Gravel2Gavel Construction & Real Estate Law Blog
On February 9, the Oregon Supreme Court affirmed the decisions of the Oregon Environmental Quality Commission (OEQC) and the Oregon Court of Appeals that Oil Re-Refining Company (ORRCO) was strictly liable for “simple” violations of the Oregon State Resource Conservation and Recovery Act (RCRA) rules. The case is Oregon Re-Refining Company v. Environmental Quality Commission of the Department of Environmental Quality for the State of Oregon.
ORRCO is a waste management company whose customer was Absorbent Technologies, Inc. (ATI), a company that made a “starch-based soil amendment” for which methanol was used to extract water from the mixture. In 2004, ATI determined that its processes produced too much wastewater, and an arrangement was made with ORRCO to pick up and treat the waste. ORRCO was not permitted to handle hazardous wastes, and following site visits and a review of ATI documents, ORRCO determined that the wastewater was a non-hazardous waste that it authorized to handle. ATI did not provide ORRCO with any hazardous waste manifests to accompany and document the transportation of the waste material.
In 2005, EPA opened an investigation into ATI which eventually led OEQC to investigate ORRCO. In 2009, OEQC issued notices of violation to ORRCO, alleging several violations of the Oregon rules that require all hazardous waste shipments to be accompanied by a RCRA manifest, and several alleged violations the state’s permitting rules (i.e., operating a hazardous waste treatment facility without a permit.
At the administrative hearing, ORRCO argued that the waste material was not a hazardous waste, and, in any event it reasonably relied upon the assurances of ATI that the water/methanol waste was not hazardous. However, the ALJ determined that the waste material was hazardous waste, and that regardless of the intentions of ORRCO, it was subject to a strict liability standard that applied to these RCRA hazardous waste rules. OEQC then assessed a civil penalty of $118,800. This penalty was approved by both the Oregon Court of Appeals and now the Oregon Supreme Court.
According to the Oregon Supreme Court, ORRCO argued that OEQC erroneously held that these manifest and permit requirements imposed a standard of strict liability. The Oregon Supreme Court, after analyzing the RCRA and RCRA rules, concluded that the civil enforcement provisions establish a strict liability regime for “simple violations” (such as the manifest and permitting rules). In addition, public welfare considerations support the strict liability view of the law and its state implementing regulations and, accordingly, ORRCO’s reliance on the assurance of its customer were unavailing.