When is an oil discharge to a navigable waterway "reasonably forseeable" so as to require a spill prevention control and countermeasures plan under the Clean Water Act?

Pepperell Associates v. U.S. Environmental Protection Agency, 246 F.3d 15 (1st Cir. 2001)

On October 17, 1996, a gasket ruptured on a boiler in a former textile mill in Lewiston, Maine. Over 300 gallons of oil spilled from the boiler room floor, down a stairwell, through a condensate pipe tunnel and into the City sewer. This occurred during a high water period, when the city sewer discharges into Gully Brook, so the oil spilled into the brook and then flowed into the Androscoggin River. Pepperell did not have a Clean Water Act (CWA) Spill Prevention Control and Countermeasures (SPCC) plan for the facility. On July 14, 1997, Pepperell removed all three of its underground oil storage tanks and on October 16, 1997 Pepperell installed a single, above-ground tank. On April 14, 1998, Pepperell submitted an SPCC plan to the EPA.

The EPA filed an administrative complaint against Pepperell alleging that it: (1) discharged oil into a navigable waterway, see 33 U.S.C. § 1321(b)(3); (2) failed to submit an SPCC plan as required by the Clean Water Act, see 33 U.S.C. ¤ 1321(j)(1), during the period the three tanks were in the ground (December 1985 through July 14, 1997); and (3) failed to have a plan after completion of the above-ground tank on October 16, 1997 until it submitted its plan on April 14, 1998. The administrative law judge found Pepperell to be liable in part and imposed a $24,876 penalty. On cross-appeals, the Environmental Appeals Board found Pepperell fully liable and imposed a $43,643 penalty on all three counts.

The First Circuit Court of Appeals held that Pepperell was subject to the CWA SPCC plan requirements when the underground tanks were in operation because due to the mill's location, it was "reasonably foreseeable" that an oil spill into navigable waters might occur. The Court found support for the EAB's conclusion that although the particular path the oil to took to Gully Brook was unforeseeable, other reasonably foreseeable paths existed. The fact that the oil reached navigable waters only because the spill occurred during a high water period did not make the spill unforeseeable because, on the record, PepperellÕs owners were both constructively and actually aware of overflows to Gully Brook during heavy rains.

The Court affirmed that Pepperell was liable specifically for the period from October 31, 1996 to July 14, 1997, even though the underground tanks were disconnected during that time. The Court reasoned that disconnecting without removing the tanks was not sufficient to reduce storage capacity to below the statutory minimum, and that disconnecting the tanks did not make an oil spill less reasonably foreseeable. The Court deferred to the EAB's reading that the "reasonably foreseeable" standard and storage capacity are distinct, so that the likelihood of a spill is not legally a function of the working capacity at a given time.

The court also ruled that Pepperell was liable for SPCC plan failure from July 1997, when it removed its underground tanks, until it finally submitted an SPCC plan in April 1998. Pepperell argued that the new tank constituted a new facility, thus allowing it six months from the October 1997 installation to submit a plan. Conversely, the EAB had held that the new tank was merely a facility modification, requiring that the SPCC be amended as of the date of installation. The Court of Appeals agreed with the EAB, reasoning that the removal of the old tanks and the installation of the new where not unconnected – particularly given the New England setting and the necessity of replacing the oil storage capacity by winter. Finally, the Court ruled that in the context of the 1,320-gallon regulatory threshold for SPCC plan applicability, adding a 20,000-gallon above-ground tank did "materially affect the facility's potential for discharge of oil into or upon the navigable waters of the United States," and thus trigger the SPCC plan amendment requirement.

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