August 08, 2011


Posted on August 8, 2011 by Michael L. Hardy

In a very interesting air pollution control enforcement case, the Court of Appeals of Ohio, Tenth Appellate District (which sits in Columbus, Ohio) issued an opinion that concerns many experienced practitioners:  State ex rel. Ohio Attorney General v. The Shelly Holding Co., et. al., 191 Ohio App. 3d 421, 2010 – Ohio – 6526, 946 N.E. 2d 295. 

Shelly owned a number of hot mix asphalt plants.  During stack tests to determine compliance with air pollution permit emission limitations,  several plants failed their tests.  But Shelly continued to operate those hot mix asphalt plants. The Ohio Environmental Protection Agency claimed that the continued operation of the plants after the failed tests constituted  continuing violations even though the state had no monitoring data to prove that point. The Trial Court rejected the state’s contention, stating that it was unwilling to infer a continued violation until Shelly successfully completed a subsequent stack test. “Simply put the Court does not find the requested inference to be reasonable given the fact that the State has the burden .  Further, the Court finds Shelly’s argument that a ‘stack test’ does not represent normal operating conditions to be compelling.  Based on the foregoing, the Court will only consider the day of the ‘stack test’ demonstrating excess emission to be evidence of a violation.” State ex rel. Ohio Attorney General v. The Shelly Holding Co., et. al. (Sept. 2, 2009), Franklin Cty. C. P. No. 07CVH07-9702.

The Court of Appeals reversed the Trial Court, stating that “…in determining the number of days each violation existed, the trial court should have concluded that the violation continued until the subsequent stack test determined that the plant no longer was violating the permit limitations.”  The Ohio Supreme Court has agreed to consider Shelly’s appeal of this ruling.  Shelly also has the amicus curiae support of  a number of trade organizations, including the Ohio Chamber of Commerce.

Arguing that the state has the burden of proof to demonstrate by a preponderance of the evidence each and every day of violation,  Shelly seeks a ruling from the Supreme Court  that would prohibit the state from showing, by mere inference, that there are ongoing violations of permits and regulations after a failed stack test.  Citing the record evidence that stack testing conditions are “snapshots” of operating conditions at the time of the test, typically “maximum, worst-case testing conditions,” Shelly claims there was undisputed evidence that those tests do not represent day-to-day operations. The state offered no evidence to show that stack test conditions are indicative of day-to-day operations.   Thus, Shelly argues, the proof of violation during a stack test does not necessarily show that the hot mix asphalt plant exceeded its permit limits during subsequent, more normal operations. Shelly also argued that the Tenth District incorrectly assumed that another stack test is the only way to show the reestablishment of compliance. Changes in operating conditions, restrictions on output or hours, and repairs may prove to be  easier corrections than awaiting another stack test that requires coordination with state schedules.  If a successful stack test is the only way to show compliance, the facility faces the Hobson’s Choice of shut down or, if it continues to operate, the possible inference of continuing violations (and fines).

In short, this case will be interesting to follow because it highlights the real world difficulties that arise from the regulatory requirement to test under unrealistic, maximum, worst case conditions that do not correspond to day to day operations.   While Shelly may be correct that it is improper to assume non-compliance during continuing, business normal operations after a failed stack test that proceeded under artificial conditions, there remains another difficult question for Shelly:  how to re-establish compliance in a mutually satisfactory way.  There is no doubt that the state regulatory authorities would balk at any ruling that would allow a regulated source unilaterally to change or curtail operations to attain compliance.

Tags: Air


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