Stockton Oil Company (Board decision, July 5, 2016)

Plain-English summary

The EAB had begun its own review of a Resource Conservation and Recovery Act enforcement decision against Stockton Oil Company because the record showed conflicting underground storage tank penalty guidance and formulas for calculating avoided costs. The parties later settled, and EPA Region 8's Regional Judicial Officer approved and incorporated the Consent Agreement. Because the settlement resolved the case, the Board did not decide the penalty-guidance concerns, set aside the ALJ's Default Order and Initial Decision, and concluded the proceedings.

Decision snapshot

• Cited authorities: 42 U.S.C. §§ 6901-91; 40 C.F.R. §§ 22.27(c), 22.30(b), and 22.30(f); 40 C.F.R. § 1.25(e)(1)
• Outcome: The ALJ's Default Order and Initial Decision were set aside, and the proceedings were concluded after settlement.
• Key point: A settlement can resolve an enforcement case without the EAB reaching unresolved concerns about the penalty guidance used in the initial decision.

Full text (EPA EAB public release)

F I L E D

JUL 5 2016

Clerk, Environmental Appeals Board
INITIALS [illegible]

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

In re:

Stockton Oil Company

RCRA (9006) Appeal No. 16-01

Docket No. RCRA-08-2014-0002

FINAL ORDER SETTING ASIDE ALJ’S DEFAULT ORDER AND INITIAL DECISION
AND CONCLUDING PROCEEDINGS

In March 2016, the Environmental Appeals Board (“Board”) issued an order electing to

exercise its sua sponte review authority under 40 C.F.R. §§ 22.27(c), .30(b) of a Default Order

and Initial Decision (“Initial Decision”) issued by Administrative Law Judge Christine Donelian

Coughlin (“ALJ”) in an enforcement action brought under the Resource Conservation and

Recovery Act (“RCRA”), 42 U.S.C. §§ 6901-91. Thereafter, the parties informed the Board that

they had reached a settlement and executed a Consent Agreement. The Board issued a limited

remand of this matter for the sole purpose of allowing EPA Region 8 (either the Regional

Administrator or the Regional Judicial Officer) to consider ratification of the Consent

Agreement. The parties have now notified the Board of the Region 8 Regional Judicial Officer’s

order approving and incorporating by reference the terms of the Consent Agreement.

The Board exercised its sua sponte review authority in this case because of concerns

including discrepancies both with respect to the applicable version of the penalty guidance

document used by Region 8 and the ALJ, and the correct formula for calculating avoided costs.

In particular, the ALJ found two UST penalty guidance documents that are publicly available

and presumably in use. Additionally, the Board found three formulas for determining the

avoided costs in those UST penalty guidance documents, each with a different order of

operations that renders different results. The ALJ identified some of these inconsistencies, but

neither the Region’s submissions to the ALJ nor the ALJ’s Initial Decision explained why it was

appropriate to use the version of the penalty policy and specific formula relied on by the Region

in its complaint.

With the subsequent approval of the Consent Agreement in this matter by the Region 8

Judicial Officer on June 24, 2016, the Board does not need to resolve the concerns that prompted

it to exercise its sua sponte authority. Nevertheless, given those concerns and in light of the

settlement of this case by the parties, the Board concludes it is appropriate to set aside the ALJ’s

Initial Decision in accordance with 40 C.F.R. § 22.30(f) and conclude the proceedings in this

case.

So ordered.¹

ENVIRONMENTAL APPEALS BOARD

By: [signature]
Mary Kay Lynch
Environmental Appeals Judge

¹ The three-member panel deciding this matter is comprised of Environmental Appeals
Judges Mary Kay Lynch, Kathie A. Stein, and Mary Beth Ward. See 40 C.F.R. § 1.25(e)(1).

CERTIFICATE OF SERVICE

I hereby certify that copies of the foregoing Final Order Setting Aside ALJ’s Default
Order and Initial Decision and Concluding Proceedings in the matter of Stockton Oil Company,
RCRA (9006) Appeal No. 16-01, were sent to the following persons in the manner indicated:

First Class Mail:

Mykel Stockton, President
Stockton Oil Company
1607 4th Avenue, North
P.O. Box 1756
Billings, MT 59103-1522

John Dock, Esq.
P.O. Box 1875
Billings, MT 59103

By Interoffice Mail:

Sybil Anderson
Headquarters Hearing Clerk
Office of Administrative Law Judges
Mail Code 1900R
1200 Pennsylvania Ave., NW
Washington, DC 20460

By Pouch Mail:

Amy Swanson, Esq.
Sr. Enforcement Attorney
U.S. EPA Region 8
Mail Code ENF-L
Denver, CO 80202-1129

Tina Artemis
Regional Hearing Clerk
U.S. EPA Region 8 (8RC)
1595 Wynkoop Street
Denver, CO 80202-1129

cc:
By Interoffice Mail:

Christine Donelian Coughlin
Administrative Law Judge
Mail Code 1900R
1200 Pennsylvania Ave., NW
Washington, DC 20460

Susan Shinkman
Office of Civil Enforcement
Mail Code 2241A
1200 Pennsylvania Ave., NW
Washington, DC 20460

By Pouch Mail:

Elyana Sutin
Regional Judicial Officer
U.S. EPA Region 8 (8RC)
1595 Wynkoop Street
Denver, CO 80202-1129

Dated: JUL 5 2016

[signature]
Annette Duncan
Secretary