SC Administrative Law Court Decisions

STATEMENT OF THE CASE

This matter is before the Administrative Law Judge Division ("Division") pursuant to the request of Starmet CMI, Inc. ("Respondent"), filed on June 27, 2002, for an expedited administrative review of the Emergency and Administrative Order ("Emergency Order") issued by R. Lewis Shaw, Deputy Commissioner of the South Carolina Department of Health and Environmental Control ("Department") on June 25, 2002. The Department issued the Emergency Order charging Respondent with violations of various statutes and regulations of the Department. Thereafter, Respondent requested an immediate hearing before the Division, pursuant to S.C. Code Ann. § 48-1-290 (1987) and S.C. Code Ann. § 13-7-50 (1976).

The case was assigned to the undersigned on the morning of June 27, 2002. Upon notice to all parties, a conference was held with the parties at the offices of the Administrative Law Judge Division at 2:00 p.m. on the date of filing. No testimony was taken nor was any other evidence presented at that conference.

As a result of that conference, an emergency hearing was scheduled for Monday, July 1, 2002 at 11:00 a.m. After careful review of all filings in both this case and in the companion contested case filing entitled South Carolina Department of Health and Environmental Control v. Starmet CMI, Inc., Docket No. 01-ALJ-07-0532-CC, a pending case within the jurisdiction of the undersigned, together with all the testimony and evidence presented at the hearing on July 1-3, 2002, all previous orders of this tribunal in this matter only, as well as the emergency order of the Department, are vacated and the following Order is issued. This order does not have any prejudicial effect on the contested case matter docketed with the Division as No. 01-ALJ-07-0532-CC, which is set for a hearing on the merits in August 2002.

Many of the facts and issues in the present case are intertwined with another pending case before the undersigned, and thus, a history of procedural events is helpful. The related case, SC DHEC v. Starmet, CMI, Inc., Docket No. 01-ALJ-07-0532-CC, was filed with the Division on November 21, 2002, as the result of an appeal of the Department's Administrative Order No. 01-01-RW. This Administrative Order, issued on October 29, 2001, cited various regulatory violations concerning radioactive waste and required Starmet to take corrective action (discussed in detail below). As the case proceeded, the parties continued to negotiate. As a result of these negotiations, a Consent Order was filed with this court on December 20, 2001. This Consent Order mainly dealt with setting a schedule for the removal of existing inventory of uranium tetraflouride (UF4). Another Consent Order was filed on April 30, 2001, which addressed Starmet's Bankruptcy filing and in which Starmet agreed not to receive any further radioactive materials unless an equal amount had been shipped off.

FINDINGS OF FACT

Having observed the witnesses and exhibits presented at the hearing and closely passed upon their credibility, and after taking into consideration the burden of persuasion by the parties, I make the following Findings of Fact:

General

• Notice of the date, time, place and nature of the hearing was timely given to the parties.



• The Respondent, Starmet CMI, Inc., formerly Carolina Metals, Inc., owns and operates a

uranium processing and conversion facility on a site located at 365 Metal Drive, Barnwell County, South Carolina ("facility" or "site"). This site was originally licensed in 1982 under its prior name Carolina Metals, Inc.

• Robert E. Quinn is the chairman of the board of Starmet Corporation, with headquarters

in Concord, Massachusetts. Mr. Quinn is the sole officer of Starmet Corporation and the sole director of its subsidiaries. Respondent is a subsidiary of Starmet Corporation.

Starmet Corporation has several other subsidiaries: (1) Starmet, NMI, which is located in Concord, Massachusetts where it manufactures depleted commercial shielding products for medical and industrial purposes; however, its operations are winding down; (2) Starmet Powders LLC; (3) Starmet Commercial Casting, LLC; and (4) Starmet Ceralcast, LLC. ⁽¹⁾

• Petitioner, the South Carolina Department of Health and Environmental Control, is an

agency within the executive branch of state government in South Carolina, created pursuant to S. C. Code Ann. § 44-1-10, et seq. It is administered by a commissioner under the supervision of the South Carolina Board of Health and Environmental Control, which consists of seven members.

• Respondent operates under the terms and conditions of S. C. Radioactive Material License

No. 322, with attached Amendment No. 26, ("license") and S. C. Code Ann. Reg. 61-63 ("regulation"). See Pet. Exh. 65.

• Pursuant to the license, Respondent is authorized to receive, acquire, possess and transfer

7799 metric tons (17,196,795 pounds) of depleted uranium in any form, including hexafluoride (UF6), tetrafluoride (UF4), metal, counterweights, and oxide(s).

• Presently, Respondent has approximately 45 employees at the facility in South Carolina.



• Robert Lewis Shaw, an employee with the Department for 31 years, has been a Deputy

Commissioner for 18 years. He is the Chief of Bureau of Waste Water and Drinking Water and is responsible for all the environmental programs at the Department.

Activities and Processes of Respondent

• Respondent is a chemical plant that processes uranium compounds. It is authorized by the

license and engages in or has engaged in the following activities and processes:

• Conversion of uranium hexafluoride (UF6) into uranium tetrafluoride (UF4). ⁽²⁾ Hydrogen fluoride (HF) is produced as a by-product of this conversion; it is captured in a scrubber that mixes it with water to form hydrofluoric acid. The hydrofluoric acid is neutralized with lime that forms calcium fluoride. This calcium fluoride is a waste which is sometimes contaminated with uranium.
• Reduction of UF4 (sometimes called "green salt") into uranium metal by mixing the UF4 in a crucible with magnesium and then heating it in a furnace. The uranium metal that is produced is called a "derby." ⁽³⁾ The "derby" is sold as a product to a contractor for the Department of Energy for usage at its facility in Oak Ridge, Tennessee for reprocessing into classified components. As a result of this process, magnesium fluoride contaminated with uranium is produced as a waste.
• Electroplates, paints, and distributes manufactured depleted uranium counterweights which are used in the aircraft industry. They are installed on airplane wings at the site. A mixed radioactive hazardous waste is produced from this process.
• Production of uranium oxide compounds from the oxidation of uranium metal for sale as a product.



• These processes create a waste inventory that consists of:
• waste UF4;
• dry active waste ("DAW");
• calcium fluoride sometimes contaminated with uranium;
• magnesium fluoride contaminated with uranium;
• hexane/nitric acid waste;
• acidic waste;
• waste uranium metal;
• dried sludges;
• lab waste;
• waste oil.

Ponds

• Original construction at the site, pursuant to the proposal to the Department in 1981 by Post,

Buckley, Schuh & Jernigan, Inc, Consulting Engineers and Planners, included two evaporation ponds/basins whose function was to assist with the treatment system for the grey wastewater. The overall wastewater management system called for process water to be evaporated in a spray dryer and the grey water ⁽⁴⁾ to be evaporated in two evaporation ponds.

12. Both basins as constructed had a compacted clay liner which was covered with a gravel and

sand leach field, leach laterals sump (under drainage system), hypalon liner, and had an earthen berm containment. The ponds were covered by a translucent roof supported from a structural steel frame.

The purpose of the covering was to eliminate rainfall as a load to the system. Further, the translucent basin cover was to provide solar heat to enhance evaporation. Fans were provided at the apex of the roof to induce air movement across the surface of the ponds. Blowers were to be used to ensure air circulation to remove water vapor from under the enclosure. Drains were to be piped to a separate test sump for each basin.

The purpose of the test sumps was to allow for testing to detect any leaks in the membrane liner which contained the impounded waters. See Pet. Exh. # 70.

13. The ponds have traditionally been operated by pumping water to the grey water sewer from

the grey water sump in the main production building. The water is then sampled prior to being discharged into the sewer. Some sludge accumulates due to sap solids and soil transport by the wind into the ponds.

14. On February 27, 2001, during an attempt to control the vegetation on the earthen berm around

the pond, the fiberglass roof panels were ignited. Approximately 60 % to 70 % of the roof was destroyed by the fire. No one was injured nor contaminated and no loss of radioactive material occurred. Many of the burning plastic panels fell from the steel structure and some penetrated the liner around the edges of the pond.

15. After an investigation, Respondent wrote a letter to the Department on March 20, 2001 stating that the pylons between the main supports had been compromised and would need to be replaced. Further, Respondent stated that the remainder of the roof would need to be removed and replaced. Also, Respondent noted that the liner in the west pond (the pond farthest from the DU Center) had significant degradation around the sides. It noted that it had been isolated and was no longer in use. See Pet. Exh. 14.

16. Respondent immediately commenced taking water samples every Tuesday and Friday from

the sump located at the end of the east pond. The test results were provided to the Department.

17. On March 20, 2001, Respondent wrote to the Department, stating that the sludge in the bottom of the ponds was 3 inches to 6 inches deep and contaminated with uranium metal oxide and UF4. ⁽⁵⁾

18. Respondent notified the Department on April 5, 2001 that it considered "the use of evaporative cooling as the best option" to remediate the ponds. Respondent noted that it had considered several options, including replacing the roof, a solar bed, forced evaporation using electricity, forced evaporation using propane as well as forced evaporation using large quantities of air. Respondent proposed to build an evaporative cooler on a 6 inch bermed concrete pad, sealed with tar and placed in a steel liner. The berm would be used to support two existing cooling systems and to contain any leaks from the systems if they occur. The cooler would be placed between the ponds and the DU Center. It would be fenced into the area of the DU Center and would process water from the ponds.

Further, Respondent stated that it intended to drain the west pond, remediate it, reinstall a liner, pump the east pond water into the west pond and then completely close the east pond. This would leave only one evaporation pond and the evaporative cooler as the water processing capability for the grey water that was generated inside the facility.

Respondent noted in the letter that it needed "to do something very quickly to handle the water" it was generating. It requested the concurrence of the Department with its plan so it could progress forward with remediation.

19. Subsequently, the parties entered into the Consent Order dated June 19, 2001 which among

other issues addressed that of the ponds. Specifically, it required remediation of the ponds.

20. Thereafter, Respondent provided to the Department as an attachment to a letter dated July

25, 2001 a program document titled "Plan for Evaporation Pond Repair and Recovery Project." See Pet. Exh. 8.

21. In this document, Respondent addressed the evaporation of the water inventory to aid with

issues concerning rain water, sludge buildup in the ponds, inspections of the liners and evaluation of the liner subsurface. Two phases were suggested. Respondent noted that it had already begun to use a forced air evaporation system to reduce the level of the water in the ponds.

22. The Department approved phase 1 of the plan by letter on August 2, 2001, However, the Department noted that the review of the pond repair and recovery issue would continue. See Pet. Exh.6.

23. The evaporation phase of the plan was not in operation in the fall of 2001.

24. After inspections at the site by Kevin Strickland, an inspector with the Department, on January 29, 2002, January30, 2002 and February 1, 2002, Mr. Henry Porter, Assistant Director, Division of Waste Management, sent a letter to Respondent on February 7, 2002 which approved Respondent's "Forced Evaporation System."

25. Although the Department wanted the evaporation equipment to be installed or located between the ponds, it was installed at another location. As of the hearing, the Department had turned off the evaporators at the site.

26. In early June 2002 the Department determined that Respondent should stop using the evaporators. At the request of the Department, Respondent covered some the dead grassy areas surrounding the evaporators with a plastic tarp. The Department determined that there was some radiation on and outside the tarp areas.

27. On June 14, 2002, Respondent notified the Department that within "the last thirty (30) days,

Starmet has developed empirical information documenting that the pond will be dewatered within six (6) months as the Department has requested, and we have obtained contractual approval for the disposal of the pond liner and residuals." See Respondent's Exhibit 4.

Waste Inventory

28. Respondent purchased from the Department of Energy 10,000,000 pounds of UF4 between 1989 and 1993 at one cents a pound. This is the "legacy waste" referred to in this order. ⁽⁶⁾ Respondent has used 4,000,000 pounds of this legacy waste in its processes but still has 6,000,000 pounds of the UF4 on site. The Department wants this waste moved off site quickly.

29. As noted above, the processes at the plant site create wastes in various forms. The Department became concerned about the amount of waste at the facility and met with Respondent on March 7, 2000 to discuss this matter.

30. As a result of that conference, Respondent submitted a proposed schedule for the disposition

of the current waste inventory on site. It was provided as an attachment to a letter sent to the Department dated May 1, 2000 for its review and approval. Respondent stated in the letter that it would "continue to provide waste inventory generation/reduction activities in the monthly report submitted to your Department." See Pet. Exh. 20.

31. The Waste Reduction Schedule for Calendar Year 2000 outlined its present inventory of its different kinds of waste by drum totals and sealed containers. It projected an end date of July 2001.

32. The Department approved the Waste Reduction Schedule in a letter dated July 10, 2000. See

Pet. Exh. 20.

33. Respondent continued with its inventory reporting and provided monthly reports to the Department.

34. In September 2001 the Department became concerned that Respondent would exceed its limit for onsite radioactive materials. The majority of the uranium on site was UF4. Although the Department agreed that Respondent needed UF4 in its reduction process which converts UF4 into uranium metal or "derbies," the Department felt Respondent was collecting too much of the UF4 on site.

35. Further, the Department began to voice concerns that the radioactive material in the drums

on site had not been properly measured.

36. The Department also raised the concern of potential theft.

37. The radioactive levels in the drums are of a low level.

38. On October 5, 2001, Respondent sent a letter to the Department with an attachment which outlined its uranium inventory on October 4, 2001. The letter stated that it was taken from "actual laboratory analysis of over 2000 drums in inventory" over the last six months.

39. Respondent provided monthly reports to the Department for the months of January through

June, 2002. See Pet. Exh. 73. They reflect the amount of waste shipped off site from December 1, 2001 through May 2, 2002.

40. Pursuant to the ALJ Consent Order dated December 20, 2001, Respondent shipped off more waste inventory than it received for the period January 1, 2002 through June 13, 2002. According to its accounting, it received 178,200.28 pounds of uranium and shipped off 478,338.00 pounds. See Pet. Exh. 48.

41. The Department continued to express concerns about the shipment of waste offsite by Respondent. Its concerns centered on the failure of Respondent to ship off more of the old waste or "legacy waste" which had been on site for a lengthy period of time versus that being produced as a byproduct from the processes occurring onsite.

42. Only two sites are authorized to receive UF4, the Chem Nuclear site in Barnwell County, South Carolina or the Envirocare facility in Utah. Respondent preferred to ship the waste to Envirocare where the cost was only about 1/10 of the cost required to dispose of the material at the Chem Nuclear facility.

For some time, Envirocare refused to accept waste from Respondent. Since early this year, Respondent has approximately $ 750,000.00 held in trust with U. S. Enrichment Corporation ("USEC"), the seller or supplier/source of UF6 to Respondent. These monies are to be used for the payment of the costs associated with shipping waste to Envirocare.

According to Mr. Quinn, this fund should pay for the cost of removing 4 million pounds of waste to the Envirocare. The plan is to continue with shipments twice a week when Respondent can become operational.

43. On March 1, 2002 Respondent notified the Department that the Radioactive Waste Transportation and Disposal Agreement ("agreement") had been entered into between itself and Earthlink Technologies. The agreement authorized transportation and disposal of CaF2 and DU counterweights. See Respondent's Exhibit 60.

44. Department employees Kevin Strickland, Mark Yeager and Mike Plemmons performed an

inspection of the facility on April 3, 2002. They took photographs of the facility on that date.

45. On April 9, 2002 Respondent advised the Department that it had shipped out 309 pounds of

uranium in 6 cylinders on April 4, 2002 and that the facility was "on schedule to ship 6 cylinders on Tuesdays and Thursdays of the next weeks until all empty cylinders are gone." See Respondent's Exhibit 60.

46. The Department felt more waste should have been shipped off site since the ALJ Consent Order of December 2001 and, if necessary, Respondent should have shipped some of the waste to the Chem Nuclear site in Barnwell County.

47. After the ALJ Consent Order of December 2001 was signed, Respondent strived to ship as

much of the waste as possible to the depository in Utah.

48. Chem Nuclear can only take a certain amount or level of waste at its South Carolina facility each year. During the year 2001, it took 7/8 th of its limit.

49. There has been a 1 ½ % reduction of the waste at the site since the ALJ Consent Order was

signed in December 2001.

50. On June 7, 2002, the Department wrote Respondent, notifying it that it could no longer receive shipments of uranium counterweights at is facility to be processed for disposal. The letter stated that Respondent could only receive uranium counterweights for electroplating, painting and distribution pursuant to its license. The Department was concerned that the shipment of uranium counterweights shipped to Respondent on June 6, 2000 were to be processed for disposal.

51. On June 14, 2002 Respondent notified the Department that "all non-legacy hazardous waste

will be removed by the end of the week." See Respondent's Exhibit 4.

Inspections of the Site by the Department

52. The Department has conducted frequent inspections at the site, usually weekly and oftentimes daily. The inspector for this facility for the last 2 ½ years was Robert Kevin Strickland. His duties include inspecting incoming shipments, providing guidance and surveys, ensuring the facility is complying with its license and Department of Transportation ("DOD") procedures. On many of his inspections, Mr. Strickland was accompanied with other inspectors or agents of the Department. Copies of his written inspection reports for the period October 25, 2001 through June 13, 2002 were reviewed by the court. See Pet. Exh. 46.

Among other items in the reports, the major concerns Mr. Strickland noted were:

• improper labeling of drums or no labeling of drums.
• steel drums containing mixed waste that have been on site for years.
• steel drums with lids missing.
• leaking drums with liquid on the floor near them.
• several drums in such poor condition that they broke apart when moved.
• stored drums with the contents not labeled.
• improper repair of steel ducting with cloth back tape (duck tape).
• phone conversation with David Felkel of Edisto Electric Cooperative on January 25, 2002 indicating the electricity would be cut off at the facility because of unpaid bills by Respondent.
• shipment of non-radioactive equipment from a sister facility in Concord, Massachusetts to this facility for storage.
• contaminated vegetation and soil near the evaporator cooler.
• the three monitor wells on the site were unlocked.
• caved in areas of the side of a pond [one nearest the woods] at the location where the three drains are which lead to the sump area.
• man ways to the sumps from the evaporation ponds had 2 or 3 inches of liquid present and in a rain could overflow.
• shipment from the Concord facility of 22 drums containing UF4 notwithstanding previous expressed concerns about further shipments from the Massachusetts site.

53. On July 26, 27 and 28, 2000, agents of the Department inspected the site. This was the point in time when the Department began to have grave concerns about the operation of this facility. As a result of that inspection, the Department made a determination that there were numerous violations of the license and the regulation at the facility. Thereafter, Respondent advised the Department that it would address these problems without the need for any enforcement action.

54. The Department inspected the site almost weekly between late July 2000 and May, 2001. From July 26 through July 28, 2000, the Department conducted an unannounced inspection at the site. Interviews were conducted with Respondent's employees. The Department determined that there were numerous violations of the license and regulation at locations within the facility, at the pond sites and along the boundary fence line. ⁽⁷⁾ It is noted that the fence line is a great distance from the public road.

55. During an inspection on May 15 and 16, 2001, the Department again determined that there

were violations of the license and the regulation at the site. See Pet. Exh. 44.

Consent Administrative Order

56. When Respondent did not meet the expectations of the Department, the parties entered into

a Consent Order which was signed on June 19, 2001. It was signed by both parties. See Petitioner's Exh. 1. The parties agreed that the Respondent would do the following:

• Pay to the Department the sum of $ 10,000.00 as a civil penalty within 20 days and an additional sum of $ 10,000.00 as a civil penalty within 40 days.
• Implement corrective actions within 20 days for the items of noncompliance and recommendations as noted in the order which were identified during the Department's July 26-28 , 2000 inspection as well as recommendations and items of noncompliance found in the Department's 592 issued to Respondent in its letter dated January 3, 2001. ⁽⁸⁾
• Provide adequate health physicist coverage throughout the plant to ensure operating and emergency procedures are adhered to.
• Within 30 days commence and comply with all requirements authorized and approved in the Department's letter of April 20, 2001, which included provisions for the evaporation of the ponds. Further, Respondent was to provide a schedule for remediation of the evaporation ponds. within 30 days. Also, within 60 days after the completion of evaporation of the ponds, Respondent was to provide a remediation plan to include the scope of work to be reviewed and approved by the Department and locate/retain a contractor to perform the work.
• Dispose of all waste within 45 days after it is produced. Such provision is not to be construed to allow quantities of radioactive material to exceed those quantities found in license conditions 5, 6, and 7 of it current radioactive materials license no. 322.
• Have 25 % of the current waste inventory disposed of within 6 months or otherwise removed from the location and to develop a waste reduction schedule for the removal of all the remainder of the waste currently stored on the site, subject to the approval of the Department.
• Complete an assessment and remediation of all outside areas within 6 months. Prior to the remediation, the plan must be approved by the Department.
• Move the compliance fence to a location within 6 months which would demonstrate that an individual continually present in an unrestricted area would not receive a dose exceeding 0.05 rem in a year. Prior to the location of the fence, Respondent must establish a routine security patrol of the compliance fence line, which schedule must be provided to the Department as well as documentation of the patrols for the department's review.
• Repair the roof on the Reduction/Administration building within nine months and dispose of all related waste.
• Evaluate and repair any holes or leaks in the duct work from the Pickling Station (used for pickling DU derbies) prior to its operation.
• Within six months provide for Department review and concurrence, comprehensive procedures and/or revisions for the health and safety program. which would then be established in a document control program to be used thereafter in operating and maintaining the facility.
• Provide all required employee training to work at the facility and to maintain records in accordance with State Regulation.
• Place alarms, which sound when they are opened, within six months at all doors which are not designated and maintained as access control points and which may be accessed from contamination areas within the Reduction Building and the DU Center. These doors are designated as fire doors. Further, Respondent must conduct an investigation pursuant to the ICR program when an alarm sounds to determine the reason.
• Prior to operation, construct a full containment area to surround the Shredder which will preclude contamination from the remaining areas of the DU Center. The Department must review the containment and duct work designs as well as the procedures to be followed during the construction and operation prior to its construction.
• Within six months, evaluate the condition of the existing duct work throughout the plant, test all HEPA filter banks, and perform all necessary repairs. All results as well as any corrective measures shall be provided to the Department.
• Reestablish negative pressure within the Reduction Building within six months and routinely inspect magnehelic gauges currently located within the Reduction Area to verify operability.

57. After this Consent Order was signed, Mr. Shaw [Deputy Commissioner of the Department

in charge of Waste Water and Drinking Water], first became aware of the issues at this facility. After the Administrative Order was signed on October 29, 2001, the matter got on Mr. Shaw's "radar screen" and he became increasingly more involved in discussions concerning the issues and concerns the Department had concerning the facility.

58. According to Mr. Shaw, in late November or early December 5, 2002, staff brought him up

to date with their concerns about conditions at the facility. In these conversations, they talked about Respondent as a "sham recycling corporation," about Respondent's alleged stockpiling of waste and about Respondent's alleged financial concerns.

Administrative Order

59. On October 29, 2001, Administrative Order ("Administrative Order") Number 01-01-RW

was issued by the Department; it was signed by the Commissioner of the Department, C. Earl Hunter. See Petitioner's Exh. 59. The Department concluded that:

• Pursuant to Radioactive Materials (Title A) Regulation, 25 S. C. Code Ann. Regs. 61-63, Respondent had:
• Failed to adjust its financial assurance for decommissioning the site to cover increased levels in radioactive wastes at the facility;
• Engaged in activities that caused it to violate this regulation, its license and license conditions, and a Consent Order executed on June 19, 2001 by the Department;
• Failed to implement a radiation protection program commensurate with the scope and extent of licensed activities by failing to perform required maintenance, remediate its evaporation ponds, and conduct adequate radiation surveys;
• Failed to use, to the extent practicable, procedures and engineering controls based upon sound radiation protection principles to achieve occupational does and doses to members of the public that are as low as is reasonably achievable; failure to ensure that each container of licensed material bears a durable, clearly visible level bearing the radiation symbol and the words "CAUTION. RADIOACTIVE MATERIAL" or "DANGER. RADIOACTIVE MATERIAL.'
• Pursuant to South Carolina Radioactive Material License number 322, issued on July 25, 2001, pursuant to the Atomic Energy and Radiation Control Act, S. C. Code Ann. § 13-7-40, et. seq. (Supp. 1989) and 25 S. C. Code Ann. Regs. 61-63, Respondent violated:
• License Condition 12 by failing to conduct operations authorized in the licensee's procedures and subsequent revisions and additions approved by th Department;
• License Condition 18 by failing to submit to the Department certification

from the owner of materials that the products had wastes resulting from activities authorized under the license will be shipped back to the owner or arrangements have been made regarding handling of the products and by storing materials, products and/or wastes for more than six (6)months;

• License Condition 21 by failing to conduct accurate physical inventories.

60. As a result of its conclusions, the Department exercised its authority pursuant to S.C. Code

Ann. §§ 13-7-40 (Supp. 1989), 13-7-85 (Supp. 1989) and S.C. Code Ann. Regs. 61-63, and issued the following order provisions in the Administrative Order:

• Respondent shall have only certain radioactive materials, authorized maintenance and repairs on equipment as needed, and authorized Respondent to ship radioactive waste and materials to licensed facilities.
• Within 45 days Respondent must reduce its inventory of depleted uranium (all forms) to 90 % of the new licensed limit of 5,000 metric tons by disposing of the current waste inventory to a permitted facility. Copies of all receipts must to provided to the Department within 10 days.
• Submit to the Department within 45 days a waste disposal plan which addresses a waste reduction schedule.
• Within 45 days submit to the Department a detailed physical inventory of all radioactive materials, wastes and contaminated equipment.
• Within 15 days submit to the department an updated decommissioning funding plan and additional financial assurance to cover the third party costs for the removal of excess wastes over operational waste levels, the remediation of the evaporation ponds, the removal of five thousand metric tons of depleted uranium to include operational wastes and the decommission for the facilities contaminated equipment.
• Cease using the evaporation ponds immediately; within 15 days submit to the Department for review and approval a revised plan for the remediation and reconstruction of the evaporation ponds within 6 months.
• Within 15 days pay make payable to the Department a civil penalty in the amount of $ 52,000.00.

Request for Review and a Hearing before the Administrative Law Judge Division

61. As authorized by statute, Respondent contested the Administrative Order and requested a contested case hearing before an Administrative Law Judge. That case was filed with the Division on November 14, 2001 and assigned docket number 01-ALJ-07-0532-CC. It was assigned to the undersigned on November 27, 2001.

62. On November 29, 2001, this tribunal issued an Order requiring the parties to file pleadings

Further, the Order amended the caption as reflected on the Transmittal which was prepared by the Department to reflect that the Department was the Petitioner since it had issued the Administrative Order, and had the burden to prove the facts and conclusions it alleged in its Administrative Order.

63. On December 4, 2001, the Department filed with the Division a Motion to Partially Lift the Automatic Stay or, Alternatively, for a Temporary Injunction pursuant to ALJD Rule 16. The motion was immediately set for a hearing by the court for December 17, 2001. Prior to the hearing, by letter dated December 14, 2001, the Department notified this court that the issue had most probably been resolved by the parties and asked for a continuance of the hearing.

64. Shortly after the request for the contested case hearing was filed with the Division, Mr. Shaw and other officials of the Department met with legal counsel for the Respondent at Respondent's request. They discussed the issues involved in the Department's Administrative Order. At that time Mr. Shaw was aware that an action had been filed with the Division requesting a full hearing on the merits concerning the enforcement of the Administrative Oder.

ALJ Consent Order of December 20, 2001

65. On December 20, 2001, a Consent Order was presented to the court for its consideration. It was approved by the court on that date. See Petitioner's Exh. 29. In its preamble, the parties noted that the Department, on its motion, sought the court to require "Respondent to comply immediately with paragraph 1 of the IT IS FURTHER ORDERED REMEDIES section of Administrative Order 01-01-RW by ceasing to bring on any more radioactive materials to its facility in Barnwell, South Carolina."

In the Order, the parties agreed to various provisions for the shipment onsite and offsite of radioactive materials. The court agreed on page 4 that "Nothing in this Consent Order in any way affects the other issues addressed in the Petition filed with the ALJD and not addressed specifically herein and these issues are reserved for hearing on the merits."

66. Within the Consent Order the court found that "if Respondent is found to be non-compliant

with this deadline [shipment of materials offsite], it may give Petitioner relief at its request, including but not limited to a civil penalty and restrictions on operation up to closure of the facility." The Consent Order provided for a scheduling conference, negotiations between the parties, and the payment of an overdue license fee by Respondent to the Department in the amount of $ 45,000.00.

67. Mr. Shaw was aware of the ALJ Consent Order of December 2002 as agreed to and approved

by this tribunal.

Scheduling Conferences on January 17, 2002 and February 27, 2002

68. This tribunal held a scheduling conference with the parties on January 17, 2002. The conversations which took place in that telephone conference were memorialized in a letter prepared by Department's counsel and dated January 17, 2002.

69. The parties noted that they were close to resolution of the evaporation pond and the inventory

issues. Further, they advised the court that Respondent had paid the overdue license fee and had met the notification and inspection requirements addressed in the Consent Order of December 20, 2001.

The parties stated that they needed to engage in discovery.

70. The court conducted another telephone conference with the parties on February 27, 2002.

Pursuant to that conference, an Order was signed on March 6, 2002, which set out a schedule for the

completion of discovery in the case. Also, the Order provided that another conference would be held with the parties on April 15, 2002.

Financial Concerns/Chapter 11 Bankruptcy Filing by Respondent

71. Electric power to the facility was terminated at approximately 10:00 a.m. on February 20,

2002 for nonpayment of billings from Edisto Electric Cooperative. Approximately $ 62,000.00 was outstanding at that date. The plant was secured and power was supplied to the administrative building by the emergency diesel generator at the site.

72. Inspector Kevin Strickland inspected the site on February 20, 2002. He noted in his report

that the facility and all processes had been secured as well as the gates to the DU center. The ponds were locked off. During his inspection on February 22, 2002, Mr. Strickland observed a larger portable generator on site. He noted no change in the site area from his previous visit.

73. At Mr. Strickland's next visit on March 18, 2002, only two people were at the site. The site

was secure and the work taking place was electroplating of counterweights.

74. Mr. Strickland noted in his written report for April 2002 that there "no new or immediate concerns" noted. He found no problems with the evaporation ponds or with the number of physics technicians on site. However, he did note on April 9, 2002 that "electric power to the facility was restored today at approximately 11:30 AM."

75. From February 22, 2002 through April 3, 2002, Respondent provided updates to the Department in no less than 14 letters concerning the electricity issue. Respondent advised that emergency generators were in operation and that there were no threats to the environment. Results of radiological surveys were provided to the Department during this period, also. See Respondent's Exhibit 60.

76. At the hearing the Department raised several concerns about the failure of Respondent to have electric power at the facility; for instance, whether the disconnection of power would affect the ventilation and fire systems and the instruments at the facility. No evidence was introduced at the hearing showing that any such problems resulted during the several months the facility used alternate power (emergency generators).

77. On March 26, 2002, Respondent filed a voluntary petition for bankruptcy pursuant to Chapter Eleven of the United States Bankruptcy Code. In its letter to the court dated April 2, 2002, Respondent stated that it was continuing with meetings with the Department on a weekly basis to work through terms of a settlement and to resolve environmental issues at the Starmet site in Barnwell County.

78. The purpose of the bankruptcy filing by Respondent was to develop the financial resources

to address the environmental issues raised by the Department. Respondent believes that within five to seven years the facility can be remediated at no cost to South Carolina taxpayers. Further, it opines that voluntary remediation would preempt both the State of South Carolina and the Environmental Protection Agency from engaging in a CERCLA exercise involving 15-25 million dollars and take in excess of ten years before the property is acceptable for any viable uses.

79. Respondent would like to continue operating the facility. It proposes a plan whereby it will

commit 100 % of its income, less bankruptcy costs and expenses together with normal operating expenses and necessary capital expenditures and repairs to be used for remediation and the shipment of waste offsite.

80. Respondent began bidding on a contract with USEC in 1998. If Respondent can conclude

a contract with USEC in 2003, it anticipates the availability of 2.5 million dollars each year to be used for this remediation and waste reduction. However, such is subject to Respondent winning the bid. Mr. Quinn stated that there are two other bidders for the contract, also.

Health Physics Technicians

81. On April 16, 2002 the Department wrote Respondent concerning its requirement that Respondent retain and maintain health physics technicians on site to oversee the activities and perform required routine monitoring and surveys. Further, they were to ensure that all employees follow health and safety procedures and to help employees if they became contaminated. The Department did not note any violation but stated it expected full compliance with the license.

82. Some of the former health physics technicians have left the employ of Respondent. Although Respondent has always maintained the minimum number of health physics technicians at the location, even by hiring temporaries, the Department expressed concerns about Respondent's ability to provide them in the future.

ALJ Consent Order dated April 30, 2002

83. Another telephone conference was held with the parties on April 15, 2002. Subsequently,

a Consent Order was signed by the undersigned on April 30, 2002. The order set forth findings which provided a history of the action with the Division, the injunctive relief request, the consent order of December 20, 2001, the bankruptcy filing and the status conference on April 15, 2002.

84. The order noted in finding of fact # 3 that "this matter [action before the Division] qualifies for the exemption set forth at 11 USC § 362 (b) (4) in that the Petitioner issued Administrative Order 01-01-RW as an exercise of its regulatory powers and because the Administrative Order does not solely address pecuniary gain, but also clean up of the site at issue here to achieve compliance with

the applicable laws and regulations of this State."

85. Further, finding of fact # 4 provided that "the parties and this Court can only go so far in this matter as to address the injunctive remediation relief sought in the Administrative Order and to merely assess Petitioner's monetary relief."

86. The order provided for an additional conference within 45 days from its date "for the parties

to inform the Court of the status of settlement negotiations and the bankruptcy proceeding."

Security at the Facility

87. During the 1980's, the facility had security on the premises for 3 to 4 years. Since 1986, there have been no arms on the site.

88. In his inspection reports from early January 2002 through June 2002, Mr. Strickland consistently noted that the site was secured, no new or immediate concerns were noted, the evaporation ponds were locked, no significant leaks were observed at the site, the evaporators were operating, the required health physics technicians were on site, and the level of the evaporation ponds were essentially the same. He made no statement in any inspection report through June 13, 2002 about there being a lack of security at the site or that Respondent should hire security guards. See Pet. Exh. 46.

89. Just prior to June 14, 2002, the Department requested Respondent provide 24 hour security

at the site. Respondent began an interview process and hired three security officials. During the process of conducting background and drug checks, the Department issued the emergency order and hired security guards for the site. Further, Respondent restricted access to the site and began installing signs and wires in the woods outside the facility to discourage any trespass. See Respondent's Exhibit 4.

90. In an internal memorandum dated June 20, 2002, the Department noted that it had "not been

able to confirm if either of the two individuals providing security [at the site] are trained security guards." See Pet. Exh. 30. These two employees were performing security functions pending the background checks on the three individuals Respondent had previously hired to perform the security function.

91. The Department wants security guards to patrol the fence line as a temporary solution to its concerns. As a long term solution, the Department wants the radiation levels at the location of the fence line reduced and the fence moved further from the operational facility at the site.

92. Mr. Porter is in charge of the Division of Waste Management at the Department. His responsibilities include oversight of radioactive waste management at facilities in South Carolina.

Thus, it is his responsibility to provide oversight of the Starmet facility.

93. Mr. Porter inspected the facility on Friday, June 21, 2002. He was accompanied by Kevin Strickland, David E. Wilson, Jr. [Asst. Bureau Chief for Land and Waste Management] and R. Lewis Shaw, a Deputy Commissioner with the Department. They discussed the closure of the facility during their ride down and on the ride back to the Department's headquarters.

94. At the hearing, officials stated that the Department has had concerns for security at the facility, particularly since the disaster in New York City on September 11, 2001. The Department is fearful that some of the materials located at this facility may be used in the making of "dirty bombs." ⁽⁹⁾

95. There is no requirement in Respondent's license or in the regulation which requires Respondent to maintain armed guards at the site.

96. The Department never issued a directive by memo, letter or verbally discussed with Respondent its desire that the Respondent maintain armed guards at the facility prior to early June 2002.

97. Respondent has ordered alarms for the exterior doors at the site. Further, it has four monitors which allow its employees inside to monitor activities outside the facility. The receptionist, among other duties, is required to continuously review the monitors.

Water Sampling at the Monitoring Wells and Ponds

98. On February 15, 2001 and March 26, 2001 the Department conducted split sampling with

Respondent at wells # 1, # 2 and # 3 and at the sumps for the evaporation ponds. ⁽¹⁰⁾ The samples were sent to General Engineering Laboratories in Charleston, South Carolina for testing. After reviewing the results of the testing, the Department prepared an internal memorandum on April 22, 2002. The Department determined that the total uranium concentration in sample wells #2 and # 3 had greatly increased between the two dates. Both these wells are closer to the evaporation ponds and the DU building. Further, the Department determined that there was an increased uranium concentration in the collection sump and attributed it to the fire at the ponds in 2001 which caused damage to the liners.

99. The Department concluded that uranium contamination from the ponds had leaked out and

had contaminated both monitoring wells and had possibly contaminated groundwater beyond the two monitoring wells. However, the Department determined that no sampling to determine the boundary of the potential contamination spread was feasible at the time. See Pet. Exh. 47 for a drawing of the site and its outside boundary lines and for the water tests.

100. On April 24, 2002, a second round of sampling was performed at the facility. On this occasion, samples were taken at groundwater monitoring wells # 1, # 2 and # 3, as well as of soil near the wells. Also, water samples were taken from the evaporation ponds, from the NPDES outfall and from Gant Mill Creek upstream of the site.

In its written memo dated June 21, 2002, the Department determined that the sampling collected in April 24, 2002, as compared to those collected on March 26, 2002, evidenced a decrease in uranium concentration. Further, the Department determined that the concentrations in well # 1 remained relatively consistent. The Department recommended a third round of testing to confirm the concentration of uranium in each well. See Pet. Exh. 71. However, no additional water sampling tests from either the groundwater monitoring wells, the ponds or Gant Mill creek were introduced into the record.

101. As of June 14, 2002, the Department had not provided copies of the groundwater sampling

data to Respondent, notwithstanding requests made by Respondent to the Department for same. See Respondent Exh. 4.

102. There are different levels of uranium in the groundwater across the State of South Carolina

which occurs naturally. (Testimony of Mr. Porter).

103. The results from the samples taken by the Department are well below the maximum contaminant levels for drinking water.

Equipment/Supplies

104. The Department raised concerns that Respondent has not recently had available appropriate

equipment and supplies necessary to perform sampling of radioactive dust. However, no specific instances were offered into evidence to prove that such supplies were not available when needed.

Basis for the Emergency Order by the Department

105. According to his testimony, Mr. Shaw was informed by staff at a meeting with them on June

12, 2002 that they were going to deny the renewal of Respondent's license. Staff felt the facility needed to be decommissioned. They informed Mr. Shaw that was there was no security at the site and that there was groundwater contamination at the facility. He did not veto their decision. Further, he stated that the Department was concerned about material at the site being used as a "dirty bomb." At that meeting Mr. Shaw and staff talked about the Department issuing an emergency order.

106. On June 13, 2002, Mr. Shaw spoke with the Commissioner of the Department about the possibility of the Department issuing an emergency order. He stated that the Commissioner gave him the authority to make the final decision to issue the emergency order.

107. On June 14, 2002, Mr. Shaw discussed the concerns, including the possibility of the Department issuing an emergency order, with the chief of staff of the Governor's office.

108. On the morning of June 14, 2002, Respondent was notified by the Department that the license would not be renewed. ⁽¹¹⁾ Mr. Shaw talked via telephone with legal counsel of the Respondent on that same day about the issues concerning groundwater contamination at the site and security at the site.

109. On Friday, June 21, 2002, Mr. Shaw, together with several senior department officers with

the Department, drove from Columbia to the site and inspected it. Mr. Shaw visited the site before making a decision on the emergency order.

Mr. Shaw stated that he saw no security at the site and that if the facility doesn't have resources to provide such, it is a threat to the environment. He characterized the facility as being in "general disrepair" with "very dangerous material on site." Further, he stated that Respondent was acting irresponsibly in managing the company."

Mr. Shaw stated that the emergency order was issued because of the general condition at the facility, the numerous conditions of non-compliance at the facility and because he felt the groundwater was contaminated.

110. On Monday, June 24, 2002, Mr. Shaw made the decision to issue the emergency order. Again, he spoke with the chief of staff at the Governor's office and with Gen. Siegfried, the director of Homeland Security for South Carolina. Gen. Siegfried then "alerted SLED [State Law Enforcement Division], the FBI [Federal Bureau of Investigation and the Highway Patrol [Department of Public Safety]."

111. Mr. Shaw noted that the Department felt there were continuing uncontrolled releases at the

site and the only choice was to have the taxpayers clean it up. He felt that giving Respondent a five year window to clean up the site was unacceptable.

112. Further, Mr. Shaw stated that he did not become aware of the groundwater contamination

until June 2002. He stated that he believes staff when they tell him that there is groundwater contamination.

113. Mr. Shaw was not aware when he signed the emergency order that over 300,000 pounds of

UF4 had been shipped off site. However, he noted that was of no concern since there was still too much waste on site.

114. Mr. Shaw stated that it was the "pattern of behavior" [of Respondent] and the groundwater

contamination on site and at the fence line that caused him to decide to issue the emergency order.

He opined that there were "too many broken promises" [by Respondent].

115. Mr. Shaw was not aware of any terrorist threats at the location and had no evidence that

water from the pond(s) were leaking into the groundwater.

116. The Department has been monitoring the site frequently over the last two years.

Telephone Conference with the parties on June 21, 2002

117. The court held an additional telephone conference with the parties on June 20, 2002. It became apparent to the court that the issues addressed in the case filing could not be resolved through negotiation between the parties and the matter needed to be set for an expedited hearing on

the merits. At the conclusion of the conversation, the court set the hearing for a day certain on August 14, 2002.

118. During the conversation with the parties, the Department did advise the court that there was

an issue concerning security at the facility and there might be a need for an emergency order. During the conversation Respondent refuted the security concern raised by the Department.

119. During that conference call, there was no request for any emergency relief from the court nor

was there any mention that the Department might issue an emergency order.

120. No further request having being filed with this tribunal for any emergency or injunctive relief, the court was awaiting the trial on the issues which was to begin on the morning of August 14, 2002.

Emergency Order

121. On June 25, 2002, Deputy Commissioner R. Lewis Shaw issued the above mentioned Emergency Order on June 25, 2002. The Emergency Order gave:

• A history of the previous inspections as outlined in the Department's Administrative Order of October 29, 2001;
• A recitation of the Consent Order executed by the Department on June 19, 2001 with the violations agreed to therein by both parties hereto;
• A recitation concerning the appeal by Respondent and the request for review by this tribunal of the Department's Administrative Order dated October 21, 2001, which request by transmitted by the Department to the Division on November 21, 2001;
• The history of the requested injunctive relief the Department had sought in December 2001 before the Division;
• The Consent Order agreed to by the parties and approved by this tribunal on December 20, 2001;
• The bankruptcy filing on March 26, 2002 by Respondent;
• The Order by this tribunal dated April 30, 2002 wherein this court retained jurisdiction over the appeal [since this was an enforcement action and not subject to the stay in the Bankruptcy filing].

122. The Emergency Order further states that the conditions at the facility "have continued to deteriorate, additional serious environmental and public safety concerns have arisen, and Starmet [Respondent] has made very little progress in reducing the inventory of radioactive materials on the Site as consented to and ordered in the December 20, 2001, ALJ [Administrative Law Judge] Consent Order."

123. Thereafter, in subparagraphs 20. a. through 20. j., the Emergency Order notes:

• Respondent has failed to comply with the ALJ order which required timely shipments of radioactive materials offsite;
• The recent sampling of groundwater monitoring wells adjacent to the evaporation ponds showed contamination and a release of uranium and possibly other constituents which came from the pond area;
• The ineffectiveness of the evaporator coolers;
• A failure of Respondent to comply with the Consent Order of June 19, 2001 by failing to commence or complete an assessment and remediation of all outside areas;
• The potential for continuing exposure of radiation to the public by Starmet's failure to move the fence and its failure to establish a security patrol along the fence line during the interim;
• Inadequate security at the facility by its failure to employ twenty-four hour security staff to prevent theft--that such is a threat to "Homeland Security" because the radioactive materials on site could be used to make what is commonly referred to as a "Dirty Bomb;"
• Respondent's failure to secure, store and label drums properly;
• Respondent's violated the December 2001 Consent Order of the ALJ by failing to to ship 40,000 pounds of UF4 off-site prior to January 15, 2001;
• Respondent's violation of the June 2001 Consent Order by significantly failing to reduce its inventory by 25 % by December 18, 2001;
• Respondent violated the December 2001 Consent Order of the ALJ by failing to ship off 1,500,000 pounds of radioactive materials by February 28, 2002;
• Respondent's failure to provide to the Department a good estimate of the radioactive materials on site;
• Improper storage of wastes from its facility in Concord, Massachusetts;
• Respondent's failure to provide 72 hours notification of all shipments of radioactive materials to the facility as required by the ALJ Consent Order and the license.

124. Further, the order provided that Respondent had repeatedly received equipment and licensed

material without prior Department authorization.

Interlocutory Order

125. After the parties had presented all their evidence and made their closing arguments at the hearing, the court recessed on the evening of July 2, 2002. That same evening the court announced on the record an interlocutory order which would be controlling pending further order, the terms of which were provided to the parties after the hearing concluded. Those terms are:

• All processing, receiving, shipping, recycling, and treatment activities at Starmet shall cease immediately pending further order.
• Releases of wastewater to the evaporation ponds and continued operation of the evaporator coolers shall cease pending further order.
• All systems such as the reduction furnaces, derby processing equipment including tanks containing nitric acid, counterweight plating line, and the ventilation system shall be properly neutralized immediately or contained by Starmet pending further order.
• Any authorized representative or employee of the Department or the EPA, including its contractors, may at reasonable times enter the Starmet facility, inspect the property, review test results, inspect and obtain samples, and perform response and interim remedial measures. Starmet shall comply with any reasonable request by the Department to facilitate any testing, inspection or interim remedial measure at the property. The court must be notified by the Department within 24 hours of any remedial action taken.
• Starmet personnel, including officers, agents, and employees are authorized access to the facility at all times, including real and personal property, together with all records. They shall be the custodians of all records at the facility pending further order. However, the Starmet personnel, including it officers, agents, and employees are limited in all their actions and activities at the facility as provided herein, pending further order.
• The Wackenhut Corporation shall continue to provide security guards at the facility twenty-four hours a day pending further order.
• Starmet personnel, including officers, agents, and employees, shall not remove any personal property or records from the site pending further order.
• The Department's emergency order, issued on June 25, 2002, is hereby vacated, and the stay issued by this court earlier this week concerning that Order is hereby lifted.

Radiation Concerns

126. Subsequent to the issuance of the emergency order, the Department hired David Hearnsberger, a health physicist and employee of Earthtec, who lives in San Antonio, Texas. He videotaped the facility on June 27, 2002. Two days later on June 29 he conducted a radiological survey at the facility. Mr. Hearnsberger was qualified by the court as an expert witness in the area of health physics.

127. During the hearing the videotape was played as Mr. Hearnsberger offered testimony. Further, Mr. Hearnsberger offered testimony concerning his survey dated June 29, 2002. See Petitioner's Exhibit 72.

The following is a listing of some of the concerns addressed by Mr. Hearnsberger

• Failure of Respondent to have an air sampling system at the facility.
• Drums or tanks were stacked excessively high.
• Certain barrels were not labeled.
• A lack of positive control in certain contaminated areas.
• Door to the jolter room was slightly open.
• Yellow markings on the floor indicating contaminated areas were not marked well.
• Sign to a room was turned backward.
• Signs of deterioration in the ceiling.
• Multiple labels on a barrel.
• Failure to have fire fighting equipment close to barrels containing uranium chips.
• Potential for leakage from the ponds.
• Fire suppression system not operable.
• Drums in poor condition.
• Drums not vertically aligned.
• Contamination of the soil outside the building.
• Radiation in the soil by the evaporator cooler.
• Condition of the liners in the ponds.
• Rainwater in the ponds causing them to overflow.

128. Mr. Hearnsberger has never been to the facility when it was "in operation," has never seen the employees performing their duties and is not familiar with their training. Further, he does not know the quantities of radioactive material in any of the drums nor does he know which drums have radioactive material. Further, while he was present some ventilation systems were operational.

129. Mr. Hearnsberger agreed that some of his recommendations are not requirements of the license or the regulation but that they are good management tools to practice. He agreed that the Regulatory Guide published by the U. S. Atomic Energy Commission does not delineate radiation levels for contamination levels nor does the Nuclear Regulatory Commission set such. See Respondent's Exhibit 25.

130. Further, Mr. Harnsberger, as well as Mr. Shaw and other officials of the Department, were

concerned about excessive radiation near the fence which enclosed the facility

DISCUSSION

The Department is the agency within the State of South Carolina which is authorized and

directed to implement the provisions of the Atomic Energy and Radiation Control Act (AERCA), S.C. Code Ann. § 13-7-10 et seq. (1976 & Supp. 2001), the Comprehensive Environmental Response Compensation and Liability Act (CERCLA), 42 U.S.C. § 9601 et seq., the South Carolina Hazardous Waste Management Act, S.C. Code Ann. § 44-56-10 et seq., and the South Carolina Pollution Control Act, S.C. Code Ann. § 48-1-10 et seq. (1987 & Supp. 2001). Further, it must apply the provisions of S.C. Code Ann. Regs. 61-63. Pursuant to its statutory and regulatory authority, the Department issued Respondent the license which controls Respondent's uranium processing activities at the facility in Barnwell County, South Carolina.

As set forth in the Findings of Fact above, throughout the last several years the Department has exercised extremely tight oversight over the facility. Since the Consent Order in June 2001, it has visited the site and conducted inspections on a regular basis. As late as October 29, 2001, the Department, through the Administrative Order signed by its Commissioner, continued to police the facility, seek reduction in its waste inventory, seek additional effort by Respondent to remediate the ponds and seek a civil penalty in the amount of $ 45,000.00.

After that Administrative Order was signed, Respondent met with the Department's Deputy Commissioner to attempt a resolution of some of the issues addressed in the Order. In late December 2001, Respondent and the Department resolved some of the issues concerning Respondent's waste inventory, and Respondent paid the civil penalty. Thereafter, to the court's best knowledge, good faith negotiations continued between the parties until the Department issued its emergency order on June 25, 2002 which closed down the facility.

The Department based its rationale for the closure of the facility by stating that there was groundwater contamination at the site, there was a lack of any financial assurance by Respondent that it could address the environmental issues at the site, and that there were "the multitude of environmental, public health and safety, and employee health and safety concerns" which have been brought to Respondent's "attention approximately two years ago." As Mr. Shaw stated at the hearing, it was a "pattern of behavior" and "groundwater contamination" together with Respondent's inability "to manage the material" which caused him to issue the emergency order.

The emergency order alleges that Respondent violated provisions of the order issued by this tribunal in December 2001 and the Administrative Order of the Department dated October 29, 2001. A comparison of the emergency order with the Department's Administrative Order of October 29, 2001, however, reveals that almost all the issues and concerns raised by the Department in the emergency order were raised previously and are part of the contested case before this tribunal. All those issues were and are still open for a hearing on the merits on August 14, 2002. The only additional concerns raised in the emergency order were the lack of security at the facility and the potential groundwater contamination.

With respect to the security issue, even though there is no requirement in the license nor in the regulation which requires security guards be employed twenty-four hours each day at the facility, nor is there any evidence in the record showing this was an immediate concern to the Department until several months ago, the court agrees that there is sufficient justification for Respondent to hire and maintain them pending the resolution of this matter on the merits. In fact, the record shows that Respondent has already hired security guards, and they should have completed their background checks and be available for full time employment by the time this order is issued.

Further, the issue of groundwater contamination was not an issue of any great concern until April or May, 2002. Only then were several samples taken by the Department. The results from these samples show that the levels of contaminants are well below the maximum contaminant levels for drinking water. Accordingly, this issue is insufficient to show that an emergency existed.

As for the other issues raised in the emergency order, the issue concerning radiation at the fence was first addressed more than a year ago and has been the subject of ongoing discussions between the parties. There is simply no evidence that the fences on the property, which are located quite a distance from the public highway, are approached by citizens in the community. Therefore, any risk to the community would be minimal. The issues concerning leakage from the liners have been an ongoing concern since the fire occurred on February 21, 2001 and will be addressed at the contested case hearing. The financial considerations have been known to the Department at least since the conference between Mr. Shaw and legal counsel for Respondent on December 5, 2001. The labeling of drums, storage of drums, waste on site and good housekeeping practices are issues of which the Department has been aware for one or more years. Finally, the expert witness for the Department made an examination of the site after the emergency order was issued and did not express an opinion that the contamination levels inside the facility were sufficient to cause danger or harm to Respondent's employees.

The Department simply failed to show any discharge or action at the facility which creates an immediate risk of harm to the citizens in the community or the employees at the plant. The emergency order consists only of a general conclusion that such a risk exists. It gives no specific history of any discharges or pollution, nor was such evidence produced at the hearing.

This court must apply the law to the facts and evidence presented to it at the hearing. Although this court may have some concerns about the viability of this company to continue its mission and comply with the license and regulation, that is a matter that will be considered in more depth at the contested case hearing on the merits. The only issue properly before the court in this matter is whether there existed an emergency at the Respondent's site on June 25, 2002 which mandated the Department to close the site down and start a decommissioning plan. For all of the above reasons, this court finds that the emergency order was improvidently issued, as there was little or no evidence placed into the record by the Department showing any imminent danger or condition at the facility which could reasonably be expected to endanger the health and safety of the public, or to contaminate the environment.

CONCLUSIONS OF LAW

Based upon the above Discussion and Findings of Fact, I make the following conclusions:

Jurisdiction

1. Pursuant to S.C. Code Ann. § 1-23-500, et seq. (Supp. 2001), an Administrative Law Judge must hear all contested matters involving the Department as a party and issues the final decision in the contested case. Brown v. S.C. Dept. of Health and Envtl. Control, ___ S.C. ___, 560 S.E.2d 410 (2002).

2. S.C. Code Regs. 61-72 § 201(A), authorizes any person to request an adjudicatory hearing by filing a petition following receipt of an administrative order.

3. S.C. Code Ann. Regs. 61-72 § 101(I) defines "Order" as:

A written document, other than a license, which embodies a final staff decision imposing sanctions or requirements. It may be, but need not be, denominated an "Order." It includes, but is not limited to, administrative orders so denominated; a staff decision to deny a license; or any decision from which appeal may be taken pursuant to other applicable law or regulation.

An emergency order issued pursuant to S.C. Code Ann. § 13-7-50 or S.C. Code Ann. § 48-1-290 (1987) is an "order" within the meaning of Regs. 61-72 § 101 (I).

4. Pursuant to S. C. Code Ann. § 1-23-630 (Supp. 2001), an Administrative Law Judge has the same power as do circuit judges to issue remedial writs necessary to give effect to its jurisdiction. S.C. Code Ann. § 1-23-650 (Supp. 2001) requires the Division to promulgate rules of procedure governing practice and procedure before the Division. ALJD Rule 1 provides that the Rules of Procedure of the Division govern all proceedings before the Administrative Law Judge Division, in which the right to a hearing:

1. is provided by the Administrative Procedures Act;

• is specifically required by other statutes or regulations; or
• Is required by due process under the South Carolina or United States Constitutions.

5. The S. C. Constitution at Art. I, § 22, S.C. Code Ann. § 1-23-320(a) (Supp. 2001) and S.C. Code Ann. § 1-23-370 (c) (1976), require that all parties be afforded an opportunity for a hearing where private rights are affected.

6. Accordingly, the Administrative Law Judge Division has subject matter jurisdiction in this

case pursuant to Article I, § 22 of the South Carolina Constitution; the South Carolina Administrative Procedures Act; S.C. Code Ann. Regs. 61-72 and the Rules of Procedure of the Division.

Title 13

7. Chapter 7 of Title 13 of the S.C. Code of Laws is titled "Nuclear Energy."

8. S.C. Code Ann. § 13-7-10 (8) (1976) defines "emergency" as "any condition existing outside the bounds of nuclear operating sites owned or licensed by a Federal agency and any condition existing within or outside of the jurisdictional confines of a facility licensed by the Department arising out of the handling or the transportation of by-product material, source material or special atomic energy materials, as hereinabove defined, and hereinafter referred to as radioactive material, which is endangering or could reasonably be expected to endanger the health and safety of the public, or to contaminate the environment."

9. Under S.C. Code Ann. § 13-7-50, whenever the Department determines that an emergency exists which requires immediate action to protect the public health and safety, it may issue an order without notice or hearing which recites the existence of the emergency and why such action is taken. Any person to whom such order is issued may request a hearing with thirty days. The order may be continued, modified or revoked with 30 days after the hearing.

Title 48

10. Title 48 of the S. C. Code of Laws is titled "Environmental Protection and Conservation" and

Article 1 thereunder is titled the "Pollution Control Act."

11. S.C. Code Ann. § 48-1-10 (1976) sets forth definitions under the Pollution Control Act. Subsection (5) defines "industrial waste" as "liquid, gaseous, solid or other waste substance or a combination thereof resulting from any process of industry, manufacturing, trade or business of from the development of any natural resources." Subsection (7) defines "Pollution" as " (1) the presence in the environment of any substance, including, but no limited to, sewage, industrial waste, other waste, air contaminant, or any combination thereof in such quantity and of such characteristics and duration as may cause, or tend to cause the environment of the State to be contaminated, unclean, noxious, odorous, impure or degraded., or which is, or tends to be injurious to human health or welfare; or which damages property, plant, animal or marine life or use of property; or (2) the man-made or man-induced alteration of the chemical, physical, biological and radiological integrity of water."

12. S.C. Code Ann. § 48-1-290 (1987) provides that the Department may issue an emergency

order, with concurrent notice to the Governor, without notice or hearing, when it finds that an emergency exists requiring immediate action to protect the public health or property. The order is effective immediately. On application made, the affected party shall be afforded a hearing within 48 hours wherein the order may be continued in effect, revoked or modified. The emergency order shall be revoked as soon as all conditions or operations change to the extent that an emergency no longer exists. See Regs. 61-72, § 606.

Other

13. Basic administrative law principles establish that an agency bears the burden of proof in an enforcement action. See Peabody Coal Co. v. Ralston, 578 N.E.2d 751 (Ind. Ct. App. 1991); David E. Shipley, South Carolina Administrative Law 5-79, -80 (1989). In the enforcement of Administrative Orders, including emergency orders, the Department has the burden of proof. Thus, the Department must show to this tribunal that an emergency situation existed at the facility on June 25, 2002, the date it issued the emergency order, or at a minimum not later than the conclusion of the hearing on July 3, 2002.

14. In South Carolina, the party having the burden of an issue in a civil matter must carry it by a preponderance of the evidence. Smith v. Smith, 194 S.C. 247, 9 S.E.2d 584 (1940). The South Carolina Supreme Court has consistently held that the standard of proof to be applied by the trier of fact in administrative proceedings is the "greater weight of the evidence" or the "preponderance of the evidence," unless there is an allegation of fraud or a statute or a court rule requiring a higher standard. Cloniger v. Cloniger, 261 S.C. 603, 193 S.E.2d 647 (1973); Parr v. Parr, 268 S.C. 58, 231 S.E.2d 695 (1977); Hill v. Jones, 255 S.C. 219, 178 S.E.2d 142 (1970); Walsh v. U. S. Rubber Co., 238 S.C. 411, 120 S.E.2d 685 (1961). The weight to be accorded the testimony is solely within the province of the trier of fact. Hill v. Jones, supra.

15. An "emergency" within the meaning of a statute authorizing the issuance of an emergency order affecting a facility contemplates an unforeseen, sudden, or unexpected set of circumstances calling for immediate action. In the Matter of Emergency Redirection of Solid Waste from Atlantic County of the Cape May County Landfill, 275 N.J. Super. 1, 645 A.2d 144 (N.J. Super. A.D. 1994).

16. The Department failed to prove by a preponderance of the evidence that an emergency existed which required immediate action to protect the public health or welfare. Its rationale and basis for its decision to issue the emergency order are, almost without exception, the same issues that are being litigated in the pending contested case in which the Department is a party. Barring the existence of a legitimate emergency, Respondent has the right to have those issues litigated on the merits in the context of a contested case hearing.

To justify the issuance of an emergency order, the Department must show an imminent risk of harm to the general public and to the employees at the facility. As discussed above, none of the evidence presented at the hearing indicates the existence of such a risk. Accordingly, I find that the emergency order issued by the Department on June 25, 2002, was improvidently granted and must

be vacated. The issues addressed by the emergency order remain to be determined in the contested case proceeding which will commence on August 14, 2002.

Although I find that the emergency order was improvidently granted, I further find that there is justification for the Department's requirement that the Respondent employ security guards at the facility pending resolution on the merits of all outstanding issues in this matter. Therefore, in the exercise of the remedial powers granted an Administrative Law Judge pursuant to S.C. Code Ann. § 1-23-630 (Supp. 2001), Respondent will be required to employ security guards as set forth below.

ORDER

Accordingly, it is hereby

ORDERED that the emergency order issued by the Department on June 25, 2002 and all previous orders of this tribunal in this matter are hereby vacated; and it is hereby

ORDERED that the Department shall no longer maintain security guards at the site; and it is further

ORDERED that Respondent, upon receipt of this order and upon the employment of security guards as set forth herein, may commence its activities and business at its facility in Barnwell, South Carolina; and it is further

ORDERED that Respondent will hire or employ armed security guards, maintaining at a minimum one security guard on the site during all twenty-four hours each day and on all seven days of each week. This shall be a condition of the license; and it is further

ORDERED that, other than as set forth above, this Order is not to be construed as any limitation on or enlargement to the provisions of the license;

AND IT IS SO ORDERED.

______________________________________

Marvin F. Kittrell

Chief Administrative Law Judge

Columbia, South Carolina

July 19, 2002

1. Presently, there is a cease and desist order issued by the State of Massachusetts against Starmet Corporation to refrain from any further shipments of radioactive materials to the Concord, Massachusetts facility. At this point, no bankruptcy action has been filed in the State of Massachusetts.

2. UF6 is a low level radioactive by-product of the enrichment of uranium. The United States Government has over one billion pounds of UF6 and sells from time to time to Respondent.

3. Respondent first entered into a contract with the Department of Energy in 1989 to process derbies. They are the only producer of the derbies in the United States.

4. Grey water consisted of laundry water, hand wash basin water, and shower water. (Which may be contaminated by contact with radioactive substances.)

5. Depleted Uranium 238 is the only radioactive isotope in the evaporation ponds.

6. "Legacy waste" is that material which is currently scheduled for disposal regardless of whether it was originally intended to be a waste material or whether it was accumulated as a potential recycled material or potentially reusable material.

7. The report noted that the Department had provided authorization to Respondent to relocate the fence line by August 11, 2000 due to radiation concerns.

8. Essentially, on pages 1-3 of the order, the violations were outlined in paragraphs 3 through 10. They consisted of the Respondent's failure to: adequately implement its radiation protection program, to maintain good housekeeping practices, to adequately post areas contrary to its radioactive material license, to secure controlled areas from unauthorized public access, to maintain potential doses to members of the public, to preclude licensed radioactive material from uncontrolled office areas, to safely secure and store stacked drummed liquid waste and adequately label and provide isotopic information, and to implement an adequate Safety Review Program by not maintaining records of its radiation protection program.

9. Mr. Porter defined a "dirty bomb" as a conventional bomb which has radioactive materials.

10. Excellent pictures of the sumps are found as an attachment to the Inspection Report dated July 26-28, 2000. See Pet. Exh. 44.

11. S. C. Code Ann. § 13-7-40 (K) (Supp. 2001) provides that a hearing must be provided to a party when the Department decides to grant, suspend, amend or revoke a license.