Appendix — Mt. Hope Asphalt Corp. v. Zagata

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APPENDIX A — DECISION AND JUDGMENT OF THE

SUPREME COURT OF NEW YORK APPELLATE

DIVISION, SECOND JUDICIAL DEPARTMENT

FILED MARCH 16, 1998

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE DIVISION :

SECOND JUDICIAL DEPARTMENT

AD2d

Argued — October 27, 1997

ae: eee

MYRIAM J. ALTMAN, J.P.

WILLIAM D. FRIEDMANN

GABRIEL M. KRAUSMAN

LEO F. McGINITY, JJ.

96-08219

In the Matter of Mt. Hope Asphalt Corp., a/k/a Mount Hope

Asphalt Corp., and Barbara Petrosky, as Executrix of the Estate

of Frank Petrosky, petitioners, v. Michael Zagata, etc., et al.,

respondents.

DECISION & JUDGMENT

Proceeding pursuant to CPLR article 78, inter alia, to

review so much of a determination of the Commissioner of the

Department of Environmental Conservation as, inter alia, after

2a

Appendix A

a hearing, determined that the petitioners violated

Environmental Conservation Law 27-0707, 6 NYCRR 360-1.7,

and Navigation Law 173 and 175, and imposed penalties and

fines against them, denied the application of the petitioner Mt.

Hope Asphalt Corp., a/k/a Mount Hope Asphalt Corp., for a

certificate to operate an afterburner, and revoked the permit of

the petitioner Mt. Hope Asphalt Corp., a/k/a Mount Hope

Asphalt Corp., to construct and test a rehydration chamber.

ADJUDGED that the determination is confirmed insofar

as reviewed and the proceeding is dismissed, on the merits,

with costs.

In order to annul an administrative determination made

after a hearing, a court must conclude that the record lacks

substantial evidence to support the determination (see, Matter

of Pell v. Board of Educ., 34 NY2d 222, 231). The petitioners’

contention that the determination of the Commissioner of the

Department of Environmental Conservation (hereinafter the

DEC) was not supported by substantial evidence is without

merit. The testimony of the witnesses for the DEC established

the facts necessary to sustain the charges that the petitioners

had violated Special Conditions 4.13 and 5.13 of the permit,

had discharged petroleum at the Mt. Hope facility in violation

of the Navigation Law, and are unfit and unsuitable to hold

DEC permits. The penalties immposed were not so

disproportionate to the offenses committed as to be shocking

to one’s sense of fairness (Matter of Pell v Board of Educ.,

supra).

March 16, 1998

3a

Appendix A

We have reviewed the petitioners’ remaining contentions

and find them to be without merit.

ALTMAN, J.P.,. FRIEDMANN, KRAUSMAN and McGINITY,

JJ., concur.

4a

Appendix A

96-082119

DECISION & ORDER ON MOTION

In the Matter of Mt. Hope Asphalt Corp., a/k/a Mount Hope

Asphalt Corp., and Barbara Petrosky, as Executrix of the Estate

of Frank Petrosky, petitioners, v Michael Zagata, etc., et al.,

respondents.

Motion by the petitioners in a proceeding pursuant to CPLR

article 78 which was transferred to this court by order of the

Supreme Court, Nassau County, entered June 6, 1996, to

substitute as a petitioner Barbara Petrosky, as the executrix of

the estate of the deceased petitioner Frank Petrosky.

Upon the papers filed in support of the motion and the

papers filed in relation thereto, it is

ORDERED that the motion is granted, and the caption of

the above-entitled case is amended accordingly.

ALTMAN, J.P., FRIEDMANN, KRAUSMAN and McGINITY,

JJ., concur.

ENTER:

Martin H. Brownstein

Clerk

March 16, 1998

Sa

APPENDIX B — ORDER OF TRANSFER,

ENTERED JUNE 6, 1996

SHORT FORM ORDER

SUPREME COURT — STATE OF NEW YORK

Present: HON. THOMAS A. ADAMS

JUSTICE

TRIAL/IAS, PART 20

NASSAU COUNTY

INDEX NO. 32468/95

MT. HOPE ASPHALT CORP., et al

Plaintiff(s),

- against -

MICHAEL ZAGATA, et al

Defendant(s).

This is an Article 78 proceeding wherein petitioner sets

forth a question specified in CPLR 7903(4) i.e., whether the

determination which was made as a result of a hearing was

supported by substantial evidence (see decision and order dated

September 7, 1995, annexed as Exhibit A to the order to show

cause). Respondent has moved to dismiss the first, second,

fourth and sixth causes of action by raising “objections in point

of law” pursuant to CPLR 7804(f).

6a

Appendix B

Upon consideration of the record submitted, this Court finds

that the determination of the objections raised by the respondent

will not terminate this proceeding. [CPLR 7804(g).]

Accordingly, pursuant to the provisions set forth in CPLR

7804(g), this matter should be transferred to the Appellate

Division for disposition of the substantial evidence issue and

all other issues raised in this proceeding.

In view of the foregoing, respondent is directed to serve

and file an answer within twenty (20) days from the date of

this order and upon filing such answer, the matter will be

remitted to the Appellate Division, Second Department.

DATED MAY 31, 1996 s/ [illegible]

J.8.C.

7a

APPENDIX C — DECISION AND ORDER OF THE NEW-

YORK STATE DEPARTMENT OF ENVIRONMENTAL

CONSERVATION DATED SEPTEMBER 7, 1995

STATE OF NEW YORK:

DEPARTMENT OF ENVIRONMENTAL

CONSERVATION

Consolidated Hearing In the Matter of Alleged Violation

of Articles 19 and 27 of the New York Environmental

Conservation Law and Parts 201, and 360 of Title 6 of the

Official Compilation of Codes, Rules and Regulations of the

State of New York, and Proceedings to Revoke All Permits

Now Held by and Deny All Applications for Permits Filed by,

DEC. Nos. 1-5445-93-09,

1-4722-01052/00003-0,

1-4722-01052/00004-0,

AND

BENEFICIAL USE DETERMINATION

MT. HOPE ASPHALT CORP., a/k/a MOUNT HOPE

ASPHALT CORP.

and

FRANK PETROSKY, Individually,, and In His Capacity

as an Officer of MT. HOPE ASPHALT CORP., a/k/a

MOUNT HOPE ASPHALT CORP.,

Respondents.

8a

Appendix C

DECISION AND ORDER

WHEREAS:

1. Staff of the Region 1. Office of the New York State

Department of Environmental conservation (“Staff”) duly

served a Notice of Hearing and Complaintupon Respondents,

thereby initiating an administrative enforcement hearing.

Separately, Staff issued a notice of intent to revoke a permit

held by Respondent Mt. Hope Asphalt Corp. (“Mt. Hope”),

revoke a Beneficial Use Determination issued to Mt. Hope and

deny its application for permit renewal.

2. Pursuant to a ruling by Administrative Law Judge

(“ALJ”) Kevin J. Casutto, issued on November 10, 1994, the

two actions were consolidated. An evidentiary hearing on the

consolidated action was commenced on January 3, 1995, at the

Department’s Region 1 Office, Stony Brook, New York, and

continued on January 4th, Sth, 9th, 10th, 11th, 12th, 17th, 18th,

19th, 20th and January 25, 1995.

3. Staff appeared and was represented at the hearing by

Assistant Regional Attorneys Louise Aja and Udo Drescher,

Region I Office, Stony Brook, New York. Respondent Mt. Hope

Asphalt Corp. appeared and was represented by Farrell, Fritz,

Caemmerer, Cleary, Barnosky & Armentano, P.C., EAB Plaza,

West Tower (14th Floor), Uniondale, New York 11556-0120,

Sanford Strenger, Esq., of counsel, and Respondent Frank

Petrosky appeared and was represented by Zimmer & Mazzei,

400 Townline Road, Hauppauge, New York 11788, Timothy,

P. Mazzei, Esq., of counsel.

9a

Appendix C

4. Upon review of the record and the Consolidated Hearing

Report (the “Report”) of ALJ Casutto (copy attached), I hereby

adopt its Findings, Conclusions and Recommendations as my

own.

5. I concur with the ALJ’s recommendation concerning

relief for the reasons stated in the Report. I find Respondent

Mt. Hope unsuitable and unfit to engage in the activities for

which it is currently permitted.

6. Concerning the Beneficial Use Determination which

Respondent Mt. Hope received, 6 NYCRR §5202.2(d) required

Respondents to comply with ai! conditions of Mt. Hope’s Permit

to Construct EP2. Therefore, compliance with the Permit to

Construct was a condition upon which the Beneficial Use

Determination was made. Respondents’ receipt, storage and

processing of petroleum-contaminated soil from sites in New

Jersey was not authorized by the Permit to Construct EP2, and

consequently, was not within the scope of authority of the

Beneficial Use Determination made by Department Staff.

7. Iconcur in the ALJ’s ruling which limited Staff's cause

of action in complaint paragraph B7 to address only those

reporting violations alleged to have occurred after May 8, 1992.

NOW THEREFORE, having considered this matter, it is

ORDERED that:

I. Respondents Mt. Hope and Petrosky have violated

Special Conditions (4)(B) and (5)(B) of Respondent Mt. Hope’s

Permit to Construct EP2; ECL §27-0707 and 6 NYCRR 360-

1.7; and Navigation Law §1.73 and Navigation Law §175.

10a

Appendix C

II. Respondent Mt. Hope and Respondent Frank Petrosky,

individually and in his capacity as an officer of Respondent

Mt. Hope Asphalt Corp., with joint and several (iability, shall

pay a penalty in the amount of Sixty Three 7 housand, Four

Hundred ($63,400.00) Dollars, and an additional penalty of Ten

Thousand ($10,000.00) Dollars is hereby assessed against

Respondent Mt. Hope, due and payable within thirty (30) days

of service of a conformed copy of this Order upon Respondents.

II]. The charges against Respondents Mt. Hope and

Petrosky, of violating Special Permit Condition (5)(e) (Permit

to Construct EP2), ECL §17-0501, 6 NYCRR 613.8 are hereby

dismissed.

IV. Respondents shall immediately cease importing any

additional materials to the site and perform remedial

investigation, remediation and closure of the Site in accordance

with the recommendations of, and subject to the approval of,

Department Staff.

V. Respondent Mt. Hope’s Permit to Construct EP4 (#1-

4722-01052/00004-0) is hereby revoked and its permit

application for all; Certificate to Operate EP2 (#1-4722-01052/

00003-0) is hereby denied. In effect, revocation and denial of

Respondent Mt. Hope’s permit and permit application render

the Beneficial Use Determination void, because the BUD was

conditioned upon Respondents’ operation of the Calverton

facility.

VI. All communications between Respondents and

Department Staff concerning this order shall. be made to: Ray

Cowen, Region I Regional. Director, New York State

Department of Environmental Conservation, Loop Road,

Building 40, Stony Brook, New York, 117902356.

lla

Appendix C

VII. The provisions, terms and conditions of the Order

shall bind Respondents, their agents, servants, employees,

successors and assigns and all persons, firms and corporations

acting for or on behalf of Respondents.

NEW YORK STATE DEPARTMENT OF

ENVIRONMENTAL CONSERVATION

MICHAEL ZAGATA, COMMISSIONER

s/ Michael Zagata

Dated: Albany, New York

September 7, 1995

To: Sanford Strenger, Esq.

Farrell, Fritz, Caemmerer,

Cleary, Barnosky & Armentano

EAB Plaza

Uniondale, NY 11556-0120

Timothy P. Mazzei, Esq.

Zimmer & Mazzei

400 Townline Road

Hauppauge, NY 11788

Louise M. Aja, Esq.

Assistant Regional Attorney

Region 1, NYSDEC

Building 40, SUNY Campus

Stony Brook, NY 11790-2356

12a

Appendix C

Mt. Hope Asphalt Corp.

(a/k/a Mount Hope Asphalt Corp.)

395 Nugent Drive

Calverton, NY 11933

Frank Petrosky

President

Mt. Hope Asphalt Corp.

(a/k/a Mount Hope Asphalt Corp.)

395 Nugent Drive

Calverton, NY 11933

Frank Petrosky

c/o Mt. Hope Asphalt Corp.

395 Nugent Drive

Calverton, NY 11933

Frank Petrosky

21 Andiron Lane

Brookhaven, NY 11917

“az. ee ae ee ee ee

13a

Appendix C

STATE OF NEW YORK

DEPARTMENT OF ENVIRONMENTAL

CONSERVATION

50 Wolf Road

Albany, New York 12233-1550

Consolidated Hearing In the Matter

o Of «

Alleged Violation of Articles 17, 19 and 27 of the New

York State Environmental Conservation Law (ECL) , and Parts

203, 360 and 613 of Title 6 of the Official Compilation of Codes,

Rules and Regulations of the State of New York, and the

Navigation Law of the State of New York, by

MT. HOPE ASPHALT CORP.,

a/k/a MOUNT HOPE ASPHALT CORP.,

AND

FRANK PETROSKY

INDIVIDSUALLY AND IN HIS CAPACITY

AS AN OFFICER OF

MT. HOPE ASPHALT CORP., a/k/a

MOUNT HOPE ASPHALT CORP.

RESPONDENTS.

DEC NOS. 1-4722-01052/00003-01

1-4722-01052/00004-0

AND

BENEFICIAL USE DETERMINATION

14a

Appendix C

HEARING REPORT

= by mn

s/ Kevin J. Casutto

Kevin J. Casutto

Administraive Law Judge

SUMMARY

This hearing report addresses a consolidated action

concerning alleged violations of water, air, and solid waste law

and regulation, and Navigation Law and regulation by

Respondents, and Staff’s intent to revoke and deny

Respondents’ permits and permit applications based upon the

alleged violations and Respondents, other relevant history.

Respondents opposed Staff's notice of intent to revoke their

permit to construct an air pollution source, revoke a Beneficial

Use Determination authorizing the use of petroleum-

contaminated soil for the production of hot asphalt, and deny

their permit application for a Certificate to Operate an air

pollution source. Respondents presented a direct case

attempting to show that the use of petroleum-contaminated soil

in the production of hot asphalt was a new process, and a

“learning experience” for both Respondents and Staff. Further,

Respondents assert they did not commit any regulatory or

statutory violation in operation of their facility but instead,

continually sought to cooperate with Staff.

The report concludes that Respondents Mt. Hope and

Petrosky, violated Special Conditions (4)(B) and (5)(B) of

Respondent Mt. Hope’s Permit to Construct an air pollution

” 15a

Appendix C

source referred to as EP2; ECL §27-0707 and 6 NYCRR 360-

1.7; and Navigation Law §§173 and 175. The report further

concludes that the charges against Respondents Mt. Hope and

Petrosky, of violating Special Permit Condition (5)(E) (Permit

to Construct EP2), ECL §17-0501, 6 NYCRR 613.8 should be

dismissed.

Although staff sought a penalty of $1.4 million, the report

recommends a monetary penalty in the amount of $63,400.00

be assessed against Respondent Mt. Hope and Respondent Frank

Petrosky, individually and in his capacity as an officer of

Respondent Mt. Hope Asphalt Corp., jointly and severally, and

that an additional penalty of $10,000.00 be assessed against

Respondent Mt. Hope.

Further, the report recommends finding that Respondent

Mt. Hope is unsuitable and unfit to hold Departmental permits.

Respondent Mt. Hope’s Permit to Construct EP4 (#1-4722-

01052/000040) should be revoked and and its permit application

for a Certificate to Operate EP2 (#1-4722-01052/00003-0)

should be denied. Respondents should be ordered to cease

importing any additional materials to the site, and ordered to

perform remedial investigation, remediation and closure at the

site pursuant to NL §173, ECL Article 27 and 6 NYCRR Part

360.

PROCEEDINGS

Pursuant to Articles 70 and 71 of the Environmental

Conservation Law of the State of New York (“ECL”) and Part

622 of Title 6 of the Official Compilation of Code, Rules and

Regulations of the State of New York (“6 NYCRR”) , a

consolidated administrative enforcement/permit revocation/

l6a

Appendix C

permit denial hearing was held before Administrative Law

Judge (“ALJ”) Kevin J. Casutto, New York State Department

of Environmental Conservation, Office of Hearings. The

hearing was held on January 3, 1995, and was continued on

eleven additional dates, concluding on January 25, 1995, in

the New York State Department of Environmental Conservation

(“DEC” or the “Department”) Region 1 Regional Office, Loop

Road, Building 40, Stony Brook, New York 11790-2356.

Following the hearing, the ALJ set a schedule for filing

initial and reply memoranda. The complete hearing transcript

was received by the Office of Hearings on February 15, 1995.

The parties, initial memoranda were received on or before

March 13, 1995, and the hearing record was closed on March

27, 1995 with receipt of the parties’ reply memoranda.

Introduction

Respondent Mt. Hope Asphalt Corp., a/k/a Mount Hope

Asphalt Corp. (“Mt. Hope”) has operated a facility at Nugent

Drive, Calverton, New York using virgin materials to produce

hot asphalt, for approximately 22 years. In or about July, 1990,

Thomas Accardi of Disposal Technologies, Inc. (“Accardi” and

“Disposal Technologies,” respectively) approached the New

York State Department of Environmental Conservation (“the

Department” and “Staff”, respectively) Region I Staff with his

concept of using No. 2 fuel oil-contaminated soil in the asphalt

manufacturing process in place of virgin material, and staff

approved the concept, under certain conditions. By late August,

1990, Mr. Accardi approached the Department’s Division of

Air with a proposed application to implement his concept. This

application was on behalf of Respondent Mt. Hope and sought

authority to modify Mt. Hope’s certificate to operate its existing

17a

Appendix C

asphalt plant at Calverton, Long Island (the “facility”) to

authorize the processing of contaminated soil through the

asphalt plant’s dryer for incorporation into asphalt products.

In or about Spring, 1991, Respoadent Mt. Hope, with the

assistance of Disposal Technologies, Inc. and Thomas Accardi,

sought authority to upgrade its facility for use of petroleum-

contaminated soil in hot asphalt production. The Mt. Hope

application was the first in the State of New York proposing to

process petroleum-contaminated soil in the production of

asphalt. On or about August 9, 1991, Respondent Mt. Hope,

obtained a beneficial use determination (“BUD”) and a Permit

to Construct an afterburner referred to as Emissions Point 2

(application #1-472201052/00003-0; Permit to Construct

Emission Point No. 00002, an afterburner [“EP2”]; “permit to

construct afterburner” or “permit to construct EP2”). Mt. Hope

constructed the afterburner, and in or about October, 1992, Mt.

Hope filed an application for issuance of a Certificate to Operate

a Source of Air Contamination, for EP2.

On January 14, 1993 Respondent Mt. Hope entered into a

Consent order with the Department to resolve certain violations

and to assure continued authority to operate EP2 (Consent Order

#1-507492-06). The Consent Order required, among other

things, construction of a rehydration chamber, Emissions Point

4. Thus, on or about February 16, 1993, Mt. Hope submitted an

application for a Permit to Construct/ Certificate to operate a

Rehydration Chamber, EP4. On July 22, 1993, the Department

issued the Permit to Construct and Test a Rehydration Chamber

(Permit to Construct #1-4722-01052/00004-0 (Emission Point

No.00004, rehydration chamber (“EP4”)]; permit issued July

19, 1993, indicating an expiration date of July 18, 1994).

18a

Appendix C

Earlier, on May 28, 1991 Respondent Mt. Hope entered

into a Consent Order with the Department to resolve violation

of ECL Article 19 and 6 NYCRR Part 201 related to the facility

(Consent Order RI-4570-91-05). On July 18, 1991, Respondent

Mt. Hope entered into a Consent Order with the Department to

resolve violations of ECL Articles 15 and 25, and 6 NYCRR

Part 661, related to another Mt. Hope facility located in

Flushing, Queens, New York. (Consent Order #R2-3559-91-

03).

On September 15, 1993 Staff issued a combined Notice of

Intent to Revoke Mt. Hope’s Permit to Construct the EP4

rehydration chamber, revocation of Mt. Hope’s BUD and denial

of Mt. Hope’s application for a Certificate to Operate EP2 (a

modified facility including the afterburner and rehydration

chamber, which was intended to process petroleum-

contaminated soil in the production of asphalt (“the combined

notice” and hereinafter referred to as the “Permit” aspect of

the consolidated action)).

By letter dated September 28, 1993, pursuant to 6 NYCRR

Parts 621 and 624, Respondents sought a hearing to review

Staff's combined Notice of Intent to Revoke the EP4 permit to

construct (621.14(d)), Denial of Mt. Hope’s application for a

permit to operate EP2 (6 NYCRR 621.7(f)) and BUD

Revocation.

Since autumn, 1993, Respondents have ceased all

production of asphalt at the facility.

* * *

19a

Appendix C

Separately, by Notice of Hearing and Verified Complaint

dated September 17, 1993, duly served upon Respondents, Staff

initiated an enforcement action against Mt. Hope and three

corporate officers, Jay Boyle, Paul Abrams and Frank Petrosky

(hereinafter referred to as the “enforcement” aspect of the

action). The corporate officers were charged in their corporate

and individual capacities. During pre-hearing motion practice

and discovery, Staff withdrew its Complaint against two of the

three corporate officers, Jay Boyle and Paul Adams. Respondent

Frank Petrosky, the third individual respondent, is President of

corporate Respondent Mt. Hope.

On November 10, 1994, upon joint motion of Staff and

Respondents, the two actions were consolidated into a single

action, to proceed under 6 NYCRR 622. The joint motion for

consolidation was granted because the allegations in Staff's

enforcement action are also asserted as a basis for revocation/

denial in Staff's permit action.

Six substantive pre-hearing rulings were issued. On June

22, 1994, a “Ruling on Prehearing Motions” [First Ruling] on

July 12, 1994 a “Ruling on Motion for Reconsideration”

[Second Ruling]; on September 29, 1994 a “Ruling on Motion

for Disqualification and Motion to Dismiss Affirmative

Defenses” [Third Ruling]; on November 1, 1994 a “Ruling on

Motion to Amend Complaint” [Fourth Ruling]; on December

7, 1994 a “Ruling on Motion to Quash” [Fifth Ruling]; and on

December 27, 1994 a “Ruling on Asserted Privileges [Sixth

Ruling].

Staff sought leave to appeal to the Commissioner, from

the second Ruling insofar as it precluded Staff from pursuing a

portion of its cause of action for the time period prior to May

20a

Appendix C

9, 1992. By determination of the Assistant Commissioner for

Hearings, dated August 5, 1994, Staff’s application for

interlocutory appeal was denied. However, Staff was advised

that the issue could be preserved for review at the conclusion

of the proceeding in Staffs closing brief, and Staff has done

so.

Staff’ initial Complaint was ainended twice prior to

hearing. Pursuant to the First Ruling, on July 8, 1994 Staff filed

its first Amended Complaint revising its theory of liability on

one cause of action. In response, Respondents filed an amended

answer dated September 1, 1994. Subsequently, by Order dated

November 3, 1994, the ALJ granted Staff's motion seeking to

file its Second Amended Complaint, adding a new cause of

action. The new cause of action alleges Respondents buried

petroleum-contaminated soil in the parking lot of their asphal'

processing plant located at 395 Nugent Drive, Calverton, New

York, in violation of Navigation Law (“NL”) Article 12, ECL

Article 19 and 6 NYCRR Parts 360 and 613. Staff does not

seek additional monetary penalties for this new cause of action,

but seeks an order of remediation. The new allegations are also

discussed below in the context of the record of compliance/

permit aspect of this consolidated action.

Following issuance of the initial Complaint, in autumn,

1993, the Office of the Suffolk County District Attorney

obtained an indictment against Respondents Mt. Hope and

Petrosky, based at least in part upon activities that are at issue

in this consolidated administrative action. That matter was

pending, pretrial, at the time this administrative consolidated

hearing was held.

istration So teaes

2la

Appendix C

An evidentiary hearing on the consolidated action was

commenced on January 3, 1995, and continued on January 4th,

Sth, 9th, 10th, 11th, 12th, 17th, 18th, 19th, 20th and January

25, 1995. Staff appeared and was represented at the hearing by

Assistant Regional Attorney Louise M. Aja and Assistant

Regional Attorney Udo Drescher, NYSDEC Region | Office,

Loop Road, Building 40, Stony Brook, New York 11790-235¢.

To support its case, Staff presented fourteen witnesses: Kathryn

Murphy, Environmental Program Specialist I., Robert Becherer,

Regional Hazardous Substances Engineer, Sid Caramintzos,

Environmental Engineer 1, Karen Baker (née Munze) , Bureau

of Water Resources, Robert A. Greene, Regional Permit

Administrator, Karen Gomez, Environmental Engineer 2 and

Ray E. Cowen III, Regional Director. From the Office of the

Suffolk County District Attorney, Steven Drielak, Detective

Lieutenant, Commanding Officer, Environmental Crime Unit;

from the Suffolk County Department of Health, George

Mathew, Chemist, Francis J. Amendola, Forensic Scientist,

Madelaine Feindt, Public Health Sanitarian and Scott Mirabella,

Chemist. Also called to testify by Staff were Kathleen Morrison

a former employee of Respondent Mt. Hope, and Richard

Parish, President, Impact Environmental, Inc.

Initially, Respondents Mt. Hope and Petrosky appeared and

were represented by McMillan, Rather, Bennett & Rigano, P.C..,

Barry S. Cohen, of counsel. On or about February 24, 1994,

the law firm of Farrell, Fritz, Caemmerer, Cleary, Barnosky &

Armentano, P.C., EAB Plaza, West Tower (14th Floor),

Uniondale, New York 1 1556-0120, Sanford Strenger, Esq., of

counsel, assumed representation of Respondents. On or about

November 10, 1994, the law firm of Zimmer & Mazzei, 400

Townline Road, Hauppauge, New York 11788, Timothy P.

Mazzei, Esq., assumed representation of Respondent Frank

Petrosky.

22a

Appendix C

Respondent Mt. Hope presented testimony from Jay Boyle,

an employee of Respondent Mt. Hope and Olin C. Braids, Ph.D.

Respondent Petrosky presented no witnesses.

Staffs Position

I. The Notice of Hearing and Complaint

Pursuant to a ruling by the Administrative Law Judge

(“ALJ”), Staff filed the (First) Amended Complaint on July 8,

1994'. The First Amended Complaint was different from the

initial Complaint insofar as it included, in Complaint §C(6)(b),

the allegation that because Respondent had violated a Beneficial

Use Determination, the subsequent receipt and/or processing

and/or disposal of any material without a permit under 6

NYCRR Part 360 was a violation of Part 360.

On September 30, 1994 the Department filed a motion to

amend the First Amended Complaint by adding a new section

“D”. This new section alleges that Respondents violated ECL

Article 17 and 6 NYCRR Part 613 because they caused a

discharge of petroleum through the burial and stockpiling of

petroleum-contaminated soil at the facility on or before

September 16, 1993, and further that Respondents failed to

notify the Department of that discharge. In addition, Staff

alleges that Respondents violated 6 NYCRR Parts 360-

1.7(a)(1)(i) and 360-1.5(a), because the burial and stockpiling

of petroleum-contaminated soil constitutes disposal of solid

waste. Staff asserts that such activities require a solid waste

management facility (“SWMF’”) permit issued pursuant to ECL

1. “Ruling on Prehearing Motions” (First Ruling) from June 22,

1994, at p.7 42.

23a

Appendix C

Article 27 and 6 NYCRR Part 360, which Respondents did not

possess. While the actual penalty amount requested remained

the same as in the First Amended Complaint, new section “D”

of Staff’s Second Amended Complaint seeks remedial

investigation and remediation, i.e., clean-up of all petroleum-

contaminated soil at the facility.

Staff's motion to add the additional cause of action was

granted, and the Second Amended Complaint (hereinafter, the

Complaint”) was deemed served on November 3, 19947.

Staff alleges violations by Respondents in its Second

Amended Complaint, which are summarized as follows:

Complaint Section B;

Violation of ECL Article 19, and6 NYCRR

Part 201

Violation of ECL Article 19, 6 NYCRR §201.2(d)

and Permit to Construct (EP2), Special Permit

Condition #4.B., by Respondents’ receipt and/or

processing on 39 occasions’, of contaminated soil

from sites located in the State of New Jersey which

did not have a NYSDEC-assigned spill number.

Violation of ECL Article 19, 6 NYCRR §201.2(d)

and Permit to Construct (EP2), Special Permit

Conditions #5.B. and 5.E., by failure to maintain,

and failure to submit to the Department on a

2. Fourth Ruling, November 1, 1994.

3. Identified in “Appendix A”, attached to this Hearing Report.

24a

Appendix C

quarterly bass, logs which contained entries for

each of the 39 instances described in the first alleged

violation. (In its closing brief, Staff changed its

position by asserting it has proven 36 of the 39

instances alleged in the Complaint).

Complaint Section C:

Violation of ECL Article 27 and 6 NYCRR

Part 360

Respondents violated ECL §27-0707 and 6 NYCRR

360-1.7, by operating a solid waste management

facility (“SWMF”) by receipt and/or processing and/

or disposal of contaminated soil on the above

referenced 39 occasions, in a manner not consistent

with a Beneficial Use Determination (“BUD”)

issued to Respondent Mt. Hope (issued August 9,

1991); or alternatively, Respondents violated ECL

§27-0707 and 6 NYCRR 360-1.7, because the BUD

did not contemplate receipt and/or processing and/

or disposal of any material from August 7, 1991 to

September 15, 1993. (As noted above, in its closing

brief, Staff changed its position by asserting it has

proven 36 of the 39 instances alleged in the

Complaint).

Complaint Section D:

Violation of Navigation Law Article 12,

ECL Article 17 and 6 NYCRR Parts 360

and 613

Respondents violated Navigation Law §173 and

ECL §17-0501()) by causing a discharge of

i Bi a it ahr ia

a oe Se eee

25a

Appendix C

petroleum at the Mt. Hope facility on or before

September 16, 1993, which violation constitutes a

continuing violation from at least September 16,

1993 to the present.

Respondents violated NL §175 and 6 NYCRR 613.8

by failing to report the facility’s spill to the

Department (now identified by Department spill

number 94-07172).

Respondents violated 6 NYCRR 360-1.7(a)(1)(i)‘,

by continuing storage and disposal of petroleum-

contaminated soil at the Mt. Hope facility, from at

least September 16, 1993 to the present.

Staff maintains that since Respondent Petrosky is the

President of Respondent Mt. Hope and has been responsible

for daily management of Mt. Hope, Respondent Petrosky is

liable for the alleged violations both individually and in his

corporate capacity.

Staff seeks a monetary penalty of $1,081,500.00 from

Respondents, jointly and severally, for these alleged violations,

or in the alternative, pursuant to the ALJ’s Second Ruling, a

monetary penalty of $877,500.00 from Respondents, jointly and

severally (Staff revised its request for monetary penalty slightly

downward in its closing brief) . Staff also seeks an order that

Respondents 1) cease conducting any activities within the

Department’s regulatory authority; 2) submit a remediation plan

and implementation schedule for Staff's approval; and upon

4. Staff alleges violation of this provision by Respondents prior to

and after the regulatory provision was amended, effective October 9,

1993.

26a

Appendix C

approval, remediate and clea up all petroleum-contaminated

soil at the facility, whether buried or above ground; and 3) such

other and further relief as the Commissioner may deem just

and proper.

II. The Combined Notice of Intent to Revoke, Revocation and

Denial

Further, pursuant to Staff’s combined notice and the

allegations set forth in the Complaint that Staff asserts it has

proven at hearing, Staff seeks revocation of all Departmental

authority granted to Respondents to operate the facility, and

denial of all Respondents’ pending applications for continuing

or additional authority to operate, because Respondents are

allegedly unsuitable and unfit to engage in environmental

activities regulated by the Department due to their history of

non-compliance.

By ietter dated September 15, 1993 Staff issued to

Respondent Mt. Hope, a Notice of Permit Denial (regarding

Mount Hope’s application #1-4722-01052/00003-0, for

Certificate to Operate EP2) , Notice of Intent to Revoke (Permit

to Construct #1-4722-01052/00004-0, Emission Point 4,

rehydration chamber) and Revocation of Beneficial Use

Determination (regarding a Beneficial use Determination issued

to Mt. Hope on August 9, 1991). In effect, Staff seeks revocation

of all authority Respondents have been granted to operate the

facility, and denial of all pending applications for additional

or continued authority to operate. The combined notice letter

identifies five factors upon which Staff bases its notice:

(1) violation of Permit to Construct (EP2) permit

condition requiring only use of petroleum-

27a

Appendix C

contaminated soil from sites identified by a

Departmental spill number on 39 occasions;

(2) violation of Permit to Construct permit

condition (EP2 afterburner) requiring maintenance

and quarterly submittal of records to Staff, which

submittals failed to identify 39 instances of receipt

of contaminated soil at the facility;

(3) that commission of the two above referenced

violations rendered the Beneficial Use

Determination invalid on those dates, and therefore

constituted operation without a solid waste

management facility permit on those dates, in

violations of ECL Article 27 and 6 NYCRR 360

(“Part 360”);

(4) failure to comply with audit requirements

imposed by the January 14, 1993 Consent Order;

and

(5) Respondents’ history of non-compliance,

including a July 18, 1991 Consent Order; the January

14, 1993 Consent Order; and six criminal simplified

information issued to L.L.H. Recycled Aggregates

(a company which shares ownership and operations

with Respondent Mt. Hope).

ai lh ali Acta bela

Respondents’ Position

Respondents filed an Answer to the initial Complaint and

cach Amended Complaint. In response to Staff's Second

Amended Complaint, Respondents each filed an Answer dated

28a

Appendix C

October 6, 1993. Those Answers each assert two affirmative

defenses.

First, Respondents each assert as an affirmative defense,

that in the 39 instances when Mt. Hope received petroleum-

contaminated soil from New Jersey sites, the soil had not been

used for stack testing, but had been part of general operations

that had been conducted at the facility as permitted by the

Department. Therefore, Respondents assert that Staff failed to

prove that Mt. Hope violated the ECL or regulations of the

Department in the manner alleged in the Department’s Second

Amended Complaint dated September 30, 1994.

Second, Respondents each assert as an affirmative defense,

that the allegations contained in Section “C” of the Second

Amended Complaint (alleging violations of ECL Article 27 and

6 NYCRR Part 360) were conducted within the authority of

the BUD or, in the alternative, were consistent with the

requirements of ECL Article 27 and 6 NYCRR 360. These

affirmative defenses are discussed below in the context of the

corresponding Complaint allegations.

Respondents assert the record demonstrates that

Respondent Mt. Hope committed no violation of Departmental

regulatory programs, but to the contrary, performed a valuable

service to the public in the manufacture of asphait and the

education of the Department as to how petroleum-contaminated

soil waste can be recycled into an environmentally sound and

beneficial product, hot asphalt.

Further, regarding alleged discharge of petroleum product,

Respondents assert that samples collected and analyzed by

Suffolk County Department of Health Services (“SCDOHS”)

rected sti 7 S

29a

Appendix C

are unreliable due to improper sampling technique, improper

sample analysis method and failure to maintain chain of custody

of the samples.

Respondent Petrosky asserts that Staff failed to establish

that he was individually liable for any violation alleged in

Staff's Complaint. Petrosky further asserts that Staff failed to

prove that he was involved in the day-to-day activities of the

facility, or was involved in the day-to-day operation of the

facility.

Regarding the permit aspect of the consolidated action,

Respondents assert that Staff failed to show that Respondents

are unfit and unsuitable to engage in regulated environmental

activities. Therefore, Respondents assert that Mt. Hope should

receive a Certificate to Operate EP2, at which Mt. Hope may

produce asphalt and asphalt products utilizing petroleum-

contaminated soil as an aggregate and a Permit to Construct

and test EP4, the rehydration chamber. Further, Respondents

assert that the Beneficial Use Determination (“BUD”)

authorizing Mt. Hope to receive, temporarily store and use

petroleum-contaminated soil as an aggregate in asphalt

production, should be continued.

Respondents conclude that the alleged violations against

Respondent Mt. Hope and Respondent Petrosky should be

dismissed, and Certificates to Operate Mt. Hope’s afterburner,

EP2, and its rehydration chamber, EP4, with petroleum-

contaminated soil should be granted.

30a

Appendix C

Findings of Fact

1. Background

1. Respondent Mt. Hope Asphalt Corp., a/k/a Mount Hope

Asphalt Corp. (“Mt. Hope”) is a corporation with offices for

the transaction of business at Nugent Drive, Calverton, New

York. Respondent Mt. Hope has operated a facility at that

location for approximately 22 years, using virgin materials to

produce hot asphalt.

2. Respondent Frank Petrosky is President of corporate

Respondent Mt. Hope.

3. In or about July, 1990, Thomas Accardi of Disposal

Technologies, approached the Department’s Region I Staff with

his concept of using No. 2 fuel oil-contaminated soil in the

asphalt manufacturing process in place of virgin material.

4. Thomas Accardi was a principal of Disposal

Technologies, Inc.

. 5. By late August, 1990, Accardi approached Staff of the

Department’s Division of Air with an application on behalf of

Respondent Mt. Hope to implement his concept of using No. 2

fuel oil-contaminated soil in the asphalt manufacturing process

in place of virgin material. Accardi sought authority to modify

Mt. Hope’s Certificate to Operate its existing asphalt plant at

Calverton, Long Island (the “facility”) to authorize the

processing of contaminated soil through the asphalt plant’s

dryer for incorporation into asphalt products.

ms

a, Pes ln” Mls

PME MP item ome 8.

3la

Appendix C

6. The Mt. Hope application was the first in the State of

‘New York proposing to process petroleum-contaminated soil

in the production of asphalt.

7. Staff approved the concept, with certain conditions. On

or about August 9, 1991, Respondent Mt. Hope, obtained a

beneficial use determination (“BUD”) and a Permit to Construct

an afterburner referred to as Emissions Point 2 (“Permit to

Construct afterburner” or “Permit to Construct EP2”). The BUD

and Permit to Construct EP2 specified conditions under which

the Accardi/Mt. Hope proposal was authorized.

8. The expiration date of the Permit to Construct EP2 was

August 6, 1992. At Respondents’ request, the permit was later

amended by extending the expiration date to September 21,

1992. The purpose of this extension was to provide additional

time for Respondents to conduct the EP2 stack test.

9. The cover letter to the Permit to Construct, dated August

9, 1991, was a Beneficial Use Determination (issued pursuant

to 6 NYCRR 360-1.2[a][4][vii][a]).

10. Prior to issuance of the Permit to Construct EP2, a

two-day stack test was conducted at the facility on November

7, 1990 and November 9, 1990.

11. Respondent Mt. Hope constructed the EP2 afterburner

and conducted a stack test of the afterburner on August 26,

1992.

12. In or about October, 1992. Mt. Hope filed an

application for issuance of a Certificate to Operate EP2, a

Source of Air Contamination.

32a

Appendix C

II. The Enforcement Action

13. Staff initiated an enforcement action against

Respondents Mt. Hope and three corporate officers, Jay Boyle,

Paul Abrams and Frank Petrosky, by Notice of Hearing and

Verified Complaint dated September 17, 1993, duly served upon

Respondents (hereinafter referred to as “the enforcement”

action).

14. The three corporate officers were charged both in their

corporate and individual capacities. Staff withdrew its

Complaint against Jay Boyle and Paul Adams, during pre-

hearing motion practice and discovery.

15. Following issuance of the initial Complaint, in autumn,

1993 the Office of the Suffolk County District Attorney

obtained an indictment against remaining Respondents Mt.

Hope and Petrosky, based at least in part upon the same

activities that are at issue in this consolidated administrative

action. That matter was pending, pre-trial, at the time this

consolidated hearing was held.

16. Since autumn, 1993, Respondents have ceased all

production of asphalt at the facility.

A. Violation of ECL Articles 19 and 27, and 6 NYCRR Part

201 and 360

17. Respondent Mt. Hope maintained logbooks at the

facility, contemporaneous records that identify the type of

material received by the facility, the date received, origin of

the material (the site the material came from), the NYSDEC

Spill Number, the quantity of material received on the dates

ude naa

33a

Appendix C

indicated, cumulative total material received, invoice number

and date billed.

18. On at least 36 occasions from on or about November

13, 1991 to on or about September 17, 1992, Respondent Mt.

Hope received and/or processed contaminated soil from sites

located in the State of New Jersey. (See Hearing Report

Appendix A).

19. For the 36 occasions from on or about November 13,

1991 to on or about September 17, 1992 that, Respondent Mt.

Hope received and/or processed contaminated soil from sites

located in the State of New Jersey, Mt. Hope’s logbooks contain

seven digit numbers similar to Departmental spill numbers,

under the column heading, “NYSDEC Spill No.”. Further,

Respondent Mt. Hope’s files also contain seven digit numbers

similar to Departmental spill numbers.

20. The New York State Department of Environmental

Conservation does not issue spill numbers for spills occurring

outside the State of New York. None of the 36 New Jersey

sites had a NYSDEC-assigned spill number.

21. The New Jersey Department of Environmental

Protection has never issued seven digit spill numbers. Instead,

since 1991, spill numbers issued by that Department contain

only ten, eleven or twelve digits.

22. The New Jersey Department of Environmental

Protection does not assign a New Jersey case number to all

sites where petroleum-contaminated soil is generated. Approval

of the New Jersey Department of Environmental Protection is

required prior to any transportation of petroleum-contaminated

34a

Appendix C

soil to locations outside the State of New Jersey. Further, the

office within the New Jersey Department of Environmental

Protection that oversees the disposal of petroleum-contaminated

soil outside of the State of New Jersey, does not require the

assignment of a New Jersey DEP case number.

23. No Staff member authorized or otherwise allowed

Respondent Mt. Hope to receive, store or process petroleum-

contaminated soil from New Jersey.

24. No permit variance had been granted to Respondent

Mt. Hope and no permit modification had been issued to

Respondent Mt. Hope to authorize receipt, storage or processing

of petroleum-contaminated soil from New Jersey.

25. The analytical reports comprising pre-marked Exhibits

169-198 (excluding Exhibits 172 and 198), were maintained as

business records in the offices of Respondent Mt. Hope and

had been removed from those offices pursuant to search warrant

by the Suffolk County District Attorney. __

26. The analytical reports comprising Exhibits 163 through

198 (except for Exhibits 169, 171, 180 and 182), contained

laboratory analyses which indicated that the respective material

was non-hazardous pursuant to the Quality Assurance/Quality

Control (QA/QC) provisions of Mt. Hopes Permit to Construct

EP2. Further, all the those analyses were conducted by a New

York certified laboratory.

27. Regarding Exhibits 169, 171, 180 and 182, the

original reports maintained at Respondent Mt. Hope’s offices

had contained laboratory analyses, but copies which Staff

received from the District Attorney’s Office by Staff lacked

those analyses.

35a

Appendix C

28. Exhibits 212 A, B and C, are three quarterly reports

submitted by Respondent Mt. Hope to Department Staff. These

quarterly reports do not contain any entries indicating that

Respondent Mt. Hope received and processed petroleum-

contaminated soil from New Jersey on 36 occasions between

November 1991 and September 1992.

29. However, Respondent Mt. Hope’s log books do contain

entries indicating that Mt. Hope received and processed

petroleum-contaminated soil from New Jersey on 36 occasions

between November 1991 and September 1992.

B. Violation of Navigation Law Article 12, ECL Article ]7

and 6 NYCRR Parts 360 and 613

The Suffolk County Department of Health Services Soil Samples

30. Pursuant to a search warrant obtained by the office of

the Suffolk County District Attorney, members of the Suffolk

County Department of Health Services obtained soil samples

at the facility on September 16, 1993.

31. It was raining intermittently on September 16, 1993

during the soil sample collection process.

32. A back-hoe used for excavation of sampling points

was decontaminated at each sample point.

33. Many photographs were taken to document the location

of each sample point.

34. Although an asphalt surface was penetrated to obtain

samples in the “parking lot” area of the facility, no asphalt

particles were collected in the sample bottles.

36a

Appendix C

35. The SCDOHS Sanitarian actually collecting soil

samples wore two pair of gloves, and replaced the outer gloves

after completing sampling collection at each sample point.

36. After a SCDOHS Sanitarian obtained a sample, it was

placed in a sample bottle. A new bottle was used to collect

each soil sample.

37. The sample bottle was then sealed and the exterior was

cleaned, if necessary. The Sanitarian then handed the sample

directly to SCDOHS laboratory personnel, who preserved each

sample in its own plastic bag, in a cooler.

38. One of the two SCDOHS laboratory personnel present

on site were in physical custody of the samples, during the entire

day of sample collection. After sample collection was

completed at the site, SCDOHS laboratory personnel brought

the sample cooler to the SCDOHS van. |

39. Inside the van, the laboratory staff performed a final

count of samples taken. Then, the laboratory personnel

transported the sample cooler, with samples, to the county

laboratory.

40. Laboratory receipt of the samples was documented by

entries in a logbook. Each sample was assigned a laboratory

number, sealed in plastic and kept in a locked refrigerator,

located in a locked “evidence room” at the laboratory.

41. SCDOHS personnel completed “Chain of Custody”

forms detailing exactly who had custody of the samples

throughout each day.

37a

Appendix C

42. Analytical results of five of the soil samples obtained

by SCDOHS at the facility on September 16, 1993 show high

levels of petroleum constituents in certain locations. The five

SCDOHS samples are identified as 6MF, 7MFI, 18MF, 20MF

and 21MF.

43. SCDOHS Chemist Amendola used the federal

Environmental Protection Agency “8240” methodology to

analyze the soil samples for presence of petroleum constituents.

44. Amendola employed three variations from the EPA

8240 methodology when analyzing the samples. He used a

capillary column, rather than a packed column; he calculated

the analysis using external calibration instead of internal

calibration; and lastly, he did not heat the samples to 40 degrees

centigrade.

45. The variation of use of a capillary column rather than

a packed column under the EPA 8240 methodology was

specifically approved by the New York State Department of

Health as an acceptable variation from the EPA recommended

methodology.

46. Regarding his use of external calibration, Amendola

recalculated the analysis of four of the five Samples using

internal calibration, at a later date. The results using internal

calibration indicate a higher level of contamination of petroleum

constituents in all four samples, than did the external calibration

analysis method.

47. Heating the samples to 40 degrees centigrade would

have produced greater violation of the sample, and would have

yielded slightly higher analysis results than was obtained absent

heating of the soil samples.

38a

Appendix C

48. Some sample analysis results are stamped “Some

surrogate standard values are below acceptable levels”.

49. Staff submitted no evidence to show that any testing

of groundwater indicated a contravention of Departmental water

quality standards.

50. Neither Respondent Mt. Hope nor Respondent

Petrosky ever reported a petroleum discharge to the Department.

51. Once Staff learned of the petroleum discharge at the

facility, Gomez prepared a spill report for the facility and

obtained a spill number from the Department’s spill hotline.

Respondent Petrosky

52. Respondent Petrosky regularly held himself out to Staff

as the individual to be contacted in matters involving Mt. Hope

Asphalt Corp. Also, Petrosky maintained an office at Mt. Hope’s

offices located at the facility, he was regularly on-site, he

regularly met with Department personnel during Staff's site

visits to the Mt. Hope facility, and he regularly responded to

Staff's concerns. For example, it was Petrosky that responded

to Staff's concerns about dust at the facility by having the road

between the offices and the facility paved.

53. Respondent Petrosky certified Mt. Hope documents,

stating that the petroleum-contaminated soil indicated therein

was recycled and made into road paving materials.

54. Respondent Petrosky, in his capacity as President of

Respondent Mt. Hope, signed the two Consent Orders

concerning the facility.

39a

Appendix C

55. Respondent Petrosky also regularly attended virtually

all meetings with Department Staff at the Department’s Region

1 Offices and at the Mt. Hope Asphalt Corp. facility, on behalf

of Mt. Hope.

Ill. The Permit Action

56. By letter dated September 15, 1993 Staff issued to

Respondent Mt. Hope, a Notice of Permit Denial (regarding

Mount Hope’s application #1-4722-01052/00003-0, [Certificate

to Operate Emission Point No.00002, an afterburner)), Notice

of Intent to Revoke Permit (Permit to Construct #1-4722-01052/

00004-0 [Emission Point No. 00004, rehydration chamber]),

and Revocation of Beneficial Use Determination (regarding the

Beneficial Use Determination issued to Mt. Hope on August 9,

1991; (hereinafter, “the combined notice”, hereinafter referred

to as “the permit” action]).

57. The combined notice letter identifies five factors upon

which Staff bases its notice:

(1) violation of Permit to Construct (EP2) permit

condition requiring only use of petroleum-

contaminated soil from sites identified by a

Departmental spill number on 39 occasions;

(2) violation of Permit to Construct permit

condition (EP2 afterburner) requiring maintenance

and quarterly submittal of records to Staff, which

submittals failed to identify 39 instances of receipt

of contaminated soil at the facility;

(3) that commission of the two above referenced

violations rendered the Beneficial Use

40a

Appendix C

Determination invalid on those dates, and therefore

constituted operation without a solid waste

management facility permit on those dates, in

violations of ECL Article 27 and 6 NYCRR 360

(“Part 360”);

(4) failure to comply with audit requirements

imposed by the January 14, 1993 Consent Order;

and

(S) Respondents’ history of non-compliance,

including a July 18, 1991 Consent Order; the January

14, 1993 Consent Order; and six criminal simplified

information issued to L.L.H. Recycled Aggregates

(a company which shares ownership and operations

with Respondent Mt. Hope) .

The Falsified Analytical Report and Signature

58. Richard Parish has been employed as President of

Impact Environmental for approximately five years.

59. In mid-1991, Impact Environmental was retained as a

consultant to Disposal Technologies.

60. Impact Environmental, in its consultant capacity to

Disposal Technologies, performed sampling on behalf of Mt.

Hope, and sent the samples to appropriate laboratories for

analysis. Upon receiving the analysis from the laboratory, the

analysis would be forwarded to Disnosal Technologies under

Parish’s cover letter.

UES

PSO ey NPR ast

4la

Appendix C

61. Regarding the Ideal Aluminum site, 100 West 7th

Street, Bayonne, New Jersey, 116.71 tons of material was

received by Respondent Mt. Hope on December 24, 1991.

62. An analytical report for this material exists in the form

of a letter dated December 31, 1991, addressed from Parish on

behalf of Impact Environmental to Disposal Technologies at

the Mt. Hope facility address.

63. Exhibit 170, regarding the Ideal Aluminum Site, is

comprised of copies of documentation maintained by

Respondent Mt. Hope at its facility. The original documents

were obtained pursuant to search warrant by the office of the

Suffolk County District Attorney,

64. Information reported in the Ideal Aluminum analytical

report/letter states, “[b]ased on our investigation of 12-24-9]

the contaminated material is non-hazardous pursuant to the

standards promulgated by the New York State Department of

Environmental Conservation. All informaticz reported by the

client was confirmed by either Freedom of Information

Legislation and/or inspection.”

65. The Ideal Aluminum analytical report contains what

purports to be Parish’s signature. In fact, it is not his signature.

Further, the letter was not prepared by Parish or by Parish’s

office, Impact Environmental.

66. The Ideal Aluminum analytical report and Signature

are not genuine, but were falsified. It is impossible to know

whether the material described therein, received by Respondent

Mt. Hope, was truly non-hazardous petroleum-contaminated

soil.

42a

Appendix C

Respondent Mt. Hope’s History of Consent Orders

67. On May 28, 1991 Respondent Mt. Hope-entered into a

Consent order with the Department to resolve violations of ECL

Article 19 and 6 NYCRR Part 201, for commencing

construction to install the afterburner at the facility as an air

pollution control device, without the required Permit to

Construct. Under the Consent Order, signed by Respondent

Frank Petrosky in his capacity as President of Mt. Hope, a

$500.00 penalty was imposed upon Respondent Mt. Hope.

(Consent Order R1-4570-91-05).

68. On July 18, 1991 Respondent Mt. Hope entered into a

Consent Order with the Department regarding Mt. Hope’s

asphalt manufacturing plant located in Flushing, Queens, New

York. That Consent Order resolved violations of ECL Articles

15 and 25, and 6 NYCRR Part 661, by Respondent Mt. Hope

for allowing stone sand screenings to enter regulated navigable

waters and tidal wetlands without the required permits. Under

the Consent Order, signed by Mt. Hope’s Treasurer, Paul

Abrams, a $10,000.00 penalty and an order requiring

remediation was imposed upon Respondent Mt. Hope. (Consent

Order #R2-3559-91-03).

69. On January 14, 1993 Respondent Mt. Hope entered

into a Consent Order with the Department to resolve certain

violations at the facility and to assure continued authority to

operate EP2 (Consent Order 1 1-5074-92-06). The January, 1993

Consent order required construction of a rehydration chamber,

EP4. This Consent Order also required dissolution of the Mt.

Hope - Accardi/Disposal Technologies relationship.

70. The January, 1993 Consent Order also required Mt.

Hope to dissolve the Mt. Hope - Accardi /Disposal Technologies

43a

Appendix C

relationship (Consent Order. Schedule, A, Section IV) , and to

comply with detailed financial auditing requirements (Consent

Order Schedule A, Section V), including an affidavit from a

Certified Public Accountant certifying that it performed an

investigation of Respondent Mt. Hope’s records regarding

Thomas Accardi’s relationship to Mt. Hope. Consent Order

1-5074-92-06.

71. On or about February 16, 1993, Mt. Hope submitted

an application for a Permit to Construct/Certificate to Operate

a Rehydration Chamber, EP4. On July 22, 1993, the Department

issued the Permit to Construct and Test a Rehydration Chamber,

EP4 (permit issued July 19, 1993, indicating an expiration date

of July 18, 1994).

72. On November 29, 1990, the Department’s then-

Director of the Division of Solid Waste issued a memorandum

for intra-agency purposes, to the Department Staff’s Regional

Solid Waste Engineers, regarding beneficial use of petroleum-

contaminated waste soil as an aggregate in asphalt production.

Conclusions of Law

1. Respondents are both “persons” within the meaning of

ECL §19-0107.

2. Thomas Accardi. and Disposal Technologies, Inc., were

agents for Respondent Mt. Hope.

3. Respondents did not operate the EP2 afterburner, an

air contamination source, in accordance with Respondent Mt.

Hope’s August 7, 1991 Permit to Construct because

Respondents regularly violated Special Condition (4)(B) of the

permit.

44a

Appendix C

4. Respondents’ affirmative defense that Special Condition

(4)(B) only applied to stack tests is without merit. The

limitations and requirements set forth in the Permit to Construct

EP2, Special Condition (4})(B), applied to Respondents’

operation of the facility throughout the period during which

the permit was valid.

5. “Processing” of petroleum-contaminated soil, as that

term is used in Permit to Construct EP2, Special Condition (4)

(B), includes “receipt” of petroleum-contaminated soil for

purposes of processing.

6. Each “Job” (or site) identified in the Complaint is taken

to represent an allegation of one incident of receipt of

petroleum-contaminated soil, even though the record establishes

that for at least some of the proven violations, Respondent Mt.

Hope did, in fact, receive a number of shipments of

contaminated soil over a period of days or weeks for particular

jobs.

7. For the 36 New Jersey job sites identified in Exhibits

163 through 198, petroleum-contaminated soil from sites

located in the State of New Jersey was received and processed

by Respondent Mt. rope.

8. For the 36 New Jersey sites identified in Exhibits 163

through 198, the spill numbers used by Respondents in their

logbooks and files are fabricated spill numbers. Those spill

numbers were not issued by the New Jersey Department of

Environmenial Protection or by the Department.

9. Respondents fabricated these spill numbers to create

the appearance that Respondents were operating within the

45a

Appendix C

authority of Respondent Mt. Hope’s Permit to Construct EP2

and BUD.

10. Respondent Mt. Hope intentionally omitted entries

from three quarterly reports (August 15, 1991 to March 31,

1992; April 1, 1992 to June 30, 1992: and July 1, 1992 to

September 30, 1992, respectively) regarding petroleum-

contaminated soil it received and processed from the 36 New

Jersey sites. Respondent Mt. Hope did so because it knew that

such activities exceeded the scope of authority of its Permit to

Construct EP2 and BUD. Respondents thereby violated Special

Permit Condition (5)(B), and consequently 6 NYCRR

§201.2(d), on three occasions.

11. Carlson Associates is not applicable regarding

computation of monetary penalty in the present action.

However, the provisions of ECL Article 71 are relevant and do

provide for a continuing violation of ECL Article 27. ECL §71-

2703(1). Staff has properly asserted a continuing violation of

ECL §27-0707 and 6 NYCRR 360-1.7, for operating a solid

waste management facility without a permit from November

17, 1991 (the first date of receipt of soil from a New Jersey

site) to September 17, 1992 (the last date of receipt of soil from

a New Jersey site).

Applicability of the Beneficial Use Determination

12. Respondents’ receipt storage and processing of

petroleum-contaminated soil from sites in New Jersey was not

authorized by the Permit to Construct EP2.

13. Compliance with the Permit to Construct EP2 was a

condition upon which the Beneficial] Use Determination was

46a

Appendix C

premised. Therefore, Respondents’ receipt. Storage and

processing of petroleum-contaminated soil from sites in New

Jersey was not within the scope of authority of the Beneficial

Use Determination.

14. A permit issued pursuant to 6 NYCRR Part 360 is

required for these activities.

15. Because Respondent Mt. Hope acted outside the scope

of authority of the BUD, Mt. Hope operated a solid waste

management facility without a permit, in violation of 6 NYCRR

§3601.7(a)(1)(ii). Respondent Mt. Hope’s receipt, storage and

processing of petroleum-contaminated soil from sites in the

State of New Jersey, absent a solid waste management facility

permit constituted operation of a solid waste management

facility without a permit, a violation of 6 NYCRR §360-1.7

(-\<1}Gi), a continuing violation of 6 NYCRR §360-

1.7(a){1)(ii), from November 17, 1991 to September 17, 1992.

The Falsified Ideal Aluminum Analytical Report

16. Respondent Mt. Hope prepared the falsified analytical

report and falsified Parish’s signature regarding the Ideal

Aluminum site.

17. Respondent Mt. Hope is responsible for the false report

and false signature as a matter of law, since either Mt. Hope or

its agent created the falsified document.

18. However, Staff failed to establish a record through

Parish, or any other witness, challenging the authenticity of

the other 35 exhibits in the series. Exhibits 163 through 198.

47a

Appendix C

19. Exhibit 8, an internal. Departmental memorandum,

does not constitute a generic beneficial use determination

because by its own terms, the memorandum requires a

determination whether or not the activity conforms with the

generic beneficial use criteria identified in the memorandum.

20. When Respondent Mt. Hope violated Special

Conditions (4)(B) and (5)(B) of the permit to construct the

afterburner, it violated 6 NYCRR §201.2(d) . Those activities

were beyond the scope of authority of the BUD and required a

SWMF permit.

The Petroleum Discharge

21. For purposes of NL §173, Staff need not prove that

discharged petroleum constituents did, in fact, flow into the

groundwater.

22. Respondents’ challenges to sampling methodology are

rejected.

23. All three variations to the 8240 EPA methodology

employed by SCDOHS Chemist Amendola in analyzing the

five samples, would, if anything, result in a false low test result,

thereby indicating a lesser presence of petroleum constituents

than would analysis of that sample under the EPA recommended

methodology without variation.

24. Respondents’ speculative contentions regarding

asphalt contamination as a result of rain run-off into the test

pits, or asphalt particles falling into the test pits, is rejected in

light of the detailed sampling process described in the record.

Rainfall during field sample collection had no impact on the

soil that was being sampled.

48a

Appendix C

25. An adequate chain of custody was maintained for

samples 6MF, 7MF, 18MF, 20MF and 21MF.

26. The phrase “Some surrogate standard values are below

acceptable ievels”, stamped on some analysis results, means

that the full surrogate level was not identified in the test result.

Therefore, those test results probably under-report presence of

substances for which the test was intended. Thus, the stamped

language on a sample result indicates that the results obtained

by the laboratory are an under-representation of the actual

petroleum contamination level in the sample.

27. A petroleum discharge occurred during Mt. Hope’s

tenure at the site. This ongoing discharge of petroleum

constitutes a continuing violation of NL §173 from at least

September 16, 1993 to the present.

28. The fact that the discharge may have been petroleum-

contaminated soil as opposed to a liquid form of petroleum is

not relevant. Analysis of the five SCDOHS samples

demonstrates a petroleum discharge occurred at the facility at

some time prior to the date of sample collection.

29. Staff's contention that Respondent Mt. Hope took

specific intentional or deliberate acts causing the discharge is

rejected.

30. Respondents’ failure to report the spill to the

Department constitutes a violation of NL §175 and 6 NYCRR

§613.8.

ee de ey ee eee a hee

49a

Appendix C

Respondent Petrosky

31. Respondent Frank Petrosky was President and day-to-

day manager of Mt. Hope Asphalt Corp. He was a high

managerial agent of corporate Respondent Mt. Hope, and was

in a position to prevent the corporate violations that occurred

regarding receipt and processing of contaminated soil from New

Jersey sites.

32. Therefore, Respondent Frank Petrosky is liable for the

violations of the corporation both in his Capacity as President

of Mt. Hope and also individually.

DISCUSSION

I. Applicable Statutory and Regulatory Provisions

Jurisdiction and authority to initiate this administrative

action is based upon Environmental Conservation Law §3-0301.

(1)(i), (1), (m), (n) and (0), ECL §3-0301(2)(h), ECL Articles

17, 19, 27 and 71 and Navigation Law, Article 12.

ECL §17-.0501(1) provides that it is unlawful for any

person, directly or indirectly, to throw, drain, run or otherwise

discharge into such waters organic or inorganic matter that shall

cause or contribute to a condition in contravention of the

standards adopted by the department pursuant to ECL §17-0301.

ECL §27-0707 provides that no person shall commence

operation, including site preparation and construction, of a new

solid waste management facility until such person has obtained

a permit pursuant: to ECL Article 27, Title 7.

50a

Appendix C

NL §172(8) and 6 NYCRR §613.1(8) provide that a

discharge is any intentional or unintentional action or omission

resulting in the releasing, spilling, leaking, pumping, pouring,

emitting, emptying or dumping of petroleum into the waters of

the state or onto lands from which it might flow or drain into

said waters, or into waters outside the jurisdiction of the state

when damage may result to the lands, waters or natural

resources within the jurisdiction of the state.

NL §173 provides that the discharge of petroleum is

prohibited.

NL §175 provides that any person responsible for causing

a discharge shall immediately notify the Department pursuant

to the rules and regulations established by the department, but

in no case later than two hours after the discharge. Failure to

so notify shall make persons liable to the penalty provisions of

§192.

6 NYCRR Part 201.2(d) provides that a person who owns

or operates an air contamination source shall construct, modify,

test, install and operate such source in accordance with all

conditions of the applicable permit to construct or certificate

to operate.

6 NYCRR §360-1.2(a)(2)(i) provides that, “material is

discarded if it is abandoned by being (i) disposed of”.

6 NYCRR §360-1.2(a)(3) provides that “[A] material is

disposed of if it is discharged, deposited, injected, dumped,

spilled, leaked or placed into or on any land or water so that

such material or any constituent thereof may enter the

environment or be emitted into the air or discharged into

groundwater or surface water”.

OT PPE TRUE” ee

Sla

Appendix C

6NYCRR §360-1.2(a)(4)(vii) states that materials that the

Department has determined are being beneficially used,

including materials that are incorporated into a manufacturing

process to produce a marketable product, are not solid waste

for the purposes of 6 NYCRR Part 360. (eff. December 31,

1988 to October 8, 1993: compare, current 6 NYCRR §360-

1.2(a)(4)(vii)).

6 NYCRR §360-1.2(b)(145) A solid waste management

facility is defined as “any facility” employed beyond the initial

solid waste collection process and managing solid waste... .”.

Solid waste is defined as “all putrescible and nonputrescible

materials or substances, except as described in paragraph (4)

of this subdivision, that are discarded or rejected ...” (6

NYCRR §360-1.2(a)(1)

6 NYCRR §360-1.5(a) provides that no person shall dispose

of solid waste in the State of New York, except at a disposal

facility exempt from the requirements of Part 360, ora disposal

facility authorized to accept such waste.

6 NYCRR §360-1.7(a)(1)(ii) provides that no person shall

operate a solid waste management facility, except in accordance

with a valid permit to operate that facility issued pursuant to 6

NYCRR Part 360, except as otherwise provided in Part 360,

Il. The Relationship Between Mt. Hope and Disposal

Technologies, Inc. _

Respondents assert that Disposal Technologies, Inc.

(“Disposal Technologies”) and its principal, Thomas Accardi

(“Accardi”; collectively, “Disposal Technologies”), never acted

as agents for Mt. Hope, but instead were independent

52a

Appendix C

contractors. Respondents further assert that Disposal

Technologies was solely responsible for preparation of the

incomplete quarterly reports, and that Respondents were not

aware of any omission in the reports.

Lastly, Respondents assert that when they learned that

Thomas Accardi/Disposal Technologies, Inc. had been

misrepresenting other business information to them,

Respondents terminated the Mt. Hope-Accardi/Disposal

Technologies relationship. Therefore, Respondents conclude

they should not be penalized or suffer loss of their authority to

operate the Mt. Hope facility, due to illegal acts or omissions

of Accardi/Disposal Technologies.

Dissolution of this relationship was a condition of the

January, 1993 Mt. Hope Consent Order. However, during the

time period at issue for the 39 New Jersey transactions alleged

in the Complaint, the Mt. Hope-Disposal Technologies

relationship did exist. In February, 1991 Mt. Hope identified

Disposal Technologies, Inc. and Accardi as its consultant.

Subsequently, Mt. Hope authorized Disposal Technologies to

prepare and submit the quarterly reports on behalf of Mt. Hope.

It is undisputed that the quarterly reports at issue were prepared

by Disposal Technologies from information either developed

by Disposal Technologies from Mt. Hope’s records, or provided

by Respondent Mt. Hope.

Whether the quarterly reports were prepared or filed by a

member of the Disposal Technologies’ staff or the Mt. Hope

Asphalt staff is irrelevant at law. Respondent Mt. Hope, the

permittee, is solely responsible for assuring compliance with

all applicable laws, regulations and permit conditions associated

with its asphalt operation. NYSDEC v. Ten Mile-River Holding,

53a

Appendix C

Ltd., M.A.C. Sand and Gravel, Inc. and Aldo Colella, Decision

of the Commissioner, August 11, 1994 [It is immaterial whether

MAC is characterized as an agent or as an independent

contractor. Very simply put, TMR as the permittee is primarily

responsible for assuring compliance with al] applicable laws,

regulations and permit conditions associated with its mining

operation].

Regardless of whether the Mt. Hope-Disposal Technologies

relationship may have dissolved at some future time, during

the time period at issue in the Complaint, Thomas Accardi and

Disposal Technologies, Inc. were agents for Respondent Mt.

Hope, as discussed above. Disposal Technologies, through

Accardi, attended meetings with Staff on behalf of Respondent

Mt. Hope. During Katy Murphy’s nine site visits, she usually

met with Respondent Petrosky, sometimes with Accardi. In

addition, Disposal Technologies (and Accardi) maintained

offices in the series of interconnected trailers located at Mt.

Hope’s facility, which also housed Mt. Hope. Mt. Hope and

Disposal Technologies were the sole business entities located

at Mt. Hope’s facility.

Respondents assert that the mere fact they offered no

explanation as to why they submitted incomplete quarterly

reports, identifying only New York materials, does not establish

intent. Respondents assert they may reasonably have had

legitimate business purposes for maintaining such records.

However, also in evidence is proof that Respondent Mt. Hope

falsified spill numbers to give the impression that only spills

identified by a NYSDEC Spill Number were being brought into

the facility. A review of Exhibits 163 through 198 shows that

these fabricated spill numbers initially appeared on documents

generated by Disposal Technologies. However, even if Mt.

54a

Appendix C

Hope employees unwittingly copied these seven digit “spill

numbers” from the Disposal Technologies documents into the

log book maintained by Mt. Hope, Mt. Hope is responsible for

the acts of Accardi/Disposal Technologies.

Kathleen Morrison, a Mt. Hope employee, testified that

when Murphy conducted site visits at the facility and reviewed

logbooks, Murphy would be shown the original logbooks’. The

logbooks are contemporaneous records that identify the type

of material received by the facility, the site the material came

from and the quantity of material received on the dates

indicated. The third column in Exhibit 84 indicates “NYSDEC

Spill No.” and lists a seven digit spill number for each entry,

including entries for materials Respondent Mt. Hope received

from the State of New Jersey®. The second column in Exhibit

86 indicates “Spill No.” and lists a seven digit spill number for

each entry for materials accepted from the State of New Jersey’.

5. Exhibits 84 and 86 are photocopies of the original documents.

6. For example, Exhibit 84, page 2, line 6 (matching Exhibit 165)

page 2, lines 17 and 18 (matching Exhibit 163), page 2, line 22 (matching

exhibit 164), page 2, line 36 (matching Exhibit 166), page 3, line 9

(matching Exhibit 167), page 3, line 10 (matching Exhibit 168), page 3,

line 15 (matching Exhibit 169), page 3, line 16 (matching Exhibit 170),

page 4, line 3 (matching Exhibit 173), page 4, line 5 (matching Exhibit

172), page 4, line 12 (matching Exhibit 174), page 4, line 13 (matching

Exhibit 175), page 4, line 18 (matching Exhibit 177), page 4. line 19

(matching Exhibit 176), page 4, lines 26 and 29 (matching Exhibit 171),

page 4, line 34 (matching Exhibit 180), page 4, line 37 (matching Exhibit

179), page 4, line 41 (matching Exhibit 181) and page 5, line 13

(matching Exhibit 178)).

7. For example, Exhibit 86, page 2, lines 14 and 26 (matching

Exhibit 189), page 3, line 6 (matching Exhibit 191), page 3, line 10

(Cont'd)

55a

Appendix C

The Department issues seven digit spill numbers, whereas the

State of New Jersey does not.

Respondent Mt. Hope (or Disposal Technologies, Inc.)

fabricated these spill numbers. The spill numbers were not

issued by the New York State Department of Environmental

Conservation. Furthermore, the spill numbers are not legitimate

spill numbers issued by the New Jersey State Department of

Environmental Protection. Respondents provided no ;

explanation for these fabricated spill numbers, other than to

assert that Accardi/Disposal Technologies created the fabricated

numbers, autonomously, as part of their plan to deceive both

Mt. Hope and the Department.

Further, Respondent Mt. Hope fabricated the spill,

numbers, with the intent to deceive the Staff members who

might inspect the log books. When Department personnel

reviewed the log books maintained at the facility, they saw

seven digit numbers appearing to be NYSDEC spill numbers

and presumed that Respondent Mt. Hope was only accepting

petroleum-contaminated soil from sites located in the State of

New York, in conformance with its permit.

Therefore, even if Respondents’ argument is accepted that

Accardi/Disposal Technologies filed incomplete quarterly

reports absent Respondents’ knowledge or consent, Respondent

Mt. Hope is liable for Accardi’s acts. Whether in fact it was

(Cont'd)

(matching Exhibit 192), page 3, line 26 (matching Exhibit 193), page 3,

line 30 (matching Exhibit 190), page 5, line 9 (matching Exhibit 194),

page 5, line 17 (matching Exhibit 195), page 5, line 25 and page 17, line

13 (matching Exhibit 196), pag 15, line 2 (matchiv:g Exhibit 197), and

page 17, line 25 (matching Exhibit 198).

56a

Appendix C

Respondent Mt. Hope or Thomas Accardi/Disposal

Technologies, Inc., that fabricated the seven digit spill numbers

resembling legitimate NYSDEC spill numbers for the 36 New

Jersey sites listed in Mt. Hope’s logbooks, Respondent Mt. Hope

is ultimately liable, as a matter of law.

Ill. The Enforcement Action

The Stipulations

The parties agreed to two factual stipulations during the

hearing. The first stipulation concerned the admission into

evidence of 27 exhibits which allegedly constituted analytical

reports of shipments of soil originating from the State of New

Jersey that had been received at Mt. Hope’s Calverton facility.

These analytical reports constitute pre-marked Exhibits 169-

198, in evidence, excluding Exhibits 172 and 198. The parties

stipulated that those 27 exhibits were maintained as business

records in the offices of Respondent Mt. Hope and had been

removed from those offices by the Suffolk County District

Attorney. Also, the parties stipulated that all of the analytical

reports (Exhibits 163 through 198), except for Exhibits 169,

171, 180 and 182, contained laboratory analyses which indicated

that all material was nonhazardous pursuant to the Quality

Assurance/Quality Control, (QA/QC) provisions of the Permit

to Construct EP2. Further, all the analyses were conducted by

a New York certified laboratory. With respect to Exhibits 169,

171, 180 and 182, Respondents asserted that the original reports

maintained at Mt. Hope’s offices had contained laboratory

analyses, but the copies received back from the District

Attorney’s Office by Staff lacked copies of those analyses.

The second stipulation entered into by the parties concerned

Exhibit No. 312, an affidavit of John Strong of the State of

—

57a

Appendix C

New Jersey Department of Environmental Protection. In sum

and substance, the affidavit states that the New Jersey

Department of Environmental Protection does not utilize a

system which contains a 7-digit spill number. The parties

stipulated that: (1) a New Jersey case number is not assigned

to all sites where petroleum-contaminated soil is generated;

(2) New Jersey Department of Environmental Protection

approval is required prior to ; 4y transportation of petroleum-

contaminated soil from the State of New Jersey, and (3) the

office that oversees the disposal of petroleum-contaminated soil

Outside of the State of New Jersey does not require the

assignment of a New Jersey DEP case number.

A. The Charge of Violation of ECL Article 19, and 6

NYCRR Part 20]

1. Alleged Violation of ECL Article 19, 6 NYCRR

§201.2(d) and Permit to Construct (EP2, the

afterburner), Special Permit Condition (4)(B), by

Respondents’ receipt and/or processing on 39 occasions

of contaminated soil from sites located in the State of

New Jersey which did not have a NYSDEC-assigned

spill number.

Staff alleges in Complaint §B that Respondents received

and/or processed contaminated soi] from sites located in the

State of New Jersey which did not have a NYSDEC-assigned

spill number on 39 occasions from on or about November 13,

1991 to on or about September 17, 1992. (The 39 occasions

identified in the Complaint are identified in Hearing Report

Appendix A).

58a

Appendix C

6 NYCRR Part 201 is promulgated pursuant to ECL Article

19*. Respondents are both “persons” within the meaning of ECL

§19-0107. Pursuant to 6 NYCRR §201.2(d), “a person who

Owns or operates an air contamination source shall construct,

modify, test, install and operate such source in accordance with

all conditions of the applicable permit to construct or certificate

to operate.” Staff asserts that Respondents did not construct,

test, install and operate their afterburner, an air contamination

source, in accordance with Respondent Mt. Hope’s August 7,

1991 Permit to Construct EP2, because they regularly violated

special condition (4)(B) of that permit’.

Special Condition (4)(B) of Respondent Mt. Hope’s Permit

to Construct an afterburner (Permit #1-473-00135/00002-0,

hereinafter referred to as “Permit to Construct the afterburner”

or “Permit to Construct EP2”) provides at page 6, that “[o]nly

contaminated soil from sites identified by a NYSDEC assigned

spill number shall be processed at the facility”.

Staff asserts that the limitation created by Special Condition

(4)(B) was necessary, to assure Staff would be able to review

all necessary information regarding the source and constituents

of petroleum-contaminated soil to be received and processed

at the facility. Staff asserts it would thereby be able to control

the risks that Respondents’ operation would otherwise pose to

human health and the environment.

8. See ECL §19-0301 and §19-0305, respectively.

9. The permit number of the Permit to Construct EP2, was changed

on June 2, 1992, to #1-4722-01052/00001-0.

59a

Appendix C

Respondents’ A ffirmative Defense

However, Respondents assert an affirmative defense that

the Permit to Construct EP2 created two distinct Categories of

authority for operation of the facility; one category of “operation

for testing purposes” and another category of “operation for

preparation for stack testing”. Subsequent to issuance of the

EP2 Permit to Construct, a second stack test of the facility with

its afterburner (EP2) installed, was conducted on August 26,

1992'°,

The first page of the permit states, under the caption

“Description of Authorized Activity”:

Construct and test emission point 00002, an air

Oxidation unit (afterburner), for the Purpose of

reducing air emissions from existing asphalt facility

and to allow use of petroleum-contaminated soil as

aggregate. The new emission point will replace

existing emission point 00001. Operate emission

point 00002 for the purposes of preparation for stack

text (sic). (emphasis added).

The caption identifying Special Condition Section (4) is

“Operation for Testing Purposes”. Respondents assert that this

heading limits the scope of Special Condition (4)(B), to

“operation of the facility for testing purposes”, as opposed to

authority granted by the first page of the permit, “operation in

preparation for testing”.

10. Prior to issuance of the Permit to Construct EP2, a two-day

Stack test was conducted at the facility on November 7 and 9, 1990.

60a

Appendix C

Respondents assert that the only restriction placed upon

Mt. Hope under Special Condition (4)(B) concerns that soil

which was to be used during Mt. Hope’s actual stack test(s).

They assert the Permit to Construct EP2 did not restrict all

receipt and processing of contaminated soil to that which had a

NYSDEC spill number assigned to the site of origination of

the soil. Instead, Respondents assert that authority granted by

the first page of the permit authorized Mt. Hope to generally

operate utilizing non-hazardous petroleum-contaminated soil

irrespective of source of origin.

Respondents further assert that the authority granted by

Special Condition (4)(B), read together with the heading to

Special Condition Section (4), limited Mt. Hope to specific

chemical compounds to be present in the soils which were to

be-a part of the stack test only, to ensure that emission test data

obtained would be as broad as possible.

Lastly, Respondents assert that Staff presented no evidence

to establish that Mt. Hope did not comply with the provisions

of Special Condition (4)(B) during the August 26, 1992 stack

test. Therefore, Respondents conclude that Staff failed to prove

that there was noncompliance with Special Condition (4)(B).

In response, Staff asserts that Special Condition Section

(3), entitled “Emission Testing and Certificate to Operate

Application”"' identifies conditions applying to the stack testing

procedure, and that Section (4) applies to all authorized

activities, generally.

Staff asserts that the heading for permit Section 4 was

created to clarify to the permittee, Respondent Mt. Hope, that

11. Exhibit 135, Permit to Construct, page 4.

6la

Appendix C

the Permit to Construct EP2 was not to be construed for any

operations other than for preparing for the afterburner stack

test and conducting that stack test. Additionally, Staff asserts

the Section 4 heading was created to clarify that any further

operation would not be authorized because the permit issued

to Respondent Mt. Hope was not a Certificate to Operate, but

instead, a Permit to Construct. F inally, Staff asserts the evidence

shows that at no time did any staff member authorize

Respondents to receive, store or process petroleum-

contaminated soil from New Jersey. Further, Staff granted no

permit variance or modification. The expiration date of the

Permit te Construct EP2 was August 6, 1992. At Respondents’

request, Staff amended the permit by extending the expiration

date to September 21 , 1992, to provide Respondents additional

time to conduct the stack test. That permit amendment stated:

“No modification of permit or special conditions.”"? Therefore,

the amendment to the Permit to Construct EP2 was limited to

an extension of the permit’s time period, and did not affect

other substantive conditions of the permit.

Respondents’ affirmative defense that Special Condition

(4) (B) only applied to stack tests is without merit because the

distinction drawn by Respondents is misplaced. Respondents

understood that the permit issued was a Permit to Construct,

not the Certificate to operate which they hoped to obtain at

soine future date. The permit conditions, when read as a whole,

are reasonably construed to mean that “authority for operation

to prepare for stack testing” is within the broader authority to

“performing the stack test”. Accordingly, the limitations and

requirements set forth in the Permit to Construct EP2, Special

12. Exhibit 146.

62a

Appendix C

Condition (4)(B), applied to Respondents’ operation of the

facility throughout the period during which the permit was valid.

By analogy to statutory construction, the title is not part of

the statute. People ex rel. Commonwealth Insurance Co. v

Coleman, 121 NY 542, 25 NE 51 (1890); Petition of Trustees

of New York & Brooklyn Bridge, 72 NY 527 (1878); People ex

rel. Cucinatta v Burger, 54 Misc. 2d 92 (1967); National

Enerdrill Corp v Crown Drilling, Inc., 119 Misc. 2d 162 (1983).

The text of a statute must take precedence over the title; the

title should not be used to nullify or limit the text of the statute.

Squadrito v Griebsch, 1 NY2d 471, 136 NE2d 504 (1956);

People v Arriaga, 45 Misc. 2d 399 (1965); Neumann v New

York, 137 AD 55 (1910); Wells v New York State Department

of Transportation, 90 Misc. 2d 535; Morabito v Hagerman Fire

District, 128 Misc. 2d 340 (1985).

Lastly, Paragraph (B)(6) of the Second Amended

Complaint alleges a violation for “receipt and/or processing”.

Respondents assert that Special Condition (4)(B) does not

contain a prohibition as to “receipt” of contaminated soil, but

only as to “processing”. Respondents conclude that no violation

can be attributed to Mt. Hope based upon noncompliance with

Special Condition (4)(B) for “receipt” of contaminated soil.

This allegation does not create separate liability for

“receipt” and for “processing”. However, “processing”

reasonably includes “receipt” for purposes of processing.

Therefore, if Respondents received the materials for processing,

then Staff's allegations based upon noncompliance with Special

Condition (4)(B) are proper. If Respondents received the

materials for some purpose other than processing, they were

acting outside the authority of the Beneficial Use

63a

Appendix C

Determination, unless they could show otherwise, as discussed

in Report Section B, below, and therefore were in violation of

ECL Article 27 and 6 NYCRR Part 360.

The 39 New Jersey Sites

Staff's allegations identify 39 New Jersey sites, and

essentially allege one transaction of receipt of contaminated

soil from each site. However, Respondents explained at hearing

that they refer to each generator of contaminated soil, by site,

as one “job”. Respondents further explained that they would

normally receive a number of shipments of contaminated soil

over a period of days or weeks, for each “Job” or site. Therefore,

Staffs allegations, identifying 39 New Jersey sites, potenually

represent more than 39 occasions of receipt by Mt. Hope of

petroleum-contaminated soil. However, since Staff did not

allege multiple occasions of receipt by Respondent Mt. Hope

for any particular “Job” or site, each “job” (or site) identified

in the Complaint is taken to represent an allegation of one

incident of receipt of petroleum-contaminated soil, even though

the record establishes that for certain sites, Respondent Mt.

Hope did, in fact, receive a number of shipments of

contaminated soil over a period of days or weeks.

Staff presented documentary evidence at hearing showing

that on at least 36 occasions Mt. Hope accepted and processed

petroleum contaminated soil froin sites located in New Jersey”.

Respondent Mt. Hope concedes that it received and

processed petroleum-contaminated soil from New Jersey in 33

of 39 incidents alleged in the Complaint, and further, that for

13. Exhibits 163-198.

64a

Appendix C

those 33 incidents soil did not originate from a site identified

by a NYSDEC spill number.

Exhibits 163 through 198 contain documentation, including

receipts for petroleum-contaminated soil for each of the 36 sites.

These receipts each contain a Disposal Technologies Inc. logo

on top and a statement toward the bottom that the “Disposal

Facility” is Mount Hope Asphalt. These exhibits also contain

non-hazardous material manifests which state that the

contaminated soil is “destined for recycling”'*. Exhibits 194,

195 and 198 include certifications by Frank Petrosky stating

that the petroleum-contaminated soil indicated therein was

recycled and made into “road paving materials”.

Respondents’ witness, Jay Boyle, admitted that Mt. Hope

processed petroleum-contaminated soil from New Jersey sites

until Respondents received Robert Becherer’s August 28, 1992

reply to Respondents’ request to accept petroleum-contaminated

soil from a certain New Jersey site referred to as the Picatinny

Arsenal site. Finally, Mt. Hope’s logbooks indicate receipt of

petroleum-contaminated soil from 36 New Jersey sites. Based

on this evidence, it reasonable to conclude that for the 36 New

Jersey job sites identified in Exhibits 163 through 198,

petroleum-contaminated soil from the State of New Jersey was

received and processed by Respondent Mt. Hope.

Staff asserts that for the 36 incidents identified by Exhibits

163 through 198, the petroleum-contaminated soil was not

identified by a NYSDEC-assigned spill number, because the

Department does not issue spill numbers for spills occurring

outside the State of New York. Staff further asserts that Exhibits

199 and 312 show that the spill numbers used by Respondents

14. See, for example, Exhibit 163, page 5.

65a

Appendix C

in their logbooks and files are false, and were fabricated by

Respondents to create the appearance that Respondents were

operating within the authority of their permit. Exhibit 199 is

an affidavit of Departmental employee Angela Chieco,

Environmental Engineer II, stating in sum and substance that

she is the Department’s spill file database custodian, and

providing the actual spill locations within New York State, for

which spill numbers identified in Exhibits 163 through 198 were

actually assigned. Exhibit 312 is an affidavit of New Jersey

Department of Environmental Protection employee John Strong

which states, in sum and substarice, that New Jersey Department

of Environmental Protection does not utilize a system which

contains a seven-digit spill number.

In the Permit to Construct EP2, the requirement of a

“NYSDEC assigned spill number” means that the Department

Staff must be the source of origin for the spill number.

Consequently, in Exhibit 84, as in other documentary evidence

in this consolidated action, seven digit spill numbers

purportedly identifying New Jersey petroleum-contaminated

soil have been fabricated by Respondent Mt. Hope. Further,

the seven digit numbers appearing in the column heading

“NYSDEC SPILL No.” are not spill numbers issued by the State

of New Jersey, because, New Jersey has never issued seven

digit spill numbers, and since 1991 has issued only ten, eleven

or twelve digit spill numbers. Respondent Mt. Hope has

assigned fabricated spill numbers to all New Jersey jobs

identified in Exhibit 84, under a column heading indicating

“NYSDEC SPILL No.”

66a

Appendix C

2. Alleged violation of ECL Article 19, and 6 NYCRR

§201.2(d) and Permit to Construct (EP2), Special Permit

Conditions (5)(B) and (5)(E), by failure to maintain,

and failure to submit to the Department on a quarterly

basis, logs which contained entries for each of the 39

instances described in the first alleged violation.

Special Condition (5)(B) of Mt. Hope’s permit to construct

an afterburner provides at page 5, in pertinent part, that:

“A log containing an entry for each delivery of

contaminated soil ta the focility must be maintained.

Within 30 days of the end of each calendar quarter,

a copy of the log must be submitted to the NYSDEC

... Each log entry must include the following items:

ae

.

NYSDEC spill number, and name of involved

individual from NYSDEC oil spill response team;

2. Location of spill site;

3. Quantity of soil to be removed;

4. Type of fuel contaminating the soil;

5. Source and method of contamination;

6. Name and address of facility where spill occurred;

7. Total percent hydrocarbons;

8. Copy of sample analysis;

9. Shipping papers showing the following items...

(emphasis added).

Special Condition (5)(E) of Mt. Hope’s permit to construct

an afterburner provides at page 5, in pertinent part, that all

records required by the permit must be kept on-site at the facility

and must be available for inspection by Staff.

67a

Appendix C

During the hearing, for purposes of clarification, the parties

referred to the handwritten logs maintained at Mt. Hope’s

facility as the “log books” and referred to the quarterly log

submittals required to be filed with Staff as the “quarterly

reports”. However, under Special Permit condition (5)(B), the

identical information kept in Respondent Mt. Hope’s log book

was required to be submitted to Department Staff in the

quarterly reports. Thus, this permit condition sets forth the

requirement that all information being maintained by

Respondent Mt. Hope in its log book was to be submitted at

quarterly intervals to Department Staff as Respondent Mt.

Hope’s quarterly report for that time period.

Mt. Hope’s logbooks for the time period at issue were

required to be reported to Staff during three calendar quarters.

Exhibits 212 A, B and C, are the quarterly reports submitted

by Respondents to Staff (August 15, 1991 to March 31, 1992;

April 1, 1992 to June 30, 1992; and July 1, 1992 to September

30, 1992, respectively). These quarterly reports do not contain

any entries indicating that Mt. Hope received and processed

petroleum-contaminated soil from New Jersey on 36 occasions

between November 1991 and September 1992. However, Mt.

Hope’s log books do contain those New Jersey entries. Exhibits

84 and 86. Therefore, although Respondent Mt. Hope was

required to submit quarterly reports to the Department

indicating all petroleum-contaminated soil deliveries to the

facility, Mt. Hope excluded the 36 New Jersey entries from its

submittals in violation of Special Condition (5) (B) of the Permit

to Construct (and consequently, 6 NYCRR §201.2[d]).

Respondents assert that Robert Becherer specifically

instructed Mt. Hope not to file many documents required under

the Permit to Construct, including the quarterly reports, because

68a

Appendix C

documents submitted were too voluminous. However, the

record shows that Becherer instructed Respondents not to file

copies of sample analyses and shipping papers, required by

Special Permit condition (5)(B)(8) and (9).

Regarding Special Condition (5)(E), Staff has failed to

show that all documents were not maintained on-site and

available for Staff inspection. In fact, the record is quite clear

that on a number of occasions, Murphy inspected the logbooks

and viewed pages indicating receipt of petroleum-contaminated

soil from New Jersey sites.

Concededly, special Permit Condition (5)(B) does not

distinguish between the iog required to be maintained at the

facility pursuant to Special Permit Conditions (5)(B) and (E) ,

and documents required to be submitted with the log under

Special Condition (5)(B)(8) and (9). Still, the record does not

establish that Becherer instructed Respondents not to file

quarterly reports, required by Special Permit Condition (5)(B).

Instead, Becherer instructed Respondents that copies of certain

supporting documentation required to be filed with the quarterly

report — i.e., copies of sample analyses and shipping papers

— need not be submitted because that documentation became

too voluminous”.

15. Nonetheless, even with respect to sample analyses and shipping

papers, if Respondents intended to rely upon Becherer’s instructions in

contradiction to Special Permit Condition (5)(B)(8) and (9), Respondents

should have sought a permit modification to omit. the filing requirements

of Condition (5)(B)(8) and (9).

69a

Appendix C

B. The Charge of Violation of ECL Article 27 and 6 NYCRR

Part 360

1. Alleged violation of ECL 527-0707 and 6 NYCRR 360-

BE

Staff's Alternative Theory of Liability

Staff asserts that Respondents violated ECL §27-0707 and

6 NYCRR 360-1.7, by operating a solid waste management

facility (“SWMF”) without a permit, by receipt and/or

processing and/or disposal of contaminated soil from New

Jersey on the above referenced 39 occasions.

The First Ruling on pre-trial motions, dated June 22, 1994,

held:

A BUD is a determination by Staff that a particular

waste stream or product made from a waste stream

is a beneficial use of that waste. National Tire

Compaction Service, Inc. (Commissioner Decision,

June 18, 1993... ). A BUD is not a permit but

instead is a determination by Staff which essentially

exempts or excepts the activities or processes

constituting the beneficial use from the 6 NYCRR

360 solid waste permit requirements. Therefore it

is logically inconsistent that a violation of Part 360

(or any other Departmental regulation) would affect

the determination of beneficial use. As such, the

BUD itself cannot be violated.

The First Ruling directed Staff to amend its theory of

liability in Complaint §C, consistent with the above ruling. In

70a

Appendix C

its amended cause of action (Complaint §C), Staff alleges

alternative theories of liability, thereby preserving its original

theory of liability for review by the Commissioner. Staff relies

upon the precedent Jn the Matter of Carlson Associates, et al.

(Commissioner’s Decision, September 1, 1993) in asserting its

pleading in the alternative. Accordingly, Staff asserts that these

activities were in violation of the Beneficial Use Determination

(“BUD”) issued to Respondent Mt. Hope on August 9, 1991

(Staff's original theory of liability, asserting that Respondents

violated the BUD); or alternatively, that Respondents violated

ECL §27-0707 and 6 NYCRR 360-1.7, because the BUD did

not contemplate receipt and/or processing and/or disposal of

any material that Respondents received from August 7, 1991

to September 15, 1993 (Staff's amended theory of liability,

pursuant to the First Ruling, that Respondents’ activities were

outside the authority of the BUD and, therefore, constituted

operation of a solid waste management facility without a

permit).

Respondents contend that the only difference between the

two alternative pleadings, is that in the latter alternative Staff

alleges that a continuing violation occurred as a result of

Respondent Mt: Hope’s receipt of soil from New Jersey.

Respondents assert that Staff's theory in alleging a continuing

violation is in error, and that Carlson Associates is not

applicable to the present action, but is only applicable with

regard to jurisdictional penalty amounts under Article 23 of

the ECL. Respondents further assert that there is no similarity

in the regulatory penalty scheme between Article 23 and Article

27 of the ECL.

Respondents correctly assert that Carlson Associates is not

a precedent regarding computation of penalty. Still, the

Tla

Appendix C

provisions of ECL Article 71 are relevant and do provide fora |

continuing violation of ECL Article 27. ECL §71-2703(l).

Therefore, Staff may properly assert a continuing violation of

Article 27. Staff has asserted a continuing violation of ECL

§27-0707 and 6 NYCRR 360-1.7, for operating a solid waste

management facility without a permit from November 17, 1991

(the first date of receipt of soil from a New Jersey site) to

September 17, 1992 (the last date of receipt of soil from a New

Jersey site).

6 NYCRR §360-1.2(a)(4)(vii) in effect during the period

of time at issue states:

“(4) The iollowing are not solid waste for the

purposes of this Part:

(vii) materials that the department has determined

are being beneficially used, including the following:

(a) materials that are incorporated into a

manufacturing process to produce a marketable

product...”

By letter dated August 9, 1991 Respondent Mt. Hope

received a Beneficial Use Determination (“BUD”) from

Department Staff. This letter is also the cover letter to

Respondent Mt. Hope’s Permit to Construct EP2. The letter

specifically refers to the enclosed Permit to Construct EP2, in

two numbered paragraphs. Pursuant to numbered paragraph (1)

of the letter, “[a]ll operations will be conducted in accordance

with 6 NYCRR Parts ... 201, ...” This language makes

72a

Appendix C

compliance with requirements of 6 NYCRR §201.2(d) a

necessary condition of the beneficial use determination.

6 NYCRR §201.2(d) required Respondents to comply with

all conditions of Mt. Hope’s Permit to Construct EP2.

Therefore, compliance with the Permit to Construct was a

condition upon which the Beneficial Use Determination was

made. Respondents’ receipt, storage and processing of

petroleum-contaminated soil from sites in New Jersey was not

authorized by the Permit to Construct EP2, and consequently,

was not within the scope of authority of the Beneficial Use

Determination made by Department Staff.

Numbered paragraph (2) of the August 9, 1991 cover letter

also requires Respondents to comply with the conditions of the

attached Permit to Construct EP2:

“The contaminated soils will be tested and shown

not to be hazardous wastes under all federal and New

York State definitions. This will be done pursuant

to special conditions of the Air Permit.”

(emphasis added).

The one Special Condition section of the permit that

discusses testing of petroleum-contaminated soil is Special

Condition Section 4. Special Condition (4)(B) requires that

“fo}nly contaminated soil from sites identified by a NYSDEC

assigned spill number shall be processed at the facility.”

Therefore, when Respondent Mt. Hope accepted and processed

petroleum-contaminated soil from sites in New Jersey,

Respondent Mt. Hope was in violation of Special Condition

(4)(B) and consequently, was engaging in activities beyond the

scope of authority of the BUD.

73a

Appendix C

A solid waste management facility is defined as any facility

employed beyond the initial solid waste collection process and

managing solid waste. 6 NYCRR §360-1.2(b) (145). Solid waste

is defined as all putrescible and nonputrescible materials or

substances that are discarded or rejected [except as described

in paragraph (4) of that subdivision]. 6 NYCRR §360-1.2(a)

(1) material is discarded if it is abandoned by being disposed

of. 6 NYCRR §36-1.2[a][2][i]. A material is disposed of if it is

discharged, deposited, injected, dumped, spilled, leaked or

placed into or on any land or water so that such material or any

constituent thereof may enter the environment or be emitted

into the air or discharged into groundwater or surface water.

6 NYCRR §360-1.2(a)(3). Petroleum-contaminated soil is a

solid waste because petroleum product has been discharged into

land to form the petroleum-contaminated soil.

As discussed above, Respondent Mt. Hope did not have

authority under the BUD for its receipt, storage, processing or

disposal of petroleum-contaminated soil from New Jersey sites.

These activities would otherwise require a permit issued

pursuant to ECL Article 27 and 6 NYCRR Part 360. Therefore,

Mt. Hope was required to have a Part 360 permit for those

activities.

Because Respondent Mt. Hope acted outside the scope of

authority of the BUD, Mt. Hope operated a solid waste

management facility without a permit, in violation of 6 NYCRR

§360-1.7(a)(1)(ii). Thus, Respondent Mt. Hope’s receipt (and

processing) of petroleum-contaminated soil from sites in the

State of New Jersey, absent a solid waste management facility

permit, constituted operation of a solid waste management

74a

Appendix C

facility without a permit, a continuing violation of 6 NYCRR

§360-1.7(a)(1)(ii), from November 17, 1991 to September 17,

1992.

The Generic Beneficial Use Determination

Respondents assert that on November 29, 1990, the

Department’s Director of the Division of Solid Waste issued a

generic Beneficial Use Determination for use of petroleum-

contaminated soil as an aggregate in asphalt production.

However, this document is an internal memorandum for intra-

agency purposes from the Division Director to the Department

Staff's Regional Solid Waste Engineers.

Although the subject of the memorandum is “Petroleum-

contaminated soil Beneficial Use Determinations”, the

memorandum explicitly states that, “we recommend that a

submittal be made to identify the project and to verify the

process details so as to give the Department an opportunity to

determine whether or not the activity conforms with the generic

beneficial use criteria or other Part 360 requirements.”

(emphasis added). This internal memorandum does not

constitute a generic beneficial use determination because by

its own terms, the memorandum requires a determination of

whether or not the activity conforms with the generic beneficial

use criteria identified in the memorandum.

In any event, even if Exhibit 8 were construed to be a

generic BUD applicable to Mt. Hope, criteria 3 requires

compliance with any other Departmental regulations, other than

6 NYCRR Part 360, which may apply. As discussed above,

Respondent Mt. Hope has not complied with 6 NYCRR™-

§201.2(d) and the terms of its Permit to Construct EP2.

75a

Appendix C

Therefore, Mt. Hope’s activities in receipt, storage and

processing of petroleum-contaminated soil from 36 New Jersey

sites, would be outside the scope of authority of the generic

BUD.

The Parish Testimony

Respondents assert that Staff failed to prove the soils

received from New Jersey were not non-hazardous, were not

tested by a New York State certified lab, or that these soils

differed in any way from soils received from the State of New

York.

The Parish testimony puts into question the validity of

certain documentation filed or maintained by Respondents

under Parish’s purported signature. Parish testified that he has

been employed as President of Impact Environmental for

approximately five years. In mid-1991, Impact Environmental

was retained as a consultant to Disposal Technologies. Impact

Environmental, in its consultant capacity to Disposal

Technologies, performed sampling on behalf of Mt. Hope, and

sent the samples to appropriate laboratories for analysis. Upon

receiving the analysis from the lab, the analysis would be

forwarded to Disposal Technologies under Parish’s cover letter.

However, Parish testified with respect to at least one such

packet of information, the analytical report (contained within

a cover letter dated December 31, 1991) addressed to Disposal

Technologies at the facility address contains what is purportedly

his signature. In fact, it is not his signature.

The documentation in Exhibit 170, including the report,

concerns material transported from the Ideal Aluminum site

76a

Appendix C

(“Ideal Aluminum”), 100 West 7th Street, Bayonne, New

Jersey, to Mt. Hope,’s facility. The reported information states,

“fbjased on our investigation of 12-24-91 the contaminated

material is nonhazardous pursuant to the standards promulgated

by the New York State Department of Environmental

Conservation. All informai:.n reported by the client was

confirmed by either Freedom of Information Legislation and/

or inspection.” Parish testified that the Ideal Aluminum

analytical report was not prepared by his office, Impact

Environmental. Because the report and signature are not

genuine, it is impossible to know whether the material described

in the analytical report was in fact non-hazardous.

The documentation comprising Exhibit 170 was maintained

at the facility offices by Mt. Hope or Disposal Technologies.

The falsified report is addressed from Richard Parish, Impact

Environmental, to Disposal Technologies, Inc. Further, the

report addresses materials received by Mt. Hope. Therefore, it

is reasonable to conclude that Mt. Hope or Disposal

_ Technologies, acting on Respondents’ behalf, prepared the false

report and falsified the Parish signature.

Respondents assert that Thomas Accardi/Disposal

Technologies acted independently in falsifying the Ideal

Aluminum analytical report. However, Respondents presented

no evidence to support this theory. In any event, Respondent

Mt. Hope is ultimately responsible for the false report and false

signature, as a matter of law, since either Mt. Hope or its agent

created the falsified document.

Staff asserts that based upon Parish’s testimony regarding

Exhibit 170, the veracity of analytical reports in evidence for

all 36 proven incidents must be questioned. Staff asserts that it

77a

Appendix C

is impossible to know whether the material described in each

report was in fact non-hazardous. However, Staff failed to

establish a record through Parish, or other witnesses, regarding

the authenticity of the other exhibits in Exhibit series 163

through 198.

Further, Staff stipulated that all of the analytical reports

for Exhibits 163 through 198, except for Exhibits 169, 171,

180 and 182, contained laboratory analyses which indicated

that all material was non-hazardous pursuant to the Quality

Assurance/Quality Cortcol (QA/QC) provisions of the Permit

to Construct EP2. Further, all the analyses were conducted by

a New York certified laboratory. With respect to Exhibits 169,

171, 180 and 182, Respondents asserted that the original reports

maintained at Mt. Hope’s offices had contained laboratory

analyses, but the copies received back from the District

Attorney’s office by Staff lacked copies of those analyses.

Therefore, except for the Ideal Aluminum analytical report

(Exhibit 170), the other 35 analytical reports and signatures

contained in Exhibits 163 through 198 are deemed to be

genuine, as represented in the respective exhibits, not falsified.

Regarding Exhibits 169, 171, 180 and 182, I credit Respondents’

assertion that the original reports maintained at Mt. Hope’s

offices contained laboratory analyses, but the copies Staff

obtained from the District Attorney’s office lacked copies of

those analyses.

In sum, with respect to the ECL Article 19 violations, when

Respondent Mt. Hope violated Special Conditions (4)(B) and

(5)(B) of the permit to construct the afterburner, it violated 6

NYCRR §201.2(d). Those activities — i.e., receipt of

petroleum-contaminated soil from New Jersey sites on 36

78a

Appendix C

occasions and failure to include those 36 occasions in three

quarterly reports to the Department — were beyond the scope

of authority of the BUD and required a SWMF permit.

C. Violation of Navigation Law Article 12, ECL Article 17

and 6 NYCRR Parts 360 and 613

Staff does not seek any monetary penalty for this

component of its Complaint, but instead seeks an order requiring

further investigation and remediation by Respondents.

Members of the Suffolk County Department of Health

Services, working with the office of the Suffolk County District

Attorney, obtained samples at the facility on September 16,

1993. Staff asserts that the samples and sample analysis show

that Respondents caused a discharge of petroleum through

illegal burial and stockpiling of petroleum-contaminated soil

at the facility, on or before September 16, 1993 and that, this

constitutes a continuing violation.

1. Alleged violation of Navigation Law §173 by causing

a discharge of petroleum at the Mt. Hope facility on or

before September 16, 1993, a continuing violation.

A petroleum “discharge” is defined very broadly under the

Navigation Law. Navigation Law (“NL”) §173 provides that

the discharge of petroleum is prohibited. NL §172(14) defines

petroleum as oil or petroleum of any kind and in any form. NL

§172(8) and 6 NYCRR §613.1(8) define a discharge as:

any intentional or unintentional action or omission

resulting in the releasing, spilling, leaking, pumping,

pouring, emitting, emptying or dumping of

79a

Appendix C

petroleum into the waters of the state or onto lands

front which it might flow or drain into said waters,

or into waters outside the jurisdiction of the state

when damage may result to the lands, waters or

natural resources within the jurisdiction of the state.

NL §175 provides that any person responsible for causing

a discharge shall immediately notify the Department pursuant

to the rules and regulations established by the department, but

in no case later than two hours after the discharge. Failure to

so notify shall make persons liable to the penalty provisions of

§192'.

Navigation Law §181(1) provides that any person who has

discharged petroleum shall be strictly liable, without regard to

fault, for all cleanup and removal costs and all direct and

indirect damages, no matter by whom sustained, as defined in

NL Article 12.

Respondents assert that the record does not support a

finding that groundwater under the facility has been impacted

or is threatened by Mt. Hope’s activities. Therefore,

Respondents conclude that Staff failed to meet its burden of

proof on this cause of action.

In applying the above statutory and regulatory definitions,

Staff need not prove that the petroleum constituents in the

petroleum-contaminated soil did, in fact, flow into the

groundwater. Merrill Transport Co. v. State of New York, 94

A.D.2d 39, 467 N.Y.S.2d 1030, appeal denied, 60 N.Y.2d 555,

16. NYCRR §613.8 further requires that: [A]ny person with

knowledge of a spill, leak or discharge of petroleum must report the

incident to the Department within two (2) hours of discovery .. .”

80a

Appendix C

467 N.Y.S.2d 1030 (while there is nothing in the record to

positively demonstrate that the spilled oil might have flowed

into protected waters, judicial notice can be taken of the

common knowledge that oil can seep through the ground into

surface and groundwater); See, Domermuth Petroleum

Equipment and Maintenance Corp. v. Herzog & Hopkins, Inc.,

111 A.D.2d 957, 490 N.Y.S.2d 54 (3d Dept. 1985) (there is no

need for specific proof that the oil was ever in danger of seeping

into protected water in order to render the above statutes

applicable (referring to NL §§172 and 181)); See, also, Bri-

Mar Corp. v. Town Bd. of Town of Knox, 145 A.D.2d 704, 534

N.Y.S.2d 831 (3d Dept. 1988) (the court distinguishes its

decision in Merrill Transport from its decision in State of New

York v. Schenectady Chemicals, 103 A.D.2d 33, 479 N.Y.S.2d

1010).

Respondents assert that for Staff to sustain their burden of

proof under the Navigation Law claim, Staff must prove by a

preponderance of the evidence that petroleum was, in fact,

discharged; that Mt. Hope was responsible for this discharge;

that Mt. Hope did not have a permit which authorized the

alleged discharge; and that the petroleum was not in a controlled

state in the environment and, therefore, had potential to seep

through the ground into surface and ground water. See, Jn the

Matter of Peterson Petroleum, Inc. (Commissioner’s Decision,

May 25, 1994); See, also, In the Matter of Max Kent

(Commissioner’s Decision, December 7, 1992). The parties’

arguments are examined further below.

The Soil Samples

The SCDOHS collected many samples from the facility

on September 16, 1993. Five of those samples at issue in this

8la

Appendix C

proceeding are identified in the record as 6MF, 7MF, 18MF,

20MF and 21MF, Exhibit 207(a) through (e). Analytical results

of the five samples obtained by SCDOHS at the facility show

high levels of petroleum constituents in certain locations. Staff

asserts that the anaiytical results are accurate and reliable and

should be relied upon as establishing petroleum contamination

in locations at the facility identified by the sampling results.

Respondent Mt. Hope asserts that Staff relies completely

upon the samples and tests conducted by SCDOHS on those

samples. Mt. Hope further asserts that the testimony of Olin

Braids and testimony of Staff witnesses, supports a finding that

no remediation is required. Respondent Mt. Hope asserts that

evidence did not establish that petroleum was discharged.

Respondent Mt. Hope relies upon three factors in support

of this position. First, Mt. Hope relies upon Braids’ opinion

that no definitive tests had been conducted to determine that

there was any potential hazard to groundwater by contamination

at the site. Secondly, Mt. Hope points to Braids’ opinion that

no contamination of the water table had occurred at the facility,

based upon his review of monitoring well data. Lastly,

Respondents assert that Braids’ testimony was not controverted

by any witness presented by Staff. Respondents’ arguments are

addressed more specifically below.

-Sampling Methodology

Respondent Mt. Hope’s challenges to sampling

methodology are invalid, and must be rejected. For example,

Mt. Hope’s assertion that improper sampling methodology was

used which could have permitted particles of asphalt to taint

samples, is speculative; Mt. Hope’s assertion that samples were

82a

Appendix C

maintained at warmer temperatures than required by sampling

methodology would, if anything, result in greater violation of

the samples and, therefore, a false-negative test result.

Additionally, the SCDOHS tock many precautions to

ensure proper sampling methodology was followed during the

sampling collection process. A new bottle was used to collect

each sample; the SCDOHS Sanitarian actually collecting the

sample(s) wore two pair ef gloves, and replaced the outer gloves

after completing samrie collection at each sample point; the

back-hoe used to <xcavate sampling points was cleaned for

decontaminauon at each sample point; and one of the two

SCDOHS laboratory personnel were in physical custody of the

samples, stored in a cooler, the entire day. Many photographs

were taken to document the location of each sample point.

-Sampling Analysis

Respondent Mt. Hope also asserts that SCDOHS

Laboratory staff varied methodology from standard EPA

sampling analysis methodology, thereby invalidating practical

quantification limits established for the standard tests.

Respondent Mt. Hope asserts that variations from the EPA

methodology render the test results suspect and not capable of

confirmation. The lengthy, detailed EPA methodology includes

use of a packed column, internal calibration and heating the

sample to 40 degrees centigrade. However, SCDOHS Chemist

Amendola employed three variations from the EPA 8240

methodology when analyzing the samples. He used a capillary

column, as opposed to a packed column; he calculated the

analysis using external calibration instead of internal

calibration; and lastly, he did not heat the samples to 40 degrees

centigrade.

83a

Appendix C

Nonetheless, Amendola concluded that the results of his

analysis are accurate and reliable. He testified that the variation

of use of a capillary column, as opposed to a packed variation

column under the EPA 8240 methodology, is an acceptable

practice, and in fact, was specifically approved by the New

York State Department of Health as an acceptable variation

from the EPA recommended methodology.

Regarding the calibration variation from EPA 8240

methodology, Amendola subsequently re-calculated the

analysis of four of the five samples at issue using internal

calibration. The four sample analyses re-computed using

internal calibration resulted in a higher level of petroleum

constituents, than did the external calibration results.

Lastly, heating the samples to 40 degrees centigrade, would

have produced greater violation and would have yielded a

slightly higher result than was obtained absent heating of the

samples. In conclusion, all, three variations to the 8240 EPA

methodology met with quality control standards of the New

York State Department of Health, and would, if anything, result

in a false low test result indicating a lesser presence of

petroleum constituents.

-Chain of Custody

Respondents’ claim that SCDOHS failed to maintain an

adequate chain of custody for the five samples. In this case,

Staff offers SCDOHS laboratory analysis of real evidence, the

five soil samples at issue. The evidentiary issue of chain of

custody requires that Staff demonstrate that SCDOHS

accounted for the custody of the evidence from the moment

84a

Appendix C

SCDOHS personnel obtained the evidence until the moment

SCDOHS perscinel analyzed the evidence. Such evidence goes

to weight of evidence and not to admissibility of evidence. See,

generally, People v Julian, 41 NY2d 340, 360 NE2d 1310

(1977).

Once a SCDOHS Sanitarian obtained a sample, it was

placed in a sample bottle. The Sanitarian sealed the sample

bottle and cleaned the exterior, if necessary. The Sanitarian

then handed the sample directly to SCDOHS laboratory

personnel present, at the facility. The laboratory personnel

received the samples from the Sanitarians. One of the two

SCDOHS laboratory personnel were in physical custody of the

samples, preserved in a cooler, during the entire day of sample

collection.

After sample collection was completed at the site, the two

SCDOHS laboratory personnel brought the sample cooler to

the SCDOHS van, where they performed a final count of

collected samples. Then the laboratory personnel transported

the sample cooler, with samples, to the SCDOHS laboratory.

The laboratory documented receipt of the samples by

entries in a SCDOHS laboratory logbook. Each sample was

assigned a laboratory number, sealed in plastic and kept in a

locked refrigerator, located in a locked “evidence room” at the

laboratory. Finally, SCDOHS personnel completed “Chain of

Custody” forms detailing exactly who had custody of the

samples throughout the day.

Staff has demonstrated that an adequate chain of custody

was maintained for the five samples at issue. Respondents’

challenge to chain of custody is therefore rejected.

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Appendix C

-Other Challenges to Sampling and Analysis

Respondents assert that rainfall could have tainted the

sampling results, due to run-off contamination from the asphalt

parking lot. However, SCDOHS Sanitarian Feindt provided

opinion testimony that the rain had no impact on the soil that

was being sampled.

Respondents also assert that SCDOHS laboratory personnel

did not know the constituents of asphalt product and, therefore,

could not know if their test results indicated asphalt

contamination of samples or presence of petroleum

contamination. However, this contention assumes possible

asphalt contamination. Feindt testified that she observed a little

bit of asphalt falling into the excavations, but said specifically

that she is certain that no asphalt particles were collected in

the sample bottles. She further stated that the rain was not so

strong as to dislodge any particles and transport them into the

excavations. She saw no soil being washed away by the rain;

she saw no erosion; and the excavations were exposed only for

a short time, while the actual sampling took place. Respondents’

speculative contentions must be rejected in light of the detailed

sampling process described in the record, as elaborated upon

by the Feindt testimony.

Lastly, some sample test results are stamped “Some

surrogate standard values are below acceptable levels”.

Respondents assert this language indicates that the SCDOHS

laboratory failed to recover control elements placed into the

samples during the laboratory sample analyses, and therefore

the laboratory cannot ensure that the test results are accurate.

However, Amendola explained that the stamp means that the

surrogate (control element) level was under-reported by the

86a

Appendix C

sample analysis methodology, and therefore the analysis result

probably under-reported the presence of those substances which

the analysis was intended to identify. In sum, the stamped

language on a sample analysis result indicates that the result

obtained by the laboratory are an under-representation of the

actual contamination level in the sample. This sample analysis

indicating presence of petroleum constituents in the soil samples

was confirmed by another test performed on these samples by

SCDOHS. Total Petroleum analysis also indicated presence of

petroleum constituents in the soil samples.

The Allegation of Petroleum Discharge

Respondents deny that any petroleum discharge occurred

at the facility. However, since Mt. Hope has been operating

the facility for production of hot asphalt for approximately 22

years, and that production process requires use of petroleum

products, it is more likely than not that the discharge occurred

during Mt. Hope’s tenure at the site. This ongoing discharge of

petroleum constitutes a continuing violation of NL §173 since

at least September 16, 1993 to the present. See, Domermuth

Petroleum Equipment and Maintenance Corp. v. Herzog &

Hopkins, 111 A.D.2d 957, 490 N.Y.S.2d 54 (3d Dept. 1985)

[under the Navigation Law, no proof is required for a specific

wrongful act or omission which directly caused the spill in order

to impose liability.)

The fact that the discharge may have been petroleum-

contaminated soil as opposed to liquid petroleum does not alter

the conclusion that analysis of the five SCDOHS samples

demonstrates a petroleum discharge occurred at some time prior

to the date of sample collection, Exhibits 207(a) through (e);

Domermuth, supra.

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Appendix C

However, Staff asserts that the record sustains a conclusion

that Respondent Mt. Hope took specific acts causing the

discharge because they paved what is referred to in the record

as the “parking lot area”. This is an area of the facility that had

been used by Mt. Hope to store mounds of raw material, possibly

concrete and/or asphalt from excavated roadways, and was

subsequently paved to create the “parking lot area”. The record

is not clear as to whether the concrete or asphalt was removed

before the parking area was created. Nor is the record clear

whether even if Mt. Hope paved over material it had deposited

previously, such material was petroleum-contaminated soil or

was some other liquid or solid petroleum product.

In any event, in my view of the record, Staff's contention

that Respondents took specific intentional or deliberate acts

causing the discharge can not be sustained. Staff's contention

that Respondents intentionally discharged petroleum, or even

that Respondents were aware of a petroleum discharge at the

facility, is unsupported in the record and must be rejected.

Nonetheless, I find Respondent Mt. Hope liable-for the spill,

and therefore responsible for further investigation and

remediation of the facility.

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Appendix C

2. Alleged violation of ECL §17-0501(1) in that the

SCDOHS sample results indicate a petroleum discharge

at Respondent Mt. Hope’s facility.

ECL §17-0501(1) states:

It shall be unlawful for any person, directly or

indirectly, to throw, drain, run or otherwise

discharge into such waters organic or inorganic

matter that shall cause or contribute to a condition

in contravention of the standards adopted by the

department pursuant to section 17-0301.

Respondent Mt. Hope asserts that to establish a violation

under ECL §17-0501(1), the Department must show that

(1) there was a discharge of organic or inorganic matter in

waters of the state, (2) Respondent Mt. Hope was responsible

for the discharge, (3) the discharged petroleum migrated into

the groundwater, and (4) that this discharge caused or

contributed to a condition in contravention of the standards

adopted by the Department pursuant to §17-0301. See, Peterson

Petroleum, Inc., supra, at 9, Max Kent, supra.

Respondent Mt. Hope further asserts that there was no

evidence submitted by Staff of any testing of groundwater which

showed a contravention of Departmental water quality

standards.

Based upon the SCDOHS soil sample analyses, Siaff has

shown by a preponderance of the evidence that a discharge

occurred at the facility, and Mt. Hope was responsible for that

discharge. However, Respondent has correctly identified the

elements of a violation of ECL §17-0501(1). Staff has not

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Appendix C

established that the discharged petroleum migrated into the

groundwater or that the discharge caused or contributed to a

condition in contravention of the standards adopted by the

Department pursuant to §17-0301. Peterson Petroleum, Inc.,

supra, Max Kent, supra.

3. Alleged violation of Navigation Law §175 and

6 NYCRR §613.8, which requires that any person who

causes a discharge immediately notify the Department.

Staff asserts Respondents violated NL §175 and 6 NYCRR

§613.8 by failing to report the discharge to the Department.

Initially, Respondent Mt. Hope asserts that 6 NYCRR Part

613, by its very terms, applies only to petroleum storage

facilities with a combined storage capacity of over 1,100 gallons

and facilities licensed under Article 12 of the Navigation Law.

6 NYCRR §613.1(b). Mt. Hope asserts no proof has been

submitted by Staff to demonstrate the facility falls within the

applicability of Part 613. Respondent concludes that based upon

the allegations in the Complaint, 6 NYCRR §613.8 is irrelevant

to the present proceeding because the Mt. Hope facility is not a

petroleum storage facility with a combined storage capacity of

over 1,100 gallons or a facility licensed under Article 12 of the

Navigation Law.

I find that 6 NYCRR Part 613 is not applicable to the instant

action, for reasons cited by Respondent Mt. Hope. However, I

find that Navigation Law Article 12 is applicable. See, NL

§§172(8), 173, 172(14), 175 and 181, discussed above.

Following is a discussion of the Navigation Law cause of action.

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Appendix C

Staff relies upon Karen Gomez’s testimony to show that

Respondent Mt. Hope never reported the petroleum discharge

to the Department. Further, Staff asserts that once Staff learned

of the petroleum discharge through its review of the SCDOHS

sample analyses, Karen Gomez prepared a spill report and

obtained a spill number from the Department’s spill hotline.

Staff asserts that Respondents’ failure to report the spill to the

Department constitutes violation of NL §175, because

Respondents were responsible for causing a discharge and failed

to notify the Department.

Respondent Mt. Hope asserts there is no credible proof

that a discharge of petroleum requiring reporting occurred at

the facility. Therefore, Mt. Hope asserts it was under no

obligation to report any discharge to the Department.

Respondent points out that Gomez was presented with a portion

of the SCDOHS soil sample analysis results in or about June,

1994. Further, that although Gomez’s June 17, 1994

memorandum to Regional Director Cowen'’ recommended

remediation of the facility, Gomez did not file a spill report

with the Department’s Central Office, Albany, New York, until

the end of August, 1994. Respondent Mt. Hope asserts that

Gomez reported a spill then, only after receiving specific

instructions to do so from the NYSDEC Region 1 Regional

Director. In sum, Mt. Hope concludes it never knew that a

discharge requiring reporting had occurred, and that in any

event, Gomez (and by implication, Staff) did not treat the

SCDOHS sample analysis results as a high priority.

Since this cause of action is limited to a request for remedial

investigation and remediation only, a determination on the

17. Exhibit 290

9la

Appendix C

allegation of failure to report a discharge is of collateral

importance. Navigation Law §173 prohibits discharge of

petroleum. The SCDOHS sample analysis results for the five

samples at issue demonstrates presence of petroleum product

in the ground at the facility. Therefore, it is reasonable to

conclude that a discharge occurrid at some time prior to

sampling, thereby causing the presence of petroleum product

in the soil. Since Respondent Mt. Hope has operated the facility

for the production of virgin hoi asphalt for more than 22 years,

Respondent Mt. Hope is reasonably responsible for that

discharge. Pursuant to Navigation Law §181(1), Respondent

Mt. Hope is strictly liable for all cleanup and removal costs

associated with the petroleum discharge. -

However, the record before me does not establish how or

when the discharge occurred; or whether the discharge was

liquid petroleum, leachate from contaminated soil, burial of

contaminated soil or some other discharge of petroleum". Staff

asserts that SCDOHS concluded that petroleum-contaminated

soil was buried at the facility, and that Respondents buried the

contaminated soil. However, the testimony of the SCDOHS

witnesses provides no opinion as to what quantity of petroleum

product is present at the facility, how widespread the discharge

is, or the likelihood of how the levels of petroleum identified

in the five samples came to be present in the facility’s soil.

Thus, Staff's assertion that Respondents buried petroleum-

contaminated soil at the facility, must be rejected. Nonetheless,

since a petroleum discharge has been proven, Respondent Mt.

Hope should be directed to perform a remedial investigation

and remediation of the facility.

18. Pursuant to NL §172(14), petroleum is defined as oil, or

petroleum of any kind and in any form.

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Appendix C

Lastly, since Staff has failed to prove how or when the

discharge occurred, it would be anomalous to impose any

penalty upon Respondents for failure to report the discharge.

In any event, the reporting allegation, if it had been proven,

would not result in a monetary penalty because Staff seeks no

monetary penalty on this cause of action. Instead, the reporting

violation would have been another factor to be considered, in

the permit aspect of this consolidated action.

D. RESPONDENT FRANK PETROSKY

Staff seeks to impose liability upon Respondent Frank

Petrosky in both his individual and corporate capacities.

Respondents admit Frank Petrosky was President of Respondent

Mt. Hope at all times at issue. However, Respondent Petrosky

asserts that Staff failed to establish that Petrosky was

individually liable for any violation alleged in Staff’s

Complaint. Further, Respondent Petrosky asserts that Staff

failed to prove he was involved in the day-to-day activities of

the facility.

It is well established that a corporate officer may be held

criminally liable for violations of statutes enacted to protect

the public health, safety and welfare, where that officer had

the authority and responsibility to prevent the violation (United

States v. Park, 95 S.Ct. 1903 (1975); United States v.

Dotterweich, 65 S.Ct 134 (1943)). The rationale for holding

corporate officers criminally responsible is more persuasive

where only civil liability is involved (United States v. Hodges

X-Ray, Inc., 759 F.2d 557 (CA 6th Cir, 1985)). The record

demonstrates that Respondent Frank Petrosky held such a

position of authority and responsibility with respect to corporate

Respondent, Mt. Hope Asphalt Corp. (See, Ronald Edgar,

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Appendix C

Productive Recycling, Inc., and Productive Recycling Corp.,

Commissioner’s Order, June 18, 1993).

With respect to Petrosky’s role as day-to-day manager of

Mt. Hope, Petrosky regularly held himself out to Staff as the

individual to be contacted in matters involving Mt. Hope

Asphalt Corp. Petrosky maintained an office at Mt. Hope’s

offices located at the facility, he was regularly on-site and he

regularly met with Department personnel, both at the

Department’s Regional office and during Staff's site visits to

the Mt. Hope facility. In fact, the record shows that Petrosky

regularly responded to Staff's concerns, and that Staff contact

with Mt. Hope in all matters regarding the facility, was almost

exclusively directed to Respondent Petrosky. For example, it

was Petrosky that responded to Staff's concerns about dust at

the facility by having the road between the offices and the

facility paved. #

In addition to these indications of Petrosky’s role managing

the day-to-day activities of the facility, he also certified the

Mt. Hope documents stating that the petroleum-contaminated

soil indicated therein was recycled and made into road paving

materials. Exhibits 194, 195 and 198. Lastly, Respondent

Petrosky regularly attended meetings with Department Staff at

the Department’s Region 1 Offices and the Mt. Hope Asphalt

Corp. facility, on behalf of Mt. Hope. In terms of contact

between Staff and Mt. Hope, Petrosky was virtually the

exclusive representative of Mt. Hope, on matters of daily

functioning of the facility and on other matters.

As President and day-to-day manager of Mt. Hope Asphalt

Corp., Frank Petrosky was a high managerial agent of

Respondent Mt. Hope, and was in a position to prevent the

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Appendix C

corporate violations that occurred regarding receipt of

contaminated soil from New Jersey sites. Therefore, Respondent

Frank Petrosky is individually liable for the violations of the

corporation. (See, U.S. Pollution Abatement Services of Oswego

Inc., 763 F.2d 133 (1985); Avory L. Clark v. Pinehill Homes,

112 A.D.2d 755 (4th Dept. 1985); Jn the Matter of Jackson's

Marina, Inc., Gordon Jackson, James H. Rambo, Inc. and

Thomas Samuels, (Commissioner’s order, November 6, 1991).

RELIEF

I. CIVIL PENALTIES

ECL §71-2703(1) provides for a maximum civil penalty in

the amount of Two Thousand Five Hundred ($2,500.00) Dollars

for each violation of ECL Article 27, Title 7, or rules or

regulations issued pursuant thereto, and an additional penalty

of not more than One Thousand ($1,000.00) Dollars for each

day during which such violation continues.

F’ .L §71-1929 provides that any person who violates any

of the provisions of, or who fails to perform any duty imposed

by Titles 1 through 11 inclusive and Title 19 of ECL Article

17, or regulations promulgated pursuant thereto, shall be liable

to a penalty of not to exceed twenty-five thousand dollars per

day for each violation. 6 NYCRR Part 613 was promulgated

pursuant to ECL §§17-0303(3) and 17-1001, et seg. Therefore,

the maximum monetary penalty for a violation of failure to

report a petroleum spill to the Department, is $25,000 through

either the NL as explained below, or through the penalty

provision in ECL §17-1929.

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Appendix C

Pursuant to ECL §71-2103(1), except as provided in §71-

2113, any person who violates any provision of ECL Article

19 or any code, rule or regulation which was promulgated

pursuant thereto, shall be liable in the case of a first violation

for a penalty not less that $250.00 nor more than $10,000.00

for said violation, and an additional penalty not to exceed

$500.00 dollars for each day during which such violation

continues. (ECL §71-2103 [eff. November 1, 1984 through

August 3, 1993]; current ECL §71-2103 increases the maximum

daily penalty from $500.00 to $10,000.00, and sets both the

maximum penalty for subsequent violations and the additional

maximum daily penalty for a continuing violation at $15,000.00

[eff. August 4, 1993}).

Navigation Law §181(1) provides that any person who has

discharged petroleum shall be strictly liable, without regard to

fault, for all cleanup and removal costs and all direct and

indirect damages, no matter by whom sustained, as defined in

NL Article 12.

NL §192 provides that any person who violates any of the

provisions of NL Article 12 or any rule promulgated thereunder

or who fails to comply with any duty created by Article 12,

shall be liable to a penalty of not more than twenty-five thousand

dollars of each offense in a court of competent jurisdiction. If

the violation is of a continuing nature each day during which it

continues shall constitute an additional, separate and distinct

offense.

The Commissioner’s Civil Penalty Policy (Enforcement

Directives, No. II, issued 6/20/90) states that undertaking any

action which requires a Departmental permit, without first

obtaining that permit, is always a serious matter, not a mere

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Appendix C

technical or paperwork violation, even if the activity is

otherwise in compliance. (Civil Penalty Policy, page 8).

Staff has computed a maximum monetary penalty in excess

of $14,000,000.00, and seeks a monetary penalty in excess of

$1,000,000.00 in its Complaint. In its closing brief, Staff has

modified its request for relief, seeking in excess of

$1,000,000.00 from each Respondent, $327,000.00 of which is

sought to be imposed by joint and several liability upon

Respondents.

A. The Charge of Violation of ECL Article 19 and 6 NYCRR

Part 201

1. Respondents violated ECL Article 19,6 NYCRR §201.2(d)

and Permit to Construct (EP2, the afterburner), Special Permit

Condition #4.B., by Respondents’ receipt and/or processing on

36 occasions, of contaminated soil from sites located in the

State of New Jersey which did not have a NYSDEC-assigned

spill number. Staff has summarized these 36 violations in a

chart in their closing brief (Hearing Report Appendix B). Staff

has proven 36 of 39 allegations set forth in their Complaint

(the three unproven allegations are the sixth, eighth and twelfth

occasions alleged in their Complaint; see Appendix A).

For these violations, Staff seeks a maximum monetary

penalty of $10,000.00 per occasion, a maximum total penalty

of $360,000.00. However, I recommend a substantially reduced

penalty level because although Respondents are ultimately

liable for these violations, in 35 of the 36 occasions proven,

Respondents received material of the kind and quality

authorized to be processed at the facility, but for the fact that

the material originated in New Jersey, rather than New York. I

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Appendix C

find these violations to be de minimis with respect to the 35

occasions other than the Ideal Aluminum violation (i.e., Ex.

170). Therefore, I recommend a penalty of $100.00 for each of

the 35 violations. With respect to the Ideal Aluminum violation,

since that analytical report and signature were falsified, I

recommend a maximum penalty of $10,000.00, a total monetary

penalty on this cause of action, of $13,500.00.

2. Staff has proven Violation of ECL Article 19, and 6 NYCRR

§201.2(d) and Permit to Construct (EP2), Special Permit

Conditions (5)(B) and (5)(E), by failure to submit to the

Department on a quarterly basis, logs which contained entries

for 36 of the 39 instances described in the first alleged violation.

The Second Ruling (dated July 12, 1994) limited Staff's cause

of action on to reporting violations alleged to have occurred

after May 8, 1992 (the most recent time period addressed by a

January 13, 1993 Consent Order).

Staff seeks a maximum monetary penalty of $10,000.00

per occasion of unreported receipt, a maximum total penalty

of $360,000.00; or, in the alternative, pursuant to the limiting

Second Ruling, Staff seeks the maximum penalty for ten

occasions of non-reporting that occurred es or, after May 8,

1992, a maximum total penalty of $100,000.00.

I adopt Staff's alternative penalty analysis on this cause of

action, because as indicated in the Second Ruling, the regulatory

and statutory authority cited in the January 14, 1993 Consent

order reporting violations (Consent Order, #1-5074-92-06) and

in Complaint paragraph B7 are the same. Therefore, res judicata

bars relitigation of the reporting cause of action alleged in

Complaint paragraph B7, for the same time period addressed

in the Consent Order. Accordingly, I limited Staff's cause of

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Appendix C

action in Complaint paragraph B7, to address only those

reporting violations alleged to have occurred after May 8, 1992

(i.e., the most recent time period addressed by the Consent

Order).

However, in assessing this penalty, I find that Respondents

violated the reporting requirement for three quarterly reports

(Exhibits 212, A, B and C), and that the pattern and number of

reporting omissions in the quarterly reports are aggravating

factors in penalty assessment. Since Respondents repeatedly

omitted reporting of New Jersey sites in the three quarterly

reports, Respondents Mt. Hope and Petrosky should be held

jointly and severally liable for the maximum penalty for the

three occasions of incomplete quarterly reports submitted on

or after May 8, 1992, a total penalty of $30,000.00 on this cause

of action.

B. The Charge of Violation of ECL Article 27 and 6 NYCRR

Part 360

Staff alleges that Respondents violated ECL §27-0707 and

6 NYCRR 360-1.7, by operating a solid waste management

facility (“SWMF”) without a permit, ‘by receipt and/or

processing and/or disposal of contaminated soil on the above

referenced 36 occasions in a manner not consistent with the

Beneficial Use Determination (“BUD”) issued to Respondent

Mt. Hope on August 9, 1991; or alternatively, Respondents

violated ECL §27-0707 and 6 NYCRR 360-1.7, because the

BUD did not contemplate receipt and/or processing and/or

disposal of any material that Respondents received from August

7, 1991 to September 15, 1993.

ECL §71-2703(1) provides for a maximum civil penalty in

the amount of Two Thousand Five Hundred ($2,500.00) Dollars

99a

Appendix C

for each violation of ECL Article 27, Title 7, or rules or

regulations issued pursuant thereto, and an additional penalty

of not more than one Thousand ($1,000.00) Dollars for each

day during which such violation continues.

I find that Respondents’ receipt, processing or disposal of

petroleum-contaminated soil from the State of New Jersey on

36 occasions were activities outside the scope of authority

granted by the BUD. These activities are within the

Department’s solid waste regulatory program. Since the

activities were outside the authority of the Beneficial Use

Determination that Respondents obtained, a solid waste

management facility permit was required for these activities, a

permit which Respondents did not obtain. Therefore,

Respondents violated ECL §27-0707 and 6 NYCRR 360-1.7,

on 36 occasions by receipt of New Jersey petroleum-

contaminated soil absent a Solid Waste Management Facility

Permit. Staff seeks a penalty of $2,500.00 for receipt of the

first New Jersey soil, on November, 17, 1991 and an additional

penalty of $1,000.00 per day for an additional 290 days (through

September 17, 1992), a penalty of $292,00.00.

As discussed above, the 36 occasions of receipt of materials

from New Jersey sites were, in all but one instance, of the kind

an¢, quality authorized to be processed at the facility, but for

the fact that it originated in New Jersey. I recommend a penalty

of $1000.00 for the initial violation and 100.00 per day for the

additional 290 days, a total monetary penalty of $29,900.00 on

this cause of action.

Therefore, the total monetary penalty recommended on the

enforcement aspect of the consolidated action, is $73,400.00.

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Appendix C

Il. REMEDIATION

Violation of Navigation Law Article 12,

ECL Article 17 and 6 NYCRR Parts 360 and 613

Staff asserts that Respondents violated Navigation Law

§173 and ECL §17-0501(1) by causing a discharge of petroleum

at the Mt. Hope facility on or before September 16, 1993, a

continuing violation. Staff does not seek any monetary penalty

for this component of its Complaint, but does seek an order

requiring further investigation and remediation. Staff asserts

that Respondents also violated ECL §17-0501(1) in that the

SCDOHS sample results indicate a petroleum discharge at

Respondent Mt. Hope’s facility.

Navigation Law §175 and 6 NYCRR §613.8 require that

any person who causes a discharge immediately notify the

Department. Staff asserts Respondents violated NL §175 and 6

NYCRR §613.8 by failing to report the discharge to the

Department. Staff witness Gomez testified that Mt. Hope never

reported the discharge to the Department. (T. 2191). Once Staff

learned of the discharge, Gomez prepared a “spill report” and

obtained a “spill number” from the Department’s “spill hotline”.

(T. 2179-2186). Staff asserts that Respondents’ failure to report

the discharge to the Department constitutes violations of NL

§175 and 6 NYCRR §613.8.

6 NYCRR §360-1.7(a)(1)(ii) (effective as of October 9,

1993) provides, in pertinent part that: “no person shall construct

or operate a solid waste management facility, or any phase of

it, in accordance with a valid permit issued pursuant to this

Part . . .”. The regulations in existence before October 9, 1993

provide essentially the same substantive requirement, with some

minor differences in wording.

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Appendix C

A solid waste management facility is defined as “any

facility employed beyond the initial solid waste collection

process and managing solid waste, including but not limited

to: storage areas or facilities; . . . disposal facilities . . .”. This

definition was not modified by the October 9, 1993 revisions

to Part 360.

Staff asserts that Respondents disposed of petroleum-

contaminated soil through burial at the facility and that

Respondents also continue to store petroleum-contaminated soil

at the facility, in violation of 6 NYCRR §360-1.7 (a) (1) (ii)

[operation of a solid waste management facility without a

permit) and 6 NYCRR §360-1.5(a) [illegal disposal of solid

waste]. As with the other allegations contained in section D of

the Second Amended Complaint, Staff seeks no penalties with

regard to these alleged violations of Part 360, but rather, seeks

an order requiring Respondents to remediate the upper “parking

lot area” and to remove stored petroleum-contaminated soil

from the west side of the stockpile area.

Respondents assert that Staff failed to prove remediation

is necessary. Respondents further assert that any soil stored on

the contaminated-soil pad, remains there lawfully.

The parties stipulated that since September 15, 1993,

Respondents have continuously maintained approximately

2,000 cubic yards of stockpiled petroleum-contaminated soil

on a storage pad at the facility. September 15, 1993 is the date

that authorization to process petroleum-contaminated soil at

this site expired. That authorization had been granted through

Consent Order No.1-5074-92-06, which was modified on

March 23, 1993; July 30, 1993; and August 27, 1993. The final

modification extended the temporary authority to operate until

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Appendix C

September 15, 1993. No further extension was granted.

Respondents were advised that they could no longer use

petroleum-contaminated soil for the production of asphalt (See,

letter from Regional Director Ray Cowen to Barry S. Cohen,

Esq., dated September 16, 1993 [Exhibit 310]). Therefore

Respondents’ argument that storage of soil remaining at the

facility is authorized by the extending provisions of SAPA, must

be rejected.

Staff asserts that Mt. Hope’s continued stockpiling of

petroleum-contaminated soil after expiration of its authority

to operate under the Consent Order, constitutes an ongoing

violation 6 NYCRR §360-1.7(a)(1)(i), in that Respondents have

been operating a solid waste management facflity without a

permit.

Based upon SCDOHS analytical soil sample results, Staff

seeks an order requiring Respondents to further investigate and

remediate the petroleum contaminated areas at the facility’.

Staff bases its request for remediation upon its review of the

sample results, consistent with guidance contained in the

Department’s Spill Technology And Remediation Series

(“STARS”), Memo #1 — Petroleum-contaminated soil

Guidance Policy”. Staff also seeks an order requiring

Respondents to remove remaining stored material to an

authorized treatment, storage or disposal facility.

19. Those areas have been identified through SCDHS analysis of

samples 6MF, 7MF, 18MF, 20MF and 21MF.

20. The STARS Memo #1 was issued in August, 1992 by the

Department’s Division of Construction Management, Bureau of Spill

Prevention and Response, in conjunction with the Department’s Division

of Solid Waste.

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Appendix C

STARS Memo #1 provides:

If the calculated maximum possible contaminant

concentration in the extract liquid is greater than

the TCLP Extraction Guidance Value, then no

conclusion can be drawn and groundwater quality

protection must be confirmed by actually performing

the TCLP extraction for that contaminant. (STARS

p. 6).

Staff witness Gomez compared the SCDOHS analysis

results to the TCLP Alternative Guidance Values in STARS

Memo #1. Gomez created a chart which identifies samples

indicating presence of petroleum constituents, and indicates

the extent to which guidance values are exceeded?'. She attached

a copy of this chart to her June 17, 1994 memorandum to

Regional Director Ray Cowen. She also provided a copy of

this chart to Respondents by enclosure with her September 6,

1994 letter to Respondents.

STARS Memo #1 was written as a guidance document to

assist Regional Spill Investigators, among others, “in

determining whether soils have been contaminated to levels

which require investigation and remediation” (STARS Memo

#1, page 1). In conformance with this guidance, Staff requests

that Respondents be ordered to further investigate and remediate

the petroleum contamination at the facility.

21. The analysis results that Ms. Gomez refers to in this chart were

calculated using external calibration standards. See Footnote 30 which

shows that the contamination levels were found to be substantially higher

when the results were recalculated using internal calibration standards.

Also, the results of 7MF, after recalculation because of mathematical

error, are still higher than the STARS Memo guidance value (see Exhibit

209, page 4).

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Appendix C

Respondent Mt. Hope asserts that Gomez conceded in her

memo of June 17, 1994 that, (i) the SCDOHS samples would

not likely test hazardous by the TCLP method, and (ii)

groundwater has not been impacted, based upon samples taken

from monitoring wells hydraulically downgradient. Gomez also

conceded at the Hearing that none of the Guidance Values

concerning human health, or fish and wildlife under STARS

were exceeded by the SCDOHS results.

Further, Respondent Mt. Hope asserts its expert witness,

Dr. Olin Braids, testified that no definitive tests had been

conducted to determine that there was any potential hazard to

groundwater by contamination at the site and that there was no

groundwater contamination at the facility based upon

monitoring analysis. Mt. Hope concludes that Braids’ testimony

was not controverted by any witness presented by Staff.

However, the evidence consisting of sampling of the

facility performed by the Suffolk County District Attorney’s

office and the Suffolk County Department of Health Services,

shows that a petroleum discharge occurred at the facility, prior

to the sample collection date. Staff asserts this evidence shows

that Respondents buried and thereby discarded additional

petroleum-contaminated soil in the south-eastern area of the

upper parking lot. However, i reject this assertion. (See, p. 49,

supra). Since the facility has been operated by Mt. Hope for

more than 22 years, it is more likely than not, that Mt. Hope is

responsible for the discharge.

The soil sample evidence indicates that a discharge

occurred. However, testimony did not identify the extent of

the discharge. Staff implicitly acknowledges it does not know

the extent of the discharge, in that it seeks an order requiring

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Appendix C

further site investigation. Further, the record before me is not

adequate to establish that the discharge occurred by Mt. Hope’s

deliberate burial of petroleum-contaminated soil. Petroleum

constituents have been used at this facility for the past 22 years

for production of hot asphalt. It is possible that the discharge

occurred inadvertently at some time in the past.

Accordingly, I reject Staff's assertion that these facts and

circumstances constitute a basis for remediation as an ongoing

violation of 6 NYCRR §360-1.7(a)(1)(i) in that Respondents

are operating a solid waste management facility without a

permit. Nonetheless, pursuant to NL §181(1), Respondents are

responsible for remediation of the discharge.

III. PERMIT REVOCATION AND DENIAL

In the permit aspect of this consolidated action, Staff seeks

to have Respondent Mt. Hope’s Departmental BUD and permit

revoked and its application for an air Certificate to Operate

EP4, denied. The basis of Staff's revocation and denial action

is its assessment that Respondent Mt. Hope is unsuitable and

unfit to hold environmental permits or engage in activities

within the Department’s purview. Each determination of

suitability and fitness is necessarily specific to the facts and

circumstances of the particular permittee/applicant.

Staff asserts two bases for a determination that Mt. Hope

is unsuitable and unfit to hold Departmental permits:

(1) Complaint violations proven in this consolidated action;

(2) Respondent Mt. Hope’s history of violations, including two

Consent Orders

This text is long and has been trimmed here. Open the source document for the complete record.