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July 29, 1988


The opinion of the court was delivered by: GERRY


 By now this court is quite familiar with the facts of this case. To recapitulate briefly: this is an action under Section 3008(a) and (g) of The Resource Conservation and Recovery Act (RCRA), 42 U.S.C. § 6928(a) and (g), for injunctive relief and civil penalties against The Vineland Chemical Co. ("Vichem") and its Chief Executive Officer, Arthur Schwerdtle (collectively "defendants"), for violations of RCRA at Vichem's facility in Vineland, New Jersey. Defendants operate two surface impoundments which are classified as "land disposal facilities", for hazardous waste 42 U.S.C. § 6924(k), and are subject to the requirements of Section 3005(a) of RCRA, 42 U.S.C. § 6925(a). In August of 1980, defendants, acting pursuant to RCRA's provisions, notified the Environmental Protection Agency ("EPA") that they were engaged in hazardous waste activity. In November, 1980, defendants submitted the first part of a permit application for the authority to continue their hazardous waste activities. The making of this application automatically granted defendants "interim status" to continue their operations pending full review of their application. In January, 1984, defendants submitted the final part of their permit application, although amendments and additions were submitted later.

 In early 1984, Congress amended RCRA in one very important way. Believing that many of the statute's interim status provisions were going unenforced, the Congress provided that all existing hazardous waste land disposal facilities automatically lost interim status (and thus their authorization to operate) unless they certified by November 8, 1985, that they were in compliance with all applicable groundwater monitoring and financial responsibility requirements. See Hazardous and Waste Amendments of 1984, Section 3005(e)(2) of RCRA, 42 U.S.C. § 6925(e)(2), as amended. This provision is called the "loss of interim status" or "LOIS".

 The parties agree that on November 8, 1985 defendants submitted to the EPA a document certifying compliance with groundwater monitoring and incorporating a statement about liability insurance. The EPA determined, however, that the certification failed to comply with the specific requirements of 42 U.S.C. § 6925(e)(2)(B). Consequently, on December 2, 1985, the EPA notified the defendants that their interim status had terminated as a matter of law on November 8, 1985, that they could no longer continue to operate their two RCRA-regulated surface impoundments, that they were required to submit a closure and post-closure plan for the impoundments, and that continued operation could subject them to both civil and criminal penalties.

 There seems to be no dispute that defendants did not cease using the surface impoundments after November 8, 1985. See e.g., Defendants' Response to Plaintiff's First Set of Interrogatories, No. 10. Instead, in February, 1986, defendants petitioned the Court of Appeals for the Third Circuit, seeking review of the EPA's determination regarding interim status. In February of last year the circuit issued its opinion, Vineland Chemical Co. v. U.S. Environmental Protection Agency, 810 F.2d 402 (3d Cir. 1987), in which it held that defendants failed to satisfy the certification requirements for financial assurance set out in 42 U.S.C. § 6925(e)(2)(B). The court held that there was "no error in the EPA's decision to terminate interim status in this case". Id. at 410. This decision is the basis for much of the instant motion.

 Before the court at this time is the plaintiff's motion for summary judgment on liability as to Counts 1 and 4 of the complaint, and to strike or in the alternative for summary judgment on the defendants' affirmative defenses. We treat with each count and each affirmative defense in turn.

 Count I

 Count I alleges that despite their loss of interim status defendants continued to treat, store or dispose of hazardous wastes in their two surface impoundments. Complaint para. 34. The complaint requests civil penalties of $ 25,000 for each day of violation and injunctive relief to prevent further violations. Because the Court of Appeals has already ruled on the validity of the LOIS determination and because defendants admit using their surface impoundments after November 8, 1985, summary judgment seems clearly appropriate on initial inspection.

 But defendants present a very interesting counter-argument. They say: we do not challenge the circuit's decision, nor do we deny using the impoundment after November 8, 1985. However, we dispute that we are liable for RCRA violations because we dispute that we lost interim status on November 8, 1985. Interim status was lost, defendants say, when the Court of Appeals affirmed the EPA's decision on February 6, 1987, not before.

 The legal basis for this argument is a line of cases beginning with Ex Parte Young, 209 U.S. 123, 52 L. Ed. 714, 28 S. Ct. 441 (1908). The key proposition of law in those cases is that a party has a due process right to contest the validity of an administrative order "without necessarily having to face ruinous penalties if the suit is lost." Brown & Williamson Tobacco Corp. v. Engman, 527 F.2d 1115, 1119 (2nd Cir. 1975), cert. denied, 426 U.S. 911, 48 L. Ed. 2d 837, 96 S. Ct. 2237 (1976). Defendants argue that the language and intent of RCRA, as construed by the Court of Appeals, support this as well. Section 6925(e)(2) states that a facility loses interim status on November 8, 1985, "unless the owner or operator of such facility . . . (B) certifies compliance with all applicable groundwater monitoring and financial responsibility requirements." Defendants would have us draw a distinction between those who submit no certification and those whose certification is found to be insufficient. The former, defendants argue, would obviously have lost their interim status on November 8, 1985. The latter have a due process right to dispute the EPA's determination in court, and cannot be penalized for their decision to exercise that right, defendants contend.

 This court finds that the Ex Parte Young line of cases is not applicable in this instance, for several reasons. First, the only decision squarely on point of which the court is aware sides with the plaintiff. In U.S. v. T&S Brass & Bronze Works, Inc., 681 F. Supp. 314, 321 (D.S.C. Jan. 27, 1988), the court found that:

Compliance with the [RCRA] statutory deadline was mandatory even if the defendant's only option was to cease business on November 8, 1985. By imposing an absolute cut-off date for certifying compliance, Congress had already determined that protection of the public health and the environment was paramount.

 (Emphasis added). Second, plaintiff cites a number of decisions in which parties chose to dispute the compliance order of an administrative agency at their peril. For example, in Train v. Natural Resources Defense Council, 421 U.S. 60, 43 L. Ed. 2d 731, 95 S. Ct. 1470 (1975), the High Court noted that when a polluter attempts to obtain a variance of clean air standards and the agency fails to grant such a variance, any appeal of the agency's decision is taken on the polluter's time, and during the appeal, "original regulations remain in effect, and the polluter's failure to comply may subject him to a variety of enforcement procedures." Id. at 92.

 Also, the plaintiff asks us to distinguish between the Young line of cases and the instant case. The former involved challenges to the agency's authority to promulgate the regulation at issue, or to the constitutional validity of the statute. In those instances, plaintiff says, due process demands a stay of statutorily-imposed penalties. Where the issue is not the validity of either the statute or the regulation, but merely the agency's interpretation of an admittedly valid statute, regulation or order, due process does not necessitate a stay of statutory penalties during the appeal. We agree. Although the difference between the validity of a regulation and the validity of the interpretation of that regulation is not always clear in practice, it seems to us that the defendant's appeal to the Court of Appeals in the instant matter posed no fundamental challenges, such as that in Young, so as to implicate the due process need for a stay.

 Finally, and perhaps most importantly, we believe that the purposes of RCRA and other environmental legislation demand that those who challenge the EPA's interpretation of its own regulation do so at their peril. Irreparable damage to the environment could be done if every litigant continued its EPA-condemned acts while exhausting its appeals. For these reasons we reject defendants' arguments. Of course, before we enter summary judgment we must assess the affirmative defenses. We do so below, after first evaluating the arguments for and against liability as to Count IV.

 Count IV

 Count IV alleges that once the defendants lost interim status on November 8, 1985, they had fifteen days in which to file both a closure and a post-closure plan for their surface impoundments. No plan was filed in the next fifteen days. This failure violated both New Jersey and federal regulations, 40 C.F.R. § 265.112 and NJAC 7:26-9.8(h)(2)(i) and 7:26-9.9(K)(1)(i). The remedy requested is civil penalties and injunctive relief which would require the defendants to submit closure and post-closure plans in a short period of time. *fn1"

 In response to this motion defendants do not deny that they submitted no closure plan within fifteen days of November 8, 1985, or of February 6, 1987. But they say that they had already submitted an adequate plan in September, 1985, as part of their long-term permit application to the New Jersey Department of Environmental Protection ("NJDEP"). Here it is important to understand that the State of New Jersey has the authority for the over-all implementation and operation of RCRA. Thus, defendants initially submitted their RCRA permit applications to state regulatory authorities. The state does not, however, have authority to regulate under RCRA's 1984 Hazardous Waste Amendments, the key part of which is the LOIS provision at issue in this suit. This is why the federal government, not the state, is the plaintiff in the present action. In any event, defendants say that their closure plan obligation under the LOIS provisions was satisfied by the September, 1985, submission to the NJDEP, which document was provided as part of defendants' permit application. Whether that submission was adequate, defendants state, is a disputed issue of material fact which precludes summary judgment.

 As regards the submission of a post-closure plan, defendants say that no post-closure plan should be required in this instance because such a plan would duplicate studies and plans to be done under the EPA's parallel superfund regulation of Vichem. Such duplication, defendants insist, is prohibited by 42 U.S.C. § 6905(b), which directs the EPA to coordinate and avoid duplication in its administration of RCRA and other federal environmental laws.

 With respect to submission of the closure plan the government responds that the plan submitted in September, 1985 does not satisfy RCRA's requirement that a closure plan be submitted within fifteen days of LOIS. First, defendants failed to notify the NJDEP and the EPA of their intent to use the September, 1985, document as their closure plan until mid-November, 1987. This was approximately two years after LOIS occurred. Second, even had the September, 1985, plan been approved for the purpose for which it was submitted -- as part of an initial operating application -- once LOIS occurred, New Jersey law, NJAC 7:26-9.8(f), required submission of an amended plan within sixty days of defendants' knowledge that they had lost interim status. No amended plan has been filed. Third, the government asserts that even if the September, 1985, plan had properly been submitted, it would, as a matter of law, not have passed muster as a post-LOIS closure plan. This is so because a plan which is submitted as part of a permit application lacks the specificity of one prepared in anticipation of actual closure. Finally, the government asserts that its interpretation of its own regulations -- in this instance, that defendants were required to submit a second closure plan -- is entitled to deference by the federal courts when that ...

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