Landmark Real Estate Management, Inc., et al. (Board decision, March 28, 2011)

Plain-English summary

The EPA Regional Judicial Officer found seven property owners and managers liable for violations of the Toxic Substances Control Act and the Residential Lead-Based Paint Hazard Reduction Act. The default order assessed a combined administrative penalty of $227,700, but it did not clearly identify which respondent was liable for which amount. The Environmental Appeals Board exercised sua sponte review and remanded the order for clarification of each respondent's liability and penalty. The remand did not itself resolve the penalty amounts.

Decision snapshot

• Cited authorities: 15 U.S.C. § 2689, 42 U.S.C. §§ 4851-4856, 40 C.F.R. part 745, 40 C.F.R. §§ 22.27(c), 22.30(b), and 1.25(e)(1)
• Outcome: The default order was remanded to the Regional Judicial Officer for clarification of individual penalty liability.
• Key point: A penalty order must identify which respondent is liable for each penalty and explain the basis for each individual assessment.

Full text (EPA EAB public release)

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

                                           )

In re: )
) MAR 2 8 2011
Landmark Real Estate Management, Inc. )
Solo Affordable Housing Solutions, LLC ) Clerk, Environmental Appeals Board Solo Development 2004, LLC ) INITIALS [signature] Minbar Properties, LLC ) 87 Bartlett Street Associates, LLC ) P.O. Box 891 ) Lewiston, MA 04243 ) TSCA Appeal No. 11-01
)
LA Italian Properties, LLC )
P.O. Box 4510 )
Portland, ME 04112 )
)
Travis Soule dba Fish Properties )
19 Woodland Way )
New Gloucester, ME 04620 )
)
-----------------------------------------------)
ORDER REMANDING TO REGIONAL JUDICIAL OFFICER

      On January 10, 2011, the Acting Regional Judicial ("RJO") Officer for U.S. EPA Region

1 (the "Region") issued an Initial Decision and Default Order ("Default Order") in the above-

captioned matter finding Landmark Real Estate Management, Inc., Solo Affordable Housing

Solutions, LLC, Solo Development 2004, LLC, Minbar Properties, LLC, 87 Bartlett Street

Associates, LLC, LA Italian Properties, LLC, and Travis Soule dba Fish Properties liable for

violations of section 409 of the Toxic Substances Control Act ("TSCA"), 15 U.S.C. § 2689, the

Residential Lead-Based Paint Hazard Reduction Act of 1992 ("RLBPHRA"), 42 U.S.C. §§ 4851-

4856, and their implementing regulations, codified at 40 C.F.R. pt. 745, subpt. F. For these

violations, the Default Order assessed a total administrative penalty of $227,700.00.

    On March 3, 2011, the Environmental Appeals Board ("Board") exercised sua sponte

review of the RJO's decision pursuant to 40 C.F.R. § 22.27(c), .30(b). Upon examination of the

Default Order, the Complaint, and other documents in the record, the Board has decided to

remand the Default Order to the RJO for clarification on the issue of penalty liability.

   The Default Order clouds its central element: who is liable for what penalty. This

confusion arises from the Default Order's varying use of the terms "Respondents" and

"Respondent." The Default Order states in one place that all seven "Respondents" are

responsible for a $227,700 penalty. See Default Order at 2 ("The Respondents are hereby found

in default and a civil penalty in the amount of $227,000[1] is assessed."). The Default Order later

states something quite different:

           "the Respondent is hereby ORDERED as follows:

           (1) Respondent is assessed a civil penalty in the amount of
           $227,700
           (2) Respondent shall, within thirty calendar days after this Default
           Order has become final, pay the civil penalty by bank, certified or
           cashier's check in the amount of $227,700."

Id. at 10 (emphasis added).

   1 The Board assumes that the RJO meant a penalty in the amount $227,700.00, the total

penalty Region 1 proposed and the penalty amount stated in other parts of the Default Order.

    Indeed, even if the Board were to assume that the use of the singular form is a

typographical error and that the RJO intended to assess a penalty for $227,7000 against all

Respondents, that outcome is inconsistent with the RJO's findings of differing individual

responsibility. The Complaint identifies four specific counts, and under each count a different

number of violations. 2 Notably, not all seven Respondents were found liable for each count, 3 nor

were all Respondents charged under the same count found liable for the same number of

violations. 4 Therefore, the Default Order's findings do not support the Default Order's statement

    2 The Complaint identifies the following counts: (1) count I - failure to disclose to a

lessee the presence of any known lead-based paint and/or lead-based paint hazards in target housing and/or failure to provide records or reports of known lead-based paint and/or lead-based paint hazards; (2) count II - failure to include as an attachment to or within lease contracts, a statement by the lessors disclosing the presence of known lead-based paint and/or lead-based paint hazards, or indicating no knowledge of the presence of lead-based paint and/or lead-based paint hazards; (3) count III - failure to include as an attachment to or within lease contracts, a list of any records or reports available to the lessors that pertain to lead-based paint and/or lead-based paint hazards, or failure to indicate that no such record or reports exists; and (4) count IV - failure to provide lessees with an EPA-approved lead hazards information pamphlet. See Administrative Complaint and Notice of Opportunity for Hearing at 8-19.

   Each count identifies a different number of violations based on the number of lease

contracts Complainant found failed to meet statutory and regulatory requirements. See id. at 20- 23.

    3 See, e.g., Default Order at 4-5 ¶¶ 9-11 (finding only Landmark Real Estate Management,

Inc. and Solo Affordable Housing Solutions, LLC liable for count I); id. at 6-7 ¶¶ 18-20 (finding all respondents, except for LA Italian Properties, LLC, liable for count IV).

    4 See Default Order at 7 ¶ 21 (finding Landmark Real Estate Management, Inc., and Solo

Affordable Housing Solutions, LLC liable for a total of 32 violations under counts I-IV; Landmark Real Estate Management, Inc., and Solo Development 2004, LLC liable for a total of 5 violations under counts II-IV; Landmark Real Estate Management, Inc., and Minbar Properties, LLC liable for a total of 6 violations under counts II-IV; Landmark Real Estate Management, Inc. and 87 Bartlett Street Associates, LLC liable for a total of 3 violations under counts II-IV; Landmark Real Estate Management, Inc. and LA Italian Properties, LLC liable for a total of 2 violations under counts II-III; and Landmark Real Estate Management, Inc. and Travis Soule dba Fish Properties liable for a total of 3 violations under counts II-IV); see also Memorandum in Support of Default Order at 17.

that all "Respondents" are liable for a $227,700 penalty, since the $227,700 represents the

combined penalty assessment for all the violations alleged in the Complaint. 5

     Accordingly, the Board remands the Default Order to the RJO for further clarification.

On remand, the RJO must clarify which respondent(s) is/are liable for what penalty, and justify

the penalty for which each individual respondent is liable.

   So ordered. 6

Dated: 3/28/2011 ENVIRONMENTAL APPEALS BOARD

                                           By: [signature]
                                               Charles J. Sheehan
                                               Environmental Appeals Judge


    5 This is not to say that the concept of joint and several liability is inapplicable here. For

example, Landmark Real Estate Management, Inc., who managed the real estate owed by the other respondents, was the only respondent found liable for all of the violations alleged in the complaint and may be found jointly and severally liable for the portion of the penalty attributable to each respondent. See, e.g., In re Ronald H. Hunt, et al., 12 E.A.D. 774-809 (EAB 2006) (upholding Administrative Law Judge's determination assessing penalties jointly and severally among respondents charged with same TSCA and RLBPHRA violations associated to same properties).

   6 The three-member panel deciding this matter is comprised of Environmental Appeals

Judges Edward E. Reich, Charles J. Sheehan, and Anna L. Wolgast. See 40 C.F.R. § 1.25(e)(1).

                               CERTIFICATE OF SERVICE

     I hereby certify that copies of the foregoing Order Remanding to Regional Judicial Officer,

in the matter of Landmark Real Estate Management, Inc., Solo Affordable Housing Solutions, LLC, Solo Development 2004, LLC, Minbar Properties, LLC, 87 Bartlett Street Associates, LLC, LA Italian Properties, LLC, and Travis Soule dba Fish Properties, TSCA Appeal No. 11-01, were sent to the following persons in the manner indicated:

By Certified Mail Return Receipt Requested:

Travis Soule, President/Manager Travis Soule, Manager Landmark Real Estate Management, Inc. LA Italian Properties, LLC Solo Affordable Housing Solutions, LLC P.O. Box 4510 Solo Development 2004, LLC Portland, ME 04112 Minbar Properties, LLC 87 Bartlett Street Associates, LLC Travis Soule dba Fish Properties P.O. Box 891 19 Woodland Way Lewiston, MA04243 New Gloucester, ME 04620

By Inter-Office Mail and FAX:

Amanda J. Helwig
U.S. Environmental Protection Agency
Water Enforcement Division, Office #4118-A
1200 Pennsylvania Ave., N.W.
Washington, DC 20460
Mail Code 2243-A
Fax: (202) 564-0018

By Pouch Mail and FAX:

Wanda I. Santiago Jill T. Metcalf Paralegal/Regional Hearing Clerk Acting Regional Judicial Officer U.S. EPA Region 1 U.S. EPA Region 1 5 Post Office Square, Suite 100 5 Post Office Square, Suite 100 Boston, MA 02109-3912 Boston, MA 02109-3912 Fax: (617) 918 - 0113 Fax: (617) 918 - 1029

Andrea Simpson
U.S. EPA Region 1
5 Post Office Square, Suite 100
Boston, MA 02109-3912
Fax: (617) 918 - 1809

Dated: MAR 28 2011
[signature]
Annette Duncan
Secretary