05.19.2016 EPA Region III Assesses Largest Superfund Stipulated Penalty Ever By: Ryan W. Trail

The Rodale Manufacturing facility in Emmaus, Pennsylvania was added to the National Priorities List in 1991 after more than 50 years of electrical component manufacturing.  Operations at the facility included electroplating, vapor degreasing, and metal shaping, all of which involved the use of chlorinated solvents.  In 2002, Schneider Electric USA, the facility’s owner, entered into a Consent Decree with the U.S. Department of Justice (DOJ) and others for remediation of groundwater contamination at the facility.  Among other things, the Consent Decree required Schneider to operate a groundwater pump and treat system equipped with air pollution control equipment that was designed to prevent harmful emissions from the groundwater being treated to the atmosphere.  The Consent Decree also contained a stipulated penalties provision by which Schneider agreed to pay a set dollar amount for each day it was out of compliance with the Consent Decree. 

The air pollution control equipment began malfunctioning in 2008, something that Schneider did not correct until 2013 when it replaced the groundwater treatment system with a system that eliminated the need for air pollution controls.  Thus, Schneider was out of compliance with the Consent Decree for approximately 5 years.  On May 3, 2016, DOJ, EPA, and the Pennsylvania Department of Environmental Protection announced that Schneider had been assessed stipulated penalties totaling $6,868,975.  This is the largest Superfund stipulated penalty ever assessed by EPA.

Violations of the Consent Decree include Schneider’s alleged failure to maintain equipment used to collect and treat hazardous air pollutants such as trichloroethylene; failure to alert state and federal agencies of the malfunctioning air pollution control device; failure to comply with state air permitting regulations; and failure to provide records to agency officials.  Although Schneider agreed to pay the multi-million dollar penalty, it neither admitted nor denied liability for the alleged violations.

EPA’s press release announcing the Schneider penalty stated, “We will not tolerate violation of our consent decrees, especially where those violations can result in risks to public health, welfare and the environment . . . The significant penalty in this case shows that non-compliance with settlement requirements has serious consequences.” Companies involved in cleanups pursuant to Consent Decrees with stipulated penalty provisions should take note.