2006-297, STATE OF NH v. ELEMENTIS CHEMICAL, INC.

Chemical, 152 N.H. 794 (2005). Elementis is in the business of distributing A detailed history of this case can be found in State v. Elementis

I. Factual Background

$95,100. We affirm. Chemical, Inc. (Elementis), pursuant to RSA 147-A:17 (2005) in the amount of (Hampsey, J.) assessing a civil forfeiture against the defendant, Elementis DUGGAN, J. The State appeals an order of the Superior Court

(Gregory E. Michael and Gregory Holmes on the brief), for the defendant. McAleese, III, on the brief and orally), and Wiggin & Nourie, P.A., of Manchester Morgan, Lewis & Bockius, LLP, of Philadelphia, Pennsylvania (John J.

attorney general, on the brief and orally), for the State. to press. Errors may be reported by E-mail at the following address: Kelly A. Ayotte, attorney general (Richard W. Head, senior assistant

page is: http://www.courts.state.nh.us/supreme. v.

editorial errors in order that corrections may be made before the opinion goes No. 2006-297 Hampshire, One Charles Doe Drive, Concord, New Hampshire 03301, of any Hillsborough-southern judicial district Readers are requested to notify the Reporter, Supreme Court of New ___________________________

a.m. on the morning of their release. The direct address of the court's home reporter@courts.state.nh.us. Opinions are available on the Internet by 9:00

well as formal revision before publication in the New Hampshire Reports. NOTICE: This opinion is subject to motions for rehearing under Rule p. 2 22 as that it was unsafe to venture further into the basement.

Building One.

site.

acrid, vinegar-like smell to that area,” and upon further inspection determined

incompatibility with the environment in which they were being stored.

hold laboratory chemicals.

797. Herlihy’s sign business, and then proceeded to inspect the main building, Waste,” and a bag containing what appeared to be caustic soda beads. Id. at front office, Bowen and Curran came upon two containers labeled “Hazardous action plan to address potential soil and groundwater contamination at the Id. at 796. In the but none arrived, so Bowen and Curran proceeded to inspect the site. 797. In the basement Bowen detected what he described as “a very strong Curran, a health officer from the Town of Merrimack. Id. at lab reagents, many of them with a sort of furry residue on them,” indicating occurred or trespassers were detected.

first floor, Bowen and Curran noticed a closet with containers appearing to “numerous containers and boxes” containing chemical products. Id. On the

Id. While in Building One, Bowen and Curran observed

Bowen and Curran started their inspection in the two buildings housing

consulting firm Arcadis, Geraghty and Miller (Arcadis) to prepare a remedial Id. Elementis to arrange for a representative of the company to accompany him,

Bowen revisited the site on August 9, p. 2 2001, accompanied by Cecil Trespassing” signs and contacting Elementis whenever unusual activity buildings were dilapidated. Id. noticed that the site was not secured against trespassers and that the the site. geologist from Arcadis to review the placement of monitoring wells. Id. Bowen Hampshire Department of Environmental Services (DES), visited the site with a Id. On July 26, 2001, David Bowen, a hydrogeologist with the New

Following its move to Nashua, Elementis hired the environmental

the site daily and provided security by patrolling the site, maintaining “No

Id. Between October 1998 and October p. 2 2001, Herlihy was present at

permitted to use the buildings rent free in exchange for providing security at of them to Joseph Herlihy, who owned a sign business. Id. Herlihy was Instead of demolishing the buildings, however, Elementis rented several

intended to demolish them. Id. a state of disrepair. Id. Elementis did not repair the buildings because it in Nashua. Id. at 796. At that time, many of the buildings on the site were in October 1998, Elementis moved its operations from the site to a new building site in Merrimack, where it conducted business until 1998. Id. at 795-96. In commercial chemical products. Id. at 795. In 1981, it purchased a twelve-acre chlorine. p. 2 265.15—General Inspection Requirements. p. 3 and tanks, as per Env-Wm 509.02(a)(1), which references 40 CFR and document daily inspections of the hazardous waste containers

of waste flammables, oxidizers, mercury, tetrahydrofuran, bromide and

DES. During this thirty (30) day period, [Elementis] must conduct

approximately $100,000. 3

Elementis that it had satisfactorily complied with the IHO, but stating that

the environment pursuant to RSA 147-A:13.”

gallons of anhydrous ammonia, 200 gallons of nitric acid and lesser quantities

[Elementis] may reuse materials at its business upon approval by New Hampshire authorized hazardous waste transporter. Services (Clean Harbors) to remove the hazardous waste at a cost of facility as specified in Env-Wm 511.01 and Env-Wm 507.03 via a

On January 24, 2002, DES issued a notice of compliance informing

Id. this waste, [Elementis] has created an imminent threat to human health and

Harbors removed approximately 10,000 gallons of sodium hydroxide, 2,000 waste using hazardous waste manifests. Id. The manifests showed that Clean

In response to the IHO, Elementis hired Clean Harbors Environmental hazardous waste at the Facility . . . is delivered to an authorized

Id.

where the waste is located, has liability under RSA 147-A:9. By abandoning

were not secure.

Elementis. Within thirty (30) calendar days of this Order, ensure that all

to, among other things:

The IHO stated that “[Elementis], as the owner and operator of the Facility there were no signs to inform trespassers of the dangers posed by the site. Id.

Id. Further, there was no fence surrounding the site and

documented that the site had been abandoned, and the buildings and grounds

Id. at 798. The IHO stated that following the inspection, DES

On August 15, 2001, DES issued an imminent hazard order (IHO) to

considerable danger to human health. Id. ammonia. Id. Both sodium hydroxide and anhydrous ammonia pose 20,000-gallon sodium hydroxide tanks and a third tank containing anhydrous and Curran observed an aboveground storage area containing two more material had seeped from the end of one pipe. Id. Outside the building, Bowen labeled “Caustic” and they observed that what appeared to be dried caustic on top of the tank. Id. The piping system associated with the tanks was of the roof of the building had collapsed onto one of the tanks and debris was observed two 20,000–gallon tanks containing sodium hydroxide. Id. A portion Bowen and Curran then entered an adjacent building, where they appropriate.

p. 4 circumstances, a civil forfeiture between $25,000 and $50,000 would be determine the amount of the forfeiture and, based upon the totality of the applied. It further argued that it was within the court’s discretionary power to

federal policy not formally adopted by law or agency rule and should not be

$1,096,100. Elementis objected, arguing that the RCRA penalty policy is a $1,100 for each succeeding day, for a total forfeiture of no less than a civil forfeiture of $50,000 for the first day of the violation, and no less than

assessment. Based upon the RCRA penalty policy guidelines, the State sought

(RCRA penalty policy) in order to calculate the amount of the forfeiture contained in the Resource Conservation and Recovery Act Civil Penalty Policy assessment. The State urged the court to adopt certain federal guidelines

which both parties presented argument on the amount of the civil forfeiture

waste between 1998 and 2001.

objective basis for excluding the manifests.” voluntarily. Thus, the fairness concerns underlying Rule 407 do not provide an

2001. evidence to conclude that Elementis’ waste was hazardous between 1998 and On February 14, 2006, the superior court conducted a hearing, during

superior court for a determination of civil forfeiture penalties. Id. at 804. without a permit. Id. at 802-04. We remanded the case to the concluded that the evidence compelled a finding that the waste was hazardous record – including the manifests excluded by the superior court – and

waste by shipping it off-site and did not dispose of the hazardous waste of Evidence 407. explaining: “Elementis had a statutory obligation to dispose of the hazardous Id. at 800. We reversed the superior court’s exclusion of the manifests,

excluding the manifests; and (2) that the court should have found sufficient The State appealed, arguing that: (1) the superior court erred in

waste laws and regulations by storing and disposing of hazardous waste establish that the waste was hazardous waste between 1998 and 2001. Id. without the manifests, the State did not produce sufficient evidence to excluded the manifests from evidence. Id. As a result, the court found that Id. In its order dismissing the claim, the court reversed itself and conducted a three-day bench trial and dismissed the State’s civil forfeiture

Id. The superior court denied the motion. Id. The court

waste manifests as subsequent remedial measures under New Hampshire Rule Elementis filed a motion in limine to exclude evidence of the hazardous

violation that lasted 951 days, for a total fine of $1,046,100. Id.

Elementis in superior court, alleging that Elementis had violated hazardous Id. at 799. In January 2003, the State filed a civil forfeiture action against penalties to which it may be subject for the violations identified in the [IHO].” “[t]his Notice of Compliance does not release [Elementis] from liability for to pay a civil forfeiture in the amount of $95,100. p. 5 reasonably appropriate. Accordingly, [Elementis] is hereby ordered

that [Elementis] violated the provisions of RSA Chapter 147-A is

address each argument in turn. failure to comply with hazardous waste management requirements. We

finds and rules that a fine of $100 per day for each of the 951 days

discretion by calculating a civil forfeiture of $100 per day in light of Elementis’

in nature. Based on the totality of the circumstances, the Court by the State that is, in essence, more punitive than compensatory such, the Court declines to assess the forfeiture amount proposed 5

forfeiture is punitive, not compensatory; and (2) unsustainably exercised its

posed by the chemicals left at the site, no injuries resulted. As

commissioner relative to RSA 147-A; or (a) Any provision of RSA 147-A or any rule adopted by the

enforcement by injunctive relief, who violates: wrong standard to calculate the penalty and failed to recognize that a civil for each day of a continuing violation, in addition to explained: forfeiture assessment should be reversed because the court: (1) used the I. Any person shall be subject to a civil forfeiture of up to $50,000

forfeitures for violations of RSA chapter 147-A, states, in pertinent part: hazardous waste. RSA 147-A:17, which provides for the assessment of civil RSA chapter 147-A governs the handling, storage and disposal of cleaning up the site. Moreover, while there was a potential threat fully with [DES] after receiving the IHO and bore the cost of secure the chemicals it left at the site, [Elementis] also cooperated

that [Elementis] violated the provisions of RSA Chapter 147-A.” The court The State contends that the superior court’s order regarding the civil

II. Discussion

The State filed a motion to reconsider, which was denied. This appeal followed.

provisions of RSA Chapter 147-A in its failure to properly store and

Court with the authority to fine [Elementis] up to $50,000 per day for each day administrative rulemaking process.” It noted that RSA 147-A:17 “provides the been adopted by the Legislature nor has it been subject to the State’s

While the Court acknowledges that [Elementis] violated the

assessment of the forfeiture amount, observing that “its provisions have not The superior court declined to use the RCRA penalty policy to guide its using [its] discretion under the statute and a set of factors.” p. 6 out an order from the Supreme Court on a remand to impose a civil penalty assessment, the superior court repeatedly acknowledged that it was “carrying

against [Elementis].” impose a penalty on Elementis. During the hearing on the civil forfeiture . . . court failed, as a matter of law, to properly calculate a civil forfeiture

the superior court understood that the purpose of the civil forfeiture was to punitive/deterrent nature of the civil forfeiture provision of RSA 147-A:17, the

reject the State’s first argument.

was intended to penalize Elementis. We agree. The record demonstrates that nature.” The State asserts that “[b]y failing to take into account the forfeiture hearing, the court repeatedly acknowledged that the civil forfeiture punitive nature of the civil forfeiture assessment. compensatory in nature,” is misplaced in light of the fact that during the civil

consider phrases from the trial court’s order out of context.”). Accordingly, we Town of Epsom, 154 N.H. ___, ___ (decided January 18, 2007) (“We refuse to

the superior court’s statement that it “declines to assess the forfeiture amount statement that the State’s proposed penalty “is, in essence, more punitive than the court’s statement to mean that it believed the State’s proposed assessment civil forfeiture is punitive, not compensatory. In particular, the State refers to Further, the State takes the court’s statement out of context. We read

RSA 147-A.” Elementis argues that the State’s reliance upon the court’s standard to calculate the civil forfeiture because it failed to recognize that a understood that its duty on remand was to assess a penalty for violations of punitive, and contends that “the record indicates that the . . . court clearly Elementis does not dispute that the civil forfeiture is intended to be was clearly untenable or unreasonable to the prejudice of its case.

The State’s first argument is that the superior court used the wrong

decision is not sustainable, a party must demonstrate that the court’s ruling N.H. ___, ___, 907 A.2d 983, 985 (2006). To show that the superior court’s 147-A:17 for an unsustainable exercise of discretion. See State v. Cohen, 154 We review the superior court’s assessment of a civil forfeiture under RSA

RSA 147-A:17, I(a)-(b).

RSA 147-A. (b) Any term or condition of a permit or an order issued under for similar violations of RCRA. maintained.

p. 7 that assessment of a civil penalty “is committed to the informed discretion of

penalties assessed by the EPA and the Federal Environmental Appeals Board violations; and that compliance is expeditiously achieved and assessment of a $95,100 civil forfeiture, and such an award is consistent with penalties are sufficient to deter persons from committing RCRA Elementis further argues that the record supports the superior court’s RCRA have declined to apply the penalty policy. Instead, courts have observed noncompliance with RCRA requirements are eliminated; that

requirements.”

penalty policy was established by the EPA:

by either the legislature or through rulemaking procedures would be improper. Furthermore, in most federal cases, courts assessing civil penalties under the violation committed; that economic incentives for

seriousness of the violation and any good faith efforts to comply with applicable

and regulations implementing that Act found at 40 CFR Part 19). The RCRA

binding on the court, and that reliance on a policy that has not been adopted federal regulation, nor has Congress seen fit to incorporate it into RCRA. consistent manner; that penalties are appropriate for the gravity of RCRA penalty policy. Elementis points out that the RCRA penalty policy is not Id. at 8. However, the EPA has not promulgated the policy as a Elementis counters that the superior court properly declined to rely upon the ensure the proper management of hazardous waste.” U.S. Envtl. Prot. Agency, penalty calculation system, which takes into consideration both “the RCRA Civil Penalty Policy, supra at 12. The policy sets forth a comprehensive authority of the Debt Collection Improvement Act of 1996, 28 U.S.C. § 2461

to ensure that RCRA civil penalties are assessed . . . in a fair and

in the Environmental Protection Agency’s (EPA) RCRA penalty policy. establishing “the basic statutory framework for a national system that would

of the civil penalty was increased from $25,000 to $27,500 pursuant to the see also RCRA Civil Penalty Policy, supra at 4 n.3 (explaining that the amount violates the requirements of the statute. See 42 U.S.C. § 6928(a), (g) (2000); RCRA provides for civil penalties of up to $27,500 for each day that a person fnl.pdf (last visited Mar. 19, 2007) (hereinafter RCRA Civil Penalty Policy). http://www.epa.gov/compliance/resources/policies/civil/rcra/rcpp2003- RCRA Civil Penalty Policy 4 (2003), available at

forfeiture calculation should have taken into account the guidelines contained In 1976, the United States Congress enacted RCRA with the purpose of management requirements. The State contends that the superior court’s civil per day in light of Elementis’ failure to comply with numerous hazardous waste

unsustainably exercised its discretion by calculating a civil forfeiture of $100 Next we address the State’s argument that the superior court left at the site, no injuries resulted. p. 8 cleaning up the site; and (3) despite the potential threat posed by the chemicals for each day of a continuing violation. cooperated fully with DES after receiving the IHO; (2) Elementis bore the cost of the statute, a judge can impose a penalty ranging from zero to $50,000 a day, are no regulations that provide guidance. According to the plain language of

discretion by not relying upon it. we hold only that the superior court here did not unsustainably exercise its RCRA penalty policy is not, for the reasons articulated above, required. Thus,

legal effect upon the civil forfeiture process. explained that its assessment took into consideration that: (1) Elementis

contains no objective criteria for assessing civil forfeiture penalties, and there

judge to utilize the RCRA penalty policy as guidance. However, utilizing the

codified the policy. Since it has not been adopted by either entity, it has no expansive range set forth in RSA 147-A:17. In addition, the superior court continued violation, totaling $95,100. This assessment falls within the day of a continuing violation of the statute. RSA 147-A:17, I. RSA 147-A:17 Here, the superior court assessed a civil forfeiture of $100 per day of trial judge broad discretion to assess civil forfeitures of up to $50,000 for each Waste Management Act, the legislature enacted RSA 147-A:17, which gives a response to the enactment of RCRA, waste management program. Although RSA chapter 147-A was promulgated in

bestows upon judges assessing civil forfeitures, it would be permissible for a

RCRA penalty policy as a regulation. In addition, our legislature has not policy is not binding on the court. DES has not – as of yet – promulgated the guidance in assessing civil forfeitures, Elementis correctly points out that the

Instead of incorporating the RCRA penalty policy into the Hazardous

proper in this instance, given that the EPA approved New Hampshire’s solid proper rule-making procedures was without legal effect). Co., 123 N.H. 653, 657 (1983) (agency policy not adopted in accordance with

administrative action.” ensure consistency with federal enforcement of RCRA and provide objective N.H. 1091, 1097 (1982), and utilizing the RCRA penalty policy would both

It is the State’s position that applying the RCRA penalty policy would be

Housewares, Inc., 62 F.3d 806, 814-15 (6th Cir. 1995). grounds by 865 F.2d 1261 (4th Cir. 1988); see also United States v. Ekco Works, Inc., 681 F. Supp. 314, 322 (D. S.C. 1988), vacated in part on other 1047, 1055 (1993) (N.D. Ind. 1993); United States v. T & S Brass and Bronze

that “the Administrator of the EPA shall consider in fixing civil penalties in an the Court,” and have utilized the factors contained in 42 U.S.C. § 6 p. 9 928(a)(3) 9

is supported by the record.

court’s order is affirmed.

the range specified in RSA 147-A:17 and its stated rationale for the assessment substantial penalty, the superior court’s civil forfeiture assessment falls within containing potentially lethal substances would have justified a more BRODERICK, C.J., and DALIANIS and GALWAY, JJ., concurred.

assessing a civil forfeiture of $ p. 9 95,100 in this case. Accordingly, the superior cannot say that the court committed an unsustainable exercise of discretion in (“we will not substitute our judgment for that of the trial court”). Thus, we

numerous hazardous waste violations and three-year abandonment of a site While there is some merit to the State’s argument that Elementis’