SC Administrative Law Court Decisions

The South Carolina Department of Health and Environmental Control (DHEC or Department) issued Administrative Order 00-0122-UST (AO), effective December 13, 2000, against Respondent Walter F. Green and Walter F. Green d/b/a Value Mart 2 and Sampit Food Mart a/k/a Value Mart 1, alleging violations of the State Underground Storage Tank Control Regulations and the State Underground Petroleum Environmental Response Bank Act. The Department assessed a civil penalty for the violations and requested the Respondent to remit past due tank registration fees. Walter Green objected to issuance of the AO and sought a contested case hearing on the matter. The contested case was heard at the offices of the Administrative Law Judge Division on May 2, 2001.

The issue before the Court is whether DHEC properly issued Administrative Order Number 00-0122-UST.

Pursuant to S.C. Code Ann. § 44-2-140 (Supp. 2000), the Department, through its Administrative Order, assessed the Respondent monetary penalties for violating the State Underground Petroleum Environmental Response Bank Act and the State Underground Storage Tank 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 observed the witnesses and exhibits presented at the hearing and closely passed upon their credibility, taking into consideration the burden of persuasion of the parties, I make the following Findings of Fact by a preponderance of the evidence:

1. Respondent Green owns underground storage tanks (USTs) as defined in the State Underground Petroleum Environmental Response Bank (SUPERB) Act which are regulated by the Underground Storage Tank Regulations. See S.C. Code Ann. §§ 44-2-10 et seq. (Supp. 2000); 25A S.C. Code Ann. Regs. 61-92.280 (Supp. 2000). The USTs are located at two facilities: Value Mart 2 (UST Permit # 03746) and Sampit Food Mart a/k/a Value Mart 1 (UST Permit # 16263). Value Mart 1 is located at 1461 Saint Delight Road in Georgetown County, while Value Mart 2 is located at 11768 S. Fraser Street in Georgetown County.

2. The Department inspected the Respondent's USTs at both locations on December 31, 1999, and on March 17, 2000. Based on the Department's inspection of the USTs and subsequent file review of Sampit Food Mart a/k/a Value Mart 1, the Department found that the Respondent neglected to provide adequate release detection methods for those tanks in violation of 25A S. C. Code Ann. Regs. 61-92.280.40(a) (Supp. 2000). The Department also cited the Respondent for failing to have the cathodic protection system at Value Mart 1 inspected by a qualified tester every three years, as required under Regulation 61-92.280.31(b) (Supp. 2000). Finally, the Department found that the Respondent failed to demonstrate financial responsibility for taking corrective action and for compensating third parties for bodily injury and property damage caused by accidental releases arising from the operation of his underground storage tanks for the Value Mart 1 location, in violation of Regulation 61-92.280.93(a) (Supp. 2000).

3. The Department's inspection of the USTs at Value Mart 2 and subsequent file review revealed that the Respondent had USTs that had been temporarily out of use for more than twelve (12) months. Those tanks had not been removed from the ground or filled with an inert material. Therefore, the Department found that the Respondent failed to properly abandon the USTs at that location in violation of 25A S.C. Code Ann. Regs. 61-92.280.70(c) (Supp. 2000). The Department also found that the Respondent failed to demonstrate financial responsibility for taking corrective action and for compensating third parties for bodily injury and property damage caused by accidental releases arising from the operation of the USTs at Value Mart 2 in violation of Regulation 61-92.280.93(a) (Supp. 2000).

4. The Department's proof of the above violations was presented by the testimony of only one witness, Joe W. Gladney, who set forth that the Respondent was cited for the above violations and that to Mr. Gladney's knowledge the Respondent had not subsequently come into compliance. The Respondent did not dispute any of the allegations against him. In fact, his attorney, Robert L. Lumpkin, Jr., stipulated that the Respondent owned and was responsible for the USTs in question. Specifically, the Respondent set forth that he intended to comply with the Department's request that he remove the tanks and test the soil. I, therefore, find that the Respondent committed the violations alleged in paragraphs 2 and 3, supra.

5. The Department issued Administrative Order Number 00-0122-UST against the Respondent on December 13, 2000, ordering that he correct the deficiencies identified in the AO and perform certain activities within thirty days of the date of the Order. The Administrative Order also required that the Respondent pay a civil penalty of $15,340.00 for the above violations. Furthermore, the Department ordered that the Respondent pay past due tank registration fees in the amount of $1,815.00.

Since the issuance of the Administrative Order and prior to the hearing into this matter, the Respondent has paid the past due tank registration fees in the amount of $1,815.00 and has submitted proof that the tanks located at Sampit Food Mart a/k/a Value Mart 1 are empty. However, the Respondent contends that his financial condition has rendered him unable at the present time to perform the remainder of the activities ordered in the AO, a position the Department has apparently considered in this case. The Department contends, on the other hand, that the Respondent was responsible for the USTs in question and that although he had complied with a portion of the Administrative Order, his failure to fully comply with the AO was the result of sheer procrastination.

The Department set forth that it followed its standard penalty schedule to establish the penalty range for violations of the Underground Storage Tank Control Regulations in accessing the $15,340.00 fine in this case. However, that schedule was never introduced into evidence nor was any evidence introduced explaining how or why the Department reached its determination that a $15,340.00 was appropriate.

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

General Findings

1. Pursuant to the Administrative Procedures Act, the Administrative Law Judge Division has jurisdiction to conduct contested case hearings concerning matters governing underground storage tanks. See S.C. Code Ann. §§ 1-23-310, et seq. (1986 and Supp. 2000); S.C. Code Ann. §§ 44-2-10, et seq. (Supp. 2000). The Department issued Administrative Order Number 00-0122-UST to the Respondent, in which a civil fee was assessed for violations of the SUPERB Act and its accompanying regulations.

2. In weighing the evidence and deciding a contested case on the merits, the Administrative Law Judge must make findings of fact and conclusions of law by a preponderance of the evidence. Anonymous (M-156-90) v. State Board of Medical Examiners, 329 S.C. 371, 496 S.E.2d 17 (1998). The burden of proof rests upon the Petitioner in this case. Id.

3. The Department has regulatory authority over underground storage tank systems pursuant to the SUPERB Act. See S.C. Code Ann. §§ 44-2-10 et seq. (Supp. 2000). Pursuant to that authority, DHEC has promulgated regulations addressing underground storage tank control, including their proper closure. See 25A S.C. Code Ann. Regs. 61-92.280 (Supp. 2000).

4. Regulation 61-92.280.31(b) provides, in pertinent part, as follows: "[a]ll UST systems equipped with cathodic protection systems must be inspected for proper operation by a qualified cathodic protection tester . . . ." 25A S.C. Code Ann. Regs. 61-92.280.31(b) (Supp. 2000).

5. Section 280.40(a) of Regulation 61-92 sets forth, in relevant part:

(a) Owners and operators of new and existing UST systems must provide a method, or combination of methods, of release detection that:

(1) Can detect a release from any portion of the tank and the connected underground piping that routinely contains product;

(2) Is installed, calibrated, operated, and maintained in accordance with the manufacturer's instructions, including routine maintenance and service checks for operability or running condition; and

(3) Meets the performance requirements in Sections 280.43 or 280.44, with any performance claims and their manner of determination described in writing by the equipment manufacturer or installer.

25A S.C. Code Ann. Regs. 61-92.280.40(a) (Supp. 2000).

6. Regulation 61-92-280.70(c) provides, in part, that:

When an UST system is temporarily closed for more than 12 months, owners and operators must permanently close the UST system if it does not meet either performance standards in Section 280.20 for new UST systems or the upgrading requirements in Section 280.21, except that the spill and overfill equipment requirements do not have to be met. Owners and operators must permanently close the substandard UST systems at the end of this 12-month period in accordance with Sections 280.71-280.74, unless the Department provides an extension of the 12-month temporary closure period.

25A. S.C. Code Ann. Regs. 61-92.280.70(c) (Supp. 2000).

7. Section 280.93(a) of the Underground Storage Tank Control Regulations, entitled "Amount and Scope of Required Financial Responsibility," sets forth that "[o]wners or operators of petroleum USTs must demonstrate financial responsibility for taking corrective action and for compensating third parties for bodily injury and property damage caused by accidental releases arising from the operation of petroleum USTs . . . ." 25A S.C. Code Ann. Regs. 61-92.280.93(a) (Supp. 2000).

Mitigation

8. 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. To that end, an Administrative Law Judge must 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).

In the present case, although the Respondent violated provisions of 25A S.C. Code Ann. Regs. 61-92.280 (Supp. 2000) by not properly maintaining the USTs on his property, the evidence introduced at the hearing did prove that Mr. Green has made strides to comply with Administrative Order Number 00-0122-UST by doing the following:

a. Submitting evidence that the tanks located at Sampit Food Mart a/k/a Value Mart 1 are empty; and

b. Remitting the past due tank registration fees in the amount of $1,815.00.

Furthermore, I find the Respondent's position concerning his inability to provide the Department with a Certificate of Financial Responsible to be persuasive.

Penalties9. Based upon the testimony submitted at the hearing into this matter, I find that the following penalties should be accessed for the violations found above:

a. For Sampit Food Mart a/k/a Value Mart 1 (UST Permit #16263):

i. $600.00 for violation of Regulation 61-92.280.31(b);

ii. $1,000.00 for violation of Regulation 61-92.280.40(a); and

iii. $600.00 for violation of Regulation 61-92.280.93(a).

b. For Value Mart 2 (UST Permit #03746):

i. $1,000.00 for violation of Regulation 61-92.280.70(c); and

ii. $600.00 for violation of Regulation 61-92.280.93(a).

However, if the Respondent can produce a satisfactory Certificate of Financial Responsibility before the fine in this matter is to be remitted under the terms of this Order, that portion of the penalty listed above for violation of Regulation 61-92.280.93(a) is to be deemed satisfied.

Based upon the Findings of Fact and Conclusions of Law, it is hereby ORDERED that a penalty of Three Thousand Eight Hundred and no/hundredths ($3,800.00) Dollars is imposed upon the Respondent to be paid to the Department within sixty (60) days of the issuance of this Order.

IT IS FURTHER ORDERED that the Respondent produce evidence to the Department that he has properly abandoned and conducted complete site assessment reports for the tanks located at Sampit Food Mart a/k/a Value Mart 1 and Value Mart 2.

AND IT IS SO ORDERED.

____________________________________

Ralph King Anderson, III

Administrative Law Judge

September 13, 2001

Columbia, South Carolina