SC Administrative Law Court Decisions

The South Carolina Department of Health and Environmental Control (DHEC or Department) issued Administrative Order No. 00-0555-UST (AO), effective November 14, 2001, against Respondent Melton's Used Cars, Inc., a/k/a Melton Lease Cars, Inc. (Melton), finding violations of the State Underground Storage Tank Control Regulations (25A S.C. Code Ann. Regs. 61-92 (Supp. 2000)) and the State Underground Petroleum Environmental Response Bank Act (S.C. Code Ann. § 44-2-10 et seq. (Supp. 2000)). The Department assessed a civil penalty for the violations and requested the Respondent to remit past due tank registration fees. Respondent Melton objected to the issuance of the AO and sought a contested case hearing on the matter. The contested case was heard on June 25, 2002, at the offices of the Administrative Law Judge Division in Columbia, South Carolina.

The issue before the Court is whether DHEC properly issued Administrative Order No. 00-0555-UST.

Pursuant to S.C. Code Ann. § 44-2-140 (Supp. 2000), the Department through its AO, assessed the Respondent monetary penalties for violating the State Underground Petroleum Environmental Response Bank Act (SUPERB Act) and the State Underground Storage Tank Regulations (the 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 Melton owned four underground storage tanks (USTs) as defined in the SUPERB Act which are regulated by the Regulations. The USTs were located at 8880 Asheville Highway, Spartanburg, Spartanburg County, South Carolina and held Facility ID # 08494. The USTs were transferred to Melton on October 4, 1989, and have never been used by the Respondent. In fact, no pump was ever attached to the USTs.

An owner of USTs is required to pay an annual renewal fee of one hundred ($100.00) dollars per tank per year. However, the Respondent did not pay the annual registration fee for the above four tanks from1990 to 1996. Therefore, the Department charged the Respondent one hundred ($100.00) dollars per tank, for a total of four hundred ($400.00) dollars a year, from 1990 through 1996 when the tanks were properly abandoned. The Department thereafter notified the Respondent that he owned two thousand eight hundred ($2,800.00) dollars in past due registration fees for 1990 through 1996. The Respondent has not paid these past due registration fees, which are the nature of this contested case.

2. The Department contends that the Respondent failed to submit a "Tier 1" assessment report. ⁽¹⁾ The evidence submitted at the hearing did not clearly establish the chain of events leading to the Respondent's failure to submit the "Tier 1" report or what is specifically required in a "Tier 1" assessment. Nevertheless, I find as follows:

The Respondent was informed of the need to submit a "Tier 1" assessment report by the Department. The Respondent then contracted with an individual to conduct one or two soil borings in 1999, which he believed complied with the Department's assessment requirements. Afterwards, the Respondent decided to have the USTs removed from his property. The USTs at the Respondent's facility were removed on June 17, 1996. When he removed the USTs from the ground, he requested that the Department sample the ground in the open pit to insure that there was no indication of a release in the soil. When the Department failed to respond to the Respondent's request, he had the holes filled. Since the issuance of Administrative Order No. 00-0555-UST, the Respondent has agreed to perform a "Tier 1" assessment and to submit the results of the testing to DHEC.

3. The Department issued the AO against the Respondent on November 14, 2001, ordering that he correct the deficiencies identified in the AO. The Administrative Order also required that the Respondent pay a civil penalty of thirteen thousand ($13,000.00) dollars for failing to conduct the "Tier 1" assessment. Furthermore, the Department ordered that the Respondent pay past due tank registration fees in the amount of two thousand eight hundred ($2,800.00) dollars. Overall, the Department assessed the Respondent a civil penalty of fifteen

thousand eight hundred ($15,800.00) dollars.

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

1. The Department issued Administrative Order No. 00-0555-UST to the Respondent, in which a civil penalty was assessed for violations of the SUPERB Act and its accompanying Regulations. The Administrative Law Judge Division has jurisdiction to conduct contested case hearings concerning matters governing underground storage tanks pursuant to the Administrative Procedures Act. See S.C. Code Ann. §§ 1-23-310 et seq. (1986 & Supp. 2000); 25A S.C. Code Ann. Regs. 61-92 § 280.302 (Supp. 2000).

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). Under that authority, DHEC has promulgated regulations addressing underground storage tank control. See 25A S.C. Code Ann. Regs. 61-92 et seq. (Supp. 2000). Regulation 61-92 § 280.72(a) (Supp 2000) provides, in pertinent part, as follows:

Before permanent closure or a change-in-service is completed, owners and operators must measure for the presence of a release where contamination is most likely to be present at the UST site. In selecting sample types, sample locations, and measurement methods, owners and operators must consider the method of closure, the nature of the stored substance, the type of backfill, the depth to ground water, and other factors appropriate for identifying the presence of a release.

Furthermore, Regulation 61-92 § 280.62(a)(5) (Supp. 2000), entitled "Initial Abatement Measures and Site Check," provides that owners of USTs must:

Measure for the presence of a release where contamination is most likely to be present at the UST site, unless the presence and source of the release have been confirmed in accordance with the site check required by Section 280.52(b) or the closure site assessment of Section 280.72(a). In selecting sample types, sample locations, and measurement methods, the owner and operator must consider the nature of the stored substance, the type of backfill, depth to ground water and other factors as appropriate for identifying the presence and source of the release.

Therefore, when the Respondent removed the USTs, he was required to measure for the presence of a release, among other things, where the contamination was most likely to be present given nature of the stored substance.

4. S.C. Code Ann. 44-2-60(A) (Supp. 2000) provides, in relevant part, as

follows: "[T]he owner or operator shall pay to the department an initial registration fee of one hundred dollars a tank . . . . The owner or operator shall pay to the department an annual renewal fee of one hundred dollars a tank a year. . . ."

5. 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, the Respondent violated provisions of 25A S.C. Code Ann. Regs. 61-92 § 280 (Supp. 2000) by failing to determine the full extent of any possible release in accordance with a schedule established by the Department. However, though the Respondent failed to properly conduct the "Tier 1" assessment, the Department presumptively failed to inform the Respondent after he called the Department of the appropriate measures for him to take in testing the site while the pits from which the USTs had been removed were open and readily assessable.

Therefore, I find that a ten thousand ($10,000.00) dollar civil penalty should be accessed for the violations cited in Administrative Order No. 00-0555-UST. However, if the Respondent submits the "Tier 1" assessment to DHEC within the time frame set out below, the ten thousand ($10,000.00) dollar penalty will be waived.

IT IS THEREFORE ORDERED that the Respondent submit the "Tier 1" assessment to the Department within forty-five (45) days of the issuance of this Final Order and Decision. If the Respondent fails to submit the "Tier 1" assessment to DHEC within that time frame, the Respondent must pay a civil penalty of ten thousand ($10,000.00) dollars to the Department within sixty (60) days of the issuance of this Final Order and Decision.

IT IS FURTHER ORDERED that the Respondent pay past due registration fees in the amount of two thousand eight hundred ($2,800.00) dollars to the Department within sixty (60) days of the issuance of this Order.

AND IT IS SO ORDERED.

____________________________________

Ralph King Anderson, III

Administrative Law Judge

September 18, 2002

Columbia, South Carolina

1. 25A S.C. Code Ann. Regs. 61-98 § I.B.50 (Supp. 2000) defines a "Tier 1 Evaluation" as "[a] risk-based analysis where non-site-specific values based on conservative exposure factors (i.e., risk-based screening levels), potential exposure pathways, and land use are evaluated to determine appropriate actions.