SW Legal Educational Publishing

Clean Air Act Penalties Must Include Consideration of Financial Condition of Vendor
Description Appeals court reversed decision of district court to impose almost $3 million in fines for violations of the Clean Air Act by a bankrupt party. A violator's financial condition is a factor to be considered when penalties are assessed.
Topic Environmental Law
Key Words Clean Air Act, Penalties, Financial Condition
C A S E   S U M M A R Y
Facts EPA successfully sued a real estate developer, who was demolishing old buildings to renovate a blighted area, for failure to properly contain materials with asbestos in the buildings. The district court fined the developer the statutory maximum of $25,000 per day for a total of $2,975,000 in fines for violating Clean Air Act standards for asbestos. While admitting to the violation of the standards, the developer appealed that the district court abused its discretion in setting the penalties without taking into account the financial condition of the developer.
Decision Reversed as to amount of penalties. The Clean Air Act imposes strict liability upon violators in such instances. The developers were "operators" under the statute, even though they did not own the property. When a fine is imposed under the Act, it must have some reasonable and proportionate nexus to the violation and the violators. Given that the developer was bankrupt, the district court abused its discretion by not taking into account the financial condition of the defendant, which left it unable to pay the fine.
Citation U.S. v. Dell's Aquilla, 150 F.3d 329 (3rd Cir., 1998)

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