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United States v. Dpc Industries, Inc. and Dpc Enterprises, LP

United States District Court, D. Nebraska

March 24, 2015

UNITED STATES OF AMERICA, Plaintiff,
v.
DPC INDUSTRIES, INC. and DPC ENTERPRISES, LP, Defendants.

JOHN C. CRUDEN, Assistant Attorney General Environment & Natural Resources Division, THOMAS A. MARIANI, JR., Deputy Section Chief Environmental Enforcement Section, KATHERINE L. MATTHEWS, Trial Attorney United States Department of Justice Environment & Natural Resources Division Environmental Enforcement Section, DEBORAH R. GILG, United States Attorney, District of Nebraska LAURIE KELLY, Assistant United States Attorney, Omaha, NE, for Plaintiff United States of America.

KARL BROOKS Regional Administrator U.S. Environmental Protection Agency, Lenexa, Kansas, DAVID COZAD, Regional Counsel U.S. Environmental Protection Agency, Lenexa, Kansas, CHRIS DUDDING, Assistant Regional Counsel U.S. Environmental Protection Agency, Lenexa, Kansas, for the United States Environmental Protection Agency.

R.C. Karm, DPC ENTERPRISE, LP, DPC Enterprises, GP, LLC, Houston, TX, for Defendant DPC Enterprises, LP.

WILLIAM E. INGRAM, CFO, Houston, TX, for Defendant DPC Industries, Inc.

CONSENT DECREE.

LAURIE SMITH CAMP, District Judge.

Plaintiff United States of America, on behalf of the United States Environmental Protection Agency ("EPA"), has filed a complaint in this action concurrently with this Consent Decree alleging that Defendant DPC Industries, Inc. violated Section 112(r) of the Clean Air Act ("CAA"), and Defendant DPC Enterprises, LP violated Section 112(r) of the Clean Air Act, 42 U.S.C. § 7412(r), and Section 312 of the Emergency Planning and Community Right-to-Know Act ("EPCRA"), 42 U.S.C. § 11022.

The Complaint against Defendants alleges that Defendants, who operate chlorine repackaging facilities in Bellevue, Nebraska, and Festus, Missouri, violated reporting requirements contained in the Clean Air Act's Risk Management Program regulations and in EPCRA. The violations alleged are based on deficiencies in each Defendant's Risk Management Plan discovered during EPA site inspections at the Festus and Bellevue plants. The Risk Management Plan must be developed and implemented pursuant to the Clean Air Act at any facility storing more than a threshold quantity of a regulated substance such as chlorine. In addition, the Complaint alleges that DPC Enterprises, LP failed to comply with EPCRA by submitting deficient emergency planning information to response authorities.

Neither DPC Industries, Inc. nor DPC Enterprises, LP admit any liability to the United States arising out of the transactions or occurrences alleged in the Complaint.

The Parties recognize, and the Court by entering this Consent Decree finds, that this Consent Decree has been negotiated by the Parties in good faith and will avoid litigation between the Parties and that this Consent Decree is fair, reasonable, and in the public interest.

NOW, THEREFORE, before the taking of any testimony, without the adjudication or admission of any issue of fact or law except as provided in Section I, and with the consent of the Parties, IT IS HEREBY ADJUDGED, ORDERED, AND DECREED as follows:

I. JURISDICTION AND VENUE

1. This Court has jurisdiction over the subject matter of this action, pursuant to 28 U.S.C. §§ 1331, 1345, and 1355 and 42 U.S.C. §§ 7413(b) and 11045(c), and over the Parties. Venue lies in this District pursuant to Section 113(b) of the CAA, 42 U.S.C. § 7413(b), and 28 U.S.C. §§ 1391(b), (c), and 1395(a), because the violations alleged against Defendants in the Complaint are alleged to have occurred in, and Defendant DPC Industries, Inc. conducts business in, this judicial district. For purposes of this Decree, or any action to enforce this Decree, Defendants consent to the Court's jurisdiction over this Decree and any such action and over Defendants and consents to venue in this judicial district.

2. For purposes of this Consent Decree, Defendants agree that the Complaint states claims upon which relief may be granted pursuant to Section 112(r) of the CAA, 42 U.S.C. § 7412(r) and Section 325(c) of EPCRA, 42 U.S.C. § 11045(c).

II. APPLICABILITY

3. The obligations of this Consent Decree apply to and are binding upon the United States, and upon Defendants and any successors, assigns, or other entities or persons otherwise bound by law.

4. No transfer of ownership or operation of either Facility, whether in compliance with the procedures of this Paragraph or otherwise, shall relieve Defendants of their obligation to ensure that the terms of the Decree are implemented. At least 30 Days prior to such transfer, Defendants shall provide a copy of this Consent Decree to the proposed transferee and shall simultaneously provide written notice of the prospective transfer, together with a copy of the proposed written agreement, to EPA Region 7 and the United States Department of Justice, in accordance with Section XIV of this Decree (Notices).

5. Defendants shall provide a copy of this Consent Decree to all officers, employees, and agents whose duties might reasonably include compliance with any provision of this Decree. Further, Defendants shall provide the relevant portion or portions of this Decree and of any Audit Action Plan or Supplemental Audit Action Plan as described in this Decree, to any contractor, including the third-party auditors performing the Corporate Office and Field Audits, retained to perform work required under this Decree or any Audit Action Plan or Supplemental Audit Action Plan produced in accordance with this Decree. In any action to enforce this Consent Decree, Defendants shall not raise as a defense the failure by any of their officers, directors, employees, agents, or contractors to take any actions necessary to comply with the provisions of this Consent Decree.

III. DEFINITIONS

6. Terms used in this Consent decree that are defined in the CAA or in regulations promulgated pursuant to the CAA shall have the meanings assigned to them in the CAA or such regulations, unless otherwise provided in this Decree. Whenever the terms set forth below are used in this Consent Decree, the following definitions shall apply:

a. "Bellevue Facility" shall mean DPC Industries, Inc.'s chlorine repackaging plant located at 11202 South 25th St., Bellevue, NE 68123.

b. "Complaint" shall mean the complaint filed by the United States in this action.

c. "Consent Decree" or "Decree" shall mean this Decree and all appendices attached hereto (listed in Section XXIII).

d. "Corporate Office" shall mean the Defendants' common environmental affairs office, housed at 1919 Jacintoport Blvd., Houston, TX, 77015.

e. "Covered Process" shall have the definition provided in 40 C.F.R. § 68.3.

f. "Day" shall mean a calendar day unless expressly stated to be a business day. In computing any period of time under this Consent Decree, where the last day would fall on a Saturday, Sunday, or federal holiday, the period shall run until the close of business of the next business day.

g. "Defendants" shall collectively mean DPC Industries Inc. and DPC Enterprises LP.

h. "Effective Date" shall have the definition provided in Section XV.

i. "EPA" shall mean the United States Environmental Protection Agency and any of its successor departments or agencies.

j. "Facilities" shall mean Defendants' facilities located in Festus, Missouri, and Bellevue, Nebraska. When only one of these facilities is referred to, it will be designated by its location, i.e., "Festus Facility" or "Bellevue Facility."

k. "Festus Facility" shall mean DPC Enterprises' chlorine repackaging plant located at 1785 Highway 61, Festus, MO 63028.

l. "Paragraph" shall mean a portion of this Decree identified by an Arabic numeral.

m. "Parties" shall mean the United States and Defendants.

n. "Section" shall mean a portion of this Decree identified by a roman numeral.

o. "States" shall mean the States of Nebraska and Missouri, unless designated individually by name.

p. "United States" shall mean the United States of America, acting on behalf of EPA.

IV. CIVIL PENALTY

7. Within 30 Days after the Effective Date of this Consent Decree, Defendant DPC Industries Inc. shall pay the sum of $87, 327 and Defendant DPC Enterprises LP shall pay the sum of $111, 673 each as a civil penalty, together with interest accruing from the date on which the Consent Decree is lodged with the Court, at the rate specified in 28 U.S.C. § 1961 as of the date of lodging.

8. Defendants shall pay the civil penalty due by https://www.pay.gov to the U.S. Department of Justice in accordance with written instructions to be provided to Defendants, following entry of the Consent Decree, by the Financial Litigation Unit ("FLU") of the U.S. Attorney's Office for the District of Nebraska, 1620 Dodge Street, Suite 1400, Omaha, NE XXXXX-XXXX, (402) 661-3700. The payment instructions provided by the FLU shall include a Consolidated Debt Collection System ("CDCS") number, which Defendants shall use to identify all payments required to be made in accordance with this Consent Decree. The FLU will provide the payment instructions to:

on behalf of Defendants. Defendants may change the individual to receive payment instructions on their behalf by providing written notice of such change to the United States and EPA in accordance with Section XIV (Notices). At the time of payment, Defendants shall send notice that payment has been made: (i) to EPA via email at acctsreceivable.cinwd@epa.gov or via regular mail at EPA Cincinnati Finance Office, 26 Martin Luther King Drive, Cincinnati, Ohio 45268; and (ii) to the United States via email or regular mail in accordance with Section XIV (Notices). Such notice shall reference the CDCS Number and DOJ case number XX-X-X-X-XXXXX.

9. Defendants shall not deduct any penalties paid under this Decree pursuant to this Section or Section VII (Stipulated Penalties) in calculating its federal income tax.

V. COMPLIANCE REQUIREMENTS

10. Defendants shall perform audits at the Corporate Office, Festus Facility, and Bellevue Facility to evaluate compliance with the CAA's Section 112(r) Risk Management Program requirements at 40 CFR Part 68, in accordance with the requirements and deadlines set forth in Paragraphs 11-16, herein.

11. Audit Performance: Within thirty (30) Days of the Effective Date, Defendants shall propose to EPA for its approval the name of a third party auditor or auditors and provide such party's or parties'qualifications to perform the audits that meet the requirements of Paragraph 11-16, below.

a. The proposed auditor for each Audit shall be a knowledgeable and experienced person or firm with expertise in risk management program requirements, as well as expertise in the risk management requirements of each Covered Process at Defendants' Facilities.

b. Defendants may propose to replace any auditor or may propose to add any additional auditor by submitting a request to EPA pursuant to Paragraphs 17-21 (Approval of Deliverables). The request shall indicate the reason for the change or addition; the qualifications of the proposed auditor; and any other relevant information. The proposed auditor shall meet the criteria of subparagraph 11.a above.

12. Audits: Within ninety (90) Days of EPA's approval of the auditor or auditors, the Defendants perform the audits and complete the Audit Reports as specified in Paragraph 15 herein. All audits will be conducted in accordance with generally accepted audit practices.

13. The Corporate Office Audit shall include: the review of 40 C.F.R. Part 68 implementation materials and records for all Covered Processes and interviews with personnel who develop, or aid in developing, or implement, or aid in implementing the Risk Management Program for Defendants' Facilities. Personnel interviews should include all Corporate Office personnel identified as holding a position in the management system for any of Defendants' Facilities and, as deemed necessary by the third-party auditor, personnel from Defendants' Facilities with relevant process knowledge to assist the auditors by providing process operations input.

a. Scope of Corporate Office Audit: The Risk Management Program Audit for the Corporate Office will include the identification of elements of the Risk Management Program for all Covered Processes at the Defendants' Facilities that originate from the Corporate Office, including but not limited to documents developed by the Corporate Office for use at the Facilities, and documents developed by the Corporate Office for use at the Corporate Office, including elements whose implementation is initiated or wholly completed by the Facilities (development may be done by the Corporate Office).

b. Identification and Evaluation of Applicable Codes & Standards: The Corporate Office Audit will identify, for all recognized and generally accepted good engineering practices (RAGAGEP) identified by the Corporate Office as being applicable to all Covered Processes at the Defendants' Facilities: whether the current version is being used; whether codes and standards, including but not limited to Chlorine Institute pamphlets and jurisdictional building, fire, electrical, and mechanical codes are appropriate to the chemicals, processes, and physical facilities; whether any RAGAGEP not identified by the Corporate Office also apply, and if such do apply, the audit shall identify those practices.

c. Evaluation of Risk Management Program Elements: In addition to the above, the Corporate Office Audit shall evaluate each of the following elements to determine whether they are adequate. To the extent that the Corporate Office has a role in Defendants' compliance with any of the following elements at the Facilities, the Corporate Office Audit shall evaluate those elements. If an element is not handled at all at the Corporate Office level, the Audit Report shall explicitly state that it applies only to the Facilities.

i. 40 C.F.R. § 68, Subpart A - General Management System. The Corporate Office Audit shall evaluate whether the management system, as written, meets the requirements of 40 C.F.R. § 68.15; and whether the management system is adequately implemented at each of the Facilities, with clearly delineated lines of authority and decisionmaking for implementation of the risk management program. The Audit will also evaluate the effectiveness of the management system, in particular, the development and implementation of the risk management program elements developed by the Corporate Office and disseminated to each Facility. The Corporate Office Audit will determine whether the lines of communication between the Corporate Office and the Facilities are adequate and effective.

ii. 40 C.F.R. § 68, Subpart B - Hazard Assessment. The Corporate Office Audit shall assess compliance with this Subpart, including evaluation of worst-case and alternate-case scenarios, and identification of receptors.

iii. 40 C.F.R. § 68, Subpart D - Program 3 Prevention Program

(1) 40 C.F.R. § 68.65 - Process Safety Information (PSI). The Corporate Office Audit shall confirm the Covered Processes at Defendants' Facilities, including but not limited to repackaging, blending, warehousing, and storage, for all RMP-regulated chemicals, including but not limited to chlorine, sulfur dioxide, and ammonia for compliance with RAGAGEP as identified in part b of this paragraph. While the Corporate Office Audit will cover all aspects of the applicable RAGAGEP, it will specifically address the following areas: safety systems (including but not limited to safety release valves and systems, chlorine detection and alarms, and the emergency action plan); labeling; and overall condition of tanking, valves, and piping. The auditor shall evaluate the PSI to ensure that changes to PSI based on recommendations from incidents are reviewed and integrated into Defendants' PSI, including but not limited to Chlorine Institute Pamphlet 6.

(2) 40 C.F.R. § 68.67 - Process Hazard Analysis (PHA). The Corporate Office Audit shall evaluate whether PHAs required by 40 C.F.R. § 68.67 have been properly performed; whether PHAs have recognized all known hazards for the regulated Covered Process(es), RMP-regulated chemicals, stationary source siting, and factors unique to each Facility (including associated controls and safety systems); whether previously performed PHAs have fully identified issues and root causes of incidents; and whether deficiencies set forth within the PHAs have been resolved adequately and in a timely manner.

(3) 40 C.F.R. § 68.69 - Operating Procedures. The Corporate Office Audit shall evaluate whether operating procedures are current, clear, complete, and consistent with recognized and accepted good engineering practices.

(4) 40 C.F.R. § 68.71 - Training. The Corporate Office Audit shall evaluate whether training and refresher training is current and adequate.

(5) 40 C.F.R. § 68.73 - Mechanical Integrity. The Corporate Office Audit shall evaluate whether the mechanical integrity program is adequate and consistent with RAGAGEP.

(6) 40 C.F.R. § 68.75 & 40 C.F.R. § 68.77 - Changes in Process. The Corporate Office Audit shall evaluate whether Management of Change (MOC) and Pre-Startup Safety Review (PSSR) policies are sufficient, and, to the extent that the Corporate Office is involved in the implementation of MOC and PSSR at the Facilities, that they are being conducted appropriately. As to MOC, the audit shall assess whether it includes all required elements and whether changes to PSI, PHA, operating procedures, mechanical integrity, training, and other program elements have been completed and documented. As to PSSR, the audit shall determine whether PSSRs were completed prior to bringing equipment online and whether findings, recommendations, and action items were resolved or implemented.

(7) 40 C.F.R. § 68.79 - Compliance Audits. The Corporate Office Audit shall evaluate whether each compliance audit conducted during the five years prior to the effective date of this consent decree was properly performed in accordance with 40 C.F.R. § 68.79; whether all elements of 40 C.F.R. § 68 Subpart D were fully evaluated; whether all issues were identified and addressed; and whether action items and time frames were appropriate and were completed in a timely manner.

(8) 40 C.F.R. § 68.81 - Incident Investigation. The Corporate Office Audit shall include a review of all incidents during the five years prior to effective date of this consent decree in accordance with 40 C.F.R. §§ 68.42 and 68.81 that should have resulted in an incident investigation. For incidents or near misses where an investigation occurred, a determination will be made whether the incident investigation was conducted properly, whether findings were appropriate, and whether appropriate action items were developed and implemented.

(9) Completion of Action Items. The Corporate Office Audit shall evaluate whether action items arising from PHAs, Compliance Audits, and Incident Investigations are appropriate, are completed in a timely manner, and that such items are fully closed-out.

iv. 40 C.F.R. § 68, Subpart E - Emergency Response. The Corporate Office Audit shall evaluate whether the emergency response program is adequate, coordinated with local emergency planners/responders, and whether mechanisms for timely notification of first responders and the public are adequate and are being implemented. Review will also be made of the notification mechanism for notifications to the state emergency response commission(s) and National Response Center.

v. 40 C.F.R. § 68, Subpart G - Risk Management Plan. The Corporate Office Audit shall evaluate whether the Risk Management Plan for each Facility is updated as required, in a timely manner following accidents or changes in the emergency contact, and that all required elements are included, accurate, and reflective of the program that is implemented at the Facility.

vi. 40 C.F.R. § 68, Subpart H - Other Requirements. The Corporate Office Audit will evaluate whether the Corporate Office is in compliance with recordkeeping and retention requirements, and any additional reporting requirements as specified in Subpart H.

14. Two Field Audits. The Field Audits shall include: the review of 40 C.F.R. Part 68 implementation materials and records for all Covered Processes; the inspection of on-site equipment, conditions, and practices; and interviews with plant personnel including operator technicians, maintenance personnel, contractors, plant management, administrative personnel, and participants in specific Risk Management Program related activities such as process hazard analyses and incident investigations (including personnel from each Facility, the Corporate Office, and from any of Defendants' other facilities that participated in either the Festus Facility's or the Bellevue Facility's Risk Management Program implementation activities). Each Field Audit will include a review of applicable requirements in the following elements of 40 C.F.R. Part 68 with increased focus on the items listed under each regulatory Subpart below:

a. 40 C.F.R. § 68, Subpart A - General Management System. Each Field Audit shall evaluate whether the management system, as written, meets the requirements of 40 C.F.R. § 68.15; and whether the management system is adequately implemented at each Facility, with clearly delineated lines of authority and decision-making for implementation of the risk management program. The Field Audits will also evaluate the effectiveness of the management system in ensuring Risk Management Program elements developed by the Corporate Office are communicated and implemented at the facility being audited.

b. 40 C.F.R. § 68, Subpart B - Hazard Assessment. Each Field Audit shall assess, for the subject Facility, compliance with this Subpart, including evaluation of worst-case and alternate-case scenarios and identification of receptors.

c. 40 C.F.R. § 68, Subpart D - Program 3 Prevention Program

i. Process Safety Information (PSI). Each Field Audit should evaluate whether the recognized and generally accepted good engineering practices (RAGAGEP) used by Defendants, including but not limited to industry codes, standards, pamphlets, and guidance documents, particularly those produced by the Chlorine Institute, are appropriate to the processes at the subject Facility.

(1) Each Field Audit shall evaluate Defendants' RMP Covered Processes, including but not limited to repackaging, blending, warehousing, and storage, for all RMP regulated chemicals, including but not limited to chlorine, sulfur dioxide, and ammonia for ...


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