ARKANSAS POLLUTION CONTROL AND ECOLOGY COMMISSION
IN THE MATTER OF CARTER
ENERGY CORPORATION
DOCKET NO. 11-007-NOV
ORDER NO. 6
)
)
ORDER
On
July
26,
2011,
the
Arkansas
Department
of
Environmental
Quality ("ADEQ" or "Department") filed a Notice of Violation, LIS 11126,
("NOV")
alleges
in
813(c) (2),
against
this
NOV
Carter
that
Energy
Corporation
Carter violated Ark.
and Commission Regulation No.
12,
("Carter").
Code Ann.
ADEQ
§ 8-7-
Reg.12.201(B) (2),
by
selling and causing to be delivered a regulated substance, petroleum,
into unregistered Above Ground Storage Tanks
("ASTs")
owned by the
Gravette Shop & Go located in Gravette, Arkansas.
On August 8,
Commission
2011,
the Arkansas Pollution Control and Ecology
("Commission")
received a
letter from Carter disputing
ADEQ's allegations in the NOV and requesting a hearing. Specifically,
Carter admits that, although it was the seller of fuel delivered to
the
Gravette
Shop
& Go,
it
did
not
deliver,
delivered, petroleum to the Gravette Shop & Go.
the delivery of fuel
nor
cause
to
be
According to Carter,
to the Gravette Shop & Go was governed by a
carrier agreement it had entered into with Quality Transportation,
Inc.
("Quality"). Carter claims that the language and terms of that
carrier agreement demonstrate that it was Quality that caused the
delivery of petroleum to the Gravette Shop & Go, not Carter.
On December 8, 2011, ADEQ filed a Motion for Summary Judgment,
and on December 16,
Judgment.
2011,
Carter filed its own Motion for Summary
On January 5, 2012, Carter filed a Reply to ADEQ's Motion
Docket No. 11-007-NOV
Order No. 6
Page 2
for Summary Judgment.
After reading the parties' respective Motions
for Summary Judgment and Carter's Reply, and reviewing the applicable
law, the hearing officer rules that there are no material facts in
dispute on the issue of liability and finds as follows:
2. JURISDICTION
The Commission has
Ark.
Code
203 (b) (5)
jurisdiction over this matter pursuant to
§ 8-1-203 (b) (5).
Ann.
Arkansas
Code
Annotated
authorizes an appeal to the Commission of a
§
8-1-
Department
enforcement action.
3. BURDEN OF PROOF
The burden of proof in a Commission administrative hearing is
preponderance
of
the
evidence.
Johnson
Examiners in Psychology, 305 Ark. 451,
Reg. 8.616(B).
judgment.
that
455,
Arkansas
Board
808 S.W.2d 766
of
(1991);
But in this case both parties have moved for summary
Rule 56 of the Arkansas Rules of Civil Procedure provides
summary
judgment
issues of material
is
fact
appropriate
where
348 Ark.
241,
249,
there
are
no
genuine
to be litigated and the moving party is
entitled to judgment as a matter of law.
Inc.,
v.
72 S.W.3d 450,
Smi th v.
455
(2002).
Rogers Group,
The hearing
officer concludes that there are no material facts in dispute on the
issue of liability in this case, and a decision can be reached as a
matter of law.
4. STIPULATION OF FACTS
Carter and ADEQ have jointly stipulated to the following facts:
Docket No. 11-007-NOV
Order No. 6
Page 3
1.
On or about July 19, 2011, the ADEQ issued an NOV to Carter
and filed the NOV with the Arkansas Pollution Control and Ecology
Commission (the "Commission").
2.
Pursuant to the NOV,
the ADEQ contends that Carter is
in
violation of Ark. Code Ann. § 8-7-813(c) (2) and Commission Regulation
No. 12 , Re g. 12. 20 1 (B) (2) .
3.
Carter has appealed the NOV to the Commission.
4.
The Commission has jurisdiction over this appeal pursuant to
Ark. Code Ann. § 8-1-203 (b) (5).
5.
Ark. Code Ann § 8-7-813 (c)
(2) provides as follows:
(2) Neither shall any person selling any regulated substance
deliver or cause to be delivered a regulated substance into any
storage tank for which he has not obtained current and proper
proof of registration from the owner or operator.
6.
Commission Regulation No. 12, Reg. 12.201(B)
(2) provides as
follows:
(2) No person selling any regulated substance shall deliver, or
cause to be delivered, a regulated substance into any storage tank
for which he or she has not obtained current and proper proof of
registration, as provided by Subsection 12.202(A), from the owner
or operator.
7.
On or about January 11,
2010,
Quality Transportation,
Inc.
("Quality") made a delivery of fuel to Gravette Shop & Go # 2 located
at 204 First Avenue, Gravette, Benton County, Arkansas.
8.
The fuel was delivered to the Gravette Shop & Go #2 on or
about January 11, 2010 and was placed in above ground storage tanks
Docket No. 11-007-NOV
Order No. 6
Page 4
not registered pursuant to Arkansas Code Annotated § 8-7-813(a) and
Commission Regulation No. 12, Reg. 12.201(A).
9.
The fuel products delivered to the Gravette Shop & Go #2 on or
about January 11,
2010,
are regulated substances pursuant to Ark.
Code Ann. § 8-7-801, et. seq.
10.
Carter states that the delivery to the Gravette Shop & Go #2
by Quality was made pursuant to a carrier agreement whereby Quality
agreed to monitor certain Carter customers' fuel needs, Quality would
fulfill the fuel needs based on such monitoring by pulling fuel from
a certain terminal and delivering it to the customer.
11.
Carter paid the maj or oil supplier
for
the
fuel
that was
pulled from the terminal and delivered to Gravette Shop & Go #2 on or
about January 11, 2010.
12.
Carter invoiced Gravette Shop & Go #2 for the fuel delivered
to that facility on or about January 11, 2010.
13.
The ADEQ contends that the January 11, 2010, delivery to the
Gravette Shop & Go #2 was a violation of Ark Code Ann § 8-7-813(c) (2)
and Commission Regulation No. 12, Reg. 12.201 (B) (2) in that the ADEQ
contends Carter was the seller of a regulated substance and caused
the regulated substance to be delivered to an unregistered storage
tank.
14.
Carter denies that it caused the fuel to be delivered,
but
rather, Carter contends that Quality caused the delivery to be made.
Docket No. 11-007-NOV
Order No. 6
Page 5
5. DISCUSSION AND CONCLUSIONS OF LAW
A. Background
This appeal arises on the heels of the Commission's decision in
In the Matter of Quality Transport,
Inc. On
Docket No.
11-002-NOV,
January 4,
2011, ADEQ issued a notice of violation against Quality
alleging the same code and regulation violations in this case - Ark.
Code Ann.
§ 8-7-813 (c) (2)
and Commission Regulation No.
12,
Reg.
12.201(B) (2) - and for the same delivery of petroleum to the Gravette
Shop
&
Go.
In Docket No.
11-002-NOV the Commission adopted the
hearing officer's recommended decision, Order No.4, which hinged on
the interpretation of Ark. Code Ann. § 8-7-813(c) (2) and Commission
Regulation No.
12,
Reg.
12.201 (B) (2).
Ultimately the Commission
determined that Quality was not liable for violating Ark. Code Ann.
§ 8-7-813 (c) (2) and Commission Regulation No. 12, Reg. 12.201 (B) (2)
because Quality was not the seller of petroleum to the Gravette Shop
& Go, a necessary element of liability under Ark. Code Ann. § 8-7813 (c) (2) and Commission Regulation No. 12, Reg. 12.201 (B) (2) .
B. The Carrier Agreement
Both Carter and ADEQ contend that three (3) essential elements
must be proven in order to hold a party liable for violations of Ark.
Code Ann.
§ 8-7-813(c) (2)
and Commission Regulation No.
12,
Reg.
12.201(B) (2). There must be (1) a seller that;
(2) delivers or causes
to be
(3)
delivered a
regulated substance;
delivered to an unregistered tank.
and
the
substance
is
The hearing officer agrees with
Docket No. 11-007-NOV
Order No. 6
Page 6
Carter and ADEQ that these are the three (3) essential elements that
must be proven to demonstrate a violation of Ark. Code Ann. § 8-7813(c) (2)
and Commission Regulation No.
12,
Reg.
12.201(8) (2).
In
this case there is no dispute that Carter was the seller of petroleum
to the Gravette Shop & Go.
Carter invoiced the Gravette Shop & Go
ADEQ Exhibit B to Motion for
for the petroleum delivered by Quality.
Summary Judgment.
Likewise it is undisputed that the Gravette Shop
& Go tanks were unregistered. Joint Stipulated Fact, Paragraph No.8.
Finally, there is no dispute that Quality physically delivered the
petroleum
to
the
Paragraph No.7.
Gravette
Shop
& Go.
Joint
Stipulated
Fact,
This leaves the hearing officer with one remaining
issue - while it did not physically make a delivery to the Gravette
Shop
&
Go,
did Carter
"cause
the
delivery"
of
petroleum to
the
Gravette Shop & Go?
Carter maintains that it did not cause the delivery of petroleum
to the Gravette Shop & Go and relies on the terms contained in the
carrier agreement for that argument.
The carrier agreement divides
Carter's customers into two (2) groups - monitored locations and nonmonitored locations.
and how much,
fuel
At monitored locations Carter determines when,
is to be delivered to its customer.
At non-
monitored locations Quality determines when, and how much, fuel is to
be delivered to a Carter customer.
The Gravette Shop
&
Go is a
Carter customer on the non-monitored list in the carrier agreement.
Hence, according to Carter, Quality not only delivered the fuel to
the
Gravette
Shop
& Go,
pursuant
to
the
terms
of
the
carrier
Docket No. 11-007-NOV
Order No. 6
Page 7
agreement Quality caused the delivery of fuel to the Gravette Shop &
Go.
ADEQ responds to Carter's assertions by maintaining that the
broad language of Ark. Code Ann. § 8-7-813 (c) (2)
demonstrates that
the Arkansas General Assembly intended not only physical delivery of
regulated substances to an unregistered tank,
but any action that
would cause the delivery of regulated substances to an unregistered
tank,
to
agreement
result
between
in
liability.
Carter
and
According
Quality
to
ADEQ
demonstrates
the
carrier
that
Carter
obtained the customers, contracted with Quality to deliver its fuel,
and
required
Quality
delivery of its fuel.
to
obtain
a
release
from
Carter
prior
to
ADEQ states that "it is hard to imagine U what
further steps Carter needed to take to "cause U
its product to be
delivered to the unregistered tanks located at the Gravette Shop &
Go.
ADEQ Motion for Summary Judgment p. 5.
In its Reply Brief Carter disputes ADEQ's interpretation of the
carrier agreement as requiring Carter's approval prior to Quality
making a delivery of its
fuel,
and states that the terms of the
carrier agreement clearly demonstrate that Quality caused deliveries
of fuel to be made to non-monitored locations such as the Gravette
Shop
&
Go.
Code Ann.
Carter further admits that its interpretation of Ark.
§ 8-7-813 (c) (2)
would create a loophole in the law,
but
that loopholes are for the Legislature to close, not the judiciary.
Carter also maintains that this loophole would not be broad,
would only apply to the unique facts of this case.
and
Docket No. 11-007-NOV
Order No. 6
Page 8
The hearing officer must undertake a statutory analysis of Ark.
Code
§ 8-7-813 (c) (2)
Ann.
and
Reg.
dispute between Carter and ADEQ.
12.201 (B) (2)
to
resolve
the
The first rule in considering the
meaning of a statute is, barring any ambiguities, to construe it just
as it reads.
McCoy v.
317 Ark. 86,
Walker,
876 S.W.2d 252
(1994).
The hearing officer concludes that Ark. Code Ann. § 8-7-813 et seq.
and Reg.12.201 are not ambiguous.
Ark.
§ 8-7-813(c) (2)
Code Ann.
officer finds
Applying the undisputed facts to
and Reg.12.201(B) (2),
the
hearing
that Carter "caused to be delivered" the regula ted
substances at issue for the following reasons.
C. Legal Analysis Of "Cause"
Blacks
effect."
Law
Dictionary
Blacks
defines
Law Dictionary,
allegation that the
cause
Ninth
as
"to
bring
about
or
Contrary to Carter's
Ed.
carrier agreement between Carter and Quality
shifted the "cause" of deliveries of Carter's fuel at non-monitored
sites
to
Quality,
the
hearing
officer
finds
that
the
carrier
agreement actually "brought about," and is the underlying cause, of
the delivery of fuel
entering
instance,
into
the
to the Gravette Shop
carrier
Quality would not
Gravette Shop & Go.
carrier agreement,
agreement
with
&
Go.
Wi thout Carter
Quality
have delivered Carter's
in
the
fuel
first
to
the
Carter and Quality negotiated and signed the
and Quality simply did not have the ability to
deliver Carter's fuel to non-monitored locations absent the carrier
agreement.
Contrary to Carter's assertions that the carrier agreement made
Docket No. 11-007-NOV
Order No. 6
Page 9
Quality the "cause" of fuel deliveries to the Gravette Shop & Go, the
hearing officer finds
cede
control
of
that the carrier agreement's terms actually
deliveries
locations to Quality.
of
Carter's
fuel
at
non-monitored
Blacks Law Dictionary defines control as the
"power or authority to manage,
direct or oversee" .
"through
ownership, by contract, or otherwise." Blacks Law Dictionary, Ninth
Ed.
Indeed, the fact that the carrier agreement divided the "power
or authority to manage,
fuel,
direct or oversee" deliveries of Carter's
depending on which list a Carter customer appears,
is also
buttressed by Carter's own Brief in Support of its Motion for Summary
judgment.
On page 4 of its Brief, Carter states:
Thus, under the
[Carter/Quality] Agreement,
[Carter] only
controls deliveries to monitored locations while [Quality]
controls deliveries to non-monitored locations such as the
Gravette Shop & Go #2.
The hearing officer concludes that,
as a matter of law,
cause and
control are two different legal concepts and the term "control" does
not appear in Ark. Code Ann. § 8-7-813(c) (2) or Reg.12.201(B) (2). The
hearing officer finds that the carrier agreement between Carter and
Quality was
the ultimate
catalyst,
or
cause,
Carter's fuel to the Gravette Shop & Go.
of
the
delivery
of
Applying the undisputed
facts to the law, the hearing officer concludes, as a matter of law,
that Carter is liable for violating Ark. Code Ann. § 8-7-813 (c) (2)
and Commission Regulation No.
officer therefore
12,
Reg.
grants ADEQ's Motion
12.201 (B) (2).
for
denies Carter's Motion for Summary Judgment.
The hearing
Summary Judgment,
and
Docket No. 11-007-NOV
Order No. 6
Page 10
D. Civil Penalties
Typically the grant of a motion for summary judgment in favor of
a
party
would
result
in
a
recommended
decision
by
the
hearing
officer. In this instance, however, the hearing officer is issuing
this
decision
because
ADEQ's
thousand,
as
an
NOV
order,
rather
requests
that
five-hundred
dollar
than
the
a
recommended
Commission
($1,500.00)
Carter for the above analyzed-violations.
civil
decision,
assess
penalty
a
one-
against
Unfortunately, the parties
have not stipulated to the proposed civil penalty and ADEQ has not
provided the hearing officer with any evidence - either by way of an
affidavi t
or civil penalty worksheets -
to determine whether the
civil penalty assessment sought by ADEQ is consistent with Commission
Regulation
No.7.
Therefore,
at this
stage
of this
appeal
the
hearing officer believes ADEQ's motion is akin to one for partial
summary
judgment.
But
proposed civil penalty,
if
the
parties
reach
or any civil penalty,
an
agreement
on
the
the hearing officer
will re-issue this order as a recommended decision.
IT IS THERFORE FOUND AND ORDERED
1.
For
the
reasons
set
forth
above,
Carter's
Motion
for
Summary Judgment is denied.
2.
For the reasons set forth above, ADEQ's Motion for Summary
Judgment is granted.
IT IS SO ORDERED
This 24~ day of January 2012
Docket No. 11-007-NOV
Order No. 6
Page 11
~~-
Charles Moulton
Administrative Hearing Officer
Docket No. 11-007-NOV
Order No. 6
Page 12
CERTIFICATE OF SERVICE
I, Patricia Goff, Commission Secretary, hereby certify that a
copy of the foregoing Order No.6, In the Matter of Carter Energy
Corporation; Docket No. 11-007-NOV has been mailed by certified mail
or by first class mail, postage prepaid to the following parties of
record, this 24 th day of January 2012.
CERTIFIED MAIL 7011 1150 0002 0948 3792
Matthew R. Hale
Polsinelli Shughart, PC
Twelve Wyandotte Plaza
120 West 12 th Street
Kansas City, Missouri 64105
(816) 421-3355
Fax (816) 374-0509
Email: [email protected]
Dawn Guthrie
Arkansas Department of
Environmental Quality
5301 Northshore Drive
North Little Rock, AR 72118
(501) 682-0888
(501) 682-0798
Fax: (501) 682-0798
Email: [email protected]
~c.~.. ~tfl
Patrlcia Goff
Commission Secretary
Arkansas Pollution Control and Ecology Commission
101 East Capitol, Suite 205
Little Rock, Arkansas 72201
(501)
682-7890
FAX:
682 -7891