SC Administrative Law Court Decisions

This matter comes before the Administrative Law Judge Division (Division) for a contested case hearing on the merits. The Respondent, Shoals Sewer Company (Shoals), appealed Administrative Order 00-169-W which was issued on August 8, 2000, by the South Carolina Department of Health and Environmental Control (DHEC or Department). The Administrative Order found that Shoals violated NPDES Permit No. SC0021873, the South Carolina Pollution Control Act found at S.C. Code Ann. § 48-1-10 et seq. (1987 & Supp. 1999), and the regulations promulgated thereunder found at 24 S.C. Code Ann. Regs. 61-9 (Supp. 1999). The Administrative Order imposed a fine of $36,000.00 and ordered that Shoals be required to conduct a series of tests, submit their results to the Department, and operate and maintain the facility in accordance with the applicable State and Federal law. A hearing was held at the offices of the Division on August 2, 2001

The Department has assessed a penalty for violations of NPDES Permit No. SC0021873, the Pollution Control Act and its regulations. Basic principles of administrative law establish that an agency bears the burden of proof in establishing that the penalty amount is justified. See Peabody Coal Co. v. Ralston, 578 N.E. 2d 751 (Ind. Ct. App. 1991); Shipley, South Carolina Administrative Law § 5-79, 5-80 (1989). The caption, therefore, is amended to reflect the correct allocation of the burden of proof in this matter.

Having heard the testimony and observed the exhibits presented at the hearing, taking into consideration the burden of persuasion of the parties, I make the following Findings of Fact by a preponderance of the evidence:

1. Shoals Sewer Company is located in Anderson County, South Carolina. On August 24, 1998, the Department issued NPDES Permit No. SC0021873 to Shoals. The permit allowed for the discharge of treated wastewater into Lake Hartwell, in Anderson County, South Carolina. Lake Hartwell (the Lake) is a body of water that is used for many recreational purposes such as skiing, fishing and swimming. The Lake also supports several species of fish and other wildlife habitats. If the wastewater treatment facility is not operated and maintained properly, there could be adverse impacts upon human health and wildlife resources, such as illness from exposure to fecal coliform. In order to protect the Lake, the permit limits the discharge of pollutants on a monthly average to the levels set forth as follows:

a. Biological Oxygen Demand: 15 milligrams per liter;

b. Total Suspended Solids: 30 milligrams per liter;

c. Ammonia Nitrogen: 10 milligrams per liter;

d. Fecal Coliform: 200 milligrams per 100 milliliters of sample;

e. Residual Chlorine: 0.5 milligrams per milliliter;

f. Dissolved Oxygen: 5.0 milligrams per liter, at a minimum at all times;

g. pH: between 6.0 and 8.5 standard units; and

h. Total Phosphorous: must monitor and report levels.

The permit also provides that "there shall be no discharge of floating solids or visible foam in other than trace amounts, nor shall the effluent cause a visible sheen on the receiving waters." Furthermore, the NPDES permit contains a duty to comply with all provisions of the permit, which is located in Part II of the permit under "General Conditions."

2. The Department conducts approximately three inspections of each NPDES permitted facility per year. In inspecting these facilities, the staff utilizes an inspection guideline known as "Operation and Maintenance Inspection Guidelines." These guidelines address requirements for proper operation and maintenance of a facility.

3. On March 9, 1998, Webster Jones, an Environmental Quality Manager for DHEC's Appalachia One District, conducted an operation and maintenance (O&M) inspection at the site. The inspection revealed that the facility was being operated unsatisfactorily in the following manners:

a. Excessive solids were present in the discharge, which is not a typical condition at a properly functioning facility;

b. The filter unit had not been cleaned and was the source of excessive odors;

c. The fence was missing several slats, which could allow individuals or animals to be able to enter the facility; and

d. Control of vegetation along the fence line was needed.

Additionally, the effluent was in such a turbid state that a chlorometric reading could not be conducted. If a facility is operating properly, the effluent is not turbid, but rather clear. There was also a leak in the effluent tank, as evidenced by a stream of liquid coming from a hole in the tank that flowed directly onto the ground surrounding the tank. That inspection resulted in an unsatisfactory rating.

4. Mr. Jones inspected the site again on March 20, 1998. Although the leak in the tank had been repaired, excessive solids were visible in the effluent, and the fence had not been restored. That inspection resulted in a second unsatisfactory rating.

5. The site was again inspected on March 30, 1998. As before, excessive solids were present in the discharge and odors were distinctively present on the site. Odors on a site are indicative that a facility is not operating properly. In addition, the fence had not been repaired. That inspection resulted in a third unsatisfactory rating.

6. Mr. Jones conducted another O&M inspection on May 7, 1998, in response to an odor complaint made to the Department. The aforementioned problems had been corrected by the time of this review and the inspection resulted in a satisfactory rating.

7. On July 16, 1999, the facility experienced an electrical failure in one of its pump stations. That failure resulted in an unpermitted discharge of approximately 250 gallons. Shoals' NPDES permit provides for the operation of back-up or auxiliary facilities when necessary to comply with the provisions of the permit. However, when the power failure occurred, the Respondent's facility did not have a back-up system in place.

8. On September 9, 1999, effluvium had overflowed from a manhole on the property as a result of a clog in the sewer line. The amount of discharge was approximately 250 gallons, as evidenced by another sanitary sewer overflow self-report form. However, the self-report form represented that wastewater from the plant did enter a stream. Nevertheless, the discharge flowed into a tributary that empties into Lake Hartwell. In fact, the evidence revealed the presence of a sheen on the water in the tributary. As a result, the wastewater entered into Lake Hartwell.

9. On December 12, 2000, Chris Eleazer, also an Environmental Quality Manager for DHEC's Appalachia One District, visited the site but was unable to gain access to the facility for inspection purposes, as required by the permit. ⁽¹⁾ Nevertheless, from behind the fence that surrounds the property, he observed an overflow of sludge and wastewater coming from the aeration basin. Under the terms of the NPDES permit, and if the plant is operated properly, such an overflow should not occur. The permit allows only for discharge to leave the plant at one specified location, which is "outfall serial number 001." A discharge from any other location constitutes an unpermitted discharge. Moreover, though the discharge was apparently contained in the plant, the discharge may have seeped into the ground or potentially may have reached Lake Hartwell.

10. D. Fred Allen, President of Shoals Sewer Company, testified that the plant violations have resulted in large part from the grease problems which have occurred due to a condominium development that was recently built which utilizes the plant. He contends that the plant was designed only to treat organic sewage, not grease laden sewage. However, he has not pursued the possibility of installing grease traps in order to alleviate the grease problem. Furthermore, Charles Kennedy, the current certified operator of the site for approximately three years, testified that he has never read DHEC's regulations governing the operation of wastewater treatment facilities. Likewise, when questioned about his knowledge of DHEC's regulations, Mr. Allen testified that he did not even know that the regulations existed.

11. After receiving a referral concerning several violations of the Respondent's NPDES permit, Robin Foy, the Manager of DHEC's Water Pollution Enforcement Section, determined that there was sufficient evidence to support the Department's claims and a Notice of Violation was sent to Shoals Sewer Company. An enforcement conference was held with Mr. Allen and, afterwards, an Administrative Order was issued citing the Respondent with the violations that are the subject of this contested case and accessing a $36,000.00 fine against Shoals Sewer Company.

The Department has three policy reasons behind assessing fines. The first is to penalize a facility for the violations that were committed; the second is to deter that facility from committing further violations; and the third is to deter other regulated facilities from disregarding DHEC's regulations and statutory requirements. Additionally, the Department's "Penalty Assessment Guide" considers two components in calculating the amount of a fine for NPDES violations. The first component is the presence of any economic benefit that could be derived from not complying with the relevant law. The second component is the gravity of the violations, such as: the potential harm to the environment; the extent of deviation from the regulatory and permit requirements; and the past history of compliance or noncompliance of the facility.

12. The Department calculated its fine based on the violations cited in Administrative Order 00-169-W, as well as the existence of Consent Order 95-001-W, which was entered into between the Department and Shoals Sewer Company in 1994. In assessing the fine, Mr. Foy employed a standardized worksheet which sets forth the factors that must be considered by the Department when calculating a fine, the level of severity (from minor to major), and how they are applied to each case:

a. Economic Benefit: Because the staff could not determine an exact amount, no penalty was assessed for this element;

b. Improper Operation and Maintenance: The potential for harm was considered to be in the "major" category, as well as the extent of deviation. Therefore, the range of the penalty was between $8,000.00 and $10,000.00;

c. Unauthorized Discharge: The potential for harm was considered to be in the "major" category because of the evidence that untreated raw sewage had entered the waters of the State. The extent of deviation was considered to be "moderate" because on both occasions where there was an unauthorized discharge, the facility cooperated in initiating cleanup procedures and taking action to prevent further discharges; and

d. Recalcitrance: The Department [Mr. Foy] considered the history of the facility, including the prior Consent Order dated December 13, 1994. The previous Consent Order was entered into by the parties of this contested case for violations of a prior NPDES permit. The Respondent paid no fine as a result of the Consent Order. Because this was determined to be evidence of prior recalcitrance, the Department imposed a $5,000.00 penalty for this factor.

Based upon the foregoing Findings of Fact, I conclude the following as a matter of law:

1. The Administrative Law Judge Division has jurisdiction over this contested case matter pursuant to the Administrative Procedures Act, S.C. Code Ann. §§1-23-310, et seq. (1986 & Supp. 1999).

2. The Administrative Law Judge must make findings of fact and conclusions of law by a preponderance of the evidence in a contested case. Anonymous v. State Board of Medical Examiners, 329 S.C. 371, 496 S.E.2d 17 (1998).

3. S.C. Code Ann. §§ 48-1-10 et seq. (1987 & Supp. 1999) governs the discharge of wastewater into the waters of South Carolina. Section 48-1-90(a) provides:

It shall be unlawful for any person, directly or indirectly, to throw, drain, run, allow to seep or otherwise discharge into the environment of the State organic or inorganic matter, including sewage, industrial wastes, except as in compliance with a permit issued by the Department.

4. S.C. Code Ann. §48-1-330 (1987 & Supp. 1999) provides for the imposition of civil penalties of up to $10,000.00 per day for a violation of Section 48-1-90.

5. 24 S.C. Code Ann. Regs. 61-9 (Supp. 1999) governs water pollution control permits. Section 61-9.122.41(a), entitled "Duty to Comply," provides:

The permittee must comply with all conditions of the permit. Any permit noncompliance constitutes a violation of the Clean Water Act and the Pollution Control Act and is grounds for enforcement action; for permit termination, revocation and reissuance, or modification; or denial of a permit renewal application.

6. Part I (A)(2) of the Respondent's NPDES permit provides that "[t]here shall be no discharge of floating solids or visible foam in other than trace amounts nor shall the effluent cause a visible sheen on the receiving waters." Part II of the permit also includes a "Duty to Comply" with all of its provisions.

7. Inherent in and fundamental to the powers of an Administrative Law Judge, as the trier of fact in contested cases under the Administrative Procedures Act, is the authority to decide the appropriate sanction when such is disputed. Walker v. South Carolina ABC Comm'n, 305 S.C. 209, 407 S.E. 2d 633 (1991). The Administrative Law Judge, as fact-finder, must impose a penalty based on the facts presented at the contested case hearing. In particular, in assessing a penalty, "each fine must be analyzed individually to determine if it is appropriate under the circumstances." Midlands Utility, Inc., v. South Carolina Department of Health and Environmental Control, 313 S.C. 210, 212, 437 S.E.2d 120, 121 (1993). Furthermore, the fact-finder "should give effect to the major purpose of a civil penalty - deterrence." Id. Similarly, an Administrative Law Judge must also consider relevant evidence presented in mitigation. Mitigation is defined as a lessening to any extent, great or small. It may be anything between the limits of complete remission on one hand and a denial of any relief on the other. In a legal sense, it necessarily implies the exercise of the judgment of the court as to what is proper under the facts of the particular case. 58 C.J.S. Mitigation p. 834, 835 (1948).

8. I conclude that Respondent Shoals Sewer Company violated the terms of its NPDES Permit No. SC0021873, S.C. Code Ann. § 48-1-90 (1987 & Supp. 1999), and 24 S.C. Code Ann. Regs. 61-9.122.41(A) (Supp. 1999), for failure to properly operate and maintain its facility in accordance with the provisions of its NPDES permit and all of its conditions. Specifically, I find that the Respondent committed the following infractions:

a. The March 9, 1998 unsatisfactory inspection, due to the inability of the staff to take a chlorine reading, the malfunction of the filter unit, and the presence of excessive solids in the discharge and the leak in the tank;

b. The March 20, 1998 unsatisfactory inspection, due to the presence of excessive solids;

c. The March 30, 1998 unsatisfactory inspection, due to the presence of solids and excessive odors; and

d. The two unauthorized discharges, which were both estimated to be approximately 250 gallons, based on the self-reporting forms submitted to the Department, and one of which entered the waters of the State.

The Department's Administrative Order also cited the Respondent for violations on October 5, 1999, October 29, 1999, November 3, 1999, and March 27, 2000. However, no evidence was offered in support of those citations.

A presence of excessive solids in the discharge can reach a receiving body of water, thereby affecting aquatic life. Furthermore, if the body of water is -- as it is in this case -- recreational water, there is the potential threat to human health. The bacteria present in the discharge could also enter the drinking water supply and cause illness among those who rely on it. Additionally, the unclean filter unit and excessive odors contribute to the potential of allowing harmful bacteria to affect surrounding animal habitat and human health. The leak in the effluent tank could contaminate the ground water in the vicinity. Finally, the fence's disrepair is a public safety concern, as it operates to keep individuals and animals from entering the vicinity and being exposed to potentially harmful bacteria.

However, except for the overflow on September 9, 1999, and the noxious odors produced by the facility, there is no evidence that the remaining violations specifically produced a detrimental environmental impact. The Respondent, also, self-reported many of the violations and thereafter utilized appropriate cleanup methods. Furthermore, the Respondent's relatively small operation increases the impact of a fine levied upon the facility. Moreover, the evidence did not support all of the violations cited in the Department's Administrative Order. Therefore, I conclude that a fine of $12,000.00 is appropriate for the above violations.

IT IS HEREBY ORDERED that Administrative Order 00-169-W is hereby affirmed as

modified by the foregoing Findings of Fact and Conclusions of Law, and a fine of Twelve Thousand ($12,000.00) Dollars is imposed against Respondent Shoals Sewer Company.

IT IS FURTHER ORDERED that the Respondent is hereby directed to comply with the testing requirements as set forth in Administrative Order 00-169-W.

AND IT IS SO ORDERED.

_______________________________

Ralph King Anderson, III

Administrative Law Judge

December 18, 2001

Columbia, South Carolina

1. D. Fred Allen, President of Shoals Sewer Company, testified that DHEC has had access to the plant at all times, by way of a key that is placed at the site. However, there was no key available to allow access to the plant when Chris Eleazer visited the site.