Case 4:22-cv-00060 Document 1 Filed on 01/07/22 in TXSD Page 1 of 13
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`UNITED STATES DISTRICT COURT
`FOR THE SOUTHERN DISTRICT OF TEXAS
`HOUSTON DIVISION
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`UNITED STATES OF AMERICA,
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`Plaintiff,
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`DERICHEBOURG RECYCLING USA,
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`Defendant.
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`Civil Action No.
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`COMPLAINT
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`The United States of America (“United States”), by the authority of the Attorney General
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`of the United States and through the undersigned attorneys, acting at the request and on behalf of
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`the Administrator of the United States Environmental Protection Agency (“EPA”), files this
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`Complaint and alleges as follows:
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`NATURE OF ACTION
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`This is a civil action against Derichebourg Recycling USA (“Derichebourg” or
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`“Defendant”), brought pursuant to Section 113(b) of the Clean Air Act (“CAA”), 42 U.S.C. §
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`7613(b).
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`The United States alleges that Defendant, a “final processor” of small appliances
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`and motor vehicle air conditioners (“MVACs”) in the scrap metal recycling process, has violated
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`the regulatory requirements at 40 C.F.R. Part 82, Subpart F (“the Recycling and Emissions
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`Reduction regulations”), promulgated pursuant to Title VI of the CAA, 42 U.S.C. §§ 7671-
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`7671q, at three of Defendant’s facilities located in Houston, Texas. Specifically, Defendant
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`violated the Recycling and Emissions Reduction regulations by failing to either (a) recover
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`refrigerants from appliances and MVACs prior to scrap recycling or (b) verify that all refrigerant
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`had been properly recovered from the appliances and MVACs prior to their delivery at
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`Defendant’s facilities.
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`This Complaint seeks civil penalties and injunctive relief based for the alleged
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`violations at Defendant’s scrap metal recycling facilities located at or near 7501 Wallisville Road
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`(“Wallisville Road Facility”), at or near 8202 West Montgomery Road (“Montgomery Road
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`Facility”) and at or near 1 Wharf Street (“Wharf Street Facility”), all of which are located in
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`Houston, Harris County, Texas (collectively, “Facilities”).
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`JURISDICTION AND VENUE
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`This court has jurisdiction over the subject matter of this action pursuant to 28
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`U.S.C. §§ 1331, 1345, and 1355 and Section 113(b) of the CAA, 42 U.S.C. § 7413(b). This
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`Court has personal jurisdiction over Defendant, which does business in the State of Texas and in
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`this judicial district.
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`Venue is proper in this District pursuant to Section 113(b) of the CAA, 42 U.S.C.
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`§ 7413(b), and 28 U.S.C. §§ 1391(b), (c) and 1395(a), because the alleged violations in this
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`Complaint occurred or are occurring at the Facility, which is located in this District.
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`NOTICE
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`Notice of the commencement of this action was provided to the Texas
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`Commission of Environmental Quality under Section 113(b) of the Act, 42 U.S.C. § 7413(b).
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`The United States Department of Justice has authority to bring this action on
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`AUTHORITY
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`behalf of the EPA under, inter alia, 28 U.S.C. §§ 516 and 519 and Section 305(a) of the CAA,
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`42 U.S.C. § 7605(a).
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`DEFENDANT
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`Defendant is a corporation organized under the laws of the State of Texas and is,
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`and was at all times relevant to this Complaint, the owner and operator of the scrap metal
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`recycling Facilities herein referred to as the Wallisville Road Facility, the Montgomery Road
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`Facility and the Wharf Street Facility, located in Houston, Texas.
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`Defendant is a “person” within the meaning of Sections 113(b) and 302(e) of the
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`CAA, 42 U.S.C. §§ 7413(b) and 7602(e), and the applicable regulations promulgated pursuant to
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`the CAA.
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`STATUTORY AND REGULATORY BACKGROUND
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`CLEAN AIR ACT
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`The CAA establishes a regulatory scheme designed to “protect and enhance the
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`quality of the Nation’s air resources so as to promote the public health and welfare and
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`productive capacity of its population.” 42 U.S.C. § 7401(b)(1).
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`Title VI
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`In 1987, the United States signed on to the Montreal Protocol, an international
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`agreement to protect and restore the stratospheric ozone layer, which shields Earth from harmful
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`ultraviolet radiation from the sun. In response to the adoption of the Montreal Protocol, the U.S.
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`Congress added Title VI, Stratospheric Ozone Protection, to the CAA Amendments of 1990.
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`Title VI of the CAA, 42 U.S.C. §§ 7671-7671q, mandates the phase-out of the
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`production and consumption of class I and class II substances that deplete the ozone layer, such
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`as chlorofluorocarbons (CFCs) and hydrochlorofluorocarbons (HCFCs).
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`Section 608(a)(2) of the CAA, 42 U.S.C. § 767lg(a)(2), requires the Administrator
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`of EPA to promulgate regulations establishing standards and requirements regarding the use and
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`disposal of class I and class II substances during service, repair, or disposal of appliances. These
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`regulations, as amended, are codified at Title 40 of the Code of Federal Regulations, Part 82,
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`Subpart F. The stated purpose of Subpart F is “to reduce emissions of class I and class II
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`refrigerants and their non-exempt substitutes to the lowest achievable level during the service,
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`maintenance, repair, and disposal of appliances… in accordance with Title VI of the CAA.” 40
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`C.F.R. § 82.150(a).
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`The regulations at 40 C.F.R. § 82.155(b) require that the final processor—as
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`defined in Paragraph 22, below—must either: (1) recover any remaining refrigerant from the
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`appliance in accordance with 40 C.F.R. § 82.155(a); or (2) verify, using a “signed statement” or
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`a “contract,” that all refrigerant that had not previously leaked out of the appliance has been
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`recovered from the appliance in accordance with 40 C.F.R. § 82.155(a). If the final processor is
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`relying upon a signed statement, the statement must include the name and address of the person
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`who recovered the refrigerant and the date the refrigerant was recovered. If the final processor is
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`relying upon a contract between the supplier and the final processor, the contract must either
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`state that the supplier will (a) recover any remaining refrigerant from the appliance in accordance
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`with 40 C.F.R. § 82.155(a) prior to delivery, or (b) verify that the refrigerant had been properly
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`recovered prior to receipt by the supplier.
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`EPA has explained that the option to use a “contract” under the 40 C.F.R. Part 82,
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`Subpart F, is only available when the final processor has an ongoing relationship with the
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`supplier. In the Preamble to the 1993 rule, EPA described the contract option in Subpart F as
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`being appropriate “for businesses such as the automotive dismantlers to streamline transactions
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`in cases where they maintain long-standing business relationships with the scrap dealers.” 58
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`Fed.Reg. 28660, 28704 (May 14, 1993). In 2016, when 40 C.F.R. Part 82, Subpart F was
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`revised, EPA reiterated that “a contract is appropriate for businesses to streamline transactions in
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`cases where they maintain long-standing business relationships. A contract would be entered
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`into prior to the transaction, such as during the set-up of a customer account, not simultaneously
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`with the transaction. A signed statement is more appropriate for one-off transactions between
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`the supplier and the final processor.” 81 Fed. Reg. 82272, 82309 (Nov. 18, 2016).
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`Pursuant to 40 C.F.R. § 82.155(c), the final processor must maintain a copy of all
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`signed statements or contracts obtained pursuant 40 C.F.R. § 82.155(b)(2) on site, in hard copy
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`or in electronic format, for three years.
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`An “appliance” is defined as “any device which contains and uses a class I or
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`class II substance or substitute as a refrigerant and which is used for household or commercial
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`purposes, including any air conditioner, MVAC, refrigerator, chiller, or freezer. 40 C.F.R.
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`§ 82.152.
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`An “MVAC” is defined as a motor vehicle air conditioner as that term is further
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`defined in 40 C.F.R. Part 82, subpart B.” 40 C.F.R. § 82.152.
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`An “MVAC-like appliance” is defined as “a mechanical vapor compression,
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`open-drive compressor appliance with a full charge of 20 pounds or less of refrigerant used to
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`cool the driver's or passenger's compartment of off-road vehicles or equipment. This includes,
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`but is not limited to, the air-conditioning equipment found on agricultural or construction
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`vehicles. This definition is not intended to cover appliances using R-22 refrigerant.” 40 C.F.R.
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`§ 82.152.
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`A “small appliance” is defined as “any appliance that is fully manufactured,
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`charged, and hermetically sealed in a factory with five (5) pounds or less of refrigerant,
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`including, but not limited to, refrigerators and freezers (designed for home, commercial, or
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`consumer use) . . . , room air conditioners . . . , dehumidifiers, under-the-counter ice makers,
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`vending machines, and drinking water coolers.” 40 C.F.R. § 82.152.
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`“Disposal” is defined as the “process leading to and including . . . the recycling of
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`any appliance for scrap.” 40 C.F.R. § 82.152.
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`A “final processor” is the person(s) who take the final step in the disposal process
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`of a small appliance, MVAC, or MVAC-like appliance (including but not limited to scrap
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`recyclers and landfill operators). 40 C.F.R. § 82.155(b).
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`Enforcement of the CAA
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`Section 113(b) of the CAA, 42 U.S.C. § 7413(b), authorizes EPA to bring a civil
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`action if EPA finds that any person has violated, or is in violation of, any requirement or
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`prohibition of subchapter VI including, but not limited to, a requirement or prohibition of any
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`rule promulgated, issued or approved under subchapter VI.
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`Section 113(b) of the CAA, 42 U.S.C. § 7413(b), authorizes the Court to enjoin a
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`violation, to require compliance, to assess and recover a civil penalty, and to award any other
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`appropriate relief for each violation.
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`Pursuant to Section 113(b) of the CAA, 42 U.S.C. § 7413(b), Defendant is liable
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`for injunctive relief and civil penalties of up to $102,638 per day for each violation occurring
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`after November 2, 2015, and assessed on or after December 23, 2020, pursuant to the Federal
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`Civil Penalties Inflation Adjustment Act of 1990, 28 U.S.C. § 2461, as amended by 31 U.S.C.
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`§ 3701, 40 C.F.R. §19.4 and 85 Fed. Reg. 83818 (Dec. 23, 2020).
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`GENERAL ALLEGATIONS
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`Defendant is (and was at all times relevant to this Complaint) the owner and
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`operator of the Facilities within the meaning of the CAA.
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`Defendant is (and was at all times relevant to this Complaint) a person who
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`disposes of appliances, including MVACs and small appliances, within the meaning of 40 C.F.R.
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`§ 82.152, as part of its business operations at the Montgomery Road, Wallisville Road, and
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`Wharf Street Facilities.
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`Defendant is (and was at all times relevant to this Complaint) a “final processor”
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`within the meaning of 40 C.F.R. § 82.155(b).
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`EPA inspected Defendant’s Montgomery Road Facility on November 7, 2018, the
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`Wallisville Road Facility on November 8, 2018, and the Wharf Street Facility on November 9,
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`2018 (“EPA’s inspections”).
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`Defendant’s Operations
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`Defendant accepts motor vehicles with MVACs and a variety of small appliances,
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`including refrigerators, freezers, window air conditioners, dehumidifiers, chillers, coolers, and
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`vending machines, at its Montgomery Road, Wallisville Road, and Wharf Street Facilities.
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`MVACs and each of these types of appliances contained refrigerants at some point in time.
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`Upon delivery, Defendant inspects and weighs the supplier’s load, approves the
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`delivery, and pays the supplier according to the weight and grade of materials delivered.
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`After Defendant accepts a load of appliances and MVACs into its Facility,
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`Defendant processes those appliances and MVACs in a shredder that shears and chops large
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`items into small pieces that can more easily be further sorted mechanically into grades and types
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`of metal.
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`At the time of EPA’s inspection of the Montgomery Road Facility, EPA observed
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`a large scrap pile containing small appliances and motor vehicles as well as at least three
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`appliances with intact refrigerant lines, which showed no sign of recovery or venting and thus
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`likely still contained refrigerants. Defendant informed EPA that it accepts small appliances daily
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`at the Montgomery Road Facility.
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`During EPA’s inspection of the Wharf Street Facility, EPA observed a large scrap
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`pile as well as multiple motor vehicles with MVACs that contained (or once contained)
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`refrigerant. Defendant informed EPA that forty percent of the shredder feed at the Wharf Street
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`Facility is comprised of motor vehicles with MVACs that contained (or once contained)
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`refrigerant.
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`During EPA’s inspection of the Wallisville Road Facility, EPA observed a scrap
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`pile and was informed by Defendant that it occasionally accepts small appliances and motor
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`vehicles with MVACs at the Wallisville Road Facility.
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`Based on this information, and subject to a reasonable opportunity for further
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`investigation and discovery, Defendant received MVACs and appliances that contained or once
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`contained refrigerants at each of the Facilities.
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`At the time of EPA’s inspections, Defendant was not recovering refrigerant from
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`any of the MVACs and appliances it received at any of the Facilities.
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`At the time of EPA’s inspections of the Wallisville Road and Wharf Street
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`Facilities, Defendant provided EPA with a copy of a “scale ticket” in use at those Facilities. The
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`scale ticket did not require the supplier to provide the name and address of the person or entity
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`who recovered the refrigerant or the date that such refrigerant was recovered. Additionally, the
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`scale ticket did not state that the supplier will recover any remaining refrigerant and did not
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`verify that the refrigerant had been properly recovered prior to receipt by the supplier.
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`Moreover, the scale ticket was used by suppliers that did not have an ongoing relationship with
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`Derichebourg.
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`At the time of EPA’s inspections, Defendant was not verifying, using a signed
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`statement or contract with the supplier, that all refrigerant that had not leaked previously had
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`been recovered from such appliances and MVACs, nor was Defendant maintaining such
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`documents on site, in hardcopy or electronic form.
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`CLAIM 1: Failure to Recover Refrigerant or to Verify Recovery
`at the Montgomery Road Facility
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`Paragraphs 1 through 39 are realleged and incorporated herein by reference.
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`Subject to a reasonable opportunity for further investigation and discovery,
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`Defendant has accepted appliances or MVACs for recycling or disposal at its Montgomery Road
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`Facility on a daily basis.
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`Dating from at least November 8, 2018, Defendant has violated 40 C.F.R.
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`§ 82.155(b)(1) or (2) by failing to recover refrigerant or verify, using a signed statement or
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`contract, that all refrigerant that had not leaked previously had been recovered from such
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`appliances and MVACs.
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`Pursuant to Section 113(b) of the CAA, 42 U.S.C. § 7413(b), Defendant is liable
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`for injunctive relief and civil penalties of up to $102,638 per day for each violation occurring
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`after November 2, 2015, and assessed on or after December 23, 2020, pursuant to the Federal
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`Civil Penalties Inflation Adjustment Act of 1990, 28 U.S.C. § 2461, as amended by 31 U.S.C.
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`§ 3701, 40 C.F.R. § 19.4 and 85 Fed. Reg. 83818 (Dec. 23, 2020).
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`Unless restrained by an Order of this Court, these violations will continue.
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`CLAIM 2: Failure to Recover Refrigerant or Verify Recovery
`at the Wallisville Road Facility
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`Paragraphs 1 through 39 are realleged and incorporated herein by reference.
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`Subject to a reasonable opportunity for further investigation and discovery,
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`Defendant has accepted appliances and MVACs for recycling or disposal at its Wallisville Road
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`Facility on a regular/routine/recurring basis.
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`Dating from at least November 8, 2018, Defendant has violated 40 C.F.R.
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`§ 82.155(b)(1) or (2) by failing to recover refrigerant or verify, using a signed statement or
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`contract, that all refrigerant that had not leaked previously had been recovered from such
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`appliances and MVACs.
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`Pursuant to Section 113(b) of the CAA, 42 U.S.C. § 7413(b), Defendant is liable
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`for injunctive relief and civil penalties of up to $102,638 per day for each violation occurring
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`after November 2, 2015, and assessed on or after December 23, 2020, pursuant to the Federal
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`Civil Penalties Inflation Adjustment Act of 1990, 28 U.S.C. § 2461, as amended by 31 U.S.C.
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`§ 3701, 40 C.F.R. § 19.4 and 85 Fed. Reg. 83818 (Dec. 23, 2020).
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`Unless restrained by an Order of this Court, these violations will continue.
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`CLAIM 3: Failure to Recover Refrigerant or Verify Recovery
`at the Wharf Street Facility
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`Paragraphs 1 through 39 are realleged and incorporated herein by reference.
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`Subject to a reasonable opportunity for further investigation and discovery,
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`Defendant has accepted appliances and MVACs for recycling or disposal at its Wharf Street
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`Facility on a regular/routine/recurring basis.
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`Dating from at least November 9, 2018, Defendant has violated 40 C.F.R.
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`§ 82.155(b)(1) or (2) by failing to recover refrigerant or verify, using a signed statement or
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`contract, that all refrigerant that had not leaked previously had been recovered from such
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`appliances and MVACs.
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`Pursuant to Section 113(b) of the CAA, 42 U.S.C. § 7413(b), Defendant is liable
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`for injunctive relief and civil penalties of up to $102,638 per day for each violation occurring
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`after November 2, 2015, and assessed on or after December 23, 2020, pursuant to the Federal
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`Civil Penalties Inflation Adjustment Act of 1990, 28 U.S.C. § 2461, as amended by 31 U.S.C.
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`§ 3701, 40 C.F.R. § 19.4 and 85 Fed. Reg. 83818 (Dec. 23, 2020).
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`Unless restrained by an Order of this Court, these violations will continue.
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`PRAYER FOR RELIEF
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`WHEREFORE, based upon the allegations in Paragraphs 1 through 54 of this Complaint,
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`the United States respectfully requests that this Court:
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`Permanently enjoin Defendant from operating its Facilities located in Houston,
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`Texas, except in accordance with the CAA and all applicable federal regulations;
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`Order Defendant to correct its handling of refrigerants by, among other things,
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`requiring Defendant to (a) recover refrigerant from intact appliances, (b) verify proper refrigerant
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`recovery from appliances arriving at the Facility no longer containing refrigerant by utilizing a
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`compliant signed statement or contract, and (c) notify suppliers of requirements for delivering a
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`small appliance or MVAC to any of the Facilities;
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`Order Defendant to take other appropriate actions to remedy, mitigate, and offset
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`the harm to public health and the environment caused by the violations of the CAA alleged
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`herein;
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`Award the United States civil penalties of up to $102,638 per day for each
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`violation occurring after November 2, 2015, and assessed on or after December 23, 2020, ;
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`Award the United States its costs of this action; and
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`Grant the United States such other relief as this Court deems just and proper.
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`Respectfully submitted,
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`TODD KIM
`Assistant Attorney General
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`Environment and Natural Resources Division
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`United States Department of Justice
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`_______________________
`NICOLE VEILLEUX
`Senior Counsel
`Environmental Enforcement Section
`Environment and Natural Resources Division
`United States Department of Justice
`P.O. Box 7611
`Ben Franklin Station
`Washington, D.C. 20044-7611
`(202) 616-8746
`(202) 616-6584 (fax)
`nicole.veilleux@usdoj.gov
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`JENNIFER LOWERY
`United States Attorney
`Southern District of Texas
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`DANIEL HU
`Assistant United States Attorney
`Texas Bar No. 10131415
`S.D. Tex. ID: 7959
`1000 Louisiana St., Suite 2300
`Houston, TX 77002
`Telephone: (713) 567-9000
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`OF COUNSEL:
`TAMARA CARNOVSKY
`Associate Regional Counsel
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`Office of Regional Counsel
`U.S. Environmental Protection Agency, Region 5
`Chicago, IL 60604
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