7-2200-14210-2

STATE OF MINNESOTA

OFFICE OF ADMINISTRATIVE HEARINGS

 

FOR THE MINNESOTA POLLUTION CONTROL AGENCY

 

In the Matter of the Administrative Penalty Order Issued to Merle Dauffenbach

FINDINGS OF FACT, CONCLUSIONS AND RECOMMENDATION

 

The above-entitled matter came on for hearing before Administrative Law Judge (ALJ) Richard C. Luis on April 12, 2001 at the Steele County Courthouse, Hearing Room C, 111 East Main Street, Owatonna, Minnesota 55060.

 

Kathleen L. Winters, Assistant Attorney General, 900 NCL Tower, 445 Minnesota Street, St. Paul, Minnesota 55101-2127, appeared on behalf of the Staff of the Minnesota Pollution Control Agency (Agency, MPCA).  Chad A. Allen, Smith, Tollefson & Rahrick, Attorneys at Law, 113 West Main Street, P.O. Box 271, Owatonna, Minnesota 55060, appeared on behalf of Merle Dauffenbach (Appellant, Respondent).

 

The record of the proceeding closed on May 31, 2001, with the receipt by the Administrative Law Judge of the parties’ Reply Briefs.

 

NOTICE

 

This Recommendation is not a final decision.  The Commissioner of the Minnesota Pollution Control Agency will make the final decision after a review of the record.  The Commissioner may adopt, reject or modify the Findings of Fact, Conclusions, and Recommendation.  Under Minn. Stat. § 116.072, subd. 6, the final decision of the Commissioner shall not be made until this Recommendation has been made available to the parties to the proceeding for at least five days.  An opportunity must be afforded to each party adversely affected by this Recommendation to file exceptions and present argument to the Commissioner.  Parties should contact Karen Studders, Commissioner, Minnesota Pollution Control Agency, 520 Lafayette Road, St. Paul, Minnesota 55155-4194, for information on filing exceptions or presenting argument.

STATEMENT OF ISSUES

 

Whether Merle Dauffenbach was required to obtain a permit for the construction and operation of a solid waste facility before receiving building demolition debris on his property.

 

Whether the failure to obtain such a permit violates solid waste storage standards enforced by the MPCA.

 

If violations of solid waste storage standards have occurred, whether the MPCA acted in an arbitrary and capricious fashion in setting the amount of the penalty for the violations found to exist.

 

Based upon all of the files, records, and proceedings herein, the Administrative Law Judge makes the following:

 

FINDINGS OF FACT

 

1.       Merle Dauffenbach owns a tract of land located at 1579 Southwest 28^th Street, Owatonna.  His home is on the property.  Beyond Mr. Dauffenbach’s home, the property is wooded.  He has cleared the area near his home.

2.       Mr. Dauffenbach’s property is located near the edge of the Owatonna city limits.  Other residences are located nearby.  The property use in the immediate vicinity is residential, not agricultural or industrial.

 

3.       On April 29, 2000, one Roger Plath hired Roger Holzemer of R and M Backhoe to haul away the demolition debris from a house to be torn down at 1485 Havana Road in Owatonna.  Originally, the demolition debris was to go to a landfill.  Mr. Plath obtained a demolition permit from the City of Owatonna and sought bids from three firms to remove the debris.  On April 29, 2000, Mr. Plath hired Roger Holzemer of R and M Backhoe to haul the demolition debris from the house and two outbuildings.

 

4.               Mr. Plath had been quoted a price of $5,000 for directly disposing of the demolition debris at the landfill.  The landfill charges by weight, using a scale.  During the spring, Mr. Plath heard from a friend that Merle Dauffenbach accepted demolition debris for disposal.  Mr. Plath discussed disposing of the house with Mr. Dauffenbach.  Mr. Dauffenbach indicated that he had a burning permit and that he would burn the debris.  In a later conversation, Mr. Plath confirmed that he would pay Mr. Dauffenbach $500.00 for receiving the demolition debris.  Mr. Dauffenbach was told by Mr. Plath that Plath would arrange for the hauling of the ashes and unburnable material to the landfill.   

5.               Mr. Plath told Mr. Holzemer that he had a new location for disposal of the demolition debris by burning and that the proper permits had been obtained.  Mr. Plath decided not to destroy the outbuildings, so he asked Mr. Holzemer to revise his bid to reflect disposal of the house alone and dispose of the debris on Mr. Dauffenbach’s property.  Mr. Holzemer revised the bid downward to reflect the smaller amount of debris and absence of landfill fees.

6.               On August 8, 2000, the house at 1485 Havana Road was torn down.  The shingles, brick, concrete, hot water heaters, and other obviously unburnable debris were separated out from the wood and other material.  The shingles and other separated items were hauled directly to the landfill.  Mr. Plath told Mr. Holzemer that, after the remaining debris was burned, Mr. Holzemer would be hired to haul the ashes and unburned debris to the landfill.

7.               The debris from the demolition was loaded into R and M’s two dump trucks and Mr. Plath led them to Mr. Dauffenbach’s property.  The truck boxes were not loaded to the top, so the contents of the loads were not clearly visible.  When they arrived Mr. Plath and Mr. Holzemer spoke to Mr. Dauffenbach.  They told Mr. Dauffenbach that there would be twenty loads of demolition debris and he responded “That many?”  Mr. Dauffenbach raised no objection to the number of truckloads of debris and he indicated where it was to be deposited.  Each truck carried between eight and ten cubic yards of demolition debris.  The area where the debris was to be deposited showed signs of having had large burns on it in the past.  The ashes from previous burns were present. 

8.               Mr. Holzemer returned later in the day and observed his skid load operator piling the material.[1]  The skid load operator was also taking logs and adding them to the demolition debris.  When Mr. Holzemer asked why the logs were being added, the skid load operator told him that Mr. Dauffenbach had come out to observe the work and had told him to add the logs.

9.               Steele County received an anonymous complaint about dumping on the Dauffenbach property.  The County contacted the MPCA and Inspector Mark Hugeback went out to investigate on August 10, 2000.

10.           Mr. Hugeback arrived at the Dauffenbach property and spoke to Mr. Dauffenbach.  He said that he had a burning permit and after a few more loads were delivered, the pile would be burned.  After discussing the situation, Mr. Hugeback and Mr. Dauffenbach went to inspect the pile. 

11.           Mr. Hugeback observed general demolition debris mixed with large logs.   He estimated by pacing off the perimeter that there were 177 cubic yards of material in the waste pile.  Mr. Hugeback photographed the pile.  The material had been piled with the use of a skid loader on bare ground with no liner underneath.  There was no cover over the pile.  The skid loader left clearly visible tracks.  The pile of debris was plainly visible from Mr. Dauffenbach’s home.  From the carpet, milled wood, paper, electrical components, and metal in the pile, Mr. Hugeback concluded that most of the pile was demolition debris.  He also observed ash mixed with the debris that Mr. Hugeback surmised was from previous burnings.

12.           Mr. Hugeback informed the Respondent that the burning permit that he holds does not authorize burning demolition debris.  Mr. Hugeback told Dauffenbach that he could not legally burn the pile of waste.  Mr. Dauffenbach responded that he would “let it set there forever.”[2]  Mr. Dauffenbach stated that he wanted “2–3 loads for kindling.”[3]  No mention was made of using any of the demolition debris for heating Mr. Dauffenbach’s home.  

13.           On August 17, 2000, Mr. Hugeback sent a letter to Mr. Dauffenbach, Mr. Plath, and Mr. Holzemer indicating to each of them that depositing the demolition debris on Mr. Dauffenbach’s property was a violation of the permit requirements of Minn. Stat. § 116.081 and Minn. R. 7001.0030 and 7001.3050, and the waste collection and transportation requirements of Minn. R. 7035.0800.[4]  The letter informed them that they had thirty days to remove and properly dispose of the demolition debris.[5]

14.           On September 21, 2000, Mr. Hugeback returned to the Appellant’s property to determine whether the waste had been removed.  The pile was still there and remained untouched from the previous inspection.  On September 26, 2000, Mr. Hugeback sent Mr. Dauffenbach a letter requesting information and indicating that the MPCA was considering an enforcement action.[6]

15.           The MPCA convened a Penalty Forum to assess what action should be taken regarding the handling of demolition debris on the Dauffenbach property.  The current violations discussed were failure to meet the permit requirements of Minn. Stat. § 116.081 and Minn. R. 7001.0030 and 7001.3050.  The Forum considered the violation as serious due to the evidence that Mr. Dauffenbach intended to burn the demolition debris.[7]  The potential for harm was assessed as minor since the failure to obtain a permit would not cause harm, so long as the waste disposal rules are subsequently followed.[8]  The deviation from compliance was assessed as major because of the lack of notice to governmental units, the amount and type of waste, and intention to burn the waste.[9]  

16.           The Forum used a penalty table to determine the base penalty.  The penalty table establishes a range of suggested base penalty amounts over the degree of potential for harm and the level of deviation from compliance.  With the potential for harm as minor and the deviation from compliance was major, the range for the base penalty runs from $500 to $2,000.[10]  The Forum selected $1,000 as being the middle of the range.  The only adjustment was to add twenty percent for willfulness, since no corrective action had been taken to remove the waste.  No modification to the penalty was proposed based on past violations, other factors as justice may require, or economic benefit.  The proposed penalty is forgivable, since Mr. Dauffenbach has had no prior violations.

17.           On December 12, 2000, the MPCA issued an Administrative Penalty Order (APO) based on violations of the permit requirements of Minn. Stat. § 116.081 and Minn. R. 7001.0030 and 7001.3050.[11]  The APO required that the demolition debris on Mr. Dauffenbach’s property be removed and properly disposed of at a permitted waste facility.  A penalty of $1,200 was imposed, but that penalty would be forgiven if the corrective action had been taken within 30 days of the APO.[12]   

18.           On February 12, 2001, Mr. Dauffenbach requested a hearing on the APO.[13]  On March 23, 2001, the MPCA issued a Notice of and Order for Hearing setting this matter on before Administrative Law Judge Richard C. Luis.   

19.           The MPCA has issued APOs to both Mr. Plath and Mr. Holzemer for their roles in the disposal of the demolition debris on Mr. Dauffenbach’s property.  The penalties in each of those APOs are higher than the penalty issued to Mr. Dauffenbach.

Based on the foregoing Findings of Fact, the Administrative Law Judge makes the following:

CONCLUSIONS

1.       The Administrative Law Judge and the Commissioner of the Minnesota Pollution Control Agency have jurisdiction in this matter pursuant to Minn. Stat. § 116.072.

2.       Proper notice of the hearing was timely given, and all relevant substantive and procedural requirements of law or rule have been fulfilled.  The matter is properly before the Administrative Law Judge. 

3.       A "solid waste management facility" is defined in Minn. R. 7035.0300, subp. 103, as “a facility for the storage, collection, transportation, processing or reuse, conversion, or disposal of solid waste.”  The Dauffenbach property became a solid waste management facility when the demolition debris was placed on the property on August 8, 2000.

 

4.       Minn. Stat. § 116.081, subd. 1, Minn. R. 7001.0030, and Minn. R. 7001.3050, subp. 1, require that a permit be obtained to operate a solid waste management facility.  By operating the solid waste management facility on his property without a permit, Merle Dauffenbach has failed to comply with this part.

 

5.       Mr. Dauffenbach violated solid waste storage standards enforced by the Minnesota Pollution Control Agency by failing to obtain a permit before storing demolition debris on his property.

 

6.       Mr. Dauffenbach should have known that he was not authorized to burn demolition debris with the Department of Natural Resources burn permit he holds for his property.

 

7.       The MPCA is not required to show that Mr. Dauffenbach intended to violate the solid waste storage standards to sustain the penalties in the APO.

 

8.       The MPCA penalty determination considered all necessary statutory factors and is reasonable and appropriate for the violations found to exist.  The Minnesota Pollution Control Agency did not act in an arbitrary and capricious fashion in setting the amount of the penalty for the violations found to exist.

 

 

Based upon the foregoing Conclusions, the Administrative Law Judge makes the following:

RECOMMENDATION

IT IS RECOMMENDED that the administrative penalty order assessing a forgivable penalty against Merle Dauffenbach of $1,200 be AFFIRMED.

 

Dated this 22^nd day of June, 2001.

 

 

                                                                

RICHARD C. LUIS

Administrative Law Judge

 

 

 

 

 

NOTICE

 

Pursuant to Minn. Stat. § 14.62, subd. 1 (1996), the Minnesota Pollution Control Agency is required to serve its final decision upon each party and the Administrative Law Judge by first-class mail.

 

Reported:   Tape Recorded; Three Tapes, No Transcript Prepared.

 

MEMORANDUM

Solid Waste Management Facility Permits

 

A permit is required to construct and operate a solid waste management facility.  Minn. Stat. 116.81, subd. 1, states:

 

Subdivision 1. Obtain permit. It shall be unlawful for any person to construct, install or operate an emission facility, air contaminant treatment facility, treatment facility, potential air contaminant storage facility, storage facility, or system or facility related to the collection, transportation, storage, processing, or disposal of waste, or any part thereof unless otherwise exempted by any agency rule now in force or hereinafter adopted, until plans therefor shall have been submitted to the agency, and a written permit therefor shall have been granted by the agency. The requirements of this section shall not be applied to motor vehicles.[14]

 

The MPCA has also adopted rules regarding solid waste management facilities.  Minn. R. 7001.3050, subp. 1 provides as follows:

 

Subpart 1.  Permit required.  Except as provided in subpart 2, a solid waste management facility permit or permit modification is required to:

A.  treat, store, process, or dispose of solid waste;

B. established, construct, or operate a solid waste management facility; or

C. change, add, or expand a permitted solid waste management facility.[15]

 

Mr. Dauffenbach did not have a Solid Waste Management Permit and he never prepared an application for such a permit.  No such permit was ever issued by the MPCA.  Mr. Dauffenbach violated the applicable permit provision when he accepted demolition debris on his property.

 

Responsibility for Solid Waste Disposal

 

At the hearing in this matter, Mr. Dauffenbach maintained that he only agreed to receive wood from Mr. Plath.  The wood, Mr. Dauffenbach asserted, was to be used only for heating his home, which has only a wood-burning stove to supply heating.  Appellant noted that the trucks were not loaded so high that he could see the contents before the debris was dumped.  Mr. Dauffenbach argues that he did not intend to receive twenty trailer-loads of demolition debris and therefore he should be entitled to have the APO rescinded or the fine forgiven.

 

The agreement between Mr. Plath and Mr. Holzemer to haul the demolition debris and the discussion regarding subsequent hauling of the ash and nonburnable materials demonstrates their understanding of the arrangement.  They both believed that all the demolition debris would be burned at one time.  Both Mr. Plath and Mr. Holzemer testified regarding Mr. Dauffenbach’s participation in selecting the site to unload the demolition debris.  He was told how many loads were coming and, while he may have expressed surprise, he did not overrule or forbid continuing the delivery.  The skid load operator piled wood from the premises onto the debris pile at the direction of Mr. Dauffenbach.  Appellant was physically present to tell the skid load operator that logs were to be added to the debris pile.  The fact that the contents were not actually visible to the Respondent as they lay inside the boxes of the trucks does not relieve him of responsibility for knowing what was inside and about to be deposited on his land.  These facts demonstrate that Mr. Dauffenbach was aware of what was happening as a result of his agreement with Mr. Plath.[16]  The ALJ believes that Mr. Dauffenbach received the demolition debris for the purpose of burning it as the means of disposal.

 

When the MPCA investigator arrived and inquired about the demolition debris, Mr. Dauffenbach responded that he had a DNR burning permit.  There is no need for such a permit for burning wood in a stove.  The only reason for such a permit is to conduct open burning.  The condition of the debris site indicated that such open burning had been done there before.  When the investigator asked what was going to be done to the debris, Mr. Dauffenbach indicated that he was going to burn it.  When told that burning the waste was unlawful, Mr. Dauffenbach responded he would leave the debris there.  These facts demonstrate that Mr. Dauffenbach intended to conduct open burning as the means of disposing of the demolition debris.  The evidence in the record does not support Mr. Dauffenbach’s contention that he agreed only to receive a small amount of wood to be used for home heating.

 

Strict Liability

 

Mr. Dauffenbach maintains that he did not intend to violate the solid waste disposal standards.  The MPCA asserts that the waste disposal standards do not require proof of intent, but rather impose strict liability on the person receiving the waste.  Mr. Dauffenbach cites In Re the Matter of Paul S. Dougherty, 482 N.W.2d 485 (Minn.App. 1992), as supporting the position that some connection must exist between Mr. Dauffenbach and receiving the waste.

 

Dougherty was an APO case similar to this matter.  The primary difference is that in Dougherty, a corporate officer was being held personally liable for violations of environmental laws where the named actor is the corporation.  In Dougherty, the Court of Appeals stated:

 

Three essential elements must be satisfied before liability will be imposed upon a corporate officer under the responsible corporate officer doctrine:  (1) the individual must be in a position of responsibility which allows the person to influence corporate policies or activities; (2) there must be a nexus between the individual’s position and the violation in question such that the individual could have influenced the corporate actions which constituted the violations; and (3) the individual’s actions or inactions facilitated the violations.[17]

 

Mr. Dauffenbach suggests that the MPCA interpretation of strict liability would hold him liable if the waste had been dumped on Mr. Dauffenbach’s property without his knowledge or permission.  As mentioned above, Appellant maintained that he could not see the waste before it was dumped.  But the facts of this matter indicate that the waste was delivered with the full knowledge and permission of Respondent.  Mr. Plath contracted with Mr. Dauffenbach, who agreed to accept the demolition debris.  Mr. Dauffenbach was present when the waste was dumped.  He directed an individual as to how to arrange the waste for burning.  Mr. Dauffenbach alone has exercised control over the waste from the time it was deposited on his property.  Whether he intended to violate the solid waste disposal standards is irrelevant to anything other than the penalty.  Mr. Dauffenbach intended to receive the waste on to his property and he did so in violation of the applicable standards.[18]  These actions would not have occurred without Mr. Dauffenbach’s agreement and he could have prevented the violations at any time until the waste was dumped on his property on August 8, 2000.

 

Another case cited by Mr. Dauffenbach as demonstrating that strict liability does not apply is Arrowhead Concrete Works v. Williams, 550 N.W.2d 883 (Minn.App. 1996).  In Arrowhead, an improperly stored pile of demolition debris caught fire.  The MPCA charged improper storage and improper disposal of the waste.  The APO made the penalty nonforgivable because of the use of burning for disposal.  The District Court granted summary judgment on the nonforgivable penalty, when genuine issues of material fact existed surrounding the fire.  The Court of Appeals held that:

 

The record supports the determination that Arrowhead illegally stored solid waste, but not the imposition of a nonforgivable penalty for that violation.  There are genuine issues of material fact precluding summary judgment on the Commissioner’s claim that Arrowhead’s response to the fire constitutes improper disposal of solid waste without a permit.[19] 

 

The Court of Appeals upheld the finding of illegal storage while noting that the responsible person “maintained that he was unaware that the pile consisted of anything more than clean pallets and vegetation.”[20]  The APO issued to Mr. Dauffenbach charged him with illegally disposing solid waste and imposing a forgivable penalty.  The holding in Arrowhead supports the imposition of a forgivable penalty on Mr. Dauffenbach, regardless of his lack of intent to violate the solid waste disposal regulations.

 

Solid Waste Storage vs. Disposal

 

Mr. Dauffenbach argues that the MPCA’s charge of improper disposal is not proven in this matter, since he did not burn the demolition debris.   Arrowhead is cited as support for this proposition.  The MPCA noted that while the evidence available to the investigator included Mr. Dauffenbach’s intent to burn the waste, the citation is based on his failure to obtain a permit.[21]

 

As discussed above, in Arrowhead the Court of Appeals held that summary judgment on an APO was improper where genuine issues of material fact remain for hearing on the issue supporting the penalty imposed.  In this matter, the issue is whether Mr. Dauffenbach obtained a permit before receiving demolition debris.  He did not.  Such a permit is necessary before either storing or disposing of such waste.[22]  Whether his conduct constitutes storage or disposal does not change the outcome. 

 

Other Factors as Justice May Require

Mr. Dauffenbach maintains that due to his age and infirmity he should not be required to pay the penalty in the APO.  He also asserts that he has limited income and he cannot afford either to pay the penalty or incur the costs necessary to abate the violation by disposing of the demolition debris properly.  The MPCA pointed out that the purpose of the penalty is to provide incentive for Mr. Dauffenbach to abate the violation.  The penalty is in the midrange of available penalties and not extraordinary.

The MPCA noted that Mr. Dauffenbach had not entered evidence regarding his financial circumstances.  The MPCA maintains that, absent such evidence, there is no basis for reducing the penalty.  Mr. Dauffenbach is a property owner and he bears a responsibility to comply with the standards imposed on all other similarly situated property owners.  To remove the incentive provided by the APO would result in continued environmental harm caused by improper waste handling.  The penalty amount is appropriate if the violation is not abated.  There is no basis for reducing the penalty absent that abatement.

 

The record in this matter demonstrates that Mr. Dauffenbach participated in the contracting for disposal of demolition debris on his property.  He was physically present when the waste was being piled for burning.  Mr. Dauffenbach is liable for the solid waste handling violations that occurred.  The MCPA imposed a penalty that is reasonable and proportionate to the violation.  Mr. Dauffenbach has shown no basis for reducing that penalty or voiding the APO.  Therefore, the Administrative Law Judge recommends that the APO in this matter be AFFIRMED. 

 

R.C.L.