UNITED STATES
ENVIRONMENTAL PROTECTION AGENCY
BEFORE THE ADMINISTRATOR
IN THE MATTER OF: )
)
BILLMAX PROPERTIES )
AND ) DKT. No. 5-CAA-029-98
UPRIGHT WRECKING, )
)
Respondents )
ORDER DENYING MOTION FOR DEFAULT ORDER
I. Background
This proceeding was commenced on September 25, 1998 with the
filing of a Complaint by the United States Environmental
Protection Agency (Complainant) against Respondents Billmax
Properties and Upright Wrecking. The Complaint charges the
Respondents with violating Section 112 of the Clean Air Act, 42
U.S.C. § 7412, by failing to comply with the asbestos National
Emission Standard for Hazardous Air Pollutants (NESHAP) at 40
C.F.R. Part 61 Subpart M. The Complaint alleges that Respondent
Billmax Properties, the owner of a building, contracted with
Respondent Upright Wrecking to demolish the building, and that
Respondents failed to inspect the building for the presence of
asbestos prior to demolition and failed to provide written notice
of the intent to demolish prior to the demolition. For these
violations, Complainant proposes that Respondents be assessed a
penalty of $20,020.
On November 3, 1998, Respondent Billmax Properties, through
counsel, filed an Answer to the Complaint, requesting a hearing
and setting forth an affirmative defenses. Subsequently, the
office of the undersigned was advised that the Complainant had
reached a settlement in principle with Respondent Billmax
Properties. A Prehearing Order was issued on January 4, 1999,
directing Complainant Billmax Properties and Complainant to file
a Consent Agreement and Consent Order (CACO) by January 29, 1999.
The CACO was filed on January 25, 1999.
The Prehearing Order also noted that the case file of the
undersigned showed that the Complainant sent the Complaint to
Respondent Upright Wrecking by certified mail, but did not show
that an Answer or any other document had been filed by Upright
Wrecking in this proceeding. The Prehearing Order therefore
directed Complainant to submit a copy of proof of service of the
Complaint in preparation for a possible finding of default.
II. Motion for Default Order
With regard to default, Section 22.17(a) of the Rules of
Practice, 40 C.F.R. Part 22, provides in pertinent part:
A party may be found in default (1) after
motion, upon failure to file a timely answer
to the complaint; (2) after motion or sua
sponte, upon failure to comply with a
prehearing or hearing order of the Presiding
Officer . . . . Default by Respondent
constitutes, for purposes of the pending
action only, an admission of all facts
alleged in the complaint and a waiver of
respondent's right to a hearing on such
factual allegations. If the complaint is for
the assessment of a civil penalty, the
penalty proposed in the complaint shall
become due and payable by respondent without
further proceedings sixty (60) days after a
final order issued upon default.
On January 13, 1999, Complainant filed a Motion an
Memorandum for Default Order (Motion). The Motion requests that
a Default Order be issued against Upright Wrecking, finding it in
violation of the Clean Air Act and asbestos NESHAP as alleged in
the Complaint. The Motion further requests that the entire
amount of the proposed penalty of $20,020 be assessed against
Upright Wrecking. Attached to the Motion was a copy of the proof
of service of the Complaint on Upright Wrecking.
Also attached to the Motion was a letter from Upright
Wrecking marked "Answer to Complaint," which had been sent by
facsimile to Complainant's counsel on October 2, 1998 (Motion,
Exhibit 4). The letter, signed by Mr. Earl Reed, President of
Upright Wrecking, included the statements, "I will try to answer
all that is required to prevent default in this matter," "we
admit to both of these charges," "[w]e were just not aware of the
requirements," and "[w]e now have in place the proper 'tools' to
make sure this does not occur again." The letter stated further
that "[t]he file we received . . . would be the end of our
company . . . [and] will put us out of business." The letter
also indicated that Upright Wrecking could not afford an
attorney.
The Motion states that Complainant's counsel telephoned
Upright Wrecking on October 28, 1998 to inform it that the letter
does not constitute the filing of an Answer, referring to the
Rules of Practice and the requirement to file an Answer with the
Regional Hearing Clerk. Complainant asserts that as of the date
of the Motion, Upright Wrecking has not filed an Answer to the
Complaint, and submits a Declaration of the Regional Hearing
Clerk stating that her files do not show receipt of an Answer
or of any correspondence from Upright Wrecking (Motion, Exhibit
6). The Motion states further:
On November 6, 1998, counsel for Complainant received
another letter from Mr. Earl L. Reed entitled Answer to
the Complaint. Exhibit 5. This letter was also not
sent to the Regional Hearing Clerk and therefore did
not constitute an Answer to the Complaint.
However, the letter Complainant refers to, is addressed, as shown
at the top of the letter, to "Regional Hearing Clerk, U.S. E.P.A.
Region 5." (Motion, Exhibit 5). In that letter, inter alia,
Respondent repeated essentially the same statements as quoted
above.
The Answer to the Complaint was due on October 24, 1998
(Motion at 6). The initial letter marked "Answer to Complaint"
was received by Complainant's counsel before that deadline.
(Motion, Exhibit 4). Complainant's counsel did not contact
Upright Wrecking until after the due date, and within nine days
of that telephone contact, Complainant received the second letter
marked "Answer to Complaint," which was addressed to the Regional
Hearing Clerk as Complainant had advised. There is no
explanation for the failure of the Regional Hearing Clerk not to
have received the latter document. (See, Motion, Exhibits 5 and
6)
By letter dated January 26, 1999, Respondent Upright
Wrecking submitted a timely Opposition to the Motion, stating
"from our records we did respond to answer, of complaint [sic],"
and stating that "we are totally unable to pay the fine" (copy
attached). The Opposition indicates that Upright Wrecking sent
to EPA tax returns of the owner and employees of Upright
Wrecking.
Respondent Upright Wrecking, appearing pro se, apparently
did not serve its documents in compliance with the requirements
of the Rules of Practice, 40 C.F.R. Part 22, including the
requirement to attach a Certificate of Service. However, Upright
Wrecking has sent a timely written response to the Complaint,
admitting the violations and claiming inability to pay the
proposed penalty. It has repeatedly expressed its intent to
avoid a default, and has showed some intent to try to settle the
matter (Motion, Exhibit 4; Opposition). In these circumstances,
a default order assessing the proposed penalty against Upright
Wrecking is unwarranted.
Accordingly, Complainant's Motion for Default Order is
hereby DENIED.
III. Further proceedings
The parties, Complainant and Upright Wrecking, should note
that Agency policy strongly supports settlement and the
procedures regarding documenting settlements are set forth in
Section 22.18(a) of the Rules of Practice, 40 C.F.R. §22.18(a).
Settlement discussions between Upright Wrecking and Complainant
may already have been undertaken and, if so, the parties are
commended for taking the initiative to resolve this matter
informally and expeditiously. If those discussions have not yet
commenced or if such discussions have stalled, each party is
reminded that pursuing this matter through a hearing and possible
appeals will require the expenditure of significant amounts of
time and financial resources. The parties should also
realistically consider the risk of not prevailing in the
proceeding despite such expenditures. A settlement allows the
parties to control the outcome of the case, whereas a judicial
decision takes such control away.
With such thoughts in mind, Complainant and Upright Wrecking
are directed to engage in a settlement conference on or before
February 26, 1999, and attempt to reach an amicable resolution of
this matter. The Complainant shall file a status report
regarding settlement on or before March 5, 1999. If the case is
settled, the Consent Agreement and Final Order signed by the
parties should be filed no later than March 19, 1999, with a copy
sent to the undersigned.
Should a settlement not be reached on or before the dates
set forth above, Complainant and Upright Wrecking must prepare
for hearing, and an order will be issued forthwith directing the
parties to file prehearing exchange documents.
________________________________
Susan L. Biro
Chief Administrative Law Judge
Dated: February 5, 1999
Washington, D.C.