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Precedent-Setting Penalty Upheld for Underground Fuel Storage Tank Violations at 23 Gas Stations in Maryland, Virginia and District of Columbia; Owner of Gas Stations to Pay $3.16 Million for Violations

Release Date: 03/18/2008
Contact Information: Donna Heron 215-814-5113 /heron.donna@epa.gov

PHILADELPHIA (March 18, 2008) -- EPA’s Environmental Appeals Board (EAB) has upheld the agency’s enforcement action against the owner of Lowest Price gas stations in Maryland, Virginia and the District of Columbia. In cooperation with state and D.C. officials, EPA filed a complaint in September 2002 against gas station owner, Euclid of Virginia, Inc. for violating regulations designed to detect and prevent fuel leaks from underground storage tanks (USTs).

In a March 11, 2008 decision, the EAB ruled against every issue raised in an appeal filed by Euclid of Virginia, Inc. The board ordered the company to pay a $3,164,555 penalty for violations involving 72 underground storage tanks at 23 gas stations. The company had appealed an administrative law judge’s November 2006 assessment of a $3.08 million penalty for these violations -- the largest penalty ever assessed by an EPA administrative law judge for violations of any federal environmental law.

The board ruled in favor of EPA’s cross-appeal against Euclid, increasing this precedent-setting penalty to $3,164,555. The EAB overturned the administrative law judge’s rulings against EPA on three counts involving inventory control violations, and imposed the proposed $79,262 penalty for these counts.

“With millions of gallons of gasoline, oil, and other petroleum products stored in underground tanks, leaving them unchecked can cause major soil and groundwater contamination,” said Donald S. Welsh, regional administrator of EPA’s mid-Atlantic region. “This decision should send a strong message to owners of underground storage tanks that it is not only in the public’s best interest but in their own, too, to comply with leak detection and prevention requirements.”

The violations involved 14 gas stations in Maryland (in Baltimore, Brentwood, Camp Spring, District Heights, Frederick, Hyattsville, two facilities in Landover Hills, Langley Park, Mitchellville, Palmer Park, Pasadena, Silver Spring, Trappe), two in Virginia (located in Chantilly and Ruckersville) and seven in the District of Columbia.

The EAB ruled that EPA had proven that Euclid failed to maintain required leak detection and control equipment, failed to perform required leak detection activities, failed to comply with corrosion-prevention standards and conduct cathodic protection testing, failed to properly install or maintain equipment to prevent releases of gasoline due to the overfilling of tanks or other spills when tanks are being filled, and failed to maintain required financial assurances.

The size of the penalty was due not only to the large number of facilities and underground storage tanks involved, but also to Euclid’s repeated non-compliance with the same regulations over periods that often lasted for several years. The administrative law judge also cited the breadth of the violations, Euclid’s “high degree of “negligence” and its overall record of non-compliance in allowing violations to continue despite numerous warnings from EPA and the Maryland, Virginia and District of Columbia state environmental agencies as further justification for a substantial penalty. The state and D.C. agencies coordinated with EPA to conduct numerous inspections of Euclid-owned gas stations, and inspectors from each agency served as witnesses at the trial.

With millions of gallons of gasoline, oil, and other petroleum products stored in underground tanks throughout the U.S., leaking tanks are a major source of soil and groundwater contamination. EPA and EPA-authorized state regulations are designed to reduce the risk of underground leaks, and thus avoid the costs of major cleanups.

EPA’s mid-Atlantic region has recently focused enforcement on owners of underground storage tanks at multiple facilities. In several instances, owners of multiple facilities have entered into agreements with EPA to conduct audits of their facilities, with reduced penalties for violations discovered during such audits. For more on EPAs UST program, including compliance assistance information, visit http://www.epa.gov/swerust1/overview.htm

The gas stations involved included: in Maryland (Baltimore, Brentwood, Camp Spring, District Heights, Frederick, Hyattsville, Landover Hills, Langley Park, Mitchellville, Palmer Park, Pasadena, Silver Spring, and Trappe), in Virginia (Chantilly and Ruckersville); and in the District of Columbia.

Euclid has the right to appeal the EAB decision to the federal circuit court. The board’s decision is available at: http://yosemite.epa.gov/oa/EAB_Web_Docket.nsf/Recent~Additions/AA99D35BC3FC069085257409006D2BD5/$File/Final....pdf