Snow & Snow, Inc. and Kerry Snow (Board decision, February 1, 2008)

Plain-English summary

Snow & Snow, Inc. and Kerry Snow operated Class II enhanced-recovery injection wells in Pennsylvania. EPA alleged failures to submit annual monitoring reports, plug or properly address abandoned wells, and maintain financial responsibility under the Safe Drinking Water Act and Underground Injection Control regulations. After Snow failed to answer the complaint or respond to EPA's motion for default, the Regional Judicial Officer entered a default order assessing a $10,000 civil penalty and requiring compliance actions. The Board reviewed the matter on its own initiative and corrected a typographical error so the required annual monitoring reports covered 1999 through 2004 rather than 1998 through 2004; all other provisions remained unchanged.

Decision snapshot

• Cited authorities: 42 U.S.C. §§ 300h, 300h-1, and 300h-2; 40 C.F.R. §§ 144.28, 22.17, and 22.30.
• Outcome: The initial default order was revised only to correct the annual monitoring period to 1999 through 2004. The $10,000 penalty and other compliance provisions remained unchanged.
• Key point: The Board used sua sponte review to correct a typographical error in a default order without changing the penalty or other requirements.

Full text (EPA EAB public release)

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

In re:

Snow & Snow, Inc. SDWA Appeal No. 07-03

Docket No. SDWA-03-2004-0193

             FINAL ORDER ELECTING TO REVIEW SUA SPONTE
           AND REVISING INITIAL DECISION AND DEFAULT ORDER

     In the 1990s-2000s, Snow & Snow, Inc. and Kerry Snow (collectively, “Snow”) owned

and operated two facilities in McKean County, Pennsylvania, where fluids were injected into wells to achieve “enhanced recovery” of oil from oil wells. The two facilities, called the “Windfall Hollow” and “Schoepperle/Pringle” facilities, had two and forty-five Class II enhanced recovery injection wells on site, respectively. On June 3, 2004, Region 3 of the U.S. Environmental Protection Agency filed an administrative complaint against Snow, alleging that Snow had violated the Safe Drinking Water Act (“SDWA”) and regulations implementing the Underground Injection Control (“UIC”) program promulgated under SDWA §§ 1421-1422, 42 U.S.C. §§ 300h, 300h-1.

Specifically, the Region alleged that Snow had:

     (1) Failed, since January 31, 2000, to submit annual monitoring reports for the wells
         for calendar years 1999-2003, as required by 40 C.F.R. § 144.28(h)(2)(i);

     (2) Failed, since May 3, 2001, to plug and abandon the injection wells at the facilities
         or demonstrate that the wells would not endanger underground sources of drinking
         water, as required by 40 C.F.R. § 144.28(c)(2)(iv)(A)-(B); and

     (3) Failed, since May 3, 2001, to maintain the required financial responsibility for the
         wells, as required by 40 C.F.R. § 144.28(d)(1).

   Snow sought and received an extension of time, until September 13, 2004, to file an

answer to the complaint. Snow did not meet that deadline, however, and indeed never filed an answer, even after being sent two letters from the Region warning of the danger of default for a failure to respond. On April 8, 2005, the Region filed a motion for a default order, and Snow never responded to that motion.

   On December 20, 2007, Regional Judicial Officer Renée Sarajian issued an Initial Decision

and Default Order, finding Snow to be in default and assessing the civil penalty proposed in the administrative complaint, $10,000. The RJO also directed Snow to undertake a number of specific actions to bring the facilities into compliance with the SDWA and UIC regulations. The RJO ordered Snow to: (1) establish an acceptable level of financial responsibility, at a minimum of
$1,000 per well, for all forty-seven Class II wells, pursuant to 40 C.F.R. § 144.28(d); (2) submit a plan for conducting mechanical integrity tests for any temporarily abandoned injection wells, pursuant to 40 C.F.R. § 144.28(g)(2)(iv); (3) submit a schedule for plugging and abandoning any permanently abandoned wells, pursuant to 40 C.F.R. § 144.28(c); and (4) submit annual monitoring reports for the two facilities for the years 1998 through 2004, pursuant to 40 C.F.R. § 144.28(h)(2).

   The SDWA explicitly authorizes the issuance of orders assessing civil penalties, requiring

compliance with regulations, or both. See 42 U.S.C. § 300h-2(c)(2). The Region and the RJO opted to do both in this case.

   Upon review of this matter for sua sponte purposes pursuant to 40 C.F.R. § 22.30(b), we

find this case to be a straightforward default situation, with the RJO holding, correctly, that Snow's failures to answer the complaint and respond to the motion for default constituted admissions of the facts alleged in the complaint and a waiver of Snow's right to contest those facts, in accordance with 40 C.F.R. § 22.17(a). The RJO examined the six factors set forth in the SDWA at 42 U.S.C. § 300h-2(c)(iv)(B) for assessing penalties, and concluded that, on the record before her, the Region's proposed penalty was appropriate and justified. Her analysis is reasonable and well within the bounds of discretion afforded in imposing monetary penalties in this kind of case.

   We note, however, that the Region limited the annual monitoring report violations alleged

in the complaint to the calendar years 1999 through 2003, that is, to the five years immediately preceding the year the complaint was filed in June 2004. The Region later specifically proposed that the annual report for calendar year 2004 also be submitted by January 31, 2005, as part of Snow's remedial actions.

   Upon review of the administrative record in this case, we elect to initiate sua sponte review

for one very narrow purpose. In summarizing the compliance requirements it suggested be imposed on Snow, the Region appears to have made a typographical error. The Region proposed that Snow be required to submit annual monitoring reports for 1998 through 2004, not 1999 through 2004. We have found no explanation or discussion in the Region's materials of the change from 1999 to 1998, which is why we believe it to be a mistake. The RJO incorporated this requirement directly into paragraph 6.D of her Initial Decision and Order of Default, also without explanation or commentary of any kind that would provide justification for the different date.

   The Board finds it prudent to address this issue via a brief corrective order. We hereby order

that the last three words of paragraph 6.D of the Initial Decision and Order of Default be changed to read “1999 through 2004” rather than “1998 through 2004.” All other provisions of the Initial Decision and Default Order remain unchanged, and the time frames for Snow's payment of the penalty and achievement of compliance activities must occur the specified number of days after issuance of this Final Order.

   So ordered.

                                         ENVIRONMENTAL APPEALS BOARD

Dated: [illegible] By: [signature]

                                              Kathie A. Stein


                        CERTIFICATE OF SERVICE

  I hereby certify that copies of the foregoing Final Order Electing to Review Sua Sponte and

Revising Initial Decision and Default Order in the matter of Snow & Snow, Inc., SDWA Appeal No. 07-03, were sent to the following persons in the manner indicated:

By Certified U.S. Mail, Return Receipt Requested:

  Jay Paul Kahle, Esq.
  71 Main Street, Suite 201
  Bradford, PA 16701

By EPA Pouch Mail:

  Philip Yeany, Esq.                            Lydia Guy
  Senior Assistant Regional Counsel             Regional Hearing Clerk
  U.S. EPA, Region 3                            U.S. EPA, Region 3
  1650 Arch Street                              1650 Arch Street
  Mail Code 3RC20                               Mail Code 3RC00
  Philadelphia, PA 19103-2029                   Philadelphia, PA 19103-2029

  The Honorable Renée Sarajian
  Regional Judicial Officer
  U.S. EPA, Region 3
  1650 Arch Street
  Mail Code 3RC00
  Philadelphia, PA 19103-2029

Dated: [illegible] Annette Duncan