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United States v. United States Seafoods LLC

United States District Court, W.D. Washington, Seattle

December 27, 2017

THE UNITED STATES OF AMERICA, Plaintiff,
v.
UNITED STATES SEAFOOD LLC, SEAFREEZE ALASKA I LLC, and ALASKA ALLIANCE INC., Defendants.

          CONSENT DECREE

          JOHN C. COUGHENOUR, UNITED STATES DISTRICT JUDGE.

         This matter comes before the Court on Plaintiff's unopposed motion for the Court to enter judgment and a Consent Decree (Dkt. No. 6). On November 8, 2017, Plaintiff filed a notice of settlement and proposed Consent Decree. (Dkt. No. 2). Pursuant to federal regulations, Plaintiff published notice of the Consent Decree in the Federal Register and solicited public comments. (Dkt. No. 6 at 1.) Plaintiff received no public comments during the required notice period. (Id.) The Court has reviewed the proposed Consent Decree and its supporting appendices, and finds that the Consent Decree is fair, reasonable, and adequate, and is consistent with the Clean Air Act. Accordingly, the Court ENTERS the following Consent Decree.

         TABLE OF CONTENTS

         I. JURISDICTION AND VENUE .......................................................................... 3

         II. APPLICABILITY ................................................................................................ 4

         III. DEFINITIONS ..................................................................................................... 7

         IV. CIVIL PENALTY .............................................................................................. 10

         V. COMPLIANCE REQUIREMENTS .................................................................. 12

         A. Compliance with Applicable Law ..................................................................... 12

         B. Consent Decree Compliance Plan ...................................................................... 13

         C. Training .............................................................................................................. 15

         D. Leak Detection, Calculation, Repair and Verification ....................................... 16

         E. Annual Refrigerant Loss Percentage ................................................................. 18

         F. Appliance Conversion ........................................................................................ 22

         G. Electronic Records Portal .................................................................................. 25

         H. Third Party Verification Requirements .............................................................. 26

         I. Permits ............................................................................................................... 33

         VI. REPORTING REQUIREMENTS ..................................................................... 33

         VII. STIPULATED PENALTIES ............................................................................. 37

         VIII. FORCE MAJEURE ........................................................................................... 41

         IX. DISPUTE RESOLUTION ................................................................................. 43

         X. INFORMATION COLLECTION AND RETENTION .................................... 46

         XI. EFFECT OF SETTLEMENT/RESERVATION OF RIGHTS .......................... 48

         XII. COSTS ............................................................................................................... 49

         XIII. NOTICES ........................................................................................................... 49

         XIV. EFFECTIVE DATE ........................................................................................... 51

         XV. RETENTION OF JURISDICTION ................................................................... 51

         XVI. MODIFICATION .............................................................................................. 51

         XVII. TERMINATION ................................................................................................ 52

         XVIII. PUBLIC PARTICIPATION .............................................................................. 53

         XIX. SIGNATORIES/SERVICE ................................................................................ 54

         XX. APPENDICES ................................................................................................... 54

         XXI. INTEGRATION ................................................................................................ 54

         XXII. FINAL JUDGMENT ......................................................................................... 55

         WHEREAS, Plaintiff United States of America, on behalf of the United States Environmental Protection Agency (EPA), has filed a complaint in this action concurrently with this Consent Decree, alleging that Defendants, United States Seafoods, LLC; Seafreeze Alaska I LLC; and Alaska Alliance LLC, have violated the regulations set forth in 40 C.F.R. Part 82, Subpart F, and promulgated by EPA pursuant to Section 608 of the Clean Air Act (CAA), 42 U.S.C. §§ 7671-7671q.

         WHEREAS, Defendants' fishing vessels employ industrial process refrigeration appliances that use a hazardous, ozone-depleting refrigerant gas known as chlorodifluoromethane or “R-22.” The Complaint against Defendants alleges that the Defendants did not make timely repairs to leaking refrigeration appliances on their vessels, verify that leaks were effectively repaired, and keep required records in violation of Section 608 of the CAA and the regulations promulgated thereunder at 40 C.F.R. Part 82, Subpart F.

         WHEREAS, Defendants do not admit any liability to the United States arising out of the transactions or occurrences alleged in the Complaint.

         WHEREAS, the Parties recognize, and the Court by entering this Consent Decree finds, that this Consent Decree has been negotiated by the Parties in good faith and will avoid litigation between the Parties, and that this Consent Decree is fair, reasonable, and in the public interest.

         Now THEREFORE, before the taking of any testimony, without the adjudication or admission of any issue of fact or law except as provided in Section I, and with the consent of the Parties, it is hereby ADJUDGED, ORDERED, AND DECREED as follows:

         I. JURISDICTION AND VENUE

         1. This Court has jurisdiction over the subject matter of this action, pursuant to 28 U.S.C. §§ 1331, 1345, and 1355, and Section 113(b) of the CAA, 42 U.S.C. § 7413(b), and over the Parties. Venue lies in this District pursuant to Section 113(b) of the CAA, 42 U.S.C. § 7413(b), and 28 U.S.C. §§ 1391(b) and (c) and 1395(a), because each of the Defendants resides and maintains its principal place of business in this district. For purposes of this Decree, or any action to enforce this Decree, Defendants consent to the Court's jurisdiction over this Decree and any such action and over Defendants, and consent to venue in this judicial district.

         2. For purposes of this Consent Decree, Defendants agree that the Complaint states claims upon which relief may be granted pursuant to Sections 113(b) and 608 of the CAA, 42 U.S.C. §§ 7413(b) and 7671g; 40 C.F.R. Part 82, Subpart F.

         II. APPLICABILITY

         3. The obligations of this Consent Decree apply to and are binding upon the United States, and upon the Settling Parties, and any successors, assigns, or other entities or persons otherwise bound by law, and apply to Vessels as specified in this Consent Decree.

         4. Upon transfer of ownership and operation of any New Vessel, the Settling Parties are relieved of their obligations under this Consent Decree as to the transferred New Vessel. Within thirty (30) Days of transferring ownership of any New Vessel, the Settling Parties shall provide the United States with notice of the transfer in accordance with Section XIII of this Consent Decree (Notices).

         5. The following procedures shall govern transfers of ownership and operation of Current Vessels, and any attempt to transfer ownership or operation of a Current Vessel without complying with this Paragraph constitutes a violation of this Decree.

         a. At least sixty (60) Days prior to any transfer of ownership and/or operation of a Current Vessel, the relevant Settling Party shall advise the person to whom the Settling Party intends to transfer ownership and/or operation of a Current Vessel (Transferee) in writing of the existence of this Consent Decree and provide a copy of this Consent Decree to the Transferee, and shall simultaneously provide the United States in accordance with Section XIII of this Consent Decree (Notices) with a copy of such written notification as well as the proposed transfer agreement.

         b. In its notice to the United States, the relevant Settling Party shall indicate whether it intends to request: (1) that the Transferee will be substituted for the Settling Party in this Consent Decree as to obligations concerning the transferred Current Vessel (a Substitution), pursuant to Paragraph 6.b below; or (2) to be relieved of the obligations of the Consent Decree with respect to that Current Vessel without a Substitution of the Transferee for the Settling Party, pursuant to Paragraph 6.a below; or (3) to remain a Settling Party responsible for compliance with this Consent Decree as to the transferred Vessel pursuant to Paragraph 6.c. below.

         c. The Settling Parties shall give EPA the opportunity to inspect the to-be-transferred Current Vessel.

         6. The relevant Settling Party shall be relieved of its obligations under this Consent Decree as to the transferred Current Vessel only where the following requirements of Paragraphs 6.a or 6.b below are satisfied.

         a. Relief from Consent Decree Obligations without a Substitution.

         A Settling Party may be relieved from the obligations in this Consent Decree without a Substitution only where the relevant Settling Party:

(1) transfers both ownership and operation of the Current Vessel to an entity that is not related to the Settling Parties; and
(2) demonstrates and certifies, in accordance with Paragraph 52 below, that all Appliances at the Current Vessel being transferred have either been Converted pursuant to Paragraph 29 of this Consent Decree, or exempted from Conversion pursuant to Paragraph 30.

         b. Substitution of Transferee for Settling Party.

         (1) A Substitution of the Transferee for the Settling Party in this Consent Decree may occur only where the Settling Party Transfers both ownership and operation of the Current Vessel.

         (2) In the notice provided pursuant to Paragraph 5 seeking a Substitution, the Settling Party shall provide the United States with information concerning the proposed Transferee and request approval to substitute the Transferee for the Settling Party with respect to Consent Decree obligations pertaining to the Current Vessel to be transferred.

         (3) Within sixty (60) Days of receiving the notice and request for substitution in Paragraph 5.b(2) above, the United States will notify the requesting Settling Party as to whether it will agree to modify the Consent Decree to effectuate the requested Substitution. The United States' approval of a proposed transfer that seeks a Substitution shall not be arbitrarily and capriciously withheld.

         (4) The United States, the Settling Parties, and the Transferee will execute, and the Court must approve, a modification pursuant to Section XVI of this Consent Decree that:

(a) Makes the Transferee a party to this Consent Decree;
(b) Makes the Transferee liable for all obligations and liabilities applicable to the Current Vessel to be transferred; and
(c) Relieves the Settling Parties of their liability under this Consent Decree for all obligations and liabilities applicable to the Current Vessel to be transferred.

         (5) Notwithstanding the foregoing, a Substitution shall not release the Settling Parties from any obligation under this Consent Decree that is not specific to the transferred Current Vessel, including the obligations set forth in Sections IV (Civil Penalty) and VII (Stipulated Penalties), and all obligations in Sections V (Compliance Requirements) and VI (Reporting Requirements) with respect to other Current Vessels.

         c. Transfer without Relieving the Settling Party of Consent Decree Obligations or a Substitution.

         Where a Settling Party transfers either ownership and/or operation of a Vessel but is not relieved of responsibility for Compliance with this Consent Decree pursuant to Paragraph 6.a above, or a Substitution does not occur pursuant to Paragraph 6.b above, the relevant Settling Party shall remain responsible for compliance with this Consent Decree and the Transferee shall be added as a Settling Party through modification of this Consent Decree under Section XVI of this Consent Decree.

         7. The Settling Parties shall provide a copy of this Consent Decree to all officers, employees, and agents whose duties might reasonably include compliance with any provision of this Decree, as well as to any contractor retained to perform work required under this Consent Decree, and any Third Party Verifier(s) hired pursuant to Section V.H of the Consent Decree (Compliance Requirements). The Settling Parties shall condition any such contract upon performance of the work in conformity with the terms of this Consent Decree.

         8. In any action to enforce this Consent Decree, the Settling Parties shall not raise as a defense the failure by any of their officers, directors, employees, agents, contractors, or Third Party Verifiers to take any actions necessary to comply with the provisions of this Consent Decree.

         III. DEFINITIONS

         9. Terms used in this Consent Decree that are defined in the CAA, or in regulations promulgated thereunder, shall have the meanings assigned to them in the CAA or such regulations, unless otherwise provided in this Decree. Whenever the terms set forth below are used in this Consent Decree, the following definitions shall apply:

a. “Appliance” shall mean all industrial process refrigeration or commercial refrigeration appliance that are located on any Vessel and that normally contain more than 50 pounds of Covered Refrigerant, as defined in 40 C.F.R. § 82.152 or 40 C.F.R. § 82.156(j), as applicable,
b. “Audit Finding” shall mean each way in which any document, record, report, diagram, test, system, review, evaluation, policy, practice, plan, training, procedure, calculation, personnel, equipment, or other item, action, or omission deviates from, or does not comply and conform with, Section V (Compliance Requirements) and with Appendices A and B of this Consent Decree.
c. “Calendar Year” shall mean the period of time beginning January 1 of a given year and running through December 31 of the same year, including weekend and holidays.
d. “Complaint” shall mean the complaint filed by the United States in this action.
e. “Consent Decree” or “Decree” shall mean this Decree.
f. “Consent Decree Compliance Plan, ” “Plan, ” or “CDCP” shall mean the Consent Decree Compliance Plan attached as Appendix A to this Consent Decree and implemented pursuant to Paragraph 16 of this Consent Decree, and any revisions made to the CDCP pursuant to Paragraph 18 of this Decree.
g. “Conversion” or “Convert” or “Converted” shall mean the complete removal of an Appliance, or the replacement or modification of an Appliance's components such that the Appliance can no longer operate using any Covered Refrigerant and can only operate using ammonia.
h. “Covered Refrigerant” shall mean any refrigerant, as defined in 40 C.F.R. § 82.152 or § 82.156(j) as applicable, with the exception of any exempt substitute as defined in 40 C.F.R. § 82.152 and § 82.154(a)(1).
i. “Current Vessel” or “Current Vessels” shall mean the aquatic fishing boats or vessels with the following names as of the Date of Lodging: Seafreeze Alaska (USCG #517242), Vaerdal (USCG #611225), Legacy (USCG #664882), Alaska Beauty (USCG #544967), Alaska Endeavor (USCG #608399), Alaska Knight (USCG #996921), and Alaska Provider (USCG #651455). The term “Vessel” as used herein does not include any structure permanently located on land.
j. “Date of Lodging” shall mean the Day that this Consent Decree is lodged with the Court for public comment pursuant to Section XVIII (Public Participation) below.
k. “Day” shall mean a calendar day unless expressly stated to be a business day. In computing any period of time under this Consent Decree, where the last day would fall on a Saturday, Sunday, or federal holiday, the period shall run until the close of business of the next business day.
l. “Defendants” shall mean United States Seafoods, LLC; Seafreeze Alaska I LLC; and Alaska Alliance LLC.
m. “EPA” shall mean the United States Environmental Protection Agency and any of its successor departments or agencies.
n. “Effective Date” shall have the definition provided in Section XIV

         (Effective Date).

o. “Full Charge” shall mean a measurement of Covered Refrigerant made in accordance with the procedure described in Paragraph 21.
p. “Interest” shall mean the interest rate set forth in 28 U.S.C. § 1961.
q. “New Vessel” or “New Vessels” shall mean any aquatic fishing boats or vessels acquired by a Settling Party that are not included in the definition of Current Vessel.
r. “Paragraph” shall mean a portion of this Decree identified by an Arabic numeral.
s. “Parties” shall mean the United States and the Settling Parties.
t. “Section” shall mean a portion of this Decree identified by a Roman numeral.
u. “Settling Parties” shall mean United States Seafoods, LLC; Seafreeze Alaska I LLC; Alaska Vaerdal LLC; Alaska Legacy LLC; Epic Alaska LLC; Alaska Beauty LLC; Seabed Surveyor LLC; and Alaska Knight LLC.
v. “United States” shall mean the United States of America, acting on behalf of EPA.
w. “Vessel” shall mean any Current Vessel or New Vessel.

         IV. CIVIL PENALTY

         10. Within sixty (60) Days after the Effective Date, Defendants shall pay the sum of $135, 000 as a civil penalty, together with Interest accruing from July 25, 2016, at the rate specified in 28 U.S.C. § 1961 as of July 25, 2016. Defendants shall be jointly and severally liable for the payment of this civil penalty.

         11. Defendants shall pay the civil penalties due at https://www.pay.gov to the U.S. Department of Justice account, in accordance with instructions provided to Defendants by the Financial Litigation Unit (FLU) of the United States Attorney's Office for the Western District of Washington after the Effective Date. The payment instructions provided by the FLU will include a Consolidated Debt Collection System (CDCS) number, which Defendants shall use to identify all payments required to be made in accordance with this Consent Decree. The FLU will provide the payment instructions to:

Matthew Upton 1801
Fairview Ave E. Ste. 100
Seattle, WA 98102
Phone: 206-763-3133
E-Mail: mupton@ussseafoods.net

         Defendants may change the individual to receive payment instructions on their behalf by providing written notice of such change to the United States and EPA in accordance with Section XIII (Notices).

         12. At the time of payment, Defendants shall send notice that payment has been made: (i) to EPA via email at accntsreceivable@cinwd@epa.gov or via regular mail at EPA Cincinnati Finance Office, 26 W. Martin Luther King Drive, Cincinnati, Ohio 45268; (ii) to the United States via email or regular mail in accordance with Section XIII (Notices); and (iii) to EPA Region 5 in accordance with Section XIII (Notices). Such notice shall state that the payment is for the civil penalty owed pursuant to the Consent Decree in United States v. United States Seafoods, LLC and shall reference the civil action number, CDCS Number and DOJ case number 90-5-2-1-11506.

         13. Defendants and Settling Parties shall not deduct any penalties paid under this Decree pursuant to this Section or Section VII (Stipulated Penalties) in calculating their federal income tax.

         V. COMPLIANCE REQUIREMENTS

         14. Applicability of the Requirements of this Section.

         All of the requirements of this Section set forth in Paragraphs 15 - 46 below shall apply to all Appliances located on Current Vessels until such Appliances undergo Conversion pursuant to Paragraph 29 below or are exempted from Conversion pursuant to Paragraph 30 below. Only the requirements of Paragraph 15 and 19 below shall apply to Appliances located on New Vessels during the term of this Consent Decree.

         A. Compliance with Applicable Law

         15. The Settling Parties shall comply with all applicable requirements of Section 608 of the Clean Air Act, 42 U.S.C. § 7671g, and its implementing regulations. The regulations promulgated under Section 608 are codified at 40 C.F.R. Part 82, Subpart F (Subpart F). In November 2016, EPA amended and added requirements to Subpart F. See 81 Fed. Reg. 82272 (Nov. 16, 2016). The amended and new requirements become effective on different dates. See, e.g., 40 C.F.R. § 82.156(i) (noting that provisions will only apply until January 1, 2019); § 82.157 (setting forth regulations applicable as of January 1, 2019). The Settling Parties shall comply with whichever Subpart F regulations are applicable at that time. Where the requirements of Section 608 or Subpart F differ from those set forth in this Consent Decree, the more stringent requirement shall apply. As applicable to the Settling Parties' Vessels and Appliances, the requirements of Section 608 or Subpart F include, but are not limited to:

a. Calculating, Inspecting for, and Repairing leaks in Appliances pursuant to 40 C.F.R. § 82.156(i)(2) or (i)(9) or 40 C.F.R. § 82.157(b), (c), (d), (f), (g) and (j), as applicable;
b. Conducting and documenting initial and follow-up verification tests on an appliance-wide basis after a leak in an Appliance is repaired as required by 40 C.F.R.

§ 82.156(i)(3) or 40 C.F.R. § 82.157(d) and (e), as applicable, consisting of one or more of the following methods: (1) soap bubble test; (2) electronic or ultrasound leak detectors; (3) pressure test; (4) vacuum test; (5) fluorescent dye and black light test; (6) infrared test; (7) near infrared (black scatter absorption gas imaging) test; and (8) Halon Refrigeration gas detection methods.

c. Keeping all records and reporting as required by 40 C.F.R. § 166 and 40 C.F.R. § 82.156(1) and (m), or 40 C.F.R. § 82.157(1) and (m), as applicable; and
d. Using certified, self-contained recovery or recycling equipment available at each Vessel with an Appliance, where required, pursuant to 40 C.F.R. § 82.154, as applicable.

         B. Consent Decree Compliance Plan

         16. No later than the Date of Lodging of this Consent Decree, the Settling Parties shall fully implement the Consent Decree Compliance Plan (CDCP) attached as Appendix A to this Consent Decree, in accordance with all provisions and schedules therein. In the event of a conflict between the CDCP and the terms of this Consent Decree, the terms of the Decree shall control.

         17. Notwithstanding any modifications the Settling Parties may make to the CDCP, the CDCP shall at all times include, at a minimum, the following components:

a. A list of all Appliances at all Vessels currently owned by the Settling Parties.
b. A schedule for regular leak detection and testing of all Appliances that will assure compliance with Paragraph 22 below.
c. The applicable requirements, methodology, and procedures to be followed for determining Full Charge in compliance with Paragraphs 20 and 21 below.
d. The requirements, methodology, and procedures applicable to leak detection, leak rate calculation, leak repair and verification testing that will be followed to assure compliance with Paragraphs 22-25 below;
e. The applicable requirements, methodology, and procedures to be followed for determining the Annual Refrigerant Loss Percentage in compliance with Paragraphs 26-28 below;
f. Requirements and procedures for employee training that, at a minimum, meet the requirements of Paragraph 19 below;
g. The requirements, methodology, and procedures for creating and maintaining records, and, as necessary, reporting to senior managers and/or EPA of:
(1) All Covered Refrigerant purchases, and any transfers between, additions to, and removals from any Appliance;
(2) All Covered Refrigerant losses or releases, whether due to leaks ...

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