Asbestos defendant seeks penalty reduction

Friedman & Schmitt argue that the penalty should be reduced to take into account the totality of the circumstances of this case, including, in particular, their lack of prior violations, their cooperation in the investigation, and their prompt efforts to correct the violations.

Friedman & Schmitt also contend that the absence of a warning that their conduct violated the CAA, lack of actual environmental hazard caused by their conduct, lack of notice of EPA’s interpretation of the regulations as discussed above, lack of any effort on their part to hide their violations and their good faith, all militate in favor of mitigation of the penalty.

The ALJ concluded that Friedman & Schmitt acted in good faith. The ALJ also noted that Friedman & Schmitt have no prior history of violations. The General CAA Penalty Policy, however, recommends that the violator’s degree of willfulness or negligence only be used to increase the amount of the penalty since the CAA is a strict liability statute.

In other words, the statute contemplates that a significant penalty may be imposed even in the absence of any proof of intent or negligence. Thus, the penalties recommended in the General CAA Penalty Policy and the Asbestos Penalty Policy are based on the assumption that the violator acted with the best of intentions, and upward adjustments are warranted when there is appropriate proof that this is not the case. For this reason, the General CAA Penalty Policy likewise recommends that a history of violations may only be used to increase the amount of the penalty.

Consistent with this view, we have previously held that the absence of a history of prior violations and unknowing violation are not grounds for downward adjustment of penalty that is otherwise calculated in accordance with an Agency penalty policy.

For these reasons, we reject Friedman & Schmitt’s request that the penalty be reduced on these grounds.