Free Statement - District Court of Arizona - Arizona

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DANIEL G. KNAUSS United States Attorney District of Arizona SUE A. KLEIN Assistant U.S. Attorney Two Renaissance Square 40 North Central Ave., Ste. 1200 Phoenix, Arizona 85004-4408 Arizona State Bar No. 11253 Telephone (602) 514-7500 E-Mail: [email protected] UNITED STATES DISTRICT COURT

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DISTRICT OF ARIZONA UNITED STATES OF AMERICA, Plaintiff, CIV-04-0626-PHX-JWS v. JOHN B. KNIGHT, JR.; ROBERT D. BROWN; NATIONAL PETROLEUM MARKETING, INC.; SUNWEST EXPRESS, INC.; and NAVAJO TRAILS, INC., Defendants, PLAINTIFF'S STATEMENT OF FACTS IN SUPPORT OF MOTION FOR PARTIAL SUMMARY JUDGMENT

PLAINTIFF, the UNITED STATES ENVIRONMENTAL PROTECTION AGENCY (EPA) submits this Separate Statement of Material Facts in Support of its

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Motion for Summary Judgment, as follows: 1. The SuperFuels gas station is located at the Tuba City, Arizona intersection of

Highways 160 and 264 within the Navajo Nation reservation (the "facility"). First Amended Answer of Defendant John B. Knight, Jr., National Petroleum Marketing, Inc.,
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Sunwest Express, Inc., and Navajo Trails, Inc. ("Knight et al. Answer"), at paragraph ("¶") XXV; Answer of Robert D. Brown ("Brown Answer") at ¶ 5; and Declaration of Norwood Scott in Support of Plaintiff's Motion for Partial Summary Judgment ("Scott Decl.") at ¶ 4. 2. In May of 1989, four new underground storage tanks ("USTs") were installed at

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the facility. Deposition of John B. Knight, Jr., Vol. I, dated June 9, 2005 ("Knight Depo.") at p. 121 lines 9-13, and p. 123 lines 1-7; Deposition of Robert D. Brown dated Nov. 3, 2005 ("Brown Depo.") at p. 83, line 25, through p. 84, line 2, p. 86, line 10

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through p. 87, line 22, and Exhibit 30, attached thereto; and Scott Decl. at ¶ 19 and Exhibit K (at p. 1), attached thereto. 3. These USTs were used for the purpose of storing and dispensing unleaded and

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diesel fuel for commercial sale at the facility. Knight et al. Answer at ¶ XXV; and Scott Decl. at ¶ 9 and Exhibit B (at p. 1, Section III), attached thereto. 4. The four USTs at the facility from May of 1989 through at least December of 1999

were made of steel. Brown Depo. at p. 74 lines 14-22 and Exhibit 20, attached thereto; and Scott Decl. at ¶¶ 7 and 12, and Exhibits B (at p. 1, Section III) and D (at p. 4), attached thereto. 5. The four USTs at the facility from May of 1989 through at least December of 1999

were equipped with cathodic protection systems. Brown Depo. at p. 74 lines 14-22 and Exhibit 20, attached thereto; and Scott Decl. at ¶ 12 and Exhibit D (at pp. 1, 4 and 5), attached thereto.

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6.

During the calendar year 1999, two of the four USTs at the facility were

manifolded together, meaning that they were connected together by a pipe and acted as one tank instead of two separate tanks. Scott Decl. at ¶¶ 10 and 15 and Exhibits B (at p. 1, Section III) and G (at pp. 11, 17, 20, 89, 93, 97, 100, 101, 104, 106, 110, 111, 115, 117, 118, 139 ­ 148, 162- 164, and 170-172), attached thereto.

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7.

On or about November 8, 1999, EPA Region 9 transmitted a letter to Defendant

John B. Knight, Jr., as President of National Petroleum Marketing, Inc., and Sunshine Western, Inc. advising him of the upcoming UST inspection of the facility planned for

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November 11, 1999. Scott Decl. at ¶ 5, and Exhibit A thereto; and Knight Depo., p. 127, lines 23-25. 8. On or about November 11, 1999, representatives from the United States

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Environmental Protection Agency ("US EPA"), the Navajo Nation Environmental Protection Agency ("NN EPA") and the Hopi Environmental Protection Office ("Hopi EPO") conducted an inspection of the USTs at the facility. Scott Decl. at ¶ 4; Brown Depo. at p. 66, line 13, through p. 68, line 6; Deposition of Earl Cook, dated Dec. 13, 2005, ("Cook Depo.") at p. 12, lines 12-22. 9. Robert Brown was present at the facility on the day of the inspection and signed

the Notice of Inspection presented by Norwood Scott as the facility representative. Brown Answer at ¶ 4; and Scott Decl. at ¶ 8, and Exhibit C, attached thereto. 10. After on or about March 10, 1995, cathodic protection potential tests in accordance

with the federal UST requirements at Title 40 Code of Federal Regulations ("40 CFR") § 280.31(b)(1) were not performed on the four USTs at the facility until on or about
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November 15, 1999. Brown Depo. at p. 74 lines 14-22, p. 83, line 25, through p. 84, line 2, p. 86, line 10 through p. 87, line 22 and Exhibits 20 and 30, attached thereto; and Scott Decl. at ¶¶ 12 and 19 and Exhibits D (at pp. 1, 4 and 5) and K (at pp. 1-3 and 5-12), attached thereto. 11. On or about November 19, 1999, Defendant Robert D. Brown transmitted

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correspondence to the United States Environmental Protection Agency ("EPA") Region 9 Underground Storage Tank Program Office ("USTPO") indicating that James Groft -- an Arizona Department of Envionmental Quality ("ADEQ") certified cathodic protection

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tester with Westest, Inc. -- performed cathodic protection potential tests on the four tanks at the facility on or about November 15, 1999. Brown Depo. at p. 74 lines 14-22 and Exhibit 20, attached thereto; and Scott Decl. at ¶ 12 and Exhibit D (at pp. 1, 4 and 5),

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attached thereto. 12. US EPA has found that "statistical inventory reconciliation" ("SIR"), when

performed according to the vendor's specifications, meets federal leak detection requirements for new and existing USTs, and SIR with a 0.2 gallon per hour leak detection capability meets the federal requirements for monthly monitoring for the life of the tank and piping. Scott Decl. at ¶ 21, and Exhibit M, attached thereto. 13. In performing SIR, an UST owner or operator must collect data on a daily basis

regarding, among other things, the volume of product deliveries, the volume of product sales, and the volume of product in the USTs. Scott Decl. at ¶ 22. 14. This data must be transmitted to an SIR vendor who will then run the statistical

inventory analysis to determine if the data demonstrates that the USTs do not have more
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than a 0.2 gallon per hour leak rate. If any UST has more than a 0.2 gallon per hour leak rate, the vendor will indicate that the UST has "failed" the SIR analysis. If the UST does not have more than a 0.2 gallon per hour leak rate, the vendor will indicate that the UST has "passed" the SIR analysis. Scott Decl. at ¶ 22. 15. On or about November 10, 1999, just prior to the announced inspection on

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November 11, 1999, the facility's SIR data from March 1999 through October 1999 -which was intended for use in performing SIR as the release detection method for the four USTs at the facility during the time period March through October 1999 -- was

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transmitted to the facility's SIR vendor, The Verde Companies ("Verde"). Scott Decl. at ¶ 23, and Exhibit H (at p. 1), attached thereto. 16. No other release detection method was performed on any of the four USTs at the

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facility during the months of March through October of 1999. Scott Decl. at ¶ 24 and Exhibits D, E, G, J, K and L, attached thereto. 17. Verde provided the SIR analysis for the months of March through October 1999 to

the facility on or about November 11, 1999. Scott Decl. at ¶ 25 and Exhibits B, G, H, and K attached thereto. 18. In the analysis provided to the facility on or about November 11, 1999, Verde

reported that two of the USTs at the facility, which were connected by the same piping and thus subject to a single SIR analysis and were both used to store regular unleaded gasoline, had failed to meet the federal leak detection requirement of having less than a 0.2 gallon per hour leak rate for the months of March, April, June, July and October of 1999. Scott Decl. At ¶ 27 and Exhibits G (at pp. 139, 142, 143, 145 and 146), H and K,
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attached thereto. These results also indicate that Verde was unable to complete the analysis and that the test results were "inconclusive" for these tanks for the months of May, August and September of 1999. Exhibit G to the Scott Decl. (at pp. 140, 141 and 144). Inconclusive results require further investigation, usually by the use of another release detection method. Exhibit M to the Scott Decl. (at p.1).

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19.

In the analysis provided to the facility on or about November 11, 1999, Verde

reported that two of the USTs at the facility, which were connected by the same piping and thus subject to a single SIR analysis and were both used to store regular unleaded

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gasoline, had failed to meet the federal leak detection requirement of having less than a 0.2 gallon per hour leak rate for the months of March, April, June, July, and October of 1999. Scott Decl. at ¶ 27 and Exhibits G (at pp. 139, 142, 143, 145 and 146), H and K,

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attached thereto. These results also indicate that Verde was unable to complete the analysis and that the test results were "inconclusive" for these tanks for the months of May, August and September of 1999. Exhibit G to the Scott Decl., (at pp. 140, 141 and 144). Inconclusive results require further investigation, usually by the use of another release detection method. Exhibit M to the Scott Decl., (at p. 1). 20. In the analysis provided to the facility on or about November 11, 1999, Verde

reported that one of the USTs at the facility, used to store premium unleaded gasoline, had failed to meet the federal leak detection requirement of having less than a 0.2 gallon per hour leak rate for the months of March, April, June, July, August, and September of 1999. Scott Decl. at ¶ 28 and Exhibits G (at pp. 130 ­ 133, 135 and 137), H and K, attached thereto.
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21.

US EPA is the implementing agency for the federal RCRA UST requirements in

Indian Country. Scott Decl. at ¶ 29. 22. Within 24 hours of receiving the SIR analysis for the months of March through

October of 1999, the facility owners and operators failed to provide notification to the U.S. EPA that they had obtained monitoring results that indicated a release may have

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occurred. Scott Decl. at ¶ 30. 23. In November and December of 1999, inventory control was utilized as the method

of release detection for the four USTs at the facility. Scott Decl. at ¶ 31 and Exhibit K (at
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pp. 16 ­ 21), attached thereto. 24. No monthly monitoring of the pressurized piping connected to the USTs at the

facility was performed during the month of March 1999 because the SIR data for March
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1999 was not submitted to the SIR vendor until on or about November 10, 1999. Scott Decl. at ¶ 32 and Exhibits D, E, G, J, K and L, attached thereto. 25. Although the UST piping was equipped with automatic line leak detectors, no line

tightness test meeting the requirements of 40 CFR § 280.44(b) was performed on the piping connected to the USTs at the facility from at least March of 1998 until on or about April 19, 1999. Scott Decl at ¶ 33 and Exhibits D, E, G, J, K and L, attached thereto. 26. The owners and operators of the USTs at the facility failed to maintain any

approved method of demonstrating financial responsibility for the USTs at the facility from at least March of 1999 through at least on or about November 19, 1999. Scott Decl. at ¶ 34 and Exhibits D and G, attached thereto. 27. Sunshine Western, Inc. entered into a lease agreement with the Navajo Nation for
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the facility in 1988. The terms of the lease indicate that it expired in August of 1997. According to the Navajo Nation Regional Business Development Office ("RBDO") for Tuba City, after August of 1997, the lease continued on a month to month basis. A subsequent lease was entered into with Navajo Trails, Inc., which commenced on November 22, 2000. Knight Depo. at p. 108, lines 7-25, and page 109, lines 13 through

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16 ; Knight et al. Answer at ¶ XVI; Scott Decl. at ¶¶ 19, 35 and 36, and Exhibits K (at pp. 5-10), N and O, attached thereto; and Declaration of Matthew Small, and Exhibit A, attached thereto.

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Sunwest Express, Inc. was the retail name and operator for Sunshine Western, Inc.

Exhibit G (at p. 1, bullet 9) to the Scott Decl. Respectfully submitted this 4th day of May, 2007. DANIEL G. KNAUSS United States Attorney District of Arizona s/Sue A. Klein _________________________ SUE A. KLEIN Assistant U.S. Attorney

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CERTIFICATION
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I hereby Certify that on May 4, 2007, I electronically transmitted the attached
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document to the Clerk's Office using the CM/ECF System for filing and transmittal of a Notice of Electronic Filing to the following CM/ECF registrants:

John W. Sedwick United States District Judge 222 W. 7th Avenue - No. 32 Anchorage, Alaska 99513 Ronald Meyer Attorney at Law One Columbus Plaza 3636 North Central Avenue Suite 1050 Phoenix, Arizona 85012 Harold D. Burr, Jr. Burr and Associates, P.C. Eighteen East University Dr., Ste. 206 Mesa, Arizona 85201 s/N. Stotler ________________________

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