## Facts

- An administrative-law judge (ALJ) assessed a civil penalty against M.A. Bruder & Sons, Inc. (Bruder) under the Resource Conservation and Recovery Act of 1976 (RCRA).
- EPA alleged that Bruder illegally operated a hazardous-waste treatment, storage, or disposal facility without interim status or an RCRA permit.
- EPA calculated and proposed a $64,900 administrative civil penalty using EPA’s RCRA penalty policy.
- The ALJ found that Bruder committed the alleged violation and agreed that EPA had applied its penalty policy calculation correctly.
- The ALJ nevertheless concluded that EPA’s proposed penalty was too narrow and did not adequately account for the statutory penalty factors.
- Instead of using the policy-based amount as the penalty, the ALJ assessed the penalty by applying RCRA’s statutory factors, focusing on seriousness of the violation and good-faith efforts to comply.
- The ALJ found the violation’s seriousness to be minimal and found that Bruder acted in good faith.
- Based on those findings, the ALJ reduced the civil penalty to $8,950.
- EPA appealed the ALJ’s civil-penalty assessment to the Environmental Appeals Board (EAB).

## Issues

1. In a RCRA administrative penalty case, may an ALJ depart from EPA’s RCRA penalty policy and set a penalty based on statutory factors such as seriousness of the violation and the respondent’s good-faith efforts to comply?

## Decision

- The EAB reviewed EPA’s appeal challenging the ALJ’s reduction of EPA’s proposed $64,900 penalty to $8,950 for operating without interim status or an RCRA permit.
- The appeal placed at issue the relationship between EPA’s RCRA penalty policy (used by the Agency to calculate a proposed penalty) and the statutory factors the ALJ must consider in setting an administrative civil penalty.
- The EAB’s decision addressed whether, and on what explanation, an ALJ may move away from a penalty amount calculated under EPA’s policy when the ALJ believes the statutory factors point to a different result.

## Legal Principles

- RCRA authorizes EPA to assess administrative civil penalties for specified violations, including operating a hazardous-waste treatment, storage, or disposal facility without interim status or a permit.
- RCRA directs the penalty decisionmaker to consider statutory factors, including the seriousness of the violation and the violator’s good-faith efforts to comply.
- EPA’s RCRA penalty policy provides a structured method EPA uses to translate statutory factors into a proposed penalty amount.
- When an ALJ sets a penalty different from EPA’s policy-based proposal, the ALJ must explain the penalty determination by tying the amount chosen to the statutory factors as applied to the record facts.
- Findings about seriousness and good faith can affect penalty size, but the reasons for mitigation must be stated clearly and supported by record evidence.

## Conclusion

In *In re M.A. Bruder and Sons, Inc., 10 E.A.D. 599 (2002)*, EPA appealed an ALJ’s RCRA civil-penalty decision that reduced EPA’s proposed $64,900 penalty to $8,950 for operating a hazardous-waste treatment, storage, or disposal facility without interim status or an RCRA permit after the ALJ applied statutory penalty factors—especially seriousness and good faith—in place of the Agency’s penalty policy amount.
