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Date: 07-02-2020

Case Style:

United States of America v. Petroleum Distributors, Inc.

Case Number: 19-CV-3904

Judge: PMH

Court: United States District Court for the Southern District of New York (New York County)

Plaintiff's Attorney: United States District Attorney’s Office

Defendant's Attorney:


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Description: New York, NY - The United States of America sued Chestnut Petroleum Distributors, Inc., and its affiliates CPD Energy Corp., CPD NY Energy Corp., Chestnut Mart of Gardiner, Inc., Chestnut Marts, Inc., Greenburgh Food Mart, Inc., Middletown Food Mart, Inc., and NJ Energy Corp. (collectively, “Defendants”), for violating the Resource Conservation and Recovery Act (“RCRA”) in connection with their ownership or operation of underground storage tanks at 20 separate gas stations within the Southern District of New York and adjoining districts.

EPA Regional Administrator Peter D. Lopez said: “Failure to regularly monitor underground storage tanks and address possible leaks risks contaminating groundwater, which is one of our most valuable natural resources. This settlement requires the companies to follow laws in place to mitigate safety threats and protect the environment.”

Petroleum products such as gasoline contain chemical compounds that pose substantial threats to human health. Service stations typically store gasoline in underground storage tanks. When operated conscientiously and monitored closely, underground storage tanks are a safe and effective means to store gasoline. But when those tanks are not subjected to basic operational safeguards, they can endanger the public and the environment, for example by leaking petroleum into the water supply, discharging toxic vapors into the air, or even triggering fires or explosions. EPA’s regulations under RCRA are designed to protect the public by requiring underground storage tank operators to reduce the likelihood of leaks, monitor for leaks so they can promptly be addressed, and maintain adequate insurance to conduct corrective action and compensate injured third parties should a leak occur.

The Consent Decree, which is subject to public comment and approval by the district court, resolves a lawsuit filed by the United States in May 2019, which alleges that Defendants repeatedly violated RCRA and related regulations at various times between 2011 and 2014 with respect to their ownership and/or operation of underground storage tanks at 20 gas stations.

* * *

In the Consent Decree filed today, Defendants admit, acknowledge, and accept responsibility for failing to perform required actions at one or more facilities on various specified dates between 2011 and 2014. This includes:

failing to perform release (i.e., leak or spill) detection;
failing to maintain and provide records of release detection monitoring;
failing to operate corrosion protection systems (including inspecting and testing) for steel underground storage tank systems and failing to maintain and provide records of corrosion protection monitoring;
failing to cap and secure underground storage tanks that were temporarily closed;
failing to perform release detection for underground storage tanks that were temporarily closed;
failing to report suspected releases or unusual operating conditions for underground storage tanks;
failing to conduct release investigations and confirm suspected releases or unusual operating conditions; and
failing to maintain insurance policies sufficient to take corrective action and compensate third parties for bodily injury and property damage caused by accidental releases arising from the operation of the underground storage tanks.

Pursuant to the Consent Decree, Defendants are required to comply with the regulations applicable to underground storage tanks for all underground storage tanks at the facilities at issue, and to take various measures to ensure such compliance, including undertaking inspections, maintaining and operating an electronic environmental management system providing centralized electronic monitoring of release detection at all underground storage tanks at the facilities, monitoring the under-dispenser containment systems at all underground storage tanks at the facilities, and providing semi-annual reports to EPA. Defendants also agree to undertake certain measures with respect to newly acquired facilities containing underground storage tanks, including providing notice to EPA of the planned acquisition, conducting a pre-acquisition assessment, and ensuring that all underground storage tanks at newly acquired facilities are promptly brought into compliance with all applicable regulations.

In addition to this injunctive relief, Defendants will pay a civil penalty of $187,500. Defendants will also be subject to substantial penalties if they fail to comply with the terms of the Consent Decree.

The Consent Decree will be lodged with the District Court for a period of at least 30 days, and notice of the Consent Decree will be published in the Federal Register before the Consent Decree is submitted for the Court’s approval. This will afford members of the public the opportunity to submit comments on the Consent Decree to the Department of Justice.

Acting U.S. Attorney Strauss thanked EPA’s attorneys and staff for their critical work on this matter.

This case is being handled by the Office’s Environmental Protection Unit. Assistant United States Attorneys Christopher Connolly, Rachael Doud, and Jennifer C. Simon are in charge of the case.

Outcome: Settled.

Plaintiff's Experts:

Defendant's Experts:

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