner indicated:

Certified Mail
Return Receipt Requested: Martha C. Gaythwaite
Friedman, Babcock & Gaythwaite
Six City Center
P.O. Box 4726
Portland, ME 04112-4276

                        Beth Tomasello
                        Sr. Enforcement Attorney
                        U.S. EPA-Region I
                        One Congress St., Suite 1100(SEL)
                        Boston, MA 02114-2023

Interoffice Mail: Bessie Hammiel
Headquarters Hearing Clerk
U.S. EPA
401 M Street, S.W. (1900)
Washington, D.C. 20460

Dated: 6/28/00 /s/
Annette Duncan
Secretary