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COURT IMPOSES SECOND HIGHEST CLEAN WATER ACT PENALTY EVER AWARDED TO THE UNITED STATES AFTER TRIAL

Release Date: 02/25/2002
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

FOR IMMEDIATE RELEASE DOJ (202) 514-2007
February 25, 2002 EPA Region 3 (215) 814-5543
www.usdoj.gov EPA (202) 564-7818
www.epa.gov



COURT IMPOSES SECOND HIGHEST CLEAN WATER ACT PENALTY EVER
AWARDED TO THE UNITED STATES AFTER TRIAL

Allegheny Ludlum to pay $8.24 million for Clean Water Act violations

Pittsburgh -- A federal district court has ordered Allegheny Ludlum Steel Corporation to pay the second highest penalty that a judge has awarded to the United States after trial under the Clean Water Act (CWA) since the law was passed in1972. The court ordered Allegheny Ludlum to pay a penalty of $8,244,670 for violations of the CWA at its steel mills on the Allegheny and Kiskimenetas Rivers outside Pittsburgh.

District Court Judge Robert Cindrich penalized Allegheny Ludlum for 1,122 days of violation. Finding that Allegheny Ludlum gained a savings of $4.1 million from its delay and failure in spending money on necessary environmental controls, the court ordered the company to pay a penalty double that amount to reflect the history and seriousness of the violations, and the company’s lack of effort to prevent them over a seven year period.

Specifically, Allegheny Ludlum saved money by avoiding the costs of staffing four treatment plants 24 hours per day, delaying modernizing a wastewater treatment plant at its Vandergrift mill for many years while investing its capital to increase production of steel at that mill, and refusing requests from its own engineers to perform a number of capital projects to eliminate or reduce spills of acids and oils.

“Companies who violate the Clean Water Act face penalties much higher than any savings they think they will achieve by avoiding or delaying environmental investment,” said Thomas L. Sansonetti, the Assistant Attorney General for the Environment and Natural Resource Division of the Department of Justice. “This penalty is a fitting consequence for Allegheny Ludlum’s corporate disregard for compliance prior to the federal lawsuit.”

“This decision should send a clear message that pollution does not pay, and EPA is committed to full enforcement of the Clean Water Act,” said EPA Deputy Regional Administrator Thomas Voltaggio.

The court’s decision recognizes that the company is presently in compliance, but finds that Allegheny Ludlum’s record improved only after many years of state enforcement and filing of the federal lawsuit in 1995.

In 1995, the Justice Department on behalf of EPA filed suit alleging numerous violations by Allegheny Ludlum of its permit limits for toxic metals zinc, chromium, nickel and other metals, as well as chronic spills of oil and grease, into the Kiskimenetas and Allegheny Rivers from its plants at Brackenridge/Natrona, West Leechburg, Bagdad, and Vandergrift, Pennsylvania. The Clean Water Act prohibits companies from discharging toxic and other pollutants into rivers and streams, but companies may obtain a permit that gives permission for them to send pollutants to rivers within specific limits.

The court found that a substantial penalty was warranted by the frequency, magnitude and seriousness of these violations, which included 893 violations of toxic pollutant limits, 180 days when the company exceeded permit limits by at least 1,000 percent, and a “notorious” July 1994 oil spill from the company’s West Leechburg mill, which spread 30 miles downstream.

Allegheny Ludlum was also found liable for a large number of spills of chemicals and/or oil into rivers near Pittsburgh. These spills also posed the risk of health hazards because of nearby drinking water intakes, and they had a severe impact on the communities’ ability to use boats, swim and otherwise enjoy the rivers.

“The court can only conclude that the violations continued because the defendant did not consider compliance with the [Clean Water] Act a priority,” wrote Judge Cindrich.

In 1997, Smithfield Foods Inc. and two subsidiaries were ordered by the U.S. District Court, Eastern District of Virginia, to pay a civil penalty of $12 million for violating the CWA on thousands of occasions. In September 1999, the U.S. Circuit Court of Appeals for the Fourth Circuit upheld the lower court’s ruling.

R-032 ###